case digest_rule 1-summary proc

8/12/2019 CASE DIGEST_Rule 1-Summary Proc

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JURISDICTION: Retroactive Effect

ARUEGO vs. CA, 1996

FACTS:

On March 7, 1983, a Complaintfor Compulsory Recognition

and Enforcement of Successional Rightswas filed before the

Regional Trial Court by the minors, private respondent

Antonia F. Aruego and her alleged sister Evelyn F. Aruego,

represented by their mother and natural guardian, Luz M.

Fabian.

The complaint prayed for an Order praying that herein

Antonia and Evelyn be declared the illegitimate children of

the deceased Jose M. Aruego, Sr.; that herein petitioners be

compelled to recognize and acknowledge them as the

compulsory heirs of the deceased Jose M. Aruego; that their

share and participation in the estate of their deceased father

be determined and ordered delivered to them. The main

basis of the action for compulsory recognition is their alleged"open and continuous possession of the status of illegitimate

children".

After trial, the lower court rendered judgment, dated June

15, 1992, declaring Antonia Aruego as illegitimate daughter of

Jose Aruego and Luz Fabian; and that Evelyn Fabian is not an

illegitimate daughter of Jose Aruego with Luz Fabian, inter

alia.

Herein petitioners filed a Motion for Partial Reconsideration

of the decision alleging loss of jurisdiction on the part of the

trial court over the complaint by virtue of the passage of

Executive Order No. 209 (as amended by E.O. No. 227),

otherwise known as the Family Code of the Philippineswhich

took effect on August 3, 1988. This motion was denied by the

lower court in the Order, dated January 14, 1993.

Private respondent's action for compulsory recognition as an

illegitimate child was brought under Book I, Title VIII of the

Civil Code on PERSONS, specifically Article 285 thereof,

which state the manner by which illegitimate children may

prove their filiation.

Petitioners, on the other hand, submit that with the advent of

the New Family Code on August 3, 1988, the trial court lost

jurisdiction over the complaint of private respondent on the

ground of prescription, considering that under Article 175,

paragraph 2, in relation to Article 172 of the New Family

Code, it is provided that an action for compulsory recognition

of illegitimate filiation, if based on the "open and continuous

possession of the status of an illegitimate child," must be

brought during the lifetime of the alleged parent without any

exception, otherwise the action will be barred by

prescription.

ISSUE:

WHETHER OR NOT the provisions of the FAMILY CODE should

be given retroactive effect in the case at bar.

HELD:

NO. Under the circumstances obtaining in the case at bar, the

right of action of the minor child has been vested by the filing

of the complaint in court under the regime of the Civil Code

and prior to the effectivity of the Family Code. The fact of

filing of the petition already vested in the petitioner her right

to file it and to have the same proceed to final adjudication in

accordance with the law in force at the time, and such right

can no longer be prejudiced or impaired by the enactment of

a new law.

The action brought by private respondent Antonia Aruego forcompulsory recognition and enforcement of successiona

rights which was filed prior to the advent of the Family Code

must be governed by Article 285 of the Civil Code and not by

Article 175, paragraph 2 of the Family Code. The present law

cannot be given retroactive effect insofar as the instant case

is concerned, as its application will prejudice the vested

right of private respondent to have her case decided under

Article 285 of the Civil Code. The right was vested to her by

the fact that she filed her action under the regime of the Civil

Code. Prescinding from this, the conclusion then ought to be

that the action was not yet barred, notwithstanding the factthat it was brought when the putative father was already

deceased, since private respondent was then still a minor

when it was filed, an exception to the general rule provided

under Article 285 of the Civil Code. Hence, the trial court

which acquired jurisdiction over the case by the filing of the

complaint, never lost jurisdiction over the same despite the

passage of E.O. No. 209, also known as the Family Code of the

Philippines.

RATIO:

The ruling herein reinforces the principle that the jurisdiction

of a court, whether in criminal or civil cases, once attached

cannot be ousted by subsequent happenings or events

although of a character which would have prevented

jurisdiction from attaching in the first instance, and it

retains jurisdiction until it finally disposes of the case.


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JURISDICTION OVER SUBJECT MATTER

RUDOLF LIETZ HOLDINGS INC., vs. REGISTRY OF DEEDS, 2000

FACTS:

Petitioner corporation was formerly known as Rudolf Lietz,

Incorporated. Subsequently, it amended its Articles of

Incorporation to change its name to Rudolf Lietz Holdings,

Inc. The Amended Articles of Incorporation was approved by

the Securities and Exchange Commission.

As a consequence of its change of name, petitioner sought

the amendment of the transfer certificates of title over real

properties owned by the said corporation, all of which were

under the old name, Rudolf Lietz, Incorporated. For this

purpose, petitioner instituted a petition for amendment of

titles with the Regional Trial Court of Paraaque City.

The petition impleaded as respondent the Registry of Deeds

of Pasay City, apparently because the titles sought to beamended all state that they were issued by the Registry of

Deeds of Pasay City. Petitioner likewise inadvertently alleged

in the body of the petition that the lands covered by the

subject titles are located in Pasay City.Subsequently, petitioner learned that the subject titles are in

the custody of the Register of Deeds of Paraaque City .

Hence, petitioner filed an Ex-Parte Motion to Admit Amended

Petition. In the attached Amended Petition, petitioner

impleaded instead as respondent the Registry of Deeds of

Paraaque City, and alleged that its lands are located in

Paraaque City.In the meantime, however, on January 30, 1998, the court a

quohad dismissed the petition motu proprio on the ground

of improper venue, it appearing therein that the respondent

is the Registry of Deeds of Pasay City and the properties are

located in Pasay City.ISSUE:

WHETHER OR NOT the trial court may motu propiodismiss a

complaint on the ground of improper venue.

HELD:

NO, it may not.

Questions or issues relating to venue of actions are basically

governed by Rule 4 of the Revised Rules of Court. It is said

that the laying of venue is procedural rather than

substantive. It relates to the jurisdiction of the court over the

person rather than the subject matter. Provisions relating to

venue establish a relation between the plaintiff and the

defendant and not between the court and the subject

matter. Venue relates to trial not to jurisdiction, touches

more of the convenience of the parties rather than the

substance of the case.

Unless and until the defendant objects to the venue in a

motion to dismiss, the venue cannot be truly said to have

been improperly laid, as for all practical intents and purposesthe venue, though technically wrong, may be acceptable to

the parties for whose convenience the rules on venue had

been devised. The trial court cannot pre-empt the

defendants prerogative to object to the improper laying of

the venue by motu propriodismissing the case.Rule 9, Section 1 of the 1997 Rules of Civil Procedure states

that defenses and objections not pleaded either in a motion

to dismiss or in the answer are deemed waived. The court

may only dismiss an action motu proprio in case of lack o

jurisdiction over the subject matter, litis pendentia, resjudicata and prescription. Therefore, the trial court in this

case erred when it dismissed the petition motu proprio. I

should have waited for a motion to dismiss or a responsive

pleading from respondent, raising the objection or affirmative

defense of improper venue, before dismissing the petition.

However, this was overtaken by petitioners motion for leave

to amend its petition.RATIO:

Jurisdiction over the subject matter or nature of an action is

conferred only by law. It may not be conferred by consent or

waiver upon a court which otherwise would have no

jurisdiction over the subject matter of an action. On the

other hand, the venue of an action as fixed by statute may be

changed by the consent of the parties, and an objection on

improper venue may be waived by the failure of the

defendant to raise it at the proper time. In such an event, the

court may still render a valid judgment. Rules as to

jurisdiction can never be left to the consent or agreement o

the parties. Venue is procedural, not jurisdictional, and

hence may be waived. It is meant to provide convenience to

the parties, rather than restrict their access to the courts as it

relates to the place of trial.


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LARESMA vs. ABELLANA, 2004

FACTS:

Respondent Antonio P. Abellana filed a Complaint with the

RTC of Toledo, Cebu, against petitioner Justino Laresma, a

farmer, for recovery of possession of Lot 4-E, a parcel of

agricultural land.

He alleged, inter alia, that since 1985, the petitioner had been

a lessee of a certain Socorro Chiong, whose agricultural land

adjoined his own; and that sometime in 1985, the petitioner,

by means of threat, strategy, and stealth, took possession of

his property and deprived him of its possession. The

respondent prayed that, after due proceedings, judgment be

rendered in his favor, ordering the petitioner to vacate the

property and pay him actual damages, attorneys fees, and

expenses of litigation. Appended to the complaint was a

contract of lease executed by the petitioners wife, Praxedes

Seguisabal Laresma, over a parcel of land owned by Socorro

Chiong (Lot 4-C).

Petitioner averred that the dispute between him and the

respondent was agrarian in nature, within the exclusive

jurisdiction of the DAR, involving as it did his right of

possession covered by Certificate of Land Transfer issued to

his wife Praxedes.

The petitioner points out that the property subject of the

complaint is covered by a CLT issued by the DAR in the name

of his wife. The petitioner avers that although the complaint

of the respondent appeared to be one for the recovery of

possession of the said property (accion publiciana), by

claiming that the petitioner was the tenant of Socorro Chiong,

the respondent indirectly attacked the said CLT. Hence, the

action is within the exclusive jurisdiction of the Department

of Agrarian Reform and Adjudication Board (DARAB) under

Republic Act No. 6657.

ISSUE:

WON the DARAB have jurisdiction over the action againstpetitioner.

HELD:

NO, the DARAB had no jurisdiction over his action against the

petitioner.

Based on the material allegations of the respondents

complaint and even on the admission of the petitioner, the

latter had never been an agricultural tenant of the

respondent. In fact, the respondent claimed that based on

the CLT issued to his wife, they became the owner of the

property covered therein. As such, the DARAB had no

jurisdiction over the said action. The dispute between the

respondent, as plaintiff, and the petitioner, as defendant, in

the RTC involving the de jure possession of Lot 4-E covered

by TCT No. 47171 is not an agrarian dispute.

Clearly, no agrarian dispute is involved in this case. In fact,both are contending parties for the ownership of the subject

property.

The action of the respondent against the petitioner is not an

agrarian dispute within the exclusive jurisdiction of the

DARAB. The well-entrenched principle is that the jurisdiction

of the court over the subject matter of the action is

determined by the material allegations of the complaint and

the law, irrespective of whether or not the plaintiff is entitled

to recover all or some of the claims or reliefs sought therein.

The jurisdiction of the court over the nature of the action

and the subject matter thereof cannot be made to depend

upon the defenses set up in the court or upon a motion to

dismiss.Once jurisdiction is vested, the same is retained up

to the end of the litigation.

The regular court does not lose its jurisdiction over an

ejectment case by the simple expedient of a party raising as a

defense therein the alleged existence of a tenancy

relationship between the parties. But it is the duty of the

court to receive evidence to determine the allegations of

tenancy. If, after hearing, tenancy had, in fact, been shown to

be the real issue, the court should dismiss the case for lack of

jurisdiction.

Nevertheless, the RTC had no jurisdiction over the action of

the respondent. In this case, the respondent filed his

complaint against the petitioner on May 24, 1994. Hence, the

jurisdiction of the regular court over the nature of this action

is governed by Republic Act No. 7691, which took effect on

April 15, 1994. Section 3 thereof amended Section 33 o

Batas Pambansa Blg. 129.

The actions envisaged in the aforequoted provisions are

accion publiciana and reinvindicatoria. To determine which

court has jurisdiction over the action, the complaint must

allege the assessed value of the real property subject of the

complaint or the interest thereon. In this case, the complaint

of the respondent against the petitioner for recovery of

possession of real property (accion publiciana).


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The complaint does not contain any allegation of the

assessed value of Lot 4-E. There is, thus, no showing on the

face of the complaint that the RTC had exclusive jurisdiction

over the action of the respondent. Moreover, as gleaned

from the receipt of realty tax payments issued to the

respondent, the assessed value of the property in 1993 was

P8,300.00. Patently then, the Municipal Trial Court of

Aloguinsan, Cebu, and not the Regional Trial Court of Toledo

City, had exclusive jurisdiction over the action of therespondent. Hence, all the proceedings in the RTC, including

its decision, are null and void.

RATIO:

The nature of an action and the jurisdiction of a tribunal are

determined by the material allegations of the complaint and

the law at the time the action was commenced. Jurisdiction

of the tribunal over the subject matter or nature of an action

is conferred only by law and not by the consent or waiver

upon a court which, otherwise, would have no jurisdiction

over the subject matter or nature of an action. Lack of

jurisdiction of the court over an action or the subject matter

of an action cannot be cured by the silence, acquiescence, or

even by express consent of the parties. If the court has no

jurisdiction over the nature of an action, it may dismiss the

same ex mero motuor motu proprio. A decision of the court

without jurisdiction is null and void; hence, it could never

logically become final and executory. Such a judgment may

be attacked directly or collaterally.


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CUDIAMAT vs. BATANGAS SAVINGS AND LOAN BANK, 2010

FACTS:

Petitioner Atty. Restituto Cudiamat and his brother Perfecto

were the registered co-owners of parcel of land (the

property) in Balayan, Batangas. Restituto, who resided in

Ozamiz City with his wife, entrusted the custody of the title to

who was residing in Balayan.

Later, Perfecto, without the knowledge and consent of

Restituto, obtained a loan from respondent Batangas Savings

and Loan Bank, Inc. (the bank). To secure the payment of the

loan, Perfecto mortgaged the property for the purpose of

which he presented a Special Power of Attorney (SPA)

purportedly executed by Restituto, with the marital consent

of his wife-herein co-petitioner Erlinda Cudiamat.

Subsequently, Restituto was informed, via letter from thebank, that the property was foreclosed. He thus, by letter

informed the bank that he had no participation in the

execution of the mortgage and that he never authorized

Perfecto for the purpose.

In the meantime, Perfecto died his widow petitioner Corazon

was being evicted from the property. She and her co-

petitioner-spouses Restituto and Erlinda filed before the

Regional Trial Court (RTC) of Balayan a complaint "for

quieting of title with damages" against the bank and the

Register of Deeds of Nasugbu, assailing the mortgage as being

null and void as they did not authorize the encumbrance of

the property.

In its Answer to the complaint, the bank, maintaining the

validity of the mortgage, alleged that it had in fact secured a

title in its name, after Perfecto failed to redeem the

mortgage; that the Balayan RTC had no jurisdiction over the

case as the bank had been placed under receivership and

under liquidation by the Philippine Deposit Insurance

Corporation (PDIC); that PDIC filed before the RTC of Nasugbu

a petition for assistance in the liquidation of the bank; and

that jurisdiction to adjudicate disputed claims against it is

lodged with the liquidation court-RTC Nasugbu.

ISSUE:

WON estoppel bars the bank from raising the issue of lack of

jurisdiction of the Balayan RTC.

HELD:

YES. In the present case, the Balayan RTC, sitting as a court of

general jurisdiction, had jurisdiction over the complaint for

quieting of title filed by petitioners on August 9, 1999. The

Nasugbu RTC, as a liquidation court, assumed jurisdiction

over the claims against the bank only on May 25, 2000, when

PDICs petition for assistance in the liquidation was raffled

thereat and given due course.

While it is well-settled that lack of jurisdiction on the subject

matter can be raised at any time and is not lost by estoppe

by laches, the present case is an exception.

As a general rule, if there is a judicial liquidation of an

insolvent bank, all claims against the bank should be filed in

the liquidation proceeding. However, the general rule should

not be applied if to order the aggrieved party to re-file or re-

litigate its case before the litigation court would be "an

exercise in futility."

RATIO:

The operation of estoppel on the question of jurisdiction

seemingly depends on whether the lower court actually had

jurisdiction or not. If it had no jurisdiction, but the case was

tried and decided upon the theory that it had jurisdiction, the

parties are not barred, on appeal, from assailing such

jurisdiction, for the same "must exist as a matter of law, and

may not be conferred by the consent of the parties or by

estoppel." However, if the lower court had jurisdiction, and

the case was heard and decided upon a given theory, suchfor instance, as that the court had no jurisdiction, the party

who induced it to adopt such theory will not be permitted, on

appeal, to assume an inconsistent position that the lowe

court had jurisdiction.


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JURISDICTION OVER PERSON OF PARTIES

ANCHETA vs. ANCHETA, 2004

FACTS:

Petitioner Marietta Ancheta filed a petition with the RTC

Makati, against the respondent Rodolfo Ancheta for the

dissolution of their conjugal partnership and judicial

separation of property with a plea for support and support

pendente lite. The parties executed a Compromise

Agreement where some of the conjugal properties were

adjudicated to the petitioner and her 8 children.

The court rendered judgment based on the said compromise

agreement. Conformably thereto, the respondent vacated, on

June 1, 1994, the resort Munting Paraiso and all the buildings

and improvements thereon. The petitioner, with the

knowledge of the respondent, thenceforth resided in the said

property.

In the meantime, the respondent intended to marry again.

On June 5, 1995, he filed a petition with the RTC Cavite, for

the declaration of nullity of his marriage with the petitioner

on the ground of psychological incapacity. Although the

respondent knew that the petitioner was already residing at

the resort Munting Paraiso in Bancal, Carmona, Cavite , he,

nevertheless, alleged in his petition that the petitioner was

residing at No. 72 CRM Avenue corner CRM Corazon, BF

Homes, Almanza, Las Pias, Metro Manila, "where she may

be served with summons." The clerk of court issued summons

to the petitioner at the address stated in the petition. Thesheriff served the summons and a copy of the petition by

substituted service on June 6, 1995 on the petitioners son,

Venancio Mariano B. Ancheta III, at his residence in Bancal,

Carmona, Cavite.

On June 21, 1995, the Sheriff submitted a Return of Service to

the court stating that the summons and a copy of the petition

were served on the petitioner through her son Venancio

Mariano B. Ancheta III on June 6, 1995.

The petitioner failed to file an answer to the petition.

Subsequently, the trial court granted the motion and

declared the petitioner in default and issued an Order

granting the petition and declaring the marriage of the

parties void ab initio.

Petitioner filed a verified petition against the respondent with

the CA under Rule 47 of the Rules of Court, as amended, for

the annulment of the order of the RTC of Cavite. She alleged,

inter alia, that the respondent committed gross

misrepresentations by making it appear in his petition that

she was a resident of No. 72 CRM Avenue cor. CRM Corazon,

BF Homes, Almanza, Las Pias, Metro Manila, when in truth

and in fact, the respondent knew very well that she was

residing at Munting Paraiso, Bancal, Carmona, Cavite

According to the petitioner, the respondent did so to deprive

her of her right to be heard in the said case, and ultimately

secure a favorable judgment without any opposition thereto.

Thus, according to the petitioner, the order of the trial courtin favor of the respondent was null and void (1) for lack of

jurisdiction over her person; and (2) due to the extrinsic fraud

perpetrated by the respondent.

ISSUE:

WHETHER OR NOT the RTC had jurisdiction over the person

of the petitioner.

HELD:

NO. The CA failed to take note from the material allegationsof the petition, that the petition was based not only on

extrinsic fraud but also on lack of jurisdiction over the person

of the petitioner, on her claim that the summons and the

copy of the complaint were not served on her. While the

original petition and amended petition did not state a cause

of action for the nullification of the assailed order on the

ground of extrinsic fraud, it was ruled however, that it states

a sufficient cause of action for the nullification of the assailed

order on the ground of lack of jurisdiction of the RTC over

the person of the petitioner, notwithstanding the absence o

any allegation therein that the ordinary remedy of new triaor reconsideration, or appeal are no longer available through

no fault of the petitioner.

In a case where a petition for the annulment of a judgment or

final order of the RTC filed under Rule 47 of the Rules of

Court is grounded on lack of jurisdiction over the person o

the defendant/respondent or over the nature or subject of

the action, the petitioner need not allege in the petition that

the ordinary remedy of new trial or reconsideration of the

final order or judgment or appeal therefrom are no longer

available through no fault of her own. This is so because ajudgment rendered or final order issued by the RTC without

jurisdiction is null and void and may be assailed any time

either collaterally or in a direct action or by resisting such

judgment or final order in any action or proceeding

whenever it is invoked,unless barred by laches


7/36

RATIO:

Jurisdiction is acquired by a trial court over the person of the

defendant either by his voluntary appearance in court and his

submission to its authority or by service of summons. The

service of summons and the complaint on the defendant is to

inform him that a case has been filed against him and, thus,

enable him to defend himself. He is, thus, put on guard as to

the demands of the plaintiff or the petitioner. Without suchservice in the absence of a valid waiver renders the judgment

of the court null and void.Jurisdiction cannot be acquired by

the court on the person of the defendant even if he knows of

the case against him unless he is validly served with

summons.

Summons and complaint may be served on the defendant

either by handing a copy thereof to him in person, or, if he

refuses to receive and sign for it, by tendering it to her.

However, if there is impossibility of prompt service of the

summons personally on the defendant despite diligent effortsto find him, service of the summons may be effected by

substituted service as provided in Section 7, Rule 14 of the

Rules of Court.

Thus, it is only when a defendant cannot be served personally

within a reasonable time that substituted service may be

made by stating the efforts made to find him and personally

serve on him the summons and complaint and the fact that

such effort failed.30

This statement should be made in the

proof of service to be accomplished and filed in court by the

sheriff. This is necessary because substituted service is a

derogation of the usual method of service. It has been held

that substituted service of summons is a method

extraordinary in character; hence, may be used only as

prescribed and in the circumstances categorized by statutes.


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JURISDICTION OF SC, CA, RTC, MTC

BARANGAY SAN ROQUE vs. HEIRS OF PASTOR, 2000

FACTS:

Petitioner filed before the MTC of Talisay, Cebu a Complaint

to expropriate a property of the respondents. The MTC

dismissed the Complaint on the ground of lack of jurisdiction.

It reasoned that "[e]minent domain is an exercise of the

power to take private property for public use after payment

of just compensation. In an action for eminent domain,

therefore, the principal cause of action is the exercise of such

power or right. The fact that the action also involves real

property is merely incidental. An action for eminent domain

is therefore within the exclusive original jurisdiction of the

Regional Trial Court and not with this Court."

The RTC also dismissed the Complaint when filed before it,

holding that an action for eminent domain affected title to

real property; hence, the value of the property to beexpropriated would determine whether the case should be

filed before the MTC or the RTC. Concluding that the action

should have been filed before the MTC since the value of the

subject property was less than P20,000.

ISSUE:

Which court, MTC or RTC, has jurisdiction over cases for

eminent domain or expropriation where the assessed value

of the subject property is below P20,000.00?

HELD:

RTC. In determining whether an action is one the subject

matter of which is not capable of pecuniary estimation, the

Supreme Court has adopted the criterion of first ascertaining

the nature of the principal action or remedy sought.

If it is primarily for the recovery of a sum of money, the claim

is considered capable of pecuniary estimation, and whether

jurisdiction is in the municipal courts or in the courts of first

instance would depend on the amount of the claim.

However, where the basic issue is something other than the

right to recover a sum of money, or where the money claim is

purely incidental to, or a consequence of, the principal relief

sought, like in suits to have the defendant perform his part of

the contract (specific performance) and in actions for

support, or for annulment of a judgment or to foreclose a

mortgage, the SC has considered such actions as cases where

the subject of the litigation may not be estimated in terms of

money, and are cognizable exclusively by courts of first

instance. The rationale of the rule is plainly that the second

class cases, besides the determination of damages, demand

an inquiry into other factors which the law has deemed to be

more within the competence of courts of first instance, which

were the lowest courts of record at the time that the first

organic laws of the Judiciary were enacted allocating

jurisdiction.

In the present case, an expropriation suit does not involve the

recovery of a sum of money. Rather, it deals with the exerciseby the government of its authority and right to take private

property for public use.

RATIO:

An expropriation suit is incapable of pecuniary estimation

Accordingly, it falls within the jurisdiction of the regional tria

courts, regardless of the value of the subject property.


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JURISDICTION OF SC, CA, RTC, MTC

INIEGO vs. PURGANAN, 2006

FACTS:

Private respondent Fokker Santos filed a complaint for quasi-

delict and damages against Jimmy T. Pinion, the driver of a

truck involved in a traffic accident, and against petitioner

Artemio Iniego, as owner of the said truck and employer of

Pinion. The complaint stemmed from a vehicular accident

that happened when a freight truck allegedly being driven by

Pinion hit private respondents jitney(?) *sic (jeepney)+ which

private respondent was driving at the time of the accident.

Petitioner filed a Motion to Admit and a Motion to Dismiss

the complaint on the ground, among other things, that the

RTC has no jurisdiction over the cause of action of the case.

Petitioner claims that actions for damages based on quasi-

delict are actions that are capable of pecuniary estimation;hence, the jurisdiction in such cases falls upon either the

municipal courts (the Municipal Trial Courts, Metropolitan

Trial Courts, Municipal Trial Courts In Cities, And Municipal

Circuit Trial Courts), or the Regional Trial Courts, depending

on the value of the damages claimed.

ISSUE:

WON actions for damages based on quasi-delicts are actions

that are capable of pecuniary estimation and as such, they fall

within the jurisdiction of the RTC or the municipal courts.

HELD:

YES. Actions for damages based on quasi-delicts are primarily

and effectively actions for the recovery of a sum of money for

the damages suffered because of the defendants alleged

tortious acts, and are therefore capable of pecuniary

estimation.

The amount of damages claimed is within the jurisdiction of

the RTC, since it is the claim for all kinds of damages that is

the basis of determining the jurisdiction of courts, whether

the claims for damages arise from the same or from different

causes of action.

Whether or not the different claims for damages are based

on a single cause of action or different causes of action, it is

the total amount thereof which shall govern. Jurisdiction in

the case at bar remains with the RTC, considering that the

total amount claimed, inclusive of the moral and exemplary

damages claimed, is P490,000.00.

In sum, actions for damages based on quasi-delicts are

actions that are capable of pecuniary estimation. As such

they fall within the jurisdiction of either the RTC or the

municipal courts, depending on the amount of damages

claimed.

RATIO:

B.P. Blg. 129, as amended by Republic Act No. 7691, that

what must be determined to be capable or incapable of

pecuniary estimation is not the cause of action, but the

subject matter of the action. A cause of action is "the delict

or wrongful act or omission committed by the defendant in

violation of the primary rights of the plaintiff." On the other

hand, the "subject matter of the action" is "the physica

facts, the thing real or personal, the money, lands, chattels

and the like, in relation to which the suit is prosecuted, and

not the delict or wrong committed by the defendant."

In determining whether an action is one the subject matter of

which is not capable of pecuniary estimation the Supreme

Court has adopted the criterion of first ascertaining the

nature of the principal action or remedy sought. If it is

primarily for the recovery of a sum of money, the claim is

considered capable of pecuniary estimation, and whethe

jurisdiction is in the municipal courts or in the courts of first

instance [now Regional Trial Courts] would depend on the

amount of the claim. However, where the basic issue is

something other than the right to recover a sum of money,

where the money claim is purely incidental to, or a

consequence of, the principal relief sought like suits to have

the defendant perform his part of the contract (specific

performance) and in actions for support, or for annulment of

a judgment or to foreclose a mortgage, this court has

considered such actions as cases where the subject of the

litigation may not be estimated in terms of money, and are

cognizable exclusively by courts of first instance [now

Regional Trial Courts].


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11/36

RULE 1, Sec. 5: COMMENCEMENT OF ACTIONS; DOCKET FEES

MANCHESTER DEVELOPMENT CORPORATION vs. CA, 1987

FACTS:

Petitioners in support of their contention that the filing fee

must be assessed on the basis of the amended complaint

contend that the Court of Appeals erred in that the filing fee

should be levied by considering the amount of damages

sought in the original complaint.

In the present case, at issue is the basis of the assessment of

the docket fee.

Based from the allegations of the complaint as well as the

designation thereof, the case at bar is both an action for

damages and specific performance. Although the amount of

damages sought is not stated in the prayer of the complaint,

it is spelled out in the body of the compliant. It is argued that

this should be the basis of assessment of the filing fee.

Meanwhile plaintiff through another counsel with leave of

court filed an amended complaint for the inclusion of a co-

plaintiff and eliminating any mention of the amount of

damages in the body of the complaint. The prayer in the

original complaint was maintained.

After the Court issued an order for the re- assessment of the

docket fee, the trial court directed plaintiffs to rectify the

amended complaint by stating the amounts which they are

asking for. It was only then that plaintiffs specified the

amount of damages in the body of the complaint. Still no

amount of damages were specified in the prayer. Said

amended complaint was admitted.

ISSUE:

Whether or not docket fee should be assessed based on the

amount of damages sought in the original complaint.

HELD:

YES. The basis of assessment of the docket fee should be the

amount of damages sought in the original complaint and not

in the amended complaint.

In the present case, the designation and the prayer show

clearly that it is an action for damages and specific

performance. The docketing fee should be assessed by

considering the amount of damages as alleged in the original

complaint.

The rule is well-settled "that a case is deemed filed only upon

payment of the docket fee regardless of the actual date of

filing in court. Thus, in the present case the trial court did not

acquire jurisdiction over the case by the payment of only the

docket fee for specific performance (without mention o

damages soughtwhich is also a basis for assessment of the

docket fee). Neither can the amendment of the complaint

thereby vest jurisdiction upon the Court. Consequently, the

order admitting the amended complaint and all subsequent

proceedings and actions taken by the trial court are null and

void.

RATIO:

The Court acquires jurisdiction over any case only upon the

payment of the prescribed docket fee. An amendment of the

complaint or similar pleading will not thereby vest jurisdiction

in the Court, much less the payment of the docket fee based

on the amounts sought in the amended pleading.


12/36

RULE 1, Sec. 5: Commencement of Actions; Docket Fees

PROTON PILIPINAS CORPORATION, AUTOMOTIVE

PHILIPPINES, ASEA ONE CORPORATION and AUTOCORP, vs.

BANQUE NATIONALE DE PARIS, 2005

FACTS:

Petitioner Proton availed of the credit facilities of herein

respondent, Banque Nationale de Paris (BNP). To guarantee

the payment of its obligation, its co-petitioners Automotive,

Asea and Autocorp executed a corporate guarantee to the

extent of US$2,000,000.00. BNP and Proton subsequently

entered into three trust receipt agreements.

Under the terms of the trust receipt agreements, Proton

would receive imported passenger motor vehicles and hold

them in trust for BNP. Proton would be free to sell the

vehicles subject to the condition that it would deliver the

proceeds of the sale to BNP, to be applied to its obligations to

it. In case the vehicles are not sold, Proton would return themto BNP, together with all the accompanying documents of

title.

Allegedly, Proton failed to deliver the proceeds of the sale

and return the unsold motor vehicles.

Pursuant to the corporate guarantee, BNP demanded from

Automotive, Asea and Autocorp the payment of the amount

representing Proton's total outstanding obligations. These

guarantors refused to pay, however. Hence, BNP filed on

before the Makati RTC a complaint against petitioners praying

that they be ordered to pay (1) US$1,544,984.40 plus accrued

interest and other related charges thereon subsequent to

August 15, 1998 until fully paid and (2) an amount equivalent

to 5% of all sums due from petitioners as attorney's fees.

The Makati RTC Clerk of Court assessed the docket fees which

BNP paid at P352,116.30.

To the complaint, the defendants-herein petitioners filed on a

Motion to Dismiss on the ground that BNP failed to pay the

correct docket fees to thus prevent the trial court from

acquiring jurisdiction over the case. As additional ground,

petitioners raised prematurity of the complaint, BNP not

having priorly sent any demand letter.

Citing Administrative Circular No. 11-94, petitioners argue

that BNP failed to pay the correct docket fees as the said

circular provides that in the assessment thereof, interest

claimed should be included. There being an underpayment of

the docket fees, petitioners conclude, the trial court did not

acquire jurisdiction over the case.

ISSUE:

Whether or not the clerk of court was correct in its

assessment of the docket fees.

HELD:

NO. The clerk of court should thus have assessed the filing fee

by taking into consideration "the total sum claimed, inclusive

of interest, damages of whatever kind, attorney's fees

litigation expenses, and costs, or the stated value of the

property in litigation.

Respecting the Court of Appeals' conclusion that the clerk of

court did not err when he applied the exchange rate of US $1

= P43.00 "[i]n the absence of any office guide of the rate of

exchange which said court functionary was duty bound to

follow,[hence,] the rate he applied is presumptively correct,"

the same does not lie. The presumption of regularity of the

clerk of court's application of the exchange rate is not

conclusive. It is disputable. As such, the presumption may beoverturned by the requisite rebutting evidence. In the case at

bar, petitioners have adequately proven with documentary

evidence that the exchange rate when the complaint was

filed on September 7, 1998 was US $1 = P43.21.

In fine, the docket fees paid by respondent were insufficient.

With respect to petitioner's argument that the trial court did

not acquire jurisdiction over the case in light of the

insufficient docket fees, the same does not lie.

In the case at bar, respondent merely relied on the

assessment made by the clerk of court which turned out to

be incorrect. Under the circumstances, the clerk of court has

the responsibility of reassessing what respondent must pay

within the prescriptive period, failing which the complaint

merits dismissal.

RATIO:

Plainly, while the payment of the prescribed docket fee is a

jurisdictional requirement, even its non-payment at the time

of filing does not automatically cause the dismissal of thecase, as long as the fee is paid within the applicable

prescriptive or reglementary period, more so when the party

involved demonstrates a willingness to abide by the rules

prescribing such payment. Thus, when insufficient filing fees

were initially paid by the plaintiffs and there was no intention

to defraud the government, the Manchester rule does not

apply.


13/36

RULE 1, Sec. 6: CONSTRUCTION

REP. of the PHILIPPINES vs. CA, 2003

FACTS:

In line with the centennial celebration of Philippine

Independence on June 12, 1998, the government embarked

on several commemorative Centennial Freedom Trail (CFT)

projects. One of these projects was the construction of the

Tejeros Convention Center and the founding site of the

Philippine Army on the property of respondent Fe Manuel.

The said property was declared by the National Historical

Institute (NHI) as a historical landmark.

To carry out the Tejeros Convention Project, the government,

through the National Centennial Commission (NCC), filed a

complaint for expropriation against respondents Fe Manuel

and Metrobank. The land was mortgaged by Fe Manuel to

Metrobank and was extrajudicially foreclosed by the latter.

Respondent Fe Manuel interposed no objection to theexpropriation as long as just compensation was paid.

The trial court ruled that plaintiff had no cause of action to

file the expropriation case and dismissed the case.

Petitioner filed a petition for certiorari before the CA, alleging

grave abuse of discretion on the part of the Judge for

summarily dismissing its complaint and denying its motion for

reconsideration.

The CA dismissed the petition in its resolution for having been

filed out of time based on . It also denied petitioners motion

for reconsideration.

Aggrieved, petitioner filed the instant petition for review,

arguing that the CA should not have applied to its case the

amendment made to Section 4, Rule 65, as amended by Bar

Matter No. 803 (thus, based on this new rule, the petition for

certiorari was filed 14 days late). Procedural rules, petitioner

argued, should not be given retroactive effect where their

application would result in injustice. Petitioner invoked

Section 6, Rule 1of the 1997 Rules of Civil Procedure which

provides that liberality should be observed in construing the

Rules of Court in order to promote its objective of securing a

just, speedy and inexpensive disposition of every action and

proceeding.

ISSUE:

Whether or not liberal construction should be applied in the

case at bar so as to show that the petition was not filed out of

time.

HELD:

YES. The amendment under A.M. 00-2-03-SC quoted above is

procedural or remedial in character. It does not create new or

remove vested rights but only operates in furtherance of the

remedy or confirmation of rights already existing. It is settled

that procedural laws do not come within the legal conception

of a retroactive law, or the general rule against retroactive

operation of statutes. They may be given retroactive effect toactions pending and undetermined at the time of thei

passage and this will not violate any right of a person who

may feel that he is adversely affected, inasmuch as there is

no vested rights in rules of procedure.

Nevertheless, by virtue of this retroactive application of A.M

00-2-03-SC, it was held that the instant petition for certiorar

was filed on time. In fact, there is no dispute that the petition

was filed by petitioner on the 60th day from receipt of the

order denying the motion for reconsideration. Petitioner

received the denial on October 12, 1998 and it filed thepetition for certiorari on December 11, 1998. Clearly

therefore the petition was filed on time.


14/36


MARICALUM MINING CORP., vs. NLRC, SIPALAY MINE FREE

LABOR UNION and CECILIO T. SALUDAR, 1998

FACTS:

A decision was rendered by the Labor Arbiter which ordered

the reinstatement of illegally dismissed equipment operator

Cecilio Saludar. The decision was not executed as all the

assets of Marinduque had been foreclosed by the PNB and

the DBP. These assets were subsequently acquired by

petitioner Maricalum while Marinduque had ceased its

operations.

8 years later, Saludar moved for the issuance of a writ of

execution against Maricalum. The Executive Labor Arbiter

granted the motion. Maricalum appealed to the NLRC

contending that it is a different entity from Marinduque

which was the only party to the original action.

The NLRC held that since more than 5 years have elapsed the

judgment could be enforced against Maricalum, not by mere

motion but by an action for revival of judgment.

Saludar filed an Action for Revival of Judgment before the

NLRC Regional Arbitration Branch (Bacolod City). Maricalum

again moved to dismiss alleging that: (1) the complaint was

not accompanied by a certificate of non-forum shopping; (2)

that the action was cognizable only by regular courts; and (3)

that it was not a party to the original case.Saludar filed an Opposition to the Motion to Dismiss,

attaching therewith an Affidavit of Compliance with Supreme

Court Circular 04-94 on non-forum shopping.

The Labor Arbiter denied Maricalum's Motion to Dismiss and

directed the parties to submit their position papers.

Subsequently, the Labor Arbiter ruledin favor of Saludar. He

held that the certification of non-forum shopping does not

apply to cases falling within the original and exclusive

jurisdiction of the NLRC and labor arbiters because the NLRC

is not a court but an agency performing quasi-judicial

functions. He also sustained the jurisdiction of the labor

arbiter over action to revive judgment involving illegal

dismissal.

ISSUE:

Whether or not Supreme Court Circular 04-94 on non-forum

shopping is mandatory and should apply to NLRC.

HELD:

YES. The certificate of non-forum shopping as provided by

this Court Circular 04-94 is mandatory and should accompany

pleadings filed before the NLRC.

The NLRC is a quasi-judicial agency, hence, initiatory

pleadings filed before it should be accompanied by a

certificate of non-forum-shopping.

Nevertheless, substantial compliance with the requirement of

the certificate of non-forum shopping is sufficient.

The fact that the Circular requires that it be strictly complied

with merely underscores its mandatory nature in that it

cannot be dispensed with or its requirements altogether

disregarded, but it does not thereby interdict substantia

compliance with its provisions under justifiable

circumstances.

In the case at bar, it is undisputed that respondent Saludarfiled an affidavit of compliance with SC Circular 04-94 on non-

forum shopping albeit a little delayed. This little delay should

not defeat the action for revival of judgment which

undeniably was filed within the ten (10) year prescriptive

period. Also, the circumstance that respondent had

painstakingly tried to enforce the favorable judgment he

obtained against petitioner for almost ten (10) years but to

no avail, should deter us from strictly construing the

provisions of the Circular. A liberal interpretation of the

Circular would be more in keeping with the objectives o

procedural rules which is to "secure a just, speedy andinexpensive disposition of every action and proceeding."


15/36


COMPOSITE ENTERPRISES, INC., vs. EMILIO M. CAPAROSO

and JOEVE QUINDIPAN, 2007

FACTS:

Petitioner is engaged in the distribution and/or supply of

confectioneries to various retail establishments within the

Philippines. Emilio Caparoso and Joeve P. Quindipan

(respondents) were employed as its deliverymen until they

were terminated on October 8, 1999.

Respondents filed a complaint for illegal dismissal against

petitioner with the NLRC. Petitioner denied that respondents

were illegally dismissed, alleging that they were employed on

a month-to-month basis and that they were terminated as a

result of the expiration of their contracts of employment.

The Labor Arbiter rendered a Decision in favor of the

respondents.

Petitioner filed with the NLRC a Motion to Resolve its motion

to be allowed to pay separation pay in lieu of reinstatement.

Meanwhile, in the NLRC set aside the Decision of the Labor

Arbiter, holding that there was no illegal dismissal since

respondents' contracts of employment were for a fixed

period.

The NLRC affirmed the Labor Arbiter's Order holding that the

reversal on appeal of the Labor Arbiter's Decision did not

affect respondents' entitlement to accrued salaries pendingappeal, pursuant to Article 223 of the Labor Code; that only

respondent's entitlement to backwages was forfeited; and

that there was no merit to petitioner's insistence on paying

separation pay to respondents, since that there was no

strong basis for petitioner's contention that reinstatement

was physically impossible due to petitioner's implementation

of a retrenchment program.

Petitioner filed a Motion for Reconsideration but it was

denied by the NLRC in a Resolution.

Within the 60-day reglementary period from date of receipt

of the NLRC Resolution denying the motion for

reconsideration, petitioner, instead of filing a motion for

reconsideration with the CA's Special Sixteenth Division, filed

a second Petition for Certiorari.

Petitioner filed a Motion for Reconsideration, attaching the

affidavit of service which was omitted in the petition.

The CA denied petitioner's Motion for Reconsideration

holding that resort to the second petition for certiorari was

no longer available due to res judicata, since the dismissa

order in the first petition for certiorari had already become

final and executory; that minute resolutions of the court

denying due course to petitions, or dismissing cases

summarily for failure to comply with the formal or substantia

requirements laid down therefor by law, were actually

dispositions on the merits constituting res judicata.

Petitioner contends that the dismissal of the first petition was

not a judgment on the merits as to constitute res judicata

and that the dismissal of the first petition was not a dismissa

with prejudice as provided by Section 5, Rule 7 of the Revised

Rules of Court.

Respondents, on the other hand, contend that petitioner's

procedural lapses in filing the first and second special civi

actions for certiorariare irreversible and there is nothing on

record to show that the petitioner at least attempted orsubsequently made a substantial compliance with the forma

or substantial requirements laid down by law; and that

petitioner's gross and utter disregard of the rules cannot

justly be rationalized by harking on the policy of libera

construction.

ISSUE:

Whether or not liberal construction should be applied in favor

of petitioner.

HELD:

YES. Contrary to the CA's ruling, failure to comply with the

non-forum shopping requirements in Section 5, Rule 7 of the

Revised Rules of Court, does not automatically warrant the

dismissal of the case with prejudice.

The Rule clearly states that the dismissal is without prejudice

unless otherwise stated by the court; and the dismissal may

be deemed with prejudice only upon proper motion and

hearing. Since the dismissal was without prejudice, it did not

bar petitioner from refiling the petition for so long as it was

made within the 60-day reglementary period for filing the

petition for certiorari.

Nevertheless, ultimately, the SC held that the NLRC did not

commit any grave abuse of discretion in issuing the Order

affirming the Order of the Labor Arbiter.


16/36

RULE 2, Sec. 1: ORDINARY CIVIL ACTION, BASIS OF.

HEIRS OF SUSANA DE GUZMAN TUAZON, vs. CA and and Ma.

Luisa VICTORIO, Aberto GUANIO, Jaime VICTORIO, Ines

MOLINA, Erlinda GREGORIO, Visitacion GERVACIO, and

Froilan GERVACIO,2004

FACTS:

Branch 71 of the RTC of Antipolo, Rizal, issued an Order in a

LRC Case granting the heirs of Susana de Guzman Tuazons

(Heirs of Tuazon) prayer for the issuance of a second owners

duplicate copy of an Original Certificate of Title (OCT) from

the Registry of Deeds of Rizal, in lieu of the lost copy.

The private respondents (Victorio et. al.,) filed with Branch 74

of the same court an action for Quieting of Title and

Nullification and Cancellation of Title, which was docketed

as a Civil Case, praying in the main that an order be issued

directing the Register of Deeds of Rizal to cancel the owners

duplicate copy of the OCT it has issued pursuant to the orderof the RTC of Antipolo, Rizal, Branch 71, in the LRC Case.

In their Answer, the Heirs of Tuazon averred inter alia that

the Victorio et. al., had no cause of action against them; that

Branch 74 had no jurisdiction to annul and/or reverse an

order of a co-equal court; and that the OCT, on file with the

Registry of Deeds of Pasig, Rizal, is subsisting, otherwise,

Branch 71 would not have ordered the issuance of a new

duplicate OCT in lieu of that which was irretrievably lost.

ISSUE:

Whether or not the cause of action of Victorio et. al., petition

has been properly alleged.

HELD:

YES. The averments of Victorio et. al., petition readily shows

that indeed, as captioned, it is one for quieting of title and

nullification and cancellation of title. Thus, they assert

therein that the issuance to the Heirs of Tuazon of a new

owners duplicate copy of the OCT, which was procured by

fraudulent representation, casts a cloud on the titles of theprivate respondents and, therefore, should be ordered

cancelled.

The Heirs of Tuazon, asseverate that their petition in LRC

Case involved the issuance, in lieu of the lost one, of the

owners copy of OCT which is governed by Section 109 of

Presidential Decree No. 1529, otherwise, known as the

Property Registration Decree. Hence, the Court of Appeals

erred when it found that the LRC Case was a petition for

reconstitution which can be validly made only in case it is the

original copy of the certificate of title with the Register of

Deeds which is lost or destroyed, and the cause of action o

which is based on Republic Act No. 26. The argument

however, is non sequitur. Regardless of whether petitioners

cause of action in LRC Case is based on Section 109 of P.D.

No. 1529 or under Rep. Act No. 26, the same has no bearing

on the petitioners cause in this case . Precisely, in both

species of reconstitution under Section 109 of P.D. No. 1529

and R.A. No. 26, the nature of the action denotes a

restoration of the instrument which is supposed to have been

lost or destroyed in its original form and condition. The

purpose of the action is merely to have the same

reproduced, after proper proceedings, in the same form

they were when the loss or destruction occurred, and does

not pass upon the ownership of the land covered by the lost

or destroyed title.

It bears stressing at this point that ownership should not be

confused with a certificate of title. Registering land under the

Torrens System does not create or vest title becauseregistration is not a mode of acquiring ownership. A

certificate of title is merely an evidence of ownership or title

over the particular property described therein. Corollarily

any question involving the issue of ownership must be

threshed out in a separate suit, which is exactly what the

private respondents did when they filed the Civil Case before

Branch 74. The trial court will then conduct a full-blown tria

wherein the parties will present their respective evidence on

the issue of ownership of the subject properties to enable the

court to resolve the said issue. Branch 74, therefore

committed no reversible error when it denied the petitionersmotion to dismiss the private respondents petition in the

Civil Case.

RATIO:

It is axiomatic that the allegations in the complaint determine

the nature of the action, and consequently, the jurisdiction o

the courts. This is because the complaint must contain a

concise statement of the ultimate facts constituting the

plaintiffs cause of action and specify the relief sought.


17/36

RULE 2, Sec. 1

SpousesPATRICK JOSE and RAFAELA JOSE, vs. Spouses HELEN

BOYONand ROMEO BOYON, 2003

FACTS:

Patrick and Rafaela Jose lodged a complaint for specific

performance against Helen and Romeo Boyon to compel

them to facilitate the transfer of ownership of a parcel of land

subject of a controverted sale.

The action was lodged before the RTC of Muntinlupa. The

judge, through the acting Branch Clerk of Court of the RTC of

Muntinlupa City, issued summons to the Spouses Boyon. As

per return of the summons, substituted servicewas resorted

to by the process server allegedly because efforts to serve the

summons personally to the Spouses Boyon failed. The

Spouses Jose filed before the trial court an Ex-parte Motion

for Leave of Court to Effect Summons by Publication. This was

granted, and subsequently, the Spouses Boyon was declaredin default.

The Spouses Boyon then questioned the jurisdiction of the

trial court (that the RTC never acquired jurisdiction over

respondents because of the invalid service of summons upon

them).

It is the contention of the spouses Jose that although the case

filed before the trial court was denominated as an action for

specific performance, it was actually an action quasi in rem,

because it involved a piece of real property located in the

Philippines. They further argue that in actions quasi in rem

involving ownership of a parcel of land, it is sufficient that the

trial court acquire jurisdiction over the res. Thus, the

summons by publication, which they effected subsequent to

the substituted service of summons, was allegedly sufficient.

On the other hand, the spouses Boyon maintain that the

proceedings in the trial court were null and void because of

the invalid and defective service of summons. According to

them, the Return of Summons issued by the process server of

the RTC failed to state that he had exerted earnest efforts to

effect the service of summons.

As to the summons by publication subsequently effected by

the Spouses Jose, the spouses Boyon argue that the case filed

before the trial court was an action for specific performance

and, therefore, an action in personam. As such, the summons

by publication was insufficient to enable the trial court to

acquire jurisdiction over the persons of respondents.

ISSUE:

Whether or not an action for specific performance is an

action in personam and not an action quasi-in rem.

HELD:

YES. An action for specific performance is an action in

personam.

In the instant case, what was filed before the trial court was

an action for specific performance directed against the

spouses Boyon. While the suit incidentally involved a piece of

land, the ownership or possession thereof was not put in

issue, since they did not assert any interest or right over it. It

bears stressing that since service of summons, especially fo

actions in personam, is essential for the acquisition of

jurisdiction over the person of the defendant, the resort to a

substituted service must be duly justified. Failure to do so

would invalidate all subsequent proceedings on jurisdictiona

grounds.

Having failed to serve the summons on the spouses Boyon

properly, the RTC did not validly acquire jurisdiction ove

their persons. Consequently, due process demands that al

the proceedings conducted subsequent thereto should be

deemed null and void.

RATIO:

In general, substituted service can be availed of only after a

clear showing that personal service of summons was not

legally possible. Also, service by publication is applicable in

actions in remand quasi in rem, but not in personal suits such

as the present one which is for specific performance.

It must be noted that extraterritorial service of summonsor

summons by publication applies only when the action is in

rem or quasi in rem.

ACTION IN REM ACTION QUASI-IN REM

It is an action against the

thing itself instead of

against the defendants

person.

An individual is named as

defendant, and the purpose

is to subject that individuals

interest in a piece of

property to the obligation or

loan burdening it.


18/36

RULE 2, Sec. 1: ORDINARY CIVIL ACTIONS, BASIS OF.

MA. TERESA CHAVES BIACO, vs. PHILIPPINE COUNTRYSIDE

RURAL BANK, 2007

FACTS:

Ernesto Biaco is the husband of Ma. Teresa Chaves Biaco.

While employed in the Philippine Countryside Rural Bank

(PCRB) as branch manager, Ernesto obtained several loans

from the respondent bank evidenced promissory notes.

As security for the payment of the said loans, Ernesto

executed a real estate mortgage in favor of the bank covering

the parcel of land described in an OCT. The real estate

mortgages bore the signatures of the spouses Biaco.

When Ernesto failed to settle the loans on its due date, PCRB

sent him a written demand which however, proved futile.

PCRB filed a complaint for foreclosure of mortgage against

the spouses Ernesto and Teresa Biaco before the RTC of

Misamis Oriental. Summons was served to the spouses Biaco

through Ernesto at his office (Export and Industry Bank)

located at Cagayan de Oro City.

The RTC rendered judgment ordering the spouses Biaco to

pay PCRB and in case of non-payment within the period, the

Sheriff of is ordered to sell at public auction the mortgaged

Lot.

The sheriff personally served the judgment to Ernesto Biaco

at his office at Export and Industry Bank. The spouses Biacodid not appeal from the adverse decision of the trial court.

Subsequently, Ma. Theresa Biaco sought the annulment of

the RTC decision contending that extrinsic fraud prevented

her from participating in the judicial foreclosure proceedings.

Inter alia, she asserted that the trial court failed to acquire

jurisdiction because summons were served on her through

her husband without any explanation as to why personal

service could not be made. Further, she contended that even

if the action is quasi in rem, personal service of summons is

essential in order to afford her due process. The substitutedservice made by the sheriff at her husbands office cannot be

deemed proper service absent any explanation that efforts

had been made to personally serve summons upon her but

that such efforts failed. Finally, she argues that the deficiency

judgment is a personal judgment which should be deemed

void for lack of jurisdiction over her person.

ISSUE:

Whether or not the trial court acquired jurisdiction based on

the nature of the action (whether the action is in personam

in rem, or quasi in rem).

HELD:

YES. In this case, the judicial foreclosure proceeding instituted

by PCRB undoubtedly vested the trial court with jurisdiction

over the res. A judicial foreclosure proceeding is an action

quasi in rem. As such, jurisdiction over the person of

petitioner is not required, it being sufficient that the tria

court is vested with jurisdiction over the subject matter.

Nevertheless, the trial court went beyond its jurisdiction over

the res and rendered a personal judgment against the

spouses Biaco which cannot be countenanced.

In this case, while the trial court acquired jurisdiction over the

res, its jurisdiction is limited to a rendition of judgment on theres. It cannot extend its jurisdiction beyond the res and issue

a judgment enforcing Ma. Theresa Biacos personal liability

In doing so without first having acquired jurisdiction over the

person of Ma. Theresa Biaco, as it did, the trial court violated

her constitutional right to due process, warranting the

annulment of the judgment rendered in the case.

RATIO:

In an action in personam, jurisdiction over the person of the

defendant is necessary for the court to validly try and decide

the case. In a proceeding in rem or quasi in rem, jurisdiction

over the person of the defendant is not a prerequisite to

confer jurisdiction on the court provided that the court

acquires jurisdiction over the res. Jurisdiction over the resis

acquired either (1)by the seizure of the property under lega

process, whereby it is brought into actual custody of the law;

or (2) as a result of the institution of legal proceedings, in

which the power of the court is recognized and made

effective.

In a proceeding in rem or quasi in rem, the only relief that

may be granted by the court against a defendant over whose

person it has not acquired jurisdiction either by valid service

of summons or by voluntary submission to its jurisdiction, is

limited to the res.


19/36

RULE 2, Sec. 2: CAUSE OF ACTION, DEFINED

Spouses JIMENEZ vs. Juan Jose JORDANA, 2004

FACTS:

In the present case, the cause of action of Jordana against the

spouses Jimenez was premised on the material averments in

the Complaint as follows:

1. Jordana offered to buy, and Bunye (the owner of a parcel

of residential land located in Ayala Alabang) agreed to sell to

him, the property for P12,300,000.

2. As agreed, Jordana tendered to her the sum of P500,000,

but she refused to accept it.

3. Bunye informed him by letter, that she could no longer

accept the offer of P12,300,000, but that she was willing to

sell it for P16,000,000; thus, she was declining to receive the

P500,000 earnest money he had sent.

4. There was a perfected contract of sale, which Bunye

breached by her unreasonable refusal to complete the sale.

5. She unreasonably refused to heed his demand for

compliance with the contract, which she "should be

compelled to specifically perform."

6. Bunye sold the same property to the spouses Jimenez,

pursuant to which TCT No. 171333 was cancelled and TCT No.

200308 issued to the latter.

7. Bunye and the Jimenezes should be compelled to execute a

contract or deed of sale over the subject property in

Jordanas favor x x x which complies with the requirements

of Article 1358 of the Civil Code" that a contract involving real

rights over immovable property must appear in a public

document.

8. As a result of Bunye's and the spouses' "unreasonable

breach and circumvention of the contract," Jordana suffered

actual damages.

9. Having acted in a "wanton, fraudulent, reckless,oppressive, or malevolent manner," Bunye and the spouses

Jimenez should be ordered to pay exemplary damages.

10. Their acts or omissions have compelled Jordana to

litigate, for which they must be ordered to reimburse

attorney's fees and litigation expenses.

ISSUE:

Whether or not Jordana has alleged a sufficient cause o

action for the recovery of property against the Spouses

Jimenez.

HELD:

YES.There are at least three reasons for this conclusion.

First, it is readily apparent that Jordana has stated a

demandable right over the subject property.

Second, Jordana has the right to compel petitioners to

respect, not violate, his rights as a prior buyer.

Third, despite the discrepancies and the linguistic lapses in

the material averments of the Supplement, the acts and/or

the omissions that violated Jordanas rights are fairly

discernible from the records and the pleadings of the Spouses

Jimenez. They more than compensate for such shortcomings.

Taken together, the allegations in the Complaint, the

pleadings of the Spouses Jimenez and the record of the case

sufficiently support a cause of action for recovery of property

against them. It is generally accepted that when property

belonging to a person is unlawfully or fraudulently taken by

another, the former has the right of action against the latter

for the recovery of the property.

RATIO:

Cause of actionis defined as "the act or omission by which aparty violates a right of another." It has the following

elements:

1) The legal right of the plaintiff;2) The correlative obligation of the defendant to respect

that legal right; and

3) An act or omission of the defendant that violates suchright.

The nature of an action is determined by the materia

averments in the complaint and the character of the relief

sought, not by the defenses asserted in the answer or motion

to dismiss. Thus, the complaint must contain a concise

statement of the ultimate or essential facts constituting the

plaintiff's cause of action.

In a motion to dismiss, a defendant hypothetically admits the

truth of the material allegations of the plaintiff's complaint

This hypothetical admission extends to the relevant and

material facts pleaded in, and the inferences fairly deducible

from, the complaint.


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Hence, to determine whether the sufficiency of the facts

alleged in the complaint constitutes a cause of action, the

test is as follows: admitting the truth of the facts alleged, can

the court render a valid judgment in accordance with the

prayer?

To sustain a motion to dismiss, the movant needs to show

that the plaintiff's claim for relief does not exist at all. On the

contrary, the complaint is sufficient "if it contains sufficientnotice of the cause of action even though the allegations may

be vague or indefinite, in which event, the proper recourse

would be, not a motion to dismiss, but a motion for a bill of

particulars."

Generally, the court takes into account only the material

allegations of the complaint, without considering extraneous

facts and circumstances. In some cases, however, the court

may also consider -- in addition to the complaint -- annexes or

documents appended to it, other pleadings of the plaintiff, or

admissions in the record. It must then bear in mind that thefacts proving the existence of a cause of action do not have to

be established or alleged by the complaint and/or the other

pleadings at the outset but, under exceptional circumstances,

even during the trial on the merits of the case.


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RULE 2, Sec. 2: CAUSE OF ACTION, DEFINED

HEIRS OF JOSE G. SANTIAGO, vs. Aurea SANTIAGO, Vicente

ONG, Mark Vincent ONG, and REGISTER OF DEEDS OF

MEYCAUAYAN, BULACAN, 2009

FACTS:

This is an action for annulment of titles, injunction, damages

and restraining order.

The heirs of Jose G. Santiago, allege in their Complaint that

their father and his brother Juan G. Santiago, both deceased,

were registered co-owners of a parcel of land. Juan Santiago,

while confined at the Chinese General Hospital, Intensive

Care Unit, allegedly sold a portion of the lot, to a two (2) year

old child Mark Vincent Ong with the participation of

defendant Aurea Santiago as evidenced by a Deed of Sale

over a Portion of Land. And in support of the foregoing sale,

an alleged affidavit of [non-]tenancy was executed by Juan G.

Santiago. Both signatures of the latter in the said two (2)documents, according to heirs of Jose G. Santiago, were

spurious, forged and falsified by Aurea Santiago et. al., who

stood to benefit from it. Vicente Ong and Mark Vincent Ong,

father and son respectively, were able to secure a title over

the disputed lot by virtue of the falsified deed of sale and a

supposed Partition Agreement executed by Jose Santiago and

Juan Santiago who were long deceased before said date.

Later on, Aurea Santiago allegedly managed to obtain a title

covering the remaining portion of the lot, in the names of

both Jose and Juan Santiago diminishing thereby the share of

herein plaintiffs in the property.

ISSUE:

Whether or not the Heirs of Santiago are the real party in

interest and therefore have a cause of action to bring the

present case.

HELD:

NO. A real party in interest is the party who stands to be

benefited or injured by the judgment in the suit, or the party

entitled to the avails of the suit. A cause of action is the act or

omission by which a party violates a right of another.

In the present case, there is no dispute that Juan Santiago

owned half of the subject lot while the other half belonged to

his brother Jose. Juan Santiago merely exercised his right

when he sold a portion of his undivided half to Mark Vincent

L. Ong. Petitioners question Juans transaction even though

petitioners are neither parties to the contract nor heirs or

assigns of Juan Santiago. Juan Santiago left a probated will

leaving all his properties to his wife Aurea, to the exclusion of

the Heirs of Jose Santiago. As heirs of Jose Santiago, co-owne

of the subject property, they may only question the sale if

their right of pre-emption under the Civil Code of the

Philippines was disregarded, and they wish to exercise such

right. However, they do not seek to exercise the right o

preemption. Thus, they are not real parties in interest in the

present case.


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RULE 2, Sec.5: JOINDER OF CAUSES OF ACTION

SPOUSES DANILO and CRISTINA DECENA, vs. SPOUSES PEDRO

and VALERIA PIQUERO, 2005

FACTS:

The Spouses Decena were the owners of a parcel of land,

with a house constructed thereon, covered by a TCT.

The Spouses Decena and the Spouses Piquero, executed a

Memorandum of Agreement (MOA) in which the former sold

the property to the latter payable in 6 installments via

postdated checks. The vendees forthwith took possession of

the property.

It appears in the MOA that the Spouses Decena obliged

themselves to transfer the property to the Spouses Piquero

upon the execution of the MOA with the condition that if two

of the postdated checks would be dishonored by the drawee

bank, the latter would be obliged to reconvey the property tothe petitioners.

The Spouses Decena, then residents of Malolos, Bulacan, filed

a Complaint against the Spouses Piquero with the RTC of

Malolos, Bulacan, for the annulment of the sale/MOA,

recovery of possession and damages. They alleged therein

that, they did not transfer the property to and in the names

of the Spouses Piquero as vendees because the first two

checks drawn and issued by them in payment for the

purchase price of the property were dishonored by the

drawee bank, and were not replaced with cash despite

demands therefor.

The Spouses Piquero filed a motion to dismiss the complaint

on the ground, inter alia, of improper venue and lack of

jurisdiction over the property subject matter of the action.

The Spouses Piquero averred that the principal action of the

Spouses Decena was for the rescission of the MOA, and that

the recovery of the possession of the property is a real action

and not a personal one; hence, it should have been brought

in the RTC of Paraaque City, where the property subject

matter of the action was located, and not in the RTC of

Malolos, Bulacan, where the petitioners resided.

The Spouses Decena on the other hand insisted that their

action for damages and attorneys fees is a personal action

and not a real action; hence, it may be filed in the RTC of

Bulacan where they reside. They averred that while their

second cause of action for the recovery of the possession of

the property is a real action, the same may, nevertheless, be

joined with the rest of their causes of action for damages,

conformably with Section 5(c), Rule 2 of the Rules of Court.

ISSUE:

Whether or not Section 5, Rule 2 of the Rules of Court

invoked by the Spouses Decena is applicable in this case.

HELD:

NO. Section 5(c), Rule 2 of the Rules of Court does not apply

This is so because the Spouses Decena, as plaintiffs in the

court a quo, had only one cause of action against the

respondents, namely, the breach of the MOA upon the

latters refusal to pay the first two installments in payment of

the property as agreed upon, and turn over to them the

possession of the real property, as well as the house

constructed thereon occupied by the Spouses Piquero. The

claim for damages for reasonable compensation for the

Spouses Piqueros use and occupation of the property, in the

interim, as well as moral and exemplary damages suffered by

the Spouses Decena on account of the breach of contract of

the Spouses Piquero are merely incidental to the main cause

of action, and are not independent or separate causes of

action.

RATIO:Sec. 5.Joinder of causes of action: xxx (c):

Under the third condition, if one cause of action falls within

the jurisdiction of the Regional Trial Court and the other falls

within the jurisdiction of a Municipal Trial Court, the action

should be filed in the Regional Trial Court. If the causes o

action have different venues, they may be joined in any of the

courts of proper venue. Hence, a real action and a persona

action may be joined either in the Regional Trial Court of theplace where the real property is located or where the parties

reside.

A cause of action is to be found in the facts alleged in the

complaint and not in the prayer for relief. It is the substance

and not the form that is controlling.

A joinder of causes of action is the uniting of two or more

demands or right of action in a complaint. The question of the

joinder of causes of action involves in particular cases a

preliminary inquiry as to whether two or more causes of

action are alleged. In declaring whether more than one cause

of action is alleged, the main thrust is whether more than one

primary right or subject of controversy is present. Other tests

are whether recovery on one ground would bar recovery on

the other, whether the same evidence would support the

other different counts and whether separate actions could be

maintained for separate relief; or whether more than one

distinct primary right or subject of controversy is alleged for

enforcement or adjudication.


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RULE 2, Sec. 5: JOINDER OF CAUSES OF ACTION

ARTEMIO INIEGO,vs. The HONORABLE JUDGE GUILLERMO G.

PURGANAN and FOKKER C. SANTOS,2006

FACTS:

Fokker Santos filed a complaint (with the RTC of Manila) for

quasi-delict and damages against Jimmy T. Pinion, the driver

of a truck involved in a traffic accident, and against Artemio

Iniego, as owner of the said truck and employer of Pinion. The

complaint stemmed from a vehicular accident that happened

when a freight truck allegedly being driven by Pinion hit

private Santos jitney which he was driving at the time of the

accident.

According to Iniego, the moral and exemplary damages

claimed by the Santos in the case at bar are not direct and

proximate consequences of the alleged negligent act. He

points out that the complaint itself stated that such moral

and exemplary damages arose from the alleged refusal ofdefendants to honor the demand for damages, and therefore

there is no reasonable cause and effect between the fault or

negligence of the defendant and the claim for moral and

exemplary damages. If the claims for moral and exemplary

damages are not included in the computation for purposes of

determining jurisdiction, only the claim for actual damages in

the amount of P40,000.00 will be considered, and the MeTC

will have jurisdiction.

ISSUE:

Whether or not actions for damages based on quasi-delict,

claims for damages arising from a different cause of action

(i.e., other than the fault or negligence of the defendant)

should be included in the computation of the jurisdictional

amount.

HELD:

NO. The SC did not give credence to petitioners arguments.

The distinction he made between damages arising directly

from injuries in a quasi-delict and those arising from a refusal

to admit liability for a quasi-delict is more apparent than real,

as the damages sought by respondent originate from the

same cause of action: the quasi-delict. The fault or negligence

of the employee and the juris tantum presumption of

negligence of his employer in his selection and supervision

are the seeds of the damages claimed, without distinction.

Even assuming, for the sake of argument, that the claims for

moral and exemplary damages arose from a cause of action

other than the quasi-delict, their inclusion in the computation

of damages for jurisdictional purposes is still proper. All

claims for damages should be considered in determining the

jurisdiction of the court regardless of whether they arose

from a single cause of action or several causes of action.

Rule 2, Section 5, of the Rules of Court allows a party to

assert as many causes of action as he may have against the

opposing party. Subsection (d) of said section provides that

where the claims in all such joined causes of action are

principally for recovery of money, the aggregate amountclaimed shall be the test of jurisdiction.

Hence, whether or not the different claims for damages are

based on a single cause of action or different causes o

action, it is the total amount thereof which shall govern

Jurisdiction in the case at bar remains with the RTC

considering that the total amount claimed, inclusive of the

moral and exemplary damages claimed, is P490,000.00.

RATIO:

The amount of damages claimed is within the jurisdiction othe RTC, since it is the claim for all kinds of damages that is

the basis of determining the jurisdiction of courts, whether

the claims for damages arise from the same or from different

causes of action.

In sum, actions for damages based on quasi-delicts are

actions that are capable of pecuniary estimation. As such

they fall within the jurisdiction of either the RTC or the

municipal courts, depending on the amount of damages

claimed. In this case, the amount o

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