remedial law part 03 ordinary civil actions reviewer

8/13/2019 Remedial Law Part 03 Ordinary Civil Actions Reviewer

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REMEDIAL LAW REVIEWER

Part III of IX

ORDINARY CIVIL ACTIONS

Mark de Leon, JD 2001

I. General ProvisionsA.Rule 1

Section 1. Title of the Rules. xxx

Sec. 2. In what courts applicable. These Rules shall apply in all the courts, except asotherwise provided by the Supreme Court. (n)

Sec. 3. Cases governed.These Rules shall govern the procedure to be observed in actions,civil or criminal, and special proceedings.

(a) A civil action is one by which a party sues another for the enforcement or protection of aright, or the prevention or redress of a wrong. (1a, R2)

A civil action may either be ordinary or special. Both are governed by the rules for ordinarycivil actions, subject to the specific rules prescribed for a special civil action. (n)

(b) A criminal action is one by which the State prosecutes a person for an act or omissionpunishable by law. (n)

(c) A special proceeding is a remedy by which a party seeks to establish a status, a right, or aparticular fact. (2a, R2)

Memorize!

Civil actionone by which a party sues anotherfor the enforcement or protection of a right, or theprevention or redress of a wrong

Criminal actionone by which the State prosecutes a person for an act or omission punishable by law.

Special proceedinga remedy by which a party seeks to establisha status, a right, or aparticular fact

Special civil actions are called so because special rules govern.

Sec. 4. In what cases not applicable. These Rules shall not apply to election cases, landregistration, cadastral, naturalization and insolvency proceedings, and other cases not herein

provided for, except by analogy or in a suppletory character and whenever practicable andconvenient. (R143a)

Cases where the Rules apply only by analogy or suppletorily

1. election cases

2. land registration

3. cadastral

4. naturalization and

5. insolvency proceedings, and

6. other cases not herein provided for

Sec. 5. Commencement of action.A civil actionis commenced by the filing of the originalcomplaint in court. If an additional defendant is impleaded in a later pleading, the action is

commenced with regard to him on the date of the filing of such later pleading, irrespective ofwhether the motion for its admission, if necessary, is denied by the court. (6a)


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Remedial Law Reviewer, Part III of IX, Last printed 3/31/2014 11:07:00 AM Mark de Leon, JD 2001 - 2 -

Sec. 6. Construction. These Rules shall be liberally construed in order to promote theirobjective of securing a just, speedy and inexpensive disposition of every action and proceeding.(2a)

Memorize Sec.6. (Just, Speedy, Inexpensivecatch-all answer in the bar!)

B.Cases

Cabrera v. Tiano, 8 SCRA 542 (1963)FACTS:Josefina Potestas Cabrera and her sister Cresencia Potestas Omulon filed an action for Partitionand Recovery of Real Estate, with Damages against Mariano Tiano. Their complaint alleged that they

were entitled to a portion of the land, since Josefina did not sign the Deed of Sale while Cresencia was aminor at the time of the sale.

Tiano claimed that he was the absolute owner of the land by acquisitive prescription of 10yrs, from thedate of purchase 02jul47. Plaintiffs commenced this case on 20jun57. Court issued summons on21jun57. Defendant received the summons on 02jul57 which was incidentally, the end of the 10yrprescriptive period.

The trial court declared that the plaintiffs are entitled each to 1/8 of the property in question plus P1,000

damages for both of them and P200 attorneys fees. Defendant moved for recon and was denied.

Defendant appealed to SC contending that prescription has already set in. He insists that the periodshould be counted from the date the summons was served on him. He claims that the judicial summons,

which could civilly interrupt his possession, was received by him only of 02jul57.

HELD: Civil actions are deemed commenced from date of the filing and docketing of the complaint withthe Clerk of Court, without taking into account the issuance and service of summons. Commencement ofthe suit prior to the expiration of the prescriptive period, interrupts the prescription period.

Sun Insurance v. Asuncion, 170 SCRA 274 (1989)

FACTS: Petitioner Sun Insurance filed a complaint with the Makati RTC for the consignation of a

premium refund on a fire insurance policy with prayer for the judicial declaration of its nullity againstprivate respondent Manuey Uy Po Tiong. Private respondent was declared in default for failure to file therequired answer within the reglementary period.

Private respondent filed a compliant in the Quezon City RTC for the refund of premiums and theissuance of a writ of preliminary attachment. Only the amount of P210 was paid by private respondent asdocket fee which prompted petitioner to raise objection. Upon order of the SC, the case was assigned toa different branch due to under-assessment of docket fees.

The case was thereafter assigned to Judge Asuncion who required the parties to comment on the Clerk ofCourts letter-report signifying her difficulty in complying with the SC Resolution since the pleadings filedby private respondent did not indicate the exact amount sought to be recovered.

Private respondent filed a Re-Amended complaint stating therein a claim of not less than 10M as actualcompensatory damages in the prayer. However, the body of the amended complaint alleges actual andcompensatory damages and attys fees in the total amount of about P44,601,623.70

Judge Asuncion issued another Order admitting the second amended complaint and stating that the sameconstituted proper compliance with the SC Resolution. Petitioner filed a petition for Certiorari with theCA questioning the order of Judge Asuncion. Private respondent filed a supplemental complaint allegingan additional claim of P20M as damages bringing the total claim to P64,601,623.70. CA denied petitionand granted writ of prelim attachment.

HELD: 1) It is not simply the filing of the complaint or appropriate initiatory pleading, but the paymentof the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature ofthe action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee,


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the court may allow payment of the fee within a reasonable time but in no case beyond the applicableprescriptive or reglementary period. 2) Permissive counterclaims, third party claims and similar pleadings,shall not be considered filed until and unless the filing fee prescribed therefore is paid. The court may alsoallow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive orreglementary period. 3) If the judgment awards a claim not specified in the pleading, or if specified thesame has been left for determination by the court, the additional filing fee therefor shall constitute a lienon the judgment.

Escolin: There are some compulsory counterclaim that needs payment of docket fees, and some whichdoes not.

Hodges v. CA, GR 87617, 184 SCRA (1990)

FACTS: Gellada filed an action for damages against Hodges in the Iloilo CFI for some allegeddefamatory statements of defendant against plaintiff. The defendant pointed out that the court cannotacquire jurisdiction over the case unless the corresponding docket fee is paid. CFI ruled against Hodges.CA affirmed CFI ruling.

HELD: SC reversed CA ruling. Filing fees should be paid in full for the court to acquire jurisdiction.Partial payment of docket fees prevents the court from acquiring jurisdiction and any proceeding

undertaken thereafter is null and void.

Spouses de Leon v. CA, 287 SCRA (1998)

FACTS: Private respondent Elayda filed in the Quezon City RTC a complaint for annulment orrescission of a contract of sale of 2 parcels of land against petitioners. The trial court held the fees shouldbe based on the value of the property. CA reversed and held that the flat rate of P400 should be charged.

HELD: An action for rescission of contract should be treated similar to an action for specificperformance. An action for rescission of contract is one which cannot be estimated and therefore thedocket fee for its filing should be the flat amount for actions incapable of pecuniary estimation, regardlessof the value of the real property which is the subject of the contract.

Manchester Development v. CA, 149 SCRA 562 (1987)

Facts:Manchester filed an action for torts and damages and specific performance. Body of the complaintspecified amount of damages, but the prayer did not. Complaint was amended deleting all amounts. Onlyafter court order did complainant specify the amount, but still only in the body, not in the prayer. Saidamended complaint was admitted.

Held: In civil cases, all pleadings should specify in both the body and prayer the amount of damagessought. The court does not acquire jurisdictions until the proper docket fee has been paid. Where anaction is both for specific performance and damages, the docket fees must be based on the total damagessought to be recovered, even if it is not spelled out in the prayer. Where the prayer clearly shows that theaction was one for damages, there can be no honest difference of opinion as to the amount of filing

fees. Where payment was insufficient and there was no honest difference of opinion as to the correctamount of filing fees, the court never acquired jurisdiction over the original complaint. There was thus nocomplaint to amend. Docket fees must be based on the original, not amended complaint. A case isdeemed filed only upon payment of the docket fee regardless of the actual date of filing in court.Henceforth, the amount sought to be recovered should be stated both in the body of the complaint and inprayer.

Escolin: The SC in Manchester prohibited plaintiffs in civil cases from not specifying the amount ofdamages.

Manuel v. Alfeche, 259 SCRA 475 (1996)

Facts:Manuel filed a libel case against writer/author and editors of the newspaper Panay News. RTCfound 3 people to be guilty but acquitted a fourth accused. However the civil indemnity by way of moral


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damages were dismissed for lack of jurisdiction. Complainant in a libel case, where the information statedthe amount of moral damages, did not pay filing fees for the impliedly instituted civil action.

Held:When a civil action is deemed impliedly instituted with the criminal, when the amount of damages,other than actual, is alleged in the complaint or information filed in court, then the corresponding filingfees shall be paid. However, when the amount of damages is not so alleged, filing fees need not be paidand shall simply constitute a first lien on the judgment, except in an award for actual damages (in every

crime there is also civil liability. These are the actual damages. Thus they should not be charged docketfees). In no case shall filing fees for actual damages be collected.

Manuel case is applicable to civil cases impliedly instituted with criminal cases. In purely civil actions, theManchester ruling applies.

de Leon: Note that under the Criminal Procedure Rules of 2000, filing fees for actual damages may becollected in case of cases for violation of BP 22.

II.Civil Procedure

A.Ordinary Civil Actions (Rules 2-5)

1. Cause of Action

a. Kinds of actions

1) Real or Personal action

Real actionthe subject matter of the action is real property (disputes about ownership, possession, andinterest concerning real property) (e.g. foreclosure of real mortgage)

Personal action the subject matter of the action is personal property (e.g. foreclosure of chattelmortgage)

2)Action in personam, in rem, and quasi in rem

Action in personamthe decision is enforceable only against the parties (no extra-territorial service ofsummons)

Action in rem the decision is enforceable against the whole world (there is extra-territorial service ofsummons thru publication)

Action quasi in rem - A real action may still be an action in personam.

de Leon: is it proper to say that all special proceedings are actions in rem?

b. Rule 2

Section 1. Ordinary civil actions, basis of . Every ordinary civil action must be based on acause of action. (n)

Sec. 2. Cause of action, defined.A cause of action is the act or omission by which a partyviolates a right of another. (n)

Memorize!

cause of actionact or omission by which a party violates a right of another.

Sec. 3. One suit for a single cause of action.A party may not institute more than one suitfor a single cause of action. (3a)

Sec. 4. Splitting a single cause of action; effect of.If two or more suits are instituted on thebasis of the same cause of action, the filing of one or a judgment upon the merits in any one isavailable as a ground for the dismissal of the others. (4a)

cf grounds for MtD


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Sec. 5.Joinder of causes of action.A party may in one pleading assert, in the alternative orotherwise, as many causes of action as he may have against an opposing party, subject to thefollowing conditions:

(a) The party joining the causes of action shall comply with the rules on joinder of parties;

cf Rule 3, Sec. 6

Sec. 6. Permissive joinder of parties.All persons in whom or against whom any right to relief in respect to or arising outof the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, may,except as otherwise provided in these Rules, join as plaintiffs or be joined as defendants in one complaint, where anyquestion of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the courtmay make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expensein connection with any proceedings in which he may have no interest. (6)

Escolin: if there is joinder of parties, the cause of action asserted by all the plaintiffs must be based on acommon question of law common to all plaintiffs or to all the defendants.

(b) The joinder shall not include special civil actions or actions governed by special rules;

e.g. forcible entry and unlawful detainer; actions governed by the rules on summary procedure (e.g.ejectment)

(c) Where the causes of action are between the same parties but pertain to different venues orjurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causesof action falls within the jurisdiction of said court and the venue lies therein; and

Joiner of actions in different venues and jurisdictions must be in a RTC, not MTC

(d) Where the claims in all the causes of action are principally for recovery of money, theaggregate amount claimed shall be the test of jurisdiction. (5a)

Joiner of causes of action was introduced in the 1997 Rules of Civil Procedure.

Memorize Section 5!

A plaintiff can not split a single cause of action, but he may join several causes of action against the samedefendant, subject to the following rules

1. must comply with the rules on joinder of parties

2. joinder shall not include special civil actions or actions governed by special rules (e.g. summaryprocedure)

3. where the causes of action are between the same parties but pertain to different venues orjurisdictions, the joinder may be allowed in the RTC provided

a. one of the causes of action falls within the jurisdiction of the RTC court and

b. the venue lies within such RTC

4. where the claims in all the causes of action are principally for recovery of money, the aggregateamount claimed shall be the test of jurisdiction.

Sec. 6. Misjoinder of causes of action. Misjoinder of causes of action is not a ground fordismissal of an action. A misjoined cause of action may, on motion of a partyor on the initiativeof the court, be severed and proceeded with separately. (n)

cf Rule 31, Sec. 2

Sec. 2. Separate trials.The court, in furtherance of convenience or to avoid prejudice, may order a separate trial ofany claim, cross-claim, counterclaim, or third-party complaint, or of any separate issue or of any number of claims,cross-claims, counterclaims, third-party complaints or issues.

cf Rule 36, Sec. 5


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Sec. 5. Separate judgments. When more than one claim for relief is presented in an action, the court, at any stage,upon a determination of the issues material to a particular claim and all counterclaims arising out of the transaction oroccurrence which is the subject matter of the claim, may render a separate judgment disposing of such claim. Thejudgment shall terminate the action with respect to the claim so disposed of and the action shall proceed as to theremaining claims. In case a separate judgment is rendered, the court by order may stay its enforcement until therendition of a subsequent judgment or judgments and may prescribe such conditions as may be necessary to securethe benefit thereof to the party in whose favor the judgment is rendered. (5a)

cf Rule 41, Sec. 1 (g)

Section 1. Subject of appeal.An appeal may be taken from a judgment or final order that completely disposes of thecase, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; xxx

Escolin: A party generally can not appeal from a judgment on 1 cause of action in joined causes of action.He must file a leave of court before appealing, or wait for judgment from all other joined causes of action.

c. Cases

Citizen Surety v. Melencio-Herrera, 38 SCRA 369 (1971)FACTS: Spouses Dacanay were indebted to Citizens Surety Insurance. As security, the Dacanaysmortgaged a parcel of land in Baguio. Since they were not able to pay said debt, the said lot was sold in aforeclosure sale. However, proceeds of the sale were insufficient to satisfy said debt. Thus CitizensSurety filed a complaint with the Manila CFI, seeking to recover the balance, plus 10% thereof as attysfees, and other costs.

At petitioners request, respondent Judge caused summons to be made by publication in the Phils Herald.But despite the publication and deposit of a prepaid copy of the complaint at the Manila Post Office,defendants did not appear within the period of 60days from last publication, as required by the summons.

Plaintiff then asked that defendants be declared in default; but instead, respondent Judge asked it to show

cause why the action should not be dismissed, the suit being in personam and the defendants not havingappeared. Respondent Judge dismissed the case despite plaintiffs argument that the summons bypublication was sufficient and valid under sec16 Rule14 RRC.

HELD:Where the action is in personam (e.g. action for deficiency judgment), the Court could not validlyacquire jurisdiction on a non-appearing defendant, absent a personal service of summons. Without suchpersonal service, any judgment on a non-appearing defendant would be violative of due process.Summons by publication cannot confer upon the court jurisdiction over said defendants, who does not

voluntarily submit himself to the authority of the court. The proper recourse for a creditor is to locateproperties, real or personal, of the resident defendant debtor and cause them to be attached, in whichcase, the attachment converts the action into a proceeding in rem or quasi in rem and the summons bypublication may then accordingly be deemed valid and effective. The case should not be dismissed butshould be held pending in the court's archives, until plaintiff succeeds in determining the whereabouts ofthe defendants' person or properties and causes valid summons to be served personally or by publication.

Escolin: Citizen Surety could not have availed of summons by publication because this provision appliesonly to actions in rem or quasi in rem. He should have invoked Rule 57, Sec. 1 (f) to convert the actioninto quasi in rem

Section 1. Grounds upon which attachment may issue.At the commencement of the action or at any time before entry ofjudgment, a plaintiff or any proper party may have the property of the adverse party attached as security for thesatisfaction of any judgment that may be recovered in the following cases:

(f) In an action against a party who does not reside and is not found in the Philippines, or on whom summons may beserved by publication.(1a)


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Bachrach Motor v. Icaragal, 68 Phil 287 (1939)

FACTS: Icaragal, with Figueroa, for value received, executed in favor of Bachrach, a promissory note;and executed a real estate mortgage on a parcel of land in Laguna as security for the pro note.

Thereafter, promissors defaulted in the payment of the agreed monthly installments. Bachrach institutedin the Manila CFI an action for the collection of the amount due. Judgment was rendered for theplaintiff. A writ of execution was issued and in pursuance thereof, the Laguna sheriff, at the indication of

the plaintiff, levied on the properties of the defendants, including the mortgaged lot.

The other defendant herein Oriental Commercial, interposed a third-party claim, alleging that by virtue ofa writ of execution issued in a civil case in the municipal court of Manila City, the said lot had already beenacquired by it at the public auction. Thus the sheriff desisted from the sale of the property and thejudgment in favor of Bachrach remained unsatisfied.

Bachrach then instituted an action to foreclose the mortgage. Trial court dismissed the complaint. ThusBachrach took the present appeal.

HELD:An action for a collection on a loan and an action for foreclosure of the mortgage that securessuch loan are based on one a single cause of action (i.e. default of the debtor). Such actions can not

therefore be split or filed separately. The filing or judgment on one action will necessarily bar the filing ofthe other.

Industrial Finance Corp. v. Apostol, 177 SCRA 521 (1989)

FACTS: Spouses Padilla bought on credit 3 units of Isuzu trucks from Industrial Transport &Equipment. They executed a prom note for the balance of the purchase price. This was secured by achattel mortgage of said trucks and, as additional collateral, a real estate mortgage on their land.

The Padillas failed to pay several installments on the prom note, the assignee Industrial Finance Corp.(IFC) sued them in the CFI for the recovery of the unpaid balance including attys fees. CFI ruled on16Apr75 in favor of IFC. On appeal, CA sustained the CFIs ruling except for modification of attys feesfrom 25% to 12% of the balance.

Meanwhile on 09Sep71 private respondents Juan and Honorata Delmendo filed a complaint against IFC,as principal party, and the Padillas, as formal parties, in respondent CFI. The Delmendos alleged that they

were the transferees of the real property which was mortgaged earlier by the Padillas to Indl Transport.The Delmendos prayed for the cancellation of the mortgaged lien annotated of the TCT and the deliveryto them by petitioner of the owners copy of said title with damages and attys fees, considering that IFC

waived its rights over the mortgage when it instituted a personal action against the Padillas for collectionof sum of money.

IFC moved for the dismissal of the complaint, contending that is has not waived its right over themortgage lien. The Delmendos filed a motion for summay judgment which the CFI granted. CFI ruledin favor of the Delmendos. IFC filed a MfR which was denied. Hence this petition.

HELD: A mortgage creditor may elect to waive his security and instead bring an ordinary action tocollect with the right to execute on all the properties of the debtor, including the subject-matter of themortgage. If he fails in the collection suit, he can not thereafter foreclose on the mortgage.

Escolin: In case of splitting of a single cause of action, the ground for dismissal is res judicata.

Escolin: If there is one cause of action but two remedies, the plaintiff should have pleaded alternativeremedies in his complaint.

Progressive Development Corp. v. CA, 301 SCRA 637 (1999)

Facts: Pursuant to a lease contract, for non-payment of rentals Progressive (lessor) repossessed the leasedproperties and seeks to auction-off movable property found therein. Westin Seafood Market (lessee) filesa forcible entry case before the MTC against the lessor. Settlement was agreed upon which was reneged


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(meaning: go back on promise) by the plaintiff. Lessor seeks to auction-off lessees properties again.Lessee now files a case for damages with the RTC against the lessor. Lessor filed a MtD the damage suiton the ground of litis pendencia and forum shopping. Instead of ruling on the motion, Judge Santiagoissued an order archiving the case pending the outcome of the forcible entry case being heard at theMeTC for the reason that the damages is principally anchored on whether or not the defend ants(petitioner herein) have committed forcible entry. Petitioner moved for recon of the order and reiteratedits motion to dismiss the damages suit.

Before petitioners MtD could be resolved, private respondent filed with the RTC an amended complaintfor damages. Westin also filed an Urgent Ex-Parte Motion for the Issuance of a TRO and Motion for theGrant of a Prelimi Prohibitory and Prelim Mandatory Injunction. RTC denied petitioners MtD andadmitted Westins amended complaint and granting the TRO.

Progressive filed with CA a special civil action for certiorari and prohibition in the ground that JudgeSantiago acted in excess of his jurisdiction and/or committed grave abuse of discretion amounting to lackof jurisdiction in admitting the amended complaint of Westin and issuing a restraining order againstProgressive; in allowing private respondent to engage in forum shopping; and, taking cognizance of theaction for damages despite lack of jurisdiction. CA dismissed the petition due to the failure of petitionerto file a MfR of Judge Santiagos order, which it explained was a prerequisite to the institution of a

petition for certiorari and prohibition. CA also found that the elements of litis pendencia were lacking tojustify the dismissal of the action for damages with the RTC because despite the pendency of the forcibleentry case with the MeTC the only damages recoverable thereat were those caused by the loss of the useand occupation of the property and not the kind of damages being claimed before the RTC which had nodirect relation to loss of material possession. CA clarified that since the damages prayed for in theamended complaint with the RTC were those caused by the alleged high-handed manner with whichpetitioner reacquired possession of the leased premises and the sale of Westins movable found therein,the RTC and not the MeTC had jurisdiction over the action of damages.

Petitioner filed petition for review on certiorari under Rule 45 alleging that CA erred in finding thatpetitioner failed to avail of its plain, speedy and adequate remedy of a prior MfR with the RTC; ruling that

the trial judge did not act with grave abuse of discretion in taking cognizance of the action for damagesand injunction despite the pendency of the forcible entry case with the MeTC; and ruling that privaterespondent did not commit forum shopping since the causes of action before the RTC and MeTC werenot identical with each other.

Held: Petition is with merit. While generally a MfR must first be filed before resorting to certiorari inorder to give the lower court an opportunity to correct the errors imputed to it, this rule admits ofexceptions and is not intended to be applied without considering the circumatances of the case. The filingof the MfR before availing of the remedy of certiorari is not sine qua non when the issue raised is onepurely of law, or where the error is patent or the disputed order is void, or questions raised on certiorariare the same as those already squarely presented to and passed upon the lower court. The MtD the actionfor damages with the RTC on the ground that another action for forcible entry was pending at the MeTC

between that same parties involving the same matter and cause of action. Outrightly rejected by the RTC,the same issue was elevated by petitioner on certiorari before the CA. Clearly, any MfR on the trial court

would have been a pointless exercise.

The forcible entry and damages case arose from a single cause of action. Hence, the case fordamages may be dismissed.

Petition is granted. CA decision and order of RTC reversed and set aside. RTC directed to dismiss thedamages case. MeTC directed to proceed with forcible entry case.

Escolin: The SC was wrong. Previous jurisprudence ruled that in cases filed with the MTC, a compulsorycounterclaim in excess of the jurisdiction of the MTC should be filed as a separate action, or if filed in thesame action, the excess is waived.


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de Leon: Under Rule 70, if a claim in an ejectment case in the MTC is for reasonable use of the property,the claim may go beyond the jurisdiction of the MTC. But if the claim is other than reasonable use of theproperty, it must be within the jurisdiction of the MTC.

de Leon: Counterclaims for moral and exemplary damages in ejectment cases before the MTC should bewithin the the amounts prescribed for summary procedure.

Agustin v. Bacalan, 135 SCRA 340 (1985)

Facts: Administrator of estate-lessor files a case for ejectment before the City Courts against the lessee.Lessee files counterclaim in excess of the City Courts jurisdiction. City Court decides for plaintiff. Onappeal, CFI rules for defendant and grants him damages. This became final. Plaintiff files separate fornullifying the CFI decision on the ground that the damages awarded was beyond the jurisdiction of theCity Court.

Held: A counterclaim not presented in the lower court can not be entertained on appeal. Defendant isdeemed to have waived his counterclaim in excess of the City Courts jurisdiction. It is as though it hasnever been brought before City Court. It may not be entertained on appeal. The amount of judgment,therefore, obtained by the defendant-appellee on appeal, cannot exceed the jurisdiction of the court in

which the action began. Since the trial court did not acquire jurisdiction over the defendant's counterclaim

in excess of the jurisdictional amount, the appellate court, likewise, acquired no jurisdiction over the sameby its decisions or otherwise. When court transcends the limits prescribed for it by law and assumes to act

where it has no jurisdiction, its adjudications will be utterly void and of no effect either as an estoppel orotherwise. The excess award of the CFI is therefore null and void. Action to declare nullity of award isproper. The award not in excess stands.

Escolin: A compulsory counterclaim beyond the jurisdiction of the court can be filed as a separate action.

Maceda v. CA, 176 SCRA (1989)

Facts: Transferee of leased property files an ejectment case against the lessee. Lessee sets up counterclaimfor reimbursement of renovation expenses, in excess of the MTCs jurisdiction. MTC ejects lessee. RTC

reinstates lessee and orders plaintiff to reimburse lessee. CA affirms RTC but deletes award ofreimbursement.

Held: MTC had no jurisdiction over the excess counterclaim. Hence, neither did the RTC. A counterclaimin excess of the limit may be pleaded only by way of defense to weaken the plaintiff's claim, but not toobtain affirmative relief.

Bayang v. CA, 148 SCRA 91 (1987)

Facts: Pending a quieting of title case, defendant dispossesses the plaintiff. CA rules in favor of plaintiff.Plaintiff now files separate action for the fruits during the period of dispossession.

Held: Ownership of the land and income from the land is a single cause of action in case of quieting of

title. The claim for the income from the land was incidental to a claim for ownership of the land. Duringthe whole period of dispossession, plaintiff made no move to amend his complaint to include a claim forthe income supposedly received by the defendant. Failure to do so is res judicata to the subsequent case.

Famador: Compulsory counterclaims should be filed with the original case. Permissive counterclaims maybe filed in a separate case.

Escolin: Plaintiff should have filed a supplementary complaint after the defendant has dispossessed him.

2. Parties to Civil Actions

a. Rule 3

Section 1. Who may be parties; plaintiff and defendant.Only natural or juridical persons, or

entities authorized by law may be parties in a civil action. The term "plaintiff" may refer to theclaiming party, the counter-claimant, the cross-claimant, or the third (fourth, etc.)-party plaintiff.


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The term "defendant" may refer to the original defending party, the defendant in a counterclaim,the cross-defendant, or the third (fourth, etc.)-party defendant. (1a)

Sec. 2. Parties in interest.A real party in interest is the party who stands to be benefited orinjured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwiseauthorized by law or these Rules, every action must be prosecuted or defended in the name of thereal party in interest. (2a)

Memorize!

real party in interestthe party who stands to be benefited or injuredby the judgment in the suit, or theparty entitled to the avails of the suit.

Sec. 3. Representatives as parties. Where the action is allowed to be prosecuted ordefended by a representative or someone acting in a fiduciary capacity, the beneficiary shall beincluded in the title of the case and shall be deemed to be the real party in interest. Arepresentative may be a trustee of an express trust, a guardian, an executor or administrator, or a

party authorized by law or these Rules. An agent acting in his own name and for the benefit of anundisclosed principal may sue or be sued without joining the principal except when the contractinvolves things belonging to the principal. (3a)

Sec. 4. Spouses as parties. Husband and wife shall sue or be sued jointly, except asprovided by law. (4a)

Sec. 5. Minor or incompetent persons.A minor or a person alleged to be incompetent, maysue or be sued, with the assistance of his father, mother, guardian, or if he has none, a guardianad litem. (5a)

Sec. 6. Permissive joinder of parties. All persons in whom or against whom any right torelief in respect to or arising out of the same transaction or series of transactions is alleged toexist, whether jointly, severally, or in the alternative, may, except as otherwise provided in theseRules, join as plaintiffs or be joined as defendants in one complaint, where any question of law orfact common to all such plaintiffs or to all such defendants may arise in the action; but the courtmay make such orders as may be just to prevent any plaintiff or defendant from beingembarrassed or put to expense in connection with any proceedings in which he may have nointerest. (6)

Memorize!

Rule on permissive joinder of partiesAll persons in whom or against whom any right to relief in respectto or arising out of the same transaction or series of transactions is alleged to exist, whether jointly,severally, or in the alternative, may join as plaintiffs or be joined as defendants in one complaint, whereany question of law or fact common to all such plaintiffs or to all such defendants may arise in the action

Misjoinder of causes of action is not a ground to dismiss a case. The proper remedy is to sever the other

cause of action and to try separately.Sec. 7. Compulsory joinder of indispensable parties. Parties in interest without whom no

final determination can be had of an action shall be joined either as plaintiffs or defendants. (7)

Memorize! Key word final

indispensable partiesparties in interest without whom no final determination can be had of an action

Failure to implead an indispensable party is ground to dismiss the case.

Sec. 8. Necessary party.A necessary party is one who is not indispensable but who oughtto be joined as a party if complete relief is to be accorded as to those already parties, or for acomplete determination or settlement of the claim subject of the action. (8a)

Memorize! Key word complete


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necessary party one who is not indispensablebut who ought to be joined as a party if completerelief is to be accordedas to those already parties, or for a complete determination or settlementofthe claim subject of the action.

Failure to implead a necessary party is a waiver of the claim against such party. It is not ground to dismissthe case.

Sec. 9. Non-joinder of necessary parties to be pleaded.Whenever in any pleading in which

a claim is asserted a necessary party is not joined, the pleader shall set forth his name, if known,and shall state why he is omitted. Should the court find the reason for the omissionunmeritorious, it may order the inclusion of the omitted necessary party if jurisdiction over his

person may be obtained.

The failure to comply with the order for his inclusion, without justifiable cause, shall bedeemed a waiver of the claim against such party.

The non-inclusion of a necessary party does not prevent the court from proceeding in theaction, and the judgment rendered therein shall be without prejudice to the rights of suchnecessary party. (8a, 9a)

When necessary party not pleaded

1. the pleader shall set forth his name, if known, and shall state why he is omitted

2. Should the court find the reason for the omission unmeritorious, it may order the inclusion of theomitted necessary party if jurisdiction over his person may be obtained.

3. failure to comply with the order for his inclusion, without justifiable cause, shall be deemed a waiverof the claim against such party.

4. The non-inclusion of a necessary party does not prevent the court from proceeding in the action, andthe judgment rendered therein shall be without prejudice to the rights of such necessary party.

Sec. 10. Unwilling co-plaintiff.If the consent of any party who should be joined as plaintiff

can not be obtained, he may be made a defendant and the reason therefor shall be stated in thecomplaint. (10)

Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder ofparties is ground for dismissal of an action. Parties may be dropped or added by order of thecourt on motion of any party or on its own initiative at any stage of the action and on such termsas are just. Any claim against a misjoined party may be severed and proceeded with separately.(11a)

de Leon: The non-joinder of a party which does not cause dismissal refers to necessary parties. Non-joinder of an indispensable party is a ground to dismiss the action.

Sec. 12. Class suit.When the subject matter of the controversy is one of common or general

interest to many persons so numerous that it is impracticable to join all as parties, a number ofthem which the court finds to be sufficiently numerous and representative as to fully protect theinterests of all concerned may sue or defend for the benefit of all. Any party in interest shall havethe right to intervene to protect his individual interest. (12a)

Memorize!

Requisites of a Class Suit

1. the subject matter of the controversy is one of common or general interest

2. to many persons so numerous it is impracticable to join all as parties

3. a number of them which the court finds to be sufficiently numerous and representative as to fully

protect the interests of all concerned sues or defends for the benefit of all


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4. Any party in interest shall have the right to intervene to protect his individual interest.

Sec. 13. Alternative defendants. Where the plaintiff is uncertain against who of severalpersons he is entitled to relief, he may join any or all of them as defendants in the alternative,although a right to relief against one may be inconsistent with a right of relief against the other.(13a)

Sec. 14. Unknown identity or name of defendant. Whenever the identity or name of a

defendant is unknown, he may be sued as the unknown owner, heir, devisee, or by such otherdesignation as the case may require; when his identity or true name is discovered, the pleadingmust be amended accordingly. (14)

Sec. 15. Entity without juridical personality as defendant. When two or more persons notorganized as an entity with juridical personality enter into a transaction, they may be sued underthe name by which they are generally or commonly known.

In the answer of such defendant, the names and addresses of the persons composing saidentity must all be revealed. (15a)

cf Rule 14, Sec. 8

Sec. 8. Service upon entity without juridical personality. When persons associated in an entity without juridical personalityare sued under the name by which they are generally or commonly known, service may be effected upon all thedefendants by serving upon any one of them, or upon the person in charge of the office or place of businessmaintained in such name. But such service shall not bind individually any person whose connection with the entityhas, upon due notice, been severed before the action was brought. (9a)

Chang Kai Shek v. CA, 172 SCRA 389 (1989)

Facts: Dismissed teacher sues unincorporated school. Plaintiff tries to amend to implead school officials,but CFI dismissed the case. CA reverses.

Held: The school can not invoke its non-compliance with the law to escape being sued. It is now inestoppel.

Sec. 16. Death of party; duty of counsel.Whenever a party to a pending action dies, and theclaim is not thereby extinguished, it shall be the duty of his counsel to inform the court withinthirty (30) days after such death of the fact thereof, and to give the name and address of his legalrepresentative or representatives. Failure of counsel to comply with this duty shall be a ground fordisciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, withoutrequiring the appointment of an executor or administrator and the court may appoint a guardianad litem for the minor heirs.

The court shall forthwith order said legal representative or representatives to appear and besubstituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one sonamed shall fail to appear within the specified period, the court may order the opposing party,

within a specified time, to procure the appointment of an executor or administrator for the estateof the deceased and the latter shall immediately appear for and on behalf of the deceased. Thecourt charges in procuring such appointment, if defrayed by the opposing party, may berecovered as costs. (16a, 17a)

Sec. 20. Action on contractual money claims. When the action is for recovery of moneyarising from contract, express or implied, and the defendant dies before entry of final judgment inthe court in which the action was pending at the time of such death, it shall not be dismissed butshall instead be allowed to continue until entry of final judgment. A favorable judgment obtained

by the plaintiff therein shall be enforced in the manner especially provided in these Rules forprosecuting claims against the estate of a deceased person. (21a)


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Money claims are now not extinguished by the death of a party.

The court can not cite in contempt a legal representative who refuses to appear in court.

cf Rule 78, Sec. 6 which shows that the plaintiff-creditor may apply for letters of administration.

Rule 78 Letters Testamentary and of Administration, When and to Whom Issued

Sec. 6. When and to whom letters of administration granted. If no executor is named in the will, or the executor orexecutors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate, administration shall begranted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the court, or tosuch person as such surviving husband or wife, or next of kin, requests to have appointed, if competent and willing toserve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, beincompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the death ofthe person to apply for administration or to request that administration be granted to some other person, it may begranted to one or more of the principal creditors, if competent and willing to serve;

(c) If there is no such creditor competent and willing to serve, it may be granted to such other person as the courtmay select.

Next of kin is someone who will inherit next to the spouse. The remedy in case conflict of interestwhere a creditor being appointed administrator is in Rule 86, Sec. 8, is to appoint a special administratorwhere the creditor appointed will have to file his claim.

Rule 86 Claims Against Estate

Sec. 8.Claim of executor or administrator against an estate.If the executor or administrator has a claim against the estatehe represents, he shall give notice thereof, in writing, to the court, and the court shall appoint a special administrator,

who shall, in the adjustment of such claim, have the same power and be subject to the same liability as the generaladministrator or executor in the settlement of other claims. The court may order the executor or administrator to payto the special administrator necessary funds to defend such claim.

If the plaintiff wins in a money claim, he must present a writ of execution with the probate court as aclaim in the estate proceedings. If the plaintiff wins in a non-money claim, the writ of execution may be

enforced without going to the probate court.cf Rule 39, Sec. 7

Rule 39, Execution Satisfaction and Effect of Judgments

Sec. 7. Execution in case of death of party. In case of the death of party, execution may issue or be enforced in thefollowing manner:

(a) In case of the death of the judgment obligee, upon the application of his executor or administrator, or successor ininterest;

(b) In case of the death of the judgment obligor, against his executor or administrator or successor in interest, if thejudgment be for the recovery of real or personal property, or the enforcement of the lien thereon;

(c) In case of the death of the judgment obligor, after execution is actually levied upon any of his property, the same

may be sold for the satisfaction of the judgment obligation, and the officer making the sale shall account to thecorresponding executor or administrator for any surplus in his hands. (7a)

If the judgment creditor dies after the final judgment, the judgment will be executed upon initiative of theexecutor or administrator. If the judgment debtor dies after the final judgment, and the judgment is a realaction or action for damages, the executor or administrator substitutes the decedent and judgment isexecuted. But if the case is for a sum of money, and if he dies before levy was executed, the judgment isfiled as a claim before the estate proceedings. But if levy was already made, the sale of the propertyproceeds, the proceeds is delivered to the plaintiff and the excess is delivered to theexecutor/administrator.

cf Rule 87, Sec. 1

Sec. 1. Actions which may and which may not be brought against executor or administrator. - No action upon a claim for therecovery of money or debt or interest thereon shall be commenced against the executor or administrator; but actions


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to recover real or personal property, or an interest therein, from the estate, or to enforce a lien thereon, and actions torecover damages for an injury to person or property, real or personal, may be commenced against him.

If the defendant dies before a case may be filed

1. for recovery of sum of moneyfile a claim before the estate proceedings, where the creditor will haveto present evidence on the validity of his claim; because the amount sought to be collected is definite

2. for recovery of propertyfile a separate case against the executor/administrator; because the amount

of the claim is unliquidated

3. for damages for injuryfile a separate case before the courts.

de Leons Rules: (SUMMARY) If the defendant dies

1. before a case is filed

a. for recovery of a sum of moneyfile a claim before the estate proceedings, where the creditor willhave to present evidence on the validity of his claim

b. real action and action for damagesfile a separate case against the executor/administrator

2. after a case is filed but before judgment

a. for recovery of a sum of money case shall not be dismissed but shall instead be allowed tocontinue until entry of final judgment; the judgment is then filed as a claim in the estateproceedings; Regalado, p. 101: Decedents legal representative should be substituted for thedecedent.

b. real action and action for damages

1) heirs of the deceased may be allowed to be substituted, without requiring the appointment ofan executor or administrator and the court may appoint a guardian ad litem for the minorheirs.

2) If no legal representative appears, the court may order the opposing party, within a specified

time, to procure the appointment of an executor or administrator for the estate of thedeceased and the latter shall immediately appear for and on behalf of the deceased. Priority toin the appointment to

a) Surviving spouse, or next of kin

b) one or more of the principal creditors, if competent and willing to serve

c) other person as the court may select.

3) in case conflict of interest where a creditor being appointed administrator is to appoint aspecial administrator where the creditor appointed will have to file his own claim

3. after judgment but before execution

a. for sum of moneypresent the writ of execution as a claim before the probate court

b. real action and action for damages substitute the defendant with his administrator or executor,and enforce the writ against him without going to the probate court

4. after levy on execution (applies only to recovery of a sum of money) continue with the auction saleand the officer making the sale shall deliver the proceeds to the plaintiff, and account to the executoror administrator for any excess

Sec. 17. Death or separation of a party who is a public officer. When a public officer is aparty in an action in his official capacity and during its pendency dies, resigns, or otherwiseceases to hold office, the action may be continued and maintained by or against his successor if,

within thirty (30) days after the successor takes office or such time as may be granted by thecourt, it is satisfactorily shown to the court by any party that there is a substantial need for


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continuing or maintaining it and that the successor adopts or continues or threatens to adopt orcontinue the action of his predecessor. Before a substitution is made, the party or officer to beaffected, unless expressly assenting thereto, shall be given reasonable notice of the applicationtherefor and accorded an opportunity to be heard. (18a)

Sec. 18. Incompetency or incapacity.If a party becomes incompetent or incapacitated, thecourt, upon motion with notice, may allow the action to be continued by or against the

incompetent or incapacitated person assisted by his legal guardian or guardian ad litem. (19a)Sec. 19. Transfer of interest.In case of any transfer of interest, the action may be continued

by or against the original party, unless the court upon motion directs the person to whom theinterest is transferred to be substituted in the action or joined with the original party. (20)

Sec. 20.Action on contractual money claims.xxx (moved to under Rule 3, Sec. 16)

Sec. 21. Indigent party.A party may be authorized to litigate his action, claim or defense asan indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one

who has no money or property sufficient and available for food, shelter and basic necessities forhimself and his family.

Such authority shall include an exemption from payment of docket and other lawful fees, andof transcripts of stenographic notes which the court may order to be furnished him. The amountof the docket and other lawful fees which the indigent was exempted from paying shall be a lienon any judgment rendered in the case favorable to the indigent, unless the court otherwise

provides.

Any adverse party may contest the grant of such authority at any time before judgment isrendered by the trial court. If the court should determine after hearing that the party declared asan indigent is in fact a person with sufficient income or property, the proper docket and otherlawful fees shall be assessed and collected by the clerk of court. If payment is not made withinthe time fixed by the court, execution shall issue for the payment thereof, without prejudice tosuch other sanctions as the court may impose. (22a)

Indigent partyone who has no money or property sufficient and available for food, shelter and basicnecessities for himself and his family.

Sec. 22. Notice to the Solicitor General. In any action involving the validity of any treaty,law, ordinance, executive order, presidential decree, rules or regulations, the court, in itsdiscretion, may require the appearance of the Solicitor General who may be heard in person orthrough a representative duly designated by him. (23a)

b. Cases

Juasing Hardware v. Mendoza, 115 SCRA 783 (1982)

FACTS Juasing Hardware, single proprietorship owned by Ong Bon Yong, filed a complaint for thecollection of a sum of money against Pilar Dolla. The case proceeded to pre-trial and trial. After plaintiffpresented its evidence and rested its case, defendant filed a Motion for Dismissal of Action (Demurrer toEvidence) praying that the action be dismissed for the plaintiffs lack of capacity to sue. Defendant in saidMotion contended that plaintiff Juasing is a single prop, not a corp or partnership duly registered inaccordance with law and therefor is not a juridical person with legal capacity to bring an action in court.

Juasing filed an Opposition and moved for the admission of an Amended Complaint. CFI Judgedismissed the case and denied admission of Amended Complaint.

HELD Correction of the designation of the plaintiff (from name of sole proprietorship to name ofindividual owner) is merely formal, not substantial, and hence may be corrected at any stage of the action.


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Chang Kai Shek v. CA, 172 SCRA 389 (1989)

FACTS Fausta Oh was abruptly dismissed for no apparent or given reason from her teaching job inChang Kai Shek School. Fausta sued and demanded separation pay, SSS benefits, salary differentials,maternity benefits, moral and exemplary damages. Chang Kai Shek filed MtD on the ground that it couldnot be sued. Complaint was amended. Certain school officials were also impleaded to make themsolidarily liable with the school. CFI dismissed the complaint. On appeal, CA set aside CFI decision and

held the school suable and liable while absolving the school officials. MfR was denied. The school thencame to SC in a petition for review on certiorari.

HELDAn unincorporated entity sued as such can not invoke its non-compliance with the law to escapebeing sued. It is now in estoppel. Petition denied. CA decision affirmed.

Hang Lung Bank v. Saulog, 201 SCRA 137 (1991)

FACTS Hang Lung Bank (HLB), foreign corp not doing business in the Phils, entered into 2 continuingguarantee agreements with Cordova Chin San (CCS) in HK whereby CCS agreed to pay on demand allsums of money which may be due the bank from Worlder Enterprises (WE). WE having defaulted in itspayment, HLB filed a collection suit against WE and CCS in the HK SC.

Thereafter, HLB sent a demand letter to CCS at his Phils address but again, no response was madethereto. Hence HLB instituted in the Makati RTC an action seeking enforcement of its just and validclaims. CCS raised in his answer to the complaint the affirmative defenses of; lack of cause of action,incapacity to sue, and improper venue.

A day before pre-trial, CCS filed MtD on grounds that HLB had no legal capacity to sue and that venue isimproper. RTC granted the MtD. HLB filed MfR but was denied. Hence the instant petition forcertiorari seeking reversal of said orders.

HELD License as a requirement for a foreign corporation to sue applies only to foreign corporationsdoing business in the Philippines. Isolated Transaction Rule unlicensed foreign corporation not doingbusiness may sue on an isolated transaction. RTC orders set aside. Case reinstated and RTC is directed to

proceed with the disposition of the case.Commissioner of Customs v. KMK Gani, 182 SCRA 591 (1990)

Unlicensed foreign corporations not engaged in business may sue in the Philippines based on an isolatedtransaction. Fact of not doing business must be alleged in the suit.

Escolin: In Commissioner of Customs, KMKs personality was not recognized because it was not able toprove that it was a duly formed corporation by presenting a certification from the government of itscountry of origin. Unlike in Hang Lung, the foreign corporation was able to prove its corporate existenceunder the foreign law.

de Leon: Even if a plaintiff foreign entity is not required to obtain a license because it is not doing

business, it must still prove its due incorporation in its country of origin.Merrill Lynch v. CA, 211 SCRA 824 (1992)

Facts: Unlicensed foreign corporation sues for recovery of money. They were doing business in thePhilippines.

Held: The defendant is estopped to deny the capacity of the foreign corporation to sue, having dealt withthe corporation.

USA v. Reyes, 219 SCRA 192 (1993)

The doctrine of immunity from suit will not apply and may not be invoked where the public official isbeing sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the

officers and agents of the government is removed the moment they are sued in their individual capacity.This situation usually arises where the public official acts without authority or in excess of the powers


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be predicated on a source of obligation other than delict. Where the civil liability survives, an action forrecovery therefor may be pursued but only by way of filing a separate civil action against theexecutor/administrator or the estate of the accused, depending on the source of obligation. In cases wherein the civil action is impliedly instituted with the criminal action, the statute of limitations on the civilliability is deemed interrupted during the pendency of the criminal case.

Nual v. CA, 221 SCRA 26 (1993)

Facts: Frank and Mary had children, one of whom was Mary Lyon Martin. They also owned a parcel ofland. They died. Luisa Lyon Nual was in possession of the land. Emma Lyon de Leon in her behalf andas guardian ad litem of the minor heirs of Frank and Mary (but not including Mary Lyon Martin) suedLuisa Lyon, now deceased and herein represented by her heirs, for partition and accounting. CFI orderedthe partition but dismissed the complaint for accounting. Affirmed by the CA, with a finding that MaryLyon Martin was a child of Frank and Mary, but the order of partitioning did not include Mary LyonMartin. Decision became final and writ of execution was issued.

Thereafter, Mary Lyon Martin filed a motion to quash the order of execution with preliminary injunction.Eventually, the lower court ordered the inclusion of Mary Lyon Martin in the partitioning as a co-owner,invoking the fact that the earlier decision had a finding that Mary Lyon Martin is one of the children of

Frank and Mary. CA affirms.Held: When a final judgment becomes executory, it thereby becomes immutable and unalterable. Thejudgment may no longer be modified in any respect, even if the modification is meant to correct what isperceived to be an erroneous conclusion of fact or law, and regardless of whether the modification isattempted to be made by the Court rendering it or by the highest Court of land. The only recognizedexceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries whichcause no prejudice to any party, and, of course, where the judgment is void. Any amendment. or alteration

which substantially affects a final and executory judgment is null and void for lack of jurisdiction,including the entire proceedings held for that purpose.

In the case at bar, the decision of the trial court has become final and executory. Thus, upon its finality,

the trial judge lost his jurisdiction over the case. Consequently, any modification that he would make, as inthis case, the inclusion of Mary Lyon Martin would be in excess of his authority. The remedy of MaryLyon Martin is to file an independent suit against the parties and all other heirs for her share in the subjectproperty, in order that all the parties in interest can prove their respective claims.

Escolin: Once a judgment has been rendered, even if it is not yet final, intervention may no longer beallowed. It is not necessary for the judgment of partition be final before the excluded heir may not beallowed to intervene. cf Rule 19, Sec. 2

Sec. 2. Time to intervene. - The motion to intervene may be filed at any time before rendition of judgment by the trialcourt. xxx

Robles v. CA, 83 SCRA 180 (1978)

Facts: Heirs sign power of attorney authorizing an heir to sell land inherited. One heir did not sign. Theland was sold and registered. Excluded heir now sues the buyer and the RoD to cancel the buyers title.

TC dismisses the case on ground that the vendors should have been impleaded as an indispensable party

Held: The action is not really one for cancellation of title, but really one questioning RoDs acceptance ofthe PoA as a Declaration of heirship. The vendors are not indispensable parties. The action forcancellation pertains only to plaintiffs rights as an excluded heir, and does not affect the rights andinterests of the vendors. In reality, plaintiffs action is one of legal redemption where the vendors areclearly not indispensable parties. Besides, the defendant RoD had the option of impleading the vendors as3rdparty defendants if he wanted to.


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Imson v. CA, 239 SCRA 58 (1994)

Facts: Plaintiff sues for damages from a vehicular accident. Beneficial owner and the driver were declaredin default. Compromise was reached with the insurer and the claim against him was withdrawn. Registeredowners now seek dismissal of the claims against them as well.

Held: The case should proceed. The rule is dismissal of the case against an indispensable party results indismissal of the case against the other indispensable parties. The insurer is merely a necessary party.

Dismissal of the case against him will not result to dismissal of the claim against the other defendants.

Escolin: The insurer is not an indispensable party to the case. The only indispensable party here is thedriver of the truck. All the others are mere necessary parties.

Mina v. Pacson, 6 SCRA 775 (1963)

Facts: Plaintiffs Mina are the illegitimate children of Joaquin Mina. Joaquin executed a two deeds ofabsolute sale to Crispino Medina and Cresencia Mina (legitimate child). These deeds bear the conformityof Joaquins wife Antonia. Joaquin died in 1958. Plainitffs Mina sued Crispino and Cresencia fordeclaration of nullity of the deeds of sale and that defendants be required to deliver to plaintiffs of saidproperties together with moral damages (1stcase). The RTC directed plaintiffs to amend their complaint to

include Antonia and other intestate heirs of Joaquin. Plaintiffs failed to comply, so 1st

case was dismissed.Thereafter plainitffs Mina brought another action with the same pleading with an additional prayer forrecognition as Joaquins illegitimate children (2nd case). Defendants filed a MTD on the ground of resjudicata. The court thereby dismissed the 2ndcase. Plaintiffs now contend that there is no res judicatabecause the 1stdismissal was void.

Held: To order an amendment to a complaint within a certain period in order to implead as party plaintiffor defendant one who is not a party to the case lies within the discretion of the Court. Where it appearsthat the person to be impleaded is an indispensable party, the party to whom such order is directed has noother choice but to comply with it. His refusal or failure to comply with the order is a ground for thedismissal of his complaint and is res judicata to a 2ndcomplaint.

Casenas v. Rosales, 19 SCRA 463 (1967)Facts: Araas and Caseas filed a complaint for specific performance and enforcement of their allegedright under a certain deed of sale, and damages against the spouses Rosales. After answer has been filedand before trial, counsel for plaintiffs informed the trial court that plaintiff Araas and defendant Rosaleshad both died. The lower court directed the surviving plaintiff, Caseas, to amend the complaint to effectthe necessary substitution of parties thereon. Caseas failed to do this, so the TC dismissed the case. Thedismissal became final. Thereafter, Caseas filed another complaint against the widow Rosales and heirs ofthe late Rosales "to quiet, and for reconveyance of, title to real property, with damages." This suit referreditself to the very same property litigated in the previous dismissed case. and asserted exactly the sameallegations as those made in the former complaint. Defendants filed MTD on ground of res judicata. TCdismissed the case.

Held: When certain of the parties died and due notice thereof was given to the trial court, it devolved onthe said court to order, not the amendment of the complaint, but the appearance of the legalrepresentatives of the deceased. An order to amend the complaint, before the proper substitution ofparties has been effected, is void and imposes upon the plaintiff no duty to comply therewith to the endthat an order dismissing the said complaint, for such non-compliance, would similarly be void.

Escolin: where the defendant dies pending the case, the duty of the court is to order the substitution ofthe defendant, not to order the amendment of the complaint to implead the heirs of the defendant

de Leon: In Mina, the court ordered the amendment of the complaint to implead an indispensable party.The order was proper, hence failure to comply was a valid ground for dismissal of the complaint. In

Casenas, the court ordered the amendment of the complaint to implead the heirs of a deceased party. The


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order was improper because the proper procedure was to substitute. Hence failure to comply was not avalid ground for dismissal of the complaint.

Escolin: Heirs of the decedent are indispensable parties in an action to for support by an illegitimate childof the decedent.

Vda dela Cruz v. CA, 88 SCRA 695 (1979)

Facts: Defendant in an ejectment case died before judgment could be rendered. TC acknowledged in itsdecision that the defendant had died. Decision became final and was executed. Heirs of the defendantnow filed a motion to substitute the deceased and to set aside as null void the decisions, orders, writ ofexecution and sale at public auction made and entered against the latter. TC allowed substitution, butdenied setting aside of the decision and execution. CA reverses.

Held: In case of the death of a party and due notice is given to the trial court, it is the duty of the court toorder the legal representative of the deceased to appear for him. In the case at bar, no legal representative

was ever summoned appear in court. No legal representative appeared to be substituted. The plaintiffs didnot procure the appointment of such legal representatives. As a result, the continuance of a proceedingduring the pendency of which a party thereto dies, without such having been validly substituted inaccordance with the rules, amounts to lack of jurisdiction.

Escolin: It is the duty of the court to order substitution and such substitution is mandatory otherwise thecourt does not acquire jurisdiction.

de Leon: If the heirs ordered to substitute refuses to appear, they may not be held in contempt. Theremedy is for the creditor to procure the appointment of an administrator for the estate and thensubstitute him for the decedent.

Vda. de Haberer v. CA, 104 SCRA 534 (1981)

Facts: TC dismisses 11 complaints for recovery of parcel of land. Plaintiff dies pending appeal. Counselnotifies the court of appellants death, and prayed for suspension of the period for filing an appellantsbrief pending appointment of an executor. CA denies extension and dismisses the appeal.

Held: The RoC requires appearance of the deceased legal representatives instead of dismissing the case.Dismissal of an appeal on the ground of failure to file appellants brief must be in accordance with thetenets of justice and fair play. The extension should have been granted.

Vda. de Salazar v. CA, 250 SCRA 305 (1995)

Formal substitution of heirs is not necessary when the heirs themselves voluntarily appeared, participatedin the case and presented evidence in defense of deceased defendant.

Acar v. Rosal,19 SCRA 625 (1967)

An applicant for leave to sue in forma pauperis, need not be a pauper; the fact that he is able-bodied and

may earn the necessary money is no answer to his statement that he has not sufficient means to prosecutethe action or to secure the costs. It suffices that plaintiff is indigent, though not a public charge.Indigents are persons who have no property or source of income sufficient for their support aside fromtheir own labor, though self-supporting when able to work and in employment. It is in this sense of beingindigent that "pauper" is taken when referring to suits in forma pauperis. In class suits, the nominalplaintiffs directly bear the cost of the suit. The proof of the indigence of the nominal parties is enough tosupport a petition to sue as pauper litigants. It need not be proved that every beneficiary of the class suit isindigent. The remedy in case of denial of a meritorious petition to sue as pauper litigants is mandamus.

Appeal is unavailing because the plaintiffs were not even accorded the status of litigants.

3.Venue of Actions

a. Distinctions between Venue and Jurisdiction


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Jurisdiction authority to hear and decide a case, established by substantive law, establishes relationbetween court and subject matter; fixed by law and can not be conferred by the party

Venue place of trial, established by procedural law, establishes relation between parties; conferred byagreement of parties, can be fixed by agreement

JURISDICTION VENUE

Authority to hear and decide a case Place of trialEstablished by substantive law Established by procedural law

Establishes relation between the court and subject matter Establishes relation between parties

Fixed by law Can be fixed by agreement

Cannot be conferred by the party Conferred by agreement of parties

Lack of jurisdiction is a ground for dismissal by the courtmotu propio

Improper venue may not be a ground fordismissal if there is no motion from

b.Rule 4

Section 1. Venue of real actions.Actions affecting title to or possession of real property, orinterest therein, shall be commenced and tried in the proper court which has jurisdiction over thearea wherein the real property involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the municipal trial courtof the municipality or city wherein the real property involved, or a portion thereof, is situated.(1[a], 2[a]a)

Venue of real actions is where the real property is located.

Sec. 2. Venue of personal actions.All other actions may be commenced and tried where theplaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principaldefendants resides, or in the case of a non-resident defendant where he may be found, at theelection of the plaintiff. (2[b]a)

Sec. 3. Venue of actions against nonresidents.If any of the defendants does not reside andis not found in the Philippines, and the action affects the personal status of the plaintiff, or any

property of said defendant located in the Philippines, the action may be commenced and tried inthe court of the place where the plaintiff resides, or where the property or any portion thereof issituated or found. (2[c]a)

Venue of personal actions is (at the option of the plaintiff)

1. where plaintiff or any of the plaintiffs reside

2. where defendant or any of the defendants reside

3. where the non-resident defendant

a. is in the Philippineswhere he may be found

b. outside the Philippines and the action affects the personal statuts of the plaintiff or any propertyof the defendant located in the Philippines, either

1) where the plaintiff resides, or

2) where the property or any portion thereof is situated or found

Sec. 4. When Rule not applicable.This Rule shall not apply-

(a) In those cases where a specific rule or law provides otherwise; or


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e.g. Labor cases are filed with the Labor arbiter (RA 1171)

(b) Where the parties have validly agreed in writing before the filing of the action on theexclusive venue thereof. (3a, 5a)

Escolin: the rules now allow raising the issue of improper venue as an affirmative defense in the answereven if there was failure to raise it in a motion to dismiss.

c.

CasesDacoycoy v. CA, 195 SCRA 641 (1991)

FACTS Jesus Dacoycoy filed before RTC of Antipolo, Rizal a complaint against private respondentRufino de Guzman praying for annulment of 2 deeds of sale involving a parcel of riceland located inLingayen, Pangasinan, the surrender of the produce, and damages. Before summons could be served onde Guzman, RTC judge ordered counsel for petitioner to confer with respondent trial judge on the matterof venue. After said conference, RTC dismissed the complaint due to improper venue. RTC found thatpetitioners action is a real action as it sought not only the annulment of the deeds of sale but alsorecovery of ownership of the riceland which was outside of the RTCs territorial jurisdiction. Petitionerappealed to IAC which affirmed RTCs order of dismissal.

Petitioner faults the IAC in affirming RTC finding that the venue was improperly laid when de Guzmanhas not even answered the complaint nor waived the venue.

HELD Petition granted. The court can not motu proprio dismiss the case on ground of improper venue.Objections to venue may be waived by the parties. Improper venue does not necessarily divest the courtof jurisdiction over the subject matter of the controversy.

Even granting that the action of petitioner is a real action, respondent trial court would still havejurisdiction over the case, it being a RTC vested with the exclusive original jurisdiction over all civilactions which involve the title to, or possession of, real property, or any interest therein.

de Leon: This does not apply in summary procedure cases where the court may motu propio dismiss the

complaint even on the ground of improper venue (SC Resolution 15 October 1991, Sec. 4).Fortune Motors v. CA, 178 SCRA 564 (1989)

FACTS Metrobank extended various loans to Fortune which was secured by a real estate mortgage on theFortune building and lot in Makati. For failure of Fortune to pay the loans, Metrobank initiatedextrajudicial foreclosure proceedings. After notice were served, posted and published, the mortgagedproperty was sold at a public auction to Metrobank as the highest bidder.

3days after the expiration of the 1yr redemption period, Fortune filed a complaint for annulment of theextrajudicial foreclosure sale alleging that the foreclosure was premature because its obligation toMetrobank was not yet due, publication of the notice of sale was incomplete, there was no public auction,and the price for which the property was sold was shockingly low.

Before summons could be served, Metrobank filed a MtD the complaint on the ground that the venue ofthe action was improperly laid in Manila for the subject real property is situated in Makati, therefore theaction to annul the foreclosure sale should be filed in Makati RTC.

MtD was opposed by Fortune alleging that its action is a personal action and that the issue is thevalidity of the extrajudicial proceedings so that it may have a new 1yr redemption period.

Manila RTC issued an order reserving the resolution of Metrobanks MtD until after the trial on the meritsas the grounds relied upon by the defendant were not clear and indubitable. Metrobank filed a MfR but

was denied by Manila RTC. Metrobank appealed to CA. CA granted and dismissed the annulment casewithout prejudice to its being filed in the proper venue.

HELDAn action to annul a real estate mortgage foreclosure sale is no different from an action to annul aprivate sale of real property. Both are actions that affect title and seek recovery of the real property sold. It


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is therefore a real action which should be commenced and tried in the province where the property or partthereof lies. Petition denied. CA decision affirmed.

Clavecilla Radio v. Antillon, 19 SCRA 379 (1967)

FACTS New Cagayan Grocery Bacolod Branch sent a message (REURTEL WASHED NOTAVAILABLE REFINED TWENTY FIFTY IF AGREEABLE SHALL SHIP LATER REPLY) to NewCagayan Grocery CDO Branch thru Clavecilla Radio Bacolod. Clavecilla Radio Cagayan received the

message. However, in delivering the same to New Cagayan Grocery CDO, the word NOT between theword WASHED and AVAILABLE was omitted, thus changing entirely the contents and purport ofthe message and causing the addressee to suffer damages.

New Cagayan filed a complaint against Clavecilla in the MTC. After service of summons, Clavecilla filedMtD the complaint on the grounds that it states no cause of action and the venue is improperly laid. NewCagayan interposed opposition to which Clavecilla filed its rejoinder. Thereafter, MTC judge Antillondenied MtD for lack of merit.

Clavecilla filed a petition for prohibition and prelim injunction with the CFI praying that judge Antillon beenjoined from further proceeding with the case on the ground of improper venue. Respondents filedMtD the petition but was opposed by Clavecilla. CFI held that Clavecilla may be sued in Manila where it

has its principal office or in CDO where it was served with summons thru the branch manager. In otherword, CFI upheld the authority of MTC to take cognizance of the case.

In appealing, Clavecilla contends that the suit against it should be filed in Manila where it holds itsprincipal office.

HELD The residence of the corporation is the place where its principal office is established. Branchoffices are not residences where it may be sued. The phrase where he (defendant) may be found as to

venue of actions applies only to non-residents. It does not apply to defendants residing in the Philippines.

Young Auto v. CA, 223 SCRA 670 (1993)

Facts: Young Auto (YASCO) sold its shares of stock in Consolidated Mktg & Devt Corp (CMDC) to

Roxas. Purchase price 8M, dp 4M check bal 4M in pd checks 1M each. After execution of the agreement,Roxas took full control of the four markets of CMDC. However YASCO held on to stock certificates assecurity pending full payment. First 4M was honored but the four 1M checks were dishonored. Roxassold one of the markets to a 3rdparty. Out of the proceeds, YASCO rcvd 600k leaving a bal of 3.4M

YASCO filed a complaint against Roxas in Cebu RTC praying that Roxas be ordered to pay the bal or thatfull control of the 3 markets be turned over to YASCO. Roxas filed MtD, ground: improper venue. RTCdismissed MTD.

Roxas appealed to CA. CA ordered dismissal of the complaint on the ground of improper venue.YASCO appealed to SC.

The Articles of Incorporation of Young Auto Motors stated that its principal office was in Cebu. In itstransactions with Roxas, Young Auto stated in its letterhead that its principal office was in Manila. Young

Auto sued Roxas in Cebu based on such transactions. Roxas files MTD on the ground of improper venue.

Held: A corporation is a resident of the place where its principal office is located as stated in the articlesof incorporation. Hence, Cebu was a validvenue for Youngs action.

Escolin: If it was Roxas who filed the case against Young in Pasay City based on the address in theletterhead, Young would be estopped from objecting on the ground of improper venue.

Hernandez v. DBP, 71 SCRA 290 (1976)

Facts: Hernandez resides in Batangas. He was awarded a lot in Quezon City by DBP. Subsequently, DBPrefused to accept Hernandezs payment and cancelled the award. Hernandez filed an action to annul thecancellation of the award in Batangas. DBP filed MTD on ground of improper venue.


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Escolin: the rules now allow raising the issue of improper venue as an affirmative defense in the answereven if there was failure to raise it in a motion to dismiss (Rule 16, Sec. 6).

Sweetlines v. Teves, 83 SCRA 361 (1978)

Facts: Boat tickets stipulated that the venue of actions arising out of the tickets should be filed in CebuCity.

Held: Although venue may be changed or transferred by agreement of the parties in writing, such anagreement will not be held valid where it practically negates the action of the claimants. Considering theexpense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in theCebu City, he would most probably decide not to file the action at all. The condition will thus defeat,instead of enhance, the ends of justice. On the other hand, Sweetlines has branches or offices in therespective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing ofthe suit in residence of plaintiff, as was done in the instant case, will not cause inconvience to, much lessprejudice Sweetlines. The stipulation, if enforced, will be subversive of the public good or interest, since it

will frustrate in meritorious cases, actions of passenger claimants outside of Cebu City, thus placingSweetlines company at a decided advantage over said persons, who may have perfectly legitimate claimsagainst it. The said condition should, therefore, be declared void and unenforceable, as contrary to public

policyEscolin: The SC characterized a contract of adhesion as void for being against public policy.

de Leon: Contrast the rationale in the cases of Sweetlines and Clavecilla re: confusion and untoldinconvenience on the part of defendants.

4. Uniform Procedure in Trial Courts

a. Rule 5

Section 1. Uniform procedure. The procedure in the Municipal Trial Courts shall be thesame as in the Regional Trial Courts, except (a) where a particular provision expressly orimpliedly applies only to either of said courts, or (b) in civil cases governed by the Rule on

Summary Procedure. (n)

Sec. 2. Meaning of terms.The term "Municipal Trial Courts" as used in these Rules shallinclude Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, andMunicipal Circuit Trial Courts. (la)

b. Rule on Summary Procedure (SC Resolution dated October 15, 1991)

1) Coverage

I. Applicability

Sec. 1. Scope. - This rule shall govern the summary procedure in the Metr

remedial law part 03 ordinary civil actions reviewer

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