Rules Part 1

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RULE 1
GENERAL PROVISIONS

I. Rule-‐‑making power of Supreme Court (Art. VIII, Sec. 5 (5), Constitution)

The Supreme Court shall have the power to promulgate rules concerning the protection
and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the
admission to the practice of law, the integrated bar, and legal assistance to the underprivileged.
Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or
modify substantive rights. Rules of procedure of special courts and quasi-‐‑judicial bodies shall
remain effective unless disapproved by the Supreme Court.

Under Art. VI, Sec. 30, of the Constitution no law shall be passed increasing the appellate
jurisdiction of the Supreme Court as provided in this Constitution without its advice and
concurrence. At present, the laws governing jurisdiction of the courts are B.P. Blg. 129 and R.A.
No. 296 insofar as it has not been repealed by B.P. Blg. 129.

II. Distinction between procedural and substantive rules
Substantive law creates, defines and regulates rights and duties regarding life, liberty or
property which when violated gives rise to a cause of action (Bustos v. Lucero, 81 Phil. 640).
Procedural law prescribes the methods of enforcing those rights and obligations created
by substantive law by providing a procedural system for obtaining redress for the invasion of
rights and violations of duties and by prescribing rules as to how suits are filed, tried and
decided by the courts.
As applied to civil law, substantive law is that which declares the rights and obligations
of parties who enter into contracts, while procedural law provides or regulates the steps to be
taken by a person whose rights under the contract was breached.
III. Force and effect of Rules of Court

Rules of Court, promulgated by authority of law, have the force and effect of law, if not
in conflict with positive law (Inchausti & Co. vs. De Leon [1913], 24 Phil., 224.) The Rules of Court
is subordinate to the statute, and, in case of conflict, the statute will prevail. An instance is
where Congress expressly enabled the courts to establish all necessary rules for the orderly
conduct of business, provided such rules were not repugnant to the laws of the United States, in
the great case of Wayman vs. Southard ([1825], 10 Wheat., 1), made the remark that "ʺthese section
give the court full power over all matters of practice. . . ."ʺ

Recurring now to section 28 of the Judiciary Law, and section 6 of the Code of Civil
Procedure, which constitute the legislative authority for the promulgation of rules by the
Supreme Court of the Philippine Islands, it is to be noted, in the first place, that the court is
given the power to make all necessary rules for orderly procedure in the court, and for
regulating the conduct of business in the court. We apprehend that within this language would
be included regulations having to do with the preparation and filing of briefs. The law also
provides that such rules shall be binding and must be observed. The general limitation is, that
the rules must not be in conflict with laws of the United States or of the Philippine Islands. The
specific limitation is that no judgment shall be reversed by reason of the failure of the court to
comply with such rules, unless the substantial rights of the party have been impaired buy such
failure. (Shioji v. Harvey, G.R. No. 18940, 27 April 1922)
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IV. Power of Supreme Court to suspend the Rules of Court

The Supreme Court may suspend the effectivity or apply with leniency the Rules of
Court in the following circumstances:

1. When compelling reasons so warrant or when the purpose of justice requires it. What
constitutes and good and sufficient cause that would merit suspension of the rules is
discretionary upon courts (CIR v. Migrant Pagbilao Corp., G.R. No. 159593, 12 October 2006).
Among the reasons that would warrant the suspension of the Rules are: (a) the existence of
special or compelling circumstances (b) merits of the case (c) cause not entirely attributable to
the fault or negligence of the party favored by the suspension of rules (d) a lack of ay showing
that the review sought is merely frivolous and dilatory (e) the other party will not be unjustly
prejudiced thereby (Sarmiento v. Zaratan, G.R. No. 167471, 5 February 2007).

2. To relieve a litigant of an injustice commensurate with his failure to comply with the
prescribed procedure and the mere invocation of substantial justice is not a magical incantation
that will automatically compel the Court to suspend procedural rules. (Cu-‐‑Unjieng v. Court of
Appeals, G.R. No. 139596, 24 January 2006)

3. Where substantial and important issues await resolution. (Migrant Pagbilao Corp.,
supra)

4. When transcendental matters of life, liberty or state security are involved (Mindanao
Savings Loan Asso. V. Vicenta Vda. De Flores, 469 SCRA 416).

5. The constitutional power of the Supreme Court to promulgate rules of practice and
procedure necessarily carries with it the power to overturn judicial precedents on points of
remedial law through the amendment of the Rules of Court (Pinga vs. Heirs of Santiago, G.R. No.
170354, 30 June 2006).

V. Compliance with, amendment to, or waiver of the Rules of Court provisions

Justice Moran points out that rules of procedure are matters of public interest (Sanidad v.
Cabotaje, 5 Phil. 204; Castaño v. Lobingier, 7 Phil 91, 94; Arzadon v. Arzadon, 15 Phil. 77) and cannot
be changed by agreement of parties (Banco Español-‐‑Filipino v. Palanca, 37 Phil. 921; Yangco v.
Herrera, 11 Phil 402-‐‑404).

When, however, the Rules themselves allow the parties to agree on a procedure different
from that provided therein, the agreement is valid. Thus, Rule 4, Section 3 provides that parties
may agree to change or transfer the venue from one province to another. Moreover, Rule 24,
Section 14 allows the parties to agree as to the procedure for taking depositions which will be
deemed valid as other dispositions.

It must be noted, upon the other hand, that there are matters of procedure which may be
waived if public interest is not affected thereby. If, for instance, the defendant fails to file his
answer within fifteen (15) days, but plaintiff refuses to as for judgment in default, he thereby
waives a right given him by the Rules. Since the Court cannot declare defendant in default
without a motion to that effect by plaintiff, the latter’s right to file the motion is exclusively his;
which he may waive while public interest is unaffected. When, however, plaintiff’s silence is so
long that it amount to a failure to prosecute his case for an unreasonable length of time, the
Court may stop his inaction by dismissing the case. And, again, mistakes of procedure which do
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not affect the merits of the case or substantial rights of the parties are not grounds for revising
orders or judgments (I Moran, 1979 ed.).

JURISDICTION

IN GENERAL

1. Definition of jurisdiction
Jurisdiction is the power and authority of the court to hear, try and decide a case (Cuenca v.
PCGG, 535 SCRA 102). It has also been referred to as the power or capacity given by law to a
court or tribunal to entertain, hear, and determine certain controversies (De la Cruz v. Court of
Appeals, 510 SCRA 103).

a. Jurisdiction over the Subject Matter

i. Jurisdiction over the subject matter is referred to as the power of a particular court to
hear the type of case that is then before it. The term also refers to the jurisdiction of
the court over the class of cases to which a particular case belongs. It is the power or
authority to hear and determine cases of the general class to which the proceeding in
question belongs (Reyes v. Diaz, 73 Phil. 484).

ii. The term “subject matter” also refers to the item with respect to which the
controversy has arisen, or concerning which the wrong has been done, and it is
ordinarily the right, the thing, or the contract under dispute (De la rama v. Mendiola,
401 SCRA 704).

iii. Jurisdiction over the subject matter is conferred by law which may be either the
Constitution or a statute (Guinhawa v. People of the Philippines, 468 SCRA 278). Since
jurisdiction is a matter of substantive law, the established general rule is that the
statute in force at the time of the commencement of the action determines
jurisdiction of the court (Cang v. Court of Appeals, 296 SCRA 128).

iv. Since jurisdiction over the subject matter is conferred only by the Constitution or by
law, it cannot be: (a) granted by agreement of the parties; (b) acquired, waived,
enlarged, or diminished by any act or omission of the parties; or (c) conferred by the
acquiescence of the courts (Republic v. Estipular, 336 SCRA 333). Neither can
jurisdiction over the subject matter be conferred by the administrative policy of any
court or a court’s unilateral assumption of jurisdiction.

v. Jurisdiction over the subject matter is determined by the allegations in the complaint
which comprise a concise statement of ultimate facts constituting the plaintiff’s cause
of action. The nature of the action, as well as which court or body has jurisdiction
over it, is determined based on the allegations contained in the complaint of the
plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein (City of Dumaguete v. Philippine Ports Authority,
G.R. No. 168973, 24 August 2011).

vi. The court’s jurisdiction over the subject matter cannot be made to depend upon
defenses set up in the answer or in a motion to dismiss (Tomas Claudio Memorial
College, Inc. v. Court of Appeals, 316 SCRA 502). The settled rule is that jurisdiction is
based on the allegations in the initiatory pleading and the defenses in the answer are
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deemed irrelevant and immaterial in its determination (De la Cruz v. Court of Appeals,
510 SCRA 103).

vii. The general rule is that the objection for want of jurisdiction of the controversy or the
subject matter may be made at any time and at any stage of the proceedings. The
court may on its own initiative object to an erroneous jurisdiction and may ex mero
motu take cognizance of lack of jurisdiction at any point in the case and has a clearly
recognized right to determine its own jurisdiction in any proceeding (Fabian v.
Desierto, 295 SCRA 470). Lack of jurisdiction is one of those excepted grounds where
the court may dismiss a claim or a case at any time when it appears from the
pleadings or the evidence on record that any of those ground exists, even if they
were not raised in the answer or in a motion to dismiss (Geonzon Vda. De Barrera v.
Heirs of Vicente Legaspi, 565 SCRA 192).

viii. However, while it is true that jurisdiction over the subject matter may be raised
at any stage of the proceedings since it is conferred by law, it is nevertheless settled
that a party may be barred from raising it on the ground of estoppel (La’o v. Republic,
479 SCRA 439). In Tijam v. Sibonghanoy, the Supreme Court barred a belated objection
to jurisdiction that was raised only after an adverse decision was rendered by the
court against the party raising the issue of jurisdiction and after seeking affirmative
relief from the court and after participating in all stages of the proceedings. The
doctrine of estoppel by laches in this case according to the Supreme Court is based
upon grounds of public policy and is principally a question of inequity or unfairness
of permitting a right or claim to be enforced or asserted.

ix. It must, however, be noted that the ruling in Tijam is the exception rather than the
rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only
in cases in which the factual milieu is analogous to that in Tijam. In such
controversies, laches should have been clearly present; that is, lack of jurisdiction
must have been raised so belatedly as to warrant the presumption that the party
entitled to assert it had abandoned or declined to assert it (Regalado v. Go, 514 SCRA
616).

b. Jurisdiction over the res or property

i. Jurisdiction over the res refers to the court’s jurisdiction over the thing or the
property which is the subject of the action. This type of jurisdiction is necessary
when the action is an action in rem or quasi in rem. When the action is one in
personam, jurisdiction over the res is not sufficient to authorize the court to render a
judgment against the defendant.

ii. Jurisdiction over the res may be acquired by the court by placing the property or
thing under its custody or constructive seizure (Example: attachment of property). It
may also be acquired by the court through statutory authority conferring upon it the
power to deal with the property or thing within the court’s territorial jurisdiction
(Example: suits involving the status of the parties or suits involving the property in
the Philippines of non-‐‑resident defendants).

iii. Any relief granted in actions in rem or quasi in rem must be confined to the res, and
the court cannot lawfully render a judgment against the defendant (Banco do Brasil v.
Court of Appeals, 333 SCRA 545). For instance, if an action to foreclose a real estate
mortgage, where the jurisdiction acquired by the court is only over the res and not
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over the person of the defendant because the debtor-‐‑mortgagor is a non-‐‑resident
who is also outside of the Philippines, the relief of the creditor extends only to the
property foreclosed. If in the foreclosure sale, there arises a deficiency, a deficiency
judgment authorized by Section 6, Rule 68 against the debtor-‐‑mortgagor would not
be feasible because a collection of the deficiency is a proceding in personam which
requires jurisdiction over the person of the debtor-‐‑mortgagor.

c. Jurisdiction over the Issues

i. Jurisdiction over the issue is the power of the court to try and decide issues raised in
the pleadings of the parties (Reyes v. Diaz, 73 Phil. 484).

ii. An issue is a disputed point or question to which parties to an action have narrowed
down their several allegations and upon which they are desirous of obtaining a
decision.

iii. Jurisdiction over the issues is conferred and determined by the pleadings of the
parties. The pleadings present the issues to be tried and determine whether or not
the issues are of fact or of law. With respect to an issue raised by the pleadings, an
issue arises because a material allegation of a claiming party is specifically denied by
the defending party.

iv. Jurisdiction over the issues may also be determined and conferred by stipulation of
the parties as when in the pre-‐‑trial, the parties enter into stipulations of facts and
documents or enter into an agreement simplifying the issues of the case.

v. Jurisdiction over the issues may also be conferred by waiver or failure to object to the
presentation of evidence on a matter not raised in the pleadings.

d. Jurisdiction over the Parties

i. Jurisdiction over the parties is the legal power of the court to render personal
judgment against a party to an action or proceedings.

ii. The manner by which the court acquires jurisdiction over the parties depends on
whether the party is the plaintiff or the defendant. Jurisdiction over the plaintiff is
acquired by his filing of the complaint or petition. By doing so, he submits himself to
the jurisdiction of the court (Davao Light & Power Co., Inc. v. Court of Appeals, 204
SCRA 343). On the other hand, jurisdiction over the defendant in civil cases is
acquired either by his voluntary appearance in court and his submission to its
authority, or by service of summons (Ang Ping v. Court of Appeals, 310 SCRA 343).

iii. To constitute voluntary appearance, it must be the kind that amounts to a voluntary
submission to the jurisdiction of the court. Submission to the court’s jurisdiction
takes the form of an appearance that seeks affirmative relief except when the relief
sought is for the purpose of objecting to the jurisdiction of the court over the person
of the defendant.

iv. Jurisprudence states that jurisdiction over the person of the defendant is required
only in action in personam. Jurisdiction over the person of the defendant is not a
prerequisite in an action in rem and quasi in rem. However, despite the fact that
jurisdiction over the person is not required in actions in rem and quasi in rem,
summons must still be served upon the defendant not for the purpose of vesting the
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court with jurisdiction but merely for satisfying the due process requirement
(Asiavest Limited v. Court of Appeals, 296 SCRA 539).

v. An objection to the jurisdiction over the person of the defendant may be raised as a
ground for a motion to dismiss. If the objection is not raised either in a motion to
dismiss or in the answer, the objection to the jurisdiction over the person is deemed
waived by virtue of the provisions of Section 1, Rule 9 of the Rules of Court.

vi. A party contesting the court’s lack of jurisdiction over the person of the defendant
may also raised other defenses. The rule allows the raising of defenses in addition to
lack of jurisdiction over the person of the defendant without creating an inference of
a voluntary submission to the jurisdiction of the court. Section 20, Rule 14 provides:

Voluntary Appearance.—The defendant’s voluntary appearance in the
action shall be equivalent to service of summons. The inclusion in a motion
to dismiss of other grounds aside from lack of jurisdiction over the person
of the defendant shall not be deemed a voluntary appearance.

2. ESTOPPEL TO DENY JURISDICTION

Heirs of Hinog v. Melicor
G.R. No. 140954, 12 April 2005

Facts:
In May 1991, Custodio, Rufo, Tomos and Honorio, all surnamed Balane (the “Balane’s”)
filed a complaint for Recovery of Ownership and Possession, Removal of Construction and
Damages against Bertuldo Hinog (“Bertuldo”). In July 1991, Bertuldo filed his answer alleging
ownership of the disputed property by virtue of a Deed of Absolute Sale dated 2 July 1980,
executed by one Tomas Pahac with the knowledge and conformity of private respondents. Pre-‐‑
trial and trial ensued. In November 1997, the Balane’s rested their case and Bertuldo started his
direct examination. However, in June 1998, Bertuldo died without completing his evidence.
Bertuldo was later substituted by his heirs, who, through counsel, filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground that private
respondents failed to specify in the complaint the amount of damages claimed so as to pay the
correct docket fees. The trial court granted the motion to expunge. In May 1999, the heirs of
Betuldo filed their supplemental pleading, appending therein a Deed of Sale dated 15
November 1982. After paying the deficiency in the docket fees, the trial court granted the
Balane’s prayer for reinstatement of the case. On 14 July 1999, Bertuldo’s heirs manifested that
the trial court having expunged the complaint and nullified all court proceedings, there is no
valid case and the complaint should not be admitted for failure to pay the correct docket fees;
that there should be no case to be reinstated and no case to proceed as there is no complaint
filed.

Issue:
Whether the heirs of Bertuldo can question the jurisdiction of the trial court over the case

Held:
No. After recognizing the jurisdiction of the trial court by seeking affirmative relief in
their motion to serve supplemental pleading upon the Balane’s, the heirs of Bertuldo are
effectively barred by estoppel from challenging the trial court’s jurisdiction. If a party invokes
the jurisdiction of a court, he cannot thereafter challenge the court’s jurisdiction in the same
case. To rule otherwise would amount to speculating on the fortune of litigation, which is
against the policy of the Court.
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It is also worth noting that when Bertuldo filed his Answer on 2 July 1991, he did not
raise the issue of lack of jurisdiction for non-‐‑payment of correct docket fees. Instead, he based
his defense on a claim of ownership and participated in the proceedings before the trial court. It
was only on 22 September 1998 or more than seven years after filing the answer, and under the
auspices of a new counsel, that the issue of jurisdiction was raised for the first time in the
motion to expunge by Bertuldo’s heirs.

After Bertuldo vigorously participated in all stages of the case before the trial court and
even invoked the trial courts authority in order to ask for affirmative relief, petitioners,
considering that they merely stepped into the shoes of their predecessor, are effectively barred
by estoppel from challenging the trial court’s jurisdiction. Although the issue of jurisdiction
may be raised at any stage of the proceedings as the same is conferred by law, it is nonetheless
settled that a party may be barred from raising it on ground of laches or estoppel.

3. JURISDICTION AT THE TIME OF FILING OF ACTION

Cang v. Court of Appeals
G.R. No. 105308, 25 September 1998

Facts:
Herbert Cang (“Cang”) and Anna Marie Clavano (“Anna Marie”) were married in 1973
and begot three (3) children. Later, Cang was able to secure a divorce decree from Anna Marie
in the United States (US). The US court issued the divorce decree that also granted sole custody
of the three minor children to Anna Marie, reserving "ʺrights of visitation at all reasonable times
and places"ʺ to Cang. While in the US, Cang remitted a portion of his salary to the Philippines
for his children'ʹs expenses and another, deposited in the bank in the name of his children.
Meanwhile, in September 1987, Anna Marie’s brother and sister-‐‑in-‐‑law filed an action for the
adoption of Cang and Anna Marie’s three (3) minor children. Attached to the application was
Anna Marie’s consent to the adoption. Upon knowing this, Cang returned to the Philippines
and opposed the adoption.

However, the trial court granted the petition for adoption, and which ruling was
affirmed by the Court of Appeals. The trial court and the Court of Appeals ruled that Anna
Marie’s consent was sufficient compliance with the requisites of Article 188 of the Family Code,
considering that Cang had already abandoned his children Cang elevated his case to the
Supreme Court, alleging that the petition for adoption was fatally defective as it did not have
his written consent as a natural father as required by Article 31 (2) of Presidential Decree No.
603, the Child and Youth Welfare Code, and Article 188 (2) of the Family Code.

Issue:
Whether the Child and Youth Welfare Code or the Family Code should govern the
petition for adoption of Cang’s three (3) children

Held:
Jurisdiction being a matter of substantive law, the established rule is that the statute in
force at the time of the commencement of the action determines the jurisdiction of the court. As
such, when private respondents filed the petition for adoption on September 25, 1987, the
applicable law was the Child and Youth Welfare Code, as amended by Executive Order No. 91.

VI. JURISDICTION OF COURTS IN CIVIL CASES

A. SUPREME COURT (SC)
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1. Exclusive original jurisdiction over
a. Petitions for certiorari, prohibition or mandamus against the:
i. Court of Appeals (CA) (Section 17, R.A. No. 296; Rule 65);
ii. Commission on Elections (COMELEC) (Rule 64);
iii. Commission on Audit (COA) (Rule 64); and
iv. Sandiganbayan.

2. Concurrent jurisdiction, subject to the hierarchy of courts with:
a. With the Regional Trial Court (RTC), in cases affecting ambassadors, other public
ministers and consuls (Section 17, R.A. No. 296 in relation to Section 21(b), B.P. Blg.
129).

b. With the CA, in
i. Petitions for certiorari, prohibition or mandamus against the RTC (Section 5
(1), Article 8, 1987 Constitution; Section 9(1), B.P. Blg. 129); and
ii. Petitions for a Writ of Kalikasan (A.M. No. 09-‐‑6-‐‑8-‐‑SC).

c. With the RTC and CA:
i. Petitions for Habeas Corpus (Section 5 (1), Article 8, 1987 Constitution;
Section 9(1), B.P. Blg. 129; and Section 21(a), B.P. Blg. 129);
ii. Petitions for Quo Warranto (Section 5 (1), Article 8, 1987 Constitution; Section
9(1), B.P. Blg. 129; and Section 21(a), B.P. Blg. 129); and
iii. Petitions for certiorari, prohibition or mandamus against inferior courts and
other bodies (Section 5 (1), Article 8, 1987 Constitution; Section 9(1), B.P. Blg.
129; and Section 21(a), B.P. Blg. 129).

d. With the RTC, CA & Sandiganbayan
i. Petitions for a Writ of Amparo (A.M. No. 07-‐‑9-‐‑12-‐‑SC); and
ii. Petitions for a Writ of Habeas Data (A.M. No. 08-‐‑1-‐‑16-‐‑SC).

3. Appellate jurisdiction
a. By way of Appeal by Certiorari (Rule 45)of the decisions of the:
i. CA;
ii. Sandiganbayan;
iii. RTC on pure questions of law;
iv. In cases involving the constitutionality or validity of a law or treaty,
international agreement or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance or regulation, legality of a tax,
impost, assessment, toll or penalty, jurisdiction of a lower court (Sec. 5, Art.
VIII, Constitution); and
v. Court of Tax Appeals en banc.

B. COURT OF APPEALS (B.P. Blg. 129 as amended by R.A. No. 7902)
1. Exclusive original jurisdiction over actions for annulment of judgments of the RTC
(Section 9(2), B.P. Blg. 129).
2. Concurrent jurisdiction with:
a. The SC:
i. Petitions for certiorari, prohibition or mandamus against the RTC;
ii. Petitions for a Writ of Kalikasan; and
iii. Petitions for certiorari, prohibition or mandamus against the NLRC (but
according to the SC in St. Martin Funeral Homes v. CA (G.R. No. 130866,
September 16, 1998), all such petitions should be initially filed in the CA in
strict observance of the rule on hierarchy of courts. The concurrent original
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jurisdiction of the SC can be availed of only under compelling and
exceptional circumstances (Regalado, p. 40).

b. The SC and RTC:
i. Petitions for Habeas Corpus;
ii. Petitions for Quo Warranto; and
iii. Petitions for certiorari, prohibition or mandamus against inferior courts and
other bodies.

c. With the RTC, SC and Sandiganbayan:
i. Petitions for a Writ of Amparo; and
ii. Petitions for a Writ of Habeas Data.

d. Appellate jurisdiction (Section 9(3), B.P. Blg. 129):
i. By way of Ordinary Appeal from the RTC and the Family Courts;
ii. By way of Petition for Review from the RTC rendered in the exercise of its
appellate jurisdiction;
iii. By way of Petition for Review from the final judgments, decisions,
resolutions, orders or awards of any quasi-‐‑judicial agency in the exercise of
its quasi-‐‑judicial functions, such as the:
-‐‑ Securities and Exchange Commission;
-‐‑ Social Security Commission;
-‐‑ Employees Compensation Commission;
-‐‑ Civil Service Commission;
-‐‑ Office of the Ombudsman in administrative disciplinary cases; and
-‐‑ Other bodies mentioned in Rule 43; and
iv. Exclusive appellate jurisdiction over decisions of the MTCs in cadastral or
land registration cases pursuant to its delegated jurisdiction.

C. REGIONAL TRIAL COURTS and MUNICIPAL TRIAL COURTS (B.P. Blg. 129 as
amended by R.A. No. 7691)

REGIONAL TRIAL COURTS MUNICIPAL TRIAL COURTS
CIVIL CASES
If the gross value, claim, or
If the gross value, claim, or demand
demand does not exceed P300,000
exceeds P300,000 (outside Metro
(outside Metro Manila), or does
Manila), or exceeds P400,000 (Metro
not exceed P400,000 (Metro
Manila):
Manila):
1. Actions involving personal property depending on the value;
2. Admiralty and maritime cases depending on the amount of demand or
claim;
3. Probate proceedings (testate or intestate) depending on the gross value of
Exclusive the estate;
Original 4. Demand for money depending on the amount.

NOTE: Exclusive of Interest, Damages of whatever kind, Attorney’s fees,
Litigation Expenses, and Costs (IDALEC), the amount of which must be
specifically alleged, but the filing fees thereon shall be paid.

NOTE: The exclusion of the term “damages of whatever kind” applies to
cases where the damages are merely incidental to or a consequence of the
main cause of action. However, in cases where the claim for damages is the
main cause of action, the amount of such claim shall be considered in
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determining the jurisdiction of the court (Administrative Circular No. 09-‐‑94).
If the assessed value or interest in the If the assessed value or interest

real property exceeds P20,000 (outside in the real property does not
Metro Manila), or exceeds P50,000 exceed P20,000 (outside Metro
(Metro Manila): Manila), or does not exceed
P50,000 (Metro Manila):
5. Actions involving title to or possession of real property, or any interest
therein depending on the assessed value.
6. Actions the subject matter of which is 6. Inclusion and exclusion of
incapable of pecuniary estimation. voters (BP 881, Sec.138);

The basic issue in an action incapable 7. Those covered by the Rules on
of pecuniary estimation is one other Summary Procedure
than the recovery of money. In this a. Forcible Entry and Unlawful
kind of action, the money claim is Detainer
merely incidental (Singsong v. Isabela
Sawmill, G.R. No. L-‐‑27343, February 28, NOTE: With jurisdiction to
1979), resolve issue of ownership to
determine only the issue of
NOTE: Annulment of judgments of the possession;
RTC is also an action which is incapable
of pecuniary estimation but is NOTE: Irrespective of the amount
cognizable by the CA by express of damages or unpaid rentals
mandate of BP 129. In other words, all sought to be recovered;
actions which are incapable of pecuniary
estimation is cognizable by the RTC NOTE: Where attorney’s fees
except the annulment of judgments of are awarded, the same shall
the RTC. not exceed P20,000.

7. Cases not within the exclusive b.Other civil cases, except
jurisdiction of any court, tribunal, probate proceedings, where
person or body exercising judicial or the total amount of the
quasi-‐‑judicial functions (General plaintiff’s claim does not
Jurisdiction of RTC); exceed PhP100,000 or does
not exceed PhP200,000 in
8. Under Sec. 5.2 of the Securities and Metro Manila, exclusive of
Regulations Code to hear and decide: interests and costs (as
a. Devices or schemes employed by or amended by A.M. No. 02-‐‑11-‐‑
any acts of the board of directors, 09-‐‑SC, effective November 25,
business associates, its officers or 2002).
partnership, amounting to fraud and
misrepresentation;
b. Intra-‐‑corporate controversies;
c. Controversies in the elections or
appointments of directors, trustees,
officers or managers of corporations,
partnerships or associations;
d. Petitions of corporations,
partnerships or associations to be
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declared in a state of suspension of
payments.
SC may designate certain branches of Petition for Habeas Corpus or
RTC to try exclusively criminal cases, application for bail in criminal
juvenile and domestic relations cases, cases in the absence of all RTC
Special agrarian cases, urban land reform cases judges in the province or city.
not falling w/in the jurisdiction of any
quasi-‐‑judicial body and other special
cases in the interest of justice.
With the SC
Actions affecting ambassadors, public
ministers and consuls.

With the SC and CA
a. Petitions for Habeas Corpus;
b. Petitions for Quo Warranto;
c. Petitions for certiorari, prohibition or
Concurrent mandamus against inferior courts and -‐‑-‐‑-‐‑-‐‑-‐‑-‐‑-‐‑-‐‑
other bodies.

With the SC, CA and Sandiganbayan
a. Petitions for a Writ of Amparo;
b. Petitions for a Writ of Habeas Data.

With the Insurance Commissioner

Claims not exceeding PhP100,000.
All cases decided by the lower courts in
their respective territorial jurisdiction
Appellate -‐‑-‐‑-‐‑-‐‑-‐‑-‐‑-‐‑-‐‑-‐‑
except decisions of lower courts in the
exercise of delegated jurisdiction.
May be assigned by the SC to hear
cadastral or land registration
cases where there is no
Delegated -‐‑-‐‑-‐‑-‐‑-‐‑-‐‑ controversy or opposition over
the land or in case of contested
lands, the value does not exceed
P100,000.

N.B. Under Section 5, R.A. No. 7691 (approved on 25 March 1994), the amounts which
determine the jurisdiction of the RTC under Section 19 (3), (4) and (8) of B.P. Blg. 129 were as
follows:
a. From 25 March 1994 to 25 March 1999: exceeds P100,000 – outside Metro Manila, and
exceeds P200,000 – inside Metro Manila;
b. From 26 March 1999 to 26 March 2004: exceeds P200,000 – outside Metro Manila, and
exceeds P400,000 – inside Metro Manila; and
c. From 27 March 2004 to present: exceeds P300,000 – outside Metro Manila, and exceeds
P400,000 – inside Metro Manila.

Accordingly, if the amount of the claim does not exceed the abovementioned amounts
during the relevant periods, the MTC shall have jurisdiction.

D. FAMILY COURTS (R.A. No. 8369)
12

1. Exclusive original jurisdiction
a. Petitions for guardianship, custody of children, habeas corpus in relation to the custody of
children;

N.B. The SC and the CA have not been deprived of their original jurisdiction to
issue writs of habeas corpus. Writs of habeas corpus which may be issued exclusively by
family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that may be
availed of in conjunction with a petition for custody of minors under Rule 99 of the
Rules of Court. In other words, the issuance of the writ is merely ancillary to the custody
case pending before the family court. The writ must be issued by the same court to avoid
splitting of jurisdiction, conflicting decisions, interference by a co-‐‑equal court and
judicial instability. – Madrian v. Madrian, G.R. No. 159374, 12 July 2007. See also In the
Matter of Application for the Issuance of a Writ of Habeas Corpus Richard Brian Thornton v.
Adelfa Thornton, G.R. No. 154598, 16 August 2004)

b. Petitions for adoption of children and the revocation thereof;
c. Complaints for annulment and declaration of nullity of marriage, matters relating to
marital status and property relations of husband & wife or those living together under
different status or agreement, and petitions for dissolution of conjugal partnership of
gains;
d. Support and/or acknowledgment;
e. Summary judicial proceedings under the Family Code; and
f. Petition for declaration of status of children, voluntary or involuntary commitment of
children, matters relating to parental authority and other cases cognizable under PD 603,
EO 56 (series of 1996) and other related laws.

2. Special provisional remedies:
a. In cases of violence among the family members living in the same domicile or
household, the Family Court may issue a restraining order against the accused or
defendant upon verified application by the complainant or the victim for relief from
abuse.
b. The court may order the temporary custody of children in all civil actions for their
custody, support pendente lite, including deduction from the salary, and use of conjugal
home and other properties in all civil actions for support.

E. Special Courts

a. Sandiganbayan (P.D. No. 1616, as amended by R.A. No. 7975 and R.A. No. 8249)

1. Exclusive original jurisdiction over civil cases filed pursuant to and in connection with
E.O No. 1, 2 14 and 14-‐‑A (Sequestration cases) issued in 1986.

2. Concurrent jurisdiction with:
RTC, CA and SC in:
i. Petitions for a Writ of Amparo; and
ii. Petitions for a Writ of Habeas Data.

3. Original jurisdiction over petitions for the issuance of the writs of mandamus,
prohibition, certiorari, habeas corpus, injunction and other ancillary writs and processes
in aid of its appellate jurisdiction and over petition of similar nature, including quo
warranto, arising or that may arise in cases file or which may be filed under E.O. Nos. 1,
2 14 and 14-‐‑A, issued in 1986 PROVIDED, that the jurisdiction over these petitions shall
not be exclusive of the supreme Court.
13

b. Court of Tax Appeals R.A. No. 9282

1. Exclusive appellate jurisdiction to review by appeal, as herein provided:
a. Decisions of the Commissioner of Internal Revenue in cases involving disputed
assessments, refunds of internal revenue taxes, fees or other charges, penalties in
relation thereto, or other matters arising under the National Internal Revenue or
other laws administered by the Bureau of Internal Revenue;

b. Inaction by the Commissioner of Internal Revenue in cases involving disputed
assessments, refunds of internal revenue taxes, fees or other charges, penalties in
relations thereto, or other matters arising under the National Internal Revenue Code
or other laws administered by the Bureau of Internal Revenue, where the National
Internal Revenue Code provides a specific period of action, in which case the
inaction shall be deemed a denial;

c. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases
originally decided or resolved by them in the exercise of their original or appellate
jurisdiction;

d. Decisions of the Commissioner of Customs in cases involving liability for customs
duties, fees or other money charges, seizure, detention or release of property
affected, fines, forfeitures or other penalties in relation thereto, or other matters
arising under the Customs Law or other laws administered by the Bureau of
Customs;

e. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate
jurisdiction over cases involving the assessment and taxation of real property
originally decided by the provincial or city board of assessment appeals;

f. Decisions of the Secretary of Finance on customs cases elevated to him automatically
for review from decisions of the Commissioner of Customs which are adverse to the
Government under Section 2315 of the Tariff and Customs Code;

g. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural
product, commodity or article, and the Secretary of Agriculture in the case of
agricultural product, commodity or article, involving dumping and countervailing
duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and
safeguard measures under Republic Act No. 8800, where either party may appeal the
decision to impose or not to impose said duties.

F. Quasi-‐‑judicial bodies

a. Securities Exchange Commission (SEC) (Sec. 5.2, RA 8799, Securities Regulation

Code)

The SEC’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree
No. 902-‐‑A has been transferred to the Courts of general jurisdiction or the appropriate Regional
Trial Court. The cases covered by this provision have been included in the table above.

b. Civil Service Commission

14

Magpale vs. CSC
G.R. No. 97381, 5 November 1992
Magpale is an employee of the Philippine Ports Authority (PPA). A formal charge for
Dishonesty, Pursuit of Private Business without permission as required by Civil Service Rules
and Regulations, Frequent and Unauthorized Absences and Neglect of Duty was filed against
him. A Decision was rendered by the Secretary of the DOTC finding him guilty of Gross
Negligence on two counts: (a) for his failure to account for the forty-‐‑four (44) assorted units of
equipment, among them a Sony Betamax and a TV Camera, and (b) for failing to render the
required liquidation of his cash advances amounting to P44,877.00 for a period of four years. He
was also found guilty of frequent and unauthorized absences. Accordingly, he was meted the
penalty of dismissal from the service with the corresponding accessory penalties. When
petitioner'ʹs motion for reconsideration of the aforesaid Decision was denied in the DOTC'ʹs
Order, he appealed to the Merit System and Protection Board (MSPB) of Civil Service
Commission. The MSPB rendered a Decision reversing the Decision of the DOTC. The pertinent
portion of the MSPB'ʹs Decision reads:
… … …
IN VIEW THEREOF, the decision appealed from is hereby reversed.

Respondent-‐‑Appellant Magpale should immediately be reinstated in the service
without loss of seniority rights and with payment of back salaries and other
emoluments to which he is entitled under the law. (pp. 31-‐‑32, Rollo.)
The PPA filed an appeal with the Civil Service Field Office-‐‑PPA, and the latter office
indorsed the appeal to respondent CSC in a letter dated March 5, 1990.
On 28 June 1990, Magpale filed a Motion to Dismiss the PPA’s appeal claiming among
others that the CSC has no jurisdiction over said appeal.
Issue:
Whether a decision exonerating a government employee from administrative liability

and reinstating him to his former position is appealable to the to the CSC
Held:
No. While it is true, as contended by respondent Civil Service Commission that under
Section 12 (par. 11), Chapter 3, Subtitle A, Book V of Executive Order 292, the CSC does have
the power to —
Hear and decide administrative cases instituted by or brought before it

directly or on appeal, including contested appointments, and review decisions
and actions of its offices and of the agencies attached to it. . . .
the exercise of the power is qualified by and should be read together with the other sections of
the same sub-‐‑title and book of Executive Order 292, particularly Section 49 which prescribes the
following requisites for the exercise of the power of appeal, to wit:
(a) the decision must be appealable;
(b) the appeal must be made by the party adversely affected by the
decision;
(c) the appeal must be made within fifteen days from receipt of the
decision, unless a petition for the reconsideration is seasonably filed; and
15

(d) the notice of appeal must be filed with the disciplining office, which
shall forward the records of the case, together with the notice of appeal to the
appellate authority within fifteen days from filing of the notice of appeal, with its
comments, if any.

Under Section 47 of the same Code, the CSC shall decide on appeal all administrative
disciplinary cases involving the imposition of:
(a) a penalty of suspension for more than thirty days; or
(b) fine in an amount exceeding thirty days salary; or
c) demotion in rank or salary or transfer; or
(d) removal or dismissal from office.
The 5 February 1990 decision of the MSPB did not involve dismissal or separation from
office, rather, the decision exonerated Magpale and ordered him reinstated to his former
position. Consequently, in the light of our pronouncements in the aforecited cases of Mendez
v. Civil Service Commission and Paredes vs. Civil Service Commission, the MSPB decision was not
a proper subject of appeal to the CSC.
c. Housing and Land Use Regulatory Board (HLURB)

Delos Santos vs. Sps. Sarmiento
G.R. No. 154877, 27 March 2007

Facts:
Spouses Sarmiento agreed to sell to Santos a residential lot. Of the P842,000.00 purchase
price, P300,000.00 shall be paid by Santos at the time of the execution of the Contract to Buy and
Sell and the remaining balance to be paid within five (5) years at a monthly amortization. Before
the purchase price could be paid in full, Santos and Spouses Sarmiento entered into a
Cancellation of Contract to Buy and Sell of wherein Spouses Sarmiento agreed to refund Santos
the P584,355.10 remitted by the latter, while Santos agreed to surrender possession of the lot to
former. On 14 July 1999, Santos wrote Spouses Sarmiento, demanding refund of P760,000.00
with interest. Spouses Sarmiento wrote back that they intend to refund the amount within 90
days. When Spouses Sarmiento failed to refund Santos, the latter filed with the HLURB a
Complaint, to enforce the cancellation of contract and demand payment of the refund plus
interest and damages. Arbiter San Vicente issued an Order dated 7 June 2000, declaring
respondents therein in default for failure to file an answer despite notice. It is noted, however,
that the respondent named in the 7 June 2000 Order is IA-‐‑JAN Sarmiento Realty, Inc. (IJSRI), not
Spouses Sarmiento.

Issue:
Does the HLURB have jurisdiction over all cancellations of contracts of sale involving a
parcel of residential land?

Held:
No. The scope and limitation of the jurisdiction of the HLURB is well-‐‑defined. Its
precursor, the National Housing Authority (NHA), was vested under Presidential
Decree (P.D.) No. 957 with exclusive jurisdiction to regulate the real estate trade and
business, specifically the registration of subdivision or condominium projects and dealers,
brokers and salesmen of subdivision lots or condominium units; issuance and suspension of
license to sell; and revocation of registration certificate and license to sell. Its jurisdiction was
later expanded under Presidential Decree (P.D.) No. 1344 of April 2, 1978, to include
adjudication of the following cases:

16

Sec. 1. In the exercise of its function to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No.
957, the National Housing Authority shall have exclusive jurisdiction to hear and
decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed
by subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, broker or
salesman. (Emphasis ours.)

… … …

At present, therefore, it is clear that the jurisdiction of the HLURB to hear and decide
cases is determined by the nature of the cause of action, the subject matter or property involved
and the parties.

The cases over which HLURB has jurisdiction are those arising from either unsound real
estate business practices, or claims for refund or other claims filed by subdivision lot or
condominium unit buyers against the project owner, developer, dealer, broker or salesman, or
demands for specific performance of contractual and statutory obligations filed by buyers
of subdivision lots or condominium units against the owner, developer, broker or salesman.

In addition, these cases must involve a subdivision project, subdivision lot,
condominium project or condominium unit. A subdivision project or subdivision lot is defined
under Sec. 2 of P.D. No. 957, thus:

Section 2 x x x

d) Subdivision project Subdivision project shall mean a tract or a parcel of
land registered under Act No. 496 which is partitioned primarily for residential
purposes into individual lots with or without improvements thereon, and offered
to the public for sale, in cash or in installment terms. It shall include all
residential, commercial, industrial and recreational areas as well as open spaces
and other community and public areas in the project.

e) Subdivision lot. Subdivision lot shall mean any of the lots, whether
residential, commercial, industrial, or recreational, in a subdivision project.

In quite a number of cases, we declared the HLURB without jurisdiction where the
complaint filed did not allege that the property involved is a subdivision or condominium
project or a subdivision lot or condominium unit.

Going back to the jurisdictional requirements, it is also important that, with reference to
cases arising from a claim for refund or specific performance, said cases must be filed by the
subdivision lot or condominium unit buyer or owner against the subdivision or condominium
project owner, developer, broker or salesman. Cases filed by buyers or owners of property
which is not alleged to be a subdivision or condominium property do not fall within the
17

jurisdiction of the HLURB for the complainants in said cases are treated as ordinary real estate
buyers or owners, not subdivision or condomium buyers or owners.

What about cases filed by subdivision or condominium project owners or developers
against their buyers? The rules on this matter differ.

The general rule is stated in Pilar Development Corporation v. Villarand Suntay v.
Gocolay where we held that the HLURB has no jurisdiction over cases filed by subdivision or
condominium owners or developers against subdivision lot or condominium unit buyers or
owners. The rationale behind this can be found in the wordings of Sec. 1, P.D. No. 1344, which
expressly qualifies that the cases cognizable by the HLURB are those instituted by subdivision
or condomium buyers or owners against the project developer or owner. This rationale is also
expressed in the preambles of P.D. No. 957 and P.D. No. 1344 which state that the policy of the
law is to curb unscrupulous practices in real estate trade and business.[52]

The only instance that HLURB may take cognizance of a case filed by the developer is
when said case is instituted as a compulsory counterclaim to a pending case filed against it by
the buyer or owner of a subdivision lot or condominium unit. We allowed this in Francel Realty
Corporation v. Sycip in order to forestall splitting of causes of action.

To summarize, not every case involving buyers and sellers of real estate may be filed
with the HLURB. Its jurisdiction is limited to those cases filed by the buyer or owner of a
subdivision or condominium and based on any of the causes of action enumerated under
Section 1 of P.D. No. 1344, and which jurisdictional facts must be clearly alleged in the
complaint.

VII. KINDS OF ACTION

An “action” is the legal and formal demand of one’s right from another person made
and insisted upon in a court of justice (Hermanos v. de la Riva, G.R. No. L-‐‑19827, 6 April 1923). A
“civil action” is one by which a party sue another for the enforcement or protection of a right, or
the prevention or redress of a wrong (Rule 1, Section 3(a)).

1. As to cause or foundation
a. Personal
i. An action which is not founded upon the privity of real rights or real property.

ii. In a personal action, the plaintiff generally seeks the recovery of personal
property, the enforcement of a contract or the recovery of damages.

iii. 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
(Go v. United Coconut Planters Bank, G.R. No. 156187, 11 November 2004).

b. Real

i. An action is “real” when it affects title to or possession of real property, or an
interest therein. All other actions are personal.

ii. An action is real when it is founded upon the privity of real estate. That means
that realty, or an interest therein is the subject matter of the action.

18

iii. Not every action, however, involving a real property is a real action because the
realty may only be incidental to the subject matter of the suit. To be a real action
it is not enough that the action must deal with real property. It is important that
the matter in litigation must also involve any of the following issues: title to,
ownership, possession, partition, foreclosure of mortgage, or any interest in real
property.

Importance of distinction between personal action and real action

• The distinction between a real action and a personal action is important for the purpose of
determining the venue of the action. Questions involving the propriety or impropriety of a
particular venue are resolved by initially determining the nature of the action.

• A real action is local, i.e., its venue depends upon the location of the property involved in
the litigation.

• A personal action is transitory, i.e., its venue depends upon the residence of the plaintiff or
the defendant. A personal action 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 non-‐‑resident defendant, where he may be found, at the election of
the plaintiff.

2. As to object
a. In rem

i. An action in rem is an action against the thing itself instead of against the person.

ii. A judgment in rem is binding upon the whole world, such as a judgment in a
land registration case or probate of will.

iii. In an action in rem jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court provided that the court acquires
jurisdiction over the res.

b. In personam

i. An proceeding in personam is a proceeding to enforce personal rights and
obligations brought against the person and is based on the jurisdiction of the
person, although it may involve his right to, or the exercise of ownership of,
specific property, or seek to compel him to control or dispose of it in accordance
with the mandate of the court.
ii. The purpose of a proceeding in personam is to impose through the judgment of a
court, some responsibility or liability directly upon the person of the defendant
(Domagas v. Jensen, 448 SCRA 663).
iii. An action in personam is an action against a person on the basis of his personal
liability.
iv. An action in personam is said to be one which has for its object a judgment against
the person.

c. Quasi in rem

19

i. An action quasi in rem is one wherein an individual is named as defendant and
the purpose of the proceeding is to subject his interest therein to the obligation or
lien burdening the property. (Asiavest Limited v. Court of Appeals, 296 SCRA 539).

ii. The object of an action quasi in rem is the sale or disposition of the property
whether by attachment, foreclosure or any other form of remedy (Banco Español-‐‑
Filipino v. Palanca, 37 Phil 921). A proceeding quasi in rem is one brought against
persons seeking to subject the property of such persons to the discharge of the
claims assailed. In an action quasi in rem, an individual is named as defendant
and the purpose of the proceeding is to subject his interests therein to the
obligation or loan burdening the property.

iii. Actions quasi in rem deal with the status, ownership or liability of a particular
property but which are intended to operate on these questions only as between
the particular parties to the proceedings and not to ascertain or cut-‐‑off the rights
or interests of all possible claimants (Domagas v. Jensen, 448 SCRA 663).

Significance of distinction between actions in rem, in personam and quasi in rem

• The distinction is important to determine whether or not jurisdiction over the person of the
defendant is required and consequently to determine the type of summons to be employed.

• Jurisdiction over the person of the defendant is necessary for the court to validly try and
decide a case against said defendant where the action is one in personam but not where the
action in in rem or quasi in rem.

• In a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction
over the res. In said action, the court is not concerned with the acquisition of jurisdiction
over the person of the defendant. In these actions, it is the acquisition by the court of
jurisdiction over the res which principally matters.

• Although summons is not required in actions in rem and quasi in rem, nonetheless, summons
must be served upon the defendant not for the purpose of vesting the court with jurisdiction
but merely fore satisfying the due process requirement.

VIII. COMMENCEMENT OF ACTION

Civil actions are commenced upon filing of the Complaint (Section 5, Rule 1, Rules of Court).
Civil actions are deemed commenced from the date of the filing and docketing of the
Complaint, without taking into account the issuance and service of summons (Cabrera v. Tiano,
G.R. No. L-‐‑17299, July 31, 1963).

1. Condition Precedent

KATARUNGANG PAMBARANGAY LAW

Under Sections 399-‐‑422, Chapter 7, Title One, Book III, Republic Act No. 7160 otherwise
known as the Local Government Code, all disputes may be subject of barangay proceedings for
amicable settlement except:
a. Where one party is the government or any subdivision or instrumentality thereof;
b. Where one party is a public officer or employee; and the disputes relates to the
performance of his judicial functions;
20

c. xxx xxx xxx
d. Disputes involving parties who actually reside in barangays of different cities or
municipalities, except where such barangay units adjoin each other and the parties
thereto agrees to submit their differences to amicable settlement by an appropriate
lupon;
e. Such other classes or disputes which the president may determine in the interest of
justice or upon the recommendation of the Secretary of Justice;
f. Where the disputes involve real properties located in different cities or municipalites
unless the parties thereto agree to submit their differences to amicable settlement by
an appropriate lupon; and
g. xxx xxx xxx
h. Sec, 1, Rule VI, Katarungang Pambarangay Rules provide for additional exception
which is any complaint by or against corporations, partnerships or juridical entities.

Lumbuan v. Ronqullo
G.R. No. 155713, 5 May 2006

The Supreme Court held that although there was no Pangkat Tagapamayapa constituted to
hear the parties’ claims, as required under R.A. No. 7160, there was already substantial
compliance of the required conciliation proceedings before the barangay, when the parties met
before the Barangay Chairman to discuss the possibility of amicable settlement.

Barangay conciliation is a condition precedent to the filing of an action (Uy v. Contreras, G.R.
No. 111416 , 26 September 1994). While failure to comply with a condition precedent is not
jurisdictional, it may be a ground to dismiss under Section 1 (j), Rule 16, Rules of Court.

• Non-‐‑compliance with the condition precedent of barangay conciliation does not prevent a
court of competent jurisdiction from exercising its power of adjudication over a case where
the defendants fail to object to such exercise of jurisdiction. But such objection should be
seasonably made before the court first taking cognizance of the complaint, and must be
raised in the Answer, or in such other pleading allowed under the Rules of Court. (Espino v.
Legarda, G.R. No. 149266, 17 March 2006; Sabay v. People of the Philippines. (G.R. No. 192150, 1
October 2014).

• Barangay conciliation is a condition precedent for filing a claim, and compliance of the same
must be alleged in the pleading. Failure to resort to conciliation is a ground for motion to
dismiss for non-‐‑compliance of condition precedent. (Willard Riano, Civil Procedure 2009
ed., p. 97)

• It is true that the precise technical effect of failure to comply with the requirement on
barangay conciliation is much the same effect produced by non-‐‑exhaustion of
administrative remedies -‐‑-‐‑ the complaint becomes afflicted with the vice of pre-‐‑maturity;
and the controversy there alleged is not ripe for judicial determination. The complaint
becomes vulnerable to a motion to dismiss. (Aquino v. Aure, G.R. No. 153567, February 18,
2008)

Parties may go directly to court without need of prior barangay conciliation under Section
412 of R.A. No. 7110 in the following instances:
a. When the accused is under detention;
b. Where a person has otherwise been deprived of personal liberty calling for habeas
corpus proceedings;
c. Where actions are coupled with provisional remedies such as preliminary injunction,
attachment, delivery of personal property and support pendente lite; and
21

d. Where action may otherwise be barred by the statute of limitations.

2. PAYMENT OF DOCKET FEES

Heirs of Bertuldo Hinog v. Melicor
G.R. No. 140954, 12 April 2005
(reiterating Sun Insurance Office, Ltd. v. Asuncion, 170 SCRA 274 (1989)

• While the payment of the prescribed docket fee is a jurisdictional requirement, even its
non-‐‑payment at the time of filing does not automatically cause the dismissal of the case,
as long as the fee is paid within the applicable prescriptive or reglementary period, more
so when the party involved demonstrates a willingness to abide by the rules prescribing
such payment.

• Guidelines regarding the payment of filing fees:
-‐‑ It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over
the subject-‐‑matter or nature of the action. Where the filing of the initiatory pleading
is not accompanied by payment of the docket fee, the court may allow payment of
the fees within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.

-‐‑ The same rule applies to permissive counterclaims, third-‐‑party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee
prescribed therefor is paid. The court may also allow payment of said fee within a
reasonable time but also in no case beyond its applicable prescriptive or

-‐‑ Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but, subsequently, the
judgment awards a claim not specified in the pleading, or if specified the same has
been left for determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.

RULE 2

CAUSES OF ACTION

I. Causes of Action (Sections 1 and 2)

Section 1 of Rule 2 of the Revised Rules of Court requires that every ordinary civil action
must be based on a cause of action. Section 2 of the same rule defines a cause of action as an act
or omission by which a party violates the right of another.

In order that one may claim to have a cause of action, the following elements must
concur: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises
or is created; (2) an obligation on the part of the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of such defendant in violation of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which
the latter may maintain an action for recovery of damages or other appropriate relief. In other
22

words, "ʺa cause of action arises when that should have been done is not done, or that which
should not have been done is done. (Anchor Savings Bank v. Furigay, G.R. No. 191178, 13 March
2013)

Heirs of Tomas Dolleton vs. Fil-‐‑Estate Management, Inc.
G.R. No, 170750, April 7, 2009

Facts:
Petitioner-‐‑heirs filed for quieting of title and/or recovery of ownership and possession
with preliminary injunction/restraining order and damages against respondents Fil-‐‑Estate
Management Inc. They claimed that they have been in open, exclusive, and notorious
possession of parcels of land for more than 90 years until Fil-‐‑Estate forcibly ousted them. Fil-‐‑
Estate contended that that have in their possession numerous certificates covering the parcels of
land and can only be attacked collaterally pursuant to PD 1529. The respondents also filed a
motion to dismiss on the grounds that the petitioners do not have a cause of action the RTC
dismissed the complaint filed by the petitioner.

Issue:
Whether or not petitioners’ Complaints state a cause of action.

Held:
Yes. The Supreme Court ruled that each of the Complaints filed by petitioners
sufficiently stated a cause of action. The Complaints alleged that petitioners are the owners of
the subject properties by acquisitive prescription. As owners thereof, they have the right to
remain in peaceful possession of the said properties and, if deprived thereof, they may recover
the same. The petitioners are in open, continuous and notorious possession of the disputed
parcels of land for more than 90 years.

The elementary test for failure to state a cause of action is whether the complaint alleges
facts which if true would justify the relief demanded. The inquiry is into the sufficiency, not the
veracity, of the material allegations. If the allegations in the complaint furnish sufficient basis on
which it can be maintained, it should not be dismissed regardless of the defense that may be
presented by the defendant. The rule of civil procedure provides the elements of a cause of
action ; 1) a right in favor of a plaintiff. 2) An obligation on the part of the defend ant to violate
such right. 3) an act or omission on the part of defendant of the right of the plaintiff which
constitutes such right.

II. Distinguished from Right of Action

Right of Action is the right to commence and prosecute an action to obtain the relief
sought. (Herrera, Vol. 1, p. 285, citing 1 C.J.S. 988).

The term "ʺcause of action"ʺ has been held to be synonymous with "ʺright of action” but in
the law of pleading one is distinguished from the other in that a right of action is a remedial
right belonging to some person, while a cause of action is a formal statement of the operative
facts that give rise to such remedial right. The one is a matter of right and depends on the
substantive law, while the other is a matter of statement and is governed by the law of
procedure. (L.G. Marquez v. Varela, G.R. No. L-‐‑4845, 24 December 1952)

The right of action accrues when there exists a cause of action. (Espanol vs. Chairman,
Philippine Veterans Administration, 137 SCRA 314).

23

The elements of a right of action are: (a) the existence of a cause of action; (b) the
performance of all conditions precedent to the brining of the action; and (c) the right to bring
and maintain the action must be in the person instituting it.

III. Splitting a cause of action (Secs. 3-‐‑4)

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. (Perez v. Court
of Appeals, G.R. No. No. 157616, 22 July 2005)

A party may not institute more than one suit for a single cause of action. (Section 3, Rule
2, Rules of Court)

If two or more suits are instituted on the basis of the same cause of action, the filing of
one or a judgment upon the merits in any one is available as a ground for the dismissal of the
others. (Section 4, Rule 2, Rules of Court)

The rule against splitting a cause of action is intended: (a) to prevent repeated litigation
between the same parties in regard to the same subject of controversy; (b) to protect the
defendant from unnecessary vexation; and (c) to avoid the costs and expenses incident to
numerous suits. It comes from the old maxim nemo debet bis vexari, pro una et eadem causa (no
man shall be twice vexed for one and the same cause). (Chua v. Metrobank, G.R. No. 182311, 19
August 2009, citing Bachrach Motor Co., Inc. v. Icarangal, 68 Phil 287)

Sps Yap vs. First E-‐‑Bank Corporation
G.R. No. 169889, 29 September 2009

Facts:
Sammy Yap (“Sammy”) obtained a P2 million loan from PDCP Development Bank, Inc.
(“PDCP”). As security, Sammy’s parents, petitioners Simon Yap and Milagros Guevarra,
executed a third-‐‑party mortgage on their land and warehouse standing on it, which mortgage
agreement allowed PDCP to extrajudicially foreclose the property in case Sammy failed to pay
the loan.

Sammy issued a promissory note and six postdated checks in favor of PDCP as
additional securities for the loan. When Sammy defaulted on the payment of his loan, PDCP
presented the six checks to the drawee bank but the said checks were dishonored. This
prompted PDCP to file a complaint against Sammy for six counts of violation of BP 22
(Bouncing Checks Law).

Therafter, PDCP filed an application for extrajudicial foreclosure of mortgage on the
property of petitioners which served as principal security for Sammy’s loan.

Subsequently, on motion of Sammy and without objection from the public prosecutor
and PDCP, the BP 22 cases were provisionally dismissed.

Petitioners filed in the Regional Trial Court (RTC) of San Carlos City, Pangasinan (the
“lower court”) a complaint for injunction (with prayer for the issuance of a temporary
restraining order/preliminary injunction), damages and accounting of payments against PDCP.
The complaint sought to stop the foreclosure sale on the ground that PDCP waived its right to
foreclose the mortgage on their property when it filed the BP 22 cases against Sammy.

24

The lower court ruled in favor of petitioners. It held that PDCP had three options when
Sammy defaulted in the payment of his loan: enforcement of the promissory note in a collection
case, enforcement of the checks under the Negotiable Instruments Law and/or BP 22, or
foreclosure of mortgage. The remedies were alternative and the choice of one excluded the
others. Thus, PDCP was deemed to have waived its right to foreclose on the property of
petitioners when it elected to sue Sammy for violation of BP 22.

PDCP appealed to the Court of Appeals, which reversed the RTC. It opined that PDCP
was not barred from exercising its right to foreclose on the property of petitioners despite suing
Sammy for violation of BP 22.

Issue:
Whether or not the subsequent foreclosure of the mortgaged property was barred by the
previous filing of the complaint for violation of B.P. 22.

Held:
No. The Supreme Court ruled that the filing of the complaint for violation of B.P. 22. did
not bar the subsequent foreclosure of the mortgaged property.

Petitioners anchor their position on Supreme Court Circular 57-‐‑97, which provides for
the rules and guidelines in the filing and prosecution of criminal cases under BP 22. Pertinent
portions of Circular 57-‐‑97 provide:

1. The criminal action for violation of [BP] 22 shall be deemed to
necessarily include the corresponding civil action, and no reservation to
file such civil action separately shall be allowed or recognized.

Circular 57-‐‑97 has been institutionalized as Section 1(b), Rule 111 of the Rules of Court:
Section 1. Institution of criminal and civil actions.—xxx

(b) The criminal action for violation of [BP] 22 shall be
deemed to include the corresponding civil action. No reservation
to file such civil action separately shall be allowed.

However, Circular 57-‐‑97 (and, it goes without saying, Section 1(b), Rule 111 of the Rules
of Court) was not yet in force when PDCP sued Sammy for violation of BP 22 and when it filed
a petition for extrajudicial foreclosure on the mortgaged property of petitioners on February 8,
1993 and May 3, 1993, respectively. In Lo Bun Tiong v. Balboa, Circular 57-‐‑97 was not applied
because the collection suit and the criminal complaints for violation of BP 22 were filed prior to
the adoption of Circular 57-‐‑97. The same principle applies here.

Thus, prior to the effectivity of Circular 57-‐‑97, the alternative remedies of foreclosure of
mortgage and collection suit were not barred even if a suit for BP 22 had been filed earlier,
unless a judgment of conviction had already been rendered in the BP 22 case finding the
accused debtor criminally liable and ordering him to pay the amount of the check(s).

In this case, no judgment of conviction (which could have declared the criminal and civil
liability of Sammy) was rendered because Sammy moved for the provisional dismissal of the
case. Hence, PDCP could have still foreclosed on the mortgage or filed a collection suit.

Furthermore, it is undisputed that the BP 22 cases were provisionally dismissed at
Sammy’s instance. In other words, PDCP was prevented from recovering the whole amount by
Sammy himself. To bar PDCP from foreclosing on petitioners’ property for the balance of the
25

indebtedness would be to penalize PDCP for the act of Sammy. That would not only be illogical
and absurd but would also violate elementary rules of justice and fair play. In sum, PDCP has
not yet effectively availed of and fully exhausted its remedy.

Note:
The Supreme Court stated the present rule in this case. If the debtor fails (or unjustly
refuses) to pay his debt when it falls due and the debt is secured by a mortgage and by a check,
the creditor has three options against the debtor and the exercise of one will bar the exercise of
the others. He may pursue either of the three but not all or a combination of them.

First, the creditor may file a collection suit against the debtor. This will open up all the
properties of the debtor to attachment and execution, even the mortgaged property itself.
Second, the creditor may opt to foreclose on the mortgaged property. In case the debt is not
fully satisfied, he may sue the debtor for deficiency judgment (not a collection case for the
whole indebtedness), in which case, all the properties of the debtor, other than the mortgaged
property, are again opened up for the satisfaction of the deficiency. Lastly, the creditor may opt
to sue the debtor for violation of BP 22 if the checks securing the obligation bounce. Circular 57-‐‑
97 and Section 1(b), Rule 111 of the Rules of Court both provide that the criminal action for
violation of BP 22 shall be deemed to necessarily include the corresponding civil action, i.e., a
collection suit. No reservation to file such civil action separately shall be allowed or recognized.

Del Rosario vs Far East Bank and Trust Company
G.R. No. 150134, 31 October 2007

Facts:
Petitioners a Complaint for sum of money against Private Development Corporation of
the Philippines (PDCP) and Far East Bank and Trust Company (FEBTC) before the RTC, Makati,
Branch 132, docketed as Civil Case No. 94-‐‑1610, mainly to recover the payment of P5.3 million –
P4.335 million to PDCP, and P965,000 to FEBTC (the “Civil Case No. 94-‐‑1610”). After the trial,
the RTC-‐‑Makati rendered a Decision ordering PDCP to pay petitioners the sum of P4.035
million, to bear interest at 12% per annum from April 25, 1994 until fully paid. As
regards FEBTC, the trial court dismissed it for lack of cause of action. The parties appealed to
the Court of Appeals (CA), which ruled that the party bound to refund the excess payment
of P5 million was FEBTC as it received the overpayment. Noting, however, that DATICOR
claimed in its complaint only the amount of P965,000 from FEBTC, the CA held that it could not
grant a relief different from or in excess of that prayed for. The CA Decision became final and
executory.

Subsequently, petitioners filed before the RTC of Makati a Complaint against FEBTC to
recover the balance of the excess payment of P4.335 million. The case was docketed as Civil
Case No. 00-‐‑540, the precursor of the present case and raffled to Branch 143 of the RTC, which
dismissed the complaint on the ground of res judicata and splitting of cause of action. It recalled
that petitioners had filed Civil Case No. 94-‐‑1610 to recover the alleged overpayment both from
PDCP and FEBTC and to secure the cancellation and release of their mortgages on real
properties, machinery and equipment; that when said case was appealed, the CA, in its
Decision, ordered PDCP to release and cancel the mortgages and FEBTC to pay P965,000 with
interest, which Decision became final and executory on November 23, 1999; and that a Notice of
Satisfaction of Judgment between petitioners and FEBTC was in fact submitted on August 8,
2000, hence, the issue between them was finally settled under the doctrine of res judicata.

Issue:
Whether or not the second Complaint docketed as Civil Case No. 00-‐‑540 was correctly
dismissed on the ground of splitting of causes of action.
26

Held:
Yes. There is a splitting of causes of action in this case. The Supreme Court noted that in
the two cases, petitioners imputed to FEBTC the same alleged wrongful act of mistakenly
receiving and refusing to return an amount in excess of what was due it in violation of their
right to a refund. The same facts and evidence presented in the first case, Civil Case No. 94-‐‑
1610, were the very same facts and evidence that petitioners presented in Civil Case No. 00-‐‑540.

Notably, the same facts were also pleaded by the parties in support of their allegations
for, and defenses against, the recovery of the P4.335 million. Petitioners, of course, plead the CA
Decision as basis for their subsequent claim for the remainder of their overpayment. It is well
established, however, that a party cannot, by varying the form of action or adopting a different
method of presenting his case, or by pleading justifiable circumstances as herein petitioners are
doing, escape the operation of the principle that one and the same cause of action shall not be
twice litigated.

The Supreme Court finds well-‐‑taken then the pronouncement of the court a quo that to
allow the re-‐‑litigation of an issue that was finally settled as between petitioners and FEBTC in
the prior case is to allow the splitting of a cause of action, a ground for dismissal under Section 4
of Rule 2 of the Rules of Court reading:

SEC. 4. Splitting of a single cause of action; effect of. – If two or more suits are
instituted on the basis of the same cause of action, the filing of one or a judgment upon
the merits in any one is available as a ground for the dismissal of the others.1

This rule proscribes a party from dividing a single or indivisible cause of action into
several parts or claims and instituting two or more actions based on it. Because the plaintiff
cannot divide the grounds for recovery, he is mandated to set forth in his first action every
ground for relief which he claims to exist and upon which he relies; he cannot be permitted to
rely upon them by piecemeal in successive actions to recover for the same wrong or injury.

Clearly then, the judgment in Civil Case No. 94-‐‑1610 operated as a bar to Civil Case No.
00-‐‑540, following the above-‐‑quoted Section 4, Rule 2 of the Rules of Court.

Petitioners were sternly reminded that both the rules on res judicata and splitting of
causes of action are based on the salutary public policy against unnecessary multiplicity of suits
– interest reipublicae ut sit finis litium. Re-‐‑litigation of matters already settled by a court'ʹs final
judgment merely burdens the courts and the taxpayers, creates uneasiness and confusion, and
wastes valuable time and energy that could be devoted to worthier cases.

CGR Corporation vs. Treyes, Jr.
G.R. No. 170916, 27 April 2007

Facts:
Petitioners claimed to have occupied 37.3033 hectares of public land in Barangay
Bulanon, Sagay City, Negros Occidental even before the notarized separate Fishpond Lease
Agreements in their respective favor were approved in October 2000 by the Secretary of
Agriculture for a period of twenty-‐‑five (25) years or until December 31, 2024.

Respondent Ernesto L. Treyes, Jr. allegedly forcibly and unlawfully entered the leased
properties and once inside barricaded the entrance to the fishponds, set up a barbed wire fence

1 Emphasis supplied.
27

along the road going to petitioners’ fishponds, and harvested several tons of milkfish, fry and
fingerlings owned by petitioners.

Petitioners was thus prompted to file with the Municipal Trial Court (MTC) in Sagay
City separate complaints for Forcible Entry With Temporary Restraining Order And/Or
Preliminary Injunction And Damages, docketed as Civil Case Nos. 1331, 1332 and 1333, against
respondent.

In a separate move, petitioners filed in March 2004 with the Bacolod RTC a complaint for
damages against respondent, docketed as Civil Case No, 04-‐‑12284. The Bacolod RTC dismissed
petitioners’ complaint for damages on the ground of prematurity.

Issue:
Whether or not the dismissal of the petitioner’s complaint for damages, filed after the
ejectment case, is correct.

Held:
No. The Court ruled that petitioners’ claim for damages have no direct relation to their
loss of possession of the premises. It had to do with respondents alleged harvesting and carting
away several tons of milkfish and other marine products in their fishponds,ransacking and
destroying of a chapel built by petitioner CGR Corporation, and stealing religious
icons and even decapitating the heads of some of them, after the act of dispossession had
occurred.

Surely, one of the elements of litis pendentia -‐‑ that the identity between the pending
actions, with respect to the parties, rights asserted and reliefs prayed for, is such that any
judgment rendered on one action will, regardless of which is successful, amount
to res judicata in the action under consideration -‐‑ is not present, hence, it may not be invoked to
dismiss petitioners complaint for damages.

Res judicata may not apply because the court in a forcible entry case has no jurisdiction
over claims for damages other than the use and occupation of the premises and attorneys fees.

Neither may forum-‐‑shopping justify a dismissal of the complaint for damages, the
elements of litis pendentia not being present, or where a final judgment in the forcible entry case
will not amount to res judicata in the former.

Petitioners filing of an independent action for damages other than those sustained as a
result of their dispossession or those caused by the loss of their use and occupation of their
properties could not thus be considered as splitting of a cause of action.

Joseph v. Bautista
G.R. No. L-‐‑41423, 23 February 1989
Facts:
Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner
of the cargo truck, based on a breach of contract of carriage and against respondents Antonio
Sioson and Lazaro Villanueva, as owner and driver, respectively, of the pick-‐‑up truck, based on
quasi-‐‑delict.
28

Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a Motion to
Exonerate and Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson
and Jacinto Pagarigan on the Instant Case, alleging that respondents Cardeno and Villanueva
already paid P 7,420.61 by way of damages to respondent Perez, and alleging further that
respondents Cardeno, Villanueva, Sioson and Pagarigan paid P 1,300.00 to petitioner by way of
amicable settlement.
Thereafter, respondent Perez filed his motion to dismiss premised on the fact that the
release of claim executed by petitioner in favor of the other respondents inured to his benefit,
considering that all the respondents are solidarity liable to herein petitioner.
RTC dismissed the case against Perez. Hence, this petition.
Issue: WON the judgment on the compromise agreement under the cause of action based on
quasi-‐‑delict is a bar to the cause of action for breach of contract of carriage
Held:
YES. The trial court was, therefore, correct in holding that there was only one cause of
action involved although the bases of recovery invoked by petitioner against the defendants
therein were not necessarily Identical since the respondents were not identically circumstanced.
However, a recovery by the petitioner under one remedy necessarily bars recovery under the
other. This, in essence, is the rationale for the proscription in our law against double recovery
for the same act or omission which, obviously, stems from the fundamental rule against unjust
enrichment.
A cause of action is understood to be the delict or wrongful act or omission committed
by the defendant in violation of the primary rights of the plaintiff. It is true that a single act or
omission can be violative of various rights at the same time, as when the act constitutes
juridically a violation of several separate and distinct legal obligations. However where there is
only one delict or wrong, there is but a single cause of action regardless of the number of rights
that may have been violated belonging to one person.
The singleness of a cause of action lies in the singleness of the-‐‑ delict or wrong violating
the rights of one person. Nevertheless, if only one injury resulted from several wrongful acts,
only one cause of action arises. In the case at bar, there is no question that the petitioner
sustained a single injury on his person. That vested in him a single cause of action, albeit with
the correlative rights of action against the different respondents through the appropriate
remedies allowed by law.
The respondents having been found to be solidarity liable to petitioner, the full payment
made by some of the solidary debtors and their subsequent release from any and all liability to
petitioner inevitably resulted in the extinguishment and release from liability of the other
solidary debtors, including herein respondent Patrocinio Perez.
Progressive Development Corporation, Inc., v. CA

G.R. No. 123555, 22 January 1999
Facts:
Petitioner leased to private respondent Westin Seafood Market, Inc., a parcel of land with a
commercial building. Private respondent failed to pay rentals despite several demands by
29

petitioner. This constituted breach of their contract; thus, pursuant to the express authority
granted under the lease agreement, petitioner repossessed the leased premises. Private
respondent filed with the MeTC of QC a complaint against petitioner for forcible entry with
damages and a prayer for a temporary restraining order and/or writ of preliminary injunction.
At the continuation of the hearing on the issuance of a writ preliminary mandatory injunction,
the parties agreed, among others, that private respondent would deposit money to guarantee
the payment of its back rentals. This agreement was incorporated in the order of the
court which in effect terminated for all intents and purposes the incident on the issuance of a
preliminary writ of injunction.
Private respondent did not comply with its undertaking to deposit. Instead, with the
forcible entry case still pending with the MeTC, private respondent instituted another action for
damages against petitioner with the RTC of QC.
Petitioner filed a motion to dismiss the damage suit on the ground of litis pendencia and
forum shopping. Instead of ruling on the motion, RTC issued an order archiving the case
pending the outcome of the forcible entry case being heard at the MeTC for the reason that "ʺthe
claim for damages is principally anchored on whether or not the defendants (petitioner herein)
have committed forcible entry.
Before petitioner'ʹs motion to dismiss could be resolved,

private respondent filed with the RTC an amended complaint for damages and an Urgent Ex-‐‑
Parte Motion for the Issuance of a TRO and Motion for the Grant of a Preliminary Prohibitory and
Preliminary Mandatory Injunction. On the very same day, Judge Santiago issued an order (a)
denying petitioner'ʹs motion to dismiss, (b) admitting private respondent'ʹs amended complaint,
and (c) granting private respondent'ʹs application for a temporary restraining order against
petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action for certiorari. But the
Court of Appeals dismissed the petition due to the failure of petitioner to file a motion for
reconsideration. It also found that the elements of litis pendencia were lacking to justify the
dismissal of the action for damages with the RTC because despite the pendency of the forcible
entry case with the MeTC the only damages recoverable thereat were those caused by the loss of
the use and occupation of the property and not the kind of damages being claimed before the
RTC which had no direct relation to loss of material possession. It clarified that since the
damages prayed for in the amended complaint with the RTC were those caused by the alleged
high-‐‑handed manner with which petitioner reacquired possession of the leased premises and
the sale of private respondents movables found therein, the RTC and not the MeTC had
jurisdiction over the action of damages.[7]
Petitioner filed the instant petition for review on certiorari against the CA claiming that that
the trial judge did not act with grave abuse of discretion in taking cognizance of the action for
damages and injunction despite the pendency of the forcible entry case with the MeTC; and, (c)
ruling that private respondent did not commit forum shopping since the causes of action before
the RTC and MeTC were not identical with each other.
Issue:
WON the action for damages filed with the RTC should be dismissed on the ground of
pendency of another action for forcible entry and damages earlier filed by the same lessee
against the same lessor before the MeTC.
Held:
YES. The restoration of possession and demand for actual damages in the case before the
MeTC and the demand for damages with the RTC both arise from the same cause of action, i.e.,
the forcible entry by petitioner into the leased premises.
30

Section 1 of Rule 70 of the Rules of Court provides that any person deprived of the
possession of any land or building by force, indimidation, threat, strategy or stealth, or against
whom the possession of any land or building is unlawfully withheld, may bring an action in the
proper Municipal Trial Court against the person or persons unlawfully withholding or
depriving of possession, together with damages and costs. The mandate under this rule is
categorical: that all cases for forcible entry or unlawful detainer shall be filed before the
Municipal Trial Court which shall include not only the plea for restoration of possession but
also all claims for damages and costs arising therefrom. Otherwise expressed, no claim for
damages arising out of forcible entry or unlawful detainer may be filed separately and
independently of the claim for restoration of possession.
This is consistent with the principle laid down in Sec. 1, par. (e), of Rule 16 of the Rules of
Court which states that the pendency of another action between the same parties for the same
cause is a ground for dismissal of an action. Res adjudicata requires that there must be between
the action sought to be dismissed and the other action the following elements: (a) identity of
parties or at least such as representing the same interest in both actions; (b) identity of rights
asserted and relief prayed for, the relief being founded on the same facts; and, (c) the identity in
the two (2) preceding particulars should be such that any judgment which may be rendered on
the other action will, regardless of which party is successful, amount to res adjudicata in the
action under consideration.
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that a
party may not institute more than one suit for a single cause of action. Under Sec. 4 of the same
Rule, if two or more suits are instituted on the basis of the same cause of action, the filing of one
or a judgment upon the merits in any one is available as a ground for the dismissal of the other
or others. "ʺCause of action"ʺ is defined by Sec. 2 of Rule 2 as the act of omission by which a party
violates a right of another. These premises obtaining, there is no question at all that private
respondent'ʹs cause of action in the forcible entry case and in the suit for damages is the alleged
illegal retaking of possession of the leased premises by the lessor, petitioner herein, from which
all legal reliefs arise.
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the
alleged unlawful entry by petitioner into the leased premises out of which three (3) reliefs
(denominated by private respondent as its causes of action) arose: (a) the restoration by the
lessor (petitioner herein) of the possession of the leased premises to the lessee; (b) the claim for
actual damages due to the losses suffered by private respondent such as the deterioration of
perishable foodstuffs stored inside the premises and the deprivation of the use of the premises
causing loss of expected profits; and, (c) the claim for attorney'ʹs fees and costs of suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a)
moral damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual
damages ofP20,000,000.00 and compensatory damages of P1,000,000.00 representing unrealized
profits; and, (c) P200,000.00 for attorney'ʹs fees and costs, all based on the alleged forcible
takeover of the leased premises by petitioner. Since actual and compensatory damages were
already prayed for in the forcible entry case before the MeTC, it is obvious that this cannot be
relitigated in the damage suit before the RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that
these sprung from the main incident being heard before the MeTC. Jurisprudence is
unequivocal that when a single delict or wrong is committed -‐‑ like the unlawful taking or
detention of the property of another -‐‑ there is but one single cause of action regardless of the number
of rights that may have been violated, and all such rights should be alleged in a single complaint as
constituting one single cause of action.[15] In a forcible entry case, the real issue is the physical
possession of the real property. The question of damages is merely secondary or incidental, so
much so that the amount thereof does not affect the jurisdiction of the court. In other words, the
31

unlawful act of a deforciant in taking possession of a piece of land by means of force and
intimidation against the rights of the party actually in possession thereof is a delict or wrong, or
a cause of action that gives rise to two (2) remedies, namely, the recovery of possession and
recovery of damages arising from the loss of possession, but only to one action. For obvious
reasons, both remedies cannot be the subject of two (2) separate and independent actions, one
for recovery of possession only, and the other, for the recovery of damages. That would
inevitably lead to what is termed in law as splitting up a cause of action.[16] In David v. de la
Cruz[17] we observed -‐‑
Herein tenants have but one cause of action against their landlord, their illegal ejectment or
removal from their landholdings, which cause of action however entitles them to two (2) claims
or remedies -‐‑ for reinstatement and damages. As both claims arise from the same cause of
action, they should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of damages may be
recovered in one case and the rest, in another.[18] In Bachrach v. Icarangal[19] we explained that the
rule was aimed at preventing repeated litigations between the same parties in regard to the
same subject of the controversy and to protect the defendant from unnecessary vexation. Nemo
debet bis vexari pro una et eadem causa.
What then is the effect of the dismissal of the other action? Since the rule is that all such
rights should be alleged in a single complaint, it goes without saying that those not therein
included cannot be the subject of subsequent complaints for they are barred forever.[20] If a suit
is brought for a part of a claim, a judgment obtained in that action precludes the plaintiff from
bringing a second action for the residue of the claim, notwithstanding that the second form of
action is not identical with the first or different grounds for relief are set for the second suit. This
principle not only embraces what was actually determined, but also extends to every matter
which the parties might have litigated in the case.[21] This is why the legal basis upon which
private respondent anchored its second claim for damages, i.e., Art. 1659 in relation to Art. 1654
of the Civil Code,[22] not otherwise raised and cited by private respondent in the forcible entry
case, cannot be used as justification for the second suit for damages. We note, not without some
degree of displeasure, that by filing a second suit for damages, private respondent was not only
able to press a claim for moral and exemplary damages which by its failure to allege the same in
its suit before the MeTC foreclosed its right to sue on it, but it was also able to obtain from the
RTC, by way of another temporary restraining order, a second reprieve from an impending public
auction sale of its movables which it could not anymore secure from the MeTC before which the
matter of the issuance of a preliminary writ of injunction was already closed.
The foregoing discussions provide sufficient basis to petitioner'ʹs charge that private
respondent and its counsel in the trial courts committed forum shopping. In Crisostomo v.
Securities and Exchange Commission[23] we ruled -‐‑
There is forum-‐‑shopping whenever, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies x
x x with respect to suits filed in the courts x x x in connection with litigations commenced in the
court x x x in anticipation of an unfavorable x x x ruling and a favorable case where the court in
which the second suit was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v. National Labor Relations
Commission[24] that there is forum shopping when the actions involve the same transactions, the
same essential facts and circumstances. The reason behind the proscription of forum shopping
is obvious. This unnecessarily burdens our courts with heavy caseloads, unduly taxes the
manpower and financial resources of the judiciary and trifles with and mocks our judicial
processes, thereby adversely affecting the efficient administration of justice. This condemnable
32

conduct has prompted the Court to issue circulars[25]ordering among others that a violation
thereof shall be cause for the dismissal of the case or cases without prejudice to the taking of
appropriate action against the counsel or party concerned.
IV. Remedies against splitting a single cause of action

There are two remedies against splitting a single cause of action, namely:

(a) by filing a motion to dismiss on the ground of litis pendentia (Section 1(e), Rule 16,
Rules of Court), or res judicata (Section 1(f), Rule 16, Rules of Court); and
(b) by filing an answer alleging either of the aforementioned grounds as affirmative
defense.

V. Joinder of Causes of Action

By a joinder of actions, or more properly, a joinder of causes of action is meant the
uniting of two or more demands or rights of action in one action, the statement of more than
one cause of action in a declaration. It is the union of two or more civil causes of action, each of
which could be made the basis of a separate suit, in the same complaint, declaration or petition.
A plaintiff may under certain circumstances join several distinct demands, controversies or
rights of action in one declaration, complaint or petition. (Ada v. Baylon, G.R. No. 182435, 13
August 2012)

The objectives of the rule or provision are to avoid a multiplicity of suits where the same
parties and subject matter are to be dealt with by effecting in one action a complete
determination of all matters in controversy and litigation between the parties involving one
subject matter, and to expedite the disposition of litigation at minimum cost. The provision
should be construed so as to avoid such multiplicity, where possible, without prejudice to the
rights of the litigants.(Id.)

Nevertheless, while parties to an action may assert in one pleading, in the alternative or
otherwise, as many causes of action as they may have against an opposing party, such joinder of
causes of action is subject to the condition, inter alia, that the joinder shall not include special
civil actions governed by special rules. (Id.)

VI. Requisites for Joinder of Causes of Action:

1. The party joining the causes of action must comply with the rules on joinder of parties.

Note: The following are elements for a joinder parties (Sec. 6, rule 3):

a. A right to relief in respect to or arising out of the same
transaction or series of transaction; and
b. A common question of law or fact.

2. The joinder shall not include special civil action or actions governed by special rules.

3. Where the causes of action are between the same parties but pertain to a different
venues or jurisdiction is with the regional trial court, provided that:

a. One of the causes of action falls within the jurisdiction of the RTC;
and
33

b. The venue lies thereon.

4. Where the claims in the causes of action are principally for recovery of money, the
aggregate amount claimed shall be the test of jurisdiction (Totality Rule)

Sps. Perez vs. Hermano,
G.R. No. 147417, 8 July 2005

Facts:
Petitioners filed a civil case for Enforcement of Contract and Damages with Prayer for
the Issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction against
Zescon Land, Inc. and/or its President Zenie Sales-‐‑Contreras, Atty. Perlita Vitan-‐‑Ele and against
respondent Antonio Hermano before the Regional Trial Court (RTC) of Quezon City, Branch
224. Respondent filed his Answer with Compulsory Counterclaim. Thereafter, respondent
Hermano filed a "ʺMotion with Leave to Dismiss the Complaint or Ordered Severed for Separate
Trial"ʺ which was granted by the trial court in an Order dated 28 February 2000.

Issue:
Whether or not the trial court correctly ordered that petitioners’ causes of action be
severed.

Held:
No. The Supreme Court ruled that the trial court committed grave abuse of discretion in
severing from the complaint petitioners’ cause of action against respondent.
While joinder of causes of action is largely left to the option of a party litigant, Section 5,
Rule 2 of our present Rules allows causes of action to be joined in one complaint conditioned
upon the following requisites: (a) it will not violate the rules on jurisdiction, venue and joinder
of parties; and (b) the causes of action arise out of the same contract, transaction or relation
between the parties, or are for demands for money or are of the same nature and character.
In this case, petitioners have adequately alleged in their complaint that after they had
already agreed to enter into a contract to sell with Zescon Land, Inc., through Sales-‐‑Contreras,
the latter also gave them other documents to sign, to wit: A Deed of Absolute Sale over the
same properties but for a lower consideration, two mortgage deeds over the same properties in
favor of respondent Hermano with accompanying notes and acknowledgment receipts for Ten
Million pesos (P10,000,000) each. Petitioners claim that Zescon Land, Inc., through Sales-‐‑
Contreras, misled them to mortgage their properties which they had already agreed to sell to
the latter.
From the averments in the complaint, it becomes reasonably apparent that there are
questions of fact and law common to both Zescon Land, Inc., and respondent Hermano arising
from a series of transaction over the same properties. There is the question of fact, for example,
of whether or not Zescon Land, Inc., indeed misled petitioners to sign the mortgage deeds in
favor of respondent Hermano. There is also the question of which of the four contracts were
validly entered into by the parties. Note that under Article 2085 of the Civil Code, for a
mortgage to be valid, it is imperative that the mortgagor be the absolute owner of the thing
mortgaged. Thus, respondent Hermano will definitely be affected if it is subsequently declared
that what was entered into by petitioners and Zescon Land, Inc., was a Contract of Sale (as
evidenced by the Deed of Absolute Sale signed by them) because this would mean that the
contracts of mortgage were void as petitioners were no longer the absolute owners of the
properties mortgaged. Finally, there is also the question of whether or not Zescon Land, Inc., as
34

represented by Sales-‐‑Contreras, and respondent Hermano committed fraud against petitioners
as to make them liable for damages.
Sps. Decena, v. Sps. Piquero

G.R. No. 155736, 31 March 2005

Facts:
Spouses Danilo and Cristina Decena were the owners of a house and lot in Parañaque
City. The petitioners and the respondents, the Spouses Pedro and Valeria Piquero, executed a
Memorandum of Agreement in which the former sold the property to the latter for P940,250.00
payable in six (6) installments via postdated checks. The vendees forthwith took possession of
the property. It appears in the MOA 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. On May 17, 1999, the petitioners, then residents of
Malolos, Bulacan, filed a Complaint against the respondents with the RTC Malolos, Bulacan, for
the annulment of the sale/MOA, recovery of possession of the property, and damages.
The respondents filed a motion to dismiss on the ground the said court had no
jurisdiction over the property subject matter of the action because it was located in Paranaque
City. They averred that the principal action of the petitioners for the rescission of the MOA, and
the recovery of the possession of the property is a real action and not a personal one; hence, it
should have been brought in the RTC of Paraaque City, where the property subject matter of the
action was located, and not in the RTC of Malolos, Bulacan, where the petitioners resided.
In opposition, the petitioners insisted that their action for damages and attorneys fees is
a personal action and not a real action; hence, it may be filed in the RTC of Bulacan where they
reside. They averred that while their second cause of action for the recovery of the possession of
the property is a real action, the same may, nevertheless, be joined with the rest of their causes
of action for damages, conformably with Section 5(c), Rule 2 of the Rules of Court.
By way of reply, the respondents averred that Section 5(c), Rule 2 of the Rules of Court
applies only when one or more of multiple causes of action falls within the exclusive
jurisdiction of the first level courts, and the other or others are within the exclusive jurisdiction
of the RTC, and the venue lies therein.
RTC denied the motion to dismiss finding that Section 5(c), Rule 2 was applicable. Upon
motion for reconsideration however, the court granted the motion to dismiss and ordered the
dismissal of the complaint. It ruled that the principal action of the petitioners was a real action
and should have been filed in the RTC of Paranaque City where the property subject matter of
the complaint was located. However, since the case was filed in the RTC of Bulacan where the
petitioners reside, which court had no jurisdiction over the subject matter of the action, it must
be dismissed.

Issue:
WON Section 5 (c) Rule 2 of the ROC is applicable.

Held:
No. After due consideration of the foregoing, we find and so rule that Section 5(c), Rule
2 of the Rules of Court does not apply. This is so because the petitioners, as plaintiffs in the
court a quo, had only one cause of action against the respondents, namely, the breach of the
MOA upon the latter’s refusal to pay the first two installments in payment of the property as
agreed upon, and turn over to the petitioners the possession of the real property, as well as the
35

house constructed thereon occupied by the respondents. The claim for damages for reasonable
compensation for the respondents’ use and occupation of the property, in the interim, as well as
moral and exemplary damages suffered by the petitioners on account of the aforestated breach
of contract of the respondents are merely incidental to the main cause of action, and are not
independent or separate causes of action. 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 Parañaque City, conformably with Section 1, Rule 4 of the Rules of Court.
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.
VII. Totality Rule

“Totality rule"ʺ under Section 33 (1) of B.P. Blg. 129 states that "ʺwhere 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."ʺ

Determination of Jurisdictional Amount in Relation to the Totality Rule

Under BP 129, as amended, and under R.A 7691, the jurisdictional amount excludes the
following:

a. Interest
b. Damages of whether kind
c. Attorney’s Fees
d. Litigation expenses and cost
These matters, however, shall be included in determining the fililng fees (Riano, p. 179)

“Damages of whatever kind” applies to cases where the damages are merely incidental
to or consequence of the main cause of action (Adm. Circ. No. 09-‐‑94, June 14, 1994). Thus , if the
main cause of action is the recovery of damages, the amount of damages should not be excluded
in determining the jurisdictional amount (Sante v. Claravall, G.R 173915, February 22, 2010).

Flores vs. Mallare-‐‑Phillipps,
G.R. No. L-‐‑66620, September 24, 1986

Facts:
Petitioner Remedio Flores (“petitioner”) filed a Complaint against respondents Ignacio
Binongcal (“Binongcal”) and Fernando Calion (“Calion”) with the Regional Trial Court, Baguio
and Benguet Province (the “lower court”). Said Complaint consists of two (2) causes of action:
(a) the first cause of action alleged in the complaint was against respondent Ignacio Binongcal
for refusing to pay the amount of P11,643.00 representing cost of truck tires which he purchased
on credit from petitioner on various occasions from August to October, 1981; and (b) the second
cause of action was against respondent Fernando Calion for allegedly refusing to pay the
amount of P10,212.00 representing cost of truck tires which he purchased on credit from
petitioner on several occasions from March, 1981 to January, 1982.

36

Respondent Binongcal filed a Motion to Dismiss on the ground of lack of jurisdiction
since the amount of the demand was only P11,643.00 and under Section 19(8) of BP129 the
regional trial court shall exercise exclusive original jurisdiction if the amount of the demand is
more than twenty thousand pesos (P20,000.00), and although another person, Calion, was
allegedly indebted to petitioner in the amount of P10,212.00, his obligation was separate and
distinct from that of Calion, who joined Binongcal’s Motion to Dismiss on the ground of lack of
jurisdiction.

The lower court ordered the dismissal of petitioner’s complaint. Hence, the appeal.

Issue:
Whether or not the RTC dismissed for lack of jurisdiction.

Held:
Yes. The lower court correctly dismissed petitioner’s Complaint for lack of jurisdiction.
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. If the causes of
action are separate and independent, their joinder in one complaint is permissive and not
mandatory, and any cause of action where the amount of the demand is twenty thousand pesos
or less may be the subject of a separate complaint filed with a metropolitan or municipal trial
court.

In the case at bar, 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 respondents Binongcal and Calion are separate
and distinct and neither of which falls within its jurisdiction.

VII. Estoppel to Question Jurisdiction

Heirs of Bertuldo Hinog vs. Melicor
G.R.No. 140954, 12 April 2005

Facts:
Private respondents own a parcel of land. They allowed Bertuldo Hinog to use a portion
of the said property for a period of ten years and construct thereon a small house. After the
expiration of the ten-‐‑year period, they demanded the return of the occupied portion and
removal of the house constructed thereon but Hinog refused and instead claimed ownership.
Private respondents filed a complaint for “Recovery of Ownership and Possession, Removal of
Construction and Damages”against Hinog. Trial ensued but Hinog died without completing his
evidence. New counsel appeared for the deceased and filed a motion to expunge the complaint
from the record and nullify all court proceedings on the ground that private respondents failed
to specify the amount of damages claimed so as to pay the correct docket fees and further
alleged that the private respondents failed to pay the correct docket fee since the main subject
matter of the case cannot be estimated as it is for recovery of ownership, possession and
removal of construction. Private respondents opposed. While the trial court ordered the
complaint to be expunged from the records, it held however that upon the complete payment of
such fees, the Court may take appropriate action in the light of the ruling in the case of
Manchester Development Corporation vs. Court of Appeals.

37

Thereafter, the private respondents, upon payment of deficiency docket fee, filed a
manifestation with prayer to reinstate the case. Despite petitioners’ opposition, the trial court
issued the assailed Order reinstating the case.

Issue:
Whether or not the trial court correctly reinstated the complaint upon the payment of
deficiency docket fees.

Held:
Yes. The Supreme Court ruled that the reinstatement of the complaint was just and
proper considering that the cause of action of private respondents, being a real action,
prescribes in thirty years, and private respondents did not really intend to evade the payment of
the prescribed docket fee but simply contend that they could not be faulted for inadequate
assessment because the clerk of court made no notice of demand or reassessment. They were in
good faith and simply relied on the assessment of the clerk of court.

While the payment of the prescribed docket fee is a jurisdictional requirement, even its
non-‐‑payment at the time of filing does not automatically cause the dismissal of the case, as long
as the fee is paid within the applicable prescriptive or reglementary period, more so when the
party involved demonstrates a willingness to abide by the rules prescribing such
payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was
no intention to defraud the government, the Manchester rule does not apply.

The Supreme Court held that the Manchester rule has been modified in Sun Insurance
Office, Ltd. (SIOL) vs. Asuncion, which defined the following guidelines involving the payment
of docket fees:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, which vests a trial court with jurisdiction over the
subject-‐‑matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fees
within a reasonable time but in no case beyond the applicable prescriptive or

2. The same rule applies to permissive counterclaims, third-‐‑party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee within a reasonable time
but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
pleading and payment of the prescribed filing fee but, subsequently, the judgment
awards a claim not specified in the pleading, or if specified the same has been left for
determination by the court, the additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his duly authorized
deputy to enforce said lien and assess and collect the additional fee.

RULE 3
PARTIES TO CIVIL ACTIONS

I. WHO MAY BE PARTIES

• Only natural or juridical persons, or entities authorized by law may be parties in a civil
action (Rule 3, Sec. 1).
38

1. Natural Persons
o A natural person is a human being, which is a product of procreation (Jurado,
Civil Law Reviewer, 21st ed., p. 62).

2. Juridical Persons

o A juridical person exists only in contemplation of law, and is a product of
legal fiction (Jurado, supra.).

o The juridical persons who may be parties to a civil action are those
enumerated in Article 44 of the New Civil Code, namely:
(a) The State and its political subdivisions;
(b) Other corporations, institutions and entities for public interest or
purpose, created by law; and
(c) Corporations, partnerships and associations for private interest or
purpose to which the law grants a juridical personality, separate and
distinct from that of each shareholder, partner or member.

3. Entities authorized by law

o One need not be or juridical person to be a party to a civil action. As long as
an entity is authorized by law to be a party, such entity may sue or be sued or
both.

o The following are examples of entities authorized by law to be parties (W. B.
Riano, Civil Procedure: A Restatement for the Bar, 2009 ed., p. 212):

a. Under Sec. 21 of the Corporation Code of the Philippines, a corporation
by estoppel is precluded from denying its existence and the members
thereof can be sued and be held liable as general partners.

b. A contract of partnership having a capital of three thousand pesos or
more but which fails to comply with the registration requirements is
nevertheless liable as a partnership to third persons (Art. 1772 in relation
to Art. 1768 of the New Civil Code).

o Articles 1772 and 1768 of the New Civil Code provide:

Article 1772. Every contract of partnership having a
capital of three thousand pesos or more, in money or
property, shall appear in a public instrument, which must
be recorded in the Office of the Securities and Exchange
Commission.
Article 1768. The partnership has a juridical
personality separate and distinct from that of each of the
partners, even in case of failure to comply with the
requirements of Article 1772, first paragraph.

c. The estate of a deceased person may be a party to an action (Limjoco v.
Intestate Estate of Fragante, 8 Phil. 776; Nazareno v. Court of Appeals, 343
SCRA 637).

39

d. A legitimate labor organization may sue and be sued in its registered
name (Labor Code, Article 242[e]).

e. The Roman Catholic Church may be a party and as to its properties, the
archbishop or diocese to which they belong may be a party (Barlin v.
Ramirez, 7 Phil. 47; Versoza v. Fernandez, 49 Phil. 627).

f. A dissolved corporation may prosecute and defend suits by or against it
provided that the suits (i) occur within three (3) years after its dissolution,
and (ii) the suits are in connection with the settlement and closure of its
affairs (Corporation Code, Sec. 122).

• The term "ʺplaintiff"ʺ may refer to the claiming party, the counter-‐‑claimant, the cross-‐‑
claimant, or the third (fourth, etc.) — party plaintiff (Rule 3, Sec. 1).

• The term "ʺdefendant"ʺ may refer to the original defending party, the defendant in a
counter-‐‑claim, the cross-‐‑defendant, or the third (fourth, etc.) — party defendant (Rule 3,
Sec. 1).

• Remedy when a party impleaded is not authorized to be a party (Riano, supra.)

o Where the plaintiff is not a natural or a juridical person or an entity authorized
by law, a motion to dismiss may be filed on the ground that “the plaintiff has no
legal capacity to sue” (Rule, 16, Sec.1[d]).

o Where it is the defendant who is not any of the above, the complaint may be
dismissed on the ground that the “pleading asserting the claim states no cause of
action” (Rule 16, Sec. 1[g]), because there cannot be a cause of action against one
who cannot be a party to a civil action.

o If the plaintiff has capacity to sue but he is not the “real party in interest,” he
ground for dismissal is “failure to state a cause of action” (Aguila v. Court of
Appeals, 319 SCRA 246; Balagtas v. Court of Appeals, 317 SCRA 69), not “lack of
legal capacity to sue.”

II. CLASSIFICATION OF PARTIES

A. Real Party in Interest

• Definition -‐‑ 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 (Rule 3,
Section 2).

• Unless otherwise authorized by law or the Rules of Court, every action must be
prosecuted or defended in the name of the real party in interest (Rule 3, Section 2).

• The determination of who the real party-‐‑in-‐‑interest is requires going back to the
elements of a cause of action. A cause of action involves the existence of a right and a
violation of such right. Evidently, the owner of the right violated stands to be the
real party in interest as plaintiff and the person responsible for the violation is the
real party in interest as defendant (Lee v. Romillo, 161 SCRA 589).

a. Lack of Personality to Sue
40

Evangelista vs. Santiago
G.R. No. 157447. April 29, 2005
FACTS:
Petitioners filed with the trial court an action for declaration of nullity of respondents
certificates of the title of parcels of land which Petitioners allegedly occupied and possessed.
They claimed that the OCT was fake and spurious. Respondent filed his Answer and claimed
that the petitioners had no legal capacity to file the Complaint since such an action will result in
the reversion of the ownership of the Subject Property to the State and hence it is the State
which must bring the action; thus, the Complaint stated no cause of action.
The trial court decided against the Petitioners. The trial court ratiocinated that the
Petitioners did not have the legal standing to sue because it is the State who must file the
corresponding case of annulment of illegal title through the Office of the Solicitor General. The
Court of Appeals affirmed the Order of the trial court and denied petitioners Motion for
Reconsideration.
ISSUE:
WON the petitioners had the legal personality to file the action?
HELD:
No, they had no legal personality to sue. The Court believes that the trial court rightfully
dismissed petitioners Complaint, but for reasons different from those relied upon by the RTC
and the CA.
No legal capacity v. No COA
Before anything else, it should be clarified that the plaintiff has no legal capacity to sue and
the pleading asserting the claim states no cause of action are two different grounds for a motion
to dismiss or are two different affirmative defenses.
Columbia Pictures, Inc. v. CA: Lack of legal capacity to sue means that the plaintiff is not in
the exercise of his civil rights, or does not have the necessary qualification to appear in the case,
or does not have the character or representation he claims. On the other hand, a case is
dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-‐‑in-‐‑
interest, hence grounded on failure to state a cause of action. The term "ʺlack of capacity to sue"ʺ
should not be confused with the term "ʺlack of personality to sue."ʺ While the former refers to a
plaintiffs general disability to sue, such as on account of minority, insanity, incompetence, lack
of juridical personality or any other general disqualifications of a party, the latter refers to the
fact that the plaintiff is not the real party-‐‑ in-‐‑interest. Correspondingly, the first can be a ground
for a motion to dismiss based on the ground of lack of legal capacity to sue; whereas the second
can be used as a ground for a motion to dismiss based on the fact that the complaint, on the face
thereof, evidently states no cause of action.
Despite the allegation of the respondent that petitioners had no legal capacity to sue, this
Court may assume that the respondent is raising the affirmative defense that the Complaint
filed by the petitioners before the trial court stated no cause of action because the petitioners
lacked the personality to sue, not being the real party-‐‑in-‐‑interest. It is the respondent’s
contention that only the State can file an action for annulment of his certificates of title, since
such an action will result in the reversion of the ownership of the Subject Property to the State.
41

In their instant Petition, petitioners further averred that rather than an action for nullity of
respondent’s certificates of title, theirs was more appropriately an action to remove a cloud on
or to quiet their title over the Subject Property.
No legal or equitable title
Even as this Court agrees with the petitioners that their action was one for removal of a
cloud on or quieting of title, it does arrive at the same conclusion as the RTC and the CA that
petitioners had no personality to file the said action, not being the parties-‐‑in-‐‑interest.
The plaintiff, in an action to remove a cloud on or to quiet title, must have legal or equitable
title to, or interest in, the real property which is the subject matter of the action. Petitioners
failed to establish in their Complaint that they had any legal or equitable title to, or legitimate
interest in, the Subject Property so as to justify their right to file an action to remove a cloud on
or to quiet title.
Therefore, without legal or equitable title to the Subject Property, the petitioners lacked the
personality to file an action for removal of a cloud on, or quieting of, title and their Complaint
was properly dismissed for failing to state a cause of action.
Excellent Quality Apparel, Inc. v. Win Multi Rich Builders, Inc.
G.R. No. 175048, 10 February 2009
Facts:
This case involves a claim for a sum of money which arose from a construction dispute.
Petitioner Excellent Quality Apparel, Inc. entered into a contract5 with Multi-‐‑Rich Builders
(Multi-‐‑Rich) represented by Wilson G. Chua (Chua), its President and General Manager, for the
construction of a garment factory. The construction of the factory building was completed on 27
November 1996.
Respondent Win Multi-‐‑Rich Builders, Inc. (Win) was incorporated with the Securities and
Exchange Commission (SEC) on 20 February 19978 with Chua as its President and General
Manager. On 26 January 2004, Win filed a complaint for a sum of money9 against petitioner and
Mr. Ying amounting to P8,634,448.20
Petitioner also denied owing anything to Win, as it had already paid all its obligations to it.
In the hearing held on 10 February 2004, the counsel of Win moved that its name in the case be
changed from "ʺWin Multi-‐‑Rich Builders, Inc."ʺ to "ʺMulti-‐‑Rich Builders, Inc."ʺ In the Reply filed by
petitioner, it moved to dismiss the case since Win was not the contractor and neither a party to
the contract, thus it cannot institute the case. Petitioner obtained a Certificate of Non-‐‑
Registration of Corporation/Partnership from the SEC which certified that the latter did not
have any records of a "ʺMulti-‐‑Rich Builders, Inc."ʺ Moreover, Win in its Rejoinder did not oppose
the allegations in the Reply. Win admitted that it was only incorporated on 20 February 1997
while the construction contract was executed on 26 March 1996. Likewise, it admitted that at the
time of execution of the contract, Multi-‐‑Rich was a registered sole proprietorship and was
issued a business permit by the Office of the Mayor of Manila.
RTC granted the motion of Win for EQA to deposit the amount. Upon deposit, Win move for
the release of the garnished money, which was vehemently objected to by the Petitioners but
nevertheless granted by the RTC. Petitioner filed a petition for certiorari before the CA. CA
annulled the two orders of the RTC but ruled that the RTC has jurisdiction over the case.
Issue:
42

WON Win has a legal personality to institute the present case.
Held:
No, Win is NOT a real party in interest. A suit may only be instituted by the real party in
interest as defined in Section 2, Rule 3 of the Rules of Court.
Win admitted that the contract was executed between Multi-‐‑Rich and petitioner. It
further admitted that Multi-‐‑Rich was a sole proprietorship with a business permit issued by the
Office of the Mayor of Manila. A sole proprietorship is the oldest, simplest, and most prevalent
form of business enterprise.31 It is an unorganized business owned by one person. The sole
proprietor is personally liable for all the debts and obligations of the business. In the case of
Mangila v. CA, we held that: … In fact, there is no law authorizing sole proprietorships to file a
suit in court…. A sole proprietorship does not possess a juridical personality separate and
distinct from the personality of the owner of the enterprise.
The original petition was instituted by Win, which is a SEC-‐‑registered corporation. It

filed a collection of sum of money suit which involved a construction contract entered into by
petitioner and Multi-‐‑Rich, a sole proprietorship. The counsel of Win wanted to change the name
of the plaintiff in the suit to Multi-‐‑Rich. The change cannot be countenanced. The plaintiff in the
collection suit is a corporation. The name cannot be changed to that of a sole proprietorship.
Again, a sole proprietorship is not vested with juridical personality to file or defend an action.34
In order for a corporation to be able to file suit and claim the receivables of its
predecessor in business, in this case a sole proprietorship, it must show proof that the
corporation had acquired the assets and liabilities of the sole proprietorship. Win could have
easily presented or attached any document e.g., deed of assignment which will show whether
the assets, liabilities and receivables of Multi-‐‑Rich were acquired by Win. Having been given
the opportunity to rebut the allegations made by petitioner, Win failed to use that opportunity.
Thus, we cannot presume that Multi-‐‑Rich is the predecessor-‐‑in-‐‑business of Win and hold that
the latter has standing to institute the collection suit.
b. Standing to Sue

• He who is directly affected and whose interest is immediate and
substantial has the standing to sue. Thus, a party must show a personal
stake in the outcome of the case or an injury to himself that can be
redressed by a favorable decision in order to warrant an invocation of the
court’s jurisdiction and justify the exercise of judicial power on his behalf.
(Domingo vs. Carague, 456 SCRA 450, 2005)

Domingo v. Carague
G.R. No. 161065. April 15, 2005

Facts:
Assailed in this petition for certiorari is the constitutionality or legality of Resolution No.
2002-‐‑05 of the Commission on Audit (COA) providing for Organizational Restructuring Plan.
Petitioners are retired Commissioners of COA and incumbent officers or employees of

COA. The retired Commissioners claim "ʺto maintain a deep-‐‑seated abiding interest in the affairs
of COA while these officers and employees claim that they were unceremoniously divested of
43

their designations/ranks as Unit Head, Team Supervisor, and Team Leader upon
implementation of the COA Organizational Restructuring Plan without just cause and without
due process, in violation of Civil Service Law. Moreover, they were deprived of their respective
Representation and Transportation Allowances (RATA), thus causing them undue financial
prejudice.
PETITIONERS: invoke Chavez v. Public Estates Authority, Agan, Jr. v. Philippine

International Air Terminals Co., Inc., and Information Technology Foundation of the Philippines v.
Commission on Elections the subject matter of a case is a matter of public concern and imbued
with public interest, then this fact alone gives them legal standing to institute the instant
petition. Petitioners contend that the COA Organizational Restructuring Plan is not just a mere
reorganization but a revamp or overhaul of the COA, with a "ʺspillover effect"ʺ upon its audit
performance. This will have an impact upon the rest of the government bodies subject to its
audit supervision, thus, should be treated as a matter of transcendental importance.
OSG: Petitioners have no legal standing to file as they have not shown "ʺa personal stake
in the outcome of the case"ʺ or an actual or potential injury that can be redressed by our
favorable decision. Petitioners themselves admitted that "ʺthey do not seek any affirmative relief
nor impute any improper or improvident act against the said respondents"ʺ. Nor may petitioners
claim that as taxpayers, they have legal standing since nowhere in their petition do they claim
that public funds are being spent in violation of law or that there is a misapplication of the
taxpayers’ money.
Issue:
WON the petitioners have the legal standing to impugn the validity of the COA
Resolution
Held:
NO. Petitioners have not shown any direct and personal interest in the COA
Organizational Restructuring Plan. There is no indication that they have sustained or are in
imminent danger of sustaining some direct injury as a result of its implementation. In fact, they
admitted that "ʺthey do not seek any affirmative relief nor impute any improper or improvident
act against the respondents"ʺ and "ʺare not motivated by any desire to seek affirmative relief from
COA or from respondents that would redound to their personal benefit or gain."ʺ Clearly, they
do not have any legal standing to file the instant suit.
Judicial power is the power to hear and decide cases pending between parties who have
the right to sue in courts of law and equity. Corollary to this dictum is the principle of locus
standi of a litigant. He who is directly affected and whose interest is immediate and substantial
has the standing to sue. Thus, a party must show a personal stake in the outcome of the case or
an injury to himself that can be redressed by a favorable decision in order to warrant an
invocation of the court’s jurisdiction and justify the exercise of judicial power on his behalf.
Petitioners’ reliance upon our rulings in Chavez, Agan, Jr., and Information Technology
Foundation is flawed:
è Chavez, we ruled that the petitioner has legal standing since he is a taxpayer and his
purpose in filing the petition is to compel the Public Estate Authority (PEA) to
perform its constitutional duties. We held that these matters are of transcendental
public importance.
44

è Agan, Jr., we held that petitioners have legal standing as they have a direct and
substantial interest to protect. By the implementation of the PIATCO contracts, they
stand to lose their source of livelihood, a property right zealously protected by the
Constitution.
è Information Technology Foundation, the nation’s political and economic future virtually
hangs in the balance, pending the outcome of the 2004 elections. Accordingly, the
award for the automation of the electoral process was a matter of public concern,
imbued with public interest. Second, the individual petitioners, as taxpayers,
asserted a material interest in seeing to it that public funds are properly used.
As re the employees’, Matib, Pacpaco, Sanchez, and Sipi-‐‑An, allegations that they were
demoted and unceremoniously divested of their previous designations, deprived of their
RATA; that they were relegated to being mere Team Members, entitled to only a reimbursable
transportation allowance; and that they were denied due process:
è Such averments lack merit. Actually, they were not demoted. Under the
Administrative Code of 1987, a demotion is the movement from one position to
another involving the issuance of an appointment with diminution in duties,
responsibilities, status, or rank which may or may not involve reduction in salary.
Here, there have been no new appointments issued under the COA Organizational
Restructuring Plan.
è Moreover, the change in their status from COA auditors cannot be attributed to the
COA Organizational Restructuring Plan but to the implementation of the Audit
Team Approach (ATAP), pursuant to COA Resolution No. 96-‐‑305 dated April 16,
1996.
è Matib, Pacpaco, Sanchez, and Sipi-‐‑An are not qualified to be Audit Team Leaders or
to receive fixed monthly RATA since none of them holds the rank or position of State
Auditor IV. But this does not mean that they are not entitled to receive reimbursable
RATA if they are designated as Audit Team Leaders. It is clear from the text of the
said COA Memorandum that the principle of non-‐‑diminution of benefits has been
upheld.
B. Representative Parties

• Where the action is allowed to be prosecuted and defended by a representative or
someone acting in a fiduciary capacity, the beneficiary shall be included in the title of
the case and shall be deemed to be the real property in interest (Rule 3, Sec. 3).

• A representative may be a trustee of an expert trust, a guardian, an executor or
administrator, or a party authorized by law or these Rules. 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 when the contract involves things belonging to
the principal (Rule 3, Sec. 3).

Oposa v. Factoran
G.R. No. 101083 July 30, 1993

Facts:
This is a class suit brought by 44 children, through their parents, claiming that they
bring the case in the name of “their generation as well as those generations yet unborn.” Aiming
to stop deforestation, it was filed against the Secretary of the Department of Environment and
45

Natural Resources, seeking to have him cancel all the timber license agreements (TLAs) in the
country and to cease and desist from accepting and approving more timber license agreements.
The children invoked their right to a balanced and healthful ecology and to protection by the
State in its capacity as parens patriae.. The petitioners claimed that the DENR Secretary'ʹs
refusal to cancel the TLAs and to stop issuing them was "ʺcontrary to the highest law of
humankind-‐‑-‐‑ the natural law—and violative of plaintiffs'ʹ right to self-‐‑preservation and
perpetuation."ʺ The case was dismissed in the lower court, invoking the law on non-‐‑impairment
of contracts, so it was brought to the Supreme Court on certiorari.
Issue:
Did the children have the legal standing to file the case?
Held:
Yes. The Supreme Court in granting the petition ruled that the children had the legal
standing to file the case based on the concept of “intergenerational responsibility”. Their right to
a healthy environment carried with it an obligation to preserve that environment for the
succeeding generations. In this, the Court recognized legal standing to sue on behalf of future
generations. Also, the Court said, the law on non-‐‑impairment of contracts must give way to the
exercise of the police power of the state in the interest of public welfare.

C. Indispensable Parties

• Definition – An indispensable party is a real party-‐‑in-‐‑interest without whom no
final determination can be had of an action (Rule 3, Sec. 7).

• Compulsory joinder of Indispensable Parties -‐‑ 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 (Lucman v. Malawi, G.R. No. 159794, 19
December 2006).

• Dismissal For Failure To Implead an Indispensable Party

o Since the joinder of indispensable parties is compulsory, the action should
be dismissed when indispensable parties are not impleaded of are not
before the court. The absence of indispensable parties renders all
subsequent actions of the trial court null and void for want of authority to
act not only as to the absent parties but even as to those present (MWSS v.
Court of Appeals, 297 SCRA 287).

o An outright dismissal of the action when indispensable parties are not
impleaded is a procedural error. Instead, parties may be dropped or
added by 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 (Rule 3, Sec. 11). It is
when the order of the court to implead an indispensable party goes
unheeded may the case be dismissed. The court is fully clothed with the
authority to dismiss a complaint due to the fault of the plaintiff as when,
among others, he does not comply with any order of the court (Rule 17,
Sec. 3; Plasabas v. Court of Appeals, G.R. No. 166519, 31 March 2009).
46

Pascual v. Robles: In the Matter of the Heirship (Intestate Estates) of the Rodriguezes
G.R. No. 182645 , 15 December 2010
Facts:
A petition for Declaration of Heirship and Appointment of Administrator and

Settlement of the Estates of the Late Rodriguez (Hermogenes) and Antonio Rodriguez (Antonio)
was filed before the RTC of Iriga City.
Since nobody opposed the petition, the RTC entered a general default against the whole
world, except the Republic of the Philippines. Thereafter, the RTC rendered a Partial declaring
Henry, Certeza and Rosalina Rodriguez as heirs in the direct descending line of the late
Antonio.
Subsequently, six groups of oppositors entered their appearances, including respondent
Jaime Robles (Robles). The RTC issued an Order declaring Robles to be an heir. However, the
RTC flipped-‐‑flopped in its subsequent decisions but the latest decision reinstated the original
order declaring Henry, Certeza, and Rosalina Rodriguez as the heirs.
Robles then appealed but RTC denied the appeal. Robles filed a petition for review on
certiorari with the SC. SC referred the petition to the CA. The CA rendered judgment annulling
the Amended Decision of the RTC. Nevertheless, Robles filed an appeal with this Court
assailing a portion of the CA Decision. SC denied the petition of Robles and the said Resolution
became final and executory.
A petition for certiorari was filed before the SC by petitioner Rene B. Pascual but Robles
was not impleaded. Thereafter, the SC rendered a decision.
Hence this petition assailing the decision which was rendered without him being
impleaded. Robles contends that he is a party-‐‑in-‐‑interest who stands to be adversely affected or
injured or benefited by the judgment in the instant case. Hence, the failure of service upon him
of a copy of the instant petition as well as petitioner'ʹs memorandum, and the fact that he was
not required or given the opportunity to file his comment or answer to the said petition nor
served with any order, resolution or any other process issued by this Court in the instant
petition, is a clear denial of his right to due process.
In his Comment and Opposition, Pascual contends that Robles has no legal standing to
participate in the instant petition. Petitioner argues that in an original action for certiorari, the
parties are the aggrieved party against the lower court and the prevailing party. Robles was
never impleaded, because he was not the prevailing party in the assailed Decision of the CA as
well as the questioned Order of the RTC.
Issue:
WON Robles is an indispensable party in the Petion for Certiorari before the SC.
Held:
YES. Robles is an indispensable party. Petitioner admitted in his Comment and

Opposition to Robles'ʹ Motion that in the instant petition he filed, only the CA and the RTC were
impleaded as respondents.
Section 5, Rule 65 of the Rules of Court provides:
47

Section 5. Respondents and costs in certain cases. – When the petition filed relates to the acts or
omissions of a judge, court, quasi-‐‑judicial agency, tribunal, corporation, board, officer or person, the
petitioner shall join as private respondent or respondents with such public respondent or
respondents, the person or persons interested in sustaining the proceedings in the court; and it shall
be the duty of such private respondents to appear and defend, both in his or their own behalf and in
behalf of the public respondent or respondents affected by the proceedings, and the costs awarded in
such proceedings in favor of the petitioner shall be against the private respondents only, and not against
the judge, court, quasi-‐‑judicial agency, tribunal, corporation, board, officer or person impleaded as public
respondent or respondents.
In Lotte Phil. Co., Inc. v. Dela Cruz,5 this Court ruled as follows:
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 "ʺthe authority to hear and determine a cause, the right to act
in a case."ʺ 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.6
In the case at bar, Robles is an indispensable party. He stands to be injured or benefited
by the outcome of the petition. Robles is interested in sustaining the assailed CA Decision,
considering that he would benefit from such judgment. As such, his non-‐‑inclusion would
render the petition for certiorari defective. Petitioner, thus, committed a mistake in failing to
implead Robles as respondent.
The rule is settled that the non-‐‑joinder of indispensable parties is not a ground for the
dismissal of an action.9 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 at such times as are just. If petitioner refuses to
implead an indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the plaintiff’s/petitioner'ʹs failure to comply therewith.
Based on the foregoing, and in the interest of fair play, the Court finds it proper to set
aside its decision and allow Robles to file his comment on the petition.
Limos v. Spouses Odones

G.R. No. 186979, 11 August 2010
Facts:
Private respondents Sps Odones filed a complaint for Annulment of Deed, Title and
Damages against petitioners Limos, Rosa delos Reyes and Sps Delos Reyes before Tarlac RTC.
The complaint alleged that they are the owners of a 940 sq m land by virtue of an Extrajudicial
Succession of Estate and Sale dated Jan 29, 2004, executed by the surviving heirs of Donata
Lardizabal, in whom the original title was vested. After registering the document of
conveyance, they found out that the OCT was cancelled and replaced by a TCT in the
petitioners’ name. Respondents sought the cancellation of said TCTs on the ground that the Sps
Lardizabal’s signatures were forgeries.
In response, petitioners filed a Motion for Bill of Particulars, which was denied, and in
their answer pleaded affirmative defenses one of which was the non-‐‑joinder of the other heirs
of Donata as indispensable parties .

48

RTC & CA denied Motion to Set for Preliminary Hearing on the Special and Affirmative
Defenses because respondents had already replied, hence this petition for certiorari.

Issue:
WON the affirmative defense of non-‐‑joinder of indispensable parties is a ground for
dismissal of action

Held:

No. Non-‐‑joinder of indispensable parties is not a ground for dismissal of an action. 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. It is only when the plaintiff refuses to implead an indispensable party despite
the order of the court, that the latter may dismiss the complaint. In this case, no such order was
issued.

Uy v. CA
G.R. No. 157065, 11 July 2006
Facts:

The Heritage Memorial Park is a flagship project of the Bases Conversion Development
Authority (BCDA) in Fort Bonifacio. To implement the project, the BCDA, on September 9, 1994,
entered into an agreement denominated as the Pool Formation Trust Agreement (PFTA) with
the Philippine National Bank (PNB) and the Public Estates Authority (PEA). The BCDA was
designated as the Project Owner; PEA, the Project Manager; and PNB as the Trustee.

As project owner, the BCDA was tasked to sell the Heritage Park Investment Certificates
to the public and buyers become certificate holders. The certificate gives the PNB the absolute
legal and beneficial title to Heritage Park in trust for the certificate holders. The PNB, as trustee,
shall protect the values of the assets in the trust, receive and have custody over the proceeds
from the sale of the certificates, administer the various funds, including disbursements for
project costs and related expenses, turnover the Perpetual Care Fund to the Successor Trustee,
turnover custody over documents pertaining to the Heritage Park and the residual funds to
BCDA, and turnover all the documents and records to the Board of Trustees after completion of
the project.

PEA, as project manager, is tasked to implement and complete the various engineering
works and improvements of Heritage Park.

On November 20, 1996, PEA and the petitioner, a single proprietorship doing business
under the name and style of Edison Development and Construction, executed a Landscaping
and Construction Agreement whereby the petitioner undertook to do all the landscaping,
including the construction of a terrasoleum of the Heritage Park. The Heritage Park Executive
Committee approved the agreement on May 29, 1997.

Pursuant to Section 11.01 of the PFTA, in April 1999, the certificate holders of the project
organized themselves into a non-‐‑stock, non-‐‑profit corporation, the Heritage Park Management
Corporation (HPMC), now the private respondent herein.
In October 1999, alleging delay in the construction of the projects and huge discrepancy
between the Accomplishment Report and the actual physical accomplishment of petitioners
49

construction firm, the Heritage Park Executive Committee terminated the two construction
contracts namely, the landscaping and nursery works, and the construction of the terrasoleum.
On March 17, 2000, pursuant to the terms of the PFTA, HPMC assumed all the functions,
duties and responsibilities of the PEA, including those under an assailed contract.
On May 31, 2001, petitioner filed a complaint against the PEA before the Construction
Industry Arbitration Commission (CIAC) where it sought to recover payment for its progress
billings on the said projects.
On March 14, 2002, an Alias Writ of Execution was issued by CIAC and on the following
day, a Notice of Garnishment was served on private respondent.

Private respondent HPMC then filed a petition for Injunction/Prohibition before the
Court of Appeals on the ground that CIAC had no jurisdiction over the subject matter since
HPMC was not impleaded as a party thereby depriving it of its right to be heard. The appellate
court ruled in favor of respondent,

Petitioners contention is that private respondent HPMC is not a party-‐‑in-‐‑interest to the
case since it is a mere trustee of the construction and development funds and would not be
directly benefited or injured by the outcome of the case.

Private respondent contends that upon its incorporation and election of its Board of
Trustees, it assumed ownership of the Heritage Park Project. Further, since it is a non-‐‑stock,
non-‐‑profit corporation, with the certificate holders as its members, any claim against the PEA is
in reality a claim against all the parties who pooled and contributed their resources for the
project; hence, it is an indispensable party.
Issue:
WON HPMC a real party-‐‑in-‐‑interest or an indispensable party

Held:

An indispensable party is one whose interest will be affected by the courts action in the
litigation, and without whom no final determination of the case can be had. The partys interest
in the subject matter of the suit and in the relief sought are so inextricably intertwined with the
other parties that his legal presence as a party to the proceeding is an absolute necessity.

Based on the Construction Agreement, PEA entered into it in its capacity as Project
Manager, pursuant to the PFTA. According to the provisions of the PFTA, upon the formation
of the HPMC, the PEA would turn over to the HPMC all the contracts relating to
the Heritage Park. At the time of the filing of the CIAC Case on May 31, 2001, PEA ceased to be
the Project Manager of the Heritage Park Project, pursuant to Section 11 of the PFTA. Through a
Deed of Assignment, PEA assigned its interests in all the existing contracts it entered into as the
Project Manager for Heritage Park to HPMC. As early as March 17, 2000, PEA officially turned
over to HPMC all the documents and equipment in its possession related to the Heritage Park
Project. Petitioner was duly informed of these incidents through a letter dated March 13,
2000. Apparently, as of the date of the filing of the CIAC Case, PEA is no longer a party-‐‑in-‐‑
interest. Instead, it is now private respondent HPMC, as the assignee, who stands to be
benefited or injured by the judgment in the suit. In its absence, there cannot be a resolution of
50

the dispute of the parties before the court which is effective, complete or equitable.[ We thus
reiterate that HPMC is an indispensable party.

Does CIAC have jurisdiction over the dispute? Section 4 of Executive Order No. 1008] is
pertinent. It provides that the jurisdiction of the CIAC over the parties is dependent on the
agreement and consent of the parties to the construction contract, to submit their dispute for
arbitration. Absent such consent, the CIAC cannot validly proceed against a party for lack of
jurisdiction.

In this instance, both parties agreed to submit the dispute for arbitration. However, the
CIAC should have dismissed the same on the ground that the private respondent was
not impleaded, it being an indispensable party to the case.

Indispensable parties must be joined either as plaintiffs or defendants. Whenever it
appears to the court in the course of a proceeding that an indispensable party has not been
joined, it is the duty of the court to stop the trial and to order the inclusion of such party. The
absence of an indispensable party renders all subsequent actuations 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.

It has come to the Courts attention that from the inception of the case, PEA informed the
CIAC that pursuant to the PFTA and the Deed of Assignment, all its rights and obligations
under the contract have already been assigned to private respondent.
The responsibility of impleading all the indispensable parties rests on the plaintiff. The
defendant does not have the right to compel the plaintiff to prosecute the action against a party
if he does not wish to do so, but the plaintiff will have to suffer the consequences of any error he
might commit in exercising his option.

• Where obligation of the parties is solidary, either of the parties is indispensable

Cerezo v.Tuazon
G.R. No. 141538, March 23, 2004
Facts:
A passenger bus collided with a tricycle somewhere in Pampanga. The tricycle driver
Tuazon filed a complaint for damages against Mrs. Cerezo, as owner of the bus line, and her
husband Attorney Juan Cerezo. However, the summons issued by the trial court was returned
unserved as the Cerezo spouses no longer held office nor resided in Makati. The trial court
issued alias summons against the Cerezo spouses at their address in Camiling, Tarlac.
Mrs. Cerezon brings this present petition lack of jurisdiction. Mrs. Cerezo asserts that the
trial court could not validly render judgment since it failed to acquire jurisdiction over Foronda.
Mrs. Cerezo points out that there was no service of summons on Foronda. Moreover, Tuazon
failed to reserve his right to institute a separate civil action for damages in the criminal action.
Held:
Such contention betrays a faulty foundation. Mrs. Cerezos contention proceeds from the
point of view of criminal law and not of civil law, while the basis of the present action of
Tuazon is quasi-‐‑delict under the Civil Code, not delict under the Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103
of the Revised Penal Code, or may give rise to an action for a quasi-‐‑delict under Article 2180 of
the Civil Code. An aggrieved party may choose between the two remedies. An action based on
51

a quasi-‐‑delict may proceed independently from the criminal action. There is, however, a
distinction between civil liability arising from a delict and civil liability arising from a quasi-‐‑
delict. The choice of remedy, whether to sue for a delict or a quasi-‐‑delict, affects the procedural
and jurisdictional issues of the action.
Tuazon chose to file an action for damages based on a quasi-‐‑delict. In his complaint,
Tuazon alleged that Mrs. Cerezo, without exercising due care and diligence in the supervision
and management of her employees and buses, hired Foronda as her driver. Tuazon became
disabled because of Forondas recklessness, gross negligence and imprudence, aggravated by
Mrs. Cerezos lack of due care and diligence in the selection and supervision of her employees,
particularly Foronda.
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code.
Article 2180 states in part:
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not engaged
in any business or industry.
Contrary to Mrs. Cerezos assertion, Foronda is not an indispensable party to the case.
An indispensable party is one whose interest is affected by the courts action in the litigation,
and without whom no final resolution of the case is possible. However, Mrs. Cerezos liability as
an employer in an action for a quasi-‐‑delict is not only solidary, it is also primary and direct.
Foronda is not an indispensable party to the final resolution of Tuazons action for damages
against Mrs. Cerezo.
The responsibility of two or more persons who are liable for a quasi-‐‑delict is solidary.
Where there is a solidary obligation on the part of debtors, as in this case, each debtor is liable
for the entire obligation. Hence, each debtor is liable to pay for the entire obligation in full.
There is no merger or renunciation of rights, but only mutual representation. Where the
obligation of the parties is solidary, either of the parties is indispensable, and the other is not
even a necessary party because complete relief is available from either. Therefore, jurisdiction
over Foronda is not even necessary as Tuazon may collect damages from Mrs. Cerezo alone.
Moreover, an employers liability based on a quasi-‐‑delict is primary and direct, while the
employers liability based on a delict is merely subsidiary.The words primary and direct, as
contrasted with subsidiary, refer to the remedy provided by law for enforcing the obligation
rather than to the character and limits of the obligation. Although liability under Article 2180
originates from the negligent act of the employee, the aggrieved party may sue the employer
directly. When an employee causes damage, the law presumes that the employer has himself
committed an act of negligence in not preventing or avoiding the damage. This is the fault that
the law condemns. While the employer is civilly liable in a subsidiary capacity for the
employees criminal negligence, the employer is also civilly liable directly and separately for his
own civil negligence in failing to exercise due diligence in selecting and supervising his
employee. The idea that the employers liability is solely subsidiary is wrong.
The action can be brought directly against the person responsible (for another), without
including the author of the act. The action against the principal is accessory in the sense that it
implies the existence of a prejudicial act committed by the employee, but it is not subsidiary in
the sense that it can not be instituted till after the judgment against the author of the act or at
least, that it is subsidiary to the principal action; the action for responsibility (of the employer) is
in itself a principal action.
52

Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda.
The trial courts acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present
case on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Article 103 of the Revised
Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved
party must initiate a criminal action where the employees delict and corresponding primary
liability are established.[47] If the present action proceeds from a delict, then the trial courts
jurisdiction over Foronda is necessary. However, the present action is clearly for the quasi-‐‑delict
of Mrs. Cerezo and not for the delict of Foronda.
D. Necessary Party or Proper Party

• Definition – A necessary party is 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
(Rule 3, Sec. 8).

• Non-‐‑joinder of necessary parties to be pleaded -‐‑ Whenever in any pleading in
which a claim is asserted a necessary party is not joined, the pleader shall set
forth his name, if known, and shall state why he is omitted (Rule 3, Sec. 9).

o Should the court find the reason for the omission unmeritorious, it may
order the inclusion of the omitted necessary party if jurisdiction over his
person may be obtained (Rule 3, Sec. 9).

o The failure to comply with the order for his inclusion, without justifiable
cause, shall be deemed a waiver of the claim against such party (Rule 3,
Sec. 9).

o The non-‐‑inclusion of a necessary party does not prevent the court from
proceeding in the action, and the judgment rendered therein shall be
without prejudice to the rights of such necessary party (Rule 3, Sec. 9).

Laperal Development Corporation, et. al v. CA
G.R. No. 96354, 8 June 1993
Facts:
Atty. Filoteo T. Banzon sought recovery of attorney'ʹs fees from Oliverio Laperal, Laperal
Development Corporation, and Imperial Development Corporation for professional services
rendered by him in the various cases. On 1983, the case was thereafter decided on the basis of a
Compromise Agreement. One of the provisions in the Compromise Agreement stated that Atty.
Banzon was waiving all other claims he may have against the defendant.
Banzon filed a complaint against Oliverio Laperal. Laperal Development Corporation.

Imperial Development Corporation, Sunbeams Convenience Foods, Inc. and Vicente Acsay for
the annulment of the Compromise Agreement and the collection of Atty’s Fees that was
53

adjudged payable to him as attorney'ʹs fees by Ascario Tuazon in Civil Case No. 3918; and 4) the
payment to him of nominal damages and attorney'ʹs fees.
RTC dismissed the case for lack of jurisdiction in the annulment of a decision of an
equal body. CA affirmed the RTC but held, however, that attorney'ʹs fees were due Atty. Banzon
in the cases of Laperal Development Corporation v. Ascario Tuazon and Ascario Tuazon v. Judge
Maglalang and Republic v. Sunbeams Convenience Foods. Inc.. 2
Petitioners now challenges the decision insofar as it orders them to pay Banzon
attorney'ʹs fees for his legal services in the aforementioned cases.
Held:
Concerning one of the cases, Republic vs. Sunbeams Convenience Foods, Inc. (G.R. No.
50464), this case was also included in the Compromise Agreement.
Notably, Sunbeams Convenience Foods, Inc. (Sunbeams, for brevity), referred to in the
complaint as "ʺMr. Laperal'ʹs Corporation,"ʺ was not joined by name as a party-‐‑defendant.
Apparently, the private respondent believed that Oliverio Laperal, being the president of the
said company, was directly obligated to him for the attorney'ʹs fees due him for his handling of
the case for Sunbeams.
It is settled that a corporation is clothed with a personality separate and distinct from
that of the persons composing it. 3 It may not generally be held liable for the personal
indebtedness of its stockholders or those of the entities connected with it. 4 Conversely, a
stockholder cannot be made to answer for any of its financial obligations even if he should be its
president. 5
There is no evidence that Sunbeams and Laperal are one and the same person. While it is
true that Laperal is a stockholder, director and officer of Sunbeams, that status alone does not
make him answerable for the liabilities of the said corporation. Such liabilities include Banzon'ʹs
attorney'ʹs fees for representing it in the case of Republic v. Sunbeams Convenience Foods, Inc.
Sunbeams should have been joined as a party-‐‑defendant in order that the judgment of
the lower court could legally affect it. But even if it was not impleaded, the court could still
validly proceed with the case because Sunbeams was not an indespensable party but only a
proper party. A proper party is one which ought to be a party if complete relief is to be
accorded as between those already parties. 6 A party is indespensable if no final determination
can be had of an action unless it is joined either as plaintiff or defendant. 7
The Compromise Agreement upon which the decision of the court was based was between
plaintiff Atty. Banzon and the defendants represented by Oliverio Laperal. To repeat, Sunbeams
was not a party to this agreement and so could not be affected by it.
III. Permissive Joinder of Parties
Rule 3, Section 6. Permissive joinder of parties. — All persons in whom or against whom any right
to relief in respect to or arising out of the same transaction or series of transactions is alleged to
exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these
Rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law
or fact common to all such plaintiffs or to all such defendants may arise in the action; but the
court may make such orders as may be just to prevent any plaintiff or defendant from being
54

embarrassed or put to expense in connection with any proceedings in which he may have no
interest.
§ The rule on permissive joinder of parties is that the parties (plaintiff/defendant) can be
joined in a single complaint and can sue or be sued in separate suits.
§ Requisites:
i. The right to relief arises out of the same transaction or series of transactions;
ii. There is a question of law or fact common to all the plaintiffs or defendants; and
iii. Such joinder is not otherwise proscribed by the provisions of the Rules on
jurisdiction and venue. (Pantranco North Express, Inc. v. Standard Insurance)
IV. Effect of Misjoinder and Non-‐‑joinder of Parties
Rule 3, Section 11. Misjoinder and non-‐‑joinder of parties. — 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 the action and on such terms
as are just. Any claim against a misjoined party may be severed and proceeded with separately.
§ An outright dismissal is not the immediate remedy in case of non-‐‑joinder or misjoinder
of parties. Instead, parties may be dropped or added by the court on motion of any
party or on its own initiative. It is when the order of the court to implead an
indispensable party goes unheeded that the case may be dismissed.
§ The non-‐‑joinder of indispensable parties is not a ground for the dismissal of the action.
At any stage of the judicial proceeding and/or at such times as are 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 despite the order of the court, the
court may dismiss the complaint for plaintiff’s failure to comply with the order.
(Pamplona Plantation Co. v. Tinghil)
V. Class Suits
Rule 3, Section 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.
Requisites for a class suit to prosper:
1. The subject matter of the controversy must be of common or general interest to many
persons;
2. The persons are so numerous that it is impracticable to join all as parties;
3. The parties actually before the court are sufficiently numerous and representative as
to fully protect the interests of all concerned; and
4. The representatives sue or defend for the benefit of all. (Berses v. Villanueva, 25 Phil.
473; Sulo ng Bayan, Inc. v. Araneta, 72 SCRA 347)
Mathay v. Consolidated Bank & Trust Company

G.R. No. L-‐‑23136, 26 August 1974
55

Facts:

Plaintiffs Mathay and other former stockholders of Consolidated Mines, Inc.
(CMI) filed a complaint denominated as a class suit under Section 12, Rule 3 of the Rules
of Court. The complaint alleged that plaintiffs and other CMI subscribing stockholders
were entitled to subscribe to the capital stock of the defendant bank but that they were
denied, through the unlawful acts and manipulation of defendant bank, the right to
subscribe in proportion to their equities. The complaint further alleged that the
individual defendants who were members of the Board of Directors acquired
stockholdings in excess of what they were lawfully entitled to. Hence, plaintiffs prayed
that these subscriptions, to the extent that plaintiffs were deprived of their right to
subscribe, be annulled and transferred to the latter and other CMI subscribing
stockholders.

The trial court granted the motion to dismiss, holding that a class suit could not
be maintained because there was no showing in the complaint that plaintiffs were
sufficiently numerous and representative, and that plaintiffs did not have a common
legal interest in the subject matter of the suit.

Issue: Whether or not the instant action could be maintained as a class suit.

Ruling:

No. The necessary elements for the maintenance of a class suit are accordingly:
(1) that the subject matter of the controversy be one of common or general interest to
many persons, and (2) that such persons be so numerous as to make it impracticable to
bring them all to the court. An action does not become a class suit merely because it is
designated as such in the pleadings. Whether the suit is or is not a class quit depends
upon the attending facts, and the complaint, or other pleading initiating the class action
should allege the existence of the necessary facts, to wit, the existence of a subject matter
of common interest, and the existence of a class and the number of persons in the alleged
class, in order that the court might be enabled to determine whether the members of the
class are so numerous as to make it impracticable to bring them all before the court, to
contrast the number appearing on the record with the number in the class and to
determine whether claimants on record adequately represent the class and the subject
matter of general or common interest.

The complaint in the instant case did not state the number of said CMI
subscribing stockholders so that the trial court could not infer, much less make sure, that
the parties actually before it were numerous and representative, so that the interests of
the parties concerned might be fully protected, and that it was impracticable to bring
such a large number of parties before the court.

The statute also requires, as a prerequisite to a class suit, that the subject-‐‑matter
of the controversy be of common or general interest to numerous persons. The interest
that plaintiffs and the CMI stockholders had in the subject matter of this suit — the
portion of stocks offering of the Bank left unsubscribed by CMI stockholders who failed
to exercise their right to subscribe — was several, not common or general in the sense
required by the statute. Each one of the plaintiffs and the CMI stockholders had
determinable interest; each one had a right, if any, only to his respective portion of the
stocks. No one of them had any right to, or any interest in, the stock to which another
was entitled
56

Where it appeared that no sufficient representative parties had been joined, the
dismissal of the action is in order.

VI. Defendants
1. Unwilling co-‐‑plaintiff
Rule 3, Section 10. Unwilling co-‐‑plaintiff. — If the consent of any party who should be
joined as plaintiff cannot be obtained, he may be made a defendant and the reason
therefor shall be stated in the complain
2. Alternative defendant
Rule 3, Section 13. Alternative defendants. — Where the plaintiff is uncertain against who
of several persons he is entitled to relief, he may join any or all of them as defendants in
the alternative, although a right to relief against one may be inconsistent with a right of
relief against the other.
§ Plaintiff may sue the shipping company and the arrastre operator alternatively
for the recovery of damages to goods shipped through a maritime vessel (Rizal
Surety & Insurance Company v. Manila, 70 SCRA 187)
3. Unknown defendant
Rule 3, Section 14. Unknown identity or name of defendant. — Whenever the identity or
name of a defendant is unknown, he may be sued as the unknown owner heir devisee,
or by such other designation as the case may require, when his identity or true name is
discovered, the pleading must be amended accordingly.
Rule 14, Section 14. Service upon defendant whose identity or whereabouts are unknown. — In
any action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry,
service may, by leave of court, be effected upon him by publication in a newspaper of
general circulation and in such places and for such time as the court may order.
4. Entity without juridical personality as defendant
Rule 3, Section 15. Entity without juridical personality as defendant. — When two or more
persons not organized as an entity with juridical personality enter into a transaction,
they may be sued under the name by which they are generally or commonly known.
In the answer of such defendant, the name and addresses of the persons composing said
entity must all be revealed.
Rule 14, Section 8. Service upon entity without juridical personality. — When persons
associated in an entity without juridical personality are sued under the name by which
they are generally or commonly known, service may be effected upon all the defendants
by serving upon any one of them, or upon the person in charge of the office or place of
business maintained in such name. But such service shall not bind individually any
person whose connection with the entity has, upon due notice, been severed before the
action was brought.
57

VII. Death of party; duty of counsel
Rule 3, Section 16. Death of party; duty of counsel. — Whenever a party to a pending action dies,
and the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court
within thirty (30) days after such death of the fact thereof, and to give the name and address of
his legal representative or representatives. Failure of counsel to comply with his duty shall be a
ground for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator and the court may appoint a guardian ad
litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or if the one so named
shall fail to appear within the specified period, the court may order the opposing party, within a
specified time to procure the appointment of an executor or administrator for the estate of the
deceased and the latter shall immediately appear for and on behalf of the deceased. The court
charges in procuring such appointment, if defrayed by the opposing party, may be recovered as
costs.
§ Upon receipt of the notice of death, the court shall determine whether or not the
claim is extinguished by such death. If the claim survives, the court shall order
the legal representative/s of the deceased to be substituted for the deceased.
§ The purpose behind the rule on substitution of parties is the protection of the
right of every party to due process. (Torres v. Court of Appeals, 278 SCRA 793)
§ General Rule: Non-‐‑compliance with the rules on substitution of a deceased party
renders the proceedings of the trial court infirm because the court acquired no
jurisdiction over the person of the legal representative of the deceased. (Brioso v.
Rili-‐‑Mariano, 396 SCRA 549)
o Exception: In an ejectment case, the non-‐‑substitution of the deceased by
his legal representatives does not deprive the court of jurisdiction. A
judgment in the ejectment case may be enforced not only against the
defendant, but also against the members of their family, their relatives, or
privies who derived their right of possession from the deceased
defendant. (Florendo, Jr. v. Coloma, 129 SCRA 304)
§ Formal substitution is not necessary when the heirs themselves voluntarily
appeared in the action and participated therein. (Vda. De Salazar v. Court of
Appeals, 250 SCRA 305)
§ Service of summons is not required to effect proper substitution. Instead of
service of summons the court shall order the legal representative of the deceased
to appear and be substituted for said deceased.
§ Examples of actions which survive the death of a party:
1. Actions and obligations arising from delicts;
2. Actions based on the tortious conduct of the defendant;
3. Actions to recover real and personal property;
4. Actions to enforce a lien on such properties;
5. Actions to recover damages for an injury to person or property by
reason of tort or delict committed by the deceased;
6. An ejectment case survives the death of a party and continues until
judgment because the issue concerning the illegality of the
58

defendant’s possession continues. (Vda. De Salazar v. Court of Appeals,
250 SCRA 305)
Rule 3, Section 20. Action and contractual money claims. — When the action is for recovery of
money arising from contract, express or implied, and the defendant dies before entry of final
judgment in the court in which the action was pending at the time of such death, it shall not be
dismissed but shall instead be allowed to continue until entry of final judgment. A favorable
judgment obtained by the plaintiff therein shall be enforced in the manner especially provided
in these Rules for prosecuting claims against the estate of a deceased person.
§ Execution shall not issue in favor of the winning party. The final judgment should be
filed as a claim against the estate of the decedent without need of proving the claim
under Rule 86, Section 5 of the Rules of Court.
VIII. EFFECT OF NON-‐‑SUBSTITUTION OF A DECEASED PARTY

Heirs of Bertuldo Hinog v. Hon. Achilles Melicor
G.R. No. 140954, 12 April 2005
Facts:
Respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane, filed a
complaint against petitioner Bertuldo Hinog for the Recovery of the possession and ownership
of their property which was leased to Hinog. Allegedly, despite the expiration of the ten-‐‑year
period lease contract, Hinog refused to vacate. Bertuldo was able to file his Answer and start his
direct examination. However, he died on 24 June 1998 without completing his evidence. Atty.
Tinampay withdrew as counsel. Atty. Petalcorin then entered his appearance as new counsel.
Atty. Petalcorin filed a motion to expunge the complaint from the record and nullify all
court proceedings on the ground that private respondents failed to pay the correct docket fees.
Private respondents opposed the motion to expunge, raising as one of its grounds the lack of
legal personality of Atty. Petalcorin to represent the litigants for his non-‐‑compliance with
Section 16, Rule 3 of the Rules of Court.
The motion was granted but subject to the payment of the deficiency docket fees. Upon
such payment, the trial court reinstated the complaint. This order was contested by petitioners.
In its 15 October 1999 Order denying petitioners’ MR, the trial court noted that there has been
no substitution of parties following the death of Bertuldo. Hence, it directed Atty. Petalcorin to
comply with the provisions of Section 16, Rule 3 of the Rules of Court. On 19 November 1999,
Atty. Petalcorin complied with such directive.
Petitioners filed the present petition for certiorari and prohibition alleging that the RTC
committed grave abuse of discretion in allowing the case to be reinstated.
In their Comment, private respondents assailed Atty. Petalcorin’s lack of legal

personality to appear as counsel for the heirs of Bertuldo for his failure to comply with Section
16, Rule 3 of the Rules of Court.
Issue:
What is the effect of the non-‐‑compliance on the rule on substitution (Section 17) upon
the legal personality to sue of Atty. Petalcorin?
Held:
59

Strictly speaking, before said compliance, Atty. Petalcorin had no standing in the court a
quo when he filed his pleadings. Be that as it may, the matter has been duly corrected by the
Order of the trial court dated 15 October 1999.
Nevertheless, the court emphasized that the purpose behind the rule on substitution is
the protection of the right of every party to due process. It is to ensure that the deceased party
would continue to be properly represented in the suit through the duly appointed legal
representative of his estate. Non-‐‑compliance with the rule on substitution would render the
proceedings and judgment of the trial court infirm because the court acquires no jurisdiction
over the persons of the legal representatives or of the heirs on whom the trial and the judgment
would be binding. Thus, proper substitution of heirs must be effected for the trial court to
acquire jurisdiction over their persons and to obviate any future claim by any heir that he was
not apprised of the litigation against Bertuldo or that he did not authorize Atty. Petalcorin to
represent him.
In this case, formal substitution of the parties was effected sixteen months after the death
of Bertuldo and only when the trial court directed Atty. Petalcorin to comply as required by
Section 16, Rule 3 of the Rules of Court.
De la Cruz v. Joaquin

G.R. No. 162788, 28 July 2005
Facts:
Respondent Pedro Joaquin filed against Petitioners Sps. dela Cruz for recovery of
possession and ownership of his land. Joaquin alleged that he obtained a loan from dela Cruz.
As security, he executed a Deed of Sale. He alleged that the sale was in fact an equitable
mortgage and he was deprived of his right to repurchase. On 24 December 1988, Pedro Joaquin
died. In 1990, the RTC decided in favor of Joaquin. On 15 February 2002, before the CA, the
daughter of the deceased Pedro, Lourdes dela Cruz, moved for her substitution as the party-‐‑
plaintiff.
The CA resolved in favor of Joaquin. In CA’s 2004 Resolution denying petitioners’

motion for reconsideration, CA ordered a substitution by legal representatives. In this present
Petition for Review, the petitioners assert that the trial court lost jurisdiction over the case upon
the death of Pedro Joaquin during the pendency of the case and having no substitution by the
heirs made.
Issue:
WON a formal substitution by the heirs of Pedro Joaquin is necessary when they
themselves actively participated in the case?
Held:
No. As a general rule, the Court nullifies not only trial proceedings conducted without
the appearance of the legal representatives of the deceased, but also the resulting judgments
since the courts acquired no jurisdiction over the persons of the legal representatives or the
heirs upon whom no judgment was binding. Notwithstanding this general rule, a formal
substitution by heirs is not necessary when they themselves voluntarily appear, participate in
the case, and present evidence in defense of the deceased. These actions negate any claim that
the right to due process was violated. The alleging party must prove that there was an
undeniable violation of due process.
60

The Rules require the legal representatives of a dead litigant to be substituted as parties
to a litigation. Strictly speaking, this requirement is necessitated by due process and not a
matter of jurisdiction. Thus, when the rights of the legal representatives of a decedent are
actually recognized and protected, noncompliance or belated formal compliance with the Rules
cannot affect the validity of the promulgated decision. After all, due process had thereby been
satisfied.
The heirs of Pedro Joaquin voluntary appeared and participated in the case. We stress
that the appellate court had ordered his legal representatives to appear and substitute for him.
The substitution even on appeal had been ordered correctly. In all proceedings, the legal
representatives must appear to protect the interests of the deceased. After the rendition of
judgment, further proceedings may be held, such as a motion for reconsideration or a new trial,
an appeal, or an execution. Considering the foregoing circumstances, the Motion for
Substitution may be deemed to have been granted; and the heirs, to have substituted for the
deceased, Pedro Joaquin. There being no violation of due process, the issue of substitution
cannot be upheld as a ground to nullify the trial court’s Decision.
Factual milieu not similar to Chittick v. CA. In the Chittick case, the children who
allegedly substituted for their mother refused to continue the case against their father and
vehemently objected to their inclusion as parties. The father also died during the pendency of
the case; thus, the children were bound to substitute for the defendant also. The substitution
effectively merged the persons of the plaintiff and the defendant and thus extinguished the
obligation being sued upon.
Charles Limbauan v. Faustino Acosta,

G.R. No. 148606. 30 June 2008
Facts:
Respondent Faustino Acosta took possession of a portion of an unused land which

should have been utilized by the government as a leprosarium. A portion of the land which
Acosta possessed for himself was occupied by Paulino Calanday who in turn conveyed the land
to Juanita Roces. Roces paid her rentals to Acosta. Subsequently, she sub-‐‑leased it to her
nephew Charles Limbauan. In 1987, Limbauan stopped paying his rentals claiming the land
was government property. Years later, the government declared the land for the housing
projects for DOH employees. Acosta thereafter filed a complaint for unlawful detainer against
Limbauan. The MTC, RTC, and CA decided in favor of Acosta. However, during the pendency
of the case before the CA, Acosta died on 22 October 2000.
The present petition seeks to reverse the CA ruling, raising as one of its grounds the lack
of proper substitution of a party in compliance with Rule 3, Section 16 (now 17) of the Rules of
Court which rendered the case moot and academic. The petition alleges that on account of the
failure of Acosta’s counsel to inform the CA of the death of Acosta during the pendency of the
appeal before it, the proceedings and judgment should be invalidated.
Issue:
WON the failure of the counsel to comply with his duty under Section 17 will invalidate
the proceedings and the judgment thereon?
Held:
61

No, this kind of action survives the death of Acosta. Hence, the failure of counsel to
comply with his duty under Section 17 to inform the court of the death of his client and no
substitution of such party is effected will NOT invalidate the proceedings and the judgment
thereon if the action survives the death of such party. Moreover, the decision rendered shall
bind his successor-‐‑in-‐‑interest. The instant action for unlawful detainer, like any action for
recovery of real property, is a real action and as such survives the death of Acosta. His heirs
have taken his place and now represent his interests in the instant petition.21 Hence, the present
case cannot be rendered moot despite the death of respondent.
IX. DEATH OR SEPARATION OF PARTY WHO IS A PUBLIC OFFICER (SEC. 17)

Requisites for substitution of public officer:
1. Removal/death of public officer and appointment of successor within 30 days
unless otherwise provided.
2. Successor adopts, continues, or threatens to continue the act sued against
3. There is substantial need to continue the action
Substitution is not automatic. Requisites:

1. Notice to the new public officer
2. Opportunity to be heard for the new officer
(Section 17)
The phrase “in his official capacity” emphasized that the public officer is a party in an
action in his official capacity, and not private, capacity. (Herrera, 2000, citing Feria)
X. INCOMPETENCY OR INCAPACITY (SEC. 18)
Section 18. Incompetency or incapacity. — If a party becomes incompetent or

incapacitated, the court, upon motion with notice, may allow the action to be continued
by or against the incompetent or incapacitated person assisted by his legal guardian or
guardian ad litem.
XI. TRANSFER OF INTEREST (SEC. 19)
Where a party to an action filed with the CA a motion stating that it had sold, transferred,
and assigned to a third person the property subject of the litigation, and prayed that the
latter be substituted as party-‐‑defendant-‐‑appellee, although the motion was not acted
upon, the transferee is bound by any judgment which may be rendered for or against the
transferor. The transfer was made pendent lite, and with notice of lis pendens. As the new
owner of the property, the transferee is the party with a substantial interest in the
property. Hence, it would be the most interested in terminating the case. Herrera citing
Mayuga v. CA, 154 SCRA 309, 28 September 1987.
Even if the transferee is not a formal party to the case, the motion for substitution not
having been acted upon, it is nonetheless bound by a compromise agreement, said
transferee being one of the contracting parties. Persons who are not formal parties to a
civil case but who willingly and voluntarily enter into a compromise agreement are
bound thereby. Supra.
The Supreme Court has declared in a number of decisions that a transferee pendente lite
stands in exactly the same position as its predecessors-‐‑in-‐‑interest, the original defendant,
and is bound by the proceedings has in the case before the property was transferred to it.
It is a proper but not an indispensable party as it would in any event be bound by the
62

judgment against his predecessor. This would follow even if it is not formally included as
a defendant through an amendment of the complaint. Herrera citing Fatalino v. Sanz, 44
Phil. 691.
The appeal, however, of the original party should also redound to the transferee’s benefit.
As it is the transferee that may ultimately be required to satisfy the judgment if it is
affirmed on appeal, it is only fair that it be deemed to have also appealed together with
its predecessor-‐‑in-‐‑interest, from the decision. To erase all doubts as to the status of the
transferee, the latter may be deemed impleaded in substitution of the original defendant.
Herrera citing Jocson v. CA, G.R. No. 95446, 16 March 1992.
Thus, where an assignable right has been transferred before action is brought, the
proceeding ought to be instituted in the name of the assignee; and where an assignment
is effected pendente lite, it is proper to have the assignee substituted for the original
plaintiff. If such substitution should not be effected and the transfer of the right action
should not be brought to the attention of the court, the original plaintiffs, if successful in
litigation would hold the fruits of the action as a sort of trustee for the use and benefit of
his assignee. But it would be surprising doctrine to hold that where the assignee has
assented to the continued prosecution of the action by the original plaintiff, the defendant
can nullify the judgment, after litigation has been concluded on the ground that the
interest in litigation has been transferred. When this feat is attempted, the defendant can
be properly met by the proposition that if any irregularity was committed in the
prosecution of the case, it was, as to him, error without injury. Certainly it cannot be
contended that the transfer of the right of action pendente lite affects the jurisdiction of the
court. Herrera citing E.B. Marcha Transport Co., Inc. v. IAC, 147 SCRA 276.
XII. INDIGENT PARTY (SEC. 21)

Under the present rule, the application to litigate as a pauper may be filed by either the
plaintiff or defendant and hearing to litigate as a pauper may be made ex parte.
Proof in support of the application need not necessarily be by affidavits, certificate of the
corresponding provincial, city, or municipal treasurer for as long as the court is satisfied
that the party is one who has no money or property sufficient and available for food,
shelter, and basic necessities for himself and his family.

The exemption includes transcript of stenographic notes which the court may order to
be furnished for himself and his family.

Unlike the former rule which creates a lien only for legal fees, under the present rule, the
amount of the docket and other lawful fees which the indigent was exempted from
paying shall be a lien on any judgment rendered in the case favorable to the indigent,
unless the court otherwise provides. Herrera, 2000.

Compare with Section 19 of Rule 141:
SEC. 19. Indigent litigants exempt from payment of legal fees. Indigent litigants (a)
whose gross income and that of their immediate family do not exceed an amount double
the monthly minimum wage of an employee and (b) who do not own real property with
a fair market value as stated in the current tax declaration of more than three hundred
thousand (P300,000.00) pesos shall be exempt from payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorable to the
indigent litigant unless the court otherwise provides.
63

To be entitled to the exemption herein provided, the litigant shall execute an affidavit
that he and his immediate family do not earn a gross income abovementioned, and they
do not own any real property with the fair value aforementioned, supported by an
affidavit of a disinterested person attesting to the truth of the litigants affidavit. The
current tax declaration, if any, shall be attached to the litigants affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to
dismiss the complaint or action or to strike out the pleading of that party, without
prejudice to whatever criminal liability may have been incurred.
If the applicant for exemption meets the salary and property requirements under Section
19 of Rule 141, then the grant of the application is mandatory. On the other hand, when
the application does not satisfy one or both requirements, then the application should
not be denied outright; instead, the court should apply the indigency test under Section
21 of Rule 3 and use its sound discretion in determining the merits of the prayer for
exemption. Sps. Algura v. the LGU of Naga, G.R. No. 150135, 30 October 2006.

A party may be allowed to litigate in forma pauperis only upon a proper showing that he
has no means to that effect by affidavits, certificate of the corresponding provincial, city,
or municipal treasurer, or otherwise. Thus, every would-‐‑be litigant who seeks
exemption from the payment of the fees prescribed for maintaining an action must
establish, not simply allege, his lack of means. Herrera citing Admin. Matter No. 88-‐‑1-‐‑646-‐‑
0, En Banc, Minute Resolution, 159 SCRA 623.

Where there is a multiplicity of such parties, each must show lack, in propia persona, as it
were. The particular circumstances or possible consequences of an actual or
contemplated suit are such as to transcend the narrow personal interests of the
immediate parties thereto and to so impugn upon the wider interests of the people at
large as to assume an aspect of “national importance,” does not under any existing law
or rules justify excusing such parties from paying the requisite judicial fees or costs.
Supra.

XIII. NOTICE TO SOLICITOR GENERAL (SEC. 22)
Section 22. Notice to the Solicitor General. — In any action involving the validity of any
treaty, law, ordinance, executive order, presidential decree, rules or regulations, the
court, in its discretion, may require the appearance of the Solicitor General who may be
heard in person or a representative duly designated by him. (23a)
Under this new rule, “presidential decree” is now included and the term “superior”
from the term court has been deleted. Thus this provision is now applicable to any court
and not limited to a superior court. Herrera, 2000.
RULE 4
VENUE OF ACTIONS

I. Venue refers to the place where a civil action may be tried; in civil cases, it essentially
concerns a rule of procedure which looks primarily at the convenience of the litigants.
(Gumabon, et al. v. Larin, G.R. No. 142523, 27 November 2001)

64

II. Venue and jurisdiction, distinguished.

Venue Jurisdiction
It is the place where the cause is It refers to the authority of the court to
instituted, heard or tried. hear and decide a case.
It may be waived. Jurisdiction over the subject matter is
conferred by law and cannot be waived.
It may be changed by the written It is fixed by law and cannot be the
agreement of the parties. subject of agreement of the parties.
It is not a ground for a motu proprio Lack of jurisdiction over the subject
dismissal, except in summary matter may be a ground for a motu
procedure. proprio dismissal.
Procedural Substantive

III. Venue of real actions
Where the action is real, the venue is local; hence, the venue is the place where the real
property involved, or any portion thereof, is situated. (Rule 4, Sec.1)

IV. Venue of personal actions
If the action is personal, the venue is transitory; hence, it is the residence of the plaintiff or
defendant at the option of the plaintiff (Rule 4, Sec.2)

V. Venue of actions against non-‐‑residents
1. Quasi in rem (action affects personal status of plaintiff) – residence of plaintiff
Where the defendant does not reside and is not found in the Philippines, and the
action affects the personal status of the plaintiff, the action may be commenced and
tried in the court of the place where the plaintiff resides. (Rule 4, Sec.3)

2. In rem (action affects property of defendant in Philippines) – location of property
Where the defendant does not reside and is not found in the Philippines, and the
action affects any property of said defendant located in the Philippines, the action
may be commenced and tried where the property or any portion thereof is situated
or found. (Rule 4, Sec.3)

VI. When rule not applicable

1. Where a specific rule or law provides otherwise

Diaz v. Adiong
G.R. No. 106847, 5 March 1993

Certain public officers instituted with the Regional Trial Court, Marawi City, separate criminal
& civil complaints for libel against Patricio Diaz (“Diaz”), the publisher and editor of the
Mindanao Kris, a newspaper of general circulation in Cotabato City. Diaz moved for the
dismissal of the action for damages, arguing that venue was improperly laid since neither
respondents hold office in Marawi nor was the article published there.

Ruling: An offended party who is at the same time a public official can only institute an action
arising from libel in two (2) venues: the place where he holds office, and the place where the
alleged libelous articles were printed & first published.

65

In the present case, it is indubitable that venue was improperly laid. However, unless and until
the defendant objects to the venue in a motion to dismiss prior to a responsive pleading, the
venue cannot truly be said to have been improperly laid since, for all practical intents and
purposes, the venue though technically wrong may yet be considered acceptable to the parties
for whose convenience the rules on venue had been devised. Petitioner Diaz then should have
timely challenged the venue laid in Marawi City in a motion to dismiss, pursuant to Sec. 4, Rule
4, of the Rules of Court. Unfortunately, Diaz had already submitted himself to the jurisdiction of
the trial court when he filed his Answer to the Complaint with Counterclaim. His motion to
dismiss was therefore belatedly filed and could no longer deprive the trial court of jurisdiction
to hear and decide the instant civil action for damages. Well-‐‑settled is the rule that improper
venue may be waived and such waiver may occur by laches.

Withal, objections to venue in civil actions arising from libel may be waived; it does not, after
all, involve a question of jurisdiction. Indeed, the laying of venue is procedural rather than
substantive, relating as it does to jurisdiction of the court over the person rather than the subject
matter. Venue relates to trial and not to jurisdiction.

Finally, Sec. 1 of Rule 16 provides that objections to improper venue must be made in a motion
to dismiss before any responsive pleading is filed. Responsive pleadings are those which seek
affirmative relief and set up defenses. Consequently, having already submitted his person to the
jurisdiction of the trial court, petitioner may no longer object to the venue which, although
mandatory in the instant case, is nevertheless waivable. As such, improper venue must be
seasonably raised, otherwise, it may be deemed waived.

2. Where parties have validly agreed in writing before filing of the action on exclusive
venue thereof

The parties may agree on a specific venue which could be in a place where neither of
them resides (Universal Robina Corp., vs. Lim, 535 SCRA 95) The parties may stipulate on
the venue as long as the agreement is (a) in writing; (b) made before the filing of the
action; and (c) exclusive as to the venue. (Rule 4, Sec. 4[b])

The mere stipulation on the venue of an action is not enough to preclude parties from
bringing a case in other venues. It must be shown that such stipulation is exclusive. In
the absence of qualifying or restrictive words, such as "ʺexclusively"ʺ and "ʺwaiving for
this purpose any other venue, "ʺshall only"ʺ preceding the designation of venue, "ʺto the
exclusion of the other courts,"ʺ or words of similar import, the stipulation should be
deemed as merely an agreement on an additional forum, not as limiting venue to the
specified place. (Auction in Malinta, Inc., vs. Luyaben, G.R. No. 173979, 12 February 2007)

Legaspi v. Republic,
G.R. No. 160653, 23 July 2008

Jesusito D. Legaspi, as owner and manager of J.D. Legaspi Construction (“petitioner”),
entered into a Construction Agreement with the Social Security System (“respondent”)
in June 1997 for the construction of a four-‐‑storey building in Baguio City which will
serve as respondent'ʹs branch office.

Petitioner had several meetings with respondent'ʹs representatives during which he
informed them of his difficulty in meeting his obligations under the contract due to the
devaluation of peso. After several failed meetings, petitioner sent a letter to respondent
66

requesting an adjustment in the contract price, which was denied by respondent. This
constrained petitioner to file a complaint for payment of sum of money plus damages
with the Regional Trial Court (RTC) of Makati City.

Instead of filing an answer, respondent, filed a Motion to Dismiss on the grounds that
venue was improperly laid and petitioner had no cause of action. On the ground of
improper venue, it was respondent'ʹs argument that the Construction Agreement
provided that all actions may be brought before the proper court in Quezon City and
that petitioner waived any other venue.

Ruling: As a general rule, venue of personal actions is governed by Section 2, Rule 4 of
the Rules of Court, to wit:

Sec. 2. Venue of personal actions. – 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 non-‐‑resident defendant, where he may be found, at the election
of the plaintiff.

The parties, however, are not precluded from agreeing in writing on an exclusive venue,
as qualified by Section 4 of the same rule. Written stipulations as to venue may be
restrictive in the sense that the suit may be filed only in the place agreed upon, or merely
permissive in that the parties may file their suit not only in the place agreed upon but
also in the places fixed by law. As in any other agreement, what is essential is the
ascertainment of the intention of the parties respecting the matter.

As regards restrictive stipulations on venue, jurisprudence instructs that it must be
shown that such stipulation is exclusive. In the absence of qualifying or restrictive
words, such as "ʺexclusively,"ʺ "ʺwaiving for this purpose any other venue,"ʺ "ʺshall only"ʺ
preceding the designation of venue, "ʺto the exclusion of the other courts,"ʺ or words of
similar import, the stipulation should be deemed as merely an agreement on an
additional forum, not as limiting venue to the specified place.

In the present case, the Construction Agreement provides:

ARTICLE XIV – JUDICIAL REMEDIES
All actions and controversies that may arise from this Agreement
involving but not limited to demands for the specific performance of the
obligations as specified in the clauses contained herein and/or as resolved
or interpreted by the CLIENT pursuant to the third paragraph of Article I
hereof may be brought by the parties before the proper courts in Quezon
City where the main office of the CLIENT is located, the CONTRACTOR
hereby expressly waiving any other venue.
x x x x (Emphasis supplied)

The venue is specific -‐‑ Quezon City -‐‑ and accompanied by the words "ʺthe
CONTRACTOR hereby expressly waiving any other venue,"ʺ which connote exclusivity
of the designated venue. These terms clearly stipulate exclusively the venue where
actions arising from the Construction Agreement should be filed.

VII. Waiver of improper venue

67

When improper venue is not objected to in a motion to dismiss it is deemed waived. In other
words, venue is waivable. It is procedural, not a jurisdictional matter. It is intended to provide
convenience to the parties, rather than restrict their access to the courts. The rules on venue
simply arrange for the convenient and effective transaction of business in the courts and do not
relate to their power, authority or jurisdiction over the subject matter of the action. (Philippine
Banking Corp., vs. Tensuan, G.R. No. 104649, 28 February 1994)

1. Express waiver

The parties may expressly waive improper venue, when they agree on a specific venue
which could be in a place neither of them resides in nor where the property is located.

The parties may stipulate on the venue as long as the agreement is (a) in writing; (b)
made before the filing of the action; and (c) exclusive as to the venue. (Rule 4, Sec. 4[b])

2. Implied waiver
There is an implied waiver of improper venue, when the defendant filed his answer and
went to trial without objecting to the improper venue. (Rule 9, Sec. 1)

The ground of improperly laid venue must be raised seasonably, else it is deemed
waived. Where the defendant failed to either file a motion to dismiss on the ground of
improper venue or include the same as an affirmative defense, he is deemed to have
waived his right to object to improper venue. (Bautista v. Maya-‐‑Maya Cottages, Inc., G.R.
No. 148361, 29 November 2005)

Dacoycoy vs. IAC
G.R. No. 74854, April 2, 1991

Petitioner Jesus Dacoycoy filed, before the RTC of Antipolo, Rizal, a complaint against private
respondent Rufino De Guzman for the annulment of 2 deeds of sale involving a parcel of rice
land located in Barrio Estanza, Lingayen, Pangasinan, the surrender of the produce thereof, and
damages due to the latter’s refusal to have said deeds set aside upon petitioner'ʹs demand.

Before summons could be served on De Guzman, the RTC issued an order requiring counsel for
the petitioner to confer with respondent judge on the matter of venue. After said conference, the
trial court dismissed the complaint on the ground of improper venue. It found, based on the
allegations in the complaint, that petitioner'ʹs action is a real action as it sought not only the
annulment of the deeds of sale but also the recovery of ownership of the subject property,
which is outside the territorial jurisdiction of the trial court. Petitioner then lodged an appeal to
the Intermediate Appellate Court, which affirmed the order of dismissal of his complaint.

Ruling: The motu proprio dismissal of petitioner'ʹs complaint by respondent trial court on the
ground of improper venue is plain error, obviously attributable to its inability to distinguish
between jurisdiction and venue.

Dismissing the complaint on the ground of improper venue is inappropriate because venue may
be waived expressly or impliedly. Where defendant fails to challenge timely the venue in a
motion to dismiss as provided by Rule 4, Sec. 4 of the Rules of Court, and allows the trial to be
held and a decision to be rendered, he cannot on appeal or in a special action be permitted to
challenge belatedly the wrong venue, which is deemed waived. Thus, unless and until the
68

defendant objects to the venue in a motion to dismiss, the venue cannot be truly said to have
been improperly laid. The trial court cannot pre-‐‑empt the defendant'ʹs prerogative to object to
the improper laying of the venue by motu proprio dismissing the case.

VIII. How to question improper venue

1. Motion to dismiss

Under Rule 16, Sec. 1(c), a motion to dismiss may be filed if the venue was improperly
laid.

2. Affirmative defense in answer

If no motion to dismiss has been filed, any of the grounds provided for dismissal under
Rule 16 may be pleaded as an affirmative defense in the answer and in discretion of the
court, a preliminary hearing may be made as if a motion to dismiss has been filed. (Rule
16, Sec. 6) Thus, if no motion to dismiss was filed, the defendant may question the
improperly laid venue in his answer.

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1

III. Force and effect of Rules of Court

If the assessed value or interest in the If the assessed value or interest

With the Insurance Commissioner

a. Securities Exchange Commission (SEC) (Sec. 5.2, RA 8799, Securities Regulation

IN VIEW THEREOF, the decision appealed from is hereby reversed.

Whether a decision exonerating a government employee from administrative liability

Hear and decide administrative cases instituted by or brought before it

c. Housing and Land Use Regulatory Board (HLURB)

RTC dismissed the case against Perez. Hence, this petition.

Progressive Development Corporation, Inc., v. CA

Before petitioner'ʹs motion to dismiss could be resolved,

IV. Remedies against splitting a single cause of action

Sps. Decena, v. Sps. Piquero

WON Section 5 (c) Rule 2 of the ROC is applicable.

VII. Totality Rule

No legal capacity v. No COA

No legal or equitable title

The original petition was instituted by Win, which is a SEC-­‐‑registered corporation. It

b. Standing to Sue

Petitioners are retired Commissioners of COA and incumbent officers or employees of

PETITIONERS: invoke Chavez v. Public Estates Authority, Agan, Jr. v. Philippine

A petition for Declaration of Heirship and Appointment of Administrator and

YES. Robles is an indispensable party. Petitioner admitted in his Comment and

Limos v. Spouses Odones

WON HPMC a real party-­‐‑in-­‐‑interest or an indispensable party

D. Necessary Party or Proper Party

Banzon filed a complaint against Oliverio Laperal. Laperal Development Corporation.

III. Permissive Joinder of Parties

IV. Effect of Misjoinder and Non-­‐‑joinder of Parties

Requisites for a class suit to prosper:

Mathay v. Consolidated Bank & Trust Company

4. Entity without juridical personality as defendant

VIII. EFFECT OF NON-­‐‑SUBSTITUTION OF A DECEASED PARTY

In their Comment, private respondents assailed Atty. Petalcorin’s lack of legal

De la Cruz v. Joaquin

The CA resolved in favor of Joaquin. In CA’s 2004 Resolution denying petitioners’

Charles Limbauan v. Faustino Acosta,

Respondent Faustino Acosta took possession of a portion of an unused land which

Substitution is not automatic. Requisites:

X. INCOMPETENCY OR INCAPACITY (SEC. 18)

Section 18. Incompetency or incapacity. — If a party becomes incompetent or

XI. TRANSFER OF INTEREST (SEC. 19)

XII. INDIGENT PARTY (SEC. 21)

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The original petition was instituted by Win, which is a SEC-‐‑registered corporation. It

WON HPMC a real party-‐‑in-‐‑interest or an indispensable party

IV. Effect of Misjoinder and Non-‐‑joinder of Parties

VIII. EFFECT OF NON-‐‑SUBSTITUTION OF A DECEASED PARTY