III.
RULE 1, Sections 1 to 6, ROC An action to foreclose a real estate mortgage is a
HERNANDEZ VS RURAL BANK OF LUCENA, INC.
G.R. No. L-29791 1978 Jan 10 (81 SCRA 75)
FACTS:
Spouses Hernandez obtained from the Rural Bank of
Lucena, Inc. a loan of P6,000, payable in a year. The
loan was secured by a mortgage on their two lots
situated in Cubao, Quezon City.About three months
after that loan was obtained, the Lucena bank
became a distressed bank. It then received
directives from the Central Bank which it construed
as a directive to suspend operations. Before the
expiration of the one year term of the loan,
Hernandez offered to pay the loan by means of a
check which was drawn against the bank by a
depositor, the San Pablo Colleges, and which was
payable to Hernandez. The payment was never
consummated. Despite several attempts,
Hernandezs check was refused, Lucena bank being
no longer in a position to honor withdrawals. In the
meantime, the Monetary Board had decided to
liquidate the Lucena bank. A petition was filed with
CFI of Manila for assistance and supervision in the
liquidation of the Lucena bank. Hernandez made a
judicial deposit of the check with the CFI of Lipa City.
He then filed with the same courtan action to compel
the Rural Bank and Central Bank as liquidator to
accept the check and to execute thecancellation of
the real estate mortgage.
ISSUE:
WoN the venue was properly laid.
HELD:
real action, but an action to compel the mortgagee
to accept payment of the mortgage debt and to
release the mortgage is a personal action. Section
2(a), Rule 4 of the Rules of Court provides that
"actions affecting title to, or for recovery
of possession, or for partition or condemnation of, or
foreclosure of mortgage on, real property, shall be
commenced and tried in the province where the
property or any part thereof lies. The rule mentions
an action for foreclosure of a real estate mortgage
but does not mention an action for the cancellation
of a real mortgage. In the instant case, the action is
primarily to compel the mortgagee to accept
payment of the mortgage debt and to release the
mortgage. Hence, the venue of plaintiffs' personal
action is the place where the defendant or any of the
defendants resides or may be found, or where the
plaintiff or any of the plaintiffs resides, at the
election of theplaintiff (Sec. 2[b], Rule 4). The term
"resides" in section 2[b] of Rule 4 refers to the place
of actual residence or the place of abode and not
necessarily to the legal residence or domicile San
Juan, Batangas might be the place where the
plaintiffs have their domicile or legal residence but
there is no question that Chicago St., Cubao, Quezon
City is their place of abode or the place where they
actually reside. So, the action in this case, which is a
personal action to compel the defendants to honor
the check in question and to cancel the mortgage,
should have been filed in Quezon City if the plaintiffs
intended to use their residence as the basis for their
choice of venue.
Case Digest: Muoz v. Atty. Yabut and Go Chan In these two consolidated cases, Ms. Emerita Muoz
G.R. No. 142676 : June 06, 2011 assails the respective decisions of the CA which were
unfavorable to her cause. Among the prayer that she
EMERITA MUOZ, Petitioner, v. ATTY. had sought from the lower court was a Motion for
VICTORIANO R. YABUT, JR. AND SAMUEL GO an Alias Writ of Execution and Application for
CHAN, Respondent. Surrender of Owners Duplicate Copy of TCT against
BPI and spouses Chan.
The first civil case is a complaint for the annulment
G.R. NO. 146718 of deed of sale against Spouses Go. The court
said that it is an action for reconveyance, which
EMERITA MUOZ, Petitioner v. SPOUSES is an action in personam available to a person
SAMUEL GO CHAN AND AIDA C. CHAN, AND THE whose property has been wrongfully registered
BANK OF THE PHILIPPINE ISLANDS, under the Torrens system in anothers name.
Respondents At the same time, an action for declaration of
nullity of title and recovery of ownership of
LEONARDO-DE CASTRO, J.: real property, or reconveyance, is a real action
(aside from action in personam), for it binds a
particular individual only although it concerns the
right to a tangible thing. Any judgment therein is
binding only upon the parties properly impleaded.
The order in the said case cannot extend to BPI

FACTS:

The subject property is a house and lot at No. 48

Scout Madrian St., Diliman, Quezon City, formerly
owned by Yee L. Ching. Yee L. Ching is married to
Emilia M. Ching (spouses Ching), Muoz's sister. Muoz'
lived at the subject property with the spouses Ching.
As consideration for the valuable services rendered
by Muoz' to the spouses Ching's family, Yee L. Ching
agreed to have the subject property transferred to
Muoz. By virtue of a Deed of Absolute Sale,
seemingly executed by Yee L. Ching in favor of Muoz,
the latter acquired a Transfer Certificate of Title.
However, in a Deed of Absolute Sale Muoz'
purportedly sold the subject property to her sister,
Emilia M. Ching. As a result, TCT No. 186306 was
cancelled and TCT No. 186366 was issued in Emilia
M. Ching's name. Emilia M. Ching, in a Deed of
Absolute Sale sold the subject property to spouses
Go Song and Tan Sio Kien (spouses Go), hence, TCT
No. 186366 was cancelled and replaced by TCT No.
258977 in the spouses Go's names.
Muoz registered her adverse claim to the subject
property on TCT No. 258977 of the spouses Go. Muoz
filed a complaint for the annulment of the deeds of
absolute sale and the cancellation of TCT No. 258977
in the spouses Go's names, and the restoration and
revival of TCT No. 186306 in Muoz's name. Muoz
caused the annotation of a notice of lis pendens on
TCT No. 258977 of the spouses Go.
The spouses Go obtained a loan of P500,000.00 from
BPI Family Savings Bank When the spouses Go
defaulted on the payment of their loan, BPI Family
foreclosed the mortgage. BPI Family executed in
favor of the spouses Samuel Go Chan and Aida C.
Chan (spouses Chan) a Deed of Absolute Sale.
Consequently, TCT No. RT-54376 (370364) in the
name of BPI Family was cancelled and TCT No. 53297
was issued in the spouses Chan's names on January
28, 1991.
Muoz' instituted before the MeTC a Complaint for
Forcible Entry with Prayer for Preliminary Mandatory
Injunction against Samuel Go Chan and Atty. Yabut.
Muoz' alleged in her complaint that she had been in
actual and physical possession of the subject
property since January 10, 1994.Muoz prayed for the
issuance of a writ of preliminary mandatory
injunction directing Samuel Go Chan and Atty. Yabut
and all persons claiming right under them to vacate
the subject property.
The MeTC adjudged that the final judgment in Civil
Case No. Q-28580 was already executed against the
spouses Chan and there was, indeed, a turn-over of
possession of the subject property to Muoz'.
Accordingly, the MeTC granted Muoz's prayer for the
issuance of a writ of preliminary mandatory
injunction, restoring possession of the subject
property to Muoz.
According to the RTC-Branch 88, the MeTC failed to
distinguish the issue of finality of the judgment of
the RTC-Branch 95 in Civil Case No. Q-28580 from
the assertions of Samuel Go Chan and Atty. Yabut
that the spouses Chan are not covered by said final
judgment because they are not successors-in-
interest, assigns, or privies of the spouses Go and
they are purchasers of the subject property in good
faith.
The Court of Appeals held that the MeTC should have
dismissed the forcible entry case on the ground of
"lis pendens"; that the spouses Chan were not
parties in Civil Case No. Q-28580, and impleading
them only in the execution stage of said case
vitiated their right to due process; that the order of
the RTC-Branch 95 involving the spouses Chan in
Civil Case No. Q-28580 was null and void,
considering that they are strangers to the case, and
they are innocent purchasers for value of the subject
property; that the notice of lis pendens was already
cancelled from the spouses Go's certificate of title at
the time they mortgaged the subject property to BPI
Family; and that the title to the subject property was
already free of any and all liens and encumbrances
when the spouses Chan purchased the said property
from BPI Family.
G.R. No. 146718
Meanwhile, Muoz' filed before the RTC-Branch 95 in
Civil Case No. Q-28580 a Motion to Cite the Register
of Deeds in Contempt of Court for the failure of the
Register of Deeds to restore Muoz's TCT. The Register
of Deeds could not cancel the spouses Chan's TCT
No. 53297, the subsisting certificate of title over the
subject property, absent any authority or directive
for him to do so.
The RTC-Branch 95 denied all of Muoz's motions. The
RTC-Branch 95 was of the view that Samuel Go
Chan's title should be litigated in another forum, not
in Civil Case No. Q-28580 where the judgment had
already become final and executory.The RTC-Branch
95 also stressed that since the judgment in Civil
Case No. Q-28580 had long become final and
executory, it could no longer be changed or
amended except for clerical error or mistake.
Attributing grave abuse of discretion on the part of
the RTC-Branch 95 in issuing its Orders Muoz' filed
before this Court a Petition for Certiorari and
Mandamus, which was remanded to the Court of
Appeals. The Court of Appeals agreed with the RTC-
Branch 95 that the spouses Chan could not be
covered by the alias writ of execution considering
that they were not impleaded in Civil Case No. Q-
28580.The cancellation of TCT No. 53297 in the
spouses Chan's names could not be done apart from
a separate action exclusively for that matter. The
spouses Chan are deemed buyers in good faith and
for value as the certificate of title delivered to them
by BPI Family was free from any liens or
encumbrances or any mark that would have raised
the spouses Chan's suspicions.
ISSUE: Whether Muoz is the rightful owner of the
subject property?
HELD: YES.
CIVIL LAW: Action for reconveyance of
property, Forcible entry
G.R. No. 146718
Civil Case No. Q-28580 is an action for
reconveyance of real property. An action for
declaration of nullity of title and recovery of
ownership of real property, or re-conveyance,
is a real action but it is an ACTION IN
PERSONAM, for it binds a particular individual
only although it concerns the right to a
tangible thing. Any judgment therein is
binding only upon the parties properly
impleaded.
Since they were not impleaded as parties and given
the opportunity to participate in Civil Case No. Q-
28580, the final judgment in said case cannot bind
BPI Family and the spouses Chan. The effect of the
said judgment cannot be extended to BPI Family and
the spouses Chan by simply issuing an alias writ of
execution against them. No man shall be affected by
any proceeding to which he is a stranger, and
strangers to a case are not bound by any judgment
rendered by the court. In the same manner, a writ of
execution can be issued only against a party and not
against one who did not have his day in court. Only
real parties in interest in an action are bound by the
judgment therein and by writs of execution issued
pursuant thereto.
Although the RTC-Branch 95 had declared with
finality in Civil Case No. Q-28580 that the titles of
Emilia M. Ching and the spouses Go were null and
void, there is yet no similar determination on the
titles of BPI Family and the spouses Chan. The
question of whether or not the titles to the subject
property of BPI Family and the spouses Chan are null
and void, since they are merely the successors-in-
interest, assigns, or privies of Emilia M. Ching and
the spouses Go, ultimately depends on the issue of
whether or not BPI Family and the spouses Chan
obtained their titles to the subject property in bad
faith, i.e., with notice of Muoz's adverse claim and
knowledge of the pendency of Civil Case No. Q-
28580.The latter is a factual issue on which we
cannot rule in the present petition, not only because
we are not a trier of facts, but more importantly,
because it was not among the issues raised and tried
in Civil Case No. Q-28580.
Muoz's legal remedy is to directly assail in a
separate action the validity of the certificates of title
of BPI Family and the spouses Chan.
There is forcible entry or desahucio when one is
deprived of physical possession of land or building
by means of force, intimidation, threat, strategy or
stealth. In such cases, the possession is illegal from
the beginning and the basic inquiry centers on who
has the prior possession de facto.
In filing forcible entry cases, the law tells us that
two allegations are mandatory for the municipal
court to acquire jurisdiction: first, the plaintiff must
allege prior physical possession of the property, and
second, he must also allege that he was deprived of
his possession by any of the means provided for in
Section 1, Rule 70 of the Rules of Court, i.e., by
force, intimidation, threat, strategy, or stealth. It is
also settled that in the resolution thereof, what is
important is determining who is entitled to the
physical possession of the property. Indeed, any of
the parties who can prove prior possession de facto
may recover such possession even from the owner
himself since such cases proceed independently of
any claim of ownership and the plaintiff needs
merely to prove prior possession de facto and undue
deprivation thereof.
Based on the foregoing, we find that the RTC-Branch
88 erred in ordering the dismissal of Civil Case No.
8286 even before completion of the proceedings
before the MeTC. At the time said case was ordered
dismissed by RTC-Branch 88, the MeTC had only
gone so far as holding a hearing on and eventually
granting Muoz's prayer for the issuance of a writ of
preliminary mandatory injunction.
Nonetheless, even though the peculiar
circumstances extant herein do not justify the
dismissal of Civil Case No. 8286, they do require
limiting pro hac vice the reliefs the MeTC may accord
to Muoz' in the event that she is able to successfully
prove forcible entry by Samuel Go Chan and Atty.
Yabut into the subject property (i.e., that the sheriff
actually turned-over to Muoz' the possession of the
subject property on January 10, 1994, and that she
was deprived of such possession by Samuel Go Chan
and Atty. Yabut on February 2, 1994 by means of
force, intimidation, threat, strategy, and stealth).
Taking into account our ruling in G.R. No. 146718 -
that the final judgment in Civil Case No. Q-28580
does not extend to the spouses Chan, who were not
impleaded as parties to the said case - the MeTC is
precluded from granting to Muoz' relief, whether
preliminary or final, that will give her possession of
the subject property. Otherwise, we will be
perpetuating the wrongful execution of the final
judgment in Civil Case No. Q-28580. Based on the
same reason, Muoz' can no longer insist on the
reinstatement of the MeTC Order dated May 16,
1994 granting a preliminary mandatory injunction
that puts her in possession of the subject property
during the course of the trial. Muoz' though may
recover damages if she is able to prove wrongful
deprivation of possession of the subject property
from February 2, 1994 until the finality of this
decision in G.R. No. 146718.
JIMMY T. GO, petitioner, vs. UNITED COCONUT
PLANTERS BANK, ANGELO V. MANAHAN,
FRANCISCO C. ZARATE, PERLITA A. URBANO
and ATTY. EDWARD MARTIN, respondents.
Doctrine: The cancellation of the real estate
mortgage is a real action, considering that a real
estate mortgage is a real right and a real
property by itself; and an action for cancellation of
real estate mortgage is necessarily an action
affecting the title to the property.
Facts:
Petitioner Go and Looyuko are co-owners of Noahs
Ark International, Noahs Ark Sugar Carriers, etc.
Their application for an Omnibus Line
accommodation with respondent United Coconut
Planters Bank (UCPB) in the amount of P900, 000,
000 was approved.
- The transaction was secured by Real Estate
Mortgages over parcels of land located at
Mandaluyong City and registered in the name of
Mr. Looyuko; and another property also located at
Mandaluyong City, registered in the name of Noahs
Ark Sugar Refinery.
- UCPB subsequently cancelled the approved
Omnibus Line accommodation; so, Go demanded
from UCPB the return of the two TCTS (No. 64070
and No. 3325) covered by Real Estate Mortgages.
UCPB however refused to return the same and
proceeded to have the two (2) pre-signed Real
Estate Mortgages notarized and caused the
registration thereof before the Registry of Deeds of
Mandaluyong City.
- UCPB filed the with the Office of the Clerk of Court
and Ex-Officio Sheriff of Mandaluyong City an
extrajudicial foreclosure of the mortgaged
land that was registered in the name of Looyuko ,
for nonpayment of the obligation secured by said
mortgage. Public auction sale was set. Hence, Go
filed a complaint for Cancellation of Real
Estate Mortgage and damages, with prayer for
temporary restraining order and/or writ of
preliminary injunction, against respondent bank and
its officers with the Regional Trial Court of Pasig
City. The complaint was later amended.
- Respondent bank, instead of filing an answer, filed
a motion to dismiss based on the several grounds.
Among which is that the complaint was filed in the
wrong venue.
Trial Court: issued an order granting petitioners
application for a writ of preliminary injunction.
Correspondingly, the auction sale was enjoined. The
trial court denied respondent banks motion to
dismiss. A motion for reconsideration was likewise
denied. UCPB filed a petition for certiorari.
CA: set aside orders issued by the trial court and
directed the trial court to dismiss case on the ground
of improper venue. A motion for reconsideration was
filed by petitioner, which was denied. Hence, this
petition for review on certiorari.
Petitioner argues: that a case for cancellation of
mortgage is a personal action and since he resides
at Pasig City, venue was properly laid therein. He
tries to make a point by alluding to the case of
Francisco S. Hernandez v. Rural Bank of Lucena.
Issue: WON petitioners complaint for cancellation
of real estate mortgage is a personal or real action
for the purpose of determining venue. [It is a real
action which should be commenced and tried in
Mandaluyong City, the place where the subject
property lies.]
Held/Ratio: In a real action, the plaintiff seeks the
recovery of real property, or as provided for in
Section 1, Rule 4, a real action is an action
affecting title to or possession of real
property, or interest therein. These include
partition or condemnation of, or foreclosure of
mortgage on, real property. The venue for real
actions is the same for regional trial courts
and municipal trial courts -- the court which
has territorial jurisdiction over the area where
the real property or any part thereof lies.
Personal action is one brought for the recovery of
personal property, for the enforcement of some
contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an
injury to the person or property. The venue for
personal actions is likewise the same for the
regional and municipal trial courts -- the court of the
place where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or
any of the principal defendants resides, at the
election of the plaintiff, as indicated in Section 2
of Rule 4. It is quite clear then that the controlling
factor in determining venue for cases of the
above nature is the primary objective for which
said cases are filed.
In a long line of cases, the Court held that annulment
of foreclosure sale is a real action. Particularly in
Carandang v. Court of Appeals, the Court held that
an action for nullification of the mortgage
documents and foreclosure of the mortgaged
property is a real action that affects the title
to the property. Petitioners reliance in the case of
Francisco S. Hernandez v. Rural Bank of Lucena is
misplaced. Firstly, said case was primarily an action
to compel the mortgagee bank to accept
payment of the mortgage debt and to release the
mortgage. That action, which is not expressly
included in the enumeration found in Section 1, Rule
4 of the 1997 Rules of Civil Procedure, does not
involve titles to the mortgaged lots. It is a personal
action and not a real action. Hence, the venue of the
plaintiffs personal action is the place where the
defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff. In
the case at bar, the action for cancellation of real
estate mortgage filed by herein petitioner was
primarily an action to compel private
respondent bank to return to him the
properties over which the bank had already
initiated foreclosure proceedings . The prime
objective is to recover said real properties.
Secondly, Carandang distinctly articulated that the
ruling in Hernandez does not apply where the
mortgaged property had already been foreclosed.
Here, bank had already initiated extrajudicial
foreclosure proceedings, and were it not for the
timely issuance of a restraining order secured by
petitioner Go in the lower court, the same would
have already been sold at a public auction. In a
relatively recent case, Asset Privatization Trust v.
Court of Appeals. It was succinctly stated that the
prayer for the nullification of the mortgage is a
prayer affecting real property, hence, is a real
action.
IV. RULE 2, Sections 1 to 6
III. Commencement of Actions to Trial
A. ACTIONS
An ordinary suit in a court of justice by which one
party prosecutes another for the enforcement or
protection of a right or the prevention or redress of a
wrong [Potente v. Saulog Transit, G.R. No. L-12300
(1959)]
An action is the legal and formal demand of ones
right from another person made and insisted upon in
a court of justice. The determinative operative act,
which converts a claim into an action, is its filing
with a court of justice. [Riano]
This is distinguished from the cause of action, which
is the fact or combination of facts which affords a
party a right to judicial interference in his behalf
[Into v. Valle, G.R. No. 145379 (2005)] and which is
the basis of ordinary civil actions. [Sec. 1, Rule 2]
B. CAUSE OF ACTION
CAUSE OF ACTION
The act or omission by which a party violates a right
of another. [Sec. 2, Rule 2]
Every ordinary civil action must be based on a cause
of action [Sec. 1, Rule 2]
A cause of action stems from the sources of
obligations under Art. 1156 of the Civil Code:
(1) Law,
(2) Contract,
(3) Quasi-contract,
(4) Acts and omissions punishable by law and
(5) Quasi-delict. [Sagrada Orden etc v.
NACOCO, G.R. No. L-3756 (1952)]
B.3 SPLITTING A SINGLE CAUSE OF ACTION; EFFECTS
SPLITTING A CAUSE OF ACTION
The act of instituting two or more suits on the basis
of the same cause of action. [Sec. 4, Rule 2]
Splitting a single cause of action is the act of
dividing a single or indivisible cause of action into
several parts or claims and instituting two or more
actions upon them. A single cause of action or entire
claim or demand cannot be split up or divided in
order to be made the subject of two or more
different actions.
EFFECTS:
The filing of one or a judgment upon the merits in
any one is available as a ground for the dismissal of
the others. [Sec. 4, Rule 2]. The remedy is for the
defendant to file a Motion to Dismiss under Rule 16.
(1) Filing of the first complaint may be pleaded in
abatement of the second complaint, on the ground
of litis pendentia [Sec. 1(e), Rule 16]; or
(2) A judgment upon the merits in any of the
complaints is available as ground for dismissal of the
others based on res judicata [Sec. 1(f), Rule 16]
A party may not institute more than one suit for a
single cause of action. [Sec. 3, Rule 2]
Rationale
(1) To prevent repeated litigation between the same
parties in regard to the same subject or controversy;
(2) To protect the defendant from unnecessary
vexation. Nemo debet vexare pro una et eadem
causa (No man shall be twice vexed for one and the
same cause);
(3) To avoid the costs and expenses incident to
numerous suits.
B.4 JOINDER AND MISJOINDER OF CAUSES OF
ACTION
JOINDER OF CAUSES OF ACTION
The assertion of as many causes of action as a party
may have against another in one pleading alone.
[Sec. 5, Rule 2]
It is also the process of uniting two or more demands
or rights of action in one action. [Riano]
Ratio: To avoid a multiplicity of suits and to expedite
disposition of litigation at minimum cost [Ada v.
Baylon, G.R. No. (2012)]
The rule however is purely permissive as there is no
positive provision of law or any rule of jurisprudence
which compels a party to join all his causes of action
and bring them at one and the same time. [Nabus v.
CA, G.R. No. 91670 (1991)]
There is no sanction against non-joinder of separate
causes of action since a plaintiff needs only a single
cause of action to maintain an action [Regalado].
Requisites [Sec. 5, Rule 2]
(1) The party joining the causes of action shall
comply with the rules on joinder of parties;
(2) The joinder shall not include special civil actions
or actions governed by special rules;
(3) Where causes of action are between the same
parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the RTC
provided one of the causes of action are within that
courts jurisdiction and venue lies therein;
(4) Where the claims in all the causes of action are
principally for recovery of money, the aggregate
amount claimed shall be the test of jurisdiction
(totality rule)
MISJOINDER OF CAUSES OF ACTION
Misjoinder is not a ground for dismissal of an action
[Sec. 6, Rule 2]
An erroneously joined cause of action may, on
motion of a party or on the initiative of the court, be
severed and proceeded with separately. [Sec. 6, Rule
2]
If there is no objection to the improper joinder or the
court did not motu proprio direct a severance, then
there exists no bar in the simultaneous adjudication
of all the erroneously joined causes of action, as long
as the court trying the case has jurisdiction over all
of the causes of action therein notwithstanding the
misjoinder. [Ada v. Baylon, G.R. No. (2012)].
If the court has no jurisdiction to try the misjoined
action, then it must be severed. Otherwise,
adjudication rendered by the court with respect to it
would be a nullity
China Banking Corporation, Inc. v CA and Heirs
of Avelina Vda. De Piero and Emmanuel Piero
GR 155299 ; 24 July 2007 ; J. Austria-Martinez [Pretz
V.]
The above provision presupposes that the different
causes of action which are joined accrue in favor of
the same plaintiff/s and against the same
defendant/s and that no misjoinder of parties is
involved. The issue of whether respondents' claims
shall be lumped together is determined by
paragraph (d) of the above provision. This paragraph
embodies the "totality rule" as exemplified by
Section 33 (1) of B.P. Blg. 129 which states, among
others, that "where there are several claims or
causes of action between the same or different
parties, embodied in the same complaint, the
amount of the demand shall be the totality of the
claims in all the causes of action, irrespective of
whether the causes of action arose out of the same
or different transactions."
NATURE: Rule 45 Review of CA decision
China Banking Corp v CA, Heirs of Avelina
Pinero and Emmanuel Pinero 2007 | Austria-
Martinez, J.
This case originated from an action for
Annulment of Real Estate Mortgage, Foreclosure of
Mortgage, Notice of Auction Sale and Damages filed
by respondents.
Avelina (respondents predecessor in interest) owned
2 adjoining pacels of land with improvements in
Mandaluyong City.
Aug 27, 1991, one Alfonso Kipte obtained a 1.2
million peso loan from petitioner secured by a
promissory note and real estate mortgage signed by
Avelina over her properties. The mortgage was
annotated to the titles. The loan was also secured by
a surety agreement signed by Kipte as principal and
Avelina as surety. Kipte defaulted so the mortgaged
properties were foreclosed (auction sale scheduled
Aug 17, 1992).
Avelina and respondent Emmanuel filed a
complaint with RTC. She denied having signed the
documents.
She alleged that sometime in September 1992, she
was surprised to receive a foreclosure notice from
the notary public, stating that her properties would
be sold at public auction at the instance of
petitioner. Avelina learned that she allegedly
executed the documents above to secure the loan of
Kipte, a person she doesnt know.
Also, the foreclosure is void since she never
voluntarily executed the mortgage or surety
agreement, never appeared before the notary public,
never received any proceeds from the loan and was
never a bsiness associate of Kipte.
That sometime in 1990, Emmanuels common
law wife Ludivina Rinnoces asked Avelina to sign
some documents allegedly pertaining to a loan from
one Cerila de Leon. Avelina signed the documents
without reading because she is blind and without
knowing the contents thereof. This happened again
in 1991.
Petitioner, on its part, contends that upon
execution of the documents, Avelina was furnished
with copies thereof and she freely and voluntarily
signed the documents. Though physically weak at
the time of execution, she was mentally sound in
complete possession of her faculties and she
understood the nature of the transaction, and that
she appeared before the notary.
1996, Avelina died and so was substituted by
the heirs.
RTC for China Banking. CA reversed. It said:
that Avelina was an old widow, 80 years old and
blind even before she purportedly signed the Real
Estate Mortgage and Surety Agreement (1991).
Her daughter testified that in 1985, her mother
became totally blined, not physically fit and suffered
an eye disease or glaucoma.
Avelina testified that she was persuaded to sign only
as a witness and that Ludivina guided her when she
signed the documents. She did not receive any
consideration from Kipte as consideration for the
mortgage, thus this attests to her credible theory
that she was only a witness.
Her deportment in court and that the fact that she
had to be guided to take the witness stand
constituted the strongest proof of blindness.
The notary remembered Avelina to b an old lady with
white complexion and white hair and who had to be
assisted and accompanied to his table to sign the
documents; he noticed that she could hardly see and
it was unusual for her, a very old woman, to be so
willing to act as surety to a promissory note of the
Kipte, a complete stranger, which involved a very
large sum (1.2M).
W/N Avelina signed the real estate mortgage and
surety agreement knowingly and voluntarily, with full
knowledge of its contents. No.
Petitioner: respondents admitted that Avelina indeed
signed the mortgage and surety agreements;
- SC: No.
- Counsel for respondents stipulated to admit
the authenticity of Avelinas signature, which
was done during the trial;
- The admission of this fact does not by itself
prove petitioners case, since at bottom, the
issue is not whether Avelina affixed her
signature on the agreements in question, but,
ultimately, whether she gave her consent to
be bound as surety.
Petitioner: that as notarial documents they are
clothed with prima facie presumption of regularity
and due execution
- SC: No.
- Notarization per se is not a guarantee of the
validity of the contents of a document;
- Generally, a notarized document carries the
evidentiary weight conferred upon it with
respect to its due execution and has in its
favor the presumption of regularity. However,
such presumption is not absolute. It may be
rebutted by clear and convincing evidence to
the contrary
Petitioner: Avelina was duly informed of the nature
and purpose of these agreements by petitioners
branch manager and the notary public before she
affixed her signature; and that the respondents could
have easily submitted a medical certificate attesting
to the supposed blindness of Avelina or made an
ophthalmologist take the witness stand; they did
neither
- SC: No.
- The rule of evidence requiring the opinion of
expert witnesses applies only to such matters
clearly within the domain of medical science,
and not to matters that are within the common
knowledge of mankind which may be testified
to by anyone familiar with the facts;
- Thus, to prove whether one is blind, it is not
necessary to submit a medical certificate
attesting to the blindness or to require an
expert witness, such as an ophthalmologist, to
testify to such fact, since the fact of blindness
can be determined through common
knowledge and by anyone with sufficient
familiarity of such fact;
- At case, , Avelina, then alive during the trial of
the case, categorically testified and attested to
her own blindness, a fact which even the trial
court noted;
- Also established, Avelina already blind she was
manipulated into signing the documents by
Ludivina who did not explain the contents
thereof; that she needed to be guided; that
she made to understand she was to sign only
as a witness; the Kipte was a stranger and so it
is implausible that she agreed to be his surety;
- In fact, it was only after Avelina received the
notices of foreclosure that she learned that
there was a mortgage document among the
papers she signed;
 - Avelinas blindness was further confirmed by
her childrens testimonies; that she did not
know the contents and that she did not know
in which capacity she was signing;
- Evidence presented by respondents are clear
and convincing, sufficient to overturn the
presumption of regularity of the subject
documents.
DENIED.
BPI FAMILY SAVINGS BANK v. VDA. DE
COSCOLLUELA
G.R. No. 167724 / June 27, 2006 / Callejo, Sr., J. /
Splitting / KJMSTA.ANA
NATURE Petition for Review under Rule 45
PETITIONERS BPI Family Savings Bank
RESPONDENTS Margarita Vda. De Cosculluela
FACTS.
Respondent and her late husband Oscar
obtained an agricultural sugar crop loan from
Far East Bank & Trust Co. (later merged with BPI)
for crop years 1997 and 1998. In the book of Far
East, the loan account was treated as a single
account, and evidenced by 67 promissory notes.
Sps. Coscolluela executed a real estate
mortgage in favor of FEBTC over their parcel of
land as security of loans on credit
accommodation obtained and those that
may be obtained.
Under the terms and conditions of the real
estate mortgage, in the event of failure to pay
the mortgage obligation or any portion thereof,
the entire principal, interest, penalties, and
other charges shall be immediately due; and Far
East mat foreclose the same extra judicially.
For failure to settle outstanding obligation on
the maturity dates, Far East sent a final demand
letter to respondent demanding payment.
Since respondent failed to settle her obligation,
Far East filed a petition for the extrajudicial
foreclosure of the mortgaged property, but only
only for 31 of the promissory notes.
During pendency of said case, Far East filed a
complaint for collection of money representing
the amounts for the 36 other promissory notes.
In respondents answer, she alleged that the
complaint was barred by litis pendentia for the
pending petition for the extrajudicial foreclosure
of the REM.
Petitioner presented a loan officer as sole
witness, who testified that respondent were
granted a loan, which was a single loan
account.
Respondent filed a Demurrer to Evidence
contending that the loan officers admission,
that there is only one loan account secured by
the REM thus barred the personal action for
collection. She insisted that the filing of said
complaint should be dismissed.
 Petitioner opposed the demurrer, stating that of the REM, the real estate of respondent
each promissory note constituted a separate served as a continuing security liable for
contract. obligations already obtainer and obligations obtained
The trial court denied the demurrer on the thereafter. In this case, the action of petitioner
ground that each note covered a loan distinct is anchored on one and the same cause: the
from the others. nonpayment of respondent. Though the debt may
Respondent filed MR but denied, prompting her be covered by several promissory notes and is
to file a certiorari petition under Rule 65 with covered by a real estate mortgage, the latter is
CA. subsidiary to the former and both refer to one and
CA granted the petitioner, stating that the the same obligation. A mortgage creditor may
institute two alternative remedies against the
remedies sought are alternative and not
debtor, either to collect debt or to foreclose
cumulative. Thus, in denying the demurrer, RTC
mortgage, but not both.
committed grave abuse of discretion.
Petitioner filed MR but it was denied. Hence, this
DECISION.
petition. WHEREFORE instant petition is dismissed for lack of
merit.
ISSUES & RATIO.
1. WON collection suit should be dismissed YES
Samson v. Gabor NO digest
Section 3, Rule 2 of the 1997 Rules of Civil Procedure
provides that a party may not institute one suit for a
single cause of action, and, if two or more suits are
instituted on the basis of the same cause of action,
the filing of one on a judgment upon the merits in
any one is available as a ground for the dismissal of
others. The law does not permit the owner of a
single of entire cause of action or an entire or
indivisible demand to divide and split the cause to
make it the subject of several actions.

The true rule which determined whether a party has

only a single and entire cause of action is whether
the entire amount arises from one and the same act
or contract or the several parts arise from distinct
and different acts. As gleaned from the plain terms
AGUSTIN vs. BACALAN
G.R. No. L-46000
March 18, 1985
135 SCRA 340
GUTIERREZ, JR. , J.:
Facts:
The precursor of this case was a complaint for
ejectment with damages filed by plaintiff-appellant
Agustin, as adininistrator of the Intestate Estate of
Susana Agustin, against defendant-appellee Bacalan,
before the City Court of Cebu. Bacalan is a lessee of
a one-door ground floor space in a building owned by
the late Susana Agustin. Due to nonpayment of
rentals despite repeated demands an action to eject
him was filed wherein the City Court of Cebu
rendered judgment dismissing the counterclaim and
ordering the defendant to vacate the premises in
question and to pay the plaintiff unpaid back rentals.
From this decision, the defendant filed an appeal
with Branch Ill of the Court of First Instance of Cebu
which rendered judgment reversing that of the City
Court. No appeal was taken by the plaintiff-appellant
hence the decision lapsed into finality and became
executory.
A writ of execution was issued by virtue of which a
notice to sell at public auction real properties
belonging to the estate of Susana Agustin was
issued by the Deputy Sheriff to satisfy judgment in
the case. Plaintiff's counsel filed a motion for
reconsideration, confessing his fault and giving the
reason why he failed to perfect the appeal on time.
The motion was denied.
Thereafter, with the aid of new counsel, the plaintiff-
appellant filed a complaint with Branch V, Court of
First Instance of Cebu, against the defendant and the
Deputy Sheriff of Cebu for the declaration of the
nullity of the above-cited decision of Branch III, Court
of First Instance of Cebu in the ejectment case on
the ground that the exercise of its appellate
jurisdiction was null and void. The court sustained
the defendant.
Issues:
I. Whether or not the present action for the
annulment of the judgment in the ejectment case is
the proper remedy after it has become final and
executory
II. Whether or not the Court of First Instance may, in
an appeal, award the defendant-appellee's
counterclaim in an amount exceeding or beyond the
jurisdiction of the court of origin
Held:
I. To this procedural dilemma, the solution lies
in the determination of the validity of the judgment
sought to be annulled, for against a void judgment,
plaintiff-appellant's recourse would be proper. There
is no question as to the validity of the court's
decision with respect to the issue of physical
possession of property, the defendant-appellee's
right to the same having been upheld. However, the
plaintiff-appellant assails the money judgment
handed down by the court which granted damages
to the defendant-appellee. By reason thereof, he
seeks the declaration of the nullity of the entire
judgment. Plaintiff-appellant loses sight of the fact
that the money judgment was awarded the
defendant-appellee in the concept of a counterclaim.
A defending party may set up a claim for money or
any other relief which he may have against the
opposing party in a counterclaim (Section 6, Rule 6,
Revised Rules of Court). And the court may, if
warranted, grant actual, moral, or exemplary
damages as prayed for. The grant of moral damages,
in the case at bar, as a counterclaim, and not as
damages for the unlawful detention of property must
be upheld. However, the amount thereof is another
matter.
II. It is well-settled that a court has no jurisdiction to
hear and determine a set-off or counterclaim in
excess of its jurisdiction (Section 5, Rule 5, Revised
Rules of Court; Ago v. Buslon, 10 SCRA 202). A
counterclaim beyond the court's jurisdiction may
only be pleaded by way of defense, the purpose of
which, however, is only to defeat or weaken
plaintiff's claim, but not to obtain affirmative relief
(Section 5, Rule 5, Revised Rules of Court).
Nevertheless, the defendant-appellee, in the case at
bar, set up his claim in excess of the jurisdiction of
the city court as a compulsory counterclaim. As
a consequence, the doctrine enunciated under the
case of One HeartClub, Inc. vs. Court of Appeals, an
appellant who files his brief and submits his case to
the Court of Appeals for decision, without
questioning the latter's jurisdiction until decision is
rendered therein, should be considered as having
voluntarily waives so much of his claim as would
exceed the jurisdiction of said Appellate Court; for
the reason that a contrary rule would encourage the
undesirable practice of appellants submitting their
cases for decision to the Court of Appeals in
expectation of favorable judgment, but with intent of
attacking its jurisdiction should the decision be
unfavorable.
The rule is that a counterclaim not presented in
the inferior court cannot be entertained in the Court
of First Instance on appeal. The amount of judgment,
therefore, obtained by the defendant-appellee on
appeal, cannot exceed the jurisdiction of the court in
which the action began. Since the trial court did not
acquire jurisdiction over the defendant's
counterclaim in excess of the jurisdictional amount,
the appellate court, likewise, acquired no jurisdiction
over the same by its decisions or otherwise.
Appellate jurisdiction being not only a continuation
of the exercise of the same judicial power which has
been executed in the court of original jurisdiction,
also presupposes that the original and appellate
courts are capable of participating in the exercise of
the same judicial power.
Flores v. Mallare-Philipps
Nature: Appeal by Certiorari under Rule 45.
FACTS:
Flores sued the respsondents for the collection of
sum of money with the RTC
The first cause of action alleged in the complaint was
against Ignacio Binongcal for refusing to pay the
amount of P11,643 representing cost of truck
tires which he purchased on credit from Flores on
various occasions from August to October, 1981;
The second cause of action was against
resp Fernando Calion for allegedly refusing to pay
the amount of P10,212 representing cost of truck
tires which he purchased on credit from pet on
several occasions from March, 1981 to January,
1982.
Binongcal filed a MTD on the ground of lack of
jurisdiction since the amount of the demand
against said resp was only P11,643.00, and
under Section 19(8) of BP129 the RTC shall exercise
exclusive original jurisdiction if the amount of
the demand is more than P20K.
Although another person, Fernando Calion, was
allegedly indebted to pet in the amount of
P10,212.00, his obligation was separate and
distinct from that of the other resp.
Calion joined in moving for the dismissal of the
complaint.
RTC dismissed the complaint.
ISSUE
WON the trial court correctly ruled on the application
of the permissive joinder of parties
Ruling
The lower court has jurisdiction over the case
following the "novel" totality rule introduced in
Section 33(l) of BP129 and Section 11 of the Interim
Rules.
Section 33(l) of BP129
That where there are several claims or causes of
action between the same or different parties,
embodied in the same complaint, the amount of
the demand shall be the totality of the
claims in all the causes of action, irrespective of
whether the causes of action arose out of the
same or different transactions. ...
Section 11 of the Interim Rules
Application of the totality rule. In actions where the
jurisdiction of the court is dependent on the
amount involved, the test of jurisdiction shall be
the aggregate sum of all the money demands,
exclusive only of interest and costs, irrespective of
WON the separate claims are owned by or due
to different parties. If any demand is for damages
in a civil action, the amount thereof must be
specifically alleged.
Former rule under Section 88 of the Judiciary Act of
1948
Where there are several claims or causes of
action between the same parties embodied in
the same complaint, the amount of the demand
shall be the totality of the demand in all the
causes of action, irrespective of whether the
causes of action arose out of the same or different
transactions; but where the claims or causes of
action joined in a single complaint are
separately owned by or due to different
parties, each separate claim shall furnish the
jurisdictional test. ...
comparison of former and present rules
 Present Rules Former Rules
Where a Totality of the claims in all the Totality of the claims in all the causes
plaintiff sues causes of action irrespective of of action irrespective of whether the
a defendant whether the COA arose out of the COA arose out of the same or diff
on two or same or diff transactions. If the transactions. If the total demand
more total demand exceeds P20K RTC exceeds P20K RTC has jurisdiction
separate has jurisdiction
causes of If the causes of action are separate and
action If the causes of action are separate independent, their joinder in one
and independent, their joinder in complaint is permissive and not
one complaint is permissive and mandatory, and any cause of action
not mandatory, and any cause of where the amount of the demand is
action where the amount of the 20K or less may be the subject of a
demand is 20K or less may be the separate complaint filed with a
subject of a separate complaint metropolitan or MTC.
filed with a metropolitan or MTC.
Two or Where the claims or causes of action The causes of action in favor of
more plaintiffsjoined in a
having a single complaint are separately owned
separate by or two or more plaintiffs or against
due to different parties, each the two or more defendants
causes ofseparate
should
action against claim shall furnish the jurisdictional
a defendanttest arise out of the same
join in a single The former rule applied only to cases of
transaction or
complaint permissive joinder of parties plaintiff.
However, it was also applicable to series of transactions and there
cases of should be a common question of
permissive joinder of parties defendant. law or fact, as provided in
Section 6
of Rule 3.

Brillo vs. Buklatan (former rule):
Separate claims against several defendants of
different amounts each of which is not more
than P2,000 and falls under the jurisdiction of the
justice of the peace court. The several claims do not
arise from the same transaction or series of
transactions and there seem to beno questions
of law or of fact common to all the defendants
as may warrant their joinder under Rule 3,
section 6.
The difference between the former and present rules
in cases of permissive joinder of parties may be
illustrated by the two cases which were cited in the
case of Vda. de Rosario vs. Justice of the
Peace as exceptions to the totality rule.
Soriano y Cia vs. Jose 29 dismissed
employees joined in a complaint against the
defendant to collect their respective claims, each of
which was within the jurisdiction of the municipal
court although the total exceeded the
jurisdictional amount, this Court held that
under the law then the municipal court had
jurisdiction. Although the plaintiffs' demands were
separate, distinct and independent of one another,
their joint suit was authorized under Section 6
of Rule 3 and each separate claim furnished
the jurisdictional test.
International Colleges, Inc. vs. Argonza, 25
dismissed teachers jointly sued for unpaid salaries,
the MC had jurisdiction because the amount of each
claim was within, although the total exceeded,
its jurisdiction and it was a case of permissive
joinder of parties plaintiff under Section 6 of
Rule 3.
Under the present law, the two cases would
be under the jurisdiction of the RTC.
Similarly, Brillo vs. Buklatan and Gacula vs. Martinez,
if the separate claims against the several defendants
arose out of the same transaction or series of
transactions and there is a common question of law
or fact, they would now be under the jurisdiction
of the RTC.
In cases of permissive joinder of parties, whether as
plaintiffs or as defendants, under Section 6 of
Rule 3, the total of all the claims shall now
furnish the jurisdictional test. Needless to state
also, if instead of joining or being joined in one
complaint separate actions are filed by or against
the parties, the amount demanded in each complaint
shall furnish the jurisdictional test.
The lower court correctly held that the jurisdictional
test is subject to the rules on joinder of parties
pursuant to Section 5 of Rule 2 and Section 6 of Rule
3 of the Rules of Court and that, after a careful
scrutiny of the complaint, it appears that there is a
misjoinder of parties for the reason that the claims
against resps Binongcal and Calion are separate and
distinct and neither of which falls within its
jurisdiction.
PANTRANCO North Express, Inc., and Alexander
Buncan, versus Standard Insurance Company, Inc.,
and Martina Gicale, G.R. No. 140746, March 16,
2005.

PANTRANCO North Express, Inc., and
Alexander Buncan, versus
Standard Insurance Company, Inc., and
Martina Gicale,
G.R. No. 140746, March 16, 2005.
NATURE OF THE CASE: The case was elevated to
the SC by Pantranco and Buncan by reason of the
ruling of the CA against them and the denial of the
appellate court of their motion for reconsideration.
The CA ruled that there was no misjoinder of parties
in the complaint filed by Standard and Gicale against
them, and that they are to be held accountable to
the money claims of the respondents.
FACTS: Crispin Gicale was driving the passenger
jeepney owned by his mother Martina Gicale.
Alexander Buncan, on the other hand, was driving a
bus owned by Pantranco North Express Inc. Both
drivers were travelling along the National Highway of
Talavera, Nueva Ecija in a rainy afternoon. Buncan
was driving the bus northbound while Cripin was
trailing behind. When the two vehicles were
negotiating a curve along the highway, the
passenger bus overtook the jeepney. In so doing,
thhe passenger bus hit the left rear side of the
jeepney and sped away.
Crispin reported the incident to the police
and to the insurer of their jeepney, Standard
Insurance Co. The total cost of the repair amounted
to P21, 415. Standard only paid P8,000 while Martina
Gicale shouldered the remaining P13,415.
Thereafter, Standard and Martina demanded
reimbursements from Pantranco and Buncan, but the
bus company and the driver refused. Thus, Standard
and Martina were prompted to file a complaint for
sum of money with the RTC of Manila.
Pantranco and Buncan denied the allegations
of the complaint and asserted that it is the MeTC
which has jurisdiction over the case.
RTC: The trial court ruled in favor of Standard and
Martina, and ordered Pantranco and Buncan to pay
the former reimbursements with interests due
thereon plus attorney's fees, and litigation expenses.
Pantranco and Buncan: The RTC has no jurisdiction
over the complaint.
1) Martina Gicale was claiming P13,415,
while Standard was claiming P8,000. Their individual
claims are below P20,000. Thus, the case falls under
the exclusive jurisdiction of the MTC.
2) There was a misjoinder of parties.
CA: The appellate court affirmed the decision of the
RTC.
1) Under the Totality Rule provided for under
Sec. 19 of BP 129, it is the sum of the two claims
that determines the jurisdictional amount. At the
time this case was heard, cases involving money
claims that amounts to more than P20,000 falls
under the exclusive jurisdiction of the RTC.
2) Even assuming that there was a
misjoinder of parties, it does not affect the
jurisdiction of the court nor is it a ground to dismiss
the complaint. The claims of Gicale and Standard
arose from the same vehicular accident involving
Pantranco's bus and Gicale's jeepney. Thus, there
was a question of fact common to all parties.

Pantranco and Buncan's motion for
reconsideration was denied by the CA.
Gicale and Standard: There was no misjoinder of
parties. Their individual claims arose from the same
vehicular accident and involve a common question
of fact and law. Thus, the RTC has jurisdiction over
the case.
ISSUE: WON there was a misjoinder of parties in the
case.
HELD: No. Sec. 6, Rule 3 of the Revised Rules of
Court provides the following requirements for a
permissive joinder of parties: (a) the right to relief
arises out of the same transaction or series of
transactions; (b) there is a question of law or fact
common to all the plaintiffs or defendants; and (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 multiplicity of suit and
ensures the convenient, speedy and orderly
administration of justice.
There is NO MISJOINDER OF PARTIES if the money
sought to be claimed is in favor of the same
plaintiff/s and against the same defendant/s.
On the issue of lumping together the claims of Gicale
and Standard, Section 5(d), Rule 2 of the same Rules
provides:
Sec. 5. Joinder of causes of action. A party may in
one pleading assert, in the alternative or otherwise,
as many causes of action as he may have against an
opposing party, subject to the following conditions:
x x x (d) Where the claims in all the causes of action
are principally for recovery of money the aggregate
amount claimed shall be the test of jurisdiction.
Further, the Court reiterates the Totality
rule exemplified by Sec. 33 (1) of BP 129: where
there are several claims or causes of action between
the same or different parties, embodied in the same
complaint, the amount of the demand shall be the
totality of the claims in all the causes of action,
irrespective of whether the causes of action arose
out of the same or different transactions.
Hence, PETITION IS DENIED.

Spouses Decena vs. Spouses Piquero [G.R. No.
155736. March 31, 2005]
Post under case digests, Remedial Law at Sunday,
March 04, 2012 Posted by Schizophrenic Mind
Facts: On September 7, 1997, Spouses Danilo and
Cristina Decena executed a Memorandum of
Agreement (MOA) with Spouses Pedro and Valeria
Piquero for the sale of their titled property in
Paranaque, costing P6,900,000.00, for the price of
P940,250.00 only, payable in six (6) installments via
postdated checks. The MOA stipulated that the that
the petitioners obliged themselves to transfer the
property to the respondents upon the execution of
the MOA with the condition that if two of the
postdated checks would be dishonored by the
drawee bank, the latter would be obliged to
reconvey the property to the petitioners. The
vendees forthwith took possession of the property.
The first two checks issued by the respondents were
dishonored by the drawee bank and were not
replaced with cash despite demands by the
petitioners who on May 17, 1999 filed a complaint,
before the RTC of Malolos, Bulacan where they
reside, against the respondents for the annulment of
the sale/MOA, recovery of possession and damages,
alleging that they did not transfer the property to
and in the names of the respondents as a result of
the dishonored checks.
Issue: Whether or not the RTC of Malolos Bulacan
gained jurisdiction over the case and should be
the venue of litigation.
Held: NO.The action of the petitioners for the
rescission of the MOA on account of the
respondents' breach thereof and the latter's failure
to return the premises subject of the complaint to
the petitioners, and the
respondents' eviction therefrom is a real action. As
such, the action should have been filed in the
proper court where the property is located, namely,
in Pararaque City, conformably with Section 1, Rule 4
of the Rules of Court
The action of the petitioners for the rescission of the
MOA on account of the respondents' breach thereof
and the latter's failure to return the premises subject
of the complaint to the petitioners, and the
respondents' eviction therefrom is a real action. As
such, the action should have been filed in the
proper court where the property is located, namely,
in Pararaque City, conformably with Section 1, Rule 4
of the Rules of Court which reads:
SECTION 1. Venue of real actions. ' Actions affecting
title to or possession of real property, or interest
therein, shall be commenced and tried in the
proper court which has jurisdiction over the area
wherein the real property involved, or a portion
thereof, is situated.
Since the petitioners, who were residents of Malolos,
Bulacan, filed their complaint in the said
RTC, venue was improperly laid; hence, the
trial court acted conformably with Section 1(c), Rule
16 of the Rules of Court when it ordered the
dismissal of the complaint.

UNIWIDE HOLDINGS INC vs CRUZ Case Digest
UNIWIDE HOLDINGS, INC., v. ALEXANDER M.
CRUZ
529 SCRA 664 (2007), SECOND DIVISION
(Carpio Morales, J.)
Where there is a joinder of causes of action
between the same parties one of which does
not arise out of the contract where the
exclusive venue was stipulated upon, the
complain may be brought before other
venues.
FACTS: Uniwide Holdings, Inc. entered into a
franchise agreement with Alexander M. Cruz
granting the latter a five-year franchise to adopt and
use the Uniwide Family Store System for the
establishment and operation of a Uniwide Family
Store in Marikina City.
The contract stipulated that Cruz will pay a monthly
service fee of P50,000.00 or three percent of gross
monthly purchases, whichever is higher to UHI,
payable within five days after the end of each month
without need of formal billing or demand from UHI.
In case of any delay in the payment of the monthly
service fee, Cruz would, under Article 10.3 of the
agreement, be liable to pay an interest charge of
three percent per month. Cruz thereafter purchased
goods from UHI's affiliated companies First Paragon
Corporation (FPC) and Uniwide Sales Warehouse
Club, Inc. (USWCI).
FPC and USWCI subsequently executed Deeds of
Assignment in favor of UHI assigning all their rights
and interests over Cruzs accounts payable to them.
Cruz had outstanding obligations with UHI, FPC and
USWCI in the amount of P1, 358, 531.89.00. UHI sent
a letter demanding for the payment of such amount
but it was not settled.
Thus, UHI filed a complaint for collection of sum of
money before the Regional Trial Court of Paraaque
against Cruz praying for payment of service fee,
accounts payable to FPC and USWCI and attorneys
fees and litigation expenses.
Cruz filed a Motion to Dismiss on the ground of
improper venue. He invokes Article 27.5 of the
agreement which provides that exclusive jurisdiction
is vested with the courts f Quezon City. The trial
court granted the Motion to Dismiss.
ISSUE: Whether or not a case based on several
causes of action is dismissible on the ground of
improper venue where only one of the causes of
action arises from a contract with exclusive venue
stipulation
HELD: In this case, UHI contended that nowhere in
the agreement is there a mention of FPC and USWCI,
and neither are the two parties thereto, hence, they
cannot be bound to the stipulation on exclusive
venue. The Court found merit in this contention.
The Supreme Court cited Section 2, Rule 4 of the
Rules of Court which provides that all other actions
may be commenced and tried where the plaintiff or
any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides,
or in the case of a nonresident defendant, where he
may be found, at the election of the plaintiff.
The forging of a written agreement on an exclusive
venue of an action does not, however, exclude
parties from bringing a case to other venues.
Where there is a joinder of causes of action between
the same parties one of which does not arise out of
the contract where the exclusive venue was
stipulated upon, the complaint, as in the one at bar,
may be brought before other venues provided that
such other cause of action falls within the jurisdiction
of the court and the venue lies therein.
It bears emphasis that the causes of action on the
assigned accounts are not based on a breach of the
agreement between UHI and Cruz. They are based
on separate, distinct and independent contracts-
deeds of assignment in which UHI is the assignee of
Cruzs obligations to the assignors FPC and USWCI.
Thus, any action arising from the deeds of
assignment cannot be subjected to the exclusive
venue stipulation embodied in the agreement.
Lordes v Binaro
Facts:
Lourdes Suites filed before the MeTC a small-claims
complaint against Binaro for nonpayment of penalty
charges on its rented rooms. Binaro responded with
a counterclaim. Lourdes Suites impugned the validity
of Binaros pleading stating that it did not comply
with the form of an Answer as required in Rule 11,
Sec 1 of the Rules of Court.
The MeTC, after evaluating the evidence, dismissed
the complaint with prejudice for lack of cause of
action. Lourdes Suites filed a certiorari before the
RTC arguing that lack of cause of action is not a valid
ground for dismissal of cases, much more a dismissal
with prejudice. It contends that a complaint even
after the presentation of evidence cannot be
dismissed on ground of lack of cause of action
because it is not expressly provided for under the
Rules on Small Claims Cases and the Rules of Civil
Procedure, and that if there was a failure to prove a
cause of action the only available remedy would be a
demurrer filed by the defendant.
The RTC ruled that there was no grave of abuse of
discretion on the part of the MeTC. The MR was also
denied. Hence, Lourdes Suites brought the issue to
the SC via petition for review under Rule 45.
Issue: W/N dismissal on the ground of lack of cause
of action is proper under the Rules of Court
Yes. The courts are not precluded from dismissing a
case for lack of cause of action such as insufficiency
of evidence. In civil cases, courts must determine if
the plaintiff was able to prove his case by a
preponderance of evidence.
The basis of the MeTC in dismissing the complaint for
lack of cause of action is the failure of plaintiff to
preponderantly establish its claim by clear and
convincing evidence. Hence, MeTC did not commit
grave abuse of discretion when it dismissed the
Complaint for lack of cause of action, as it referred to
the evidence presented and not to the allegations in
the Complaint.
The dismissal of the complaint with prejudice is
likewise not an exercise of wanton or palpable
discretion. This case is an action for small claims
where decisions are rendered final and
unappealable; hence, a decision dismissing it is
necessarily with prejudice.
V. Rule 3 Sections 1 to 3: Parties to a Civil
Action
C. PARTIES
PLAINTIFF
One having an interest in the matter of the action or
in obtaining the relief demanded. The term may
either refer to the claiming party, counter-claimant,
cross-claimant, or third-party plaintiff. [Sec. 1, Rule
3]
DEFENDANT One claiming an interest in the
controversy or the subject thereof adverse to the
plaintiff.
Term may refer to the original defending party, the
defendant in a counterclaim, the cross-defendant, or
the third (fourth, etc.)- party defendant. [Sec. 1, Rule
3] It also includes an unwilling co-plaintiff, or one
who should be joined as plaintiff but refuses to give
his consent thereto. [Sec. 10, Rule 3]
Who may be Parties [Sec. 1, Rule 3]
(1) Natural persons;
(2) Juridical persons [Art. 44, Civil Code];
(a) The State and its political subdivisions;
(b) Other corporations, institutions and entities for
public interest or public purpose, created by law; and
(c) Corporations, partnerships, and associations for
private interest or purpose to which the law grants a
judicial personality, separate and distinct from that
of each shareholder, partner, or member.
(3) Entities authorized by law. [Riano]
C.1 REAL PARTY-IN-INTEREST
REAL PARTY-IN-INTEREST
The party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the
avails of the suit. [Sec. 2, Rule 3] Interest means
material interest or an interest in issue to be
affected by the decree or judgment of the case, as
distinguished from mere curiosity about the question
involved. [Ang v. Sps. Ang, G.R. No. 186993 (2012)]
The interest must be real, which a present and
substantial interest as distinguished from a mere
expectancy or a future, contingent, subordinate, or
consequential interest. [Rayo v. Metrobank, G.R. No.
165142]
It should be material and direct, as distinguished
from a mere incidental interest.[Mayor Rhustam
Dagadag v. Tongnawa, G.R.
No. 161166-67 (2005)]
Unless authorized by law or the Rules, every action
must be prosecuted or defended in thename of the
real party in interest. [Sec. 2, Rule 3]
Husband and wife shall sue and be sued jointly,
except as provided by law. [Sec. 4, Rule 3]
Exceptions:
(1) Judicial separation of property
(2) Abandonment
(3) Exclusive property of spouses
(4) Suits with respect to the practice of profession
REPRESENTATIVES AS PARTIES
A representative is one acting in fiduciary capacity,
such as a trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by
law or the Rules of Court. [Sec. 3, Rule 3]
Where the action is allowed to be prosecuted or
defended by a representative party, the beneficiary
shall be included in the title of the case and shall be
deemed to be the real party in interest. An agent
acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without
joining the principal, except if the contract involves
things belonging to the principal.
A minor or a person alleged to be incompetent may
sue or be sued, with the assistance of his father,
mother, guardian, or if he has none, a guardian ad
litem. [Sec. 5, Rule 3]
Minors (represented by their parents) are real parties
in interest under the principle of intergenerational
responsibility. [Oposa v. Factoran, G.R. No. 101083
(1993)]
Failure to Name a Real Party-in- Interest
If the suit is not brought in the name of or against
the real party-in-interest, a Motion to Dismiss may be
filed on the ground that the complaint states no
cause of action. [Balagtas v. CA, G.R. No. 109073
(1999)]]
Remedies:
(1) Amendment of pleadings [Alonso v. Villamor, G.R.
No. L-2352 (1910)]; or
(2) Complaint may be deemed amended to include
the real party-in-interest [Balquidra v. CFI Capiz, G.R.
No. L-40490 (1977)]
As an exception, the real litigant may be held bound
as a party even if not formally impleaded provided
he had his day in court.
[Albert v. University Publishing Co., G.R. No. L- 9300
(1958)]
C.2. INDISPENSABLE AND NECESSARY PARTIES
INDISPENSABLE PARTY
A real party-in-interest without whom no final
determination can be had of an action.
[Sec. 7, Rule 3]
NECESSARY PARTY
Not an indispensable party but ought to be joined as
a party if complete relief is to be accorded as to
those already parties, or for a complete
determination or settlement of the claim subject of
the action [Sec. 8, Rule 3]Although joinder of parties
is generally permissive [Sec. 6, Rule 3] the joinder of
a party becomes compulsory when the oneinvolved
is an indispensable party. [Sec. 7, Rule 3]
A person is not an indispensable party if his interest
in the controversy or subject matter is separable
from the interest of the other parties, so that it will
not necessarily be directly or injuriously affected by
a decree which does not complete justice between
them. [Riano]
Iron and Steel Authority vs. Court
of AppealsGR No. 102976, October 25, 1995
FACTS:The Iron and Steel Authority (ISA) was created
by PD No. 272, in order, generally,
to develop and promote theiron and steel industry
in the Philippines. Initially, it was created for a term
of 5 years but when its original term expired,its term
was extended for another 10 years by EO No. 555.
The National Steel Corporation (NSC) then a wholly
ownedsubsidiary of the National Development
Corporation which is an entity wholly owned by the
National Governmentembarked on an expansion
program which includes the construction of a steel
mill in Iligan City. Proclamation No. 2239was issued
by the President withdrawing from sale or settlement
a tract of land in Iligan City to be used by the
NSC.However, certain portions of the public land
under Proclamation 2239 were occupied by Maria
Cristina Fertilizer Co.(MCFC). LOI No. 1277 was
issued directing NSC to negotiate with the owners of
MCFC for and on behalf of the
Government for the compensation of MCFCs present
occupancy rights on the subject land. The LOI
directed that ISA
may exercise the power of eminent domain should
the negotiations fail. The negotiations failed and ISA
commencedexpropriation proceedings against MCFC.
While trial was on-going the statutory existence of
ISA had expired promptingMCFC to file the dismissal
of the case since ISA has ceased to be a juridical
person.
The trial court granted
MCFCs motion
to dismiss anchoring on the Rules of Cour
t that only natural or juridical persons or entities
authorized by law may be parties to a civil case.
ISA moved for a reconsideration contending that
despite the expiration of its term, its
juridicialexistence continued until the winding up of
its affairs could be completed. In the alternative ISA
urged that the Rep. ofthe Philippines should be
allowed to be substituted in its place. The RTC
denied its motion for reconsideration. This
wasaffirmed by the CA.
ISSUE:Whether or not the Republic of the Philippines
is entitled to be substituted for ISA in view of the
expiration of
ISAs term.
HELD:There is no provision in PD No. 272 recognizing
ISA as possessing general or comprehensive juridical
personalityseparate and distinct from that of the
Government. ISA in fact appears to be a non-
incorporated agency orinstrumentality of the
Government of the Republic of the Philippines.
It is common knowledge that other agencies
orinstrumentalities of the Government of the
Republic are case in corporate form, that is to say,
are incorporated agenciesor instrumentalities, Republic, no special statutory provision having been
sometimes with and other times without capital shown to have mandated succession thereto by
stock, and accordingly vested with a some otherentity or agency of the Republic.
juridical personality distinct from the personality of t It follows that the Republic of the Philippines is
he Republic. entitled to be substituted in the expropriation
The term Authority has been used t proceedings as party-
o designate bothincorporated and non-incorporated plaintiff in lieu of ISA, the statutory term of ISA
agencies or instrumentalities of the Government. having expired. The expiration of ISAs statutory
The Court considers that ISA is properly regarded as did not by itself
an agent or delegate of the Republic of the require or justify the dismissal of the eminent
Philippines. domain proceedings. Further, no new legislative act
TheRepublic itself is a body corporate and juridical is necessary should theRepublic decide, upon being
person vested with full panoply of powers and substituted for ISA, in fact to continue to prosecute
attributes which are the expropriation proceedings
compendiously described as legal personality.
When the statutory term of a non-incorporated RALA V RALA, TAMPINGCO no digest
agency expires, the powers, duties and functions as
well as theassets and liabilities of that agency revert
back to, and are re-assumed by, the Republic of the
Philippines, in the absenceof special provisions of
law specifying some other disposition thereof
such as e.g. devolution or transmission of
such powers, duties, functions, etc. to some other id
entified successor agency or instrumentality of the R
epublic of thePhilippines. When the expiring agency
is an incorporated one, the consequences of such
expiry must be looked for, in the first instance, in the
charter of that agency and, by way
of supplementation in the provisions of the
Corporation Code.
Since ISA is a non-incorporated agency or
instrumentality of the Republic, its powers, duties,
functions, assets andliabilities are properly regarded
as folded back into the Government of the
Philippines and hence assumed once again bythe

FACTS: Sometime in 1996, Sabas Limbaring
subdivided his Lot 2325-D, covered by Transfer
Certificate of Title (TCT) No. 5268, into two lots
denominated as Lot Nos. 2325-D-1 and 2325-D-2. He
then executed in favor of Jennifer Limbaring a Deed
of Sale for Lot 2325-D-2 for P60,000; and, in favor of
Sarah Jane Limbaring, another Deed for Lot 2325-D-1
for P14,440. Accordingly, TCT No. 5268 was
cancelled and TCT Nos. T-21921 and T-21920 were
issued in the names of Jennifer and Sarah Jane,
respectively. Sensing some irregularities in the
transaction, Percita Oco, the daughter of Sabas
Limbaring, left Puerto Princesa City and went to
Ozamis City. She then filed a case of perjury and
falsification of documents against respondent, her
uncle who was the father of Jennifer and Sarah Jane.
During the pre-litigation conference called by City
Prosecutor Luzminda Uy on July 1, 1996, the parties
agreed that the two parcels of land should be
reconveyed to Percita, who was to pay respondent
all the expenses that had been and would be
incurred to transfer the titles to her name.
ISSUE: Was there a trust created between Limbaring
when he purchased the properties in favor of his
daughter.
RULING: No, Under the last sentence of Article 1448,
respondent's alleged acts paying the price of the
subject properties and, in the titles, naming his
children as owners -- raise the presumption that a
gift was effected in their favor. Respondent failed to
rebut this presumption. Absent any clear proof that a
trust was created, he cannot be deemed a real party
in interest.49 That he should be deemed a trustor on
the basis merely of having paid the purchase price is
plainly contradicted by the presumption based on
Article 1448 of the Civil Code "that there is a gift in
favor of the child," not with parent.
Pascual vs. Pascual [G.R. No. 84240. March 25, 1992]
15AUG
Ponente: PARAS, J.
FACTS:
Don Andres Pascual died intestate (on October 12,
1973) without any issue, legitimate, acknowledged
natural, adopted or spurious children. Petitioners
Olivia and Hermes both surnamed Pascual are the
acknowledged natural children of the late Eligio
Pascual, the latter being the full blood brother of the
decedent Don Andres Pascual. Petitioners filed their
Motion to Reiterate Hereditary Rights and the
Memorandum in Support of Motion to reiterate
Hereditary Rights. the Regional Trial Court, presided
over by Judge Manuel S. Padolina issued an order,
the dispositive portion of which resolved to deny this
motion reiterating their hereditary rights. Their
motion for reconsideration was also denied.
Petitioners appealed their case to the Court of
Appeals, but like the ruling of CA, their motion for
reconsideration was also dismissed. In this petition
for review on certiorari, petitioners contend that they
do not fall squarely within the purview of Article 992
of the Civil Code of the Philippines, can be
interpreted to exclude recognized (and
acknowledged) natural children as their illegitimacy
is not due to the subsistence of a prior marriage
when such children were under conception.
ISSUE:
Whether or not Article 992 of the Civil Code of the
Philippines, can be interpreted to exclude recognized
natural children from the inheritance of the
deceased.
HELD:
NO. Petition is devoid of merit.
RATIO:
The issue in the case at bar, had already been laid to
rest in Diaz v. IAC, where this Court ruled that
under Art.992 of the Civil Code, there exists a barrier
or iron curtain in that it prohibits absolutely a
succession ab intestado between the illegitimate
child and the legitimate children and relatives of the
father or mother of said legitimate child.
[T]he interpretation of the law desired by the
petitioner may be more humane but it is also an
elementary rule in statutory construction that when
the words and phrases of the statute are clear and
unequivocal, their meaning must be determined
from the language employed and the statute must
be taken to mean exactly what is says.
Eligio Pascual is a legitimate child but petitioners are
his illegitimate children and the term illegitimate
refers to both natural and spurious. It may be said
that the law may be harsh but that is the law (DURA
LEX SED LEX)
JOWETT K. GOLANGCO, Petitioner, vs. JONE B.
FUNG, Respondent.
G.R. No. 157952 September 8, 2009
BERSAMIN, J.:
FACTS:
Golangco,(1995) as a complainant initiated a
prosecution for libel against the respondent Fung in
RTC. Allegedly, the respondent had issued an office
memorandum dated May 10, 1995 maliciously
imputing against the petitioner the commission of
bribery and had sent copies of the memorandum to
the petitioners superiors in the POEA and to other
public officers and personalities not connected with
the POEA, causing damage and prejudice to the
petitioner.
On Hearing day the Prosecution still failed to present
Atty. Ramos as its witness because no subpoena had
been issued to and served on him for the purpose.
RTC judge issued an order terminating the
Prosecutions presentation of evidence
Pet. went to CA on certiorari to assail the order and
claimed that the RTC judge committed grave abuse
of discretion for not issuing the subpoena to require
Atty. Ramos to appear and testify in the May 23,
2001 hearing. He contended that his prior request
for the subpoena for the February 20, 2001 hearing
should have been treated as a continuing request for
the subpoena considering that the Rules of Court did
not require a party to apply for a subpoena again
should it not be served in the first time.
Court of Appeals rejected the petitioner and
dismissed the petition for certiorari
Hence , a Petition for review on certiorari was filed in
SC.
ISSUE:
Whether the Court of Appeals correctly ruled on the
petition for certiorari of the petitioner?YES
RULING:
The gross procedural misstep committed by the
petitioner in the Court of Appeals
The petitioner did not join the People of the
Philippines as a party in his action for certiorari in
the Court of Appeals. He ignored that the People
of the Philippines were indispensable parties
due to his objective being to set aside the trial
courts order dated May 23, 2001 that concerned the
public aspect of Criminal Case The omission was
fatal and already enough cause for the summary
rejection of his petition for certiorari.
The petitioner did not also obtain the consent of the
Office of the Solicitor General (OSG) to his petition
for certiorari. At the very least, he should have
furnished a copy of the petition for certiorari to the
OSG prior to the filing. Pet. violated Administrative
Code which mandates the OSG to represent the
Government in the Supreme Court and the
Court of Appeals in all criminal proceedings;
represent the Government and its officers in
the Supreme Court, the Court of Appeals, and
all other courts or tribunals in all civil actions
and special proceedings in which the
Government or any officer thereof in his official
capacity is a party.
Therefore, the trial judge did not act capriciously,
arbitrarily or whimsically in issuing the assailed
order. Thus, the Court of Appeals properly dismissed
the petition for certiorari.
Equitable PCI Bank, Inc. (now known as Banco
De Oro-EPCI, Inc.) vs. Heirs of Antonio
Tiu,namely: Arlene T. Fu, Michael U. Tiu,
Andrew U. Tiu, Edgar U. Tiu and Erwin U. Tiu
G.R. No.178529, September 4, 2009 // Carpio
Morales, J:
Provision on parties in interest of the Rules
of Court
FACTS
:In 1994, Antonio Tiu (deceased), father of herein
respondents, executed a REAL ESTATE MORTGAGEin
favor of petitioner covering a lot (registered in his
name) located in Tacloban City in order to securethe
indebtedness of one Gabriel Ching. 4 years
thereafter, Antonio executed an
Amendment to the RealEstate Mortgage
(AREM) increasing the amount secured by the
mortgage. Said mortgage as well as its amendment
bore the signature of Antonios wife, Matilde, above
the words With my Marital Consent.
Since the loan obligation remained unsettled,
petitioner (Equitable PCI Bank, now known as Banco
deOro-EPCI, Inc.) filed before the Regional Trial Court
(RTC) of Tacloban City
a
Petition for Sale
for
the extrajudicial foreclosure of the AREM and the
sale at public auction of the lot
covered thereby. Thesame was granted by the RTC
Clerk of Court. However, the public auction sale did
not push through asscheduled because of the TRO
issued by the RTC after the respondents (children of
Antonio) filed aComplaint for the annulment of the
AREM with a prayer for the issuance of a TRO and
writ of preliminary injunction and damages. They
alleged, among others, that the AREM is null and
void becauseit did not bear the signature of their
mother, who, according to them, was then already
suffering from Alzheimers disease.
In response to said Complaint, the petitioner filed a
MOTION TO DISMISS
, arguing among others that
1) the complaint states
no cause of action
because respondents are
not the real parties in interest
; 2) thecause of action has already
prescribed
; 3) the venue is improperly laid
. The RTC, however, denied themotion, stating that
respondents are real parties in interest because t
hey stand to be benefited or injuredby the
action as their inheritance
(as heirs of the deceased) is at stake. Hence, the
petitioner filed a petition for certiorari,
prohibition and mandamus before the CA which was
again denied. Hence, this petition.
ISSUE
: Whether or not the complaint for the annulment of
the AREM filed by respondents-children ofAntonio
states a cause of action notwithstanding the fact
that their mother, Matilde (who
principallyobliged under the AREM) was
not impleaded.
HELD
: The petition for certiorari was
GRANTED
by the SC. The Court held that it is Matilde,
Antonios wife, and
NOT HER CHILDREN
, who should have filed the instant suit.Settled is the
rule that every action must be prosecuted or
defended in the name of the real party ininterest
(Sec. 2, Rule 3 of the Rules of Court). In annulment of
contracts, Art. 1397 of the Civil Code provides that
the suit may be instituted by all who are
thereby obliged principally or subsidiarily xxx.In the
case at bar, the AREM was executed by Antonio, with
the marital consent of Matilde. Since themortgaged
property is presumed conjugal, she is the
one obliged principally under the AREM. It is thusshe,
following Art. 1397 of the Civil Code vis a vis Sec. 2
of Rule 3 of the Rules of Court, who is the real
party in interest, hence, the action must be
prosecuted in her name as she stands to be
benefited or injuredin the action.Assuming that
Matilde is indeed incapacitated, it is her legal
guardian who should file the action on
her behalf. Not only is there no allegation in the
complaint, that respondents have been legally
designated asguardians to file the action on her
behalf, the name of Matilde (who is deemed the real
party in interest)was likewise not included in the title
was of the case, in violation of Sec. 3 of Rule 3 of the
Rules of Court.
V-GENT no digest

Cameron Granville Asset Mgt. vs. Chua no digest
Case Digest: DOH v. Phil Pharmawealth
G.R. No. 182358 : February 20, 2013
DEPARTMENT OF HEALTH, THE SECRETARY OF
HEALTH, and MA. MARGARITA M. GALON,
Petitioners, v .PHIL PHARMAWEALTH, INC.,
Respondent.
DEL CASTILLO, J.:
FACTS:
On August 28, 2000, the DOH issued Memorandum
No. 171-C which provided for a list and category of
sanctions to be imposed on accredited government
suppliers of pharmaceutical products in case of
adverse findings regarding their products (e.g.
substandard, fake, or misbranded) or violations
committed by them during their accreditation.
In line with Memorandum No. 171-C, the DOH,
through former Undersecretary Ma. Margarita M.
Galon(Galon), issued Memorandum No. 209 series of
2000,inviting representatives of 24 accredited drug
companies, including herein respondent Phil
Pharmawealth, Inc. (PPI) to a meeting on October 27,
2000. During the meeting, Undersecretary Galon
handed them copies of a document entitled "Report
on Violative Products"issued by the Bureau of Food
and Drugs (BFAD), which detailed violations or
adverse findings relative to these accredited drug
companies products. Specifically, the BFAD found
that PPI products which were being sold to the public
were unfit for human consumption.
During the October 27, 2000 meeting, the 24 drug
companies were directed to submit within 10 days,
or until November 6, 2000, their respective
explanations on the adverse findings covering their
respective products contained in the Report on
Violative Products.
Instead of submitting its written explanation within
the 10-day period as required, PPI belatedly sent a
letter dated November 13, 2000 addressed to
Undersecretary Galon, informing her that PPI has
referred the Report on Violative Products to its
lawyers with instructions to prepare the
corresponding reply. However, PPI did not indicate
when its reply would be submitted; nor did it seek an
extension of the 10-day period, which had previously
expired on November 6, 2000, much less offer any
explanation for its failure to timely submit its reply.
In a letter-reply dated November 23, 2000
Undersecretary Galon found "untenable" PPI
November 13, 2000 letter and therein informed PPI
that, effective immediately, its accreditation has
been suspended for two years pursuant to AO 10
and Memorandum No. 171-C.
In another December 14, 2000 letter addressed to
Undersecretary Galon, PPI through counsel
questioned the suspension of its accreditation,
saying that the same was made pursuant to Section
VII of AO 10 which it claimed was patently illegal and
null and void because it arrogated unto the DOH
Accreditation Committee powers and functions which
were granted to the BFAD under Republic Act (RA)
No. 3720 and Executive Order (EO) No. 175. PPI
added that its accreditation was suspended without
the benefit of notice and hearing, in violation of its
right to substantive and administrative due process.
It thus demanded that the DOH desist from
implementing the suspension of its accreditation,
under pain of legal redress.
On December 28, 2000, PPI filed before the Regional
Trial Court of Pasig City a Complaint seeking to
declare null and void certain DOH administrative
issuances, with prayer for damages and injunction
against the DOH, former Secretary Romualdez and
DOH Undersecretary Galon.
In their Amended Answer,the DOH, former Secretary
Romualdez, then Secretary Dayrit, and
Undersecretary Galon sought the dismissal of the
Complaint, stressing that PPI accreditation was
suspended because most of the drugs it was
importing and distributing/selling to the public were
found by the BFAD to be substandard for human
consumption. They added that the DOH is primarily
responsible for the formulation, planning,
implementation, and coordination of policies and
programs in the field of health; it is vested with the
comprehensive power to make essential health
services and goods available to the people, including
accreditation of drug suppliers and regulation of
importation and distribution of basic medicines for
the public.
In a January 8, 2001 Order, the trial court partially
granted PPI prayer for a temporary restraining order,
but only covering PPI products which were not
included in the list of violative products or drugs as
found by the BFAD.
In a Manifestation and Motion dated July 8, 2003,
petitioners moved for the dismissal of Civil Case No.
68200, claiming that the case was one against the
State; that the Complaint was improperly verified;
and lack of authority of the corporate officer to
commence the suit, as the requisite resolution of PPI
board of directors granting to the commencing
officer PPI Vice President for Legal and
Administrative Affairs, Alan Alambra, the authority to
file Civil Case No. 68200 was lacking. The trial court
dismissed Civil Case No. 68200, declaring the case
to be one instituted against the State, in which case
the principle of state immunity from suit is
applicable.
On appeal, the CA, in the herein assailed Decision,
reversed the trial court ruling and ordered the
remand of the case for the conduct of further
proceedings. The CA concluded that it was
premature for the trial court to have dismissed the
Complaint. The CA further held that instead of
dismissing the case, the trial court should have
deferred the hearing and resolution of the motion to
dismiss and proceeded to trial. It added that it was
apparent from the Complaint that petitioners were
being sued in their private and personal capacities
for acts done beyond the scope of their official
functions. Thus, the issue of whether the suit is
against the State could best be threshed out during
trial on the merits, rather than in proceedings
covering a motion to dismiss.
ISSUE: Whether or not Civil Case No. 68200 should
be dismissed for being a suit against the State?
HELD: Civil Case No. 68200 should be
dismissed.
The doctrine of non-suability - This Court in
Department of Agriculture v. National Labor
Relations Commission discussed:
The basic postulate enshrined in the constitution
that the State may not be sued without its consent,
reflects nothing less than a recognition of the
sovereign character of the State and an express
affirmation of the unwritten rule effectively
insulating it from the jurisdiction of courts. It is
based on the very essence of sovereignty. x x x [A]
sovereign is exempt from suit, not because of any
formal conception or obsolete theory, but on the
logical and practical ground that there can be no
legal right as against the authority that makes the
law on which the right depends. True, the doctrine,
not too infrequently, is derisively called the royal
prerogative of dishonesty because it grants the state
the prerogative to defeat any legitimate claim
against it by simply invoking its nonsuability. We
have had occasion to explain in its defense,
however, that a continued adherence to the doctrine
of non-suability cannot be deplored, for the loss of
governmental efficiency and the obstacle to the
performance of its multifarious functions would be
far greater in severity than the inconvenience that
may be caused private parties, if such fundamental
principle is to be abandoned and the availability of
judicial remedy is not to be accordingly restricted.
The rule, in any case, is not really absolute for it
does not say that the state may not be sued under
any circumstance. On the contrary, as correctly
phrased, the doctrine only conveys, the state may
not be sued without its consent; it's clear import
then is that the State may at times be sued. The
State consent may be given either expressly or
impliedly. Express consent may be made through a
general law or a special law. x xx Implied consent, on
the other hand, is conceded when the State itself
commences litigation, thus opening itself to a
counterclaim or when it enters into a contract. In this
situation, the government is deemed to have
descended to the level of the other contracting party
and to have divested itself of its sovereign immunity.
This rule, x x x is not, however, without qualification.
Not all contracts entered into by the government
operate as a waiver of its non-suability; distinction
must still be made between one which is executed in
the exercise of its sovereign function and another
which is done in its proprietary capacity.
As a general rule, a state may not be sued. However,
if it consents, either expressly or impliedly, then it
may be the subject of a suit. There is express
consent when a law, either special or general, so
provides. On the other hand, there is implied consent
when the state "enters into a contract or it itself
commences litigation." However, it must be clarified
that when a state enters into a contract, it does not
automatically mean that it has waived its non-
suability. The State "will be deemed to have
impliedly waived its non-suability [only] if it has
entered into a contract in its proprietary or private
capacity. [However,] when the contract involves its
sovereign or governmental capacity[,] x x x no such
waiver may be implied.""Statutory provisions
waiving [s]tate immunity are construed in strictissimi
juris. For, waiver of immunity is in derogation of
sovereignty."
The DOH can validly invoke state immunity.
The DOH is an unincorporated agency which
performs sovereign or governmental functions
because it has not consented, either expressly
or impliedly, to be sued. Significantly, the DOH
is an unincorporated agency which performs
functions of governmental character.
As regards the other petitioners, to wit, Secretaries
Romualdez and Dayrit, and Undersecretary Galon, it
must be stressed that the doctrine of state immunity
extends its protective mantle also to complaints filed
against state officials for acts done in the discharge
and performance of their duties. "The suability of a
government official depends on whether the official
concerned was acting within his official or
jurisdictional capacity, and whether the acts done in
the performance of official functions will result in a
charge or financial liability against the government."
Otherwise stated, "public officials can be held
personally accountable for acts claimed to have
been performed in connection with official duties
where they have acted ultra vires or where there is
showing of bad faith."
It is beyond doubt that the acts imputed against
Secretaries Romualdez and Dayrit, as well as
Undersecretary Galon, were done while in the
performance and discharge of their official functions
or in their official capacities, and not in their
personal or individual capacities. Secretaries
Romualdez and Dayrit were being charged with the
issuance of the assailed orders. On the other hand,
Undersecretary Galon was being charged with
implementing the assailed issuances. By no stretch
of imagination could the same be categorized as
ultra vires simply because the said acts are well
within the scope of their authority. Section 4 of RA
3720 specifically provides that the BFAD is an office
under the Office of the Health Secretary. Also, the
Health Secretary is authorized to issue rules and
regulations as may be necessary to effectively
enforce the provisions of RA 3720. As regards
Undersecretary Galon, she is authorized by law to
supervise the offices under the DOH authority, such
as the BFAD. Moreover, there was also no showing of
bad faith on their part. The assailed issuances were
not directed only against PPI. The suspension of PPI
accreditation only came about after it failed to
submit its comment as directed by Undersecretary
Galon. It is also beyond dispute that if found
wanting, a financial charge will be imposed upon
them which will require an appropriation from the
state of the needed amount. Thus, based on the
foregoing considerations, the Complaint against
them should likewise be dismissed for being a suit
against the state which absolutely did not give its
consent to be sued. Based on the foregoing
considerations, and regardless of the merits of PPI
case, this case deserves a dismissal. Evidently, the
very foundation of Civil Case No. 68200 has
crumbled at this initial juncture.
Case Title: Air Transportation Office (ATO)
v. Sps. David and Elisea Ramos
G.R. no and Date: G.R. No. 159402
February 23, 2011
Ponente: Justice Bersamin
Facts
Sps. Ramos discovered that a portion of their land
(somewhere in Baguio) was being used as part of the
runway and running shoulder of the Loakan Airport
which is operated by ATO. Sometime in 1995,
respondents agreed to convey the subject portion by
deed of sale to ATO in consideration of the amount
of Php778,150.00. However, ATO failed to pay
despite repeated verbal and written demands. Thus,
an action for collection against ATO was filed by the
respondents before the RTC. ATOs primary
contention was that the deed of sale was entered
into the performance of governmental functions. RTC
ruled in favor of the respondents. CA affirmed RTC.
Hence, the petition.
Issue/s
Whether ATO could be sued without the States
consent.
Ruling/s
SC dismissed the petition for lack of merit.
The States immunity from suit does not extend to
the petitioner (ATO) because it is an agency of the
State engaged in an enterprise that is far from being
the States exclusive prerogative. The CA thereby
correctly appreciated the juridical character of the
ATO as an agency of the Government not performing
a purely governmental or sovereign function, but
was instead involved in the management and
maintenance of the Loakan Airport, an activity that
was not the exclusive prerogative of the State in its
sovereign capacity. Hence, the ATO had no claim to
the States immunity from suit. The SC further
observes that the doctrine of sovereign immunity
cannot be successfully invoked to defeat a valid
claim for compensation arising from the taking
without just compensation and without the proper
expropriation proceedings being first resorted to of
the plaintiffs property.
Lastly, the issue of whether or not the ATO could be
sued without the States consent has been rendered
moot by the passage of Republic Act No. 9497,
otherwise known as the Civil Aviation Authority Act
of 2008. R.A. No. 9497 abolished the ATO and under
its Transitory Provisions, R.A. No. 9497 established in
place of the ATO the Civil Aviation Authority of the
Philippines (CAAP), which thereby assumed all of the
ATOs powers, duties and rights, assets, real and
personal properties, funds, and revenues. Section 23
of R.A. No. 9497 enumerates the corporate powers
vested in the CAAP, including the power to sue and
be sued, to enter into contracts of every class, kind
and description, to construct, acquire, own, hold,
operate, maintain, administer and lease personal
and real properties, and to settle, under such terms
and conditions most advantageous to it, any claim
by or against it. With the CAAP having legally
succeeded the ATO pursuant to R.A. No. 9497, the
obligations that the ATO had incurred by virtue of the
deed of sale with the Ramos spouses might now be
enforced against the CAAP.
39. AMERICAN EXPRESS plaintiff-appellee, vs.
CIRIO H. SANTIAGO defendant-appellant
This case is on appeal directly to this Court by the
defendant from the decision of the Court of First
Instance of Manila in its Civil Case No. 48318,
sentencing him to pay the plaintiff the amount of
$15,297.53, plus interest at the legal rate from the
date the complaint was filed and 25% of the amount
due by way of attorneys fees.
FACTS:
Defendant, Santiago applied for a credit card
to the plaintiff at the latter's office in New York
City and upon such application the
corresponding American Express Credit Card
(AmEx) was issued to him.
He used it in making purchases and obtaining
services on credit in various foreign countries.
The credit charges he obtained ran up to a
total of $15,297.53.
In September 1961 AmEX made demands for
payment upon Santiago, the latter refused to
pay.
The AmEx filed the presented suit for
collection.
Santiago, in his answer to the complaint,
alleged that the AmEx has no cause of action
against him, not being the real party in
interest, the credit card issued by AmEx was
merely to introduce the appellant to the
different establishments from which he made
purchases and obtained services on credit and
that it was these establishments who should
properly have brought the suit.
The lower court, held that the stores or
establishments which sold goods and services
to the appellant on credit "bills the American
Express Corporation which settles the accounts
directly and, in turn bills the customers who
possess the credit cards, in other words, with
the possession of the credit card, the
possessor could purchase on credit from any
store, and he could do that because the
purchases on credit are backed-up by the
American Express Corporation thru the credit
card. This corporation pays for the purchase
and AmEx has to reimburse such payment to
the owner of the credit card."
Santiago presented no evidence in his behalf.
On the other hand AmEx presented as
evidence not only the application signed by
the appellant for the issuance of the credit
card, manifesting conformity to the condition
therein stated but also the testimony, in the
form of deposition upon written
 interrogatories, of its employee, George R. de
Salvio,
The other points raised by Santiago in his brief
have to do with certain objections mostly on
technical grounds, such as, for example, that
the matter sought to be elicited from the
witness had already been admitted in the
stipulation of facts, or that it was irrelevant
and immaterial; that the question was leading,
or vague, or sought to obtain from the witness
a conclusion.
Santiago also objected to the admission of the
deposition as a whole on the ground that the
procedure prescribed in Section 20 of Rule 24
was not followed, particularly that portion
which states that the officer who took the
deposition shall "promptly file it with the
court in which the action is pending or
send it by registered mail to the Clerk of
Court thereof for filing." The non-
compliance with this rule, according to
Santiago, consists in the fact that it was the
AmEx counsel who picked up the deposition
from the Department of Foreign Affairs and
delivered it to the Clerk of Court instead of its
being filed directly with the latter.
AmEx explained that:
... . The Philippine Consulate in New York by
letter dated October 8, 1965 notified the
undersigned of the transmission on said date
of the deposition "through the Department of
Foreign Affairs to the Clerk of Court; yet, it was
verified from the Clerk of Court that as of
November 19, 1965 the deposition was not yet
received. Upon inquiry with the Department of
Foreign Affairs, the latter advised the
undersigned that it received the sealed
envelope from the consulate on October 20,
1965 and turned it over on October 25, 1965,
to its record section, which until November 19,
1965, had done nothing towards transmitting
the deposition to the court. This prompted the
Department of Foreign Affairs to request the
undersigned to take care of having the
deposition filed with the court, which the
undersigned consented to do, and did by
means of their letter to the Clerk of Court
dated November 19, 1965 (Exh. G-1) only to
expedite filing of the deposition and "to
accommodate the Department of Foreign
Affairs." The undersigned received the
sealed envelope from the Department of
Foreign Affairs and delivered it in exactly
the same condition to the Clerk of Court.
ISSUE: w/n AmEx is a real party in interest. (YES)
HELD:
SC - We do not believe that the manner, in which the
deposition was delivered to the Clerk of Court, so
affected its integrity as to render it inadmissible.
After all there is no pretense here that Santiago did
not contract the indebtedness for the collection of
which he is being sued or that the same has been
paid, the only important issue posed in this appeal
being whether or not AmEx is the real party in
interest. On this score the finding of the lower court,
supported as it is by the evidence before it, is
conclusive.
V. Rule 3 Sections 1 to 3: Parties to a Civil
Action
ARON vs. Heirs of Alfredo REALON
PETITION for review on certiorari of a decision of the
Court of Appeals.
FACTS:
Roman Realon was the owner of two parcels of land
which was inherited by Alfredo Realon and his
siblings. Sometime in 1979, Alfredo executed a
contract to sell his undivided portion of the lot to
petitioner. He also obliged himself to execute a deed
of final sale. However Alfredo failed to register the
sale. To secure the balance of the purchase price
Aaron, mortgaged the property to the remaining heir.
Alfredo Realon died and his successors were
unaware about the sale. Engr. Ilaban filed, the
attorney-in-fact of Aron, filed a case for consignation
against the heirs of Realon. The Realons countered
by contending that undue influence was present at
the execution of the sale and that the balance of the
price due in the contract to sell was not paid. Aaron
contended that the contract to sell was superseded
by the deeds of the sale with mortgage. In respond
the Realons contended that even the other heirs did
not receive the proceeds from the contract to sell
allegedly executed by Alfredo. The Regional Trial
Court held that there was fraud present.
ISSUE:
Whether or not the other heirs of Alfredo are the real
parties in interest.
HELD
The settled rule is that every action must be
prosecuted and defended in the name of the real
party in a fiduciary capacity. The beneficiary must be
deemed as the real party in interest. Thus the
presence of all the indispensible party is a condition
sine qua non for the exercise of judicial power. The
plaintiff is mandated to implead all indispensable
party and in the absence of one render all
subsequent judgment voids. Failure to include the
other heirs as indispensible parties in the complaint
to nullify the contract to sell is fatal to the complaint.
Actions; Pleadings and
Practice; Parties; Capacity; The party bringing suit
has the burden of proving the sufficiency of the
representative character that he claimsThe settled
rule is that every action must be prosecuted or
defended in the name of the real party-in-interest.
Where the action is allowed to be prosecuted or
defended by a representative acting in a fiduciary
capacity, the beneficiary must be included in the
title of the case and shall be deemed to be the real
party-in-interest. The name of such beneficiaries
shall, likewise, be included in the complaint. Section
4, Rule 8 of the Rules of Court further provides that
facts showing the capacity of a party to sue or be
sued, or the authority of a party to sue or be sued in
a representative capacity must be averred in the
complaint. In order to maintain an action in a court
of justice, the plaintiff must have an actual legal
existence, that is, he or she or it must be a person in
law and possessed of a legal entity as either a
natural or an artificial person, and no suit can
lawfully be prosecuted in the name of that person.
The party bringing suit has the burden of proving the
sufficiency of the representative character that he
claims. If a complaint is filed by one who claims to
represent a party as plaintiff but who, in fact, is not
authorized to do so, such complaint is not deemed
filed and the court does not acquire jurisdiction over
the complaint. It must be stressed that an
unauthorized complaint does not produce any legal
effect. Corollary, the defendant can assail the facts
alleged therein through a motion to dismiss on the
ground that the plaintiff has no capacity to sue
under Section 1(d) of Rule 16 of the Rules of Court,
that is, that he does not have the representative he
claims.
Indispensable Parties; It is precisely when an
indispensable party is not before the court that the
action should be dismissed.The presence of all
indispensable parties is a condition sine qua non for
the exercise of judicial power. It is precisely when an
indispensable party is not before the court that the
action should be dismissed. The plaintiff is mandated
to implead all indispensable parties, and the
absence of one renders all subsequent actions of the
court null and void for want of authority to act, not
only as to the absent parties, but even as to those
present. One who is not a party to a case is not
bound by any decision of the court; otherwise, he
will be deprived of his right to due process.
Without the presence of all the other heirs as
plaintiffs, the trial court cannot validly render
judgment and grant relief in favor of the
respondents.The surviving signatories of the
assailed deeds and the other heirs of the deceased
vendors were not impleaded as plaintiffs. Without
the presence of all the other heirs as plaintiffs, the
trial court could not validly render judgment and
grant relief in favor of the respondents; it could,
likewise, not rule in favor of the petitioner for the
refund of his payments made to the respondents as
the successors-in-interest of the vendors. The failure
of the respondents to implead the said signatories
and all the other heirs as parties-plaintiffs
constituted a legal obstacle to the trial court and the
appellate courts exercise of judicial power over the
said case, and thereby rendered any orders or
judgments made therein a nullity. To reiterate, the
absence of an indispensable party renders all
subsequent actions of the court null and void for
want of authority to act, not only as to the absent
parties, but even as to those present. Thus, the RTC
should have ordered the dismissal of the complaint.
Lotte Phils. v. Dela Cruz (2005)
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
Lotte Philippines is a domestic corporation who hired
7J Maintenance and Janitorial Services to provide
manpower for maintenance. The respondents were
hired as repackers or sealers. Lotte eventually
dispensed with the respondents' services allegedly
because of the expiration/termination of its contract.
Respondents filed for illegal dismissal. The labor
arbiter declared that 7J was the employer of the
respondents. He found 7J guilty.
7J should be impleaded. The joiner of indispensable
parties is mandatory. Indispensable parties are
necessary to vest the court with jurisdiction. If they
are not present in a suit or proceeding, judgment of
a court cannot attain finality. The CA's ruling (that
Lotte was the respondents' real employer) made the
candy company jointly and severally liable with 7J,
who was not impleaded. Since the outcome of the
decision directly affected 7J (in terms of liability), it is
an indispensable party in interest. Non-joinder of
indispensable parties is not the ground for the
dismissal of an action. The remedy is to implead the
non-party claimed to be indispensable. The remedy
may be effected through order of the court on
motion of the party, or through the court's own
initiative at any stage of the action and/or whenever
it is just. If a petitioner refuses to implead an
indispensable party despite a court order, the court
may dismiss the complaint/petition for failure to
comply.
Remedial Law; Parties; Pleadings and Practice; An
indispensable party is a party in interest without
whom no final determination can be had of an
action, and who shall be joined either as plaintiffs or
defendants; The joinder of indispensable parties is
mandatory; The absence of an indispensable party
renders all subsequent actions of the court null and
void for want of authority to act, not only as to the
absent parties but even as to those present.An
indispensable party is a party in interest without
whom no final determination can be had of an
action, and who shall be joined either as plaintiffs or
defendants. The joinder of indispensable parties is
mandatory. The presence of indispensable parties is
necessary to vest the court with jurisdiction, which is
the authority to hear and determine a cause, the
right to act in a case. Thus, without the presence of
indispensable parties to a suit or proceeding,
judgment of a court cannot attain real finality. The
absence of an indispensable party renders all
subsequent actions of the court null and void for
want of authority to act, not only as to the absent
parties but even as to those present.
The non-joinder of indispensable parties is not a
ground for the dismissal of an action and the
remedy is to implead the non-party claimed to be
indispensable.In Domingo v. Scheer, we held that
the non-joinder of indispensable parties is not a
ground for the dismissal of an action and the remedy
is to implead the non-party claimed to be
indispensable. Parties may be added by order of the
court on motion of the party or on its own initiative
at any stage of the action and/or such times as are
just. If the petitioner refuses to implead an
indispensable party despite the order of the court,
the latter may dismiss the complaint/petition for the
petitioner/plaintiffs failure to comply therefor.
Dael v. Teves (1985)
PETITION for certiorari to review the order of
the Court of First Instance of Misamis Oriental,
Br. VIII. Teves, J.
Spouses Dael filed a Complaint for Ownership,
Recovery of Possession against the Edorots claiming
that they are the owners of a parcel of land and that
the Edorots by means of force, threats and
intimidation occupied it. Defendants claim that they
inherited it from their deceased parents. The two
other defendants, Petra and Herminigildo, died
before the filing of the complaint. Judge Teves issued
an Order for the Daels to file an amended complaint
to include the heirs or representatives of deceased
defendants. After the 15-day period, defendants
moved that the case be dismissed for the Daels
failure to comply. Judge Teves then dismissed the
complaint.
The judge did not err when he ordered the Daels to
file an amended complaint. Deceased Herminigildo
and Petra also have an undivided interest in the
property and should be impleaded. Since both of
them are already dead, the heirs became the real
parties in interest who should be impleaded as
defendants for there to be a final determination of
the civil case (Sec 7, Rule 3).
Remedial Law; Civil
Procedure; Pleadings; Amendment of
complaint; Indispensable Parties; Where plaintiffs
failed to comply with a court order ordering
amendment of the complaint to include heirs of
deceased defendants who are indispensable parties,
order of dismissal of complaint proper.The heirs of
deceased defendants in the case at bar being clearly
indispensable parties, respondent Judge acted
properly in ordering the amendment of the
complaint so as to include the said heirs as
defendants. Since the petitioners failed to comply
with this Order, respondent Judge acted within his
prerogative in dismissing the complaint pursuant to
Section 3, Rule 17 of the Rules of Court.
Duty of attorney to inform the court promptly of
the death, incapacity or incompetency of his client,
and to give the name and residence of his legal
representative under Rule 3, Sec. 16 of the Rules of
Court, applies where a party dies after the filing of
the complaint and during the pendency of the case,
but not where the defendants whose heirs are
sought to be implemented died even before the
filing of the complaint.We find petitioners reliance
on the aforequoted provision as misplaced. Rule 3,
Section 16 of the Rules applies to a situation where a
party (whether plaintiff or defendant) dies after the
filing of the complaint and during the pendency of
the case. This is not the situation in the case at bar
since the two defendants, whose heirs are to be
impleaded died even before the filing of the
complaint.
Respondents manifestation informing the court
that petitioners have not complied with a court order
to amend the complaint, not being a litigated or
contentious motion, may be acted upon without
proof of service on the adverse party; Power of court
to motu proprio dismiss a case for failure to comply
with its order; Case at bar.Finally, anent the
contention of petitioners that private respondents
ex-parte manifestation did not comply with the
required notice of motions pursuant to Sections 4, 5
and 6 of Rule 15 of the Rules of Court, suffice it to
state that the said manifestation informing the
Court that petitioners have not complied with the
order to amend the complaint, is not a litigated or
contentious motion and may be acted upon even
without proof of service on the adverse party. In fact,
under Section 3 of Rule 17, quoted earlier, the Court
can motu proprio or on its own motion, dismiss the
case for failure to comply with its order.
Dismissal of complaint by trial court for failure of
plaintiffs-petitioners to comply with its order should
not operate as an adjudication on the merits to
avoid injustice.Upon the foregoing facts, We find
that respondent Judge committed no error in
dismissing the complaint. However, to avoid
injustice, such dismissal should not operate as an
adjudication on the merits.
Seno v. Mangubat (1987)
APPEAL from the order of the Court of First
Instance of Rizal, Br. I.
Crisanta Seno approached Marcos Mangubat to
negotiate a mortgage over a parcel of land so she
can pay off a previous indebtedness. They agreed on
a mortgage and that, as long as the interest is being
paid, the mortgage over the property would not be
foreclosed. Seno agreed to the execution of a Deed
of Absolute Sale in his favor. Mangubat was then
able to obtain a title in his name and two others who
sold their shares to him. When Crisanta was unable
to pay she was sued for ejectment by Mangubat. In
January 1969, Seno learned that defendant Marcos
Mangubat sold the subject property. Allegedly, the
buyers bought it in bad faith. Buyers filed an
ejectment case against Crisanta for alleged non-
payment of rentals. On motion of Luzame and
Penaflor, the TC ordered the inclusion as defendants
of Andres Evangelista and Bienvenido Mangubat (the
two who sold their shares) as they are indispensable
parties.
Andres Evangelista and Bienvenido Mangubat are
not indispensable parties but only proper parties.
Sections 7 and 8, Rule 3: Indispensable parties must
always be joined either as plaintiffs or defendants,
for the court cannot proceed without them.
Necessary parties must be joined, in order to
adjudicate the whole controversy and avoid
multiplicity of suits and a final decree can be made
in their absence without affecting them. Said
defendants no longer have any interest in the
subject property.
However, being parties to the instrument sought to
be reformed, their presence is necessary in order to
settle all the possible issues of tile controversy.
Remedial Law; Parties; Secs. 7 and 8, Rule 3 of Rules
of Court; Indispensable and Necessary Parties,
definedUnder Section 7, indispensable parties
must always be joined either as plaintiffs or
defendants, for the court cannot proceed without
them. Necessary parties must be joined, under
Section 8, in order 'to adjudicate the whole
controversy and avoid multiplicity of suits.
Indispensable parties are those with such an interest
in the controversy that a final decree would
necessarily affect their rights, so that the courts
cannot proceed without their presence. Necessary
parties are those whose presence is necessary to
adjudicate the whole controversy, but whose
interests are so far separable that a final decree can
be made in their absence without affecting them.
Defendants, being parties to the instrument
sought to be reformed, their presence is necessary
in order to settle all the possible issues of
controversy. In the present case, there are no
rights of defendants Andres Evangelista and
Bienvenido Mangubat to be safeguarded if the sale
should be held to be in fact an absolute sale nor if
the sale is held to be an equitable mortgage.
Defendants, being proper parties, their joinder as
parties-defendants was correctly ordered under Sec.
8 of Rule 8.In fact the plaintiffs were not after
defendants Andres Evangelista and Bienvenido
Mangubat as shown by their noninclusion in the
complaint and their opposition to the motion to
include said defendants in the complaint as
indispensable parties. It was only because they were
ordered by the court a quo that they included the
said defendants in the complaint. The lower court
erroneously held that the said defendants are
indispensable parties. Notwithstanding, defendants
Andres Evangelista and Bienvenido Mangubat not
being indispensable parties but only proper parties,
their joinder as parties defendants was correctly
ordered being in accordance with Sec. 8 of Rule 3.
Prescription; Case at bar; Defendants were only
impleaded in the amended complaint of Dec. 29,
1971 from July 17, 1961, the date of execution of
the Deed of Absolute Sale, clearly more than 10
years prescriptive period.ln the instant case,
defendants Andres Evangelista and Bienvenido
Mangubat were only impleaded in the amended
complaint of December 29, 1971 or ten (10) years,
five (5) months and twelve (12) days from July 17,
1961 the date of execution of the subject Deed of
Absolute Sale, clearly more than the ten (10) year
prescriptive period.
Quiombing v. CA (1990)
PETITION to review the decision of the Court of
Appeals.
Quiombing and Biscocho entered a "Construction
and Service Agreement" with the Saligos for the
construction of the Saligos house. Manuelita Saligo
signed a promissory note for the balance. Quiombing
filed a complaint for recovery of the balance.
Defendants filed a motion to dismiss and contend
that Biscocho was an indispensable party.
One of the two solidary creditors may sue by himself
alone for the recovery of amounts due to both of
them without joining the other creditor as a co-
plaintiff. Where the obligation of the parties is
solidary, either one of the parties is indispensable,
and the other is not even necessary (now proper)
because complete relief may be obtained from
either."
Summary: Spouses Saligo (D) contended that the
other solidary creditor must be included as co-
plaintiff being an indispensable party to the claim.
Rule of Law: Either one of the solidary creditors my
file a claim against the debtor.
Facts: Spouses Saligo (D) contracted Quiombing (P)
and his co-creditor Bischoco to construct a house for
them. The Construction and Service Agreement
between the parties stated that the creditors
Quiombing (P) and Bischoco "jointly and severally"
bound themselves to construct a house for the
debtors. Upon completion, Quiombing (P) was paid
partially, but was unable to collect the balance after
repeated demands. Quiombing (P) alone filed for
recovery of the balance plus charges and interests.
Issues: (1) May one of the two solidary creditors
sue by himself alone for the recovery of amounts
due to both of them without joining the other
creditor as a co-plaintiff?
(2) In such a case, is the defendant entitled to the
dismissal of the complaint on the ground of non-
joinder of the second creditor as an indispensable
part? (3) More to the point, is the second solidary
creditor an indispensable party?
Ruling: Yes. The question of who should sue the
private respondents was a personal issue between
creditors Quiombing and Biscocho. It did not matter
who as between them filed the complaint because
the private respondents were liable to either of the
two as a solidary creditor for the full amount of the
debt. Full satisfaction of a judgment obtained against
them by Quiombing would discharge their obligation
to Biscocho, and vice versa; hence, it was not
necessary for both creditors Quiombing and
Biscocho to file the complaint. Inclusion of Biscocho
as a co-plaintiff when Quiombing was competent to
sue by himself alone, would be a useless formality.
Necessary parties are those whose presence is
necessary to adjudicate the whole controversy, but
whose interests are so far separable that a final
decree can be made in their absence without
affecting them. (Necessary parties are now
called proper parties.)
Wyoga Gas and Oil Corp. v. Schrack, I Fed. Rules
Service, 292.
Where the obligation of the parties is solidary, either
one of the parties is indispensable, and the other is
not even necessary (now proper) because complete
relief may be obtained from either.
Feria, Civil Procedure, 1969, p. 153.
A joint obligation is one in which each of the
debtors is liable only for a proportionate part of the
debt, and each creditor is entitled only to a
proportionate part of the credit.
A solidary obligation is one in which each debtor is
liable for the entire obligation, and each creditor is
entitled to demand the whole obligation.
Hence, in the former, each creditor can recover only
his share of the obligation, and each debtor can be
made to pay only his part; whereas, in the latter,
each creditor may enforce the entire obligation, and
each debtor may be obliged to pay it in full.
Tolentino, Civil Code of the Philippines, Vol. IV.
1985, p. 218.
Civil Law; Obligations; Joint obligation distinguished
from solidary obligation; Concept of active solidarity.
Distinguishing it from the joint obligation, Tolentino
makes the following observations in his distinguished
work on the Civil Code: A joint obligation is one in
which each of the debtors is liable only for a
proportionate part of the debt, and each creditor is
entitled only to a proportionate part of the credit.
A solidary obligation is one in which each debtor is
liable for the entire obligation, and each creditor is
entitled to demand the whole obligation. Hence, in
the former, each creditor can recover only his share
of the obligation, and each debtor can be made to
pay only his part; whereas, in the latter, each
creditor may enforce the entire obligation, and each
debtor may be obliged to pay it in full. The same
work describes the concept of active solidarity thus:
The essence of active solidarity consists in the
authority of each creditor to claim and enforce the
rights of all, with the resulting obligation of paying
every one what belongs to him; there is no merger,
much less a renunciation of rights, but only mutual
representation.
Parties; Necessary parties distinguished from
Indispensable parties; Where the obligation is
solidary, either one of the parties is indispensable
and the other is not necessary; Reason.
Indispensable parties are those with such an interest
in the controversy that a final decree would
necessarily affect their rights, so that the court
cannot proceed without their presence. Necessary
parties are those whose presence is necessary to
adjudicate the whole controversy, but whose
interests are so far separable that a final decree can
be made in their absence without affecting them.
(Necessary parties are now called proper parties
under the 1964 amendments of the Rules of Court.)
According to Justice Jose Y. Feria, where the
obligation of the parties is solidary, either one of the
parties is indispensable, and the other is not even
necessary (now proper) because complete relief may
be obtained from either.
Domingo v. Scheer (2004)
PETITION for review on certiorari of the Court of
Appeals.
Vice Consul Jutta Hippelein informed the Philippine
ambassador to Germany that the respondent who
was granted resident status here had police records
and financial liabilities in Germany. The Board of
Commissioners (BOC) issued a Summary Deportation
Order. MR was not acted upon by the BOC. Neither
was he arrested nor deported. Respondent informed
the BOC that his passport has been renewed by the
German embassy upon the dismissal of the case
against him. BOC still failed to resolve the MR. BID
agents apprehended the respondent in his
residence. Petitioner maintains that the respondents
petition for certiorari, prohibition and mandamus
before the Court of Appeals should have been
dismissed because he failed to implead BOC as
the real party-in-interest.
The case should not have been dismissed for the
failure of the respondent to implead the BOD. The
court agrees that BOC was an indispensable party to
the respondents petition in the Court of Appeals.
However, the non-joinder of indispensable
parties is not a ground for the dismissal of an
action. Parties may be added by order of the court
on motion of the party or on its own initiative at any
stage of the action and/or such times as are just. If
the petitioner/plaintiff refuses to implead an
indispensable party despite the order of the
court, the latter may dismiss the
complaint/petition for the petitioner/plaintiffs
failure to comply therefor.
Actions; Pleadings and
Practice; Parties; Indispensable Parties; The absence
of an indispensable party renders all subsequent
actions of the court null and void.Section 7, Rule 3
of the Rules of Court, as amended, requires
indispensable parties to be joined as plaintiffs or
defendants. The joinder of indispensable parties is
mandatory. Without the presence of indispensable
parties to the suit, the judgment of the court cannot
attain real finality. Strangers to a case are not bound
by the judgment rendered by the court. The absence
of an indispensable party renders all subsequent
actions of the court null and void. Lack of authority
to act not only of the absent party but also as to
those present. The responsibility of impleading all
the indispensable parties rests on the
petitioner/plaintiff.
Non-Joinder; The non-joinder of indispensable
parties is not a ground for the dismissal of an action.
However, the non-joinder of indispensable parties
is not a ground for the dismissal of an action. Parties
may be added by order of the court on motion of the
party or on its own initiative at any stage of the
action and/or such times as are just. If the
petitioner/plaintiff refuses to implead an
indispensable party despite the order of the court,
the latter may dismiss the complaint/petition for the
petitioner/plaintiffs failure to comply therefor. The
remedy is to implead the non-party claimed to be
indispensable. In this case, the CA did not require
the respondent (petitioner therein) to implead the
BOC as respondent, but merely relied on the rulings
of the Court in Vivo v. Arca and Vivo v. Cloribel. The
CAs reliance on the said rulings is, however,
misplaced. The acts subject of the petition in the two
cases were those of the Immigration Commissioner
and not those of the BOC; hence, the BOC was not a
necessary nor even an indispensable party in the
aforecited cases.
Purpose; There is nothing sacred about processes
or pleadings, their forms or contentstheir sole
purpose is to facilitate the application of justice to
the rival claims of contending parties.There is
nothing sacred about processes or pleadings, their
forms or contents. Their sole purpose is to facilitate
the application of justice to the rival claims of
contending parties. They were created, not to hinder
and delay, but to facilitate and promote, the
administration of justice. They do not constitute the
thing itself, which courts are always striving to
secure to litigants. They are designed as the means
best adapted to obtain that thing. In other words,
they are a means to an end. When they lose the
character of the one and become the other, the
administration of justice is at fault and courts are
correspondingly remiss in the performance of their
obvious duty.
Chua v. Torres (2005)
PETITION for review on certiorari of the orders
of the Regional Trial Court of Caloocan City, Br.
126.
Christine Chua filed a complaint for damages against
Jorge Torres and Antonio Beltran. The complaint
alleged that Jonathan Chua issued a RCBC Check in
favor of. However, the check was dishonored. Beltran
sent a demand letter informing Christine Chua
informing her. Petitioner ignored the demand letter.
Without ascertaining who actually issued the check,
Beltran instituted a criminal action against petitioner
for violation of BP 22. Jonathan Chua was
impleaded as a necessary party-plaintiff. RTC
ordered dismissal of complaint on ground that
Jonathan had not executed a certification against
forum-shopping.
The absence of the signature in the required
verification of a party misjoined as a plaintiff is not a
ground for the dismissal. Jonathan Chua was
misjoined as a party plaintiff in this case. Jonathan
does not stand to be affected should the RTC rule
either favorably or unfavorably on the complaint.
Absence of signature of misjoined party is not a
ground for dismissal of action. A misjoined party
plaintiff has no business participating in the case as
a plaintiff in the first place, and it would make little
sense to require the misjoined party in complying
with all the requirements expected of plaintiffs.
certification requirement.It bears noting that
Jonathan Chua did not sign as well any verification to
the complaint, ostensibly in violation of Section 7,
Rule 4 of the Rules of Civil Procedure. The RTC failed
to mention such fact, as does petitioner in her
present petition. In their arguments before this
Court, respondents do refer in passing to the
verification requirement, but do not place any
particular focus thereto. The verification requirement
is separate from the certification requirement. It is
noted that as a matter of practice, the verification is
usually accomplished at the same time as the
certification against forum-shopping; hence the
customary nomenclature, Verification and
Certification of Non Forum-Shopping or its variants.
For this reason, it is quite possible that the RTC
meant to assail as well the failure of Jonathan Chua
to verify the complaint.
The verification is significant, as it is intended to
secure an assurance that the allegations in the
pleading are true and correct and not the product of
the imagination or a matter of speculation, and that
the pleading is filed in good faith.The verification
requirement is significant, as it is intended to secure
an assurance that the allegations in the pleading are
true and correct and not the product of the
imagination or a matter of speculation, and that the
pleading is filed in good faith. The absence of a
proper verification is cause to treat the pleading as
unsigned and dismissible. It would be as well that
the Court discuss whether under the circumstances,
Jonathan Chua is also required to execute a
verification in respect to petitioners complaint.
Civil Procedure; Parties; It is elementary that it is
only in the name of a real party in interest that a
civil suit may be prosecuted. Under Section 2, Rule 3
of the Rules of Civil Procedure, a real party in
interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party
entitled to the avails of the suit.It is elementary
that it is only in the name of a real party in interest
that a civil suit may be prosecuted. Under Section 2,
Rule 3 of the Rules of Civil Procedure, a real party in
interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party
entitled to the avails of the suit. Interest within the
meaning of the rule means material interest, an
interest in issue and to be affected by the decree, as
distinguished from mere interest in the question
involved, or a mere incidental interest. One having
no right or interest to protect cannot invoke the
jurisdiction of the court as a party plaintiff in an
action. To qualify a person to be a real party in
interest in whose name an action must be
prosecuted, he must appear to be the present real
owner of the right sought to enforced.
Necessary parties are those whose presence is
necessary to adjudicate the whole controversy, but
whose interests are so far separable that a final
decree can be made in their absence without
affecting them.Section 8, Rule 7 of the Rules of
Civil Procedure defines a necessary party as one
who is not indispensable but who ought to be joined
as a party if complete relief is to be accorded as to
those already parties, or for a complete
determination or settlement of the claim subject of
the action. Necessary parties are those whose
presence is necessary to adjudicate the whole
controversy, but whose interests are so far
separable that a final decree can be made in their
absence without affecting them.
Said defendants no longer have any interest in the
subject property. However, being parties to the
instrument sought to be reformed, their presence is
necessary in order to settle all the possible issues of
the controversy.An example of a necessary party
may be found in Seno v. Mangubat. Petitioner
therein sold her property through a deed of sale to
three vendees. Two of the vendees then sold their
shares to the third buyer, who then sold the property
to another set of persons. Thereafter, petitioner, who
claimed that the true intent of the first sale was an
equitable mortgage, filed a complaint seeking the
reformation of the deed of sale and the annulment
of the second sale. The question arose whether the
two vendees who had since disposed of their shares
should be considered as indispensable parties or
necessary parties. In concluding that they were only
necessary parties, the Court reasoned: In the
present
case, there are no rights of defendants Andres
Evangelista and Bienvenido Mangubat to be
safeguarded if the sale should be held to be in fact
an absolute sale nor if the sale is held to be an
equitable mortgage. Defendant Marcos Mangubat
became the absolute owner of the subject property
by virtue of the sale to him of the shares of the
aforementioned defendants in the property. Said
defendants no longer have any interest in the
subject property. However, being parties to the
instrument sought to be reformed, their presence is
necessary in order to settle all the possible issues of
the controversy. Whether the disputed sale be
declared an absolute sale or an equitable mortgage,
the rights of all the defendants will have been amply
protected. Defendants-spouses Luzame in any event
may enforce their rights against defendant Marcos
Mangubat.
Forum Shopping; Absence of the signature of the
person misjoined as a party-plaintiff in either the
verification page or certification against forum
shopping is not a ground for the dismissal of the
action.What the Court may rule upon is whether
the absence of the signature of the person misjoined
as a party-plaintiff in either the verification page or
certification against forum-shopping is ground for
the dismissal of the action. We rule that it is not so,
and that the RTC erred in dismissing the instant
complaint. There is no judicial precedent affirming or
rejecting such a view, but we are comfortable with
making such a pronouncement. A misjoined party
plaintiff has no business participating in the case as
a plaintiff in the first place, and it would make little
sense to require the misjoined party in complying
with all the requirements expected of plaintiffs.
Section 11, Rule 3 of the 1997 Rules of Civil
Procedure prohibits the dismissal of a suit on the
ground of non-joinder or misjoinder of parties.
Section 11, Rule 3 of the 1997 Rules of Civil
Procedure states: Neither misjoinder nor non-joinder
of parties is ground for dismissal of an action.
Parties may be dropped or added by order of the
court on motion of any party or on its own initiative
at any stage of the action and on such terms as are
just. Any claim against a misjoined party may be
severed and proceeded with separately. Clearly,
misjoinder of parties is not fatal to the complaint.
The rule prohibits dismissal of a suit on the ground of
non-joinder or misjoinder of parties. Moreover, the
dropping of misjoined parties from the complaint
may be done motu proprio by the court, at any
stage, without need for a motion to such effect from
the adverse party. Section 11, Rule 3 indicates that
the misjoinder of parties, while erroneous, may be
corrected with ease through amendment, without
further hindrance to the prosecution of the suit.
Courts; Jurisdictions; It should then follow that any
act or omission committed by a misjoined party
plaintiff should not be cause for impediment to the
prosecution of the case, much less for the dismissal
of the suit.It should then follow that any act or
omission committed by a misjoined party plaintiff
should not be cause for impediment to the
prosecution of the case, much less for the dismissal
of the suit. After all, such party should not have been
included in the first place, and no efficacy should be
accorded to whatever act or omission of the party.
Since the misjoined party plaintiff receives no
recognition from the court as either an indispensable
or necessary party-plaintiff, it then follows that
whatever action or inaction the misjoined party may
take on the verification or certification against
forum-shopping is inconsequential. Hence, it should
not have mattered to the RTC that Jonathan Chua
had failed to sign the certification against forum-
shopping, since he was misjoined as a plaintiff in the
first place. The fact that Jonathan was misjoined is
clear on the face of the complaint itself, and the
error of the RTC in dismissing the complaint is not
obviated by the fact that the adverse party failed to
raise this point. After all, the RTC could have motu
proprio dropped Jonathan as a plaintiff, for the
reasons above-stated which should have been
evident to it upon examination of the complaint.
Republic v. Campos (1989)
PETITION to review the resolutions of the
Sandiganbayan.
The Republic of the Philippines filed with t the
Sandiganbayan a complaint against Jose D. Campos
and 48 others to recover from them ill-gotten wealth
which they illegally acquired when they were in
office. Summonses were issued by the
Sandiganbayan against Romualdez et. al. Campos Jr.,
prayed that he be removed as party defendant from
the complaint that he had voluntarily surrendered or
turned over any share in his name on any of the
corporations referred to to the RP government and
that he was entitled to the immunity granted by the
PCGG. Private respondents opposed petitioners
motion. RPs contentions: Jose D. Campos, Jr. was
included as defendant in the complaint through
mistake that pursuant to Section 11, Rule 3 of the
Revised Rules of Court it has a right to drop him as
defendant without prior consent of any party.
Dropping Campos Jr. as defendant in the civil case
does not violate Sec. 11, Rule 3. Section 11, Rule 3
of the Rules of Court really contemplates erroneous
or mistaken non-joinder and misjoinder of parties.
The rule presupposes that the original inclusion had
been made in the honest conviction that it was
proper and the subsequent dropping is requested
because it turned out that such inclusion was a
mistake.
Courts; Sandiganbayan; Administrative
Law; Executive Order No. 14; PCGG; The PCGG does
not try and decide, or hear and determine, or
adjudicate with finality cases involving the issue of
whether or not property should be forfeited and
transferred to the State because the same is ill-
gotten; this function is reserved to the
___
Sandiganbayan. Executive Order No. 14 defines
the jurisdiction over cases involving the ill-gotten
wealth of former President Ferdinand E. Marcos, Mrs.
Imelda R. Marcos, members of their immediate
family, close relatives, subordinates, close and/or
business associates, dummies, agents and
nominees. Section 2 thereof provides that the PCGG
shall file all such cases, whether civil or criminal,
with the Sandiganbayan, which shall have exclusive
and original jurisdiction thereof. In the case
ofPresidential Commission on Good Government v.
Pea (159 SCRA 556 [1988]), the court interpreted
the Sandiganbayans jurisdiction under this statute
to extend to all cases of the commission x x x, and
all incidents arising from, incidental to, or related to
(them), such cases necessarily fall likewise under
the Sandiganbayans exclusive and original
jurisdiction subject to review on certiorari
exclusively by the Supreme Court. (pp. 561-562;
Italics supplied). Likewise, in the case of Bataan
Shipyard & Engineering Co., Inc. v. Presidential
Commission on Good Government, (150 SCRA 181
[1987]) we said: It should also by now be
reasonably evident from what has thus far been said
that the PCGG is not, and was never intended to act
as, a judge. Its general function is to conduct
investigations in order to collect
evidence establishing instances of ill-gotten
wealth; issue sequestration, and such orders as may
be warranted by the evidence thus collected and as
may be necessary to preserve and conserve the
assets of which it takes custody and control and
prevent their disappearance, loss or dissipation; and
eventually file and prosecute in the proper court of
competent jurisdiction all cases investigated by it as
may be warranted by its findings. It does not try and
decide, or hear and determine, or adjudicate with
any character of finality or compulsion, cases
involving the essential issue of whether or not
property should be forfeited and transferred to the
State because ill-gotten within the meaning of the
Constitution and the executive orders. This function
is reserved to the designated court, in this case, the
Sandiganbayan. (Ex. Ord. No. 14)
Powers of the PCGG; The powers of the PCGG are
not unlimited; the Sandiganbayan has jurisdiction to
determine whether or not the PCGG exceeded its
power. ___ The powers of the PCGG are not unlimited.
Its jurisdiction over cases involving ill-gotten wealth
must be within the parameters stated in Executive
Order No. 14. Necessarily, the jurisdiction of the
Sandiganbayan which is tasked to handle the ill-
gotten wealth cases must include the jurisdiction to
determine whether or not the PCGG exceeded its
power to grant immunity pursuant to the provisions
of Executive Order No. 14.
 The PCGG is authorized to file both criminal and
civil cases against persons suspected of having
acquired ill-gotten wealth. ___ A cursory reading of
Executive Order No. 14 shows that the PCGG is
authorized to file both criminal and c ivil cases
against persons suspected of having acquired ill-
gotten wealth. Section 3 thereof provides: Section
3. Civil suits for restitution, reparation of damages,
or indemnification for consequential damages,
forfeiture proceedings provided for under Republic
Act No. 1379, or any other civil actions under the
Civil Code or other existing laws, in connection with
Executive Order No. 1 dated February 28, 1986 and
Executive Order No. 2 dated March 12, 1986, may be
filed separately from and proceed independently of
any criminal proceedings and may be proved by a
preponderance of evidence.
Civil Immunity; Compromise Agreements; In the
absence of an express prohibition, the rule on
amicable settlements in civil cases under the Civil
Code is applicable to PCGG cases. ___ The well-settled
doctrine is that amicable settlements and/or
compromises are not only allowed but actually
encouraged in civil cases. Article 2028 of the Civil
Code categorically states: A compromise is a
contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one
already commenced. On the other hand, there is no
similar general rule in criminal prosecutions.
Immunity must be specifically granted. In the instant
case, the PCGG issued a resolution dated May 28,
1986, granting immunity from both civil and criminal
prosecutions to Jose Y. Campos and his family.
Undoubtedly, this resolution embodies a compromise
agreement between the PCGG on one hand and Jose
Y. Campos on the other. Hence, in exchange for the
voluntary surrender of the ill-gotten properties
acquired by the then President Ferdinand E. Marcos
and his family which were in Jose Campos control,
the latter and his family were given full immunity in
both civil and criminal prosecutions. In the absence
of an express prohibition, the rule on amicable
settlements and/or compromises on civil cases under
the Civil Code is applicable to PCGG cases.
Remedial Law; Civil Procedure; Parties; Misjoinder
and Non-Joinder of Parties; PCGGs motion to drop
Campos, Jr. in the civil case has legal basis under
Sec. 11, Rule 3 of the Rules of Court. ___Even from the
viewpoint of procedure, the PCGG was right when it
filed a motion to drop Jose Campos, Jr. as defendant
in the civil case. Section 11, Rule 3 of the Rules of
Court states: SECTION 11, RULE 3. Misjoinder and
non-joinder of parties. ___ Misjoinder of parties is not
ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of
any party or of its own initiative at any stage of the
action and on such terms as are just. x x x (Italics
supplied) We interpreted this rule in the case of Lim
Tanhu v. Ramolete, 66 SCRA 425 (1975): x x x the
latter rule does not comprehend whimsical and
irrational dropping or adding of parties in a
complaint. What it really contemplates is erroneous
or mistaken non-joinder and misjoinder of parties. No
one is free to join anybody in a complaint in court
only to drop him unceremoniously later at the
pleasure of the plaintiff. The rule presupposes that
the original inclusion had been made in the honest
conviction that it was proper and the subsequent
dropping is requested because it turned out that
such inclusion was a mistake. And this is the reason
why the rule ordains that the dropping be on such
terms as are just ___ just to all the other parties.
There is nothing whimsical or capricious in dropping
the petitioner-intervenor from the complaint. Quite
the contrary, it is based on sound and salutary
reasons.
Indispensable Parties; Effect of Solidarity; Solidarity
does not make a solidary obligor an indispensable
party in a suit filed by a creditor. ___ As discussed
earlier, the PCGGs motion to drop Campos, Jr. as
defendant in Civil Case 0010 has legal basis under
Executive Order No. 14. The fact that Campos, Jr.
and all the other defendants were charged solidarily
in the complaint does not make him an
indispensable party. We have ruled in the case of
Operators Incorporated v. American Biscuit Co., Inc.,
[154 SCRA 738 (1987)] that Solidarity does not
make a solidary obligor an indispensable party in a
suit filed by the creditor. Article 1216 of the Civil
Code says that the creditor may proceed against
anyone of the solidary debtors or some or all of them
simultaneously.
Malagarte v. CA (2009)
Assailed in this petition for review on certiorari under
Rule 45 of the Rules of Court are the May 12, 2004
Decision1of the Court of Appeals (CA) in CA-G.R. CV
No. 43085 and the December 1, 2004
Resolution2 denying reconsideration of the
challenged decision.
Malazarte spouses filed a complaint for recovery of
title to property regarding a parcel of coconut land
declared under in the name of petitioner Nieves.
Respondents claim they inheritted the land from a
common ancestor, Francisco Plasabas. In the course
of the trial was that petitioner was not the sole and
absolute owner of the land. After resting their case,
respondents raised the argument that the case
should have been terminated at inception for
petitioners failure to implead indispensable parties,
the other co-owners Jose, Victor and Victoria.
The failure to implead petitioners siblings in the
case before the RTC is not cause for its dismissal. A
co-owner may file suit without necessarily joining all
the other co-owners as co-plaintiffs because the suit
is deemed to be instituted for the benefit of all and
any judgment of the court in favor of the plaintiff will
benefit the other co-owners, but if the judgment is
adverse, the same cannot prejudice the rights of the
unimpleaded co-owners. The only exception to this
rule is when the action is for the benefit of the
plaintiff alone who claims to be the sole owner and
is, thus, entitled to the possession thereof. In such a
case, the action will not prosper unless the plaintiff
impleads the other co-owners who are indispensable
parties.
Marmo v. Anacay (2009)
Moises Anacay filed a case for annulment of sale and
recovery of title, stating that the respondent and his
wife are co-owners of a house and lot i which they
authorized Josephine Marmo to sell. Josephine sold
the property to petitioner but Danilo defaulted in his
installment payments. Moises then discovered that
the original TCT had been cancelled earlier and one
was issued in Josephines name by virtue of a
falsified Deed of Absolute Sale and that a
subsequent TCT was issued in Danilos
name.Petitioners filed a Motion to Dismiss the case
for the respondents failure to include his children as
indispensable parties
The respondents children are not indispensable
parties. A487 of the Civil Code: When the
controversy involves a property held in common, any
one of the co-owners may bring an action in
ejectment. THUS, where the suit is brought by a co-
owner without repudiating the ownership, the suit is
presumed to be filed for the benefit of the other co-
owners and may proceed without impleading the
other co-owners. Respondent never disputed the
existence of a co-ownership. The issue is
falsification, an issue that does not require the
participation of the respondents co-owners at trial.
They are not parties to the assailed document, as
their Their co-owner and father adequately protect
their rights and interests as co-owners.