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LA NAVAL DRUG CORP vs CAATWEL vs CONCEPCION PROGRESSIVE ASSO INC

The present petition under Rule 45 of the Rules of Court assails the decision1 of theCourt of Appeals (CA), dated March 17, 2005 in CA-G.R. SP No. 85170, declaringpetitioners Eustacio Atwel,2 Lucia Pilpil and Manuel Melgazo estopped fromquestioning the jurisdiction of Branch 8 of the Regional Trial Court (RTC) of Tacloban

City as a special commercial court under Republic Act (RA) No. 8799.3

The facts follow.In 1948, then Assemblyman Emiliano Melgazo4 founded and organized ConcepcionProgressive Association (CPA) in Hilongos, Leyte. The organization aimed to providelivelihood to and generate income for his supporters.In 1968, after his election as CPA president, Emiliano Melgazo bought a parcel ofland in behalf of the association. The property was later on converted into a wetmarket where agricultural, livestock and other farm products were sold. It alsohoused a cockpit and an area for various forms of amusement. The incomegenerated from the property, mostly rentals from the wet market, was paid to CPA.When Emiliano Melgazo died, his son, petitioner Manuel Melgazo, succeeded him asCPA president and administrator of the property. On the other hand, petitioners

Atwel and Pilpil were elected as CPA vice-president and treasurer, respectively.In 1997, while CPA was in the process of registering as a stock corporation, its otherelected officers and members formed their own group and registered themselves inthe Securities and Exchange Commission (SEC) as officers and members ofrespondent Concepcion Progressive Association, Inc. (CPAI). Petitioners were notlisted either as officers or members of CPAI. Later, CPAI objected to petitioners'collection of rentals from the wet market vendors.In 2000, CPAI filed a case in the SEC for mandatory injunction.5 With the passage ofRA 8799, the case was transferred to Branch 24 of the Southern Leyte RTC andsubsequently, to Branch 8 of the Tacloban City RTC. Both were special commercialcourts.In the complaint, CPAI alleged that it was the owner of the property and petitioners,without authority, were collecting rentals from the wet market vendors.In their answer, petitioners refuted CPAI's claim saying that it was preposterous andimpossible for the latter to have acquired ownership over the property in 1968 whenit was only in 1997 that it was incorporated and registered with the SEC. Petitionersadded that since the property was purchased using the money of petitioner ManuelMelgazo's father (the late Emiliano Melgazo), it belonged to the latter.On June 9, 2004, the special commercial court ruled that the deed of sale coveringthe property was in the name of CPA, not Emiliano Melgazo:

The terms and language of said Deed is unmistakable that the vendee is [CPA],through Emiliano Melgazo, and Emiliano Melgazo signed said Deed "for and [in]behalf of the CPA"...there is therefore no doubt as to who the vendee is. It is [CPA]and not Emiliano Melgazo. As such, it is [CPA] who is the owner of said property andnot [petitioner] Manuel Melgazo... [Petitioners] contend that the money used in thepurchase of [the property] was Emiliano Melgazo['s]. This Court is not persuadedand to rule otherwise...will be a contravention [to] the Parole Evidence Rule.6

In the dispositive portion of the decision, the court, however, considered CPA to beone and the same as CPAI:WHEREFORE, premises considered, this Court finds for [CPAI] and against[petitioners] and the latter are hereby directed to cease and desist from collectingthe vendor's fee for and [on] behalf of [CPAI] and to account what they have

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collected from October 1996 up to the present and [turn over] the same to theproper officer.SO ORDERED.7

Aggrieved, petitioners went to the CA and contested the jurisdiction of the specialcommercial court over the case. According to them, they were not CPAI members,hence the case did not involve an intra-corporate dispute "between and among

members" so as to warrant the special commercial court's jurisdiction over it. CPAI,on the other hand, argued that petitioners were already in estoppel as they hadparticipated actively in the court proceedings.In its assailed decision of March 17, 2005, although the CA found that the specialcommercial court should not have tried the case since there was no intra-corporatedispute among CPAI members or officers, it nonetheless held that petitioners werealready barred from questioning the court's jurisdiction based on the doctrine ofestoppel. Quoting this Court's ruling in Tijam v. Sibonghanoy,8the CA held:An examination of the record of the case will show that [CPAI] admitted in its Pre-

Trial Brief and Amended Pre-Trial Brief that petitioners are not its members. Thefact that petitioners are admittedly not members of [CPAI], then, [the specialcommercial court] should not have taken cognizance of the case as [it] exercises

special and limited jurisdiction under R.A. No. 8799. However, as correctly arguedand pointed out by [CPAI], the acts of the petitioners, through their counsel, inparticipating in the trial of the case...show that they themselves consider the trialcourt to have jurisdiction over the case.9

xxx xxx xxx...[I]n the case ofTijam v. Sibonghanoy, the Supreme Court categorically that:"The rule is that the jurisdiction over the subject matter is conferred upon the courtsexclusively by law, and as the lack of it affects the very authority of the court totake cognizance of the case, the objection may be raised at any stage of theproceedings. However, considering the facts and the circumstances of the presentcase, a party may be barred by laches from invoking this plea for the first time onappeal for the purpose of annulling everything done in the case with the activeparticipation of said party invoking the plea."Hence, we agree with [CPAI] that petitioners, after actively participating in the trialof the case, can no longer be allowed to impugn the jurisdiction of the court...10

xxx xxx xxxWHEREFORE, based on the foregoing premises, judgment is hereby rendered by usDISMISSING the petition filed in this case and AFFIRMING the DECISION dated June9, 2004 of the [special commercial court] of Tacloban City, Branch 8 in SEC CaseNo. 2001-07-110.SO ORDERED.11

Petitioners filed a motion for reconsideration but it was denied by the CA.12 Hence,this petition.Petitioners essentially argue that estoppel cannot apply because a court's

jurisdiction is conferred exclusively by the Constitution or by law, notby the parties'agreement or by estoppel.We agree.Originally, Section 5 of Presidential Decree (PD) 902-A13 conferred on the SECoriginal and exclusive jurisdiction over the following:(1) Devices or schemes employed by, or any act of, the board of directors, businessassociates, officers or partners, amounting to fraud or misrepresentation which may

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be detrimental to the interest of the public and/or of the stockholders, partners, ormembers of any corporation, partnership, or association;(2) Controversies arising out of intra-corporate, partnership, orassociation relations, between and among stockholders, members, orassociates; or association of which they are stockholders, members, orassociates, respectively;

(3) Controversies in the election or appointment of directors, trustees, officers ormanagers of corporations, partnerships, or associations;(4) Petitions of corporations, partnerships or associations to be declared in the stateof suspension of payment in cases where the corporation, partnership or associationpossesses sufficient property to cover all its debts but foresees the impossibility ofmeeting them when they fall due or in cases where the corporation, partnership orassociation has no sufficient assets to cover its liabilities but is under themanagement of a rehabilitation receiver or management committee...(emphasissupplied)Upon the enactment of RA 8799 in 2000, the jurisdiction of the SEC over intra-corporate controversies and other cases enumerated in Section 5 of PD 902-A wastransferred to the courts of general jurisdiction. Under this authority, Branch 8 of

the Tacloban City RTC, acting as a special commercial court, deemed themandatory injunction case filed by CPAI an intra-corporate dispute falling undersubparagraph (2) of the aforecited provision as it involved the officers and membersthereof.

To determine whether a case involves an intra-corporate controversy to be heardand decided by the RTC, two elements must concur:(1) the status or relationship of the parties and(2) the nature of the question that is subject of their controversy.14

The first element requires that the controversy must arise out of intra-corporate orpartnership relations: (a) between any or all of the parties and the corporation,partnership or association of which they are stockholders, members or associates;(b) between any or all of them and the corporation, partnership or association ofwhich they are stockholders, members or associates and (c) between suchcorporation, partnership or association and the State insofar as it concerns theirindividual franchises. On the other hand, the second element requires that thedispute among the parties be intrinsically connected with the regulation of thecorporation.15 If the nature of the controversy involves matters that are purely civilin character, necessarily, the case does not involve an intra-corporate controversy.16

In the case at bar, these elements are not present. The records reveal thatpetitioners were never officers nor members of CPAI. CPAI itself admitted this in itspleadings. In fact, petitioners were the only remaining members of CPA which,obviously, was not the CPAI that was registered in the SEC.Moreover, the issue in this case does not concern the regulation of CPAI (or evenCPA). The determination as to who is the true owner of the disputed propertyentitled to the income generated therefrom is civil in nature and should be threshedout in a regular court. Cases of this nature are cognizable by the RTC under BP129.17Therefore, the conflict among the parties here was outside the jurisdiction ofthe special commercial court.But did the doctrine of estoppel bar petitioners from questioning the jurisdiction ofthe special commercial court? No.In Lozon v. NLRC,18this Court came up with a clear rule on when jurisdiction byestoppel applies and when it does not:

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The operation of estoppel on the question of jurisdiction seeminglydepends on whether the lower court actually had jurisdiction or not . If ithad no jurisdiction, but the case was tried and decided upon the theorythat it had jurisdiction, the parties are not barred, on appeal, fromassailing 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 anddecided upon a given theory, such, for instance, as that the court had no

jurisdiction, the party who induced it to adopt such theory will not be permitted, onappeal, to assume an inconsistent position that the lower court had jurisdiction....(emphasis supplied)

The ruling was reiterated in Metromedia Times Corporation [(Metromedia)] v.Pastorin,19where we reversed the CA ruling that Metromedia was already estoppedfrom questioning the jurisdiction of the labor arbiter (LA) after it participated in theproceedings before him. There, an illegal dismissal case was filed by an employeeagainst Metromedia alleging that his transfer to another department20 wastantamount to constructive dismissal. Realizing the issue was properly cognizableby a voluntary arbitrator, Metromedia assailed the LA's jurisdiction in the NLRC and

the CA. The CA, also citing Tijam,21ruled erroneously that Metromedia was alreadybarred from questioning the LA's jurisdiction.We likewise held in Metromedia that Tijam provided an exceptional circumstance.

To void the trial court's decision in Tijam for lack of jurisdiction was not only unfairbut patently revolting considering that the question on jurisdiction was raised onlyafter 15 years of tedious litigation.22 We said:

The notion that the defense of lack of jurisdiction may be waived by estoppel on theparty invoking the same most prominently emerged in Tijam v. Sibonghanoy....[H]owever, Tijam represented an exceptional case wherein the party invoking thelack of jurisdiction only did so after fifteen (15) years, and at a stage where the casewas already elevated to the Court of Appeals.In Calimlim v.Ramirez,23 which we extensively quoted in Metromedia, we spokeofTijam in this sense:A rule that had been settled by unquestioned acceptance and upheld in decisions sonumerous to cite is that jurisdiction is a matter of law and may not be conferred byconsent or agreement of the parties....[T]his doctrine has been qualified by recentpronouncements which stemmed principally from the ruling in the cited case of[Tijam v.]Sibonghanoy. It is to be regretted, however, that the holding in said casehad been applied to situations which were obviously not contemplated therein. Theexceptional circumstances involved in [Tijam v.]Sibonghanoywhich justified thedeparture from the accepted doctrine of non-waivability of objection to jurisdictionhas been ignored and instead a blanket doctrine had been repeatedly upheld thatrendered the supposed ruling [therein] not as the exception, but rather the generalrule, virtually overthrowing altogether the time-honored principle that the issue of

jurisdiction is not lost by waiver or by estoppel.The rule remains that estoppel does not confer jurisdiction on a tribunal that hasnone over the cause of action or subject matter of the case.24 Unfortunately forCPAI, no exceptional circumstance appears in this case to warrant divergence fromthe rule. Jurisdiction by estoppel is not available here.Consequently, CPAI cannot be permitted to wrest from petitioners (as the remainingCPA officers) the administration of the disputed property until after the parties'rights are clearly adjudicated in the proper courts. It is neither fair nor legal to bind

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a party to the result of a suit or proceeding in a court with no jurisdiction.25 Thedecision of a tribunal not vested with the appropriate jurisdiction is null and void.26

WHEREFORE, the petition is hereby GRANTED. The assailed decision of the Courtof Appeals in CA-G.R. SP No. 85170 is REVERSED and SET ASIDE. Accordingly, SECCase No. 2001-07-110 is DISMISSED for lack of jurisdiction.SO ORDERED.

CITY OF BACOLOD vs SAN MIGUEL

An appeal from the decision of the Court of First Instance of Negros Occidental in itsCivil Case No. 7355, ordering the San Miguel Brewery, Inc. to pay to the City ofBacolod the sum of P36,519.10, representing surcharges on certain fees which,under existing ordinances of the City of Bacolod, the San Miguel Brewery shouldhave paid quarterly to the treasurer of the said city for and/or during the periodfrom July, 1959 to December, 1962, but which were paid only on April 23, 1963.On February 17, 1949, the City Council of Bacolod passed Ordinance No. 66, seriesof 1949 imposing upon "any person, firm or corporation engaged in the

manufacturer bottling of coca-cola, pepsi cola, tru orange, lemonade, and other softdrinks within the jurisdiction of the City of Bacolod, ... a fee of ONE TWENTY-FOURTH(1/24) of a centavo for every bottle thereof," plus "a surcharge of 2% every month,but in no case to exceed 24% for one whole year," upon "such local manufacturersor bottler above-mentioned who will be delinquent on any amount of fees due"under the ordinance.In 1959, this ordinance was amended by Ordinance No. 150, series of 1959, byincreasing the fee to "one-eighth (1/8) of a centavo for every bottle thereof." Inother words, the fee was increased from P0.01 to P0.03 per case of soft drinks.Appellant refused to pay the additional fee and challenged the validity of the wholeordinance.Under date of March 23, 1960, appellee sued appellant in Civil Case No. 5693 of theCourt of First Instance of Negros Occidental, with the corresponding Complaintalleging, inter alia:3. That the defendant, Manager of the San Miguel Brewery, Bacolod Coca ColaPlant, Bacolod Branch since the approval of Ordinance No. 66, Series of 1949 asamended by Ordinance No. 150, Series of 1959, which took effect on July 1, 1959,only paid to the plaintiff herein the P0.01 bottling tax per case of soft drinks therebyrefusing to pay the P0.03 bottling tax per case of soft drinks which amounted toP26,306.54 at P0.02 per case of soft drinks such as coca cola and tru orangemanufactured or bottled by said company as per statement submitted by theAssistant City Treasurer of Bacolod City herewith attached as Annex "C" of thiscomplaint;and praying... that judgment be rendered for the plaintiff:"(a) Ordering the defendant to pay the plaintiff the bottling taxes of P0.03 per caseof soft drinks as provided for in Section 1, Ordinance No. 66, Series of 1949, asamended by Ordinance No. 150, Series of 1959, as well as the sum of P26,306.54representing unpaid bottling taxes due with legal rate of interest thereon from thedate of the filing of this complaint until complete payment thereof; ... costs, etc."'

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In due time, appellant filed its answer. This was followed by a stipulation of factsbetween the parties, whereupon, the court rendered judgment on November 12,1960; with the following dispositive portion:WHEREFORE, San Miguel Brewery Inc. is ordered to pay to the plaintiff the sum ofP26,306.54 and the tax at the rate of three centavos per case levied in OrdinanceNo. 66 and 150 from March, 1960, and thereafter. Costs against the defendant.

Appellant appealed from the said decision to this Court where it pressed thequestion of the invalidity of the abovementioned taxing ordinances. In that appeal(G.R. No. L-18290), however, this Court affirmed the decision appealed from andupheld the constitutionality of the questioned ordinances and the authority of theappellee to enact the same. For reasons not extant in the record, it was alreadyafter this decision had become final when appellee moved for the reconsiderationthereof, praying that the same be amended so as to include the penalties andsurcharges provided for in the ordinances. Naturally, the said motion was denied,for the reason that "the decision is already final and may not be amended." Whenexecution was had before the lower court, the appellee again sought the inclusionof the surcharges referred to; and once again the move was frustrated by the Courtof First Instance of Negros Occidental which denied the motion, as follows:

Acting upon the motion dated October 24, 1963, filed by the Assistant City Fiscal,Raymundo Rallos, counsel for the plaintiff, and the opposition thereto filed byattorneys for the defendants dated November 9, 1963, as well as the reply to theopposition of counsel for the defendants dated December 5, 1963, taking intoconsideration that the decision of this Court as affirmed by the Supreme Court doesnot specifically mention the alleged surcharges claimed by the plaintiff-appellee,the Court hereby resolves to deny, as it hereby denies, the aforesaid motion, for notbeing meritorious.Failing thus in its attempt to collect the surcharge provided for in the ordinances inquestion, appellee filed a second action (Civil Case No. 7355) to collect the saidsurcharges. Under date of July 10, 1964, it filed the corresponding complaint beforethe same Court of First Instance of Negros Occidental alleging, inter alia, that:6. That soon after the decision of the Honorable Supreme Court affirming thedecision of the Hon. Court, the defendant herein on April 23, 1963 paid to the Cityof Bacolod, the amount of ONE HUNDRED FIFTY SIX THOUSAND NINE HUNDREDTWENTY FOUR PESOS and TWENTY CENTAVOS (P156,924.20) as taxes from July,1959 to December, 1962 in compliance with the provision of Section 1, OrdinanceNo. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959, whichcorresponds to the taxes due under said section in the amount of P0.03 per case ofsoft soft drinks manufactured by the defendant, but refused and still continuedrefusing to pay the surcharge as provided for under Section 4 of Ordinance No. 66,Series of 1949, as amended by Ordinance No. 150, Series of 1959, which reads asfollows:"SEC. 4 A surcharge of 2% every month, but in no case to exceed 24% for onewhole year, shall be imposed on such local manufacturer or bottlers abovementioned who will be delinquent on any amount of fees under the ordinance."which up to now amounted to THIRTY SIX THOUSAND FIVE HUNDRED NINETEENPESOS AND TEN CENTAVOS (P36,519.10), as shown by the certified statement ofthe office of the City Treasurer of Bacolod City herewith attached as Annex "E" andmade an integral part of this complaint;7. That the said interest and/or penalties to the said bottling taxes which defendantrefused to pay have long been overdue;

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and again praying... that judgment be rendered for the plaintiff:(a) Ordering the defendant to pay the penalty and/or interest therein Section 4 ofOrdinance No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959the total amount of THIRTY SIX THOUSAND FIVE HUNDRED NINETEEN PESOS and

TEN CENTAVOS (P36,519.10), representing the surcharges from August, 1959 to

December, 1962, inclusive, and the 24% penalty computed as of June 30, 1964,from the amount of P152,162.90, with legal rate of interest thereon from the date ofthe filing of this complaint until complete payment thereof;" plus costs, etc.On July 24, 1964, appellant filed a motion to dismiss the case on the grounds that:(1) the cause of action is barred by a prior judgment, and (2) a party may notinstitute more than one suit for a single cause of action. This motion was denied bythe court a quo in its order dated August 22, 1964; so appellant filed its answerwherein it substantially reiterated, as affirmative defenses, the above-mentionedgrounds of its motion to dismiss. Thereafter, the parties submitted the case for

judgment on the pleadings, whereupon, the court rendered judgment on March 11,1965 with the following dispositive portion: .IN VIEW THEREOF, judgment is hereby rendered ordering the defendant San Miguel

Brewery, Inc. to pay to the plaintiff the sum of P36,519.10 representing thesurcharges as provided in section 4 of Ordinance 66, series of 1949 of the City ofBacolod. No costs.Appellants moved for reconsideration but its motion was denied, hence, the instantappeal.Appellant has only one assignment of error, to wit:

THE LOWER COURT ERRED IN FINDING THE APPELLANT LIABLE TO THE APPELLEEFOR THE SUM OF P36,519.10 REPRESENTING SURCHARGES AS PROVIDED IN TAXORDINANCE NO. 66, SERIES OF 1949, AS AMENDED, OF THE CITY OF BACOLOD.Under this, it argues that the action of appellee cannot be maintained because (1) aparty may not institute more than one suit for a single cause of action; and (2)appellee's action for recovery of the surcharges in question is barred by prior

judgment.We find appellant's position essentially correct. There is no question that appelleesplit up its cause of action when it filed the first complaint on March 23, 1960,seeking the recovery of only the bottling taxes or charges plus legal interest,without mentioning in any manner the surcharges.

The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the Rules of Court of1940 which were still in force then provided:SEC. 3. Splitting a cause of action, forbidden. A single cause of action cannot besplit up into two or more parts so as to be made the subject of differentcomplaints. .SEC. 4. Effect of splitting. If separate complaints were brought for different partsof a single cause of action, the filing of the first may be pleaded in abatement of theothers, and a judgment upon the merits in either is available as a bar in the others.Indeed, this rule against the splitting up of a cause of action is an old one. In fact, itpreceded the Rules of Court or any statutory provision. In Bachrach Motor Co., Inc.vs. Icarangal et al.,1 this Court already explained its meaning, origin and purpose,thus:But, even if we have no such section 708 of our Code of Civil Procedure, or section59 of the Insolvency Law, we have still the rule against splitting a single cause ofaction. This rule, though not contained in any statutory provision, has been applied

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by this court in all appropriate cases. Thus, in Santos vs. Moir(36 Phil. 350, 359), wesaid: "It is well recognized that a party cannot split a single cause of action intoparts and sue on each part separately. A complaint for the recovery of personalproperty with damages for detention states a single cause of action which cannotbe divided into an action for possession and one for damages; and if suit is broughtfor possession only a subsequent action cannot be maintained to recover the

damages resulting from the unlawful detention." In Rubio de Larena vs.Villanueva (53 Phil. 923, 927), we reiterated the rule by stating that "... a party willnot be permitted to split up a single cause of action and make it the basis forseveral suits" and that when a lease provides for the payment of the rent inseparate installments, each installment constitutes an independent cause of action,but when, at the time the complaint is filed, there are several installments due, allof them constitute a single cause of action and should be included in a singlecomplaint, and if some of them are not so included, they are barred. The samedoctrine is stated inLavarro vs. Labitoria (54 Phil. 788), wherein we said that "aparty will not be permitted to split up a single cause of action and make it a basisfor several suits" and that a claim for partition of real property as well as forimprovements constitutes a single cause of action, and a complaint for partition

alone bars a subsequent complaint for the improvements. And in Blossom & Co. vs.Manila Gas Corporation (55 Phil. 226-240), we held that "as a general rule acontract to do several things at several times is divisible in its nature, so as toauthorize successive actions; and a judgment recovered for a single breach of acontinuing contract or covenant is no bar to suit for a subsequent breach thereof.But where the covenant or contract is entire, and the breach total, there can be onlyone action, and plaintiff must therein recover all his damages.

The rule against splitting a single cause of action is intended "to prevent repeatedlitigation between the same parties in regard to the same subject of controversy; toprotect defendant from unnecessary vexation; and to avoid the costs and expensesincident to numerous suits." (1 C.J. 1107) It comes from that old maximnemo debetbis vexare pro una et eadem causa (no man shall be twice vexed for one and thesame cause). (Ex parte Lange, 18 Wall 163, 168; 21 Law Ed. 872; also U.S. vs.

Throckmorton, 98 U.S. 61; 25 Law Ed. 93). And it developed, certainly not as anoriginal legal right of the defendant, but as an interposition of courts upon principlesof public policy to prevent inconvenience and hardship incident to repeated andunnecessary litigations. (1 C. J. 1107).In the light of these precedents, it cannot be denied that appellant's failure to paythe bottling charges or taxes and the surcharges for delinquency in the paymentthereof constitutes but one single cause of action which under the above rule canbe the subject of only one complaint, under pain of either of them being barred ifnot included in the same complaint with the other. The error of appellee springsfrom a misconception or a vague comprehension of the elements of a cause ofaction. The classical definition of a cause of action is that it is "a delict or wrong bywhich the rights of the plaintiff are violated by the defendant." Its elements may begenerally stated to be (1) a right existing in favor of the plaintiff; (2) acorresponding obligation on the part of the defendant to respect such right; and (3)an act or omission of the plaintiff which constitutes a violation of the plaintiff's rightwhich defendant had the duty to respect. For purposes, however, of the rule againstsplitting up of a cause of action, a clearer understanding can be achieved, iftogether with these elements, the right to relief is considered.

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separate and distinct defenses, since either of the former is by law only the result oreffect of the latter, or, better said, the sanction for or behind it.It thus results that the judgment of the lower court must be, as it is hereby,reversed and the complaint of appellee is dismissed. No costs.

JALANDONI vs MARTIR-GUANZON

Appeal by the spouses Amado P. Jalandoni and Paz Ramos from an order of theCourt of First Instance of Occidental Negros dismissing her complaint in Civil CaseNo. 3586 of said court.It appears that on January 9, 1947, the appellant spouses began a suit (Case No.573) against the appellees Antonio Guanzon, eta al., for partition of lots Nos. 130-A,130-B and 130-F of the Murcia Cadastre, as well as lots Nos. 1288 and 1376 of theBogo Cadastre, and for recovery of damages caused by the defendants'unwarranted refusal to recognize plaintiffs' right and partition said lots, as was toaccount for and deliver plaintiff's share in the crops obtained during the agriculturalyears from 1941-1942 to 1946-1947. By decision of February 22, 1955, the Court of

First Instance of Negros Occidental held for plaintiffs and ordered the partition ofthe lands involved, but denied their claim for damages because of failure to "provethe exact and actual damages suffered by them.

The decision having become final because none of the parties appealed therefrom,the plaintiffs instituted the present action (No. 3586 of the same Court of FirstInstance) on August 26, 1955, seeking recovery from the defendants of thefollowing amounts: (1) P20,000 as moral and exemplary damages due to suffering,anguish and anxiety occasioned by the defendant's refusal to partition of theproperties involved in the proceeding case; (2) P55,528.20 as share of the productsof the property from 1947 (when the preceeding case No. 573 was filed) until 1955when judgment was rendered therein (3) P4,689.54 as land taxes due unpaid on theproperties involved; and (4) P2,500 for attorney's fees.Upon motion of defendant's, the court a quo dismissed the second complaint forfailure to state a cause of action; and after their motion to reconsider was denied,plaintiffs appealed to this Court on points of law.We find the dismissal to have been correctly entered. Except as concomitant tophysical injuries, moral and corrective damages (allegedly due to suffering, anguishand axiety caused by the refusal of defendants in 1941 to partition the commonproperty) were not recoverable under the Civil Code of 1899 which was thegoverning law at the time. Recovery of such damages was established for the firsttime in 1950 by the new Civil Code, and action not be made to apply retroactivelyto acts that occurred character of these damages. The rule is expressly laid downby paragraph 1 of Article 2257 of the new Code.ART. 2257. Provision of this Code which attach a civil sanction or penalty or adeprivation of rights to acts or ommissions which were not penalized by the formerlaws, are not applicable to those who, when said laws were in force may haveexecuted the act or incurred in the ommission forbidden or condemmned by thisCode.xxx xxx xxx.As to the value of the plaintiff's share in the products of the land during the timethat the former action was pending (which are the damages claimed under thesecond cause of action), their recovery is now barred by the previous judgment.

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These damages are but the result of the original cause of action, viz., the continuingrefusal by defendants in 1941 to recognize the plaintiffs' right to an interest in theproperty. In the same way that plaintiffs claimed for their share of the produce from1941 to 1947, these later damages could have been claimed in the first action,either in the original complaint (for their existence could be anticipated when thefirst complaint was filed) or else by supplemental plaeding. To allow them to be

recovered by subsequent suit would be a violation of the rule against multiplicity ofsuits, and specifically of sections 3 and 4 of Rules 2 of the Rules of Court, againstthe splitting of causes of action, since these damages spring from the same causeof action that was pleading in the former case No. 573 between the same parties(Blossom & Co. vs. Manila Gas Corporation, 55 Phil. 26; Santos vs. Moir, 36 Phil.350; Pascua vs. Sideco, 24 Phil 26; Bachrach Motor Co. vs. Icarangal, 68 Phil. 287).

That the former judgment did not touch upon these damages is not material to itsconclusive effect; between the same parties, with the same subject matter andcause of action, a final judgment on the merits is conclusive not only the questionsactually contested and determined, but upon all matters that might havebeen litigated and decided in the former suit, i.e., all matters properly belonging tothe subject of the controversy and within the scope of the issue (Penalosa vs.

Tuason, 22 Phil. 312; National Bank vs. Barretto, 52 Off. Gaz., 182; Miranda vs.Tianco, 96 Phil., 526, 51 Off. Gaz., [3] 1366). Hence, the rejection of plaintiffs' claimfor damages in Case No. 573 imports denial of those who claimed, since there are amere continuation of the former.Annent the land taxes allegedly overdue and unpaid, it is readily apparent that,taxes beein due to the government, plaintiffs have no right to compel paymentthereof to themselves. The case could be otherwise if plaintiffs had paid the taxesto stave of forfeiture of the common property of tax delinquency; in that event, theycould compel contribution. But the complaint does not aver any such tax payment.Little need be said concerning the claim for attorney's fees under the fourth causeof action. If they be fees for the lawyer's services in the former case, they arebarred from recovery for the reasons already given; if for services in the presentcase, there is no jurisdiction therefor, since no case is made out for the plaintiffs.

The order of dismissal appealed from is affirmed. Costs against plaintiffs-appellants.So ordered.

JOSEPH vs BAUTISTA

Petitioner prays in this appeal by certiorari for the annulment and setting aside ofthe order, dated July 8, 1975, dismissing petitioner's complaint, as well as the order,dated August 22, 1975, denying his motion for reconsideration of said dismissal,both issued by respondent Judge Crispin V. Bautista of the former Court of FirstInstance of Bulacan, Branch III.Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis Joseph vs.Patrocinio Perez, Domingo Villa y de Jesus, Rosario Vargas, Antonio Sioson, LazaroVillanueva and Jacinto Pagarigan", filed before the Court of First Instance ofBulacan, Branch III, and presided over by respondent Judge Crispin V. Bautista;while private respondents Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan andLazaro Villanueva are four of the defendants in said case. Defendant Domingo Villay de Jesus did not answer either the original or the amended complaint, whiledefendant Rosario Vargas could not be served with summons; and respondent

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Alberto Cardeno is included herein as he was impleaded by defendant PatrocinioPerez, one of respondents herein, in her cross-claim.

The generative facts of this case, as culled from the written submission of theparties, are as follows:Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YTPhil. '73 for conveying cargoes and passengers for a consideration from Dagupan

City to Manila. On January 12, 1973, said cargo truck driven by defendant DomingoVilla was on its way to Valenzuela, Bulacan from Pangasinan. Petitioner, with acargo of livestock, boarded the cargo truck at Dagupan City after paying the sum ofP 9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck wasnegotiating the National Highway proceeding towards Manila, defendant DomingoVilla tried to overtake a tricycle likewise proceeding in the same direction. At aboutthe same time, a pick-up truck with Plate No. 45-95 B, supposedly owned byrespondents Antonio Sioson and Jacinto Pagarigan, then driven by respondentLazaro Villanueva, tried to overtake the cargo truck which was then in the processof overtaking the tricycle, thereby forcing the cargo truck to veer towards theshoulder of the road and to ram a mango tree. As a result, petitioner sustained abone fracture in one of his legs. 1

The following proceedings thereafter took place: 2

Petitioner filed a complaint for damages against respondent Patrocinio Perez, asowner of the cargo truck, based on a breach of contract of carriage and againstrespondents Antonio Sioson and Lazaro Villanueva, as owner and driver,respectively, of the pick-up truck, based on quasi-delict.Respondent Sioson filed his answer alleging that he is not and never was an ownerof the pick-up truck and neither would he acquire ownership thereof in the future.On September 24, 1973, petitioner, with prior leave of court, filed his amendedcomplaint impleading respondents Jacinto Pagarigan and a certain Rosario Vargasas additional alternative defendants. Petitioner apparently could not ascertain whothe real owner of said cargo truck was, whether respondents Patrocinio Perez orRosario Vargas, and who was the real owner of said pick-up truck, whetherrespondents Antonio Sioson or Jacinto Pagarigan.Respondent Perez filed her amended answer with crossclaim against her co-defendants for indemnity and subrogation in the event she is ordered to paypetitioner's claim, and therein impleaded cross-defendant Alberto Cardeno asadditional alternative defendant.On September 27, 1974, respondents Lazaro Villanueva, Alberto Cardeno, AntonioSioson and Jacinto Pagarigan, thru their insurer, Insurance Corporation of thePhilippines, paid petitioner's claim for injuries sustained in the amount of P1,300.00. By reason thereof, petitioner executed a release of claim releasing fromliability the following parties, viz: Insurance Corporation of the Philippines, AlbertoCardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan.On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno and theirinsurer, the Insurance Corporation of the Philippines, paid respondent PatrocinioPerez' claim for damages to her cargo truck in the amount of P 7,420.61.Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a"Motion to Exonerate and Exclude Defs/ Cross defs. Alberto Cardeno, LazaroVillanueva, Antonio Sioson and Jacinto Pagarigan on the Instant Case", alleging thatrespondents Cardeno and Villanueva already paid P 7,420.61 by way of damages torespondent Perez, and alleging further that respondents Cardeno, Villanueva,Sioson and Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement.

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Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion dated Dec.2, 1974 and Counter Motion" to dismiss. The so-called counter motion to dismisswas premised on the fact that the release of claim executed by petitioner in favor ofthe other respondents inured to the benefit of respondent Perez, considering that allthe respondents are solidarity liable to herein petitioner.On July 8, 1975, respondent judge issued the questioned order dismissing the case,

and a motion for the reconsideration thereof was denied. Hence, this appeal,petitioner contending that respondent judge erred in declaring that the release ofclaim executed by petitioner in favor of respondents Sioson, Villanueva andPagarigan inured to the benefit of respondent Perez; ergo, it likewise erred indismissing the case.We find the present recourse devoid of merit.

The argument that there are two causes of action embodied in petitioner'scomplaint, hence the judgment on the compromise agreement under the cause ofaction based on quasi-delict is not a bar to the cause of action for breach of contractof carriage, is untenable.A cause of action is understood to be the delict or wrongful act or omissioncommitted by the defendant in violation of the primary rights of the plaintiff. 3 It is

true that a single act or omission can be violative of various rights at the same time,as when the act constitutes juridically a violation of several separate and distinctlegal obligations. However where there is only one delict or wrong, there is but asingle cause of action regardless of the number of rights that may have beenviolated belonging to one person. 4

The singleness of a cause of action lies in the singleness of the- delict or wrongviolating the rights of one person. Nevertheless, if only one injury resulted fromseveral wrongful acts, only one cause of action arises. 5In the case at bar, there isno question that the petitioner sustained a single injury on his person. That vestedin him a single cause of action, albeit with the correlative rights of action againstthe different respondents through the appropriate remedies allowed by law.

The trial court was, therefore, correct in holding that there was only one cause ofaction involved although the bases of recovery invoked by petitioner against thedefendants therein were not necessarily Identical since the respondents were notidentically circumstanced. However, a recovery by the petitioner under one remedynecessarily bars recovery under the other. This, in essence, is the rationale for theproscription in our law against double recovery for the same act or omission which,obviously, stems from the fundamental rule against unjust enrichment.

There is no question that the respondents herein are solidarily liable to petitioner.On the evidence presented in the court below, the trial court found them to be soliable. It is undisputed that petitioner, in his amended complaint, prayed that thetrial court hold respondents jointly and severally liable. Furthermore, the allegationsin the amended complaint clearly impleaded respondents as solidary debtors. Wecannot accept the vacuous contention of petitioner that said allegations areintended to apply only in the event that execution be issued in his favor. There isnothing in law or jurisprudence which would countenance such a procedure.

The respondents having been found to be solidarity liable to petitioner, the fullpayment made by some of the solidary debtors and their subsequent release fromany and all liability to petitioner inevitably resulted in the extinguishment andrelease from liability of the other solidary debtors, including herein respondentPatrocinio Perez.

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The claim that there was an agreement entered into between the parties during thepre-trial conference that, after such payment made by the other respondents, thecase shall proceed as against respondent Perez is both incredible andunsubstantiated. There is nothing in the records to show, either by way of a pre-trialorder, minutes or a transcript of the notes of the alleged pre-trial hearing, that therewas indeed such as agreement.

WHEREFORE, the challenged orders of the respondent judge are hereby AFFIRMED.SO ORDERED

SARSABA vs VDA DE TE

Before us is a petition for review on certiorari1 with prayer for preliminary injunctionassailing the Order2 dated March 22, 2006 of the Regional Trial Court (RTC), Branch19, Digos City, Davao del Sur, in Civil Case No. 3488.

The facts, as culled from the records, follow.On February 14, 1995, a Decision was rendered in NLRC Case No. RAB-11-07-00608-93 entitled, Patricio Sereno v. Teodoro Gasing/Truck Operator, finding Sereno

to have been illegally dismissed and ordering Gasing to pay him his monetaryclaims in the amount of P43,606.47. After the Writ of Execution was returnedunsatisfied, Labor Arbiter Newton R. Sancho issued an Alias Writ of Execution3 on

June 10, 1996, directing Fulgencio R. Lavarez, Sheriff II of the National LaborRelations Commission (NLRC), to satisfy the judgment award. On July 23, 1996,Lavarez, accompanied by Sereno and his counsel, petitioner Atty. Rogelio E.Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which at that timewas in the possession of Gasing. On July 30, 1996, the truck was sold at publicauction, with Sereno appearing as the highest bidder.4

Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-fact, FaustinoCastaeda, filed with the RTC, Branch 18, Digos, Davao del Sur, a Complaint5 forrecovery of motor vehicle, damages with prayer for the delivery of the truckpendente lite against petitioner, Sereno, Lavarez and the NLRC of Davao City,docketed as Civil Case No. 3488.Respondent alleged that: (1) she is the wife of the late Pedro Te, the registeredowner of the truck, as evidenced by the Official Receipt6 and Certificate ofRegistration;7 (2) Gasing merely rented the truck from her; (3) Lavarez erroneouslyassumed that Gasing owned the truck because he was, at the time of the"taking,"8 in possession of the same; and (4) since neither she nor her husbandwere parties to the labor case between Sereno and Gasing, she should not be madeto answer for the judgment award, much less be deprived of the truck as aconsequence of the levy in execution.Petitioner filed a Motion to Dismiss9 on the following grounds: (1) respondent has nolegal personality to sue, having no real interests over the property subject of theinstant complaint; (2) the allegations in the complaint do not sufficiently state thatthe respondent has cause of action; (3) the allegations in the complaint do notcontain sufficient cause of action as against him; and (4) the complaint is notaccompanied by an Affidavit of Merit and Bond that would entitle the respondent tothe delivery of the tuck pendente lite.

The NLRC also filed a Motion to Dismiss10 on the grounds of lack of jurisdiction andlack of cause of action.

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Meanwhile, Lavarez filed an Answer with Compulsory Counterclaim and Third-PartyComplaint.11 By way of special and affirmative defenses, he asserted that the RTCdoes not have jurisdiction over the subject matter and that the complaint does notstate a cause of action.On January 21, 2000, the RTC issued an Order12 denying petitioner's Motion toDismiss for lack of merit.

In his Answer,13 petitioner denied the material allegations in the complaint.Specifically, he cited as affirmative defenses that: respondent had no legalpersonality to sue, as she had no interest over the motor vehicle; that there was noshowing that the heirs have filed an intestate estate proceedings of the estate ofPedro Te, or that respondent was duly authorized by her co-heirs to file the case;and that the truck was already sold to Gasing on March 11, 1986 by one JesusMatias, who bought the same from the Spouses Te. Corollarily, Gasing was alreadythe lawful owner of the truck when it was levied on execution and, later on, sold atpublic auction.Incidentally, Lavarez filed a Motion for Inhibition,14 which was opposed15 byrespondent.On October 13, 2000, RTC Branch 18 issued an Order16 of inhibition and directed the

transfer of the records to Branch 19. RTC Branch 19, however, returned the recordsback to Branch 18 in view of the appointment of a new judge in place of Judge-designate Rodolfo A. Escovilla. Yet, Branch 19 issued another Order17 datedNovember 22, 2000 retaining the case in said branch.Eventually, the RTC issued an Order18 dated May 19, 2003 denying the separatemotions to dismiss filed by the NLRC and Lavarez, and setting the Pre-TrialConference on July 25, 2003.On October 17, 2005, petitioner filed an Omnibus Motion to Dismiss the Case on thefollowing grounds:19 (1) lack of jurisdiction over one of the principal defendants; and(2) to discharge respondent's attorney-in-fact for lack of legal personality to sue.It appeared that the respondent, Fe Vda. de Te, died on April 12, 2005.20

Respondent, through her lawyer, Atty. William G. Carpentero, filed anOpposition,21 contending that the failure to serve summons upon Sereno is not aground for dismissing the complaint, because the other defendants have alreadysubmitted their respective responsive pleadings. He also contended that thedefendants, including herein petitioner, had previously filed separate motions todismiss the complaint, which the RTC denied for lack of merit. Moreover,respondent's death did not render functus officio her right to sue since her attorney-in-fact, Faustino Castaeda, had long testified on the complaint on March 13, 1998for and on her behalf and, accordingly, submitted documentary exhibits in supportof the complaint.On March 22, 2006, the RTC issued the assailed Order22 denying petitioner'saforesaid motion.Petitioner then filed a Motion for Reconsideration with Motion for Inhibition,23 inwhich he claimed that the judge who issued the Order was biased and partial. Hewent on to state that the judge's husband was the defendant in a petition for

judicial recognition of which he was the counsel, docketed as Civil Case No. C-XXI-100, before the RTC, Branch 21, Bansalan, Davao del Sur. Thus, propriety dictatesthat the judge should inhibit herself from the case.Acting on the motion for inhibition, Judge Carmelita Sarno-Davin granted thesame24 and ordered that the case be re-raffled to Branch 18. Eventually, the said

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RTC issued an Order25 on October 16, 2006 denying petitioner's motion forreconsideration for lack of merit.Hence, petitioner directly sought recourse from the Court via the present petitioninvolving pure questions of law, which he claimed were resolved by the RTCcontrary to law, rules and existing jurisprudence.26

There is a "question of law" when the doubt or difference arises as to what the

law is on certain state of facts, and which does not call for an examination of theprobative value of the evidence presented by the parties-litigants. On the otherhand, there is a "question of fact" when the doubt or controversy arises as to thetruth or falsity of the alleged facts. Simply put, when there is no dispute as to fact,the question of whether or not the conclusion drawn therefrom is correct, is aquestion of law.27

Verily, the issues raised by herein petitioner are "questions of law," as theirresolution rest solely on what the law provides given the set of circumstancesavailing. The first issue involves the jurisdiction of the court over the person of oneof the defendants, who was not served with summons on account of his death. Thesecond issue, on the other hand, pertains to the legal effect of death of the plaintiffduring the pendency of the case.

At first brush, it may appear that since pure questions of law were raised,petitioner's resort to this Court was justified and the resolution of theaforementioned issues will necessarily follow. However, a perusal of the petitionrequires that certain procedural issues must initially be resolved before We delveinto the merits of the case.Notably, the petition was filed directly from the RTC which issued the Order in theexercise of its original jurisdiction. The question before Us then is: whether or notpetitioner correctly availed of the mode of appeal under Rule 45 of the Rules ofCourt.Significantly, the rule on appeals is outlined below, to wit:28

(1) In all cases decided by the RTC in the exercise of its original jurisdiction,appeal may be made to the Court of Appeals by mere notice of appeal where theappellant raises questions of fact or mixed questions of fact and law;(2) In all cases decided by the RTC in the exercise of its original

jurisdictionwhere the appellant raises only questions of law, the appealmust be taken to the Supreme Court on a petition for review oncertiorari under Rule45.(3) All appeals from judgments rendered by the RTC in the exercise of its appellate

jurisdiction, regardless of whether the appellant raises questions of fact, questionsof law, or mixed questions of fact and law, shall be brought to the Court of Appealsby filing a petition for review under Rule 42.Accordingly, an appeal may be taken from the RTC which exercised its original

jurisdiction, before the Court of Appeals or directly before this Court, provided thatthe subject of the same is ajudgment or final order that completely disposes ofthe case, or of a particular matter therein when declared by the Rules to beappealable.29The first mode of appeal, to be filed before the Court of Appeals,pertains to a writ of error under Section 2(a), Rule 41 of the Rules of Court, ifquestions of fact or questions of fact and law are raised or involved. On the otherhand, the second mode is by way of an appeal by certiorari before the SupremeCourt under Section 2(c), Rule 41, in relation to Rule 45, where only questions oflaw are raised or involved.30

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An order or judgment of the RTC is deemed final when it finally disposes of apending action, so that nothing more can be done with it in the trial court. In otherwords, the order or judgment ends the litigation in the lower court.31 On the otherhand, an order which does not dispose of the case completely and indicates thatother things remain to be done by the court as regards the merits,is interlocutory. Interlocutoryrefers to something between the commencement

and the end of the suit which decides some point or matter, but is not a finaldecision on the whole controversy.32

The subject of the present petition is an Order of the RTC, which denied petitioner'sOmnibus Motion to Dismiss, for lack of merit.We have said time and again that an order denying a motion to dismiss isinterlocutory.33 Under Section 1(c), Rule 41 of the Rules of Court, an interlocutoryorder is not appealable. As a remedy for the denial, a party has to file an answerand interpose as a defense the objections raised in the motion, and then to proceedto trial; or, a party may immediately avail of the remedy available to the aggrievedparty by filing an appropriate special civil action for certiorari under Rule 65 of theRevised Rules of Court. Let it be stressed though that a petition for certiorari isappropriate only when an order has been issued without or in excess of jurisdiction,

or with grave abuse of discretion amounting to lack or excess of jurisdiction.Based on the foregoing, the Order of the RTC denying petitioner's Omnibus Motionto Dismiss is not appealable even on pure questions of law. It is worth mentioningthat the proper procedure in this case, as enunciated by this Court, is to cite suchinterlocutory order as an error in the appeal of the case -- in the event that the RTCrules in favor of respondent -- and not to appeal such interlocutory order. On theother hand, if the petition is to be treated as a petition for review under Rule 45, itwould likewise fail because the proper subject would only be judgments or finalorders that completely dispose of the case.34

Not being a proper subject of an appeal, the Order of the RTC is consideredinterlocutory. Petitioner should have proceeded with the trial of the case and,should the RTC eventually render an unfavorable verdict, petitioner should assailthe said Order as part of an appeal that may be taken from the final judgment to berendered in this case. Such rule is founded on considerations of orderly procedure,to forestall useless appeals and avoidundue inconvenience to the appealing party by having to assail orders as they arepromulgated by the court, when all such orders may be contested in a singleappeal.In one case,35 the Court adverted to the hazards of interlocutory appeals:It is axiomatic that an interlocutory order cannot be challenged by an appeal. Thus,it has been held that "the proper remedy in such cases is an ordinary appeal froman adverse judgment on the merits, incorporating in said appeal the grounds forassailing the interlocutory order. Allowing appeals from interlocutory orders wouldresult in the `sorry spectacle of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to havemade an error in any of its interlocutory rulings. x x x.Another recognized reason of the law in permitting appeal only from a final order or

judgment, and not from an interlocutory or incidental one, is to avoid multiplicity ofappeals in a single action, which must necessarily suspend the hearing and decisionon the merits of the case during the pendency of the appeal. If such appeal wereallowed, trial on the merits of the case would necessarily be delayed for aconsiderable length of time and compel the adverse party to incur unnecessary

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expenses, for one of the parties may interpose as many appeals as incidentalquestions may be raised by him, and interlocutory orders rendered or issued by thelower court.36

And, even if We treat the petition to have been filed under Rule 65, the same is stilldismissible for violating the principle on hierarchy of courts. Generally, a directresort to us in a petition for certiorari is highly improper, for it violates the

established policy of strict observance of the judicial hierarchy of courts.37 Thisprinciple, as a rule, requires that recourse must first be made to the lower-rankedcourt exercising concurrent jurisdiction with a higher court. However, the judicialhierarchy of courts is not an iron-clad rule. A strict application of the rule is notnecessary when cases brought before the appellate courts do not involve factualbut legal questions.38

In the present case, petitioner submits pure questions of law involving the effect ofnon-service of summons following the death of the person to whom it should beserved, and the effect of the death of the complainant during the pendency of thecase. We deem it best to rule on these issues, not only for the benefit of the benchand bar, but in order to prevent further delay in the trial of the case. Resultantly,our relaxation of the policy of strict observance of the judicial hierarchy of courts is

warranted.Anent the first issue, petitioner argues that, since Sereno died before summons wasserved on him, the RTC should have dismissed the complaint against all thedefendants and that the same should be filed against his estate.

The Sheriff's Return of Service39 dated May 19, 1997 states that Sereno could not beserved with copy of the summons, together with a copy of the complaint, becausehe was already dead.In view of Sereno's death, petitioner asks that the complaint should be dismissed,not only against Sereno, but as to all the defendants, considering that the RTC didnot acquire jurisdiction over the person of Sereno.1avvph!1

Jurisdiction over a party is acquired by service of summons by the sheriff, hisdeputy or other proper court officer, either personally by handing a copy thereof tothe defendant or by substituted service.40 On the otherhand, summons is a writ by which the defendant is notified of the action broughtagainst him. Service of such writ is the means by which the court may acquire

jurisdiction over his person.41

Records show that petitioner had filed a Motion to Dismiss on the grounds of lack oflegal personality of respondent; the allegations in the complaint did not sufficientlystate that respondent has a cause of action or a cause of action against thedefendants; and, the complaint was not accompanied by an affidavit of merit andbond. The RTC denied the motion and held therein that, on the basis of theallegations of fact in the complaint, it can render a valid judgment. Petitioner,subsequently, filed his answer by denying all the material allegations of thecomplaint. And by way of special and affirmative defenses, he reiterated thatrespondent had no legal personality to sue as she had no real interest over theproperty and that while the truck was still registered in Pedro Te's name, the samewas already sold to Gasing.Significantly, a motion to dismiss may be filed within the time for but before thefiling of an answer to the complaint or pleading asserting a claim.42 Among thegrounds mentioned is the court's lack of jurisdiction over the person of thedefending party.

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As a rule, all defenses and objections not pleaded, either in a motion to dismiss or inan answer, are deemed waived.43 The exceptions to this rule are: (1) when the courthas no jurisdiction over the subject matter, (2) when there is another action pendingbetween the parties for the same cause, or (3) when the action is barred by prior

judgment or by statute of limitations, in which cases, the court may dismiss theclaim.

In the case before Us, petitioner raises the issue of lack of jurisdiction over theperson of Sereno, not in his Motion to Dismiss or in his Answer but only in hisOmnibus Motion to Dismiss. Having failed to invoke this ground at the proper time,that is, in a motion to dismiss, petitioner cannot raise it now for the first time onappeal.In fine, We cannot countenance petitioner's argument that the complaint againstthe other defendants should have been dismissed, considering that the RTC neveracquired jurisdiction over the person of Sereno. The court's failure to acquire

jurisdiction over one's person is a defense which is personal to the person claimingit. Obviously, it is now impossible for Sereno to invoke the same in view of hisdeath. Neither can petitioner invoke such ground, on behalf of Sereno, so as to reapthe benefit of having the case dismissed against all of the defendants. Failure to

serve summons on Sereno's person will not be a cause for the dismissal of thecomplaint against the other defendants, considering that they have been servedwith copies of the summons and complaints and have long submitted theirrespective responsive pleadings. In fact, the other defendants in the complaint weregiven the chance to raise all possible defenses and objections personal to them intheir respective motions to dismiss and their subsequent answers.We agree with the RTC in its Order when it resolved the issue in this wise:As correctly pointed by defendants, the Honorable Court has not acquired

jurisdiction over the person of Patricio Sereno since there was indeed no validservice of summons insofar as Patricio Sereno is concerned. Patricio Sereno diedbefore the summons, together with a copy of the complaint and its annexes, couldbe served upon him.However, the failure to effect service of summons unto Patricio Sereno, one of thedefendants herein does not render the action DISMISSIBLE, considering that thethree (3) other defendants, namely, Atty. Rogelio E. Sarsaba, Fulgencio Lavares andthe NLRC, were validly served with summons and the case with respect to theanswering defendants may still proceed independently. Be it recalled that the three(3) answering defendants have previously filed a Motion to Dismiss the Complaintwhich was denied by the Court.Hence, only the case against Patricio Sereno will be DISMISSED and the same maybe filed as a claim against the estate of Patricio Sereno, but the case with respect tothe three (3) other accused will proceed.Anent the second issue, petitioner moves that respondent's attorney-in-fact,Faustino Castaeda, be discharged as he has no more legal personality to sue onbehalf of Fe Vda. de Te, who passed away on April 12, 2005, during the pendency ofthe case before the RTC.When a party to a pending action dies and the claim is not extinguished, the Rulesof Court require a substitution of the deceased.44 Section 1, Rule 87 of the Rules ofCourt enumerates the actions that survived and may be filed against the decedent'srepresentatives as follows: (1) actions to recover real or personal property or aninterest thereon, (2) actions to enforce liens thereon, and (3) actions to recoverdamages for an injury to a person or a property. In such cases, a counsel is obliged

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to inform the court of the death of his client and give the name and address of thelatter's legal representative.45

The rule on substitution of parties is governed by Section 16,46 Rule 3 of the 1997Rules of Civil Procedure, as amended.Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, buta requirement of due process. The rule on substitution was crafted to protect every

party's right to due process. It was designed to ensure that the deceased partywould continue to be properly represented in the suit through his heirs or the dulyappointed legal representative of his estate. Moreover, non-compliance with theRules results in the denial of the right to due process for the heirs who, though notduly notified of the proceedings, would be substantially affected by the decisionrendered therein. Thus, it is only when there is a denial of due process, as when thedeceased is not represented by any legal representative or heir, that the courtnullifies the trial proceedings and the resulting judgment therein.47

In the case before Us, it appears that respondent's counsel did not make anymanifestation before the RTC as to her death. In fact, he had actively participated inthe proceedings. Neither had he shown any proof that he had been retained byrespondent's legal representative or any one who succeeded her.

However, such failure of counsel would not lead Us to invalidate the proceedingsthat have long taken place before the RTC. The Court has repeatedly declared thatfailure of the counsel to comply with his duty to inform the court of the death of hisclient, such that no substitution is effected, will not invalidate the proceedings andthe judgment rendered thereon if the action survives the death of such party. Thetrial court's jurisdiction over the case subsists despite the death of the party.48

The purpose behind this rule is the protection of the right to due process of everyparty to the litigation who may be affected by the intervening death. The deceasedlitigants are themselves protected as they continue to be properly represented inthe suit through the duly appointed legal representative of their estate.49

Anent the claim of petitioner that the special power of attorney50 dated March 4,1997 executed by respondent in favor of Faustino has become functus officio andthat the agency constituted between them has been extinguished upon the death ofrespondent, corollarily, he had no more personality to appear and prosecute thecase on her behalf.Agency is extinguished by the death of the principal.51 The only exception where theagency shall remain in full force and effect even after the death of the principal iswhen if it has been constituted in the common interest of the latter and of theagent, or in the interest of a third person who has accepted the stipulation in hisfavor.52

A perusal of the special power of attorney leads us to conclude that it wasconstituted for the benefit solely of the principal or for respondent Fe Vda. de Te.Nowhere can we infer from the stipulations therein that it was created for thecommon interest of respondent and her attorney-in-fact. Neither was there anymention that it was to benefit a third person who has accepted the stipulation in hisfavor.On this ground, We agree with petitioner. However, We do not believe that suchground would cause the dismissal of the complaint. For as We have said, Civil CaseNo. 3488, which is an action for the recovery of a personal property, a motorvehicle, is an action that survives pursuant to Section 1, Rule 87 of the Rules ofCourt. As such, it is not extinguished by the death of a party.

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In Gonzalez v. Philippine Amusement and Gaming Corporation,53We have laid downthe criteria for determining whether an action survives the death of a plaintiff orpetitioner, to wit:x x x The question as to whether an action survives or not depends on the nature ofthe action and the damage sued for. If the causes of action which survive the wrongcomplained [of] affects primarily and principally property and property rights, the

injuries to the person being merely incidental, while in the causes of action which donot survive the injury complained of is to the person the property and rights ofproperty affected being incidental. x x x

Thus, the RTC aptly resolved the second issue with the following ratiocination:While it may be true as alleged by defendants that with the death of Plaintiff, FeVda. de Te, the Special Power of Attorney she executed empowering the Attorney-in-fact, Faustino Castaeda to sue in her behalf has been rendered functus officio,however, this Court believes that the Attorney-in-fact had not lost his personality toprosecute this case.It bears stressing that when this case was initiated/filed by the Attorney-in-fact, theplaintiff was still very much alive.Records reveal that the Attorney-in-fact has testified long before in behalf of the

said plaintiff and more particularly during the state when the plaintiff wasvehemently opposing the dismissal of the complainant. Subsequently thereto, heeven offered documentary evidence in support of the complaint, and this courtadmitted the same. When this case was initiated, jurisdiction was vested upon thisCourt to try and hear the same to the end. Well-settled is the rule to the point ofbeing elementary that once jurisdiction is acquired by this Court, it attaches untilthe case is decided.

Thus, the proper remedy here is the Substitution of Heirs and not the dismissal ofthis case which would work injustice to the plaintiff.SEC. 16, RULE 3 provides for the substitution of the plaintiff who dies pendinghearing of the case by his/her legal heirs. As to whether or not the heirs will stillcontinue to engage the services of the Attorney-in-fact is another matter, which lieswithin the sole discretion of the heirs.In fine, We hold that the petition should be denied as the RTC Order is interlocutory;hence, not a proper subject of an appeal before the Court. In the same breath, Wealso hold that, if the petition is to be treated as a petition for certiorari as arelaxation of the judicial hierarchy of courts, the same is also dismissible for beingsubstantially insufficient to warrant the Court the nullification of the Order of theRTC.Let this be an occasion for Us to reiterate that the rules are there to aid litigants inprosecuting or defending their cases before the courts. However, these very rulesshould not be abused so as to advance one's personal purposes, to the detriment oforderly administration of justice. We can surmise from the present case hereinpetitioner's manipulation in order to circumvent the rule on modes of appeal andthe hierarchy of courts so that the issues presented herein could be settled withoutgoing through the established procedures. In Vergara, Sr. v. Suelto,54 We stressedthat this should be the constant policy that must be observed strictly by the courtsand lawyers, thus:x x x. The Supreme Court is a court of last resort, and must so remain if it is tosatisfactorily perform the functions assigned to it by the fundamental charter andimmemorial tradition. It cannot and should not be burdened with the task of dealingwith causes in the first instance. Its original jurisdiction to issue the so-called

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extraordinary writs should be exercised only where absolutely necessary or whereserious and important reasons exist therefor. Hence, that jurisdiction shouldgenerally be exercised relative to actions or proceedings before the Court ofAppeals, or before constitutional or other tribunals, bodies or agencies whose actsfor some reason or another are not controllable by the Court of Appeals. Where theissuance of an extraordinary writ is also within the competence of the Court of

Appeals or a Regional Trial Court, it is in either of these courts that the specificaction for the writs procurement must be presented. This is and should continue tobe the policy in this regard, a policy that courts and lawyers must strictly observe.55

WHEREFORE, premises considered, the Petition is DENIED. The Order dated March22, 2006 of the Regional Trial Court, Branch 19, Digos, Davao del Sur in Civil CaseNo. 3488, is hereby AFFIRMED. Costs against the petitioner.SO ORDERED.

GONZALES vs PAGCOR

At bar is a special civil action for prohibition assailing the constitutionality of the

creation of the Philippine Amusement and Gaming Corporation (PAGCOR) as well asthe "grant of franchises" by PAGCOR to 1) Sports and Games EntertainmentCorporation (SAGE) to engage in internet gambling, 2) Best World Gaming andEntertainment Corporation (BEST WORLD) to engage in computerized bingogaming, and 3) Belle Jai-alai Corporation (BELLE) and Filipinas GamingEntertainment Totalizator Corporation (FILGAME) to engage in jai-alai operations.Ramon A. Gonzales, as a citizen, taxpayer and member of the Philippine Bar, filedon September 28, 2000 the instant Petition1 as a class suit under Section 12, Rule 3of the Rules of Court2 seeking to restrain PAGCOR from continuing its operationsand prohibit it and its co-respondents from enforcing: (1) the "Grant of an Authorityand Agreement for the Operation of Sports Betting and InternetGambling"3 executed between PAGCOR and SAGE; (2) the "Grant of Authority toOperate Computerized Bingo Games"4 between PAGCOR and BEST WORLD; and (3)the "Agreement"5 among PAGCOR, BELLE and FILGAME to conduct jai-alaioperations.In compliance with this Courts Resolution of October 18, 2000, respondents filedtheir respective comments on the petition, to which petitioner filed correspondingreplies.In Del Mar v. Phil. Amusement and Gaming Corp., et al.,6 this Court, by Decision ofNovember 29, 2000, enjoined PAGCOR, BELLE, and FILGAME from managing,maintaining and operating jai-alai games, and from enforcing the agreemententered into by them for that purpose. 7

Their motions for reconsideration of said decision in Del Marhaving beendenied,8 PAGCOR, BELLE and FILGAME filed motions for clarification which thisCourt, by Resolution of August 24, 2001, resolved in this wise:WHEREFORE, . . . the Court resolves (a) to partially GRANT the motions forclarification insofar as it is prayed thatPhilippine Amusement and GamingCorporation (PAGCOR) has a valid franchise to, but only by itself (i.e., notin association with any other person or entity) operate, maintain and/ormanage the game of jai-alai, and (b) to DENY the motions insofar asrespondents would also seek a reconsideration of the Courts decision of29 November 2000 that has, since then, (i) enjoined the continued

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operation, maintenance, and/or management of jai-alai games by PAGCORin association with its co-respondents Belle Jai-Alai Corporation and/orFilipinas Gaming Entertainment Totalizator Corporation and (ii) held to bewithout force and effect the agreement of 17 June 1999 among saidrespondents.SO ORDERED.9 (Emphasis supplied)

Respondents BELLE and FILGAME thus filed on December 6, 2001 a Manifestationstating that:1. Respondents [BELLE] and FILGAME were impleaded in the instant petition byreason of the "Agreement", dated 17 June 1999, which they executed withPhilippine Amusement and Gaming Corporation ("PAGCOR").2. However, the said "Agreement" was already declared invalid by the SupremeCourt (en banc) in the consolidated cases of Del Mar vs. PAGCOR, et al. [G.R. No.138298] and Sandoval vs. PAGCOR, et al. [G.R. No. 138982] through its "Resolution"dated 16 August 2001, which has already become final and executory.[3]. Considering that there is no more privity of contract between PAGCOR, [BELLE]and FILGAME, it is respectfully submitted that the participation of respondents[BELLE] and FILGAME is no longer warranted. Thus, there is no more necessity for

respondents [BELLE] and FILGAME to file a memorandum in the instantcase.10(Emphasis supplied)In its Comment on the petition at bar filed on March 29, 2001, BEST WORLD statedthat it had "been unable to operate its bingo terminals and bingo games since itsclosure and shut down by PAGCOR and DILG" pursuant to a Memorandum datedOctober 19, 2000 issued by then President Joseph Ejercito Estrada.11 A copy of saidMemorandum addressed to the Chairman of PAGCOR, which was attached to BESTWORLDs Comment, reads:MEMORANDUM FROM THE PRESIDENT

TO: The ChairmanPhilippine Amusements and Gaming

Corporation(PAGCOR)

SUBJECT:

CLOSURE OF CERTAIN PAGCORFACILITIES AND OUTLETS

DATE: 19 October 2000

You