Turner vs.
Lorenzo Shipping RTC:
FACTS:
The petitioners (Philip and Elnora Turner) held 1,010,000 shares of stock of the
respondent (Lorenzo Shipping Corp.), a domestic corporation engaged primarily in
cargo shipping activities.
The respondent decided to amend its articles of incorporation to remove the
stockholders’ pre-emptive rights to newly issued shares of stock.
The petitioners voted against the amendment and demanded payment of their
shares at the rate of P2.276/share based on the book value of the shares, or a total
of P2,298,760.00.
The respondent found the fair value of the shares demanded to be unacceptable.
It insisted that the market value on the date before the action to remove the pre-
emptive right was taken should be the value, or P0.41/share (P414,100.00) and that
the payment could be made only if the respondent had unrestricted retained earnings
in its books to cover the value of the shares, which was not the case.
The disagreement on the valuation of the shares led the parties to constitute
an appraisal committee pursuant to Sec. 82 of the Corporation Code.
The committee reported its valuation of P2.54/share, for an aggregate value
of P2,565,400.00.
Subsequently, the petitioners demanded payment based on the valuation plus
2%/month penalty from the date of their original demand for payment, as well as the
reimbursement of the amounts advanced as professional fees to the appraisers.
Respondent refused the petitioners’ demand, explaining that pursuant to the
Corporation Code, the dissenting stockholders exercising their appraisal rights could
be paid only when the corporation had unrestricted retained earnings to cover the fair
value of the shares, but that it had no retained earnings at the time of the petitioners’
demand, as borne out by its Financial Statements for Fiscal Year 1999 showing a
deficit of P72,973,114.00 as of December 31, 1999.
Upon the respondent’s refusal to pay, the petitioners sued the
respondent for collection and damages in the RTC on January 22, 2001.
The petitioners filed their motion for partial summary judgment, claiming that the
respondent has an accumulated unrestricted retained earnings of P11,975,490.00,
evidenced by its Financial Statement as of the Quarter Ending March 31, 2002;
The respondent opposed the motion for partial summary judgment, stating that the
determination of the unrestricted retained earnings should be made at the end of the
fiscal year of the respondent, and that the petitioners did not have a cause of action
against the respondent.
RTC granted the petitioners’ motion fixing the fair value of the shares of
stocks at P2.54 per share.
The evidence submitted shows that the respondent has retained earnings of
P11,975,490 as of March 21, 2002. This is not disputed by the defendant. Its only
argument against paying is that there must be unrestricted retained
earnings at the time the demand for payment is made. RTC further stated that
the law does not say that the unrestricted retained earnings must exist at the time of
the demand.
Even if there are no retained earnings at the time the demand is made if there are
retained earnings later, the fair value of such stocks must be paid. The only restriction
is that there must be sufficient funds to cover the creditors after the dissenting
stockholder is paid.
Subsequently, on November 28, 2002, the RTC issued a writ of execution.
CA:
The respondent commenced a special civil action for certiorari in the CA.
CA issued a TRO, enjoining the petitioners, and their agents and representatives
from enforcing the writ of execution. By then, however, the writ of execution had
been partially enforced.
The TRO then lapsed without the CA issuing a writ of preliminary injunction to prevent
the execution. Thereupon, the sheriff resumed the enforcement of the writ of
execution.
CA granted respondent's petition. The Orders and the corresponding Writs
of Garnishment are NULLIFIED and the Civil Case is ordered DISMISSED.
ISSUE: WON the petitioners have a valid cause of action against the
respondent.
HELD: No.
SC upheld the decision of the CA. RTC acted in excess of its jurisdiction.
No payment shall be made to any dissenting stockholder unless the
corporation has unrestricted retained earnings in its books to cover the
payment (apply the Trust fund doctrine).
In case the corporation has no available unrestricted retained
earnings in its books, Sec. 83 provides that if the dissenting stockholder is
not paid the value of his shares within 30 days after the award, his
voting and dividend rights shall immediately be restored.
The respondent had indisputably no unrestricted retained earnings in its books at the
time the petitioners commenced the Civil Case on January 22, 2001. It proved that
the respondent’s legal obligation to pay the value of the petitioners’ shares did not
yet arise.
The Turners’ right of action arose only when petitioner had already retained
earnings in the amount of P11,975,490.00 on March 21, 2002; such right of
action was inexistent on January 22, 2001 when they filed the Complaint.
The RTC concluded that the respondent’s obligation to pay had accrued by its having
the unrestricted retained earnings after the making of the demand by the petitioners.
It based its conclusion on the fact that the Corporation Code did not provide that the
unrestricted retained earnings must already exist at the time of the demand.
The RTC’s construal of the Corporation Code was unsustainable, because it
did not take into account the petitioners’ lack of a cause of action against
the respondent.
**In order to give rise to any obligation to pay on the part of the respondent, the
petitioners should first make a valid demand that the respondent refused to pay
despite having unrestricted retained earnings. Otherwise, the respondent could not
be said to be guilty of any actionable omission that could sustain their action to collect.
(THERE MUST FIRST BE A REFUSAL despite having dividends)
**SUBSEQUENT EXISTENCE OF RETAINED EARNINGS: DOES NOT CURE LACK
OF COA:
Neither did the subsequent existence of unrestricted retained earnings after
the filing of the complaint cure the lack of cause of action.
The petitioners’ right of action could only spring from an existing cause of action.
Thus, a complaint whose cause of action has not yet accrued cannot be cured by an
amended or supplemental pleading alleging the existence or accrual of a cause of
action during the pendency of the action.
For, only when there is an invasion of primary rights, not before, does the adjective
or remedial law become operative.
Verily, a premature invocation of the court’s intervention renders the complaint
without a cause of action and dismissible on such ground. In short, the Civil Case,
being a groundless suit, should be dismissed.
Even the fact that the respondent already had unrestricted retained earnings more
than sufficient to cover the petitioners’ claims on June 26, 2002 (when they filed their
motion for partial summary judgment) did not rectify the absence of the cause
of action at the time of the commencement of the Civil Case.
The motion for partial summary judgment, being a mere application for
relief other than by a pleading, was not the same as the complaint in
the Civil Case.
Thereby, the petitioners did not meet the requirement of the Rules of Court that a
cause of action must exist at the commencement of an action, which is "commenced
by the filing of the original complaint in court."
“The argument of the petitioners is baseless. The RTC was guilty of an error
of jurisdiction, for it exceeded its jurisdiction by taking cognizance of the
complaint that was not based on an existing cause of action.” -SC
Additional info:
Cause of Action:
A cause of action is the act or omission by which a party violates a right of another.
The essential elements of a cause of action are: (a) the existence of a legal right in
favor of the plaintiff; (b) a correlative legal duty of the defendant to respect such
right; and (c) an act or omission by such defendant in violation of the right of the
plaintiff with a resulting injury or damage to the plaintiff for which the latter may
maintain an action for the recovery of relief from the defendant. Although the first
two elements may exist, a cause of action arises only upon the occurrence of the last
element, giving the plaintiff the right to maintain an action in court for recovery of
damages or other appropriate relief.
Stockholder's Appraisal Right:
Section 81. Instances of appraisal right. - Any stockholder of a corporation shall have
the right to dissent and demand payment of the fair value of his shares.
The right of appraisal may be exercised when there is a fundamental change in the
charter or articles of incorporation substantially prejudicing the rights of the
stockholders. It does not vest unless objectionable corporate action is taken. It serves
the purpose of enabling the dissenting stockholder to have his interests purchased
and to retire from the corporation.
The Corporation Code defines how the right of appraisal is exercised, as well as the
implications of the right of appraisal, as follows:
1. The appraisal right is exercised by any stockholder who has voted against the
proposed corporate action by making a written demand on the corporation within 30
days after the date on which the vote was taken for the payment of the fair value of
his shares. The failure to make the demand within the period is deemed a waiver of
the appraisal right. (Sec. 82)
2. If the withdrawing stockholder and the corporation cannot agree on the fair value
of the shares within a period of 60 days from the date the stockholders approved the
corporate action, the fair value shall be determined and appraised by three
disinterested persons, one of whom shall be named by the stockholder, another by
the corporation, and the third by the two thus chosen. The findings and award of the
majority of the appraisers shall be final, and the corporation shall pay their award
within 30 days after the award is made. Upon payment by the corporation of the
agreed or awarded price, the stockholder shall forthwith transfer his or her shares to
the corporation. (Sec. 82)
3. All rights accruing to the withdrawing stockholder’s shares, including voting and
dividend rights, shall be suspended from the time of demand for the payment of the
fair value of the shares until either the abandonment of the corporate action involved
or the purchase of the shares by the corporation, except the right of such stockholder
to receive payment of the fair value of the shares. (Sec. 83)
4. Within 10 days after demanding payment for his or her shares, a dissenting
stockholder shall submit to the corporation the certificates of stock representing his
shares for notation thereon that such shares are dissenting shares. A failure to do so
shall, at the option of the corporation, terminate his rights under this Title X of the
Corporation Code. If shares represented by the certificates bearing such notation are
transferred, and the certificates are consequently canceled, the rights of the
transferor as a dissenting stockholder under this Title shall cease and the transferee
shall have all the rights of a regular stockholder; and all dividend distributions that
would have accrued on such shares shall be paid to the transferee. (Sec. 86)

5. If the proposed corporate action is implemented or effected, the corporation shall

pay to such stockholder, upon the surrender of the certificates of stock representing
his shares, the fair value thereof as of the day prior to the date on which the vote
was taken, excluding any appreciation or depreciation in anticipation of such
corporate action. (Sec. 82)

Totality Rule; Where claim for damages are not merely incidental to or
consequences of the main action but constitute the primary relief prayed for
in the complaint
 plaintiffs or to all such defendants may arise in the action; but the court may make
G.R. No.140746 – Pantranco North Express, Inc. vs. Standard Insurance such orders as may be just to prevent any plaintiff or defendant from being
Company, Inc. embarrassed or put to expense in connection with any proceedings in which he may
Sandoval-Gutierrez, J. have no interest. (6n)

A Pantranco bus and a jeep figured in a collision on a rainy October 28, 1984. The
bus overtook the jeep while the two vehicles were negotiating a curve. Crispin Gicale
was driving the jeep owned by his mother Martina (respondents together with
Standard Insurance) while Alexander Buncan (petitioner, together with Pantranco)
was the driver of the Pantranco bus. The bus sped away after the collision. The total
cost for the repair of the jeep amounted to PHP 21,415. However, Standard only
shouldered PHP 8,000 while Martina shouldered the PHP 13,415 balance. Thereafter,
herein respondents demanded reimbursement from Pantranco, which the latter
refused, prompting respondents to file with the RTC a complaint for a sum of money.
Petitioners denied the allegations and averred that it is the MTC which has jurisdiction
over the case, not the RTC because both claims are below the PHP 20,000 threshold.
The RTC, CA rendered decisions in favor of herein respondents. Aggrieved, the
petitioners filed the subject petition with the Supreme Court. The Court decided in
favor of the respondents, citing the “totality rule” embodied and exemplified by
Section 5(d) Rule 2 and Section 33(1) of B.P. Blg. 129.
Section 5(d) Rule 2 ROC
Section 5. Joinder of causes of action. — A party may in one pleading assert, in the
alternative or otherwise, as many causes of action as he may have against an
opposing party, subject to the following conditions:
xxx
(d) Where the claims in all the causes of action are principally for recovery of money
the aggregate amount claimed shall be the test of jurisdiction
Section 33(1) B.P. Blg. 129
“xxx where the claims in all the causes of action are principally for recovery of money,
the aggregate amount claimed shall be the test of jurisdiction.”

DOCTRINE

Totality Rule [exemplified by Section 33(1) of B.P. Blg. 129]

Where there are several claims or causes of action between the same or different
parties, embodied in the same complaint, the amount of the demand shall be the
totality of the claims in all causes of action, irrespective of whether the causes
of action arose out of the same or different transactions.

“Embodied in the same complaint” = joinder of parties & joinder of causes

of action

See: Section 6, Rule 3 of the ROC [Section 6. Permissive joinder of parties.]

Permissive joinder of parties requires: (a) the right to relief arises out of the same
transaction or series of transactions; (b) there is a question of law or fact common to
all the plaintiffs or defendants; and (c) such joinder is not otherwise proscribed by
the provisions of the Rules on jurisdiction and venue.

See also: Section 5(d), Rule 2 of the ROC [Section 5. Joinder of causes of action.]

IMPORTANT PROVISIONS

Section 6, Rule 3 ROC

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
FACTS
 28 October 1984 (rainy): Crispin Gicale was driving the passenger jeep owned
by his mother Martina along the National Highway in Talavera, Nueva Ecija.
 While negotiating a curve, a Pantranco bus driven by Alexander Buncan (trailing
behind the jeep) overtook the latter and hit the left rear side of the jeep and sped
away thereafter. Crispin reported the incident to the police and their insurance
company, Standard Insurance Company Inc.
 The repairs of the jeep amounted to PHP 21,415.00. Standard shouldered PHP
8,000.00 while Martina shouldered the balance of PHP 13,415.00.
 Petitioners demanded reimbursement from Pantranco, however, the latter
refused. Martina and Standard (herein respondents) filed with the RTC a
complaint for sum of money.The RTC ruled in favor of herein respondents and
was affirmed by the Court of Appeals.
RTC
o Standard Insurance and Martina
 Complaint for sum of money
o Pantranco and Buncan
 Denied allegations
 Averred that it is the MTC that has jurisdiction, not the RTC
o RTC Decision
 In favor of Standard and Martina
CA
o Pantranco and Buncan appealed
 Argued that Martina’s claim of PHP 13,415.00 and Standard’s claim of
PHP 8,000.00 fell under the exclusive original jurisdiction of the MTC.
 Contended that there was a misjoinder of parties
 Claimed that they were denied due process because the case was
deemed submitted for decision “without even declaring defendants in
default or to have waived presentation of evidence”
o CA Decision
 Pantranco’s argument regarding jurisdiction is incorrect per the Totality
Rule provided for in Section 19, BP 129 (not yet amended) which states
that it is the sum of the two claims that determines the
jurisdictional amount
 In the case at bench, total is above PHP 20,000 and is therefore under
the RTC jurisdiction.
 On misjoinder: assuming that there was, Sec. 11 Rule 7 of the ROC and
under the Rules of Civil Procedure, the misjoinder does not affect the
jurisdiction of the court nor is it a ground to dismiss complaint.
 On due process denial: This is incorrect. Pantranco failed to present
during the scheduled hearing for the reception of their evidence despite
notice and without any motion or explanation, nor did they file any
motion for reconsideration.
Aggrieved, Pantranco filed for certiorari with the Supreme Court.
ISSUE with HOLDING
Whether the Regional Trial Court had jurisdiction over the case. – YES.
 Pantranco insists that the RTC has no jurisdiction because the cause of action of each
respondent did not arise from the same transaction and there are no common
questions of law and fact.
 SC
o In this case, there is a single transaction common to all: Pantranco’s bus hitting
the rear side of the jeep. There is also a common question of fact: whether
Pantranco was negligent.
o To determine identity of cause of action, it must be ascertained whether the same
evidence which is necessary to sustain the second cause of action would have
been sufficient for the first cause to recover
o Here, if both parties filed suit, the same evidence would have been presented to
sustain their causes of action, thus filing by both respondents with the court is in
order (speedy and orderly administration of justice)
Whether Pantranco is liable to the respondents. – YES.
 The finding of the RTC as confirmed by the CA is a factual finding which is binding
upon the Supreme Court.
 It has been repeatedly held that a trial court’s factual findings, when affirmed by the
Appelalate Court, are conclusive and binding upon the SC.
 There is not sufficient ground in the present case to deviate from this rule.
Whether Pantranco was denied due process. – NO.
 Records show that during the hearing, Pantranco’s counsel filed two motions to reset
the trial and were granted by the trial court. Then they filed a notice to withdraw.
 After Standard and Martina presented their evidence, the trial court (based
on the motion of Pantranco) reset the hearing to another date. Pantranco
failed to appear on the said date.
 The trial court warned Pantranco that if they fail to appear in the next hearing
date, the case will be submitted for resolution on the basis of the evidence
presented.
 After two more postponements, Pantranco still failed to appear. Thus the
trial court submitted it for decision.
 The essence of due process is simply an opportunity to be heard which clearly
was given.
SPOUSES PEREZ v. HERMANO
July 8, 2005 | Chico-Nazario, J. | Joinder
SUMMARY: Petitioners Aviso and Sps. Hermano filed a complaint against Zecson
Land, Sales-Contreras, Vitan-Ele, and Hermano. Petitioners presented 3 causes of
action in their complaint. Hermano filed a civil case of judicial foreclosure of real estate
mortgage against petitioner Aviso and a motion with leave to dismiss the complaint
against him, or order severed for separate trial. Hermano argued that there was a
misjoinder of causes of action under Rule 2, Sec. 6, ROC in view of the misjoinder of
parties defendants under a different transaction or cause of action. The trial court
granted Hermano’s motion and dropped the latter as a defendant in this case.
However, SC held that there was no misjoinder of causes of action since it is 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
subject of the petitioners’ complaint. Because of the presence of these questions of
fact and law, and bearing in mind that the joinder of causes of action should be
liberally construed as to effect in one action a complete determination of all matters
in controversy involving one subject matter, the SC held that the trial court committed
grave abuse of discretion in severing from the complaint petitioners cause of action
against respondent Hermano.
Hence, the SC’s order to reinstate Hermano as one of the defendants in this case.
DOCTRINE: The joinder of causes of action may involve the same parties or different
parties. If the joinder involves different parties, as in this case, there must be a
question of fact or of law common to both parties joined, arising out of the same
transaction or series of transaction.
FACTS:
 April 27, 1998 – petitioners Cristina Agraviador Aviso and spouses Victor and
Milagros Perez filed a civil case for enforcement of contract and damages with
prayer for the issuance of a TRO and/or preliminary injunction against Zescon
Land, Inc. and/or its President Zenie Sales-Contreras, Atty. Perlita Vitan-Ele and
against respondent herein Antonio Hermano.
 Petitioners presented 3 causes of action in their complaint:
1) for enforcement of contract to sell entered into between petitioners and
Zecson Land, Inc.
2) for annulment or rescission of 2 contracts of mortgage entered into
between petitioners and Hermano
3) for damages against all defendants
 1st cause of action: Petitioners allege that they entered into a contract to sell with
Zescon Land, Inc. through Zenie Sales-Contreras for the purchase of 5 parcels of
land in the total amount of P19.1M. As part of their agreement, a portion of the
purchase price would be paid to them as down payment, another portion to be
given to them as cash advance upon the execution of the contract and another
portion to be used by the buyer, Zescon Land, Inc., to pay for loans earlier
contracted by petitioners which loans were secured by mortgages.
 2nd cause of action: Petitioners contend that in a tricky machination and
simultaneous with the execution of the aforesaid Contract to Sell, they were
made to sign other documents, two of which were Mortgage deeds over the same
five properties in favor of respondent Hermano, whom they had never met. It
was allegedly explained to them by Sales-Contreras that the mortgage contracts
would merely serve to facilitate the payment of the price as agreed upon in their
Contract to Sell. Petitioners claim that it was never their intention to mortgage
their property to respondent Hermano and that they have never received a single
centavo from mortgaging their property to him. Petitioners acknowledge,
however, that respondent Hermano was responsible for discharging their
obligations under the first mortgage and for having the titles over the subject
lands released, albeit not to them but to respondent Hermano. They seek a TRO
against respondent Hermano who had informed them that he would be
foreclosing the subject properties.
 3rd cause of action: Damages for being deprived of the beneficial use of the
property and the proceeds the petitioners stood to lose by way of unearned
profits, and for suffering sleepless nights due to respondents’ misrepresentations.
 Hermano denied petitioners’ allegations and filed a civil case of judicial
foreclosure of real estate mortgage against petitioner Aviso and a motion with
leave to dismiss the complaint against him, or order severed for separate trial.
Hermano argued that there was a misjoinder of causes of action under Rule 2,
Sec. 6, ROC. He argued that the action for the enforcement of contract and
damages with prayer for the issuance of TRO and/or preliminary injunction
against Zescon Land and/or its president may not, under Rule 2, Sec. 6, ROC,
join him as party defendant to annul and/or rescind the real estate mortgages of
subject properties. Hence, there is a misjoinder of parties defendants under a
different transaction or cause of action; that under the said Rule 2, Section 6,
upon motion of Hermano in the instant case, the complaint against him can be
severed and tried separately.

 The trial court granted Hermano’s motion on the justification that the latter,
having filed a special civil action for judicial foreclosure of mortgage, should be
dropped as one of the defendants in this case and whatever case petitioners may
have against Hermano can be set up by way of an answer to said judicial
foreclosure. Petitioners’ MR was dismissed by the trial court.
 Petitioners brought up the case to the CA in a petition for certiorari under Rule
65. The pivotal issue to be resolved is WON the trial court committed grave abuse
of discretion in dismissing the complaint against Hermano. However, CA
dismissed the case for being filed out of time (see re reglementary period).
Hence, this petition.
RULING: Petition granted. CA resolution reversed and set aside. Orders of RTC
annulled and set aside. RTC is further ordered to reinstate Hermano as one of the
defendants in the civil case.
Whether there was misjoinder of causes of action – NO.
 As far as can be gathered from the assailed orders, the trial court deemed the
first condition (that the party joining the causes of actions shall comply with the
rules on joinder of parties) on joinder of causes of action under Sec. 5, Rule 2 to
be lacking.
 SC: It is well to remember that the joinder of causes of action may involve the
same parties or different parties. If the joinder involves different parties, as in
this case, there must be a question of fact or of law common to both parties
joined, arising out of the same transaction or series of transaction.
 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 P10M 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 above 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.
o Whether or not Zescon Land, Inc., indeed misled petitioners to sign the
mortgage deeds in favor of respondent Hermano
o Which of the 4 contracts were validly entered into by the parties
o 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, 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.
o Whether or not Zescon Land, Inc., as represented by Sales-Contreras, and
respondent Hermano committed fraud against petitioners as to make them
liable for damages.
 Prescinding from the foregoing, and bearing in mind that the joinder of causes of
action should be liberally construed as to effect in one action a complete
determination of all matters in controversy involving one subject matter, the SC
held that the trial court committed grave abuse of discretion in severing from the
complaint petitioners cause of action against respondent Hermano.
[NOTES]
Rules on joinder of causes of action as discussed in Republic v. Hernandez:
 A joinder of causes of action 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.
 The joinder of separate causes of action, where allowable, is permissive and not
mandatory in the absence of a contrary statutory provision, even though the
causes of action arose from the same factual setting and might under applicable
joinder rules be joined. Modern statutes and rules governing joinders are intended
to avoid a multiplicity of suits and to promote the efficient administration of justice
wherever this may be done without prejudice to the rights of the litigants. To
achieve these ends, they are liberally construed.
 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.
 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. Being of a remedial nature, the provision should be liberally
construed, to the end that related controversies between the same parties may
be adjudicated at one time; and it should be made effectual as far as practicable,
with the end in view of promoting the efficient administration of justice.
 While the rule allows a plaintiff to join as many separate claims as he may have,
there should nevertheless be some unity in the problem presented and a common
question of law and fact involved, subject always to the restriction thereon
regarding jurisdiction, venue and joinder of parties. Unlimited joinder is not
authorized.
 Rule 2, Sec. 6. Misjoinder of causes of action. - Misjoinder of causes of action is
not a ground for dismissal of an action. A misjoined cause of action may, on motion
of a party or on the initiative of the court, be severed and proceeded with
separately.
 There is misjoinder of causes of action when the conditions for joinder under
Section 5, Rule 2 are not met. Section 5 provides: Joinder of causes of action. - A
party may in one pleading assert, in the alternative or otherwise, as many causes
of action as he may have against an opposing party, subject to the following
conditions:
(a) The party joining the causes of action shall comply with the rules on joinder
of parties
(b) The joinder shall not include special civil actions or actions governed by special
rules;
(c) Where the causes of action are between the same parties but pertain to
different venues or jurisdictions, the joinder may be allowed in the Regional Trial
Court provided one of the causes of action falls within the jurisdiction of said court
and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of
money, the aggregate amount claimed shall be the test of jurisdiction.
[Re reglementary period]
 CA: Rendered the first assailed resolution dismissing the petition for certiorari for doing so and it was reversible error on the part of the CA in not giving said
having been filed beyond the reglementary period pursuant to Section 4, Rule petition due course.
65. Subsequently, CA promulgated the second assailed resolution dismissing  However, instead of remanding the case to the CA, which would only unduly
petitioners’ MR, holding that from the time petitioners received the assailed order prolong the disposition of the substantive issue raised, SC decided to resolve the
and filed their MR, 4 days had elapsed, and when the petitioners received the petition originally filed therein.
denial of their MR and filed a petition, a total of 63 days had elapsed.
o A.M. No. 00-2-03-50 further amending Section 4, Rule 65 of the New Rules
on Civil Procedure states that the petition shall be filed not later than sixty
(60) days from notice of the judgment, Order or Resolution and in case a
motion for reconsideration or new trial is timely filed, whether such motion
is required or not, the 60-day period shall be counted from notice of the
denial of said motion.
o Viewed from its light, the assailed Orders had already attained finality, and
are now beyond the power of CA to review.
 SC: Following the amendment introduced by A.M. No. 00-2-03-SC to Section 4,
Rule 65 of the 1997 Rules on Civil Procedure, the petition was filed on the 60 th
day, thus, within the reglementary period.
 Admittedly, at the time petitioners filed their petition for certiorari on August 17,
2000, the rule then prevailing was Section 4, Rule 65 of the 1997 Rules on Civil
Procedure, as amended by Circular No. 39-98 effective September 1, 1998,
which provides: “The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution sought to be assailed… If the
petitioner had filed a motion for new trial or reconsideration in due time after
notice of said judgment, order, or resolution, the period herein fixed shall be
interrupted. If the motion is denied, the aggrieved party may file the petition
within the remaining period, but which shall not be less than five (5) days in any
event, reckoned from notice of such denial.”
 However, on Sept. 1, 2000, during the pendency of the case before the CA, Sec.
4 was amended anew by A.M. No. 00-2-03-SC which now provides: “The petition
shall be filed not later than sixty (60) days from notice of the judgment, order
or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the sixty-day period shall be counted
from notice of the denial of said motion.” Under this amendment, the 60-day
period within which to file the petition starts to run from receipt of notice of the
denial of the motion for reconsideration, if one is filed.
 In Narzoles v. NLRC, the SC described this latest amendment as curative in
nature as it remedied the confusion brought about by Circular No. 39-98
because, historically, i.e., even before the 1997 revision to the Rules of Civil
Procedure, a party had a fresh period from receipt of the order denying the
motion for reconsideration to file a petition for certiorari. Curative statutes,
which are enacted to cure defects in a prior law or to validate legal proceedings
which would otherwise be void for want of conformity with certain legal
requirements, by their very essence, are retroactive. And, being a procedural
rule, it was held in Sps. Ma. Carmen and Victor Javellana v. Hon. Presiding Judge
Benito Legarda that procedural laws are construed to be applicable to actions
pending and undetermined at the time of their passage, and are deemed
retroactive in that sense and to that extent.
 Consequently, petitioners had a fresh period of 60 days from the time they
received the Order of the trial court denying their motion for reconsideration on
June 18, 2000. When they filed their petition with the Court of Appeals on August
17, 2000, exactly 60 days had elapsed following the rule that in computing a
period, the first day shall be excluded and the last day included. Hence, there G.R. No. 182779 August 23, 2010
can be no doubt that the petition was filed within the reglementary period for
VICTORINA (VICTORIA) ALICE LIM LAZARO, Petitioner,
vs.
BREWMASTER INTERNATIONAL, INC., Respondent.
RESOLUTION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Court of Appeals (CA)
Decision1 dated September 4, 2007 and Resolution dated January 31, 2008, which
awarded the amount sought by respondent in its Complaint. As held by the CA, to
grant the relief prayed for by respondent is, in the words of Section 6 of the Revised
Rule on Summary Procedure, the judgment "warranted by the facts alleged in the
complaint."
Respondent, Brewmaster International, Inc., is a marketing company engaged in
selling and distributing beer and other products of Asia Brewery, Inc. On November
9, 2005, it filed a Complaint for Sum of Money against Prescillo G. Lazaro (Prescillo)
and petitioner, Victorina (also known as Victoria) Alice Lazaro, with the Metropolitan
Trial Court (MeTC) of Makati City. The complaint alleged as follows:
6. During the period from February 2002 to May 2002, defendants obtained
on credit from plaintiff beer and other products in the total amount of ONE
HUNDRED THIRTY EIGHT THOUSAND FIVE HUNDRED TWO PESOS AND
NINETY TWO CENTAVOS (Php 138,502.92), evidenced by sales invoices
photocopies of which are hereto attached as Annexes "A," "A-1" to "A-11,"
7. Despite repeated demands, defendants have failed and refused, and up
to now, still fail and refuse to pay their aforesaid obligation to plaintiff in the
amount of ONE HUNDRED THIRTY EIGHT THOUSAND FIVE HUNDRED TWO
PESOS AND NINETY TWO CENTAVOS (Php 138,502.92) as evidenced by the
demand letters dated 21 April 2003, 12 May 2003, 5 August 2003 and 17
August 2005, photocopies of which are hereto attached as Annexes "B," "C,"
"C-1," "D," "D-1," "D-2," and "E," "E-1,"
8. Under the terms of the sales invoices, defendants agreed that in case of
litigation, the venue shall only be at the proper courts of Makati City and to
pay 24% interest on all overdue accounts.
WHEREFORE, it is respectfully prayed that judgment be rendered in favor of plaintiff
and against the defendants, ordering the latter to pay the sum of Php138,502.92
representing plaintiff’s claim and the sum of Php33,240.00 as interest.
Plaintiff prays for such other or further relief and remedies that are just and equitable
in the premises.2
Annexes A, A-1 to A-11 are photocopies of sales invoices3 indicating the amount of
the goods purchased and showing that they were sold to "TOTAL" and received by a
certain Daniel Limuco.
Prescillo filed an answer with counterclaim, denying any knowledge of the obligation
sued upon. According to Prescillo, he and petitioner had lived separately since January
15, 2002 and he never authorized petitioner to purchase anything from respondent.
He pointed out that the purchaser of the items, as borne out by the sales invoices
attached to the complaint, was Total, which should have been the one sued by
respondent.4
Petitioner, in her own answer with counterclaims, likewise denied having transacted
with respondent, and averred that the documents attached to the complaint showed
that it was Total which purchased goods from respondent.5
On June 14, 2006, during the scheduled preliminary conference, petitioner and her
co-defendant did not appear. Hence, the MeTC declared the case submitted for
decision.6
On August 22, 2006, the MeTC dismissed the complaint, ratiocinating that
respondent, as plaintiff, failed to meet the burden of proof required to establish its
claim by preponderance of evidence. The court a quo noted that the sales invoices
attached to the complaint showed that the beer and the other products were sold to
Total and were received by a certain Daniel Limuco; they did not indicate, in any way,
that the goods were received by petitioner or her husband.7
Respondent elevated the case to the Regional Trial Court (RTC) through a notice of
appeal. Attached to its Memorandum was additional evidence, showing that it
transacted with petitioner and her husband, who were then the operators and
franchisees of the Total gasoline station and convenience store where the subject
goods were delivered, and that Daniel Limuco was their employee.8
Unmoved, the RTC found no reversible error in the assailed decision. It agreed with
the MeTC that respondent failed to submit any evidence proving that petitioner and
her husband were liable for the obligation. The RTC disregarded the documents
attached to the memorandum on the ground that admission of such additional
evidence would be offensive to the basic rule of fair play and would violate the other
party’s right to due process. Thus, the RTC affirmed the assailed decision in toto.9
Respondent then went to the CA through a petition for review. There, it succeeded in
obtaining a judgment in its favor. Applying Section 710 of the Revised Rule on
Summary Procedure, in conjunction with Section 611 thereof, the CA held that
judgment should have been rendered "as may be warranted by the facts alleged in
the complaint" considering that both defendants failed to appear during the
preliminary conference. The appellate court said that "by instead referring to the sales
invoices and bypassing [the] ultimate facts [alleged in the complaint], the MeTC
contravened the evident purposes of the [Revised] Rule on Summary Procedure
directing that the judgment be based on the allegations of the complaint, which were,
firstly, to avoid delay and, secondly, to consider the non-appearance at the
preliminary conference as an admission of the ultimate facts." The CA judiciously
pronounced that:
In fact, evidentiary matters (like the sales invoices attached to the complaint) were
not yet to be considered as of that early stage of the proceedings known under the
Rule on Summary Procedure as the preliminary conference. The evidentiary matters
and facts are to be required only upon the termination of the preliminary conference
and only if further proceedings become necessary to establish factual issues defined
in the order issued by the court. (citing Section 9, Rule on Summary Procedure)
Thus, finding the amount claimed to be warranted by the allegations in the complaint,
the CA, in its September 4, 2007 Decision, reversed the trial court’s decision and
ordered petitioner and her husband to pay the said amount plus interests, thus:
WHEREFORE, the DECISION DATED MARCH 12, 2007 is REVERSED AND SET ASIDE.
The respondents are ORDERED to pay, jointly and severally, to the petitioner the
amount of ₱138,502.92, plus interest of 6% per annum from the filing of the
complaint until this judgment becomes final and executory, and 12% per annum upon
finality of this judgment until full payment.
The respondents are also ORDERED to pay the costs of suit.
SO ORDERED.12
Petitioner filed a motion for reconsideration of the said Decision but the same was
denied by the CA in its January 31, 2008 Resolution.13
Petitioner submits the following issues to this Court for resolution:
Petitioner respectfully submits that the Honorable Court of Appeals erred in the
interpretation of Section 6 of the Revised Rules of Summary Procedure when it
reversed the Decision of the RTC, Branch 162 of Makati in Civil Case [N]o. 06-944.
Petitioner further submits that the Court of Appeals erred in giving relief to the private
respondent despite the lack of cause of action in its complaint against the petitioner
herein.14
Petitioner contends that the Revised Rule on Summary Procedure does not warrant
the automatic grant of relief in favor of the plaintiff when the complaint fails to state
a cause of action. She avers that respondent’s complaint fails to state a cause of
action; hence, no relief can be given to respondent. Petitioner points out that the
sales invoices formed part of the complaint and should be considered in determining
whether respondent has a cause of action against her. Consideration of the said sales
invoices, she avers, would show that there is no contractual relationship between her
and respondent; the invoices did not indicate in any way that petitioner was liable for
the amount stated therein.
Petitioner is correct in saying that no relief can be awarded to respondent if its
complaint does not state a cause of action. Indeed, if the complaint does not state a
cause of action, then no relief can be granted to the plaintiff and it would necessarily
follow that the allegations in the complaint would not warrant a judgment favorable
to the plaintiff.
The basic requirement under the rules of procedure is that a complaint must make a
plain, concise, and direct statement of the ultimate facts on which the plaintiff relies
for his claim.15 Ultimate facts mean the important and substantial facts which either
directly form the basis of the plaintiff’s primary right and duty or directly make up the
wrongful acts or omissions of the defendant.16 They refer to the principal,
determinative, constitutive facts upon the existence of which the cause of action rests.
The term does not refer to details of probative matter or particulars of evidence which
establish the material elements.17
The test of sufficiency of the facts alleged in a complaint to constitute a cause of
action is whether, admitting the facts alleged, the court could render a valid judgment
upon the same in accordance with the prayer of the petition or complaint.18 To
determine whether the complaint states a cause of action, all documents attached
thereto may, in fact, be considered, particularly when referred to in the
complaint.19 We emphasize, however, that the inquiry is into the sufficiency, not the
veracity of the material allegations in the complaint.20 Thus, consideration of the
annexed documents should only be taken in the context of ascertaining the sufficiency
of the allegations in the complaint.
Petitioner argues that the complaint fails to state a cause of action since reference to
the sales invoices attached to and cited in paragraph six of the Complaint shows that
it was not her who purchased and received the goods from respondent.
Contrary to petitioner’s stance, we find that the Complaint sufficiently states a cause
of action.1âwphi1 The following allegations in the complaint adequately make up a
cause of action for collection of sum of money against petitioner: (1) that petitioner
and her husband obtained beer and other products worth a total of ₱138,502.92 on
credit from respondent; and (2) that they refused to pay the said amount despite
demand.
As correctly held by the CA, the sales invoices are not actionable documents. They
were not the bases of respondent’s action for sum of money but were attached to the
Complaint only to provide details on the alleged transactions. They were evidentiary
in nature and not even necessary to be stated or cited in the Complaint.
At any rate, consideration of the attached sales invoices would not change our
conclusion. The sales invoices, naming Total as the purchaser of the goods, do not
absolutely foreclose the probability of petitioner being liable for the amounts reflected
thereon. An invoice is nothing more than a detailed statement of the nature, quantity,
and cost of the thing sold and has been considered not a bill of sale.21 Had the case
proceeded further, respondent could have presented evidence linking these sales
invoices to petitioner.
In Peña v. Court of Appeals,22 petitioners therein likewise argued that the sales
invoices did not show that they had any involvement in the transactions covered by
the same. What the Court said in reply to this argument bolsters our view in this
petition:
Although it appears in the other sales invoices that the petitioners were the
salespersons who brokered the sales of the products covered by the said sales
invoices to the vendees therein named, the said entries are not conclusive of the
extent and the nature of the involvement of the petitioners in the sales of the products
under the said sales invoices which are not absolutely binding. They may be explained
and put to silence by all the facts and circumstances characterizing the true import of
the dealings to which they refer. The facts contained in the said sales invoices may
be contradicted by oral testimony.23

WHEREFORE, premises considered, the Court of Appeals Decision dated September

4, 2007 and Resolution dated January 31, 2008 are AFFIRMED.

SO ORDERED.
Prince Transport, Inc. and Mr. Renato Claros v. Diosdado Garcia, Luisito In the instant case, aside from their specific prayer for reinstatement,
Garcia, Et. Al.G.R. No. 16 !"1, #anuar$ 1!, !%11 respondents, in their separate complaints, prayed for such reliefs whichare
deemed /ust and e7uitable.
FACTS:

Prince Transport, Inc. (PTI), is a company engaged in the business of

transporting passengers byland; respondents were hired either as drivers,
conductors, mechanics or inspectors, except for respondent iosdado !arcia
(!arcia), who was assigned as "perations #anager. $ometime in"ctober
%&&' the commissions received by the respondents were reduced to ' to
from * to+& . This led respondents and other employees of PTI to hold a
series of meetings to discuss the protection of their interests as employees.
anato -laros, president of PTI, made nown to!arcia his ob/ections to the
formation of a union and in order to bloc the continued formation of the
union, PTI caused the transfer of all union members and sympathi0ers to
one of its sub1companies, 2ubas Transport (2ubas). The business of 2ubas
deteriorated because of the refusalof PTI to maintain and repair the units
being used therein, which resulted in the virtual stoppageof its operations
and respondents3 loss of employment. 4ence, the respondent1employees
filedcomplaints against PTI for illegal dismissal and unfair labor practice. PTI
contended that it hasnothing to do with the management and operations of
2ubas as well as the control andsupervision of the latter3s employees.

ISSUE:

5hether or not the order to reinstate respondents was valid considering that
the issue of reinstatement was never brought up before the -6 and
respondents never 7uestioned the awardof separation pay.

HELD:

89$. It is clear from the complaints filed by respondents that they are
see ing reinstatement.$ection % (c), ule ' of the ules of -ourt provides
that a pleading shall specify the relief sought, but may add a general prayer
for such further or other reliefs as may be deemed /ust ande7uitable. :nder
this rule, a court can grant the relief warranted by the allegation and the
proof even if it is not specifically sought by the in/ured party; the inclusion
of a general prayer may /ustify the grant of a remedy different from or
together with the specific remedy sought, if thefacts alleged in the complaint
and the evidence introduced so warrant. The general prayer is broad enough
to /ustify extension of a remedy different from or together with the
specificremedy sought.< 9ven without the prayer for a specific remedy,
proper relief may be granted bythe court if the facts alleged in the complaint
and the evidence introduced so warrant. The courtshall grant relief
warranted by the allegations and the proof even if no such relief is prayedfor.
The prayer in the complaint for other reliefs e7uitable and /ust in the
premises /ustifies thegrant of a relief not otherwise specifically prayed for.
 never encumbered or disposed the property. In 1996, plaintiffs had the property
fenced but defendant deprived them of the final use and enjoyment of their property.
G.R. No. 168943 October 27, 2006
Plaintiffs prayed that, after due proceedings, judgment be rendered in their favor,
thus:
IGLESIA NI CRISTO, petitioner,
vs.
HON. THELMA A. PONFERRADA, in her capacity as Presiding Judge, Regional WHEREFORE, it is respectfully prayed that, after due hearing, judgment be
Trial Court, Br. 104, Quezon City, and HEIRS OF ENRIQUE G. rendered quieting the title of plaintiffs over and/or recover possession of
SANTOS, respondents. their said property in the name of deceased Enrique Santos, covered by said
TCT No. RT-110323(57272) of the Register of Deeds at Quezon City and
that:

1. The title of defendant, TCT No. 321744 be ordered cancelled by

the Register of Deeds of Quezon City;
DECISION

2. The defendant be ordered to pay plaintiffs’ claims for actual

damages in the sum of P100,000.00;

3. The defendant be ordered to pay plaintiffs’ claims for

CALLEJO, SR, J.:
compensatory damages in the sum of at least P1,000,000.00;

This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA)
4. The defendant be ordered to pay plaintiffs’ claims for
in CA-G.R. SP No. 72686 and its Resolution2 denying the motion for reconsideration
reimbursement of the lawyer’s professional fees consisting of the
of the said decision.
aforesaid P50,000.00 acceptance fee and reimbursement of the
said success fee in par. 10 above; and lawyer’s expenses
On October 24, 2001, Alicia, Alfredo, Roberto, Enrique and Susan, all surnamed of P2,000.00 for each hearing in this case;
Santos, and Sonia Santos-Wallin, represented by Enrique G. Santos, filed a
complaint3 for Quieting of Title and/or Accion Reinvindicatoria before the Regional
5. The defendant be ordered to pay expenses and costs of litigation
Trial Court (RTC) of Quezon City against the Iglesia Ni Cristo (INC), defendant
in the sum of at least P200,000.00.
therein.

Other reliefs that are just and equitable in the premises are, likewise, prayed
Plaintiffs alleged therein that, during his lifetime, Enrique Santos was the owner of a
for.4
936-square-meter parcel of land located in Tandang Sora, Quezon City covered by
Transfer Certificate of Title (TCT) No. 57272 issued by the Register of Deeds on July
27, 1961 which cancelled TCT No. 57193-289. He had been in possession of the As gleaned from the caption of the complaint, plaintiffs appear to be the heirs of
owner’s duplicate of said title and had been in continuous, open, adverse and peaceful Enrique Santos, represented by Enrique G. Santos. The latter signed the Verification
possession of the property. He died on February 9, 1970 and was survived by his and Certificate of Non-Forum Shopping which reads:
wife, Alicia Santos, and other plaintiffs, who were their children. Thereafter, plaintiffs
took peaceful and adverse possession of the property, and of the owner’s duplicate
I, ENRIQUE G. SANTOS, of legal age, under oath, state that I am one of the
of said title. When the Office of the Register of Deeds of Quezon City was burned on
children of the late Enrique Santos and I represent the heirs of said Enrique
June 11, 1988, the original copy of said title was burned as well. The Register of
Santos who are my co-plaintiffs in the above-captioned case and that I
Deeds had the title reconstituted as TCT No. RT-110323, based on the owner’s
directed the preparation of the instant complaint, the contents of which are
duplicate of TCT No. 57272. Sometime in February 1996, plaintiffs learned that
true and correct to the best of my knowledge and the attachments are
defendant was claiming ownership over the property based on TCT No. 321744 issued
faithful reproductions of the official copies in my possession.
on September 18, 1984 which, on its face, cancelled TCT No. 320898, under the name
of the Philippine National Bank, which allegedly cancelled TCT No. 252070 in the
names of the spouses Marcos and Romana dela Cruz. They insisted that TCT Nos. I hereby certify that I have not commenced any other action or proceeding
321744, 320898 and 252070 were not among the titles issued by the Register of involving the same issues in the Supreme Court, the Court of Appeals, or
Deeds of Quezon City and even if the Register of Deeds issued said titles, it was different Divisions thereof, or any other tribunal or agency, and to the best
contrary to law. Enrique Santos, during his lifetime, and his heirs, after his death, of my knowledge, no such action or proceeding is pending in the Supreme
Court, the Court of Appeals, or different Divisions thereof, or any other
 tribunal or agency, and that I shall notify this Commission within three days
from notice that a similar action or proceeding has been filed or is pending
thereat.
IN WITNESS WHEREOF, I hereby affix my signature this 23rd day of October
2001 at Pasig City, Metro Manila.
(Sgd.)
ENRIQUE G. SANTOS
SUBSCRIBED AND SWORN to before me this 23rd day of October 2001 at
Pasig City, affiant exhibiting to me his CTC No. 07303074 issued at Sta. Cruz,
Laguna on April 16, 2001.
(Sgd.)
PETER FRANCIS G. ZAGALA
Notary Public
Until December 31, 2002
PTR No. 0287069
Issued on 1-10-01
At Pasig City5
Defendant moved to dismiss plaintiffs’ complaint on the following grounds: (1)
plaintiffs failed to faithfully comply with the procedural requirements set forth in
Section 5, Rule 7 of the 1997 Rules of Civil Procedure; (2) the action (either Quieting
of Title or Accion Reinvindicatoria) had prescribed, the same having been filed only
on October 24, 2001 beyond the statutory ten-year period therefor; and (3) that the
complaint is defective in many respects.6
Defendant asserted that the case involved more than one plaintiff but the verification
and certification against forum shopping incorporated in the complaint was signed
only by Enrique Santos. Although the complaint alleges that plaintiffs are represented
by Enrique Santos, there is no showing that he was, indeed, authorized to so
represent the other plaintiffs to file the complaint and to sign the verification and
certification of non-forum shopping.7 Thus, plaintiffs failed to comply with Section 5,
Rule 7 of the Rules of Court. Defendant cited the ruling of this Court in Loquias v.
Office of the Ombudsman.8
Defendant maintained that the complaint is defective in that, although there is an
allegation that Enrique Santos represents the other heirs, there is nothing in the
pleading to show the latter’s authority to that effect; the complaint fails to aver with
particularity the facts showing the capacity of defendant corporation to sue and be
sued; and the pleading does not state the address of plaintiffs. Defendant likewise
averred that the complaint should be dismissed on the ground of prescription. It
argued that plaintiffs anchor their claim on quieting of title and considering that they
are not in possession of the land in question, their cause of action prescribed after
ten years. On the other hand, if the supposed right of plaintiffs is based on accion
reinvindicatoria, prescription would set in after 10 years from dispossession. In both
cases, defendant asserts, the reckoning point is 1984 when defendant acquired TCT
No. 321744 and possession of the land in question.
In their Comment9 on the motion, plaintiffs averred that the relationship of a co-
owner to the other co-owners is fiduciary in character; thus, anyone of them could
effectively act for another for the benefit of the property without need for an
authorization. Consequently, Enrique Santos had the authority to represent the other
heirs as plaintiffs and to sign the verification and certification against forum
shopping.10 On the issue of prescription, plaintiffs argued that the prescriptive period
for the actions should be reckoned from 1996, when defendant claimed ownership
over the property and barred plaintiffs from fencing their property, not in 1984 when
TCT No. 321744 was issued by the Register of Deeds in the name of defendant as
owner.
In its reply, defendant averred that absent any authority from his co-heirs, Enrique
Santos must implead them as plaintiffs as they are indispensable parties. In response,
plaintiffs aver that a co-owner of a property can execute an action for quieting of title
without impleading the other co-owners.
The trial court issued an Order11 denying defendant’s motion to dismiss. It declared
that since Enrique Santos was one of the heirs, his signature in the verification and
certification constitutes substantial compliance with the Rules. The court cited the
ruling of this Court in Dar v. Alonzo-Legasto.12 The court, likewise, held that
prescription had not set in and that failure to state the address of plaintiffs in the
complaint does not warrant the dismissal of the complaint.
Defendant filed a motion for reconsideration, which the court likewise denied in an
Order13 dated July 10, 2002.
Unsatisfied, defendant, as petitioner, filed a Petition for Certiorari and Prohibition with
Prayer for the Issuance of a Temporary Restraining Order and/or Preliminary
Injunction14 before the CA, raising the following issues:
I.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION WHEN SHE HELD THAT THE CERTIFICATION OF NON-FORUM
SHOPPING SIGNED BY ENRIQUE G. SANTOS ALONE IS A SUBSTANTIAL
COMPLIANCE WITH SECTION 5, RULE 7 OF THE 1997 RULES OF CIVIL
PROCEDURE, IN CLEAR CONTRAVENTION OF THE RULES OF COURT, AND
THE RULING IN LOQUIAS V. OFFICE OF THE OMBUDSMAN, G.R. NO.
1399396 (SIC), AUGUST 16, 2000, 338 SCRA 62, AND ORTIZ V. COURT OF
APPEALS, G.R. NO. 127393, 299 SCRA 708 (DECEMBER 4, 1998).
II.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION IN APPLYING THE RULING IN DAR, ET. AL. V. HON. ROSE
MARIE ALONZO-LEGASTO, ET. AL., G.R. NO. 143016, AUGUST 30, 2000 TO
THE INSTANT CASE.
 III.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION WHEN SHE HELD THAT THE AUTHORITY OF ENRIQUE G.
SANTOS TO REPRESENT HIS CO-HEIRS IN THE FILING OF THE COMPLAINT
AGAINST THE "INC" IS A MATTER OF EVIDENCE.
IV.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ERRED AND ABUSED HER
DISCRETION WHEN SHE HELD THAT THE ACTION FOR QUIETING OF TITLE
AND/OR ACCION REINVINDICATORIA (CIVIL CASE NO. Q-01-45415) HAS
NOT YET PRESCRIBED.15
Petitioner averred that, of the plaintiffs below, only plaintiff Enrique Santos signed
the verification and certification of non-forum shopping. Under Section 5, Rule 7 of
the 1997 Rules of Civil Procedure, all the plaintiffs must sign, unless one of them is
authorized by a special power of attorney to sign for and in behalf of the others.
Petitioner argues that the bare claim of Enrique Santos that he signed the verification
and certification in his behalf and of the other plaintiffs who are his co-heirs/co-owners
of the property does not even constitute substantial compliance of the rule. Contrary
to the ruling of the trial court, the absence or existence of an authority of Enrique
Santos to sign the verification and certification for and in behalf of his co-plaintiffs is
not a matter of evidence. The defect is fatal to the complaint of respondents and
cannot be cured by an amendment of the complaint. The trial court erred in applying
the ruling of this Court in Dar v. Alonzo-Legasto.16
Petitioner maintained that the action of respondents, whether it be one for quieting
of title or an accion reinvindicatoria, had prescribed when the complaint was filed on
October 24, 2001. Petitioner asserts that this is because when respondents filed their
complaint, they were not in actual or physical possession of the property, as it
(petitioner) has been in actual possession of the property since 1984 when TCT No.
321744 was issued to it by the Register of Deeds. This is evident from the nature of
a reinvindicatory action itself – which is an action whereby plaintiff alleges ownership
over the subject parcel of land and seeks recovery of its full possession. By their
action, respondents thereby admitted that petitioner was in actual possession of the
property, and as such, respondents’ action for quieting of title or accion
reinvindicatoria may prescribe in ten (10) years from 1984 or in 1994, it appearing
that it acted in good faith when it acquired the property from the registered owner,
conformably with Article 555(4) of the New Civil Code.
On April 7, 2005, the CA rendered the assailed decision17 dismissing the petition,
holding that the RTC did not commit grave abuse of its discretion amounting to lack
or excess of jurisdiction in denying petitioner’s motion to dismiss. As the Court held
in DAR v. Alonzo-Legasto18 and in Gudoy v. Guadalquiver,19 the certification signed
by one with respect to a property over which he shares a common interest with the
rest of the plaintiffs (respondents herein) substantially complied with the Rules. As to
the issue of prescription, the appellate court held that the prescriptive period should
be reckoned from 1996, when petitioner claimed ownership and barred respondents
from fencing the property.
Petitioner is now before this Court on petition for review on certiorari, raising the
following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE
CERTIFICATION OF NON-FORUM SHOPPING SIGNED BY RESPONDENT
ENRIQUE G. SANTOS ALONE IS A SUBSTANTIAL COMPLIANCE WITH
SECTION 5, RULE 7 OF THE 1997 RULES OF CIVIL PROCEDURE AND IN
APPLYING THE CASE OF GUDOY V. GUADALQUIVER, 429 SCRA 723,
WITHOUT REGARD TO MORE RECENT JURISPRUDENCE.
II.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT
THE AUTHORITY OF RESPONDENT ENRIQUE G. SANTOS TO REPRESENT HIS
CO-HEIRS IN THE FILING OF THE COMPLAINT AGAINST THE PETITIONER IS
A MATTER OF EVIDENCE.
III.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE
ACTION FOR QUIETING OF TITLE AND/OR ACCION REINVINDICATORIA
(CIVIL CASE NO. Q-01-45415) HAS NOT YET PRESCRIBED.20
Petitioner reiterated its arguments in support of its petition in the CA as its arguments
in support of its petition in the present case.
Sections 4 and 5, Rule 7 of the Revised Rules of Court on verification and certification
against forum shopping read:
Sec. 4. Verification. – Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading
and that the allegations therein are true and correct of his personal
knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on
"information and belief" or upon "knowledge, information and belief," or
lacks a proper verification, shall be treated as an unsigned pleading.
Sec. 5. Certification against forum shopping. – The plaintiff or principal party
shall certify under oath in the complaint or other initiatory pleading asserting
a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not theretofore commenced
any action or filed any claim involving the same issues in any court, tribunal
or quasi-judicial agency and, to the best of his knowledge, no such other
 action or claim is pending therein; (b) if there is such other pending action
or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5) days therefrom to
the court wherein his aforesaid complaint or initiatory pleading has been
filed.
Failure to comply with the foregoing requirements shall not be curable by
mere amendment of the complaint or other initiatory pleading but shall be
cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall
constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative sanctions.
The purpose of verification is simply to secure an assurance that the allegations of
the petition (or complaint) have been made in good faith; or are true and correct, not
merely speculative. This requirement is simply a condition affecting the form of
pleadings, and noncompliance therewith does not necessarily render it fatally
defective. Indeed, verification is only a formal, not a jurisdictional requirement.21
The issue in the present case is not the lack of verification but the sufficiency of one
executed by only one of plaintiffs. This Court held in Ateneo de Naga University v.
Manalo,22 that the verification requirement is deemed substantially complied with
when, as in the present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the petition
(complaint), signed the verification attached to it. Such verification is deemed
sufficient assurance that the matters alleged in the petition have been made in good
faith or are true and correct, not merely speculative.
The same liberality should likewise be applied to the certification against forum
shopping. The general rule is that the certification must be signed by all plaintiffs in
a case and the signature of only one of them is insufficient. However, the Court has
also stressed in a number of cases that the rules on forum shopping were designed
to promote and facilitate the orderly administration of justice and thus should not be
interpreted with such absolute literalness as to subvert its own ultimate and legitimate
objective. The rule of substantial compliance may be availed of with respect to the
contents of the certification. This is because the requirement of strict compliance with
the provisions merely underscores its mandatory nature in that the certification
cannot be altogether dispensed with or its requirements completely disregarded.23
The substantial compliance rule has been applied by this Court in a number of
cases: Cavile v. Heirs of Cavile,24where the Court sustained the validity of the
certification signed by only one of petitioners because he is a relative of the other
petitioners and co-owner of the properties in dispute; Heirs of Agapito T. Olarte v.
Office of the President of the Philippines,25 where the Court allowed a certification
signed by only two petitioners because the case involved a family home in which all
the petitioners shared a common interest; Gudoy v. Guadalquiver,26 where the Court
considered as valid the certification signed by only four of the nine petitioners because
all petitioners filed as co-owners pro indiviso a complaint against respondents for
quieting of title and damages, as such, they all have joint interest in the undivided
whole; and Dar v. Alonzo-Legasto,27 where the Court sustained the certification
signed by only one of the spouses as they were sued jointly involving a property in
which they had a common interest.
It is noteworthy that in all of the above cases, the Court applied the rule on substantial
compliance because of the commonality of interest of all the parties with respect to
the subject of the controversy.
Applying the doctrines laid down in the above cases, we find and so hold that the CA
did not err in affirming the application of the rule on substantial compliance. In the
instant case, the property involved is a 936-square-meter real property. Both parties
have their respective TCTs over the property. Respondents herein who are plaintiffs
in the case below have a common interest over the property being the heirs of the
late Enrique Santos, the alleged registered owner of the subject property as shown in
one of the TCTs. As such heirs, they are considered co-owners pro indiviso of the
whole property since no specific portion yet has been adjudicated to any of the heirs.
Consequently, as one of the heirs and principal party, the lone signature of Enrique
G. Santos in the verification and certification is sufficient for the RTC to take
cognizance of the case. The commonality of their interest gave Enrique G. Santos the
authority to inform the RTC on behalf of the other plaintiffs therein that they have not
commenced any action or claim involving the same issues in another court or tribunal,
and that there is no other pending action or claim in another court or tribunal involving
the same issues. Hence, the RTC correctly denied the motion to dismiss filed by
petitioner.
Considering that at stake in the present case is the ownership and possession over a
prime property in Quezon City, the apparent merit of the substantive aspects of the
case should be deemed as a special circumstance or compelling reason to allow the
relaxation of the rule.
Time and again, this Court has held that rules of procedure are established to secure
substantial justice. Being instruments for the speedy and efficient administration of
justice, they may be used to achieve such end, not to derail it. In particular, when a
strict and literal application of the rules on non-forum shopping and verification will
result in a patent denial of substantial justice, these may be liberally construed.28 The
ends of justice are better served when cases are determined on the merits – after all
parties are given full opportunity to ventilate their causes and defenses – rather than
on technicality or some procedural imperfections.29
Indeed, this Court strictly applied the rules on verification and certification against
forum shopping as in the cases of Loquias v. Office of the Ombudsman30 and Tolentino
v. Rivera.31 However, in both cases, the commonality of interest between or among
the parties is wanting. In Loquias, the co-parties were being sued in their individual
capacities as mayor, vice mayor and members of the municipal board. In Tolentino,
the lone signature of Tolentino was held insufficient because he had no authority to
sign in behalf of the Francisco spouses. In such case, the Court concluded that
Tolentino merely used the spouses’ names for whatever mileage he thought he could
gain. It is thus clear from these cases that the commonality of interest is material in
the relaxation of the Rules.
Anent the issue of the authority of Enrique G. Santos to represent his co-heirs/co-
plaintiffs, we find no necessity to show such authority. Respondents herein are co-
owners of the subject property. As such co-owners, each of the heirs may properly
bring an action for ejectment, forcible entry and detainer, or any kind of action for
the recovery of possession of the subject properties. Thus, a co-owner may bring such
an action, even without joining all the other co-owners as co-plaintiffs, because the
suit is deemed to be instituted for the benefit of all.32
We uphold the validity of the complaint because of the following circumstances: (1)
the caption of the instant case is Heirs of Enrique Santos v. Iglesia ni Cristo;33 (2) the
opening statement of the complaint states that plaintiffs are the heirs of Enrique
Santos and likewise names the particular heirs of the latter who instituted the
complaint below;34 (3) the case involves a property owned by the predecessor-in-
interest of plaintiffs therein;35 and (4) the verification signed by Enrique G. Santos
clearly states that he is one of the children of the late Enrique Santos and that he
represents the heirs of said Enrique Santos.36
On the issue of prescription of action, petitioner avers that the action of respondents
is one to quiet title and/or accion reinvindicatoria, and that respondents asserted
ownership over the property and sought the recovery of possession of the subject
parcel of land. It insists that the very nature of the action presupposes that
respondents had not been in actual and material possession of the property, and that
it was petitioner which had been in possession of the property since 1984 when it
acquired title thereon. The action of respondent prescribed in ten years from 1984
when petitioner allegedly dispossessed respondents, in accordance with Article 555(4)
of the New Civil Code.
The contention of petitioner has no merit. The nature of an action is determined by
the material allegations of the complaint and the character of the relief sought by
plaintiff, and the law in effect when the action was filed irrespective of whether he is
entitled to all or only some of such relief.37 As gleaned from the averments of the
complaint, the action of respondents was one for quieting of title under Rule 64 of the
Rules of Court, in relation to Article 476 of the New Civil Code. The latter provision
reads:
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective but is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, and may be prejudicial to
said title, an action may be brought to remove such cloud or to quiet the
title.
An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein.
A cloud is said to be a semblance of a title, either legal or equitable, or a cloud of an
interest in land appearing in some legal form but which is, in fact, unfounded, or
which it would be inequitable to enforce.38 An action for quieting of title is
imprescriptible until the claimant is ousted of his possession.39
The owner of a real property, as plaintiff, is entitled to the relief of quieting of title
even if, at the time of the commencement of his action, he was not in actual
possession of real property. After all, under Article 477 of the New Civil Code, the
owner need not be in possession of the property. If on the face of TCT No. 321744
under the name of plaintiff, its invalidity does not appear but rests partly in pais, an
action for quieting of title is proper.40
In the present case, respondents herein, as plaintiffs below, alleged in their complaint,
that their father, Enrique Santos, was the owner of the property based on TCT No.
57272 issued on July 27, 1961; and that, after his death on February 9, 1970, they
inherited the property; Enrique Santos, during his lifetime, and respondents, after the
death of the former, had been in actual, continuous and peaceful possession of the
property until 1994 when petitioner claimed ownership based on TCT No. 321744
issued on September 18, 1984 and barred respondents from fencing their property.
Petitioner’s claim that it had been in actual or material possession of the property
since 1984 when TCT No. 321744 was issued in its favor is belied by the allegations
in the complaint that respondents had been in actual and material possession of the
property since 1961 up to the time they filed their complaint on October 24, 2001.
Admittedly, respondents interposed the alternative reinvindicatory action against
petitioner. An accion reinvindicatoria does not necessarily presuppose that the actual
and material possession of the property is on defendant and that plaintiff seeks the
recovery of such possession from defendant. It bears stressing that an accion
reinvindicatoria is a remedy seeking the recovery of ownership and includes jus
possidendi, jus utendi, and jus fruendi as well. It is an action whereby a party claims
ownership over a parcel of land and seeks recovery of its full possession.41 Thus, the
owner of real property in actual and material possession thereof may file an accion
reinvindicatoria against another seeking ownership over a parcel of land including jus
vindicandi, or the right to exclude defendants from the possession thereof. In this
case, respondents filed an alternative reinvindicatory action claiming ownership over
the property and the cancellation of TCT No. 321744 under the name of petitioner. In
fine, they sought to enforce their jus utendi and jus vindicandi when petitioner claimed
ownership and prevented them from fencing the property.
Since respondents were in actual or physical possession of the property when they
filed their complaint against petitioner on October 24, 2001, the prescriptive period
for the reinvindicatory action had not even commenced to run, even if petitioner was
able to secure TCT No. 321744 over the property in 1984. The reason for this is that
x x x one who is in actual possession of a piece of land claiming to be the
owner thereof may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a continuing right to seek
the aid of a court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his own title, which right can
be claimed only by one who is in possession.42
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The decision of the
Court of Appeals in CA-G.R. SP No. 72686 is AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 157867 December 15, 2009
METROPOLITAN BANK & TRUST COMPANY, Petitioner,
vs.
HON. SALVADOR ABAD SANTOS, Presiding Judge, RTC, Br. 65, Makati City
and MANFRED JACOB DE KONING, Respondents.
DECISION
BRION, J.:
This petition for review on certiorari,1 seeks to reverse and set aside the decision
dated November 21, 2002 and subsequent ruling on motion for reconsideration of the
Court of Appeals (CA) in CA-G.R. SP No. 62325.2 The CA decision affirmed the order
of the Regional Trial Court (RTC) of Makati City, Branch 65,3 dismissing the petition
filed by Metropolitan Bank & Trust Company (Metrobank) for the issuance of a writ of
possession of a condominium unit it had previously foreclosed. This dismissal was
based on the finding that the petition contained a false certification against forum
shopping.
FACTUAL ANTECEDENTS
Respondent Manfred Jacob De Koning (De Koning) obtained a loan from Metrobank
in the principal amount of Two Million, Nineteen Thousand Pesos (₱2,019,000.00),
evidenced by promissory note No. TLS/97-039/382599 dated July 24, 1997. To secure
the payment of this loan, De Koning executed a real estate mortgage (REM) in favor
of Metrobank dated July 22, 1996 over a condominium unit and all its improvements.
The unit is located at Unit 1703 Cityland 10 Tower 1, H.V. Dela Costa Street, Makati
City, and is covered by Condominium Certificate of Title No. 10681.
When De Koning failed to pay his loan despite demand, Metrobank instituted
extrajudicial foreclosure proceedings against the REM. Metrobank was the highest
bidder at the public auction of the condominium unit held on November 24, 1998 and
a Certificate of Sale was issued in the bank's favor. Metrobank duly registered this
Certificate of Sale with the Registry of Deeds for Makati City on January 18, 2000.
The redemption period lapsed without De Koning redeeming the property. Thus,
Metrobank demanded that he turn over possession of the condominium unit. When
De Koning refused, Metrobank filed on July 28, 2000 with the RTC Makati, Branch 65,
an ex parte petition for a writ of possession over the foreclosed property, pursuant to
Act No. 3135, as amended.
On August 1, 2000, the lower court issued an order setting the ex parte hearing of
Metrobank’s petition and directing that a copy of the order be given to De Koning to
inform him of the existence of the proceedings.
During the scheduled ex parte hearing on August 18, 2000, De Koning’s counsel
appeared and manifested that he filed a motion to dismiss on the ground that
Metrobank’s petition violated Section 5, Rule 7 of the Rules of Court (Rules)4 which
requires the attachment of a certification against forum shopping to a complaint or
other initiatory pleading. According to De Koning, Metrobank’s petition for the
issuance of a writ of possession involved the same parties, the same issues and the
same subject matter as the case he had filed on October 30, 1998 with the RTC of
Makati,5 to question Metrobank’s right to foreclose the mortgage. De Koning also had
a pending petition for certiorari with the CA,6 which arose from the RTC case he filed.
When Metrobank failed to disclose the existence of these two pending cases in the
certification attached to its petition, it failed to comply with the mandatory
requirements of the Rules so that its petition should be dismissed.
The RTC agreed with De Koning and dismissed Metrobank’s petition in its September
18, 2000 order on the ground De Koning cited, i.e.,for having a false certification of
non-forum shopping. The lower court denied Metrobank’s motion for reconsideration.
Metrobank thus elevated the matter to the CA on a petition for certiorari on January
5, 2001.
The CA affirmed the dismissal of Metrobank’s petition. It explained that Section 5,
Rule 7 of the Rules is not limited to actions, but covers any "initiatory pleading" that
asserts a claim for relief. Since Metrobank’s petition for writ of possession is an
initiatory pleading, it must perforce be covered by this rule. Thus, Metrobank’s failure
to disclose in the verification and certification the existence of the two cases filed by
De Koning, involving the issue of Metrobank’s right to foreclose on the property,
rendered the petition dismissible.
The CA denied Metrobank’s subsequent motion for reconsideration. Hence, this
petition for review on certiorari, raising the following issues:
ISSUES
I.
THE COURT OF APPEALS AND THE LOWER COURT, CONTRARY TO THE APPLICABLE
DECISIONS OF THIS HONORABLE COURT, RULED THAT THE EX PARTE PETITION FOR
THE ISSUANCE OF A WRIT OF POSSESSION IS AN INITIATORY PLEADING ASSERTING
A CLAIM.
II.
THE COURT OF APPEALS, IN UPHOLDING THE RULING OF THE LOWER COURT,
DELIBERATELY IGNORED THE FACT THAT THE PETITION FOR THE ISSUANCE OF A
WRIT OF POSSESSION IS EX PARTE IN NATURE.
III.
THE COURT OF APPEALS COMMITTED A MISAPPREHENSION OF FACTS.
Metrobank claims that an ex parte petition for the issuance of a writ of possession is
not an initiatory pleading asserting a claim. Rather, it is a mere incident in the transfer
of title over the real property which was acquired by Metrobank through an
extrajudicial foreclosure sale, in accordance with Section 7 of Act No. 3135, as
amended. Thus, the petition is not covered by Section 5, Rule 7 of the Rules and a
certification against forum shopping is not required.
Section 1, Rule 65 of the Rules, clearly provides that a petition for certiorari is
available only when "there is no appeal, or any plain, speedy and adequate remedy
in the ordinary course of law." A petition for certiorari cannot coexist with an appeal
or any other adequate remedy. The existence and the availability of the right to appeal
are antithetical to the availment of the special civil action for certiorari. As we have
long held, these two remedies are "mutually exclusive."7
Admittedly, Metrobank’s petition for certiorari before the CA assails the dismissal
order of the RTC and, under normal circumstances, Metrobank should have filed an
appeal.

However, where the exigencies of the case are such that the ordinary methods of
Metrobank further argues that considering the ex parte nature of the proceedings, De
appeal may not prove adequate -- either in point of promptness or completeness, so
Koning was not even entitled to be notified of the resulting proceedings, and the lower
that a partial if not a total failure of justice could result - a writ of certiorari may still
court and the CA should have disregarded De Koning’s motion to dismiss.
be issued.8 Other exceptions, Justice Florenz D. Regalado listed are as follows:

Lastly, Metrobank posits that the CA misapprehended the facts of the case when it
(1) where the appeal does not constitute a speedy and adequate remedy (Salvadades
affirmed the lower court’s finding that Metrobank’s petition and the two cases filed by
vs. Pajarillo, et al., 78 Phil. 77), as where 33 appeals were involved from orders issued
De Koning involved the same parties. There could be no identity of parties in these
in a single proceeding which will inevitably result in a proliferation of more appeals
cases for the simple reason that, unlike the two cases filed by De Koning, Metrobank’s
(PCIB vs. Escolin, et al., L-27860 and 27896, Mar. 29, 1974); (2) where the orders
petition is a proceeding ex parte which did not involve De Koning as a party. Nor could
were also issued either in excess of or without jurisdiction (Aguilar vs. Tan, L-23600,
there be an identity in issues or subject matter since the only issue involved in
Jun 30, 1970, Cf. Bautista, et al. vs. Sarmiento, et al., L-45137, Sept. 231985); (3)
Metrobank’s petition is its entitlement to possess the property foreclosed, whereas
for certain special consideration, as public welfare or public policy (See Jose vs.
De Koning’s civil case involved the validity of the terms and conditions of the loan
Zulueta, et al. -16598, May 31, 1961 and the cases cited therein); (4) where in
documents. Furthermore, the extra-judicial foreclosure of the mortgaged property
criminal actions, the court rejects rebuttal evidence for the prosecution as, in case of
and De Koning’s petition for certiorari with the CA involved the issue of whether the
acquittal, there could be no remedy (People vs. Abalos, L029039, Nov. 28,
presiding judge in the civil case acted with grave abuse of discretion when he denied
1968); (5) where the order is a patent nullity (Marcelo vs. De Guzman, et al., L-
De Koning’s motion to set for hearing the application for preliminary injunction.
29077, June 29, 1982); and (6) where the decision in the certiorari case will avoid
future litigations (St. Peter Memorial Park, Inc. vs. Campos, et al., L-38280, Mar. 21,
De Koning, in opposition, maintains that Metrobank’s petition was fatally defective for 1975).9 [Emphasis supplied.]
violating the strict requirements of Section 5, Rule 7 of the Rules. As noted by both
the lower court and the CA's ruling that Metrobank failed to disclose the two pending
Grave abuse of discretion may arise when a lower court or tribunal violates or
cases he previously filed before the RTC and the CA, which both involved the bank’s
contravenes the Constitution, the law or existing jurisprudence.10 As will be discussed
right to foreclose and, ultimately, the bank’s right to a writ of possession by virtue of
in greater detail below, the RTC decision dismissing Metrobank’s petition was patently
foreclosure.
erroneous and clearly contravened existing jurisprudence. For this reason, we cannot
fault Metrobank for resorting to the filing of a petition for certiorari with the CA to
De Koning also asserts that Metrobank should have appealed the lower court’s remedy a patent legal error in the hope of obtaining a speedy and adequate remedy.
decision and not filed a special civil action for certiorari since the order being
questioned is one of dismissal and not an interlocutory order. According to De Koning,
Nature of a petition for a writ of possession
since the filing of a petition for certiorari cannot be a substitute for a lost appeal and
does not stop the running of the period of appeal, the questioned RTC order has now
become final and executory and the present petition is moot and academic. A writ of possession is defined as "a writ of execution employed to enforce a judgment
to recover the possession of land. It commands the sheriff to enter the land and give
its possession to the person entitled under the judgment."11
THE COURT’S RULING

There are three instances when a writ of possession may be issued: (a) in land
We find Metrobank’s petition meritorious.
registration proceedings under Section 17 of Act No. 496; (b) in judicial foreclosure,
provided the debtor is in possession of the mortgaged realty and no third person, not
Procedural Issue a party to the foreclosure suit, had intervened; and (c) in extrajudicial foreclosure of
a real estate mortgage under Section 7 of Act No. 3135, as amended by Act No.
4118.12 The present case falls under the third instance.1avvphi1
The procedure for obtaining a writ of possession in extrajudicial foreclosure cases is
found in Section 7 of Act No. 3135, as amended by Act No. 4118, which states:
Section 7. In any sale made under the provisions of this Act, the purchaser may
petition the Court of First Instance of the province or place where the property or any
part thereof is situated, to give him possession thereof during the redemption period,
furnishing bond in an amount equivalent to the use of the property for a period of
twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this
Act. Such petition shall be made under oath and filed in form of an ex parte
motion in the registration or cadastral proceedings if the property is registered, or in
special proceedings in the case of property registered under the Mortgage Law or
under section one hundred and ninety-four of the Administrative Code, or of any other
real property encumbered with a mortgage duly registered in the office of any register
of deeds in accordance with any existing law, and in each case the clerk of the court
shall, upon the filing of such petition, collect the fees specified in paragraph eleven of
section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as
amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall,
upon approval of the bond, order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who shall execute said order
immediately.
Based on this provision, a writ of possession may issue either (1) within the one year
redemption period, upon the filing of a bond, or (2) after the lapse of the redemption
period, without need of a bond.13 In order to obtain a writ of possession, the
purchaser in a foreclosure sale must file a petition, in the form of an ex parte
motion, in the registration or cadastral proceedings of the registered
property. The reason why this pleading, although denominated as a petition, is
actually considered a motion is best explained in Sps. Arquiza v. CA,14 where we said:
The certification against forum shopping is required only in a complaint or
other initiatory pleading. The ex partepetition for the issuance of a writ of possession
filed by the respondent is not an initiatory pleading. Although the private respondent
denominated its pleading as a petition, it is, nonetheless, a motion. What
distinguishes a motion from a petition or other pleading is not its form or the title
given by the party executing it, but rather its purpose. The office of a motion is not
to initiate new litigation, but to bring a material but incidental matter arising in the
progress of the case in which the motion is filed. A motion is not an independent right
or remedy, but is confined to incidental matters in the progress of a cause. It relates
to some question that is collateral to the main object of the action and is connected
with and dependent upon the principal remedy. An application for a writ of possession
is a mere incident in the registration proceeding. Hence, although it was denominated
as a "petition," it was in substance merely a motion. Thus, the CA correctly made the
following observations:
Such petition for the issuance of a writ of possession is filed in the form of an ex
parte motion, inter alia, in the registration or cadastral proceedings if the property is
registered. Apropos, as an incident or consequence of the original registration or
cadastral proceedings, the motion or petition for the issuance of a writ of possession,
not being an initiatory pleading, dispels the requirement of a forum-shopping
certification. Axiomatic is that the petitioner need not file a certification of non-forum
shopping since his claims are not initiatory in character (Ponciano vs. Parentela, Jr.,
331 SCRA 605 [2000]) [Emphasis supplied.]
The right to possess a property merely follows the right of ownership. Thus, after the
consolidation of title in the buyer’s name for failure of the mortgagor to redeem, the
writ of possession becomes a matter of right and its issuance to a purchaser in an
extrajudicial foreclosure is merely a ministerial function.15 Sps. Arquiza v. CA further
tells us:16
Indeed, it is well-settled that an ordinary action to acquire possession in favor of the
purchaser at an extrajudicial foreclosure of real property is not necessary. There is
no law in this jurisdiction whereby the purchaser at a sheriff’s sale of real property is
obliged to bring a separate and independent suit for possession after the one-year
period for redemption has expired and after he has obtained the sheriff’s final
certificate of sale. The basis of this right to possession is the purchaser’s ownership
of the property. The mere filing of an ex parte motion for the issuance of the writ of
possession would suffice, and no bond is required. [Emphasis supplied.]
Since a petition for a writ of possession under Section 7 of Act No. 3135, as amended,
is neither a complaint nor an initiatory pleading, a certificate against non-forum
shopping is not required. The certificate that Metrobank attached to its petition is thus
a superfluity that the lower court should have disregarded.
No intervention allowed in ex parte proceedings
We also find merit in Metrobank’s contention that the lower court should not have
allowed De Koning to intervene in the proceedings.
A judicial proceeding, order, injunction, etc., is ex parte when it is taken or granted
at the instance and for the benefit of one party only, and without notice to, or
contestation by, any person adversely interested.17
Given that the proceeding for a writ of possession, by the terms of Section 7 of Act
No. 3135, is undoubtedly ex parte in nature, the lower court clearly erred not only
when it notified De Koning of Metrobank’s ex parte petition for the writ of possession,
but also when it allowed De Koning to participate in the proceedings and when it took
cognizance and upheld De Koning’s motion to dismiss.
As we held in Ancheta v. Metropolitan Bank and Trust Company, Inc.:18
In GSIS v. Court of Appeals, this Court discussed the inappropriateness of intervening
in a summary proceeding under Section 7 of Act No. 3135:
The proceedings in which respondent Knecht sought to intervene is an ex
parte proceeding pursuant to Sec. 7 of Act No. 3135, and, as pointed out by
petitioner, is a "judicial proceeding brought for the benefit of one party only, and
without notice to, or consent by any person adversely interested (Stella vs. Mosele,
19 N.E., 2d. 433, 435, 299 III App. 53; Imbrought v. Parker, 83 N.E. 2d 42, 43, 336
III App. 124; City Nat. Bank & Trust Co. v. Aavis Hotel Corporation, 280 III App. 247),
x x x or a proceeding wherein relief is granted without an opportunity for the person
against whom the relief is sought to be heard" (Restatement, Torts, S 674, p.
365, Rollo).
xxx
Intervention is defined as "a proceeding in a suit or action by which a third person is
permitted by the court to make himself a party, either joining plaintiff in claiming
what is sought by the complaint, or uniting with defendant in resisting the claims of
plaintiff, or demanding something adversely to both of them; the act or proceeding
by which a third person becomes a party in a suit pending between others; the
admission, by leave of court, of a person not an original party to pending legal
proceedings, by which such person becomes a party thereto for the protection of
some right of interest alleged by him to be affected by such proceedings" (33 C.J.,
477, cited in Eulalio Garcia, et al. vs. Sinforoso David, et al., 67 Phil. 279, at p. 282).
Action, under Rule 2, Sec. 1, is defined as an ordinary suit in a court of justice, by
which one party prosecutes another for the enforcement or protection of a right, or
the prevention or redress of a wrong.
From the aforesaid definitions, it is clear that intervention contemplates a suit, and is
therefore exercisable during a trial and, as pointed out by petitioner is one which
envisions the introduction of evidence by the parties, leading to the rendition of the
decision in the case (p. 363, Rollo). Very clearly, this concept is not that contemplated
by Sec. 7 of Act No. 3135, whereby, under settled jurisprudence, the Judge has to
order the immediate issuance of a writ of possession 1) upon the filing of the proper
motion and 2) the approval of the corresponding bond. The rationale for the mandate
is to allow the purchaser to have possession of the foreclosed property without delay,
such possession being founded on his right of ownership. A trial which entails delay
is obviously out of the question. [Emphasis supplied.]
WHEREFORE, premises considered, we GRANT the petition. The Decision of the
Court of Appeals in CA-G.R. SP No. 62325 dated November 21, 2002, as well as the
orders of the Regional Trial Court of Makati City, Branch 65 in LRC Case No. M-4068
dated September 18, 2000 and October 23, 2000, is REVERSED and SET ASIDE. LRC
Case No. M-4068 is ordered remanded to the Regional Trial Court of Makati City,
Branch 65, for further proceedings and proper disposition. Costs against respondent
Manfred Jacob De Koning.
SO ORDERED.
G.R. No. 162836 July 30, 2009
CEFERINA ARGALLON-JOCSON and RODOLFO TUISING, Petitioners,
vs.
COURT OF APPEALS, HON. BONIFACIO T. ONG, in his capacity as the acting
Presiding Judge of the Regional Trial Court of Roxas, Isabela, Branch 23,
MARIA CRISTINA FERTILIZER CORP., and MARCELO STEEL
CORP., Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 dated 16 January 2004 and the
Resolution dated 25 March 2004 of the Court of Appeals in CA-G.R. SP No. 79179.
The Court of Appeals affirmed the Order dated 14 April 2003 of the Regional Trial
Court of Roxas, Isabela, Branch 23 (trial court), in Civil Case No. Br. 23-377.
The Facts
On 10 August 1992, petitioner Ceferina Argallon-Jocson (Jocson) filed a complaint for
Reconveyance and Damages against Marcelo Steel Corporation and Maria Cristina
Fertilizer Corporation (MCFC), which were represented by Jose Marcelo as president
of both companies.
On 24 February 1999, the trial court rendered a decision, the dispositive portion of
which reads:
AS A CONSEQUENCE OF ALL THE FOREGOING, judgment is hereby rendered in favor
of the plaintiff [Jocson] and against the defendants [Marcelo Steel Corporation and
MCFC]: (1) Ordering the defendants to pay the plaintiff the balance of ₱2,004,810.42,
with legal interest from 1976 up to the present; (2) attorney’s fees in the amount of
₱20,000.00; and (3) to pay the costs.3
Marcelo Steel Corporation and MCFC (private respondents) appealed to the Court of
Appeals, which affirmed the trial court’s decision. Private respondents did not appeal
the Court of Appeals’ decision, which became final and executory. Jocson then filed a
Motion for Issuance of a Writ of Execution. On 9 December 2002, the trial court issued
an order for the issuance of a writ of execution in accordance with the tenor of the
decision.
On 20 December 2002, a Writ of Execution4 (writ) was issued to the Sheriff of the
Office of the Clerk of Court of Manila, commanding the Sheriff to implement the writ
upon private respondents in accordance with the tenor of the decision. The writ was
indorsed to Sheriffs Levy Duka, Luis Alina, Andreil Garcia, and Nathaniel Abaya, who
levied upon the properties of Marcelo Steel Corporation in full satisfaction of the
judgment debt. The execution sale was then scheduled on 17 February 2003. On 14
February 2003, Midas International Development Corporation (Midas Corp.) filed a
third-party claim, alleging that some of the levied properties were previously
mortgaged to Midas Corp. The execution sale was postponed to 21 February 2003.
On 20 February 2003, Jocson posted a ₱36 million indemnity bond5 so that the levied
properties would not be released to claimant Midas Corp. The Sheriffs then proceeded
with the execution sale on 21 February 2003 and sold the properties of Marcelo Steel
Corporation for the full satisfaction of the judgment against private respondents. A
certificate of sale6 was issued to petitioner Rodolfo Tuising (Tuising), who was the
highest bidder at the auction sale for ₱9.9 million.
On 28 February 2003, Jocson filed with the trial court a Very Urgent Ex-Parte Motion
for Issuance of a Break-Open Order and Petition for Contempt of Court.7 On 3 March
2003, Marcelo Steel Corporation filed an Extremely Urgent Omnibus Motion,8 praying
for the annulment of the execution sale and for the issuance of an order directing the
Sheriffs not to deliver the properties sold to Tuising pending resolution of Marcelo
Steel Corporation’s motion. Marcelo Steel Corporation alleged that its obligation was
merely joint with MCFC and that the total price of the properties sold on execution
was unconscionably inadequate.
On 14 April 2003, the trial court issued an order, the dispositive portion of which
reads:
WHEREFORE, premises considered, the execution sale of the properties of the
defendant Marcelo Steel Corporation, namely: Seven (7) dilapidated warehouses,
detachable metal structural steel with scattered machineries, metal scraps, metal G.I.
Pipes, wires and post, held on February 21, 2003, is hereby declared null and void
and the Certificate of Sale dated February 21, 2003 issued pursuant thereto is hereby
set aside and cancelled.
The motion for the issuance of a break-open order is hereby denied for lack of merit
and basis.9
Jocson moved for reconsideration of the trial court’s order, claiming that the nature
of the obligation to pay the balance of the purchase price was solidary. Tuising filed
a Motion for Intervention with Leave of Court with Motion for Reconsideration and
Entry of Appearance. On the other hand, Marcelo Steel Corporation filed, on 7 May
2003, a Manifestation and Motion on Satisfaction of Judgment, depositing with the
trial court a Manager’s Check in the amount of ₱4,260,198.11 representing full
satisfaction of Marcelo Steel Corporation’s obligation to Jocson. On 14 July 2003, the
trial court denied Jocson’s motion for reconsideration and Tuising’s motion for
intervention and reconsideration, and granted Marcelo Steel Corporation’s prayer for
entry of satisfaction of judgment on its behalf.10
On 18 August 2003, Jocson filed with the trial court a Notice of Appeal, which she
later withdrew on 4 September 2003, and in lieu thereof, petitioners Jocson and
Tuising filed a Petition for Certiorari with the Court of Appeals.11The Court of Appeals
dismissed the petition for lack of merit. Jocson and Tuising filed a motion for
reconsideration,12 which the Court of Appeals denied on 25 March 2004. Hence, this
petition.lavvphil
Meanwhile, on 23 February 2004, Jocson filed with the trial court a Motion for
Issuance of Alias Writ of Execution to implement the decision as against MCFC, stating
that in view of the Court of Appeals’ decision, there is a need to execute the decision
as against the other defendant MCFC.13
The Trial Court’s Ruling
In its Order dated 14 April 2003, the trial court ruled that the liability of Marcelo Steel
Corporation was limited to its proportional share in the entire money judgment.
Considering that the dispositive portion of the Decision dated 24 February 1999 in
this case did not state that the obligation of private respondents was solidary, then
their obligation was merely joint. Citing the case of PH Credit Corporation v. Court of
Appeals,14 the trial court held that "being made to pay for an obligation in its entirety
when one’s liability is merely for a portion is a sufficient ground to contest an
execution sale. It would be the height of inequity if we allow judgment obligors to
shoulder entire monetary judgments when their legal liabilities are limited only to
their proportionate shares in the entire obligation."
The Court of Appeals’ Ruling
The Court of Appeals held that in consonance with Section 1, Rule 65 of the
Rules of Civil Procedure,15certiorari is not a substitute for lost appeal.
Moreover, the Court of Appeals found that the assigned issues were factual
issues not proper in a petition for certiorari, which is limited to the issues of
jurisdiction and grave abuse of discretion.
The Court of Appeals found no grave abuse of discretion on the part of the respondent
judge. On the merits of the case, the Court of Appeals held that the obligation of
private respondents to Jocson was merely joint. The Court of Appeals noted that the
trial court’s Decision dated 24 February 1999 was silent as to the nature of the
liability. Solidary obligations are not presumed in the absence of an express
determination thereof in the judgment. When the judgment does not provide that the
defendants are liable to pay jointly and severally a certain amount of money, none of
them may be compelled to satisfy in full said judgment.
The Court of Appeals found that the Sheriffs disregarded the trial court’s 24 February
1999 Decision, and deviated from the trial court’s Order dated 9 December 2002 and
the writ of execution dated 20 December 2002, which directed them to execute the
writ in accordance with the tenor of the decision.
The Issues
Petitioners contend that:
1. THE HONORABLE COURT OF APPEALS ERRED IN DECIDING THAT PETITIONERS’
WITHDRAWAL OF THEIR NOTICE OF APPEAL AND SUBSTITUTING IT BY PETITION
FOR CERTIORARI IS PROCEDURALLY IMPERMISSIBLE.
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECIDING THAT THE
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION WHEN HE DECLARED THE
OBLIGATION OF THE DEFENDANTS IN CIVIL CASE NO. 23-377 AS JOINT AND NOT
SOLIDARY.
3. THE HONORABLE COURT OF APPEALS ERRED IN [NOT] DECIDING THAT THE
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN DENYING THE MOTION
FOR A BREAK-OPEN AND DECLARING THE EXECUTION SALE CONDUCTED ON
FEBRUARY 21, 2003 NULL AND VOID AND THE CERTIFICATE OF SALE AWARDED TO
PETITIONER TUISING CANCELLED.
4. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECIDING THAT THE
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN GRANTING THE PRAYER
FOR SATISFACTION OF JUDGMENT DESPITE RECEIPT OF PETITIONER JOCSON OF
THE PROCEEDS OF THE SALE AS EVIDENCED BY THE ACKNOWLEDGMENT RECEIPT.
5. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECIDING THAT THE
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN DENYING THE MOTION
FOR INTERVENTION AND IN NOT CONSIDERING THE SAME AS PRO INTERESSE
SUO.16
The Ruling of the Court
We find the petition without merit.
At the outset, the Court notes that the petition supposedly filed by petitioners Jocson
and Tuising was not signed by Jocson’s counsel. It was Tuising’s counsel who signed
in behalf of Jocson’s counsel. Tuising’s counsel had no authority to sign the petition
in behalf of Jocson. The records are bereft of any proof that Jocson ever authorized
Tuising’s counsel to be her counsel or to act in her behalf. Under Section 3, Rule 7 of
the Rules of Civil Procedure,17every pleading must be signed by the party or counsel
representing him, otherwise the pleading produces no legal effect.
Furthermore, only Tuising signed the Verification and Certification for Non-Forum
Shopping. Jocson did not sign the Verification and Certification. Section 1, Rule 45 of
the Rules of Civil Procedure requires the petition for review on certiorari to be
verified.18 A pleading required to be verified which lacks proper verification shall be
treated as an unsigned pleading.19 Although Tuising belatedly filed on 24 September
2004 a "Special Power of Attorney" allegedly signed by Jocson and authorizing Tuising
to file the petition for review and to verify and to certify the petition, no explanation
was given by Tuising why the Special Power of Attorney was belatedly filed four
months after the petition for review was filed on 12 May 2004. The lack of a
certification against forum shopping or a defective certification is generally not curable
by its subsequent submission or correction, unless there is a need to relax the rule
under special circumstances or for compelling reasons.20 We find no compelling
reason for a liberal application of the rules especially in this case where the petitioner
who did not sign the verification and certification for non-forum shopping already filed
with the trial court a Motion for Issuance of Alias Writ of Execution. By filing
the Motion for Issuance of Alias Writ of Execution, Jocson was in effect abiding by the
Court of Appeals’ Decision dated 16 January 2004.
In Athena Computers, Inc. v. Reyes,21 the Court held that the appellate court was
correct in dismissing the petition where the verification and certification for non-forum
shopping were signed by only one of the two petitioners. The Court held:
The verification of the petition and certification on non-forum shopping before the
Court of Appeals were signed only by Jimenez. There is no showing that he was
authorized to sign the same by Athena, his co-petitioner.
Section 4, Rule 7 of the Rules states that a pleading is verified by an affidavit that the
affiant has read the pleading and that the allegations therein are true and correct to
his knowledge and belief. Consequently, the verification should have been signed not
only by Jimenez but also by Athena’s duly authorized representative.
In Docena v. Lapesura, we ruled that the certificate of non-forum shopping should be
signed by all the petitioners or plaintiffs in a case, and that the signing by only one
of them is insufficient. The attestation on non-forum shopping requires personal
knowledge by the party executing the same, and the lone signing petitioner cannot
be presumed to have personal knowledge of the filing or non-filing by his co-
petitioners of any action or claim the same as similar to the current petition.22
In this case, the flaw is fatal considering that Jocson, the co-petitioner who did not
sign the verification and certification of non-forum shopping and whose counsel did
not sign the petition, was the principal party in the original case. Jocson was the
plaintiff in the trial court who sought reconveyance of her properties while her co-
petitioner Tuising was not a party in the original case but was merely the highest
bidder in the execution sale which was declared void by the trial court.1awphi1
The certification of non-forum shopping is rooted in the principle that a party-litigant
should not be allowed to pursue simultaneous remedies in different fora, such act
being detrimental to an orderly judicial procedure.23 The petition, signed only by
Tuising’s counsel, conveniently failed to mention the fact that on 23 February 2004,
prior to the filing of the petition, Jocson already filed with the trial court a Motion for
Issuance of Alias Writ of Execution which reads:
MOTION FOR ISSUANCE OF ALIAS WRIT OF EXECUTION
PLAINTIFF, by counsel, respectfully states:
1. The Court of Appeals had ruled finally that the DECISION can be
implemented only as against defendant Marcelo Steel Corporation and the
RTC Sheriff of Manila, in levying the properties of the two defendant
corporations, violated the dispositive portion of the decision because there
is no showing that their liability is solidary. (CA-G.R. SP-No. 79179);
2. There is need, therefore, to execute the decision as against the other
defendant MARIA CRISTINA FERTILIZER CORPORATION.
WHEREFORE, premises considered, it is respectfully prayed that an ALIAS WRIT OF
EXECUTION be issued to implement the decision as against defendant MARIA
CRISTINA FERTILIZER CORPORATION.24
Clearly, such an action is incompatible with this petition for review. Even at the
appellate court’s level, the Motion for Reconsideration25 supposedly filed by
petitioners Jocson and Tuising on 3 February 2004 was also signed by Tuising’s
counsel only.26 Jocson’s filing of a Motion for Issuance of Alias Writ of Execution to
implement the decision as against MCFC clearly indicates that she already acceded to
the Court of Appeals’ Decision dated 16 January 2004 and no longer intended to move
for its reconsideration, much less appeal to this Court. Besides, a party should not be
allowed to abuse and make a mockery of the judicial process by pursuing
simultaneous and incompatible remedies in different courts.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 16 January 2004
and the Resolution dated 25 March 2004 of the Court of Appeals in CA-G.R. SP No.
79179.
SO ORDERED.
G.R. No. 117029 March 19, 1997
PELTAN DEVELOPMENT, INC., PATROCINIO E. MARGOLLES, EDGARDO C.
ESPINOSA, VIRGINIA E. VILLONGCO, LUCIA E. LAPERAL, NORMA
C. 1 ESPINOSA, TERESITA E. CASAL and ALICE E. SOTTO, petitioners,
vs.
COURT OF APPEALS, ALEJANDRO Q. REY and JUAN B. ARAUJO, respondents.
The Facts
The facts, as found by public respondent, are undisputed by the parties, to wit:
PANGANIBAN, J.:
In resolving a motion to dismiss for failure to state a cause of action, should the Court
of Appeals invoke a Supreme Court decision promulgated after such motion was filed
by defendants and ruled upon by the trial court? Is such invocation violative of the
rule that motions to dismiss based on lack of cause of action should be ruled upon
only on the basis of the allegations of the complaint? Who are the real parties-in-
interest in an action to cancel a Torrens certificate of title?
Petitioners challenge the Decision 2 of public respondent 3
in CA-G.R. CV No. 28244
promulgated on June 29, 1994, which ruled as follows: 4
WHEREFORE, the appealed order dated August 22, 1989 is
REVERSED and SET ASIDE. The trial court is ordered to try the case
on plaintiffs' (herein private respondents) complaint/amended
complaint against all defendants (herein petitioners).
Let the original record of the case be returned to the court of origin.
In a Resolution 5 promulgated on September 2, 1994, Respondent Court denied
petitioners' motion for reconsideration.
The order reversed by public respondent had been issued by the Regional Trial Court
of Pasay City, Branch 112, in Civil Case No. LP-8852-P. The order in part ruled: 6
Considering the arguments and counter-arguments urged by the
parties in this case, particularly on the nature and effect of the
action filed by plaintiffs, the Court is inclined to grant the Motion to
Dismiss filed by defendant Peltan Development Corporation on the
basis of the Supreme Court ruling in Gabila vs. Barriga, 41 SCRA
131. The ultimate result of the cancellation prayed for by the
plaintiffs, if granted by this Court, would be to revert the property
in question to the public domain. Therefore, the ultimate beneficiary
of such cancellation would be the Government. Since the
Government can only be represented by the Office of the Solicitor
General, which has repeatedly refused to institute or join an action
for cancellation of defendant's titles, then, the real party in interest
cannot be said to have instituted the present action. It is the
Government, not the plaintiffs which is the real party in interest.
Plaintiffs not being the real party in interest, they have no cause of
action against the defendants.
WHEREFORE, the Motion to Dismiss is hereby granted and this case
is hereby dismissed, without prejudice to plaintiffs' pursuing
administrative relief in the proper government agencies concerned.
7
On February 20, 1981 plaintiffs (herein private respondents) filed
against eleven (11) defendants (herein petitioners) a complaint
captioned for "Cancellation of Titles and Damages". On December
15, 1981, the complaint was amended by including or impleading
as the twelfth defendant the City Townhouse Development
Corporation. Omitting the jurisdictional facts, the allegations in the
amended complaint are quoted hereunder:
II
Plaintiffs are applicants for a free patent over a parcel of land
comprising an area of 197,527 square meters, more or less,
situated in Barrio Tindig na Manga, Las Piñas, Metro Manila.
III
Prior to the filing of their petition for free patent, plaintiffs had for
many years been occupying and cultivating the aforestated piece of
land until their crops, houses and other improvements they
introduced thereon were illegally bulldozed and destroyed by
persons led by defendant Edgardo Espinosa . . . . Thereafter, the
same persons forcibly and physically drove out plaintiffs therefrom.
IV
Plaintiffs filed their petition for issuance of free patent covering the
aforesaid property with the Bureau of Lands in May 1976, as a result
of which they were issued by the Lands Bureau Survey Authority
No. 54 (IV-1) on December 16, 1976.
V
Accordingly, and on the strength of the aforesaid authority to
survey, plaintiffs had the property surveyed by Geodetic Engineer
Regino L. Sobrerinas, Jr. on December 20-21, 1976.
VI
During the years that plaintiffs were occupying, cultivating, planting
and staying on the aforestated parcel of land, neither . . . one of
the defendants was in possession thereof.
VII
The processing and eventual approval of plaintiffs' free patent
application or petition over the subject piece of land have, however,
been obstructed and/or held in abeyance, despite the absence of
any opposition thereto, because of the alleged existence of several
supposed certificates of title thereon, . . . of the defendants,
namely:
Peltan Development, Inc. — Transfer Certificate of Title No. S-
17992
xxx xxx xxx
VIII
The aforestated transfer certificates of title of the abovenamed
defendants, plaintiffs discovered, and therefore they hereby allege,
were all derived from an alleged Original Certificate of Title No.
4216 supposedly issued by the Register of Deeds of Rizal and
registered in the name of the Spouses Lorenzo Gana and Maria
Juliana Carlos in 1929 allegedly pursuant to Decree No. 351823
issued by the Court of First Instance of Rizal in Land Registration
Case (LRC) No. 672.
IX
Plaintiffs, however, subsequently discovered, after a thorough
research, that the alleged Original Certificate of Title No. 4216 of
the Spouses Lorenzo Gana and Juliana Carlos — whence all the
transfer certificates of title of the . . . abovenamed defendants
originated and/or were derived from — was FICTITIOUS and/or
SPURIOUS . . . .
xxx xxx xxx
X
Being, thus, derived and/or having originated from a FICTITIOUS
and/or SPURIOUS original certificate of title (OCT No. 4216), as
herein above shown, ALL the aforestated transfer certificates of title
of the . . . abovenamed defendants are, logically and imperatively,
FAKE, SPURIOUS and/or NULL AND VOID as well. Hence, they all
must and should be CANCELED.
xxx xxx xxx
XIV
Before they decided to institute this action, plaintiffs informed,
indeed they warned, the defendants that their so-called titles over
the parcels of land or portions thereof covered by plaintiffs' free
patent application and/or petition are either fake, spurious or void
for reasons aforestated. But the defendants simply ignored
plaintiffs' admonitions.
XV
Accordingly, plaintiffs were compelled to retain the services of the
undersigned counsel to file this complaint not only because they
have been materially and substantially prejudiced by the existence
of defendants' spurious titles, but also because as citizens and
taxpayers of this country they have a legitimate interest in the
disposition of alienable lands of the State, as well as the right to
question any illegitimate, unlawful or spurious award, disposition or
registration thereof to protect not just their interest but also the
public.
XVI
Because of the defendant's illegal titling of the parcel of land or
portions thereof covered by plaintiffs' free patent application, and
particularly by the unlawful disturbance of plaintiff's possession
thereof and destruction of plaintiffs' plants and dwellings thereon,
which was caused and/or directed by the defendants Edgardo
Espinosa and Pat C. Margolles, said defendants should be ordered
to pay plaintiffs actual or compensatory damages in such amount
as may be proven during the trial of this case. (Original Records,
Vol. I, pp. 202-214)
On the basis of the foregoing allegations, the prayer in the amended
complaint states:
WHEREFORE, it is most respectfully prayed that after hearing,
judgment (should) be rendered:
 1. Canceling the transfer certificates of titles of the defendants as
specified in par. VII hereof and/or declaring them null and void for
having originated or being derived from a fictitious, spurious or void
original certificates of title.
2. Ordering defendants Edgardo Espinosa and Pat C. Margolles to
pay plaintiffs actual or compensatory damages as may be proven
during the trial of this case. And —
3. Ordering the defendants to pay plaintiffs appropriate amount of
exemplary damages and reasonable amount of attorney's fees, as
well as to pay the costs.
Plaintiffs further respectfully pray for such other reliefs just and
equitable in the premises. (Original Records, Vol. I, p. 215)
xxx xxx xxx
On April 3, 1985, defendant Peltan Development Corporation
(Peltan, for brevity) filed a "Motion For Preliminary Hearing on
Affirmative Defenses" mainly on the ground that the complaint
states no cause of action against defendant Peltan. It is alleged in
the motion that plaintiffs are not the real parties in interest in the
action as they do not assert any present and subsisting title of
ownership over the property in question. Invoking the case
of Gabila vs. Barriga, L-28917, promulgated on September 30,
1971, the defendant Peltan contends that the action being one for
cancellation of the certificates of title the Government, through the
Solicitor General — not a private individual like plaintiff Gabila —
was the real party in interest.
On April 27, 1989 plaintiffs filed their opposition to defendant
Peltan's aforesaid motion in which plaintiffs reasserted their cause
of action as set forth in their complaint, and pointed to the trial
court the pertinent averments in their action showing their rights
and interests or claims that had been violated which thus placed
them in the status of a real party in interest. Subsequently,
defendant Peltan filed its reply to plaintiffs' opposition, with
plaintiffs submitting their rejoinder thereto. Then finally defendant
Peltan filed its comment on the rejoinder.
On August 22, 1989, the trial court dismissed the complaint. Holding that the plaintiffs
were not the real parties-in-interest, the RTC ruled that they had no cause of action
against the defendants. The order was reversed by public respondent. Hence, this
petition for review.
In a motion filed before this Court on March 8, 1996, petitioners prayed for the
cancellation of the notice of lis pendens annotated on their titles "under Entry No.
210060/T-12473-A." The notice was caused by Private Respondent Alejandro Rey
because of the pendency of Civil Case No. LP-8852-P, the dismissal of which is the
issue at bench.8
Ruling of the Court of Appeals
As observed earlier, the Court of Appeals reversed and set aside the order of the
Regional Trial Court, holding that the two elements of a cause of action were present
in the complaint, to wit: 1) the plaintiff's primary right and 2) the delict or wrongful
act of the defendant violative of that right. The CA held that private respondents had
a right over the property as shown by the allegation that they had been occupying
the landholding in question and that they had applied for a free patent thereon; and
that petitioners committed a delict against private respondents by forcibly driving
them out of the property, and delaying the processing and approval of their
application for free patent because of the existence of petitioners' transfer certificates
of title derived from OCT No. 4126. 9 The CA further held that the RTC "should have
treated the case as an accion publiciana to determine who as between the parties
plaintiffs and defendants have a better right of possession." 10
Stressing that only the facts alleged in the complaint should have been considered in
resolving the motion to dismiss, Respondent CA held that the trial court had erred in
accepting the allegations of herein petitioners that private respondents' requests for
the Solicitor General to file an action to annul OCT No. 4216 had been repeatedly
denied.
Public respondent also rejected the application of the Gabila 11
ruling to the case at
bar. It reasoned: 12
True, plaintiffs in their complaint prayed inter alia for the
cancellation of the transfer certificates of title of the defendants for
being derived from a spurious or false original certificate of title.
Relying on the case of Gabila vs. Barriga, supra, defendants argued
that the ultimate result of a favorable decision on complaints of
such nature is for the lands to revert back to the ownership of the
state, and hence, such actions may only be instituted by the
Government through the Solicitor Generel (sic). This argument is
misplaced. Firstly, unlike the Gabila case, the herein plaintiffs in
their complaint did not assert and pray for reversion. Secondly, the
prayer for cancellation of the defendants' Torrens titles does not
negate nor eliminate the presence of the elements of plaintiffs'
cause of action on the basis of the allegations in the complaint, as
already discussed. Thirdly, the prayer of a complaint is not a
material factor in determining the relief grantable, which rests upon
the facts proved (Lacson vs. Diaz, 47 O.G. No. 12 Supp. 377, Aug.
4, 1950, No. L-2839). Precisely, as a matter of practice, complaints
filed in court usually contain a general prayer "for other relief which
may be just and equitable in the premises" like the complaint in the
case at bar. Fourthly, in the Gabila case, the Supreme Court did not
affirm the trial court's dismissal order. Instead, per dispositive
portion of the decision, it ordered the setting aside of the appealed
dismissal order and directing the return of the records of the case
to the trial court with admonition to the party interested to formally
 implead the Bureau of Lands with notice to the Solicitor General.
Obviously, the posture of defendants Peltan is not entirely
supported by the Gabila case.
The Issues
Petitioners assign the following errors committed by public respondent: 13
a. Ordering the trial court to proceed on private respondents' cause
of action for the nullification of OCT No. 4216 on the ground that it
is fake/spurious when the Supreme Court had already ruled in G.R.
No. 109490 and in G.R. No. 112038 that OCT No. 4216 is genuine
and valid — and in disregarding and refusing to pass upon the said
squarely applicable decisions of this Honorable Court;
b. Ordering the trial court to proceed on private respondents' cause
of action for damages for the supposed acts of the private
respondents Margolles and Espinosa despite non-payment of the
jurisdictional docket fees when this cause of action had already
prescribed — and in disregarding and refusing to pass upon the
squarely applicable Manchester ruling;
c. In not applying the Gabila ruling to dismiss the subject complaint
considering that respondents do not even pretend to have any title
or right to the subject property to authorize them to ask for a free
patent thereon since it is already (a) private property covered by
petitioners' torrens title derived from OCT No. 4216 issued in 1929.
The Court's Ruling
We grant the petition and reverse the public respondent.
What Determines Cause of Action?
It is a well-settled rule that the existence of a cause of action is determined by the
allegations in the complaint. 14 In the resolution of a motion to dismiss based on
failure to state a cause of action, only the facts alleged in the complaint must be
considered. The test in cases like these is whether a court can render a valid judgment
on the complaint based upon the facts alleged and pursuant to the prayer
therein. 15 Hence, it has been held that a motion to dismiss generally partakes of the
nature of a demurrer which hypothetically admits the truth of the factual allegations
made in a complaint. 16
It is axiomatic nonetheless that a court has a mandate to apply relevant statutes and
jurisprudence in determining whether the allegations in a complaint establish a cause
of action. While it focuses on the complaint, a court clearly cannot disregard decisions
material to the proper appreciation of the questions before it. In resolving a motion
to dismiss, every court must take cognizance of decisions this Court has rendered
because they are proper subjects of mandatory judicial notice as provided by Section
1 of Rule 129 of the Rules of Court, to wit:
Sec. 1. Judicial notice, when mandatory. — A court shall take
judicial notice, without the introduction of evidence, of the
existence and territorial extent of states, their political history,
forms of government and symbols of nationality, the law of nations,
the admiralty and maritime courts of the world and their seals, the
political constitution and history of the Philippines, the official acts
of the legislative, executive and judicial departments of the
Philippines, laws of nature, the measure of time, and the
geographical divisions. (Emphasis supplied.)
The said decisions, more importantly, "form part of the legal system," 17 and failure
of any court to apply them shall constitute an abdication of its duty to resolve a
dispute in accordance with law, and shall be a ground for administrative action against
an inferior court magistrate.
In resolving the present complaint, therefore, the Court is well aware that a decision
in Margolles vs. CA, 18 rendered on 14 February 1994, upheld the validity of OCT No.
4216 (and the certificates of title derived therefrom), the same OCT that the present
complaint seeks to nullify for being "fictitious and spurious." Respondent CA, in its
assailed Decision dated 29 June 1994, failed to consider Margolles vs. CA. This we
cannot countenance.
In finding that the complaint stared a cause of action, Public Respondent CA
recognized that private respondent had a valid right over the property in question,
based on their actual possession thereof and their pending application for a free
patent thereon. The linchpin of this right, however, is the validity of OCT No. 4216.
In other words, private respondents' right is premised on the allegation that the title
of herein petitioners originated merely from the "fictitious and/or spurious" OCT No.
4216.
Because it had failed to take cognizance of Margolles vs. CA, the CA was unable to
consider that the legality of OCT No. 4216. As adverted to earlier, Margolles
vs. CA upheld the validity of this title and the titles derived therefrom by, among
others, Petitioner Peltan Corporation. Clearly, private respondents' possession of the
land, and their pending application for a free patent thereon, did not not vest in them
a right superior to the valid title of petitioner originating from OCT No. 4216. Indeed,
private respondents can invoke no right at all against the petitioners. Accordingly, the
first element or a cause of action, i.e., plaintiff's right, is not present in the instant
case.
In this light, the CA's treatment of the present suit as an accion publiciana to
determine which one among the parties had a better right over the property is but an
exercise in redundancy. As discussed above, the same issue has been foreclosed by
the Supreme Court in Margolles.
The Supreme Court promulgated Margolles ahead of the assailed CA decision. It was
incumbent upon Respondent CA to take judicial notice thereof and apply it in resolving
this case. That the CA did not is clearly a reversible error.
Furthermore, allowing repeated suits seeking to nullify OCT No. 4216, like the present
case, will bring to naught the principle of indefeasibility of titles issued under the
Torrens system of land registration. 19 Thus, in a resolution 20dated 10 August 1994,
the First Division of this Court, applying the Margolles ruling, dismissed a petition for
review involving herein petitioner Peltan Corporation which had raised as issue the
validity of OCT No. 4216. The Court, in the case at bench, can do no less. Subjecting
OCT No. 4216 to further scrutiny, as proposed in the amended complaint, is no longer
an available option.
Are Private Respondents the Real Parties-in-Interest?
The Court also holds that private respondents are not the proper parties to initiate
the present suit. The complaint, praying as it did for the cancellation of the transfer
certificates of title of petitioners on the ground that they were derived from a
"spurious" OCT No. 4216, assailed in effect the validity of said title. While private
respondents did not pray for the reversion of the land to the government, we agree
with the petitioners that the prayer in the complaint will have the same result of
reverting the land to the government under the Regalian doctrine. 21 Gabila
vs. Barrigaruled that only the government is entitled to this relief. The Court in that
case held:
The present motion to dismiss is actually predicated on Section
1(g), Rule 16 of the Revised Rules of Court, i.e., failure of the
complaint to state a cause of action, for it alleges in paragraph 12
thereof that the plaintiff admits that he has no right to demand the
cancellation or amendment of the defendant's title, because, even
if the said title were canceled or amended, the ownership of the
land embraced therein, or of the portion thereof affected by the
amendment, would revert to the public domain. In his amended
complaint the plaintiff makes no pretense at all that any part of the
land covered by the defendant's title was privately owned by him
or by his predecessors-in-interest. Indeed, it is admitted therein
that the said land was at all times a part of the public domain until
December 18, 1964, when the government issued a title thereon in
favor of defendant. Thus, if there is any person or entity to relief, it
can only be the government.
In the case at bar, the plaintiff's own averments negate the
existence of such right, for it would appear therefrom that whatever
right might have been violated by the defendant belonged to the
government, not to the plaintiff. Plaintiff-appellant argues that
although his complaint is captioned as one for cancellation of title,
he has nevertheless stated therein several causes of action based
on his alleged rights of possession and ownership over the
improvements, on defendant-appellees alleged fraudulent
acquisition of the land, and on the damages allegedly incurred by
him (plaintiff-appellant) in relation to the improvements. These
matters are merely ancillary to the central issue of whether or not
defendant-appellee's title should be canceled or amended, and they
may not be leaned upon in an effort to make out a cause of action
in relation to the said focal issue. Indeed, the principal relief prayed
for in the amended complaint is the cancellation or amendment of
defendant-appellee's title. 22
Nonpayment of Docket Fees
As we have already ruled that the private respondents are nor the real parties in
interest, we find no more need to pass upon the question of nonpayment of filing
fees.
WHEREFORE, the petition is GRANTED and the assailed Decision is REVERSED and
SET ASIDE. The complaint of private respondents in Civil Case No. LP-8852-F is
DISMISSED. The notice of lis pendens, annotated in the titles of petitioners because
of Civil Care No. LP-8852-P, is ordered CANCELED. No costs.
SO ORDERED.
G.R. No. 181132 June 5, 2009
HEIRS OF LORETO C. MARAMAG, represented by surviving spouse VICENTA
PANGILINAN MARAMAG,Petitioners,
vs.
EVA VERNA DE GUZMAN MARAMAG, ODESSA DE GUZMAN MARAMAG, KARL
BRIAN DE GUZMAN MARAMAG, TRISHA ANGELIE MARAMAG, THE INSULAR
LIFE ASSURANCE COMPANY, LTD., and GREAT PACIFIC LIFE ASSURANCE
CORPORATION, Respondents.
DECISION
NACHURA, J.:
This is a petition1 for review on certiorari under Rule 45 of the Rules, seeking to
reverse and set aside the Resolution2 dated January 8, 2008 of the Court of Appeals
(CA), in CA-G.R. CV No. 85948, dismissing petitioners’ appeal for lack of jurisdiction.
The case stems from a petition3 filed against respondents with the Regional Trial
Court, Branch 29, for revocation and/or reduction of insurance proceeds for being
void and/or inofficious, with prayer for a temporary restraining order (TRO) and a writ
of preliminary injunction.
The petition alleged that: (1) petitioners were the legitimate wife and children of
Loreto Maramag (Loreto), while respondents were Loreto’s illegitimate family; (2) Eva
de Guzman Maramag (Eva) was a concubine of Loreto and a suspect in the killing of
the latter, thus, she is disqualified to receive any proceeds from his insurance policies
from Insular Life Assurance Company, Ltd. (Insular)4 and Great Pacific Life Assurance
Corporation (Grepalife);5 (3) the illegitimate children of Loreto—Odessa, Karl Brian,
and Trisha Angelie—were entitled only to one-half of the legitime of the legitimate
children, thus, the proceeds released to Odessa and those to be released to Karl Brian
and Trisha Angelie were inofficious and should be reduced; and (4) petitioners could
not be deprived of their legitimes, which should be satisfied first.
In support of the prayer for TRO and writ of preliminary injunction, petitioners alleged,
among others, that part of the insurance proceeds had already been released in favor
of Odessa, while the rest of the proceeds are to be released in favor of Karl Brian and
Trisha Angelie, both minors, upon the appointment of their legal guardian. Petitioners
also prayed for the total amount of ₱320,000.00 as actual litigation expenses and
attorney’s fees.
In answer,6 Insular admitted that Loreto misrepresented Eva as his legitimate wife
and Odessa, Karl Brian, and Trisha Angelie as his legitimate children, and that they
filed their claims for the insurance proceeds of the insurance policies; that when it
ascertained that Eva was not the legal wife of Loreto, it disqualified her as a
beneficiary and divided the proceeds among Odessa, Karl Brian, and Trisha Angelie,
as the remaining designated beneficiaries; and that it released Odessa’s share as she
was of age, but withheld the release of the shares of minors Karl Brian and Trisha
Angelie pending submission of letters of guardianship. Insular alleged that the
complaint or petition failed to state a cause of action insofar as it sought to declare
as void the designation of Eva as beneficiary, because Loreto revoked her designation
as such in Policy No. A001544070 and it disqualified her in Policy No. A001693029;
and insofar as it sought to declare as inofficious the shares of Odessa, Karl Brian, and
Trisha Angelie, considering that no settlement of Loreto’s estate had been filed nor
had the respective shares of the heirs been determined. Insular further claimed that
it was bound to honor the insurance policies designating the children of Loreto with
Eva as beneficiaries pursuant to Section 53 of the Insurance Code.
In its own answer7 with compulsory counterclaim, Grepalife alleged that Eva was not
designated as an insurance policy beneficiary; that the claims filed by Odessa, Karl
Brian, and Trisha Angelie were denied because Loreto was ineligible for insurance due
to a misrepresentation in his application form that he was born on December 10, 1936
and, thus, not more than 65 years old when he signed it in September 2001; that the
case was premature, there being no claim filed by the legitimate family of Loreto; and
that the law on succession does not apply where the designation of insurance
beneficiaries is clear.
As the whereabouts of Eva, Odessa, Karl Brian, and Trisha Angelie were not known
to petitioners, summons by publication was resorted to. Still, the illegitimate family
of Loreto failed to file their answer. Hence, the trial court, upon motion of petitioners,
declared them in default in its Order dated May 7, 2004.
During the pre-trial on July 28, 2004, both Insular and Grepalife moved that the
issues raised in their respective answers be resolved first. The trial court ordered
petitioners to comment within 15 days.
In their comment, petitioners alleged that the issue raised by Insular and Grepalife
was purely legal – whether the complaint itself was proper or not – and that the
designation of a beneficiary is an act of liberality or a donation and, therefore, subject
to the provisions of Articles 7528 and 7729 of the Civil Code.
In reply, both Insular and Grepalife countered that the insurance proceeds belong
exclusively to the designated beneficiaries in the policies, not to the estate or to the
heirs of the insured. Grepalife also reiterated that it had disqualified Eva as a
beneficiary when it ascertained that Loreto was legally married to Vicenta Pangilinan
Maramag.
On September 21, 2004, the trial court issued a Resolution, the dispositive portion of
which reads –
WHEREFORE, the motion to dismiss incorporated in the answer of defendants Insular
Life and Grepalife is granted with respect to defendants Odessa, Karl Brian and Trisha
Maramag. The action shall proceed with respect to the other defendants Eva Verna
de Guzman, Insular Life and Grepalife.
SO ORDERED.10
In so ruling, the trial court ratiocinated thus –
Art. 2011 of the Civil Code provides that the contract of insurance is governed by the
(sic) special laws. Matters not expressly provided for in such special laws shall be
regulated by this Code. The principal law on insurance is the Insurance Code, as
amended. Only in case of deficiency in the Insurance Code that the Civil Code may
be resorted to. (Enriquez v. Sun Life Assurance Co., 41 Phil. 269.)
The Insurance Code, as amended, contains a provision regarding to whom the
insurance proceeds shall be paid. It is very clear under Sec. 53 thereof that the
insurance proceeds shall be applied exclusively to the proper interest of the person in
whose name or for whose benefit it is made, unless otherwise specified in the policy.
Since the defendants are the ones named as the primary beneficiary (sic) in the
insurances (sic) taken by the deceased Loreto C. Maramag and there is no showing
that herein plaintiffs were also included as beneficiary (sic) therein the insurance
proceeds shall exclusively be paid to them. This is because the beneficiary has a
vested right to the indemnity, unless the insured reserves the right to change the
beneficiary. (Grecio v. Sunlife Assurance Co. of Canada, 48 Phil. [sic] 63).
Neither could the plaintiffs invoked (sic) the law on donations or the rules on
testamentary succession in order to defeat the right of herein defendants to collect
the insurance indemnity. The beneficiary in a contract of insurance is not the donee
spoken in the law of donation. The rules on testamentary succession cannot apply
here, for the insurance indemnity does not partake of a donation. As such, the
insurance indemnity cannot be considered as an advance of the inheritance which can
be subject to collation (Del Val v. Del Val, 29 Phil. 534). In the case of Southern Luzon
Employees’ Association v. Juanita Golpeo, et al., the Honorable Supreme Court made
the following pronouncements[:]
"With the finding of the trial court that the proceeds to the Life Insurance Policy
belongs exclusively to the defendant as his individual and separate property, we agree
that the proceeds of an insurance policy belong exclusively to the beneficiary and not
to the estate of the person whose life was insured, and that such proceeds are the
separate and individual property of the beneficiary and not of the heirs of the person
whose life was insured, is the doctrine in America. We believe that the same doctrine
obtains in these Islands by virtue of Section 428 of the Code of Commerce x x x."
In [the] light of the above pronouncements, it is very clear that the plaintiffs has (sic) there are no beneficiaries designated, or when the only designated beneficiary is
no sufficient cause of action against defendants Odessa, Karl Brian and Trisha Angelie disqualified, that the proceeds should be paid to the estate of the insured. As to the
Maramag for the reduction and/or declaration of inofficiousness of donation as claim that the proceeds to be paid to Loreto’s illegitimate children should be reduced
primary beneficiary (sic) in the insurances (sic) of the late Loreto C. Maramag. based on the rules on legitime, the trial court held that the distribution of the
insurance proceeds is governed primarily by the Insurance Code, and the provisions
of the Civil Code are irrelevant and inapplicable. With respect to the Grepalife policy,
However, herein plaintiffs are not totally bereft of any cause of action. One of the
the trial court noted that Eva was never designated as a beneficiary, but only Odessa,
named beneficiary (sic) in the insurances (sic) taken by the late Loreto C. Maramag
Karl Brian, and Trisha Angelie; thus, it upheld the dismissal of the case as to the
is his concubine Eva Verna De Guzman. Any person who is forbidden from receiving
illegitimate children. It further held that the matter of Loreto’s misrepresentation was
any donation under Article 739 cannot be named beneficiary of a life insurance policy
premature; the appropriate action may be filed only upon denial of the claim of the
of the person who cannot make any donation to him, according to said article (Art.
named beneficiaries for the insurance proceeds by Grepalife.
2012, Civil Code). If a concubine is made the beneficiary, it is believed that the
insurance contract will still remain valid, but the indemnity must go to the legal heirs
and not to the concubine, for evidently, what is prohibited under Art. 2012 is the Petitioners appealed the June 16, 2005 Resolution to the CA, but it dismissed the
naming of the improper beneficiary. In such case, the action for the declaration of appeal for lack of jurisdiction, holding that the decision of the trial court dismissing
nullity may be brought by the spouse of the donor or donee, and the guilt of the donor the complaint for failure to state a cause of action involved a pure question of law.
and donee may be proved by preponderance of evidence in the same action The appellate court also noted that petitioners did not file within the reglementary
(Comment of Edgardo L. Paras, Civil Code of the Philippines, page 897). Since the period a motion for reconsideration of the trial court’s Resolution, dated September
designation of defendant Eva Verna de Guzman as one of the primary beneficiary (sic) 21, 2004, dismissing the complaint as against Odessa, Karl Brian, and Trisha Angelie;
in the insurances (sic) taken by the late Loreto C. Maramag is void under Art. 739 of thus, the said Resolution had already attained finality.
the Civil Code, the insurance indemnity that should be paid to her must go to the
legal heirs of the deceased which this court may properly take cognizance as the
Hence, this petition raising the following issues:
action for the declaration for the nullity of a void donation falls within the general
jurisdiction of this Court.11
a. In determining the merits of a motion to dismiss for failure to state a
cause of action, may the Court consider matters which were not alleged in
Insular and Grepalife filed their respective motions for reconsideration, arguing, in
12 13
the Complaint, particularly the defenses put up by the defendants in their
the main, that the petition failed to state a cause of action. Insular further averred
Answer?
that the proceeds were divided among the three children as the remaining named
beneficiaries. Grepalife, for its part, also alleged that the premiums paid had already
been refunded. b. In granting a motion for reconsideration of a motion to dismiss for failure
to state a cause of action, did not the Regional Trial Court engage in the
examination and determination of what were the facts and their probative
Petitioners, in their comment, reiterated their earlier arguments and posited that
value, or the truth thereof, when it premised the dismissal on allegations of
whether the complaint may be dismissed for failure to state a cause of action must
the defendants in their answer – which had not been proven?
be determined solely on the basis of the allegations in the complaint, such that the
defenses of Insular and Grepalife would be better threshed out during trial.1avvphi1
c. x x x (A)re the members of the legitimate family entitled to the proceeds
of the insurance for the concubine?15
On June 16, 2005, the trial court issued a Resolution, disposing, as follows:

In essence, petitioners posit that their petition before the trial court should not have
WHEREFORE, in view of the foregoing disquisitions, the Motions for Reconsideration
been dismissed for failure to state a cause of action because the finding that Eva was
filed by defendants Grepalife and Insular Life are hereby GRANTED. Accordingly, the
either disqualified as a beneficiary by the insurance companies or that her designation
portion of the Resolution of this Court dated 21 September 2004 which ordered the
was revoked by Loreto, hypothetically admitted as true, was raised only in the
prosecution of the case against defendant Eva Verna De Guzman, Grepalife and
answers and motions for reconsideration of both Insular and Grepalife. They argue
Insular Life is hereby SET ASIDE, and the case against them is hereby ordered
that for a motion to dismiss to prosper on that ground, only the allegations in the
DISMISSED.
complaint should be considered. They further contend that, even assuming Insular
disqualified Eva as a beneficiary, her share should not have been distributed to her
SO ORDERED.14 children with Loreto but, instead, awarded to them, being the legitimate heirs of the
insured deceased, in accordance with law and jurisprudence.
In granting the motions for reconsideration of Insular and Grepalife, the trial court
considered the allegations of Insular that Loreto revoked the designation of Eva in The petition should be denied.
one policy and that Insular disqualified her as a beneficiary in the other policy such
that the entire proceeds would be paid to the illegitimate children of Loreto with Eva
pursuant to Section 53 of the Insurance Code. It ruled that it is only in cases where
The grant of the motion to dismiss was based on the trial court’s finding that the
petition failed to state a cause of action, as provided in Rule 16, Section 1(g), of the
Rules of Court, which reads –
SECTION 1. Grounds. – Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made on any of
the following grounds:
xxxx
(g) That the pleading asserting the claim states no cause of action.
A cause of action is the act or omission by which a party violates a right of another.16 A
complaint states a cause of action when it contains the three (3) elements of a cause
of action—(1) the legal right of the plaintiff; (2) the correlative obligation of the
defendant; and (3) the act or omission of the defendant in violation of the legal right.
If any of these elements is absent, the complaint becomes vulnerable to a motion to
dismiss on the ground of failure to state a cause of action.17
When a motion to dismiss is premised on this ground, the ruling thereon should be
based only on the facts alleged in the complaint. The court must resolve the issue on
the strength of such allegations, assuming them to be true. The test of sufficiency of
a cause of action rests on whether, hypothetically admitting the facts alleged in the
complaint to be true, the court can render a valid judgment upon the same, in
accordance with the prayer in the complaint. This is the general rule.
However, this rule is subject to well-recognized exceptions, such that there is no
hypothetical admission of the veracity of the allegations if:
1. the falsity of the allegations is subject to judicial notice;
2. such allegations are legally impossible;
3. the allegations refer to facts which are inadmissible in evidence;
4. by the record or document in the pleading, the allegations appear
unfounded; or
5. there is evidence which has been presented to the court by stipulation of
the parties or in the course of the hearings related to the case.18
In this case, it is clear from the petition filed before the trial court that, although
petitioners are the legitimate heirs of Loreto, they were not named as beneficiaries in
the insurance policies issued by Insular and Grepalife. The basis of petitioners’ claim
is that Eva, being a concubine of Loreto and a suspect in his murder, is disqualified
from being designated as beneficiary of the insurance policies, and that Eva’s children
with Loreto, being illegitimate children, are entitled to a lesser share of the proceeds
of the policies. They also argued that pursuant to Section 12 of the Insurance
Code,19 Eva’s share in the proceeds should be forfeited in their favor, the former
having brought about the death of Loreto. Thus, they prayed that the share of Eva
and portions of the shares of Loreto’s illegitimate children should be awarded to them,
being the legitimate heirs of Loreto entitled to their respective legitimes.
It is evident from the face of the complaint that petitioners are not entitled to a
favorable judgment in light of Article 2011 of the Civil Code which expressly provides
that insurance contracts shall be governed by special laws, i.e., the Insurance Code.
Section 53 of the Insurance Code states—
SECTION 53. The insurance proceeds shall be applied exclusively to the proper
interest of the person in whose name or for whose benefit it is made unless otherwise
specified in the policy.
Pursuant thereto, it is obvious that the only persons entitled to claim the insurance
proceeds are either the insured, if still alive; or the beneficiary, if the insured is
already deceased, upon the maturation of the policy.20 The exception to this rule is a
situation where the insurance contract was intended to benefit third persons who are
not parties to the same in the form of favorable stipulations or indemnity. In such a
case, third parties may directly sue and claim from the insurer.21
Petitioners are third parties to the insurance contracts with Insular and Grepalife and,
thus, are not entitled to the proceeds thereof. Accordingly, respondents Insular and
Grepalife have no legal obligation to turn over the insurance proceeds to petitioners.
The revocation of Eva as a beneficiary in one policy and her disqualification as such
in another are of no moment considering that the designation of the illegitimate
children as beneficiaries in Loreto’s insurance policies remains valid. Because no legal
proscription exists in naming as beneficiaries the children of illicit relationships by the
insured,22 the shares of Eva in the insurance proceeds, whether forfeited by the court
in view of the prohibition on donations under Article 739 of the Civil Code or by the
insurers themselves for reasons based on the insurance contracts, must be awarded
to the said illegitimate children, the designated beneficiaries, to the exclusion of
petitioners. It is only in cases where the insured has not designated any
beneficiary,23 or when the designated beneficiary is disqualified by law to receive the
proceeds,24 that the insurance policy proceeds shall redound to the benefit of the
estate of the insured.
In this regard, the assailed June 16, 2005 Resolution of the trial court should be
upheld. In the same light, the Decision of the CA dated January 8, 2008 should be
sustained. Indeed, the appellate court had no jurisdiction to take cognizance of the
appeal; the issue of failure to state a cause of action is a question of law and not of
fact, there being no findings of fact in the first place.25
WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners.
SO ORDERED.
. United Coconut Planters Bank v. Beluso
Facts:

On 16 April 1996, UCPB granted the spouses Beluso a Promissory Notes Line under a
Credit Agreement whereby the latter could avail from the former credit of up to a
maximum amount of P1.2 Million pesos for a term ending on 30 April 1997. The
spouses Beluso constituted, other than their promissory notes, a real estate mortgage
over parcels of land in Roxas City, covered by Transfer Certificates of Title No. T-
31539 and T-27828, as additional security for the obligation. The Credit Agreement
was subsequently amended to increase the amount of the Promissory Notes Line to a
maximum of P2.35 Million pesos and to extend the term thereof to 28 February 1998.
To completely avail themselves of the P2.35 Million credit line extended to them by
UCPB, the spouses Beluso executed two more promissory notes for a total
of P350,000.00.
On 2 September 1998, UCPB demanded that the spouses Beluso pay their total
obligation of P2,932,543.00 plus 25% attorneys fees, but the spouses Beluso failed
to comply therewith. UCPB foreclosed the properties mortgaged by the spouses
Beluso to secure their credit line, which already ballooned to P3,784,603.00.
On 9 February 1999, the spouses Beluso filed a Petition for Annulment, Accounting
and Damages against UCPB with the RTC of Makati City. On 23 March 2000, the RTC
ruled in favor of the spouses Beluso
On 8 May 2000, the RTC denied UCPBs Motion for Reconsideration, prompting UCPB
to appeal the RTC Decision with the Court of Appeals. The Court of Appeals affirmed
the RTC Decision. The Court of Appeals denied UCPBs Motion for Reconsideration for
lack of merit. UCPB thus filed the present petition
Issue:
WON the Honorable Court of Appeals committed serious and reversible error when it
failed to order the dismissal of the case because the respondents are guilty of forum
shopping.
Rulings:
Rule 16, Section 5 bars the refiling of an action previously dismissed only in the
following instances: SEC. 5. Effect of dismissal. Subject to the right of appeal, an
order granting a motion to dismiss based on paragraphs (f), (h) and (i) of section 1
hereof shall bar the refiling of the same action or claim. (n)
When an action is dismissed on the motion of the other party, it is only when the
ground for the dismissal of an action is found in paragraphs (f), (h) and (i) that the
action cannot be refiled. As regards all the other grounds, the complainant is allowed
to file same action, but should take care that, this time, it is filed with the proper
court or after the accomplishment of the erstwhile absent condition precedent, as the
case may be
UCPB, however, brings to the attention of this Court a Motion for Reconsideration filed
by the spouses Beluso on 15 January 1999 with the RTC of Roxas City, which Motion
had not yet been ruled upon when the spouses Beluso filed Civil Case No. 99-314 with
the RTC of Makati. Hence, there were allegedly two pending actions between the same
parties on the same issue at the time of the filing of Civil Case No. 99-314 on 9
February 1999 with the RTC of Makati. This will still not change our findings. It is
indeed the general rule that in cases where there are two pending actions between
the same parties on the same issue, it should be the later case that should be
dismissed. However, this rule is not absolute. According to this Court in Allied Banking
Corporation v. Court of Appeals.
G.R. No. 159189 February 21, 2007
THE MANILA BANKING CORPORATION, Petitioner,
vs.
UNIVERSITY OF BAGUIO, INC. and GROUP DEVELOPERS, INC., Respondents.
DECISION
QUISUMBING, J.:
On appeal is the Order1 dated April 11, 2002 of the Regional Trial Court (RTC) of
Makati City, Branch 61, in Civil Case No. 90-389, dismissing petitioner’s amended
complaint for a sum of money with application for preliminary attachment. In the
appeal under Section 2, Rule 41, on a pure question of law, petitioner alleges that the
assailed Order of the RTC was manifestly not in accord with law and jurisprudence.
Also assailed is the trial court’s June 27, 2003 Order2 denying the motion for
reconsideration.1awphi1.net
The facts are culled from the records.
On November 26, 1981, petitioner Manila Banking Corporation granted a ₱14 million
credit line3 to respondent University of Baguio, Inc. for the construction of additional
buildings and purchase of new equipment.4 On behalf of the university, then Vice-
Chairman Fernando C. Bautista, Jr.5 signed Promissory Note (PN) Nos. 10660, 10672,
10687, and 107086 and executed a continuing suretyship agreement.7 However,
Bautista, Jr. diverted the net proceeds of the loan. He endorsed and delivered the
four checks representing the net proceeds to respondent Group Developers, Inc.
(GDI).8 The loan was not paid.
On February 12, 1990, the bank filed a complaint for a sum of money with application
for preliminary attachment9against the university, Bautista, Jr. and his wife Milagros,
before the RTC of Makati City. Five years later, on March 31, 1995, the bank amended
the complaint and impleaded GDI as additional defendant.
In the amended complaint,10 the bank alleged that it was unaware and did not
approve the diversion of the loan to GDI; that it granted the loan without collateral
upon the university’s undertaking that it would construct new buildings; and that GDI
connived with the university and Bautista, Jr. in fraudulently contracting the debt.
In its Answer, the university claimed that the bank and GDI approved the diversion.
Allegedly, Victor G. Puyat, then GDI’s President, and Vicente G. Puyat, then the bank’s
President, decided to use the proceeds of the loan. The university stated that Vicente
G. Puyat and Victor G. Puyat even assured the university, in separate letters11 both
dated October 22, 1981, that it would be relieved of any liability from the loan.
Consequently, even if the loan was overdue, the bank did not demand payment until
February 8, 1989. By way of cross-claim, the university prayed that GDI be ordered
to pay the university the amount it would have to pay the bank. In addition, the
university filed a third-party complaint against Victor G. Puyat and the heirs of Vicente
G. Puyat.
In the appealed Order of April 11, 2002, the trial court ruled that the bank had no
cause of action against the defendants because its claim for a sum of money had been
paid through the dacion en pago. The trial court noted that the bank even admitted
the settlement. It disposed of the case as follows:
WHEREFORE, in view of the foregoing, defendant [respondent herein] University of
Baguio’s Motion to Dismiss Amended Complaint is herein GRANTED and this complaint
for collection of sum of money is herein DISMISSED.

On December 14, 1995, the bank and GDI executed a deed of dacion en pago.12 As
Defendant UBI [respondent university] shall file the appropriate Manifestation in
attorney-in-fact of Batulao Bio-Loop Farms, Inc., GDI ceded and transferred to the
Court specifying the dates in June when it will be available to present evidence on its
bank a parcel of land consisting of 210,000 square meters located in Nasugbu,
counterclaim.
Batangas and covered by Transfer Certificate of Title No. T-70784. The dacion en
pago was for a consideration of ₱78 million and in full settlement of the loan under
PN Nos. 10660, 10672, 10687, and 10708, subject of Civil Case No. 90-389.13 SO ORDERED.19

In an Omnibus Order14 dated April 21, 1997, the trial court dismissed the third-party Hence, this appeal where petitioner alleges:
complaint against the heirs of Vicente G. Puyat for being premature since the bank’s
cause of action was against the university as a "dummy" of GDI. The trial court also I.
dismissed the case as to Fernando Bautista, Jr. and his wife upon Fernando’s death.
The trial court further ruled that the university’s motion to implead GDI as third-party
defendant, and GDI’s motions to dismiss the amended complaint and cross-claim, The RTC seriously erred in granting the Motion to Dismiss of respondent UBI
had been mooted by the dacion en pago. on the basis of a document that has already been indisputably stricken off
from (sic) the records of the case.

On March 19, 1998, the university moved to dismiss the amended complaint on the
grounds that: (1) there was "no more cause of action" against it since the loan had ii.
been settled by GDI; and (2) the bank "failed to prosecute the action for an
unreasonable length of time."15 In an Order16 dated August 17, 1999, the trial court The RTC seriously erred in granting ubi’s Motion to Dismiss when the issues
denied the motion since the "matters relied upon by the university were evidentiary raised therein are evidentiary in nature and did not refer to the allegations
in nature." in the complaint.

On October 14, 1999, the university moved to set the case for pre-trial on December iii.
2, 1999.17
The RTC seriously erred in ruling, without trial, that the Deed of Dacion en
On August 3, 2000, the trial court resolved GDI’s motion to resolve the motions to Pago between petitioner and respondent ubI [Should be gdi] has not been
dismiss and defer pre-trial; expunged from the record the deed of dacion en pago; rescinded.
and reinstated GDI’s motions to dismiss the amended complaint and cross-claim on
the ground that no compromise agreement was submitted for its approval.18
iv.

On August 29, 2001, the university filed a manifestation with motion for
reconsideration of the August 17, 1999 Order denying the university’s motion to The RTC should have denied ubi’s Manifestation (with Motion for
dismiss the amended complaint. The university argued that the grounds for its motion Reconsideration) as the filing of the Motion to Dismiss after respondent ubi
to dismiss were not evidentiary as the deed of dacion en pago and the bank’s judicial filed its Answer violated the Rules of Court.
admission thereof were on record.
V.
The bank opposed the motion on the ground that the motion for reconsideration of
the August 17, 1999 Order was filed after more than two years. The bank noted that The RTC, without justifiable nor legal basis, adopted different policies to
it was the university which moved to set the case for pre-trial; thus, its claim of not parties similarly situated.
seeking reconsideration of the August 17, 1999 Order because of the scheduled pre-
trial was preposterous. The bank concluded that the motion to dismiss lacked basis
vi.
since the deed of dacion en pago had already been expunged.
 The RTC, without justifiable nor legal basis, resolved for the second time a
Motion to Dismiss which it has earlier denied instead of resolving the
Manifestation (with Motion for Reconsideration of said denial) which it was
being asked to resolve.20
In essence, the issue for our resolution is, did the trial court err in dismissing the
amended complaint, without trial, upon motion of respondent university?
Petitioner argues that the university’s motion to dismiss on alleged lack of cause of
action because of the deed of dacion en pago, an evidence aliunde, was improper
since petitioner has yet to present its evidence. Petitioner also argues that the April
11, 2002 appealed Order was flawed because it was based on evidence expunged
from the record.
Respondent university counters that the amended complaint deserved dismissal
because petitioner admitted the dacion en pago and stated its lack of interest to
pursue the case against respondent university. The university contends that
petitioner’s acceptance of the Batangas property, as equivalent of performance,
extinguished the obligation under the four promissory notes. Thus, the university
concludes that no more cause of action lies against it.
For its part, respondent GDI maintains that the dacion en pago has no "legal effect"
but also avers that the dacion en pago effectively paid the loan warranting dismissal
of the complaint, cross-claim and counterclaim against it.
Prefatorily, we note the trial court’s inconsistent rulings in this case. To recall, the
Omnibus Order dated April 21, 1997 appeared to have considered the dacion en
pago as full settlement of the case. The trial court thus ruled that the dacion en
pago mooted the motion to implead GDI as third-party defendant, and GDI’s motions
to dismiss amended complaint and third-party cross-claim.21 Yet, in the same order,
the trial court dismissed the case against the heirs of Vicente G. Puyat on the ground
of prematurity, since petitioner’s cause of action was against respondent university
as "dummy" of GDI, implying that the case was not yet actually settled. Recall also
that the August 17, 1999 Order ruled that the payment of the loan through the dacion
en pago was "evidentiary"22 or had to be proved. The order was silent on whether it
reversed the trial court’s earlier statement that the dacion en pago settled the loan
and the case.
A year later, on August 3, 2000, the trial court expunged the deed of dacion en
pago and reinstated GDI’s motions to dismiss the amended complaint and cross-
claim.23 Then, the appealed Order of April 11, 2002 ruled that petitioner had "no cause
of action" against the defendants since the loan was settled by the dacion en
pago,24 despite the order which expunged the deed.
In Domondon v. Lopez,25 we distinguished a motion to dismiss for failure of the
complaint to state a cause of action from a motion to dismiss based on lack of cause
of action. The first is governed by Section 1 (g),26 Rule 16, while the second by Rule
33,27 of the Rules of Court, to wit:
. . . The first [situation where the complaint does not allege a sufficient cause of
action] is raised in a motion to dismiss under Rule 16 before a responsive pleading is
filed and can be determined only from the allegations in the initiatory pleading and
not from evidentiary or other matters aliunde. The second [situation where the
evidence does not sustain the cause of action alleged] is raised in a demurrer to
evidence under Rule 33 after the plaintiff has rested his case and can be resolved only
on the basis of the evidence he has presented in support of his claim. The first does
not concern itself with the truth and falsity of the allegations while the second arises
precisely because the judge has determined the truth and falsity of the allegations
and has found the evidence wanting.
Hence, a motion to dismiss based on lack of cause of action is filed by the defendant
after the plaintiff has presented his evidence on the ground that the latter has shown
no right to the relief sought. While a motion to dismiss under Rule 16 is based on
preliminary objections which can be ventilated before the beginning of the trial, a
motion to dismiss under Rule 33 is in the nature of a demurrer to evidence on the
ground of insufficiency of evidence and is presented only after the plaintiff has rested
his case.28 (Emphasis supplied.)
In this case, the university’s March 19, 1998 motion to dismiss the amended
complaint was improper under Rule 16 because it was filed after respondent university
filed its responsive pleading, its Answer. Also, the motion’s merit could not be
determined based solely on the allegations of the initiatory pleading, the amended
complaint, since the motion was based on the deed of dacion en pago, which was not
even alleged in the complaint. And since the deed of dacion en pago had been
expunged from the record, the trial court erred in its finding of payment and lack of
cause of action based on the deed. In fact, on January 11, 2002 or just three months
before it dismissed the amended complaint, the trial court had even noted petitioner
counsel’s manifestation regarding the parties’ initial efforts to enter into a "dacion en
pago but not based on the previous offer made but on a new proposal involving new
properties"29 and urged them to pursue further settlement discussions.30
In addition, the motion alleged that petitioner had "no more cause of action" or lacked
a cause of action against the university. Following Domondon, that motion was a
motion to dismiss under Rule 33 in the nature of demurrer to evidence and would be
proper only after petitioner had presented its evidence and rested its case. In the
case at bar, there had been no presentation of evidence yet and petitioner had not
rested its case. Therefore, the August 17, 1999 Order properly denied the motion to
dismiss for being improper under either Rule 16 or 33.
The trial court had also made a premature statement in its Omnibus Order dated April
21, 1997 that the dacion en pago settled the loan and the case, even as it also stated
that respondent university was used as a "dummy" of GDI. If indeed there was fraud,
considering the uncollateralized loan, its diversion, nonpayment, absence of demand
although overdue, and the dacion en pago where title of the property accepted as
payment cannot be transferred, the fraud should be uncovered to determine who are
liable to pay the loan. We note too that the April 11, 2002 Order was unclear if it ruled
again on the university’s March 19, 1998 motion to dismiss or acted on its August 29,
2001 manifestation with motion for reconsideration of the two-year old August 17,
1999 Order. To reiterate, the August 17, 1999 Order aptly denied the motion. Thus,
we reverse the April 11, 2002 and June 27, 2003 assailed Orders.
Lastly, it must be pointed out that while the Court allows a relaxation in the application
of procedural rules in some instances, courts and litigants are enjoined to follow rules
strictly because they are designed to facilitate the adjudication of cases.31 Instead of
rules being followed, however, we find their misapplication in this case resulting to
inconsistent rulings, confusion and delay. Had the trial court exercised its inherent
power to control its proceedings,32 it would not have taken this long to reach pre-trial,
which had been first set on December 2, 1999 through respondent university’s
motion. Significantly, even the trial court had tentatively set the pre-trial on June 7,
200233 but erroneously dismissed the amended complaint on April 11, 2002.

WHEREFORE, we GRANT the petition and SET ASIDE the trial court’s April 11, 2002
and June 27, 2003 Orders. The trial court is ORDERED to proceed with the pre-trial
and hear this case with dispatch. No pronouncement as to costs.

SO ORDERED.