REMEDIAL LAW REVIEWER

Part III of IX

ORDINARY CIVIL ACTIONS

I. General Provisions

A.Rule 1

Section 1. Title of the Rules. — xxx

Sec. 2. In what courts applicable. — These Rules shall apply in all the courts, except as otherwise 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 a right, 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 ordinary civil 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 omission punishable by law. (n)

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

Memorize!

Civil action – one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong

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

Special proceeding – a remedy by which a party seeks to establish a status, a right, or a particular 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, land registration, cadastral, naturalization and insolvency proceedings, and other cases not herein provided for, except by analogy or in a suppletory character and whenever practicable and convenient. (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 action is commenced by the filing of the original complaint 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 of whether the motion for its admission, if necessary, is denied by the court. (6a)

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

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

B.CasesCabrera v. Tiano, 8 SCRA 542 (1963) Civil actions are deemed commenced from date of the filing and docketing of the complaint with the Clerk of Court, without taking into account the issuance and service of summons. Commencement of the suit prior to the expiration of the prescriptive period, interrupts the prescription period.

Sun Insurance v. Asuncion, 170 SCRA 274 (1989) 1) It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive 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 also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3) If the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment.

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

Hodges v. CA, GR 87617, 184 SCRA (1990) 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 proceedings undertaken thereafter is null and void.

Spouses de Leon v. CA, 287 SCRA (1998) An action for rescission of contract should be treated similar to an action for specific performance. An action for rescission of contract is one which cannot be estimated and therefore the docket fee for its filing should be the flat amount for actions incapable of pecuniary estimation, regardless of the value of the real property which is the subject of the contract.

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

Facts: Body of the complaint specified amount of damages, but the prayer did not. Complaint was amended deleting all amounts. Only after court order did complainant specify the amount, but still only in the body, not in the prayer.

Held: In civil cases, all pleadings should specify in both the body and prayer the amount of damages sought. The court does not acquire jurisdictions until the proper docket fee has been paid. Where an

action is both for specific performance and damages, the docket fees must be based on the total damages sought to be recovered, even if it is not spelled out in the prayer. Where the prayer clearly shows that the action 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 correct amount of filing fees, the court never acquired jurisdiction over the original complaint. There was thus no complaint to amend. Docket fees must be based on the original, not amended complaint. A case is deemed 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 in prayer.

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

Manuel v. Alfeche, 259 SCRA 475 (1996)

Facts: Complainant in a libel case, where the information stated the 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 filing fees shall be paid. However, when the amount of damages is not so alleged, filing fees need not be paid and shall simply constitute a first lien on the judgment, except in an award for actual damages. 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, the Manchester ruling applies.

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

II. Civil Procedure

A.Ordinary Civil Actions (Rules 2-5)

Cause of Action

a. Kinds of actions

1)Real or Personal actionReal action – the subject matter of the action is real property (e.g. foreclosure of real mortgage)

Personal action – the subject matter of the action is personal property (e.g. foreclosure of chattel mortgage)

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

Action in personam – the decision is enforceable only against the parties

Action in rem – the decision is enforceable against the whole world

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 a cause of action. (n)

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

Memorize!

cause of action – act 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 suit for a single cause of action. (3a)

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

cf grounds for MtD

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

(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 out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these Rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in 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 based on a common 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 or jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the jurisdiction of said court and the venue lies therein; and

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, the aggregate 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 same defendant, 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. summary procedure)

3. where the causes of action are between the same parties but pertain to different venues or jurisdictions, 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 aggregate amount claimed shall be the test of jurisdiction.

Sec. 6. Misjoinder of causes of action. – Misjoinder of causes of action is not a ground for dismissal of an action. A misjoined cause of action may, on motion of a party or on the initiative of the court, be severed and proceeded with separately. (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 of any 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

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 or occurrence which is the subject matter of the claim, may render a separate judgment disposing of such claim. The judgment shall terminate the action with respect to the claim so disposed of and the action shall proceed as to the remaining claims. In case a separate judgment is rendered, the court by order may stay its enforcement until the rendition of a subsequent judgment or judgments and may prescribe such conditions as may be necessary to secure the 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 the case, 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. CasesCitizen Surety v. Melencio-Herrera, 38 SCRA 369 (1971) Where the action is in personam (e.g. action for deficiency judgment(, the Court could not validly acquire jurisdiction on a non-appearing defendant, absent a personal service of summons. Without such personal 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 locate properties, real or personal, of the resident defendant debtor and cause them to be attached, in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may then accordingly be deemed valid and effective. The case should not be dismissed but should be held pending in the court's archives, until plaintiff succeeds in determining the whereabouts of the 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 applies only to actions in rem or quasi in rem. He should have invoked Rule 57, Sec. 1 (f) to convert the action into quasi in rem

Section 1. Grounds upon which attachment may issue. — At the commencement of the action or at any time before entry of judgment, a plaintiff or any proper party may have the property of the adverse party attached as security for the satisfaction 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 be served by publication.(1a)

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

An action for a collection on a loan and an action for foreclosure of the mortgage that secures such 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 of the other.

Industrial Finance Corp. v. Apostol, 177 SCRA 521 (1989) A mortgage creditor may elect to waive his security and instead bring an ordinary action to collect with the right to execute on all the properties of the debtor, including the subject-matter of the mortgage. 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 alternative remedies in his complaint.

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

Facts: Pursuant to a lease contract, for non-payment of rentals lessor repossessed the leased properties and seeks to auction-off movable property found therein. Lessee files a forcible entry case before the MTC against the lessor. Settlement was agreed upon which was reneged by the plaintiff. Lessor seeks to auction-off lessee’s properties again. Lessee now files a case for damages with the RTC against the lessor.

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

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

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 the property, it must be within the jurisdiction of the MTC.

de Leon: Counterclaims for moral and exemplary damages in ejectment cases before the MTC should be within 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 Court’s jurisdiction. City Court decides for plaintiff. On appeal, CFI rules for defendant and grants him damages. This became final. Plaintiff files separate for nullifying the CFI decision on the ground that the damages awarded was beyond the jurisdiction of the City Court.

Held: A counterclaim not presented in the lower court can not be entertained on appeal. Defendant is deemed to have waived his counterclaim in excess of the City Court’s jurisdiction. It is as though it has never 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 same by 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 or otherwise. The excess award of the CFI is therefore null and void. Action to declare nullity of award is proper. 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 counterclaim for reimbursement of renovation expenses, in excess of the MTC’s jurisdiction. MTC ejects lessee. RTC reinstates lessee and orders plaintiff to reimburse lessee. CA affirms RTC but deletes award of reimbursement.

Held: MTC had no jurisdiction over the excess counterclaim. Hence, neither did the RTC. A counterclaim in excess of the limit may be pleaded only by way of defense to weaken the plaintiff's claim, but not to obtain 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. During the whole period of dispossession, plaintiff made no move to amend his complaint to include a claim for the income supposedly received by the defendant. Failure to do so is res judicata to the subsequent case.

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

Parties to Civil Actions

d. 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 the claiming party, the counter-claimant, the cross-claimant, or the third (fourth, etc.)-party plaintiff. 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 or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. (2a)

Memorize!

real party in interest – the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.

Sec. 3. Representatives as parties. — Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative 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 an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. (3a)

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

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

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

Memorize!

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

Misjoinder of causes of action is not a ground to dismiss a case. The proper remedy is to severe 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 parties — parties 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 ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action. (8a)

Memorize! Key word “complete”

necessary party – one who is not indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action.

Failure to implead a necessary party is a waiver of the claim against such party. It is not ground to dismiss the 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 omission unmeritorious, 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 be deemed a waiver of the claim against such party.

The non-inclusion of a necessary party does not prevent the court from proceeding in the action, and the judgment rendered therein shall be without prejudice to the rights of such necessary party. (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 the omitted 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 waiver of the claim against such party.

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

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 the complaint. (10)

Sec. 11. Misjoinder and non-joinder of parties. — Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as 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 of them which the court finds to be sufficiently numerous and representative as to fully protect the interests of all concerned may sue or defend for the benefit of all. Any party in interest shall have the right to intervene to protect his individual interest. (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

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 several persons he is entitled to relief, he may join any or all of them as defendants in the alternative, although a right to relief against one may be inconsistent with a right of relief against the other. (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 other designation as the case may require; when his identity or true name is discovered, the pleading must be amended accordingly. (14)

Sec. 15. Entity without juridical personality as defendant. — When two or more persons not organized as an entity with juridical personality enter into a transaction, they may be sued under the name by which they are generally or commonly known.

In the answer of such defendant, the names and addresses of the persons composing said entity 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 personality are sued under the name by which they are generally or commonly known, service may be effected upon all the defendants by serving upon any one of them, or upon the person in charge of the office or place of business maintained in such name. But such service shall not bind individually any person whose connection with the entity has, upon due notice, been severed before the action was brought. (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 in estoppel.

Sec. 16. Death of party; duty of counsel. — Whenever a party to a pending action dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of the fact thereof, and to give the name and address of his legal representative or representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs.

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

If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail to appear within the specified period, the court may order the opposing party, within a specified time, to procure the appointment of an executor or administrator for the estate of the deceased and the latter shall immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. (16a, 17a)

Sec. 20. Action on contractual money claims. — When the action is for recovery of money arising from contract, express or implied, and the defendant dies before entry of final judgment in the court in which the action was pending at the time of such death, it shall not be dismissed but shall instead be allowed to continue until entry of final judgment. A favorable judgment obtained by the plaintiff therein shall be enforced in the manner especially provided in these Rules for prosecuting claims against the estate of a deceased person. (21a)

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 or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate, administration shall be granted:

(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 to such person as such surviving husband or wife, or next of kin, requests to have appointed, if competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the death of the person to apply for administration or to request that administration be granted to some other person, it may be granted 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 court may select.

“Next of kin” is someone who will inherit next to the spouse. The remedy in case conflict of interest where a creditor being appointed administrator is in Rule 86, Sec. 8, is to appoint a special administrator where 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 estate he 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 general administrator or executor in the settlement of other claims. The court may order the executor or administrator to pay to 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 a claim 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 the following manner:

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

(b) In case of the death of the judgment obligor, against his executor or administrator or successor in interest, if the judgment 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 the corresponding 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 the executor or administrator. If the judgment debtor dies after the final judgment, and the judgment is a real action or action for damages, the executor or administrator substitutes the decedent and judgment is executed. But if the case is for a sum of money, and if he dies before levy was executed, the judgment is filed as a claim before the estate proceedings. But if levy was already made, the sale of the property proceeds, the proceeds is delivered to the plaintiff and the excess is delivered to the executor/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 the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; but actions to recover real or personal property, or an interest therein, from the estate, or to enforce a lien thereon, and actions to recover 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 money – file a claim before the estate proceedings, where the creditor will have to present evidence on the validity of his claim; because the amount sought to be collected is definite

2. for recovery of property – file a separate case against the executor/administrator; because the amount of the claim is unliquidated

3. for damages for injury – file a separate case before the courts.

de Leon’s Rules: If the defendant dies

1. before a case is filed

a. for recovery of a sum of money – file a claim before the estate proceedings, where the creditor will have to present evidence on the validity of his claim

b. real action and action for damages – file 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 to continue until entry of final judgment; the judgment is then filed as a claim in the estate proceedings; Regalado, p. 101: Decedent’s legal representative should be substituted for the decedent.

b. real action and action for damages

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

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 the deceased and the latter shall immediately appear for and on behalf of the deceased. Priority to in 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 a special administrator where the creditor appointed will have to file his own claim

3. after judgment but before execution

a. for sum of money – present 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 sale and the officer making the sale shall deliver the proceeds to the plaintiff, and account to the executor or administrator for any excess

Sec. 17. Death or separation of a party who is a public officer. — When a public officer is a party in an action in his official capacity and during its pendency dies, resigns, or otherwise ceases 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 the court, it is satisfactorily shown to the court by any party that there is a substantial need for continuing or maintaining it and that the successor adopts or continues or threatens to adopt or continue the action of his predecessor. Before a substitution is made, the party or officer to be affected, unless expressly assenting thereto, shall be given

reasonable notice of the application therefor and accorded an opportunity to be heard. (18a)

Sec. 18. Incompetency or incapacity. — If a party becomes incompetent or incapacitated, the court, upon motion with notice, may allow the action to be continued by or against the incompetent or incapacitated person assisted by his legal guardian or guardian ad litem. (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 the interest 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 as an 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 for himself and his family.

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

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

Indigent party — one who has no money or property sufficient and available for food, shelter and basic necessities 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 its discretion, may require the appearance of the Solicitor General who may be heard in person or through a representative duly designated by him. (23a)

e. CasesJuasing Hardware v. Mendoza, 115 SCRA 783 (1982) Correction of the designation of the plaintiff (from name of sole proprietorship to name of individual owner) is merely formal, not substantial, and hence may be corrected at any stage of the action.

Chang Kai Shek v. CA, 172 SCRA 389 (1989) An unincorporated entity sued as such can not invoke its non-compliance with the law to escape being sued. It is now in estoppel.

Hang Lung Bank v. Saulog, 201 SCRA 137 (1991) License as a requirement for a foreign corporation to sue applies only to foreign corporations doing business in the Philippines. “Isolated Transaction Rule” – unlicensed foreign corporation not doing business may sue on an isolated transaction

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 isolated transaction. Fact of not doing business must be alleged in the suit.

Escolin: In Commissioner of Customs, KMK’s personality was not recognized because it was not able to prove that it was a duly formed corporation by presenting a certification from the government of its country of origin. Unlike in Hang Lung, the foreign corporation was able to prove its corporate existence under 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 the Philippines.

Held: The defendant is estopped to deny the capacity of the foreign corporation to sue, having dealt with the 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 is being 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 vested in him. A public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith, or beyond the scope of his authority or jurisdiction.

Flores v. Mallare-Philips, 144 SCRA 377 (1986)

Facts: Plaintiff files 1 complaint against 2 distinct defendants before the RTC under distinct separate causes of action. Total amount of the claim is with RTC jurisdiction, but individual claim is under MTC jurisdiction. RTC dismisses the complaint .

Held: In cases of joinder of causes of action, the amount of the demand shall be the totality of the claims in all the causes of action irrespective of whether the causes of action arose out of the same or different transactions. In cases of permissive joinder of parties, whether as plaintiffs or as defendants, the total of all the claims shall now furnish the jurisdictional test. However, there should be a proper joinder of parties for the totality rule to apply. In this case, the 2 causes of action did not arise out of the same transaction or series of transactions and there was not common question of law or fact. There was improper joining of parties, hence the totality rule does not apply. MTC has jurisdiction.

Ralla v. Ralla, 199 SCRA 495 (1991)

Facts: Validly disinherited son sues for annulment of sale of property from the decedent to another heir.

Held: The disinherited son has no legal standing to question the validity of the sale. He is not a real party in interest as he does not stand to be benefited or injured by the judgment or a party entitled to the avails of the suit. “Interest” means material interest.

Mansion Biscuit v. CA, 250 SCRA 195 (1995) Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as the civil liability based solely thereon. However, the claim for civil liability survives, if the same may also be predicated on a source of obligation other than delict. Where the civil liability survives, an action for recovery therefor may be pursued but only by way of filing a separate civil action against the executor/administrator or the estate of the accused, depending on the source of obligation. In cases where in the civil action is impliedly instituted with the criminal action, the statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal case.

Nuñal v. CA, 221 SCRA 26 (1993)

Facts: Frank and Mary had children, one of whom was Mary Lyon Martin. They also owned a parcel of land. They died. Luisa Lyon Nuñal was in possession of the land. Emma Lyon de Leon in her behalf and as guardian ad litem of the minor heirs of Frank and Mary (but not including Mary Lyon Martin) sued Luisa Lyon, now deceased and herein represented by her heirs, for partition and accounting. CFI ordered the partition but dismissed the complaint for accounting. Affirmed by the CA, with a finding that Mary Lyon Martin was a child of Frank and Mary, but the order of partitioning did not include Mary Lyon Martin. 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. The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the Court rendering it or by the highest Court of land. The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause 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 in this case, the inclusion of Mary Lyon Martin would be in excess of his authority. The remedy of Mary Lyon Martin is to file an independent suit against the parties and all other heirs for her share

in the subject property, 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 be allowed. It is not necessary for the judgment of partition be final before the excluded heir may not be allowed 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 trial court. 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. The land was sold and registered. Excluded heir now sues the buyer and the RoD to “cancel” the buyer’s 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 RoD’s acceptance of the PoA as a Declaration of heirship. The vendors are not indispensable parties. The action for cancellation pertains only to plaintiff’s rights as an excluded heir, and does not affect the rights and interests of the vendors. In reality, plaintiff’s action is one of legal redemption where the vendors are clearly not indispensable parties. Besides, the defendant RoD had the option of impleading the vendors as 3rd party defendants if he wanted to.

Imson v. CA, 239 SCRA 58 (1994)

Facts: Plaintiff sues for damages from a vehicular accident. Beneficial owner and the driver were declared in default. Compromise was reached with the insurer and the claim against him was withdrawn. Registered owners 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 in dismissal 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 the driver of the truck. All the others are mere necessary parties.

Mina v. Pacson, 6 SCRA 775 (1962)

Facts: Plaintiffs Mina are the illegitimate children of Joaquin Mina. Joaquin executed a two deeds of absolute sale to Crispino Medina and Cresencia Mina (legitimate child). These deeds bear the conformity of Joaquin’s wife Antonia. Joaquin died in 1958. Plainitffs Mina sued Crispino and Cresencia for declaration of nullity of the deeds of sale and that defendants be required to deliver to plaintiffs ¼ of said properties together with moral damages (1st case). 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 for recognition as Joaquin’s illegitimate children (2nd case). Defendants filed a MTD on the ground of res judicata. The court thereby dismissed the 2nd case. Plaintiffs

now contend that there is no res judicata because the 1st dismissal was void.

Held: To order an amendment to a complaint within a certain period in order to implead as party plaintiff or defendant one who is not a party to the case lies within the discretion of the Court. Where it appears that the person to be impleaded is an indispensable party, the party to whom such order is directed has no other choice but to comply with it. His refusal or failure to comply with the order is a ground for the dismissal of his complaint and is res judicata to a 2nd

complaint.

Casenas v. Rosales, 19 SCRA 463 (1967)

Facts: Arañas and Caseñas filed a complaint for specific performance and enforcement of their alleged right under a certain deed of sale, and damages against the spouses Rosales. After answer has been filed and before trial, counsel for plaintiffs informed the trial court that plaintiff Arañas and defendant Rosales had both died. The lower court directed the surviving plaintiff, Caseñas, to amend the complaint to effect the necessary substitution of parties thereon. Caseñas failed to do this, so the TC dismissed the case. The dismissal became final. Thereafter, Caseñas filed another complaint against the widow Rosales and heirs of the late Rosales "to quiet, and for reconveyance of, title to real property, with damages." This suit referred itself to the very same property litigated in the previous dismissed case. and asserted exactly the same allegations as those made in the former complaint. Defendants filed MTD on ground of res judicata. TC dismissed the case.

Held: When certain of the parties died and due notice thereof was given to the trial court, it devolved on the said court to order, not the amendment of the complaint, but the appearance of the legal representatives of the deceased. An order to amend the complaint, before the proper substitution of parties has been effected, is void and imposes upon the plaintiff no duty to comply therewith to the end that 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 of the 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 order was improper because the proper procedure was to substitute. Hence failure to comply was not a valid ground for dismissal of the complaint.

Escolin: Heirs of the decedent are indispensable parties in an action to for support by an illegitimate child of 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 its decision that the defendant had died. Decision became final and was executed. Heirs of the defendant now filed a motion to substitute the deceased and to set aside as null void the decisions, orders, writ of execution and sale at public auction

made and entered against the latter. TC allowed substitution, but denied 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 to order 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 did not procure the appointment of such legal representatives. As a result, the continuance of a proceeding during the pendency of which a party thereto dies, without such having been validly substituted in accordance 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 the court does not acquire jurisdiction.

de Leon: If the heirs ordered to substitute refuses to appear, they may not be held in contempt. The remedy is for the creditor to procure the appointment of an administrator for the estate and then substitute 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. Counsel notifies the court of appellant’s death, and prayed for suspension of the period for filing an appellant’s brief 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 appellant’s brief must be in accordance with the tenets 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, participated in 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 prosecute the 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 from their own labor, though self-supporting when able to work and in employment. It is in this sense of being indigent that "pauper" is taken when referring to suits in forma pauperis. In class suits, the nominal plaintiffs directly bear the cost of the suit. The proof of the indigence of the nominal parties is enough to support a petition to sue as pauper litigants. It need not be proved that every beneficiary of the class suit is indigent. 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.

Venue of Actions

f. Distinctions between Venue and Jurisdiction

Jurisdiction – authority to hear and decide a case, established by substantive law, establishes relation between 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 by agreement of parties, can be fixed by agreement