[G.R. NO.
151900 : August 30, 2005]  Significantly, while Jonathan Chua was named as a plaintiff to the suit, it was
CHRISTINE CHUA, Petitioners, v. JORGE TORRES and ANTONIO
BELTRAN, Respondents.
FACTS:
 On 24 October 2001, a complaint for damages was lodged before the
Regional Trial Court (RTC) of Caloocan City, Branch 126. The complaint was
filed by Christine Chua, petitioner, impleading her brother Jonathan Chua
as a necessary co-plaintiff, against Jorge Torres, the owner of a Caltex
Service Center and Antonio Beltran, an employee of the said establishment
and the head of its Sales and Collection Division.
 The complaint alleged that on April 3, 2000, Jonathan Chua issued his
personal RCBC Check in the amount of P9,849.20 in favor of Caltex as
payment for diesel oil. However, the check was dishonored by the drawee
bank on the ground that the account was closed. A demand letter was then
sent to Christine Chua informing her of the dishonor of the check and
demanding payment. However, Christine ignored such on the ground that she
was not the one who issued the check.
 Beltran then instituted a criminal action for violation of Batas Pambansa
Bilang 22 against Christine with the MTC of Caloocan City, Branch 50 without
bothering to ascertain who had actually issued the check. The MTC then
issued a warrant of arrest against Christine Chua wherein the police tasked
with serving it looked for her in her residence, her brother’s repair shop and
even at her school in Manila Central University where she was enrolled as a
medical student. Such act allegedly caused the embarrassment and "social
humiliation" of Christine.
 According to her, Beltran’s purported negligence amounted to either
malicious prosecution or serious defamation since she was not the one who
issued the check. On the other hand, Torres, as employer of Beltran, was
alleged to have failed to observe the diligence of a good father of the family to
prevent the damage she suffered by petitioner. Moral and exemplary
damages together with attorney's fees were sought to the total amount of
Two Million Pesos.
explicitly qualified in the second paragraph of the complaint that he was being
"impleaded as a necessary party-plaintiff".6 There was no allegation in the
complaint of any damage or injury sustained by Jonathan. Neither did
Jonathan Chua sign any verification or certification against forum-shopping.8
 The RTC dismissed the complaint on the ground that Jonathan Chua had not
executed a certification against forum-shopping which was in violation of
Section 5, Rule 7 of the Rules of Civil Procedure
 Petitioner then filed a motion for reconsideration which was denied by the
RTC.
 Thereafter, petitioner elevated the matter directly to the Supreme Court by
way of Petition for Review under Rule 45, raising a purely legal question.
ISSUE: Whether or not it was proper for petitioner Christine Chua to have impleaded
her brother as a necessary party?
RULING: The Supreme Court ruled in the negative since Jonathan was not a
necessary party in the complaint.
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."24 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.25
In the case, Jonathan Chua does not stand to be affected should the RTC rule either
favorably or unfavorably of the complaint. There can be complete relief granted to
Christine Chua and complete determination of the case even if Jonathan was not
impleaded. This is due to the nature of the cause of action of the complaint, which
alleges an injury personal to petitioner, and the relief prayed for, which is to be
adjudicated solely to petitioner. There is no allegation in the complaint alleging any
violation or omission of any right of Jonathan, either arising from contract or from
law.
Jonathan would stand unaffected by the final ruling on the complaint. The judicial
confirmation or rejection of the allegations therein, or grant or denial of the reliefs
prayed for will not infringe on or augment any of his rights under the law.
Further, the Court held that the RTC erred in dismissing the instant complaint.
Section 11, Rule 3 of the 1997 Rules of Civil Procedure states that: Neither
misjoinder nor non-joinder of parties is ground for dismissal of an action.
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 RTC could have motu proprio dropped Jonathan as a plaintiff.
Possible questions:
 Indispensable vs Necessary Party
G.R. No. L-44339 December 2, 1987
CRISANTA F. SENO, CAROLA SENO SANTOS, MANUEL SENO, JR., DIANA
SENO CONDER, EMILY SENO and WALTER SENO, plaintiffs,
vs.
MARCOS MANGUBAT and Spouses FRANCISCO LUZAME and VERGITA
PENAFLOR, ANDRES EVANGELISTA and BIENVENIDO
MANGUBAT, defendants.
FACTS:
 Crisanta Seno and other plaintiffs filed a complaint on August 29, 1969
seeking for:
1) the reformation of a Deed of Sale executed in favor of defendant
Marcos Mangubat, Bienvenido Mangubat and Andres Evangelista; and
2) the annulment of a subsequent sale to defendant spouses Francisco
Luzame and Vergita Penaflor of a parcel of land in Paranaque, Rizal.
Indispensable parties – those without whom no final determination can be
had of an action
Necessary parties – those that are not indispensable but who ought to be
joined as parties if complete relief is to be accorded as to those already
parties or for the complete determination or settlement of the claim subject of
the action
 No valid judgment can be had without indispensable party. But without a
necessary party, there can be valid judgment but the whole controversy is
not resolved.
 Jonathan Chua was impleaded as a necessary party since he issued the
dishonored check.
 The complaint alleged that Crisanta Seno approached Marcos Mangubat in
1961 to negotiate with him a mortgage over the subject parcel of land so she
can pay off a previous indebtedness. They agreed on a mortgage for the
sum of P15,000.00 with interest of 2% a month payable every month and that
as long as the interest is being paid, the mortgage over the property will not
be foreclosed.
 Crisanta Seno then agreed to the execution of a Deed Of Absolute Sale over
the subject property for P5,000 in favor of Mangubat, Andres Evangelista and
Bienvenido Mangubat on July 17, 1961 upon the assurance of Mangubat that
he will respect their true agreement on the mortgage.
 On January 8, 1962, Andres Evangelista and Bienvenido Mangubat executed
a Deed of Absolute Sale transferring their share in the property to defendant
Marcos Mangubat which the latter was able to obtain a title in his name.
 Plaintiff Crisanta F. Seno continued paying defendant Marcos Mangubat the
2% interest per month. However, when she failed to pay sometime in 1963,
she was sued for ejectment by defendant Marcos Mangubat alleging non-
payment of rentals.
  Thereafter, plaintiff Crisanta F. Seno learned that defendant Marcos
Mangubat sold the subject property in favor of spouses Francisco Luzame
and Vergita Penaflor for the sum of P10,000.00 on January 14, 1969. The
defendant spouses Luzame then filed an ejectment case against plaintiff
Crisanta Seno for alleged non-payment of rentals.
 Plaintiffs alleged that defendant spouses Francisco Luzame and Vergita
Penaflor bought the property in bad faith since they had knowledge of the
circumstances surrounding the transaction between her and defendant
Marcos Mangubat;
 On October 20, 1975, the trial court ordered the inclusion as defendants of
Andres Evangelista and Bienvenido Mangubat on the ground that they are
indispensable parties. In compliance to such, the plaintiffs filed their amended
complaint impleading Andres Evangelista and Bienvenido Mangubat as
defendants.
 The newly impleaded defendants moved for the dismissal of the case against
them on the ground of prescription which was granted by the court. It cited
Art. 1144 of the Civil Code of the Philippines, which provides that an action
upon a written contract must be brought within 10 years from the time the
right of action accrued.
 Defendants Luzame and Penaflor and Marcos Mangubat, in their motion for
reconsideration asked the court to dismiss the case against all the
defendants which was granted.
 The plaintiffs filed a motion for reconsideration of the foregoing order but was
denied by the trial court on January 17, 1973. Hence, an appeal was brought
before the Court of Appeals which certified the instant case to the Supreme
Court holding that the assignment of errors made by plaintiffs in their appeal
raised purely legal questions.
ISSUE: Whether or not defendants Andres Evangelista and Bienvenido Mangubat
are indispensable parties in the case without whom no action can be taken thereon?
RULING:
The Supreme Court held that defendants Andres Evangelista and Bienvenido
Mangubat are not indispensable parties but rather necessary parties.
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. Under Section 7 of Rule 3 of the Rules of Civil Procedure,
they must always be joined either as plaintiffs or defendants, for the court cannot
proceed without them.
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 since they have
already sold their share in the property to Marcos Mangubat. Hence, they 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.
However, the Supreme Court held that the order of the lower court to be join
Evangelista and Mangubat as parties defendants was proper in accordance with
Sec. 8 of Rule 3 of the Rules of Civil Procedure.
Sec. 8. Joinder of proper parties. — When persons who are not
indispensable but who ought to be parties if complete relief is to be
accorded as between those already parties, have not been made parties
and are subject to the jurisdiction of the court as to both service of process
and venue, the court shall order them summoned to appear in the action.
But the court may, in its discretion, proceed in the action without making
such persons parties, and the judgment rendered therein shall be without
prejudice to the rights of such persons.
SUB ISSUES:
(1) Whether or not the action against defendants has prescribed in view of Art. 1144,
Civil Code, which provides that the action must be brought ten years from the time
the right of action accrues?
YES. In 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 (4) Whether or not the dismissal against all defendants was proper?
period.
Yes because plaintiffs are barred by laches to bring suit against them. A perusal of
the records shows that from t he time of the execution of the deed of sale on July 17,
1961 to the time of the filing of the present complaint on August 29, 1969 or a period
(2) Whether or not the complaint should not have been dismissed but the court
of 8 years, I month and 12 days, plaintiffs never took any step to enforce their rights
proceeded with a trial on the merits because there is an issue of fact appearing on
which they claim to have despite the several opportunities available to them.
the pleadings, that is, that defendants Andres Evangelista and Bienvenido Mangubat
were mere dummies of defendant Marcos Mangubat? As defendants-appellees contend, before the nine-year period lapsed, plaintiffs never
raised a voice to protest against all these proceedings. They chose to sleep on their
NO. Since the action against defendants had prescribed, the court a quo properly
rights and to rely on defendants' alleged word that their true agreement would be
ordered the dismissal of the complaint.
respected rather than bring their grievances to a court of law. However, when an
ejectment case was filed against them just when the 10-year prescriptive period for
bringing of their suit was nearly over, they finally decided to stake their claim against
(3) Whether or not that the prescription of action against defendants Andres the defendants.
Evangelista and Bienvenido Mangubat was personal to them and could not include
defendant Marcos Mangubat? By the negligence of plaintiffs in asserting their rights for an unreasonable length of
time, they are now forever precluded from enforcing whatever right they may have
NO. In the instant case, the parties discharged were the original vendees who have against defendants.
since transferred their interest in the subject property to one of the original co-
vendees, and the latter after having been vested with absolute title over the subject
property sold the same to defendants spouses Luzame. the trial court may still be
able to grant plaintiffs' demands for reformation of the instrument and annulment of
subsequent sale if after trial on the merits, plaintiffs prove their allegations that POSSIBLE QUESTIONS:
defendants Andres Evangelista and Bienvenido Mangubat were in fact were
dummies of Marcos Mangubat and that the sale executed on July 17, 1961 was in
reality an equitable mortgage.
 Who are Andres and Bienvenido?
By the dismissal of the case against defendants Andres Evangelista and Bienvenido
Mangubat, the court a quo had lost jurisdiction over them. We have already pointed
out that the joinder of proper parties is necessary in order to determine all the
possible issues of the controversy; but if for some reason or another it is not possible They are the alleged co-vendees of the subject property together with Marcos
to join them, as when they are out of the jurisdiction of the Court, the court may Mangubat.
proceed without them, and the judgment that may be rendered shall be without
prejudice to their rights.22 Hence, notwithstanding the absence of said defendants,
the court could still proceed with the trial of the case as against the remaining
defendants in accordance with Sec. 8 of Rule 3.

 What original complaint was filed?

A complaint for the reformation of a Deed of Sale executed in favor of defendant
Marcos Mangubat; and the annulment of a subsequent sale to defendant spouses
Francisco Luzame and Vergita Penaflor of a parcel of land in Paranaque, Rizal.
 What instrument is sought to be reformed?
G.R. No. 201816               April 8, 2013
HEIRS OF AUSTINO MESINA and GENOVEVA S. MESINA, rep. by NORMAN
MESINA, Petitioners,
vs.
HEIRS OF DOMINGO FIAN, SR., rep. by THERESA FIAN YRAY, ET
AL., Respondents.
FACTS:
 During their lifetime, the late spouses Faustino and Genoveva Mesina bought
from spouses Domingo Fian Sr. and Maria Fian (spouses Fian) two parcels of
land on installment. Upon the death of the spouses Fian, their heirs, claiming
ownership of the parcels of land and taking possession of them––refused to
acknowledge the payments for the lots and denied that their late parents sold
the property to the spouses Mesina.
 Meanwhile, the spouses Mesina passed away. It was then the Heirs of
Mesina that demanded for the Heirs of Fian to vacate the lots and to turn over
the possession of the properties. However, the Heirs of Fian refused to do so.
 On August 8, 2005, Norman, as attorney for his siblings Victor, Maria and
Lorna, filed an action for quieting of title and damages before the
Regional Trial Court (RTC), Branch 14 in Baybay, Leyte against the Heirs
of Fian, naming only Theresa Fian Yray (Theresa) as the representative of
the Heirs of Fian.
 Thereafter, on September 5, 2005, respondent Theresa filed a Motion to
Dismiss the complaint, arguing that the complaint states no cause of action
and that the case should be dismissed for gross violation of Sections 1 and 2
of Rule 3 of the Rules of Court. She claims that the "Heirs of Mesina" could
not be considered as a juridical person or entity authorized by law to file a
The deed of sale executed between Crisanta Seno and Marcos and Bienvenido
Mangubat and Evangelista.
civil action. Neither could the "Heirs of Fian" be made as defendant, not being
a juridical person as well. She added that since the names of all the heirs of
the late spouses Mesina and spouses Fian were not individually named, the
complaint is infirmed, warranting its dismissal.
 The RTC then granted the motion to dismiss ruling that the Rules of Court is
explicit that only natural or juridical persons or entities authorized by law may
be parties in a civil action. The Heirs of Mesina as plaintiffs and the Heirs of
Fian as defendants do not fall with the category of natural or juridical persons
as contemplated by law. Said heirs not having been individually named could
not be the real parties in interest. Hence, the complaint states no cause of
action.
 On December 27, 2005, petitioners moved for reconsideration which was
denied by the RTC. Aggrieved, petitioners appealed to the Court of Appeals.
 The Court of Appeals then affirmed the RTC decision ruling that all the heirs
of the spouses Fian are indispensable parties and should have been
impleaded in the complaint. Petitioners filed their Motion for Reconsideration,
which was likewise denied by the CA.
 Hence, petitioners filed a petition for review under Rule 45 with the Supreme
Court.
ISSUE: Whether or not the complaint of petitioners states no cause of action?
RULING:
NO. The infirmity in the complaint is not a failure to state a cause of action but a non-
joinder of an indispensable party.
Failure to state a cause of action refers to the insufficiency of the pleading. A from notice with a warning that his failure to do so shall mean dismissal of the
complaint states a cause of action if it avers the existence of the three essential complaint.
elements of a cause of action, namely:
(a) The legal right of the plaintiff;
(b) The correlative obligation of the defendant; and
SUB-ISSUES:
(c) The act or omission of the defendant in violation of said right.9
 Whether or not there was defective verification in the case?
By a simple reading of the elements of a failure to state a cause of action, it can be
NO. That the verification of the complaint does not include the phrase "or based on
readily seen that the inclusion of Theresa’s co-heirs does not fall under any of the
authentic records" does not make the verification defective. Notably, the provision
above elements.
used the disjunctive word "or." The word "or" is a disjunctive article indicating an
Non-joinder means the "failure to bring a person who is a necessary party or in alternative.14 As such, "personal knowledge" and "authentic records" need not concur
this case an indispensable party into a lawsuit."10 An indispensable party, on the in a verification as they are to be taken separately.
other hand, is a party-in-interest without whom no final determination can be had of
Also, verification, like in most cases required by the rules of procedure, is a formal
the action, and who shall be joined either as plaintiff or defendant.11
requirement, not jurisdictional. It is mainly intended to secure an assurance that
As such, this is properly a non-joinder of indispensable party, the indispensable matters which are alleged are done in good faith or are true and correct and not of
parties who were not included in the complaint being the other heirs of Fian, and not mere speculation. Thus, when circumstances so warrant, as in the case at hand, "the
a failure of the complaint to state a cause of action. court may simply order the correction of unverified pleadings or act on it and waive
strict compliance with the rules in order that the ends of justice may thereby be
served."
The Supreme Court cited the case of Pamplona Plantation Company, Inc. v.
Tinghil wherein it held that :
POINTS TO REMEMBER:
“The non-joinder of indispensable parties is not a ground for the dismissal of
an action. At any stage of a judicial proceeding and/or at such times as are  If the indispensable party is not impleaded, there can be no valid judgment.
just, parties may be added on the motion of a party or on the initiative of the
tribunal concerned. If the plaintiff refuses to implead an indispensable party  But it is a ground for dismissal if there is an order to implead and the party
despite the order of the court, that court may dismiss the complaint for the fails to do so.
plaintiff’s failure to comply with the order. The remedy is to implead the non-
party claimed to be indispensable. (Sec.11, Rule 3 of the Rules of Civil
Procedure)
Thus, the dismissal of the case for failure to state a cause of action is improper.
What the trial court should have done is to direct petitioner Norman Mesina to
implead all the heirs of Domingo Fian, Sr. as defendants within a reasonable time
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., et al., PETITIONERS,
[G.R. No. 152272 : March 05, 2012] VS. FIL-ESTATE LAND, INC., et al., RESPONDENTS.
[G. R. NO. 152397]  A TRO was then issued against Fil-Estate for a period of twenty (20) days
while several hearings were conducted to determine the propriety of the
FIL-ESTATE LAND, INC., et. al, PETITIONERS, VS. JUANA COMPLEX I issuance of a WPI.
HOMEOWNERS ASSOCIATION, INC., et al., RESPONDENTS. On February 26, 1999, Fil-Estate, filed a motion to dismiss arguing that the
complaint failed to state a cause of action and that it was improperly filed as a
class suit.
FACTS:
 On January 20, 1999, Juana Complex I Homeowners Association, Inc.
 On March 3, 1999, the RTC issued granted the Writ of Preliminary Injunction
(JCHA) together with individual residents of Juana Complex I and other
and required JCHA to post a bond.
neighboring subdivisions instituted a complaint for damages, in its own behalf
and as a class suit representing the regular commuters and motorists of
 Fil-Estate filed a motion for reconsideration arguing, among others, that JCHA
Juana Complex I and neighboring subdivisions who were deprived of the use
failed to satisfy the requirements for the issuance of a WPI.
of La Paz Road, against Fil-Estate Land, Inc., Fil-estate Ecocentrum
Corporation (FEEC), La Paz Housing & Development Corporation (La Paz),
 The RTC then denied both the motion to dismiss and the motion for
and Warbird Security Agency and their respective officers.
reconsideration filed by Fil-Estate.
 The complaint alleged that petitioners were regular commuters and motorists
 Hence, Fil-Estate, filed a petition for certiorari and prohibition before the CA.
who constantly travelled towards the direction of Manila and Calamba and
They contended that the complaint failed to state a cause of action; that it
used the entry and exit toll gates of South Luzon Expressway (SLEX) by
was improperly filed as a class suit; and that defendants failed to show
passing through right-of-way public road known as La Paz Road for more
that they had a clear and unmistakable right to the use of La Paz Road.
than ten years.
They further claimed that La Paz Road was a torrens registered private
road and there was neither a voluntary nor legal easement constituted
 However, on August 1998, Fil-estate excavated, broke and deliberately
over it.
ruined La Paz Road which prevented them from passing said road. Although
the residents restored it to make it passable, Fil-estate excavated the road
 The CA partially granting the petition. It ruled that:
again.
-the complaint sufficiently stated a cause of action when JCHA, et al. alleged
in their complaint that they had been using La Paz Road for more than ten
 According to petitioners, the act of Fil-estate in excavating La Paz Road
(10) years and that their right was violated when Fil-Estate closed and
caused damage, prejudice, inconvenience, annoyance, and loss of precious
excavated the road.
hours to them, the commuters and motorists because traffic was re-routed to
-It sustained the RTC ruling that the complaint was properly filed as a class
narrow streets that caused terrible traffic congestion and hazard. The
suit as it was shown that the case was of common interest and that the
petitioners argued that its permanent closure would not only prejudice their
individuals sought to be represented were so numerous that it was
right to free and unhampered use of the property but would also cause great
impractical to include all of them as parties.
damage and irreparable injury.
-The CA, however, annulled the Writ of Preliminary Injunction for failure of
JCHA to prove their clear and present right over La Paz Road.
 JCHA also prayed for the immediate issuance of a Temporary Restraining
Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al.
 The CA ordered the remand of the case to the RTC for a full-blown trial on
from stopping and intimidating them in their use of La Paz Road.
the merits.
 Hence, two consolidated petitions for review were filed by the JCHA and Fil
Estate Land assailing the decision of the Court of Appeals.
ISSUE: Whether or not the complaint filed by Juana Complex Homeowners
Association was improperly filed as a class suit?
RULING:
NO. The Supreme Court held that the complaint of JCHI was properly filed as a
class suit.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. – When the subject matter of the controversy is one of
common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court finds to
be sufficiently numerous and representative as to fully protect the interests of
all concerned may sue or defend for the benefit of all. Any party in interest
shall have the right to intervene to protect his individual interest.
The necessary elements for the maintenance of a class suit are:   Desistance from what?
1) the subject matter of controversy is one of common or general interest
to many persons;
2) the parties affected are so numerous that it is impracticable to bring
them all to court; and
3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protect the interests of all
concerned.
SUB ISSUES:
In the case, the suit is clearly one that benefits all commuters and motorists who use
La Paz Road. The Supreme Court quoted the CA in holding that:
The subject matter of the instant case, i.e., the closure and excavation of the La Paz
Road, is initially shown to be of common or general interest to many persons. The
records reveal that numerous individuals have filed manifestations with the lower
court, conveying their intention to join private respondents in the suit and claiming
that they are similarly situated with private respondents for they were also prejudiced
by the acts of petitioners in closing and excavating the La Paz Road. Moreover, the
individuals sought to be represented by private respondents in the suit are so
numerous that it is impracticable to join them all as parties and be named individually
as plaintiffs in the complaint. These individuals claim to be residents of various
barangays in Biñan, Laguna and other barangays in San Pedro, Laguna.
POSSIBLE QUESTIONS:
 What was the original complaint?
 A complaint for damages and a prayer for the issuance of a temporary
restraining order and writ of preliminary injunction filed by Juana Complex
I Homeowners Association.
 JCHA prayed that Fil Estate desist from stopping and intimidating them
from using La Paz Road.
(1) Whether or not the complaint states a cause of action?
YES. In the present case, the Court finds the allegations in the complaint sufficient to
establish a cause of action. First, JCHA, et al.’s averments in the complaint show a
demandable right over La Paz Road. These are: (1) their right to use the road on the
basis of their allegation that they had been using the road for more than 10 years;
and (2) an easement of a right of way has been constituted over the said roads.
There is no other road as wide as La Paz Road existing in the vicinity and it is the
shortest, convenient and safe route towards SLEX Halang that the commuters and
motorists may use. Second, there is an alleged violation of such right committed by
Fil-Estate, et al. when they excavated the road and prevented the commuters and
motorists from using the same. Third, JCHA, et al. consequently suffered injury and
that a valid judgment could have been rendered in accordance with the relief sought
therein.
(2) Whether or not a WPI is warranted?
NO. In the case at bench, JCHA, et al. failed to establish a prima facie proof of
violation of their right to justify the issuance of a WPI. Their right to the use of La Paz
Road is disputable since they have no clear legal right therein. Private respondents
failed to prove as yet that they have a clear and unmistakable right over the La Paz
[G.R. NO. 143365 : December 4, 2008]
GENEROSO SALIGUMBA, ERNESTO SALIGUMBA, and HEIRS OF SPOUSES
VALERIA SALIGUMBA AND ELISEO SALIGUMBA, SR., Petitioners, v. MONICA
PALANOG, Respondent.
FACTS:
 Monica and Avelino Palanog (Spouses Palanog), filed a complaint on
February 28, 1977 for Quieting of Title with Damages against defendants,
spouses Valeria Saligumba and Eliseo Saligumba, Sr. (spouses Saligumbas),
before the Regional Trial Court, Branch 3, Kalibo, Aklan. The complaint
alleged that the spouses Palanogs had been in actual, open, adverse and
continuous possession as owners for more than 50 years of a parcel of land
located in Solido, Nabas, Aklan.
 The spouses Saligumbas allegedly prevented them from entering and
residing on the subject premises and had destroyed the barbed wires
Road – which was sought to be protected by the injunctive writ. They merely anchor
their purported right over the La Paz Road on the bare allegation that they have
been using the same as public road right-of-way for more than ten years.
A writ of preliminary injunction is available to prevent a threatened or continuous
irremediable injury to parties before their claims can be thoroughly studied and
adjudicated.[25]  The requisites for its issuance are: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an urgent and paramount
necessity for the writ to prevent serious damage. [26]  For the writ to issue, the right
sought to be protected must be a present right, a legal right which must be shown to
be clear and positive.[27] This means that the persons applying for the writ must show
that they have an ostensible right to the final relief prayed for in their complaint.[28]
enclosing the land. Hence, they prayed that they be declared the true and
rightful owners of the land in question.
 At the hearing on 1 June 1984, only the counsel for spouses Palanogs
appeared. The hearing was then reset and the court directed the spouses
Saligumbas to secure the services of another counsel who would be ready on
such date. However, the order sent to Eliseo Saligumba, Sr. was returned to
the court unserved with the notation "Party Deceased" while the order sent to
defendant Valeria Saligumba was returned with the notation "Party in Manila.”
 At the hearing on 15 August 1984, the trial court stated that Atty. Miralles,
who had not withdrawn as counsel for spouses Saligumbas despite his
appointment as Municipal Circuit Trial Court judge, would be held responsible
for the case of spouses Saligumbas until he formally withdrew as counsel.
The trial court reminded Atty. Miralles to secure the consent of spouses
Saligumbas for his withdrawal. A copy of the order was sent to Valeria
Saligumba but the same was returned unserved with the notation "Party in
Manila."7

 Thereafter, Atty. Miralles then moved for postponement on the ground that
his client was sick. However, the presentation of evidence of Spouses
Palanogs continued and the Spouses Palanogs thereafter rested their case.
 On the next hearing on 3 June 1985, only spouses Palanogs and counsel
appeared. Upon motion of the spouses Palanogs, spouses Saligumbas were
deemed to have waived the presentation of their evidence.
 On 3 August 1987, after a lapse of more than two years, the trial court
considered the case submitted for decision. Judgment was then rendered on
August 7, 1987 declaring spouses Palanogs the lawful owners of the subject
land and ordering spouses Saligumbas to vacate the premises and restore
possession to spouses Palanogs. A copy of the court’s decision was then
furnished to the parties by an order dated August 7, 1987.
 Thereafter, a motion for the issuance of a writ of execution of the said
decision was filed. However, the trial court, in its Order dated 8 May 1997,
ruled that since more than five years had elapsed after the date of its finality,
the decision could no longer be executed by mere motion.
 Thus, on 9 May 1997, Monica Palanog (respondent), now a widow, filed a
Complaint before the RTC Branch 5 seeking to revive and enforce the
Decision dated 7 August 1987 in Civil Case No. 2570 which she claimed has
not been barred by the statute of limitations. She impleaded petitioners
Generoso Saligumba and Ernesto Saligumba, the heirs and children of the
spouses Saligumbas, as defendants.
 Petitioner Generoso Saligumba, for himself and in representation of his
brother Ernesto who was out of the country working as a seaman, engaged
the services of the Public Attorney's Office. Thereafter, the Saligumbas filed
an answer alleging that: (1) respondent had no cause of action; (2) the
spouses Saligumbas died while Civil Case No. 2570 was pending and no
order of substitution was issued and hence, the trial was null and void; and
(3) the court did not acquire jurisdiction over the heirs of the spouses
Saligumbas and therefore, the judgment was not binding on them.
 The RTC-Branch 5 rendered a decision in favor of respondent ordering the
revival of judgment in Civil Case No. 2570.
 Petitioners Saligumba then filed a Petition for Review with the Supreme
Court. They argued that the decision in Civil Case No. 2570 is null and void
since there was no proper substitution of the deceased spouses Saligumbas
despite the trial court's knowledge that the deceased spouses Saligumbas
were no longer represented by counsel. They argue that they were deprived
of due process and justice was not duly served on them.
ISSUE: Whether or not the decision in Civil Case No. 2570 is null and void since
there was no proper substitution of the deceased Spouses Saligumbas?
RULING:
No. The decision in Civil Case No. 2570 is valid. The Supreme Court held that under
Section 16, Rule 3 of the Revised Rules of Court, it is the duty of counsel for the
deceased to inform the court of the death of his client. The failure of counsel to
comply with his duty under Section 16 to inform the court of the death of his client
and the non-substitution of such party will not invalidate the proceedings and the
judgment thereon if the action survives the death of such party. The decision
rendered shall bind the party's successor-in-interest.
In the case, Civil Case No. 2570 is an action for quieting of title with damages which
is an action involving real property. It is an action that survives pursuant to Section 1,
Rule 8716 as the claim is not extinguished by the death of a party.
Section 17, Rule 3 of the Revised Rules of Court 17 provides that after a party dies
and the claim is not thereby extinguished, the court shall order, upon proper notice,
the legal representative of the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within such time as may be granted.
While it is true that the trial court, after receiving an informal notice of death by the
mere notation in the envelopes, failed to order the appearance of the legal
representative or heir of the deceased. However, Section 17 is explicit that the duty
of the court to order the legal representative or heir to appear arises only "upon
proper notice." The notation "Party-Deceased" on the unserved notices could not be
the "proper notice" contemplated by the rule.
Atty. Miralles who continued to represent the Saligumbas since he did not formally
withdrew as their counsel never notified the court of the death’s of his clients. He
continued to represent the deceased spouses even after the latter's demise. Thus,
his failure to inform the court of his clients’ demise did not invalidate the proceedings
in the Civil Case.
G. R. No. 76431 October 16, 1989
FORTUNE MOTORS, (PHILS.) INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, METROPOLITAN BANK and TRUST
COMPANY, respondents.
FACTS:
 Private respondent Metropolitan Bank extended various loans to petitioner
Fortune Motors in the total sum of P32,500,000.00 which loan was secured by a
real estate mortgage on the Fortune building and lot in Makati, Rizal. Due to
financial difficulties and the onslaught of economic recession, the petitioner was
not able to pay the loan which became due.
 For failure of the petitioner to pay the loans, the respondent bank initiated
extrajudicial foreclosure proceedings. The mortgaged property was sold at public
auction for the price of P47,899,264.91 with the mortgagee Bank as the highest
bidder. The sheriff's certificate of sale was registered on October 24, 1984 and
had a one-year redemption period to expire on October 24,1985.
 On October 21, 1985, three days before the expiration of the redemption
period, petitioner Fortune Motors filed a complaint for annulment of the
extrajudicial foreclosure sale. It alleged that the foreclosure was premature
because its obligation to the Bank was not yet due, the publication of the notice
of sale was incomplete, there was no public auction, and the price for which the
property was sold was "shockingly low".
 Before summons could be served, private respondent Bank filed a motion to
dismiss the complaint on the ground that the venue of the action was
POSSIBLE QUESTIONS:
 How did counsel notify the death of his client?
 There was no notification from counsel. It was only through the court order that
was returned underserved with a notation that Eliseo Saligumba Sr. had died.
improperly laid in Manila for the realty covered by the real estate mortgage
is situated in Makati, therefore the action to annul the foreclosure sale
should be filed in the Regional Trial Court of Makati.
 However, this was opposed by petitioner Fortune Motors alleging that its action
"is a personal action" and that "the issue is the validity of the extrajudicial
foreclosure proceedings" so that it may have a new one year period to redeem.
 The lower court reserved the resolution of the Bank's motion to dismiss until after
the trial on the merits.
 The Bank filed a motion for reconsideration which was denied by the lower court.
 On June 11, 1986 the respondent Bank filed a petition for certiorari and
prohibition in the Court of Appeals which was granted by the CA. The complaint
in the Civil Case No. 85-33218 is dismissed without prejudice to its being filed in
the proper venue.
 A motion for reconsideration was filed by Fortune Motors which was however
denied. Hence, the petition for review on certiorari was filed by petitioner with the
Supreme Court.
ISSUE: Whether petitioner's action for annulment of the real estate mortgage extrajudicial
foreclosure sale of Fortune Building is a personal action?
RULING:
No. A prayer for annulment or rescission of contract does not operate to efface the true
objectives and nature of the action which is to recover real property. Hence, the Court held
that an action for the annulment or rescission of a sale of real property is a real action. Its
prime objective is to recover said real property.
While it is true that petitioner does not directly seek the recovery of title or possession of the
property in question, his action for annulment of sale and his claim for damages are closely
intertwined with the issue of ownership of the building which, under the law, is considered
immovable property, the recovery of which is petitioner's primary objective.
In the case, respondent Court of Appeals, therefore, did not err in dismissing the case on the
ground of improper venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16).
G.R. No. 179018               June 18, 2012
PAGLAUM MANAGEMENT & DEVELOPMENT CORP. and HEALTH
MARKETING TECHNOLOGIES, INC., Petitioners,
vs.
UNION BANK OF THE PHILIPPINES, NOTARY PUBLIC JOHN DOE, and
REGISTER OF DEEDS of Cebu City and Cebu Province Respondents.
J. KING & SONS CO., INC. Intervenor.
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Decision dated 31 May 20071 and Resolution dated 24 July 2007
issued by the Court of Appeals (CA).
FACTS:
 Petitioner Paglaum Management and Development Corporation (PAGLAUM)
is the registered owner of three parcels of land located in the Province of
Cebu which were co-owned by Benjamin B. Dy, the president of petitioner
Health Marketing Technologies, Inc. (HealthTech).

 On February 3, nn m1994, respondent Union Bank of the Philippines
(Union Bank) extended HealthTech a credit line in the amount of ₱
10,000,000.8 To secure this obligation, PAGLAUM executed three Real
Estate Mortgages on behalf of HealthTech and in favor of Union Bank.9 It
must be noted that the Real Estate Mortgage, on the provision regarding the
venue of all suits and actions arising out of or in connection therewith,
originally stipulates:
Section 9. Venue. – The venue of all suits and actions arising out of or in connection
with this Mortgage shall be in Makati, Metro Manila or in the place where any of the
Mortgaged Properties is located, at the absolute option of the Mortgagee, the parties
hereto waiving any other venue.10 (Emphasis supplied.)
However, under the two Real Estate Mortgages dated 11 February 1994, the
following version appears:
Section 9. Venue. – The venue of all suits and actions arising out of or in connection
with this Mortgage shall be in Cebu City Metro Manila or in the place where any of
the Mortgaged Properties is located, at the absolute option of the Mortgagee, the
xxxxxxxxxxxxx any other venue.11 (Emphasis supplied.)
Meanwhile, the same provision in the Real Estate Mortgage dated 22 April 1998
contains the following:
Section 9. Venue. – The venue of all suits and actions arising out of or in connection
with this Mortgage shall be in _________ or in the place where any of the Mortgaged
Properties is located, at the absolute option of the Mortgagee, the parties hereto
waiving any other venue.12
HealthTech and Union Bank agreed to subsequent renewals and increases in the
credit line,13 with the total amount of debt reaching ₱ 36,500,000.14 Unfortunately,
according to HealthTech, the 1997 Asian financial crisis adversely affected its
business and caused it difficulty in meeting its obligations with Union Bank.15 Thus,
on 11 December 1998, both parties entered into a Restructuring Agreement,16 which
states that any action or proceeding arising out of or in connection therewith shall be
commenced in Makati City, with both parties waiving any other venue.17
Despite the Restructuring Agreement, HealthTech failed to pay its obligation,
prompting Union Bank to send a demand letter dated 9 October 2000, stating that
the latter would be constrained to institute foreclosure proceedings, unless
HealthTech settled its account in full.18
Since HealthTech defaulted on its payment, Union Bank extra-judicially foreclosed
the mortgaged properties.19 The bank, as the sole bidder in the auction sale, was
then issued a Certificate of Sale dated 24 May 2001.20 Thereafter, it filed a Petition
for Consolidation of Title.21
Consequently, HealthTech filed a Complaint for Annulment of Sale and Titles with
Damages and Application for Temporary Restraining Order and Writ of Injunction
dated 23 October 2001, praying for: (a) the issuance of a temporary restraining
order, and later a writ of preliminary injunction, directing Union Bank to refrain from
exercising acts of ownership over the foreclosed properties; (b) the annulment of the
extra-judicial foreclosure of real properties; (c) the cancellation of the registration of
the Certificates of Sale and the resulting titles issued; (d) the reinstatement of
PAGLAUM’s ownership over the subject properties; and (e) the payment of
damages.22 The case was docketed as Civil Case No. 01-1567 and raffled to the
Regional Trial Court, National Capital Judicial Region, Makati City, Branch 134 (RTC
Br. 134), which issued in favor of PAGLAUM and HealthTech a Writ of Preliminary
Injunction restraining Union Bank from proceeding with the auction sale of the three
mortgaged properties.23
On 23 November 2001, Union Bank filed a Motion to Dismiss on the following
grounds: (a) lack of jurisdiction over the issuance of the injunctive relief; (b) improper
venue; and (c) lack of authority of the person who signed the Complaint.24 RTC Br.
134 granted this Motion in its Order dated 11 March 2003, resulting in the dismissal
of the case, as well as the dissolution of the Writ of Preliminary Injunction.25 It
likewise denied the subsequent Motion for Reconsideration filed by PAGLAUM and
HealthTech.26
PAGLAUM and HealthTech elevated the case to the CA, which affirmed the Order
dated 11 March 200327 and denied the Motion for Reconsideration.28
In the instant Petition, PAGLAUM and HealthTech argue that: (a) the Restructuring
Agreement governs the choice of venue between the parties, and (b) the agreement
on the choice of venue must be interpreted with the convenience of the parties in
mind and the view that any obscurity therein was caused by Union Bank.29
On the other hand, Union Bank contends that: (a) the Restructuring Agreement is
applicable only to the contract of loan, and not to the Real Estate Mortgage, and (b)
the mortgage contracts explicitly state that the choice of venue exclusively belongs to
it.30
Meanwhile, intervenor J. King & Sons Company, Inc. adopts the position of Union
Bank and reiterates the position that Cebu City is the proper venue.31
The sole issue to be resolved is whether Makati City is the proper venue to assail the
foreclosure of the subject real estate mortgage. This Court rules in the affirmative.
Civil Case No. 01-1567, being an action for Annulment of Sale and Titles resulting
from the extrajudicial foreclosure by Union Bank of the mortgaged real properties, is
classified as a real action. In Fortune Motors v. Court of Appeals,32 this Court held
that a case seeking to annul a foreclosure of a real estate mortgage is a real action,
viz:
An action to annul a real estate mortgage foreclosure sale is no different from an
action to annul a private sale of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950).
While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and his claim
for damages are closely intertwined with the issue of ownership of the building which,
under the law, is considered immovable property, the recovery of which is petitioner’s
primary objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the fundamental and
prime objective and nature of the case, which is to recover said real property. It is a
real action.33
Being a real action, the filing and trial of the Civil Case No. 01-1567 should be
governed by the following relevant provisions of the Rules of Court (the Rules):
Rule 4
VENUE OF ACTIONS
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.
Forcible entry and detainer actions shall be commenced and tried in the municipal
trial court of the municipality or city wherein the real property involved, or a portion
thereof, is situated.
Sec. 3. When Rule not applicable. – This Rule shall not apply –
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof. (Emphasis supplied.)
In Sps. Lantin v. Lantion,34 this Court explained that a venue stipulation must contain
words that show exclusivity or restrictiveness, as follows:
At the outset, we must make clear that under Section 4 (b) of Rule 4 of the 1997
Rules of Civil Procedure, the general rules on venue of actions shall not apply where
the parties, before the filing of the action, have validly agreed in writing on an
exclusive venue. The mere stipulation on the venue of an action, however, is not
enough to preclude parties from bringing a case in other venues. The parties must
be able to show that such stipulation is exclusive. In the absence of qualifying or
restrictive words, the stipulation should be deemed as merely an agreement on an
additional forum, not as limiting venue to the specified place.
x x x           x x x          x x x
Clearly, the words "exclusively" and "waiving for this purpose any other venue" are
restrictive and used advisedly to meet the requirements.35 (Emphasis supplied.)
According to the Rules, real actions shall be commenced and tried in the court that
has jurisdiction over the area where the property is situated. In this case, all the
mortgaged properties are located in the Province of Cebu. Thus, following the
general rule, PAGLAUM and HealthTech should have filed their case in Cebu, and
not in Makati.
However, the Rules provide an exception, in that real actions can be commenced
and tried in a court other than where the property is situated in instances where the
parties have previously and validly agreed in writing on the exclusive venue thereof.
In the case at bar, the parties claim that such an agreement exists. The only dispute
is whether the venue that should be followed is that contained in the Real Estate
Mortgages, as contended by Union Bank, or that in the Restructuring Agreement, as
posited by PAGLAUM and HealthTech. This Court rules that the venue stipulation in
the Restructuring Agreement should be controlling.
The Real Estate Mortgages were executed by PAGLAUM in favor of Union Bank to
secure the credit line extended by the latter to HealthTech. All three mortgage
contracts contain a dragnet clause, which secures succeeding obligations, including
renewals, extensions, amendments or novations thereof, incurred by HealthTech
from Union Bank, to wit:
Section 1. Secured Obligations. – The obligations secured by this Mortgage (the
"Secured Obligations") are the following:
a) All the obligations of the Borrower and/or the Mortgagor under: (i) the
Notes, the Agreement, and this Mortgage; (ii) any and all instruments or
documents issued upon the renewal, extension, amendment or novation of
the Notes, the Agreement and this Mortgage, irrespective of whether such
obligations as renewed, extended, amended or novated are in the nature of
new, separate or additional obligations; and (iii) any and all instruments or
documents issued pursuant to the Notes, the Agreement and this Mortgage;
b) All other obligations of the Borrower and/or the Mortgagor in favor of the
Mortgagee, whether presently owing or hereinafter incurred and whether or
not arising from or connected with the Agreement, the Notes and/or this
Mortgage; and
c) Any and all expenses which may be incurred in collecting any and all of the
above and in enforcing any and all rights, powers and remedies of the
Mortgagee under this Mortgage.36
On the other hand, the Restructuring Agreement was entered into by HealthTech
and Union Bank to modify the entire loan obligation. Section 7 thereof provides:
Security. – The principal, interests, penalties and other charges for which the
BORROWER may be bound to the BANK under the terms of this Restructuring
Agreement, including the renewal, extension, amendment or novation of this
Restructuring Agreement, irrespective of whether the obligations arising out of or in
connection with this Restructuring Agreement, as renewed, extended, amended or
novated, are in the nature of new, separate or additional obligations, and all other
instruments or documents covering the Indebtedness or otherwise made pursuant to
this Restructuring Agreement (the "Secured Obligations"), shall continue to be
secured by the following security arrangements (the "Collaterals"):
a. Real Estate Mortgage dated February 11, 1994 executed by Paglaum
Management and Development Corporation over a 474 square meter
property covered by TCT No. 112489;
February 1994, the phrase "parties hereto waiving" – from the entire phrase "the
parties hereto waiving any other venue" – was stricken from the final executed
contract. Following the ruling in Sps. Lantin as earlier quoted, in the absence of
qualifying or restrictive words, the venue stipulation should only be deemed as an
agreement on an additional forum, and not as a restriction on a specified
place.1âwphi1

b. Real Estate Mortgage dated February 11, 1994 executed by Paglaum
Management and Development Corporation over a 2,796 square meter
property covered by TCT No. T-68516;
c. Real Estate Mortgage dated April 22, 1998 executed by Paglaum
Management and Development Corporation over a 3,711 square meter
property covered by TCT No. 112488;
d. Continuing Surety Agreement of Benjamin B. Dy;
Without need of any further act and deed, the existing Collaterals, shall remain in full
force and effect and continue to secure the payment and performance of the
obligations of the BORROWER arising from the Notes and this Restructuring
Agreement.37 (Emphasis supplied.)
Considering that Makati City was agreed upon by the parties to be the venue for all
actions arising out of or in connection with the loan obligation incurred by
HealthTech, as well as the Real Estate Mortgages executed by PAGLAUM, the CA
committed reversible error in affirming the dismissal of Civil Case No. 01-1567 by
RTC Br. 134 on the ground of improper venue.
WHEREFORE, the Petition for Review is GRANTED. The Decision dated 31 May
2007 and Resolution dated 24 July 2007 in CA-G.R. CV No. 82053 of the Court of
Appeals, as well as the Orders dated 11 March 2003 and 19 September 2003 issued
by the Regional Trial Court, Makati City, Branch 134, are REVERSED and SET
ASIDE. The Complaint in Civil Case No. 01-1567 is hereby REINSTATED.
SO ORDERED.

Meanwhile, Section 20 of the Restructuring Agreement as regards the venue of

actions state:

20. Venue – Venue of any action or proceeding arising out of or connected with this
Restructuring Agreement, the Note, the Collateral and any and all related documents
shall be in Makati City, [HealthTech] and [Union Bank] hereby waiving any other
venue.38 (Emphasis supplied.)

These quoted provisions of the Real Estate Mortgages and the later Restructuring
Agreement clearly reveal the intention of the parties to implement a restrictive venue
stipulation, which applies not only to the principal obligation, but also to the
mortgages. The phrase "waiving any other venue" plainly shows that the choice of
Makati City as the venue for actions arising out of or in connection with the
Restructuring Agreement and the Collateral, with the Real Estate Mortgages being
explicitly defined as such, is exclusive.

Even if this Court were to consider the venue stipulations under the Real Estate
Mortgages, it must be underscored that those provisions did not contain words
showing exclusivity or restrictiveness. In fact, in the Real Estate Mortgages dated 11