Remedial Law I - Case Digest (Rules 1-5) (Wo Dela Cruz Case)

RULES 1-5
(Coverage for August 30)

CASE DIGEST
ALDAY VS. FGU INSURANCE – AGUSTINES
CASE TITLE Alday vs. FGU Insurance

G.R. 138822 January 23, 2001
APPLICABLE RULE / Jurisdiction, docket fees, permissive counterclaim, compulsory counterclaim
SECTION / TOPIC(based
from the syllabus)
FACTS Respondent FGU Insurance Corporation filed a complaint with the RTC of Makati alleging that petitioner Evangeline K.
Alday owed P114,650.76, representing unliquidated cash advances, unremitted costs of premiums and other charges
incurred by petitioner in the course of her work as an insurance agent for respondent. Respondent also prayed for
exemplary damages, attorneys fees, and costs of suit. Petitioner filed her answer and by way of counterclaim, asserted
her right for the payment of P104,893.45, representing direct commissions, profit commissions and contingent
bonuses earned from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting to
P500,000.00.In addition, petitioner prayed for attorneys fees, litigation expenses, moral damages and exemplary
damages for the allegedly unfounded action filed by respondent.
Respondent filed a Motion to Strike Out Answer With Compulsory Counterclaim And To Declare Defendant in Default
because petitioners answer was allegedly filed out of time. However, the trial court denied the motion similarly
rejected respondents motion for reconsideration. A few weeks later, respondent filed a motion to dismiss petitioners
counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of
docket fees by petitioner. In response, petitioner asked the trial court to declare her counterclaim as exempt from
payment of docket fees since it is compulsory and that respondent be declared in default for having failed to answer
such counterclaim.
The trial court granted respondent's motion to dismiss petitioner's counterclaim and consequently, denied petitioners
motion. The court found petitioners counterclaim to be merely permissive in nature and held that petitioner's failure to
pay docket fees prevented the court from acquiring jurisdiction over the same. The trial court similarly denied
petitioners motion for reconsideration.
The Court of Appeals sustained the trial court, finding that petitioners own admissions, as contained in her answer,
show that her counterclaim is merely permissive.
REMEDIAL MATTERS MTC n/a
1. Provide the description RTC Petition for Sum of Money (alleged cash accountabilities) by Petitioner; Petition to Dismiss by
of the initial complaint Respondent
at the court a quo. CA / CTA Motion for Reconsideration
2. Let us be accurate as to
Others n/a
the remedy used in
(Quasi Judicial
each court (i.e. petition
Agencies, if
for certiorari, appeal,
any)
petition for review,
etc.).
ISSUE I. Is the counterclaim of petitioner permissive or compulsory?

(based from the syllabus) II. Is the counterclaim of petitioner exempt from the payment of docket fees and therefore the court acquired
jurisdiction over the same?
III. Is the issue of lack of jurisdiction for failure to pay the correct docket fees?
RULING
I. The counterclaim of petitioner is PERMISSIVE. In Valencia v. Court of Appeals, this Court capsulized the criteria or
(If possible, highlight or
tests that may be used in determining whether a counterclaim is compulsory or permissive, summarized as follows:
underline the doctrine)
1. Are the issues of fact and law raised by the claim and counterclaim largely the same?
2. Would res judicata bar a subsequent suit on defendants claim absent the compulsory counterclaim rule?
3. Will substantially the same evidence support or refute plaintiff's claim as well as defendants counterclaim?
4. Is there any logical relation between the claim and the counterclaim?
Another test, applied in the more recent case of Quintallina v. Court of Appeals, is the compelling test of
compulsoriness which requires a logical relationship between the claim and counterclaim, that is, where conducting
separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the
parties and the court.
Tested against the abovementioned standards, petitioners counterclaim for commissions, bonuses, and accumulated
premium reserves is merely permissive. The evidence required to prove petitioners claims differs from that needed to
establish respondent's demands for the recovery of cash accountabilities from petitioner, such as cash advances and
costs of premiums. The recovery of respondent's claims is not contingent or dependent upon establishing petitioners
counterclaim, such that conducting separate trials will not result in the substantial duplication of the time and effort of
the court and the parties. One would search the records in vain for a logical connection between the parties'
claims.This conclusion is further reinforced by petitioners own admissions since she declared in her answer that
respondents cause of action, unlike her own, was not based upon the Special Agents Contract. However, petitioners
claims for damages, allegedly suffered as a result of the filing by respondent of its complaint, are compulsory.
II. NO. The counterclaim being permissive, in order for the trial court to acquire jurisdiction over the same, petitioner
is bound to pay the prescribed docket fees. It is not simply the filing of the complaint or appropriate initiators
pleading, but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter
Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 1

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. The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary
period.
Meanwhile, the compulsory counterclaim of petitioner for damages based on the filing by respondent of an allegedly
unfounded and malicious suit need not be answered since it is inseparable from the claims of respondent. If
respondent were to answer the compulsory counterclaim of petitioner, it would merely result in the former pleading
the same facts raised in its complaint.
III. The lack of jurisdiction of a court may be raised at any stage of the action, a party may be estopped from raising
such questions if he has actively taken part in the very proceedings which he questions, belatedly objecting to the
courts jurisdiction in the event that the judgment order subsequently rendered is adverse to him. In this case,
respondent actively took party in the proceedings before the Court of Appeals by filing its appellees brief with the
same. Its, participation when taken together with its failure to object to the appellate courts jurisdiction during the
entire duration of the proceedings before such court, demonstrates a willingness to abide by the resolution of the case
by such tribunal and accordingly, respondent is now most decidedly estopped from objecting to the Court of Appeals
assumption of jurisdiction over petitioners appeal.
KOREA TECHNOLOGIES VS. LERMA – ABEJUELA
CASE TITLE Korea Technologies Co. Ltd. vs. Hon. Alberto Lerma and Pacific General Steel Manufacturing Corp.
APPLICABLE Respondent’s Answer with compulsory counterclaim does not require payment of docket fees; nor certificate of non-forum
RULE shopping in responsive pleading is required.
The Rules on payment of docket fees for counterclaim and cross-claims were amended effective August 16, 2004
FACTS  KOGIES (Korea Technologies) is a Korean corp. engaged in the supply and installation of LPG cylinder manufacturing
plants. While PGSMC is a domestic corp.
 They executed a contract whereby KOGIES would set-up an LPG cylinder manufacturing plant in the Phil., they will
also ship the machinery and facilities and install it for the initial operation of the plant. While PGSMC will pay the total
contact prince of USD1.5 million.
 However, after the installation the operation could not be conducted as PGSMC encountered financial difficulties
affecting the supply of material. Thus forcing the parties to agree that KOGIES deemed complied with the terms and
conditions of the contract.
 For the remaining balance of USD306,000 for the installation and initial operation, PGSMC issued two post dated
checks, but were later on dishonored due to stop payment.
 KOGIES sent a demand letter to PGSMC , the latter replied that the checks were fully funded but the payment were
stopped. PGSMC informed KOGIES of its intention of cancelling the contract for it altered and lowered the quality of
machineries and equipment delivered to them. They will also dismantle and transfer the machineries installed in the
plant.
 KOGIES wrote PGSMC that it could not unilaterally rescind the contract nor dismantle and transfer the machineries. It
insisted that their disputes be settled by arbitration as agreed in their contract.
REMEDIAL RTC  KOGIES filed a complaint for specific performance against PGSMC. The RTC granted a TRO against
MATTERS PGSMC to restrain from dismantling and transferring the machinery and equipment installed until July 22,
1998.
 July 17, 1998 PGSMC filed an answer with compulsory counterclaim asserting their right to
dismantle and transfer, and that KOGIES is not entitled of the payment for it failed to
completely install and make plant operational
 KOGIES filed its reply to answer and answer to the counterclaim. It denied the allegations of PGSMC and
claimed that it performed all undertakings in their contract. It also filed a supplemental memorandum
with motion to dismiss of PGSMC’s counterclaim which lacks the jurisdictional requirement. But denied. A
motion for reconsideration was later filed.
 PGSMC also filed a motion for inspection of things to determine whether there was indeed an alteration
and lowering of quality. It was granted.
CA /CTA  KOGIES filed a petition for certiorari without waiting for the resolution of RTC on its motion for
reconsideration; seeking for annulment of order disallowing the injunctive writ to prohibit the inspection
of the machineries and not to allow the answer with cumpolsary counterclaim of PGSMC for non-payment
of docket fees and failure to include a cert. Of non-forum shopping.
 CA affirmed the orders of RTC and denied the petition for certiorari. As to the counterclaim being
compulsory one, the issue of non-payment of docket fees and non-attachment of cert. of non-forum
shopping by PGSMC is not required.
ISSUE/S WON the PGSMC’s cumpolsary counterclaim does not require payment of docket fees and attachment cert. of non-forum
shopping?
WON the petition was filed prematurely without waiting for the resolution of the motion for reconsideration of RTC?
RULING YES, the counter-claim of PGSMC was incorporated in its answer with compulsory counterclaim in accordance with Sec. 8 of
Rule 11 of ROC which was the rule effective at the time the answer with counterclaim was filed, hence not liable
to pay filing fees. Sec. 8 states that a cumpolsary counter-claim or cross-claim that a defending party has at the time he files
his answer shall be contained therein. However, effective August 16, 2001 under Sec. 7 Rule 141 as amended by AM no. 04-20-
04SC docket fees are now required to be paid in compulsory counterclaim or cross-claim.
Also, PGSMC’s answer is not an initiatory pleading but it is a responsive pleading which does not requires a cert.
against forum shopping under Sec.5 Rule 7 of ROC.
NO, the circumstances in this case would allow an exception to the rule, that before certiorari may be availed of KOGIES must
have file a motion for reconsideration and said motion should have been resolved first by court a quo. The reason behind is to
enable the RTC to correct its mistake without the intervention of the higher court. But such petition was not filed prematurely,
because of the urgent necessity to resolve the issue on the dismantling of the facilities and any further delay would
prejudice the interest of KOGIES. The RTC in directing the branch Sheriff to inspect the plant, equipment and facilities when not
competent and knowledgeable on said matter is evidently flawed and devoid of any legal support. Indeed, an imminent and real
threat or irreparable destruction to KOGIES equipment and machineries.
MERCADO VS. CA – AMBROCIO
CASE TITLE LEONIDES MERCADO, represented by his heirs: RACQUEL D. MERCADO, JIMMY D. MERCADO,

HENRY D. MERCADO, LOURICAR D. MERCADO
and VIRGILIO D. MERCADO, Petitioners
- v e r s u s -
COURT OF APPEALS and SAN MIGUEL CORPORATION, Respondents
(GR No. 169576, October 17, 2008)
APPLICABLE RULE / Rules 1-5
SECTION / TOPIC (based Docket Fees, Counterclaim
from the syllabus)
FACTS Leonides Mercado had been distributing respondent San Miguel Corporations (SMCs) beer products in Quiapo, Manila
since 1967. In 1991, SMC extended to him a P7.5 million credit line allowing him to withdraw goods on credit. To
secure his purchases, Mercado assigned three China Banking Corporation (CBC) certificates of deposit amounting to P5
million to SMC and executed a continuing hold-out agreement stating that in case of default, SMC is authorized to
encash the deposit and that any issue on whether or not there was default shall be settled between Mercado and SMC.
He also submitted three surety bonds from Eastern Assurance and Surety Corporation (EASCO) totaling P2.6 million.
On February 10, 1992, SMC notified CBC that Mercado failed to pay for the items he withdrew on credit. Consequently,
citing the continuing hold-out agreement, it asked CBC to release the proceeds of the assigned certificates of deposit.
CBC approved SMBs request and informed Mercado.
On March 2, 1992, Mercado filed an action to annul the continuing hold-out agreement and deed of
assignment in the Regional Trial Court (RTC) of Manila, Branch 55. He claimed that the continuing hold-out
agreement allowed forfeiture without the benefit of foreclosure. It was therefore void pursuant to Article 2088 1 of the
Civil Code. Moreover, Mercado argued that he had already settled his recent purchases on credit but SMC erroneously
applied the said payments to his old accounts not covered by the continuing hold-out agreement ( i.e., purchases made
prior to the extension of the credit line).

On March 18, 1992, SMC filed its answer with counterclaim against Mercado. It contended that Mercado delivered
only two CBC certificates of deposit amounting to P4.5 million and asserted that the execution of the continuing hold-
out agreement and deed of assignment was a recognized business practice. Furthermore, because Mercado admitted
his outstanding liabilities, SMC sought payment of the products he withdrew (or purchased on credit)
worth P7,468,153.75.

On April 23, 1992, SMC filed a third-party complaint against EASCO. It sought to collect the proceeds of the surety
bonds submitted by Mercado.
On September 14, 1994, Mercado filed an urgent manifestation and motion seeking the dismissal of the
complaint. He claimed that he was no longer interested in annulling the continuing hold-out agreement and deed of
assignment. The RTC, however, denied the motion. Instead, it set the case for pre-trial. Thereafter, trial ensued.

REMEDIAL MATTERS MTC
3. Provide the description RTC RTC dismissed the petition of Mercado as he acknowledged the accuracy of SMC’s computation of his
of the initial complaint outstanding liability. The RTC ordered Mercado and EASCO (to the extent of P2.6 million or the value
at the court a quo. of its bonds) to jointly and severally pay SMC.
4. Let us be accurate as to CA / CTA Aggrieved, Mercado and EASCO appealed to the Court of Appeals (CA) insisting that Mercado did not
the remedy used in default in the payment of his obligations to SMC.
for certiorari, appeal, On December 14, 2004, the CA affirmed the RTC decision in toto. Mercado and EASCO both moved
petition for review, for reconsideration but their respective motions were denied.
etc.). Others
(Quasi Judicial
Agencies, if
any)
ISSUE Whether or not SMCs counterclaim was permissive in nature. Inasmuch as SMC did not pay docket fees, the RTC
(based from the syllabus) never acquired jurisdiction over the counterclaim.
Note: Mercado passed away and was substituted by his heirs, petitioners Racquel D. Mercado, Jimmy D. Mercado,
Henry D. Mercado, Louricar D. Mercado and Virgilio D. Mercado.
1
Article 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any
stipulation to the contrary is null and void. (1859a)
RULING Petition is denied.
underline the doctrine) A counterclaim (or a claim which a defending party may have against any party) may be compulsory or permissive. A
counterclaim that (1) arises out of (or is necessarily connected with) the transaction or occurrence that is the subject
matter of the opposing party’s claim; (2) falls within the jurisdiction of the court and (3) does not require for its
adjudication the presence of third parties over whom the court cannot acquire jurisdiction, is compulsory. Otherwise, a
counterclaim is merely permissive.
When Mercado sought to annul the continuing hold-out agreement and deed of assignment (which he executed as
security for his credit purchases), he in effect sought to be freed from them. While he admitted having outstanding
obligations, he nevertheless asserted that those were not covered by the assailed accessory contracts. For its part,
aside from invoking the validity of the said agreements, SMC therefore sought to collect the payment for the value of
goods Mercado purchased on credit. Thus, Mercado’s complaint and SMCs counterclaim both touched the
issues of whether the continuing hold-out agreement and deed of assignment were valid and whether
Mercado had outstanding liabilities to SMC. The same evidence would essentially support or refute
Mercado’s claim and SMCs counterclaim.

Based on the foregoing, had these issues been tried separately, the efforts of the RTC and the parties would have had
to be duplicated. Clearly, SMCs counterclaim, being logically related to Mercados claim, was compulsory in nature.
Consequently, the payment of docket fees was not necessary for the RTC to acquire jurisdiction over the subject
matter.
Note: EASCO also filed a petition for review on certiorari in the SC but eventually agreed to settle its liability with SMC,
which led to the termination of its petition.
PROTON PILIPINAS VS. BANQUE NATIONALE DE PARIS – ALVARADO
CASE TITLE PROTON PILIPINAS CORPORATION vs. BANQUE NATIONALE DE PARIS

APPLICABLE RULE / RULE 1, SECTION 5 | COMMENCEMENT OF ACTION; PAYMENT OF THE CORRECT DOCKET FEES
SECTION / TOPIC (based
from the syllabus)
FACTS Proton availed of the credit facilities of BNP. BNP and Proton subsequently entered into three trust receipt agreements,
wherein Proton would receive imported passenger motor vehicles and hold the in trust for BNP. Proton would be free
to sell the vehicles subject to the condition that it would deliver the proceeds of the sale to BNP, to be applied to its
obligations to it. In case the vehicles are not sold, Proton would return them to BNP, together with all the
accompanying documents of title. Allegedly, Proton failed to deliver the proceeds of the sale and return the unsold
motor vehicles. BNP then went after the three guarantors (also petitioners in this case), but the guarantors refused to
pay.
Petitioners, citing Administrative Circular No. 11-94, argued that (1) BNP failed to pay the correct docket
fees as in the assessment thereof, interest claimed should be included. There being an underpayment of the docket
fees, the trial court did not acquire jurisdiction over the case; (2) the clerk of court, in converting BNP’s claims from US
dollars to Philippines pesos, applied the wrong exchange rate when the complaint was filed; and (3) pursuant to
Supreme Court Circular No. 7 which provides that “all complaints must specify amount of damages sought not only in
the body of the pleading, but also in the prayer in order to be accepted and admitted for filing,” the complaint should
have been dismissed for failure to specify the amount of interest in the prayer. Petitioners also relied on Manchester
Development Corporation vs. CA which upheld the same requirements.
BNP, on the other hand, maintains that it paid the filing fee which was assessed by the clerk of court, and
that there was no violation of the SC Circular No. 7 because the amount of damages was clearly specified in the
prayer. BNP posits that the amount of US$1,544,984.40 represents not only the principal but also interest and other
related charges which had accrued as of August 15, 1998. Moreover, BNP used Section 7 (a) of Rule 141 of the Rules
of Court, as well as jurisprudence which relied on said rule to contend that where the action is purely for the recovery
of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of
interests and costs—hence, it even made an overpayment of docket fees.
5. Provide the description RTC Hence, BNP filed on September 7, 1998 before the Makati Regional Trial Court (RTC) a
of the initial complaint complaint against petitioners praying that they be ordered to pay (1) US$ 1,544,984.40 plus accrued
at the court a quo. interest and other related charges thereon subsequent to August 15, 1998 until fully paid and (2) an
6. Let us be accurate as to amount equivalent to 5% of all sums due from petitioners as attorneys fees. The Makati RTC Clerk
the remedy used in of Court assessed the docket fees which BNP paid at P352,116.30. Petitioners filed a Motion to
each court (i.e. petition Dismiss on the ground that BNP failed to pay the correct docket fees to thus prevent the trial court
for certiorari, appeal, from acquiring jurisdiction over the case. As additional ground, petitioners raised prematurity of the
petition for review, complaint, BNP not having priorly sent any demand letter. Said Motion to Dismiss was then denied.
etc.). Petitioners filed a Motion for Reconsideration of said denial, but such was also denied by the trial
court.
CA / CTA Petitioners thereupon brought the case on certiorari and mandamus to the Court of
Appeals (CA), which also denied the same.
SC Their Motion for Reconsideration having been denied by the CA, petitioners filed a petition
for review on certiorari.

ISSUES 1) Whether or not interest claimed by BNP should be included in the computation for payment of docket fees.
(based from the syllabus) (2) Whether or not the court acquired jurisdiction over the case on the ground that petitioner BNP failed to pay the
correct docket fees.
RULING (1) Interest claimed by BNP should be included in the computation for payment of docket fees.
underline the doctrine) When the complaint was filed in 1998, as correctly pointed out by petitioners, Rule 141 had been amended by
Administrative Circular No. 11-94.
The clerk of court should thus have assessed the filing fee by taking into consideration the total sum claimed, inclusive
of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs, or the stated value of the
property in litigation.
Respecting the Court of Appeals conclusion that the clerk of court did not err when he applied the exchange rate of US
$1 = P43.00 in the absence of any office guide of the rate of exchange which said court functionary was duty bound
to follow, [hence,] the rate he applied is presumptively correct, the same does not lie. The presumption of regularity
of the clerk of courts application of the exchange rate is not conclusive. It is disputable. As such, the presumption may
be overturned by the requisite rebutting evidence. In the case at bar, petitioners have adequately proven with
documentary evidence that the exchange rate when the complaint was filed on September 7, 1998 was US $1 =
P43.21.

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

(2) The court acquired jurisdiction over the case.

True, in Manchester Development Corporation vs. CA this Court held that the court acquires jurisdiction over any case
only upon the payment of the prescribed docket fees, hence, it concluded that the trial court did not acquire
jurisdiction over the case. However, the ruling in Manchester was due to the fact that there was clearly an effort to
defraud the government in avoiding to pay the correct docket fees; whereas in the other cases, the plaintiff
demonstrated his willingness to abide by paying the additional fees as required.

In the present case, a more liberal interpretation of the rules is called for considering that private
respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as
required.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of
the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in
charge should determine and, thereafter, if any amount is found due, he must require the private respondent to pay
the same.

Thus, the Court rules as follows:

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. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be
considered filed until and unless the filing fee prescribed therefor 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. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the
prescribed filing fee but, subsequently, 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. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien
and assess and collect the additional fee.

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the
time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable
prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules
prescribing such payment with no intention to defraud the government.

In the case at bar, BNP merely relied on the assessment made by the clerk of court which turned out to be incorrect.
Under the circumstances, the clerk of court has the responsibility of reassessing what respondent must pay within the
prescriptive period, failing which the complaint merits dismissal.

Parenthetically, in the complaint, BNP prayed for accrued interest subsequent to August 15, 1998 until fully paid. The
complaint having been filed on September 7, 1998, respondents claim includes the interest from August 16, 1998 until
such date of filing.

BNP did not, however, pay the filing fee corresponding to its claim for interest from August 16, 1998 until the filing of
the complaint on September 7, 1998. As priorly discussed, this is required under Rule 141, as amended by
Administrative Circular No. 11-94, which was the rule applicable at the time. Thus, as the complaint currently stands,
BNP cannot claim the interest from August 16, 1998 until September 7, 1998, unless respondent is allowed by motion
to amend its complaint within a reasonable time and specify the precise amount of interest petitioners owe from

August 16, 1998 to September 7, 1998 and pay the corresponding docket fee therefor.

With respect to the interest accruing after the filing of the complaint, the same can only be determined after a final
judgment has been handed down. BNP cannot thus be made to pay the corresponding docket fee therefor. Pursuant,
however, to Section 2, Rule 141, as amended by Administrative Circular No. 11-94, BNP should be made to pay
additional fees which shall constitute a lien in the event the trial court adjudges that it is entitled to interest accruing
after the filing of the complaint.
Regarding awards of claims not specified in the pleading, this Court held that the same refers only to damages
arising after the filing of the complaint or similar pleading as to which the additional filing fee therefor
shall constitute a lien on the judgment.

The amount of any claim for damages, therefore, arising on or before the filing of the complaint or any pleading
should be specified. While it is true that the determination of certain damages as exemplary or corrective damages is
left to the sound discretion of the court, it is the duty of the parties claiming such damages to specify the amount
sought on the basis of which the court may make a proper determination, and for the proper assessment of the
appropriate docket fees. The exception contemplated as to claims not specified or to claims although
specified are left for determination of the court is limited only to any damages that may arise after the
filing of the complaint or similar pleading for then it will not be possible for the claimant to specify nor
speculate as to the amount thereof.

WHEREFORE, the petition is GRANTED in part. The July 25, 2001 Decision and the December 18, 2001 Resolution of
the Court Appeals are hereby MODIFIED. The Clerk of Court of the Regional Trial Court of Makati City is ordered to
reassess and determine the docket fees that should be paid by BNP in accordance with the Decision of this Court, and
direct respondent to pay the same within fifteen (15) days, provided the applicable prescriptive or reglementary period
has not yet expired. Thereafter, the trial court is ordered to proceed with the case with utmost dispatch.

SO ORDERED.
RUBY SHELTER VS. FORMARAN - ANCIRO
CASE TITLE RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION vs. HON. PABLO C. FORMARAN
III, et.al
APPLICABLE RULE / Payment of docket fees is not only mandatory, but also jurisdictional
SECTION / TOPIC
FACTS RUBY SHELTER BUILDERS obtained a loan in the total amount of ₱95,700,620.00 from respondents Tan and
Obiedo, secured by real estate mortgages over five parcels of land, all located in Triangulo, Naga City. When petitioner
was unable to pay the loan when it became due and demandable, respondents Tan and Obiedo agreed to an
extension of the same. In a Memorandum of Agreement executed by both parties, respondents Tan and Obiedo
granted to settle its indebtedness, and condoned the interests, penalties and surcharges accruing thereon which
amounted to ₱74,678,647.00.
MOA provides that if petitioner is unable to redeem the parcels of land within the period agreed upon,
respondents Tan and Obiedo could already present the Deeds of Absolute Sale covering the same to the Office of the
Register of Deeds for Naga City so respondents Tan and Obiedo could acquire TCTs to the said properties in their
names. It also provided that if petitioner contest, judicially or otherwise, any act, transaction, or event related to or
necessarily connected with the said Memorandum and the Deeds of Absolute Sale involving the five parcels of land, it
would pay respondents Tan and Obiedo ₱10,000,000.00 as liquidated damages inclusive of costs and attorney’s fees.
Petitioner would likewise pay respondents Tan and Obiedo the condoned interests, surcharges and penalties.
Ruby Shelter Builders filed before the RTC a Complaint against respondents Tan, Obiedo, and Atty. Reyes, for
declaration of nullity of deeds of sales and damages, with prayer for the issuance of a writ of preliminary injunction
and/or temporary restraining order (TRO). Upon filing its Complaint with the RTC, Ruby Shelter Builders paid the sum
of ₱13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court
initially considered the case as an action incapable of pecuniary estimation and computed the docket and other legal
fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.
REMEDIAL MATTERS RTC Tan filed an Omnibus Motion contending that the case involved real properties, the docket
fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141
of the Rules of Court, as amended. Thus, since petitioner did not pay the appropriate docket fees,
the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to
issue an order requiring petitioner to pay the correct and accurate docket fees pursuant to Section
7(a), Rule 141.
RTC issued an Order granting respondent Tan’s Omnibus Motion. In holding that both
petitioner and respondent Tan must pay docket fees in accordance with Section 7(a), Rule 141 of

the Rules of Court. RTC Clerk of Court computed, upon the request of counsel for the petitioner, the
additional docket fees must be paid after excluding the amount petitioner previously paid, petitioner
must still pay the amount of ₱720,392.60 as docket fees
Petitioner moved for the partial reconsideration of the 24 March 2006 Order of the RTC,
arguing that Civil Case was principally for the annulment of the Deeds of Absolute Sale and, as such,
incapable of pecuniary estimation. Petitioner submitted that the RTC erred in applying Section 7(a),
Rule 141 of the Rules of Court, as amended, to petitioner’s first cause of action in its Complaint in
Civil Case No. 2006-0030.In its Order, the RTC refused to reconsider.
CA / CTA Ruby Shelter Builders filed a Petition for Certiorari with the Court of Appeals; According to
petitioner, the RTC acted with grave abuse of discretion, amounting to lack or excess of jurisdiction,
when it issued its Orders mandating that the docket/filing fees for Civil Case filed by them, an action
for annulment of deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of Court, as
amended. If the Orders would not be revoked, corrected, or rectified, petitioner would suffer grave
injustice and irreparable damage. CA affirmed the decision of the RTC. Without seeking
reconsideration of the foregoing Decision with the Court of Appeals, petitioner filed its Petition for
Review on Certiorari before the Supreme Court
ISSUE Whether or not the RTC acquired jurisdiction over the case.
RULING No. Applying the case of Manchester Development Corporation v. Court of Appeals, the Court explicitly
pronounced that "The court acquires jurisdiction over any case only upon the payment of the prescribed
docket fee." Hence, the payment of docket fees is not only mandatory, but also jurisdictional.
In the Petition at bar, petitioner did not pay the correct amount of docket fees. Petitioner should pay docket
fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. RTC, instead of dismissing outright
petitioner’s Complaint, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of
the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the
correct amount before, pursuant to Section 7(b)(1), Rule 141.
The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value
of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)(1),
Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation. In order to resolve
the issue of whether petitioner paid the correct amount of docket fees, it is necessary to determine the true nature of
its Complaint. A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is
now Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title to or recovery of possession of real
property.
While it is true that petitioner does not directly seek the recovery of title or possession of the property in
question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of
ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner's
primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property
does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real
property. It is a real action.
A real action indisputably involves real property. The docket fees for a real action would still be determined in
accordance with the value of the real property involved therein; the only difference is in what constitutes the
acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on the
assessed or estimated value, would now be using the fair market value of the real properties (as stated in the Tax
Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof,
the stated value of the same
The instant Petition for Review is hereby DENIED. The Decision ordering petitioner Ruby Shelter Builders and
Realty Development Corporation to pay additional docket/filing fees, computed based on Section 7(a), Rule 141 of the
Rules of Court
ST. LOUIS UNIVERSITY VS. COBARUBBIAS – AU
CASE TITLE ST. LOUIS UNIVERSITY vs. COBARRUBIAS

APPLICABLE RULE / Payment of docket fees
from the syllabus)
FACTS Evangeline C. Cobarrubias is an associate professor of the St. Louis University (SLU) College of Human Sciences and
an active member of the Union of Faculty and Employees of Saint Louis University (UFESLU). CBA between SLU and
UFESLU contained the following provisions: “For teaching employees in college who fail the yearly evaluation, the
following provisions shall apply: (a) Teaching employees who are retained for three (3) cumulative years in five (5)
years shall be on forced leave for one (1) regular semester during which period all benefits due them shall be
suspended.”
SLU placed Cobarrubias on forced leave when she failed the evaluation.

7. Provide the description RTC
of the initial complaint CA / CTA On December 5, 2007, Cobarrubias filed with the CA a petition for review under Rule 43 of the Rules
at the court a quo. of Court but failed to pay the required filing fees and to attach to the petition copies of the material
8. Let us be accurate as to portions of the record. The CA dismissed the petition. On February 15, 2008, Cobarrubias filed her
the remedy used in motion for reconsideration, arguing that the ground cited is technical. She, nonetheless, attached to
each court (i.e. petition her motion copies of the material portions of the record and the postal money orders for P4,230.00.
for certiorari, appeal, The CA reinstated the petition. It found that Cobarrubias substantially complied with the rules by
petition for review, paying the appeal fee in full and attaching the proper documents in her motion for reconsideration.
etc.).
Others Cobarrubias sought recourse from the CBA’s grievance machinery but no settlement was reached.
(Quasi Judicial Thus, she filed with the National Conciliation and Mediation Board (NCMB) of the DOLE a case for
Agencies, if illegal forced leave and illegal suspension. The case was then referred to the Voluntary Arbitrator
any) (VA). But, the VA dismissed the case.
ISSUE Whether or not the Court of Appeals erred in reinstating Cobarubbias’ petition despite her failure to appeal (docket)
(based from the syllabus) fee within the reglementary period
RULING Yes. Appeal is not a natural right but a mere statutory privilege, thus, appeal must be made strictly in accordance with
(If possible, highlight or the provision set by law. Rule 43 of the Rules of Court provides that appeals from the judgment of the VA shall be
underline the doctrine) taken to the CA, by filing a petition for review within fifteen (15) days from the receipt of the notice of judgment.
Furthermore, upon the filing of the petition, the petitioner shall pay to the CA clerk of court the docketing
and other lawful fees; non-compliance with the procedural requirements shall be a sufficient ground for
the petition’s dismissal. Thus, payment in full of docket fees within the prescribed period is not only
mandatory, but also jurisdictional. It is an essential requirement, without which, the decision appealed from
would become final and executory as if no appeal has been filed.
In the present case, Cobarrubias filed her petition for review on December 5, 2007, fifteen (15) days from receipt of
the VA decision on November 20, 2007 but paid her docket fees in full only after seventy-two (72) days, when she
filed her motion for reconsideration on February 15, 2008 and attached the postal money orders for P4,230.00.
Undeniably, the docket fees were paid late, and without payment of the full docket fees, Cobarrubias’ appeal was not
perfected within the reglementary period.
There are, however, recognized exceptions to their strict observance, such as: (1) most persuasive and weighty
reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed
procedure; (3) good faith of the defaulting party by immediately paying within a reasonable time from the time of the
default; (4) the existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing
that the review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9)
fraud, accident, mistake or excusable negligence without the appellant’s fault; (10) peculiar, legal and equitable
circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12) importance of the
issues involved; and (13) exercise of sound discretion by the judge, guided by all the attendant circumstances. Thus,
there should be an effort, on the part of the party invoking liberality, to advance a reasonable or meritorious
explanation for his/her failure to comply with the rules.
In Cobarrubias' case, no such explanation has been advanced. Other than insisting that the ends of justice and fair
play are better served if the case is decided on its merits, Cobarrubias offered no excuse for her failure to pay the
docket fees in full when she filed her petition for review. Cobarrubias’ omission is fatal to her cause.
GIPA VS. SOUTHERN LUZON INSTITUTE – ARISTON
CASE TITLE Gipa v. Southern Luzon Institute

GR No. 177425
June 18, 2014
APPLICABLE RULE / Rules 1 – 5 / Actions: Commencement / payment of docket fees - Sec 4, Rule 41 of the Rules of Court
from the syllabus)
FACTS Southern Luzon Institute (SLI) is the alleged absolute owner of a 7,516 sq.m. parcel of land in Brgy.
Poblacion, Bukan, Sorsogon, covered by a OCT No. P-28928. A portion of the land is allegedly occupied by the
following persons.
- Alonzo Gipa - Felipe Montalban
- Imelda Marollano - Arturo Rogacion
- Juanito Ludovice - Virgilio Gracela
- Demar Bitangcor - Rosemarie Alvarez
- Virgilio Giojit - Rosita Montalban (Rosita)

 Rosita as Represented by Daisy M. Placer (Placer) through an SPA.
SLI, as plaintiff, demanded that they vacate the premises, however they refused prompting SLI to file
before the RTC of Sorsogon, seeking that they immediately vacate the premises. In their counterclaim as
defendants, they claimed that they are the lawful possessors of the property, as they had been in this land since
their predecessors in interest back in the 1950s, and that SLI merely acquired title over the property thru frau, bad
faith, and misrepresentation.
REMEDIAL MATTERS RTC - ruled in The RTC gave weight to SLI’s the Miscellaneous Sales Application (MSA) over the
favor of SLI subject property, and the testimony of the Supervising Draftsman of the National Housing
Authority (NHA) who stated that herein respondents were occupying said land according to the
1. SLI filed a complaint that
survey. Also it was impossible for the respondents to not have known that it was the property of
before the RTC that the
SLI due to the fact that they were denied Revocable Permit Applications and that hey only
defendants be ordered to
presented tax declarations and other documents which were self-serving.
immediately vacate the
premises, turn over the CA - Ruled The CA dismissed the appeal as the docket fees were not paid, herein respondents –
same to SLI, and pay in favor of SLI now petitioners paid said docket fee amounting to P3,000, and attached a certification form the
compensatory damages, due to RTC as evidence. However CA further required P30 for the legal research fund which the
attorney’s fees and cost procedural respondents failed to pay even after the lapse of 9 months. The CA dismissed their appeal once
of suit. matters (non- more; defendants filed a motion for reconsideration under the principle of liberality in the
payment of application of technical rules; denied.
docket fees)
2. defendants Filed an
appeal before the CA
3. Defendants then filed a

motion for
reconsideration
ISSUE 1. Whether Placer may act as a plaintiff on her own capacity, replacing Rosita
(based from the syllabus) 2. Whether the CA gravely erred in dismissing the appeal despite the substantial payment of the docket fees
3. Whether the petitioners contention of principle of liberality should granted
RULING 1. No. It must, however, be noted at the outset that the caption of the present Petition includes Placer as
(If possible, highlight or one of the petitioners. In fact, the other petitioners even authorized her to sign the verification and certification of
underline the doctrine) non-forum shopping in their behalf. A review of the records, however, shows that she was not one of the
defendants before the RTC. Her only participation therein was that she represented her sister Rosita as one of the
defendants by virtue of a Special Power of Attorney which the latter executed in her favor. Notably in the present
Petition, Placer appears to have been impleaded in her personal capacity and not as Rosita’s representative. This
cannot be done. It bears emphasizing that an appeal on certiorari, as in this case, is a continuation of the original
suit. Hence, the parties in the original suit must also be the parties in such an appeal. Placer, therefore, not being a
party in the complaint before the RTC has no personality to continue the same on appeal and cannot be considered
as a petitioner. At the most, her only role in this Petition was to sign the verification and certification of non-forum
shopping for and in behalf of petitioners.
2. No, Sec 4, Rule 41 of the RoC provides that:
Sec. 4. Appellate court docket and other lawful fees. – Within the period for taking an appeal,
the appellant shall pay to the clerk of court which rendered the judgment or final order
appealed from, the full amount of the appellate court docket and other lawful fees. Proof of
payment of said fees shall be transmitted to the appellate court together with the original
record or the record on appeal.
In Gonzales v. Pe, the Court’s explanation anent the requirement of full payment of docket and other
lawful fees under the above-quoted provision was iterated, viz:
In Far Corporation v. Magdaluyo, as with other subsequent cases of the same ruling, the
Court explained that the procedural requirement under Section 4 of Rule 41 is not merely directory, as the
payment of the docket and other legal fees within the prescribed period is both mandatory and
jurisdictional. It bears stressing that an appeal is not a right, but a mere statutory privilege. An ordinary
appeal from a decision or final order of the RTC to the CA must be made within 15 days from notice. And
within this period, the full amount of the appellate court docket and other lawful fees must be paid to the
clerk of the court which rendered the judgment or final order appealed from. The requirement of paying
the full amount of the appellate docket fees within the prescribed period is not a mere technicality of law
or procedure. The payment of docket fees within the prescribed period is mandatory for the perfection of
an appeal. Without such payment, the appeal is not perfected. The appellate court does not acquire
jurisdiction over the subject matter of the action and the Decision sought to be appealed from becomes
final and executory.
3. It was already granted when the CA allowed the petitioners to pay the substantial portion of
the docket fees and when it allowed the petitioners to pay the legal research fees for 9 months. Failing to
do so warranted the dismissal of the appeal
Under Section 1 (c), Rule 50, an appeal may be dismissed by the CA, on its own motion or on
that of the appellee, on the ground of the non-payment of the docket and other lawful fees within the
reglementary period as provided under Section 4 of Rule 41. The payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal. In both original and appellate cases,
the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees.
Suffice it to say that "[c]oncomitant to the liberal interpretation of the rules of procedure should
be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the
rules." Those who seek exemption from the application of the rule have the burden of proving the
existence of exceptionally meritorious reason warranting such departure.
REYES VS. PEOPLE - AUSTRIA
CASE TITLE RODGING REYES, petitioner, vs. PEOPLE OF THE PHILIPPINES

and SALUD M. GEGATO, respondents.
[G.R. No. 193034. July 20, 2015.]
APPLICABLE RULE / Note: Covers Docket Fees

from the syllabus) Section 1, Rule 42 of the Rules of Court states the need to pay docket fees, thus:
Section 1. How appeal taken; time for filing . — A party desiring to appeal from a decision of the Regional Trial Court
rendered in the exercise of its appellate jurisdiction may file a verified petition for review with the Court of Appeals,
paying at the same time to the clerk of said court the corresponding docket and other lawful fees, depositing the
amount of P500.00 for costs, . ..
FACTS Rodging Reyes was charged for Grave threats by Salud M. Gegato before the Municipal Circuit Trial Court (MCTC) of
Bayugan and Sibagat, Bayugan, Agusan del Sur.
Before arraignment, Reyes filed a Motion to Quash based on the ground of jurisdiction and that the crime is not Grave
Threats under Article 282 of the Revised Penal Code, but Other Light Threats under Article 285, paragraph 2 of the
same Code. The MCTC, in its Order dated June 3, 2002, denied the motion. Motion for reconsideration was also denied
by the same court in an Order dated July 25, 2002.
Motion for Inhibition was also filed by Reyes on the ground that the complainant Gegato was the Court Interpreter in
the same court. The said motion was denied as the ground raised by Reyes does not fall in the grounds laid under
Section 1 of Rule 137. It reached the SC, where the Court directed the MCTC to proceed with dispatch and apply the
Rules on Summary Procedure.
REMEDIAL MATTERS MCT Found Reyes guilty of the crime charged. To suffer imprisonment of medium period of arresto mayor or
C period of two months and one day to four months. In addition, Reyes was ordered to pay Gegato the
following: Php100,000 for moral damages and Php20,000 for attorney’s fees.
Reyes appealed to RTC.

RTC Denied the appeal but found Reyes guilty beyond reasonable doubt of the crime of Other Light Threats under
Article 285, par. 2, RPC, instead of Grave Threats as originally adjudged by the MCTC. Modified the penalty
of imprisonment to 10 days of arresto mayor and the moral damages reduced to Php50,000 while attorney’s
fees of Php20,000, stands.
Motion for Reconsideration was filed by Reyes. In RTC’s Amended Decision, it denied the MR but modified its
original decision reducing the amount of moral damages to Php10,000 and attorney’s fees to Php10,000.
CA Reyes then filed for Motion for Extention of Time to File a Petition for Review. However, instead of filing a
Petition for Review within the 15-day period allowed by CA, Reyes filed a second Motion for Extention of
Time asking for another 15 days within which to file his petition for review. Afterwhich Reyes filed his Petition
for Review.
CA dismissed the petition. The Resolution partly reads, as follows:

Reyes’ first Motion for Extension of Time to File Petition for Review asking for fifteen (15) days from June 6,
2007 or until June 21, 2007 is DENIED for failure to pay the full amount of the docket fees pursuant to Sec.
1, Rule 42 of the Rules of Court. His second motion for extension is likewise DENIED as no further extension
may be granted except for most compelling reason. The petition subsequently filed is, however, NOTED but
DISMISSED on the following grounds:
1. Filed beyond the reglementary period;

2. Failure of petitioner to pay complete docket fees as prescribed by law. It is deficient by P3,530.00;
3. Failure of petitioner to indicate a complete statement of material dates as required under the Rules.
Reyes did not mention in the body of the petition when he received the RTC's Order dated May 16, 2007
denying his Motion for Reconsideration;
4. Failure of petitioner to attach pertinent documents material in the petition. No copy of the May 16, 2007
Order denying his Motion for Reconsideration was attached to the petition.
Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 10

On August 14, 2007, Reyes filed a Motion for Reconsideration, but it was denied by the CA in its Resolution
dated October 17, 2008 for failure of Reyes to furnish copies to the Solicitor General and the private
Respondent Gegato. Thus, petitioner filed a Second Motion for Reconsideration.
In its Resolution dated November 23, 2009, the CA granted the petitioner's second Motion for
Reconsideration setting aside its previous Resolution dated October 17, 2008 and dismissing the first Motion
for Reconsideration dated August 13, 2007. The CA, in the same Resolution, discussed the other grounds for
the dismissal of the petition as contained in its first Resolution dated August 2, 2007. Thus, the CA not only
denied the first Motion for Reconsideration dated August 13, 2007 but also dismissed the Petition for Review
filed earlier.
On December 28, 2009, Reyes filed a third Motion for Reconsideration, but was resolved by the CA with
“NOTE WITHOUT ACTION” in view of the Resolution dated November 23, 2009, dismissing the petition with
finality.
Hence, Reyes filed a Petition for Review on Certiorari under Rule 45 of the RoC before the SC, assailing the
CA’s Resolution dated November 23, 2009 and insists that the CA erred in favoring procedural technicalities
over his constitutional right to due process.
ISSUE 1. Whether or not payment of docket fees in appeal is mandatory? YES
2. Whether or not second motion for reconsideration must be allowed? NO
3. Whether or not leniency in the interest of justice must be applied in favor of Petitioner Reyes? NO
RULING 1. The rule is that payment in full of the docket fees within the prescribed period is mandatory . In
Manchester v. Court of Appeals, it was held that a court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee.
The strict application of this rule was, however, relaxed two (2) years after in the case of Sun Insurance Office, Ltd. v.
Asuncion, wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the
docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the
applicable prescriptive or reglementary period. This ruling was made on the premise that the plaintiff had
demonstrated his willingness to abide by the rules by paying the additional docket fees required. Thus, in the more
recent case of United Overseas Bank v. Ros , the Court explained that where the party does not deliberately intend to
defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional
docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict
regulations set in Manchester, will apply.
Admittedly, this rule is not without recognized qualifications. The Court has declared that in appealed cases,
failure to pay the appellate court docket fee within the prescribed period warrants only discretionary as
opposed to automatic dismissal of the appeal and that the court shall exercise its power to dismiss in
accordance with the tenets of justice and fair play, and with great deal of circumspection considering all
attendant circumstances.
In that connection, the CA, in its discretion, may grant an additional period of fifteen (15) days only within which to
file the petition for review upon proper motion and the payment of the full amount of the docket and other lawful fees
and the deposit for costs before the expiration of the reglementary period and that no further extension shall be
granted except for the most compelling reason and in no case to exceed fifteen (15) days.
Therefore, the grant of any extensions for the filing of the petition is discretionary and subject to the
condition that the full amount of the docket and lawful fees are paid before the expiration of the
reglementary period to file the petition. In its Resolution dated November 23, 2009, the CA clearly explained its
denial of petitioner's motion for extension of time to file a petition for review, thus:
Clearly, there are pre-requisites before a motion for extension to file a Rule 42 petition for review could even be
granted. The petitioner must pay the full amount of the docket and other lawful fees and the deposit for costs before
the expiration of the reglementary period. This requirement was not met by the petitioner as the docket fees he had
paid are actually deficient by Three Thousand Five Hundred Thirty Pesos (3,530.00). Granting the petitioner's two (2)
motions for extension of time to file petition for review would have been beyond the pale of the limits allowed by the
Rules for the Court in that instance, considering that the petitioner failed to fulfill a requirement.
1. The Court emphasizes that second and subsequent motions for reconsideration are, as a general rule,
prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second motion for reconsideration
of a judgment or final resolution by the same party shall be entertained." The rule rests on the basic tenet of
immutability of judgments. "At some point, a decision becomes final and executory and, consequently, all litigations
must come to an end."
The general rule, however, against second and subsequent motions for reconsideration admits of settled
exceptions. In Neypes v. Court of Appeals, the Court declared:
In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or
unmindful of the extraordinary situations that merit liberal application of the Rules. In those situations where
technicalities were dispensed with, our decisions were not meant to undermine the force and effectivity of the periods
set by law. But we hasten to add that in those rare cases where procedural rules were not stringently applied, there
always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have
always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that
every litigant be given the full opportunity for the just and proper disposition of his cause.
2. Petitioner now begs this Court for leniency in the interest of justice. While there is a crying need to unclog
court dockets, on the one hand, there is, on the other, a greater demand for resolving genuine disputes fairly and
equitably, for it is far better to dispose of a case on the merit which is a primordial end, rather than on a technicality
that may result in injustice. However, [i]t is only when persuasive reasons exist that the Rules may be
relaxed to spare a litigant of an injustice not commensurate with his failure to comply with the
prescribed procedure. In the present case, petitioner failed to convince this Court of the need to relax the rules and
the eventual injustice that he will suffer if his prayer is not granted.
Dispositive Portion: Petition for Certiorari under Rule 45 is denied for lack of merit. CA resolution dated November 23, 2009 is affirmed.
NTC VS. HEIRS OF EBESA – CAPURCOS
CASE TITLE NATIONAL TRANSMISSION CORPORATION, Petitioner, v. HEIRS OF TEODULO EBESA, NAMELY:

PORFERIA L. EBESA, EFREN EBESA, DANTE EBESA AND CYNTHIA EBESA, AND ATTY. FORTUNATO
VELOSO, Respondents
APPLICABLE RULE / COMMENCEMENT OF ACTION; PAYMENT OF DOCKET FEES
from the syllabus)
FACTS Early in 2005, NTC filed a case to expropriate the 1,479-square-meter portion of Lot No. 18470, situated in Quiot,
Pardo, Cebu City. It is declared under the co-ownership of the heirs of Teodulo Ebesa, namely, Porferia Ebesa, Efren
Ebesa, Dante Ebesa and Cynthia Ebesa Ramirez (Heirs of Ebesa), but is occupied by Atty. Fortunato Veloso (Veloso)
(respondents), who allegedly purchased the property, as evidenced by an unregistered Deed of Sale. NTC alleged that
the acquisition of an easement right-of-way over a portion of the subject property is necessary for the construction
and maintenance of the Quiot (Pardo) 100MVA Substation Project in Cebu City, an undertaking that partook of a public
purpose.
In his Answer, Veloso, acting as his own counsel in collaboration with Atty. Nilo Ahat, conceded that the project was
indeed intended for a public purpose but disputed its necessity and urgency and alleged that the project will not only
affect a portion of the property but its entirety considering that the construction entails the installation of huge
permanent steel towers and the air space directly above the subject property will be permanently occupied with
transmission lines. The RTC issued an Order of Expropriation. After settling the amount of just compensation to be
paid to Veloso, the RTC rendered a decision directing the NTC to pay Veloso the amount of 35M pesos with interest
and costs and or immediately return the land to Veloso and await the finality of the judgment before paying Veloso.
The MR filed by NTC was denied by the RTC prompting it to file an appeal before the CA. Thereafter, the CA directed
the NTC to submit official receipt or proof of payment of the appeal fees within 10 days from notice. T he NTC filed a
Manifestation, alleging that it cannot comply with the order of the CA as it did not pay appeal docket fees.
It asseverated that the receiving clerk of the RTC did not accept its payment for the appeal fees on the
ground that it is exempted from doing so, being a GOCC. The now respondents filed a Motion to Dismiss stating
that the judgment has now attained finality since the payment of docket fees is mandatory and jurisdictional and non-
payment thereof will not toll the running of the appeal period. Afterwards, the NTC filed another Manifestation
informing the CA that it already filed on September 18, 2006 a Manifestation with Urgent Ex-Parte Motion with the
RTC and settled the payment of appeal fees also submitting the official receipts for the said payment
The CA granted the Motion to Dismiss. The CA held that the NTC's counsel should know that as a GOCC, it is not
exempted from the payment of docket and other legal fees.
Unyielding, the NTC, in its present appeal, contends that the failure to pay appeal docket fees does not automatically
cause the dismissal of the appeal, but lies on the discretion of the court. It asseverates that since its failure to pay the
appeal fees was not willful and deliberate, its omission could be excused in the interest of justice and equity. It
reiterates that it was prepared to pay the docket fees if not for the receiving clerk's advice that the same was not
necessary as it is a GOCC. Even then, it eventually paid the appeal fees, although past the reglementary period.

9. Provide the description RTC The RTC rendered a decision directing the NTC to pay Veloso the amount of 35M pesos with interest
of the initial complaint and costs and or immediately return the land to Veloso and await the finality of the judgment before
at the court a quo. paying Veloso. The MR filed by NTC was denied
10. Let us be accurate as to CA / CTA The CA granted the Motion to Dismiss.
the remedy used in
Others
(Quasi Judicial
for certiorari, appeal,
Agencies, if
any)
etc.).
ISSUE Whether or not CA was correct in dismissing NTC’s appeal on the ground of non payment of docket fees resulting into
(based from the syllabus) the finality of the RTC’s decision

RULING Verily, the payment of appeal docket fees is both mandatory and jurisdictional. It is mandatory as it is
(If possible, highlight or required in all appealed cases, otherwise, the Court does not acquire the authority to hear and decide
underline the doctrine) the appeal. The failure to pay or even the partial payment of the appeal fees does not toll the running of
the prescriptive period, hence, will not prevent the judgment from becoming final and executory. Such
was the circumstance in the instant appeal. The NTC failed to pay the appeal fees without justifiable excuse. That its
counsel or his representative was misled by the advice of the receiving clerk of the RTC is unacceptable as the
exercise of ordinary diligence could have avoided such a blunder. It is apparent from the records that the NTC had
ample time to rectify the error or clarify its reservation regarding the propriety of its supposed exemption from the
appeal fees.
In the present case, the NTC failed to present any justifiable excuse for its failure to pay the docket fees like in the
cases of Mactan Cebu International Airport Authority v. Manguhat and Yambao v. CA. In Mactan Cebu International
Airport Authority, the petitioner took the initiative to verify the necessity of paying the docket fees and paid it outright,
albeit six days after the lapse of the period to appeal. Quite the opposite, the NTC in the present case never lifted a
linger until it was required by the CA to present proof of its payment of the docket fees and paid the same only six
months after the period to appeal has prescribed.
VARGAS VS. OGSOS - RAYOSO
CASE TITLE Vargas vs. Ogsos

APPLICABLE RULE / Payment of Docket Fees; Counterclaims
from the syllabus)
FACTS On February 10, 1994, Ogsos, Sr. and the Heirs of Fermina Pepico (Fermina), represented by their Attorney-in-Fact,
Catalino V. Noel, entered into a Contract of Lease 5 (lease contract) covering five (5) parcels of agricultural land
owned by the latter, with an aggregate area of 23 hectares, more or less, situated in Maaslum Manjuyod, Negros
Oriental (leased premises). Based on the contract, Ogsos, Sr. agreed to pay the Heirs of Fermina 230 piculs or 290.95
liquid-kilogram (lkg.) of centrifugal sugar every crop year, starting from crop year 1994-1995 to crop year 2000-2001,
as lease rental.
The term of the lease contract was extended for three (3) years, or until the end of crop year 2004, due to Ogsos,
Sr.'s introduction of improvements on the leased premises. Thereafter, or on December 30, 1996, the said contract
was amended, modifying the lease rental from 230 piculs or 290.95 lkg. of centrifugal sugar every crop year to
P150,000.00 cash, beginning the crop year 1996-1997.
Elizabeth Sy-Vargas and Kathryn, who are among the heirs of Fermina, claimed that the lease rentals from crop year
1994-1995 to crop year 1998-1999 were not paid.
Basis for Counterclaim

The respondents contended that they had faithfully complied with their obligations as embodied in the lease contract
and its subsequent amendments. They denied abandoning the leased premises and claimed that sometime in
December 1998, petitioner and Kathryn unlawfully took possession of the leased premises and appropriated for
themselves the sugarcane ready for harvest under the pretext that they would apply the proceeds thereof to the
unpaid rent. They likewise alleged that in the same year, Ogsos, Sr. and his wife fell ill, which incidents forced
respondents to obtain loans from several businessmen. The arrangement regarding the foregoing loans was that the
said creditors would be allowed to harvest the sugarcane from the leased premises and apply the proceeds thereof to
the loans. They further contended that when the creditors were about to harvest the sugarcane, they were prevented
by petitioner and Kathryn; resulting in respondents' default in the payment of their debts. On March 22, 2000, Ogsos,
Sr. died. The respondents asserted that when petitioner and Kathryn took possession of the leased premises,
respondents lost their profits equivalent to the aforesaid production starting from crop year 1999-2000 until the
termination of the lease contract on crop year 2003-2004.

11. Provide the description RTC The plaintiff filed a Complaint for Specific Performance and Damages against Ogsos.
of the initial complaint Summons was served in May 2000, but respondent Ogsos, Jr. only filed a motion to admit answer
at the court a quo. and answer to the complaint after more than two (2) years, or on December 17, 2002. Thus,
12. Let us be accurate as to petitioner and Kathryn filed on January 28, 2003, an opposition thereto, and moved to declare
the remedy used in respondents in default, which the RTC granted in an Order dated March 7, 2003.
each court (i.e. petition CA Their motion for reconsideration having been denied by the RTC, respondents, then, elevated the
for certiorari, appeal, matter via a petition for certiorari to the CA. CA granted respondents petition and remanded the
petition for review, case to the RTC. CA ordered the RTC to admit respondents' answer so as to give them the
etc.). opportunity to be heard and to present their side on the merits of the case.
RTC After hearing their side, respondents filed a counterclaim for these lost profits plus damages.
Respondents moved for the dismissal of the complaint in view of the absence of the required
Certificate of Non-Forum Shopping. In a Resolution dated November 9, 2005, the RTC dismissed the
case without prejudice. They moved for the hearing of their counterclaim, to which the RTC
required petitioner and Kathryn to submit a comment, but none was filed. Hence, in an Order dated

February 9, 2006, the RTC set the case for reception of evidence on respondents' counterclaim.
Petitioner and Kathryn filed a motion to dismiss arguing that the counterclaim was permissive and
that respondents had not paid the appropriate docket fees.
RTC denied the said motion, declaring respondents' counterclaim as compulsory; thus, holding that
the payment of the required docket fees was no longer necessary.
In so ruling, it found that Ogsos, Sr. faithfully paid the lease rentals during the crop years 1994 to
1997 35 but eventually stopped their payments when petitioner and Kathryn took possession and
harvested the sugarcane in the leased premises sometime in December 1998, despite respondents'
objection. Accordingly, petitioner and Kathryn reneged on their obligation to maintain respondents'
peaceful and adequate enjoyment of the leased premises when the former forcibly and unlawfully
deprived the latter of possession thereof in December 1998, despite payment of the lease rentals.
Due to this, petitioner and Kathryn were held liable for breach of the lease contract.
CA Affirmed the ruling of the RTC. The CA ruled that the RTC was correct in ruling that respondents'
counterclaim is not permissive but compulsory; hence, payment of docket fees was not necessary.
Further, the CA ruled that even though the counterclaim was compulsory, the same would not be
automatically dismissed upon the dismissal of the action if the dismissal was caused by the fault of
the plaintiff, as in this case.
Petitioner and Kathryn filed their motion for reconsideration, denied.
Others
ISSUE Whether or not the respondents are required to pay docket fees for their counterclaim. Yes.
(based from the syllabus)
RULING In a petition for review on certiorari, the Court ruled that essentially, the nature of a counterclaim is determinative of
(If possible, highlight or whether or not the counterclaimant is required to pay docket fees. The rule in permissive counterclaims is that for
underline the doctrine) the trial court to acquire jurisdiction, the counterclaimant is bound to pay the prescribed docket fees. On the other
hand, the prevailing rule with respect to compulsory counterclaims is that no filing fees are required for the trial court
to acquire jurisdiction over the subject matter.
The court ruled that the counterclaim is permissive, and not compulsory as held by the courts a quo, respondents are
required to pay docket fees. However, it must be clarified that respondents' failure to pay the required docket fees,
per se, should not necessarily lead to the dismissal of their counterclaim. It has long been settled that while the court
acquires jurisdiction over any case only upon the payment of the prescribed docket fees, its non-payment at the time
of :ling of the initiatory pleading does not automatically cause its dismissal provided that: (a) the fees are paid within
a reasonable period; and (b) there was no intention on the part of the claimant to defraud the government.
Here, respondents cannot be faulted for non-payment of docket fees in connection with their counterclaim, primarily
because as early as November 16, 2006, the RTC had already found such counterclaim to be compulsory in nature.
Verily, respondents' reliance on the findings of the courts a quo, albeit erroneous, exhibits their good faith in not
paying the docket fees, much more their intention not to defraud the government.
Instead, the docket fees required shall constitute a judgment lien on the monetary awards in respondents' favor.
The Court held that in instances where a litigant's non-payment of docket fees was made in good faith and without
any intention of defrauding the government, the clerk of court of the court a quo should be ordered to assess the
amount of deficient docket fees due from such litigant, which will constitute a judgment lien on the amount awarded
to him, and enforce such lien.
CAMASO VS. TSM SHIPPING – DE LEON
CASE TITLE WOODROW B. CAMASO vs TSM SHIPPING (PHILS), INC., UTKILEN, and/or JONES TULOD
APPLICABLE RULE / DOCKET FEES, SECTION 3, RULE 46 (RULES OF COURT)
from the syllabus)
FACTS Camaso claims he has been working with TSM for five years. In 2015, he signed an employment contract with TSM
Shipping and Utkilen as Second Mate for 6 months. While on board the vessel, he was diagnosed with tonsillar cancer.
This caused his repatriation. He underwent a series of tests in St. Luke’s Medical Center and the diagnosis was
confirmed. He had to undergo chemotherapy sessions and radiation therapy which was paid by the respondents. After
some time, the respondents refused to shoulder the expenses. Hence, Camaso had to shoulder the cost of his
treatment. Camaso’s belief that his illness was work-related prompted Camaso to file a complaint before the NLRC.
of the initial complaint CA / CTA Petition for Certiorari – dismissed for the non-payment of the required docket fees as required under
at the court a quo. Rule 46, Section 3 of the Rules of Court.

the remedy used in Camaso filed a Motion for Reconsideration, contending that a check was attached to the petition he
each court (i.e. petition filed before the CA, and that upon verification of his counsel’s messenger, the Division Clerk of Court
for certiorari, appeal, overlooked it.
etc.). CA dismissed the petition. It held that assuming there was a check attached, such is not a mode of
payment sanctioned by the 2009 Internal Rules of the Court of Appeals which allows only payment
in cash, postal money order, certified, manager’s or cashier’s checks payable to the CA.
Others Case begins at the National Labor Relations Commission with an instant complaint for disability
(Quasi Judicial benefits, sickwage allowance, reimbursement of medical and hospital expenses, and other
Agencies, if consequential damages.
any)
The Labor Arbiter ruled in favor of Camaso,and ordered respondents to pay for total and permanent
disability benefits plus attorney’s fees, and dismissed other monetary claims for lack of merit.
On appeal to NLRC, the complaint was dismissed for lack of merit.
Camaso moved for reconsideration before the NLRC, but was denied.
ISSUE Note: If there are other remedial issues in the case aside from the topic in the syllabus, kindly include it as well.
(based from the syllabus) Whether or not the CA correctly dismissed Camaso’s petition for certiorari for non-payment of docket fees.
RULING “Section 3, Rule 46 of the Rules of Court provides that in original actions filed before the CA, such as a petition for
(If possible, highlight or certiorari, the payment of the corresponding docket fees is required, and that the failure to comply with the same shall
underline the doctrine) be sufficient ground for the dismissal of such action, viz.:
Section 3. Contents and filing of petition,· effect of non-compliance with requirements. -The petition shall contain the
full names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved,
the factual background of the case, and the grounds relied upon for the relief prayed for.
In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the
judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if
any, was filed and when notice of the denial thereof was received.
xx xx
The petitioner shall pay the corresponding docket and other lawful fees to the clerk of court and deposit
the amount of P500.00 for costs at the time of the filing of the petition.
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground
for the dismissal of the petition.”
Verily, the failure to pay the required docket fees per se should not necessarily lead to the dismissal of a
case. It has long been settled that while the court acquires jurisdiction over any case only upon the
payment of the prescribed docket fees, its non-payment at the time of filing of the initiatory pleading
does not automatically cause its dismissal provided that: (a) the fees are paid within a reasonable
period; and (b) there was no intention on the part of the claimant to defraud the government.
Here, it appears that when Camaso filed his certiorari petition through his counsel and via mail, a Metrobank check
dated July 6, 2015 under the account name of Pedro L. Linsangan was attached thereto to serve as payment of docket
fees. Although this was not an authorized mode of payment under Section 6, Rule VII of the 2009 IRCA, the
attachment of such personal check shows that Camaso exerted earnest efforts to pay the required docket fees.
Clearly, this exhibits good faith and evinces his intention not to defraud the government. In this relation, the assertion
of the Officer-in-Charge of the CA Receiving Section that there was no check attached to Camaso’s certiorari petition is
clearly belied by the fact that when it was examined at the Office of the Division Clerk of Court, the check was found
to be still stapled thereto.
DYNAMIC BUILDERS VS. PRISBITERO - CARITOS
CASE TITLE G.R. No. 174202 April 7, 2015
DYNAMIC BUILDERS & CONSTRUCTION CO. (PHIL.), INC., Petitioner,

vs.
HON. RICARDO P. PRESBITERO, JR., MAYOR AND HEAD OF PROCURING UNIT OF THE MUNICIPALITY
OF VALLADOLID, NEGROS OCCIDENTAL; BIDS AND A WARDS COMMITTEE, MUNICIPALITY OF
VALLADOLID, NEGROS OCCIDENTAL; AND HENRY L. JORDAN AND/OR HLJ CONSTRUCTION AND
ENTERPRISE,Respondents.
APPLICABLE RULE / Splitting a cause of action
from the syllabus)
FACTS The Municipality of Valladolid Negros Occidental, through its Bids and Awards Committee (BAC), publises an invitation
to bid for the construction of a rubble concrete seawall along the municipality’s shoreline, and Dynamic Builders of the
bidders. However Dynamic Builders was informed that its bid proposal had been found to be not substantially
responsive. Dynamic Builders sought reconsideration for being declared as not substantially responsive however BAC
denied this request.
Dynamic Builders lodged a formal protest against Respondent Presbitero to set aside the BAC’s decision and the
protest was also denied.

of the initial complaint Dynamic Builders filed a Petition for Certiorari before the RTC of Bago City Negros Occidental for
at the court a quo. assailing the decision of Respondent Presbitero denying Dynamic Builders Motion for Reconsideration
16. Let us be accurate as to and pursuant to Art XVII Sec 58 of RA No. 9184, known as the Government of Procurement Reform
the remedy used in Act.
for certiorari, appeal, Simultaneously, Dynamic Builders filed this Petition for Prohibition with application for temporary
petition for review, restraining order and/or writ of preliminary injunction before this court.
etc.).
CA / CTA
Others
(Quasi Judicial
Agencies, if
any)
ISSUE Whether or not the petitioner violated the rules against the splitting of a cause of action, multiplicity of suits and forum
(based from the syllabus) shopping?
RULING YES. There is nothing in Republic Act No. 8975 or in Presidential Decree No. 1818 that allows the simultaneous
(If possible, highlight or availment of legal remedies before the Regional Trial Court and this court.
Republic Act No. 8975, even when read with Presidential Decree No. 1818, does not sanction the splitting of a cause
of action in order for a party to avail itself of the ancilliary remedy of a temporary restraining order from this court.
Rule 2, Section 3 of the Rules of Court provides that "[a] party may not institute more than one suit for a single cause
of action." Moreover, Section 4 discusses the splitting of a single cause of action in that "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." The splitting of a cause of action "violate[s] the policy against
multiplicity of suits, whose primary objective [is] to avoid unduly burdening the dockets of the courts.
This Petition seeks to enjoin the execution of public respondent's Decision and Resolution on the protest — the same
Decision and Resolution sought to be set aside in the Petition before the Regional Trial Court. In essence, petitioner
seeks the same relief through two separate Petitions filed before separate courts. This violates the rule against forum
shopping
RELUCIO VS. LOPEZ – DORADO
CASE TITLE RELUCIO VS. LOPEZ

373 SCRA 578
APPLICABLE RULE / RULE 3
SECTION / TOPIC REAL PARTY IN INTEREST; NECESSARY PARTY
FACTS Angelina Meija Lopez filed a petition for Appointment as Sole Administratix of Conjugal Partnership of Properties,
Forfeiture, etc. against her husband Alberto Lopez and Imelda Relucio, for Alberto abandoned Angelina and her four
children and maintained an illicit relationship with Imelda Relucio.
It was further alleged that defendant Lopez and petitioner Relucio, during their period of cohabitation since 1976,
have amassed a fortune consisting mainly of stockholdings in Lopez-owned or controlled corporations, residential,
agricultural, commercial lots, houses, apartments and buildings, cars and other motor vehicles, bank accounts and
jewelry. These properties, which are in the names of defendant Lopez and petitioner Relucio singly or jointly or their
dummies and proxies, have been acquired principally if not solely through the actual contribution of money, property
and industry of defendant Lopez with minimal, if not nil, actual contribution from petitioner Relucio.
REMEDIAL MATTERS RTC petition for APPOINTMENT AS SOLE ADMINISTRATRIX OF CONJUGAL PARTNERSHIP OF
PROPERTIES, FORFEITURE, ETC. Was filed by angelina Lopez. And motion to dismiss was filed by
Relucio on the ground that Angelina Lopez has no cause of action against her. The judge of the RTC
denied her Motion to Dismiss on the ground that some of the properties are registered in her
name.A motion for reconsideration was filed by Relucio but the same was denied by the RTC.
CA / CTA petition for certiorari assailing the trial courts denial of her motion to dismiss. But the CA denied the
motion
ISSUE Whether Relucio is an indispensable party or only a necessary party.
RULING Relucio is neither an indespensable party nor a necessary party.

“A real party in interest is one who stands "to be benefited or injured by the judgment of the suit."In this case,
petitioner would not be affected by any judgment in Special Proceedings M-3630.If petitioner is not a real party in
interest, she cannot be an indispensable party. An indispensable party is one without whom there can be no final
determination of an action. Petitioner's participation in Special Proceedings M-36-30 is not indispensable. Certainly, the
trial court can issue a judgment ordering Alberto J. Lopez to make an accounting of his conjugal partnership with
respondent, and give support to respondent and their children, and dissolve Alberto J. Lopez' conjugal partnership
with respondent, and forfeit Alberto J. Lopez' share in property co-owned by him and petitioner. Such judgment would
be perfectly valid and enforceable against Alberto J. Lopez.Nor can petitioner be a necessary party in Special
Proceedings M-3630.
A necessary party as one who is not indispensable but who ought to be joined as party if complete relief is to be
accorded those already parties, or for a complete determination or settlement of the claim subject of the action. In the
context of her petition in the lower court, respondent would be accorded complete relief if Alberto J. Lopez were
ordered to account for his alleged conjugal partnership property with respondent, give support to respondent and her
children, turn over his share in the co-ownership with petitioner and dissolve his conjugal partnership or absolute
community property with respondent.
The Court GRANTS the petition and REVERSES the decision of the Court of Appeals. The Court DISMISSES Special
Proceedings M-3630 of the Regional Trial Court, Makati, Branch 141 against petitioner.
DE CASTRO VS. CA – CATUBAY
CASE TITLE De Castro vs. Court of Appeals, 384 SCRA 607, G.R. No. 115838 July 18, 2002
APPLICABLE RULE / Parties/Indispensable Parties/
from the syllabus)
FACTS Plaintiff Francisco Artigo ("Artigo" for brevity) sued defendant Constante A. De Castro ("Constante" for brevity) and
Corazon A. De Castro ("Corazon" for brevity) to collect the unpaid balance of his broker's commission from
the De Castros.
De Castros were co-owners of four lots. In a letter Artigo was authorized by De Castros to act as real estate broker in
the sale of these properties for the amount of P23,000,000.00, five percent (5%) of which will be given to the agent
as commission.
Artigo found Times Transit Corporation, represented by its president Mr. Rondaris, as a prospective buyer which
desired to buy two (2) lots only, specifically lots 14 and 15. Eventually, the sale of lots 14 and 15 was consummated.
Artigo however received only P48,893.76 as commission. He asserted that his total commission should be P352,500.00
which is five percent (5%) of the agreed price of P7,050,000.00 paid by Times Transit Corporation to the De Castro for
the two (2) lots. Francisco Artigo then sued petitioners Constante and Corazon to collect the unpaid balance of his
broker’s commission.
Defense of the De Castros: That Artigo's complaint should have been dismissed for failure to implead all the co-owners
of the two lots. The De Castros claim that Artigo always knew that the two lots were co-owned by Constante and
Corazon with their other siblings Jose and Carmela whom Constante merely represented. The De Castros contend that
failure to implead such indispensable parties is fatal to the complaint since Artigo, as agent of all the four co-owners,
would be paid with funds co-owned by the four co-owners.
RTC "WHEREFORE, the Court finds defendants Constante and Corazon Amor de Castro jointly and
solidarily liable to plaintiff the sum of:
a) P303,606.24 representing unpaid commission;

b) P25,000.00 for and by way of moral damages;
c) P45,000.00 for and by way of attorney's fees;
d) To pay the cost of this suit.
CA / CTA The Court of Appeals affirmed in toto the decision of the trial court.
The Court of Appeals ruled that Artigo's complaint is not dismissible for failure to implead as
indispensable parties the other co-owners of the two lots. The Court of Appeals explained that it is
not necessary to implead the other co-owners since the action is exclusively based on a contract of
agency between Artigo and Constante.
SC: Before us is a Petition for Review on Certiorari seeking to annul the Decision of the Court of
Appeals, which affirmed in toto the decision of the Regional Trial Court in Civil Case.
Others
(Quasi Judicial
Agencies, if
any)

ISSUE Whether the complaint should be dismissed on the ground of failure to implead the other co-owners as
indispensable parties
RULING NO. An indispensable party is one whose interest will be affected by the court's action in the litigation, and without
whom no final determination of the case can be had. The joinder of indispensable parties is mandatory and courts
cannot proceed without their presence. Whenever it appears to the court in the course of a proceeding that an
indispensable party has not been joined, it is the duty of the court to stop the trial and order the inclusion of such
party.
However, the rule on mandatory joinder of indispensable parties is not applicable to the instant case.
Under the note/letter sent by the De Castro to Antigo, a contract of agency was clearly constituted between Constante
and Artigo. Whether Constante appointed Artigo as agent, in Constante’s individual or representative capacity, or both,
the De Castros cannot seek the dismissal of the case for failure to implead the other co-owners as indispensable
parties.
The De Castros admit that the other co-owners are solidarily liable under the contract of agency, citing Article 1915 of
the Civil Code, which reads: Art. 1915. If two or more persons have appointed an agent for a common transaction or
undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. The solidary liability of
the four co-owners, however, militates against the De Castros theory that the other co-owners should be impleaded as
indispensable parties.
When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a contract of
agency, each obligor may be compelled to pay the entire obligation. The agent may recover the whole compensation
from any one of the co-principals, as in this case.
ORQUIOLA VS. CA - ECO
CASE TITLE VICTOR ORQUIOLA and HONORATA ORQUIOLA, petitioners, vs. HON. COURT OF APPEALS,
HON. VIVENCIO S. BACLIG, Presiding Judge, Regional Trial Court, Branch 77, Quezon City, THE
SHERIFF OF QUEZON CITY and HIS/HER DEPUTIES and PURA KALAW LEDESMA,
substituted by TANDANG SORA DEVELOPMENT CORPORATION , respondents. [G.R. No.
141463. August 6, 2002]
APPLICABLE RULE / SECTION / TOPIC REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; WRIT OF EXECUTION MAY ISSUE ONLY
AGAINST A PARTY AND NOT AGAINST ONE WHO DID NOT HAVE HIS DAY IN COURT
FACTS Pura Kalaw Ledesma was the registered owner of Lot 689, covered by TCT Nos. 111267 and 111266,
in Tandang Sora, Quezon City. This parcel of land was adjacent to certain portions of Lot 707 of the
Piedad Estates, namely, Lot 707-A and 707-B, registered in the name of Herminigilda Pedro under TCT
Nos. 16951 and 16952, respectively. On October 29, 1964, Herminigilda sold Lot 707-A and 707-B to
Mariano Lising who then registered both lots and Lot 707-C in the name of M.B. Lising Realty and
subdivided them into smaller lots.
Certain portions of the subdivided lots were sold to third persons including herein petitioners,
spouses Victor and Honorata Orquiola, who purchased a portion of Lot 707-A-2, Lot 5, Block 1 of the
subdivision plan (LRC), Psd-42965. The parcel is now #33 Doa Regina St., Regina Village, Tandang
Sora, Quezon City. The other portions were registered in the name of the heirs of Pedro, heirs of
Lising, and other third persons.

RTC Pura Kalaw Ledesma filed a complaint, docketed as Civil Case No.
Q-12918, with the Regional Trial Court Branch 77, of Quezon City
against Herminigilda Pedro and Mariano Lising for allegedly
encroaching upon Lot 689.
During the pendency of the action, Tandang Sora Development Corporation

replaced Pura Kalaw Ledesma as plaintiff by virtue of an assignment of Lot
689 made by Ledesma in favor of said corporation. Trial continued for three
decades.
Branch 77, Regional Trial Court, Quezon City rendered a decision against
defendants Pedro and Lising jointly and severally liable for encroaching on
plaintiffs land and ordered them:
(a) to solidarily pay the plaintiff Tandang Sora Dev.

Corp. actual damages in the amount of P20,000 with

interest from date of filing of the complaint;
(b) to remove all construction, including barbed wires

and fences, illegally constructed by defendants on
plaintiffs property at defendants expense;
(c) to replace the removed concrete monuments

removed by defendants, at their own expense;
(d) to pay attorneys fees in the amount of FIVE

THOUSAND PESOS (P5,000.00) with interest computed
from the date of filing of the complaint;
(e) to relocate the boundaries to conform with the

Commissioners Report, particularly, Annexes A and B
thereof, at the expense of the defendants.
As a result, in February 1998, the Deputy Sheriff of Quezon City directed

petitioners, through an alias writ of execution, to remove the house
they constructed on the land they were occupying. However, despite the
service of the said writ to all the defendants and the petitioners, they
failed to comply therewith, as per the Partial Sheriffs Return, dated
February 9, 1998, issued by the Deputy Sheriff of this branch of the Court.
Thus, the trial court ordered to demolish the structures in order to
implement the said decision.
CA / CTA To prohibit Judge Vivencio Baclig of the Regional Trial Court of Quezon City
from issuing a writ of demolition and the Quezon City sheriff from
implementing the alias writ of execution, petitioners filed with the
Court of Appeals a petition for prohibition with prayer for a
restraining order and preliminary injunction on April 17, 1998.
Petitioners alleged that they bought the subject parcel of land in good faith
and for value, hence, they were parties in interest. Since they were not
impleaded in Civil Case No. Q-12918, the writ of demolition issued
in connection therewith cannot be enforced against them because
to do so would amount to deprivation of property without due
process of law.
However, the CA dismissed the petition. It held that as buyers

and successors-in-interest of Mariano Lising, petitioners were
considered privies who derived their rights from Lising by virtue of
the sale and could be reached by the execution order in Civil Case
No. Q-12918.
Others (Quasi Judicial
Agencies, if any)
ISSUE Whether or not the Court of Appeals erred in holding that the subject decision of the trial court can
also be enforced against the petitioners even if they were not impleaded as parties thereto.
RULING YES, the Supreme Court ruled that the Court of Appeals erred in holding that the subject decision of
the trial court can also be enforced against the petitioners even if they were not impleaded as parties
thereto. As builders in good faith and innocent purchasers for value, petitioners have rights over the
subject property and hence are proper parties in interest in any case thereon. Consequently, private
respondents should have impleaded them in Civil Case No. Q-12918. Since they failed to do so,
petitioners cannot be reached by the decision in said case.
No man shall be affected by any proceeding to which he is a stranger, and strangers to a

case are not bound by any judgment rendered by the court. In the same manner, a writ of
execution can be issued only against a party and not against one who did not have his day
in court. Only real parties in interest in an action are bound by the judgment therein and
by writs of execution and demolition issued pursuant thereto.
In our view, the spouses Victor and Honorata Orquiola have valid and meritorious cause to resist the
demolition of their house on their own titled lot, which is tantamount to a deprivation of property
without due process of law.
CHINA BANKING VS. OLIVER – CRUZ
CASE TITLE CHINA BANKING CORPORATION, petitioner, vs. MERCEDES M. OLIVER

[G.R. No. 135796. October 3, 2002.]
APPLICABLE RULE /
SECTION / TOPIC(based An Indispensable Party; An indispensable party is a party in interest without whom no final determination can be had

from the syllabus) of an action, and who shall be joined either as plaintiffs or defendants. (Sec 7, Rule 3)
The joinder of indispensable parties is mandatory. The presence of indispensable parties is necessary to vest the court
with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case. Thus, without the
presence of indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality. The absence
of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not
only as to the absent parties but even as to those present.
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 wth any
proceedings in which he may have no interest. (sec 6, Rule 3)
Neither misjoinder nor Non-joinder of parties is not a ground for dismissal of an action. Parties may be dropped or
added by order of the court on motion of any party or its own initiative at any stage the action and on such terms as
are just. Any claim against a misjoined party may be severed and proceeded with separately. (Sec 11, Rule 3)
FACTS Mercedes M. Oliver filed a complaint for "Annulment of Mortgage and Cancellation of Title with Damages" against
petitioner and the Register of Deeds and Deputy Register of Deeds of Makati City, namely: Attys. Mila Flores and
Ferdinand Ignacio.
Oliver averred that: she is the registered owner of a parcel of land in Tunasan, Muntinlupa as evidenced by Transfer
Certificate of Title (TCT) No. S-50195 of the Makati Registry of Deeds (RD).
Sometime in November of 1995, she learned that a real estate mortgage was constituted over her property in favor of
China Banking Corporation (CBC) and that the mortgage was already annotated on the original of her title on file with
the RD of Makati; aware that she never executed any mortgage in favor of anybody and that her owner's duplicate of
the title has always been in her possession since 1977, she went to the RD of Makati to verify; she was told by Ignacio
that there was indeed a mortgage on her property in favor of CBC.
Ignacio then gave her a copy of the deed of real estate mortgage executed by a certain “Mercedes M. Oliver” who is
not however plaintiff; she went to CBC and shower Mr. Roberto c. Uyguienco, VP, her genuine title; and in a letter to
him dated November 29, 1995, she reiterated that the owner’s duplicate copy in the possession of CBC was spurious
and requested the bank authorities to investigate those involved in the anomaly.
CBC filed a Motion to Dismiss alleging lack of cause of action and non-joinder of indispensable parties. It argued that
in order to determine who is the real owner of the property and whose owner’s duplicate is genuine, the “Mercedes M.
Oliver” who signed the real estate mortgage must be impleaded as an indispensable party citing Sec 7, Rule of the
Revised Rules of Court falling which the complaint should be dismissed.
REMEDIAL MATTERS RTC The trial court denied the motion ruling that a valid judgement can be rendered on the basis of the
allegations of the complaint; that the matters alleged in the motion to dismiss are evidentiary which
petitioner may substantiate at the proper time; and that if there are other parties to petitioner, the rules
provide the manner of bringing them to court.
CA CBC filed with the CA a petition for certiorari and prohibition under Rule 65 of the Rules of Court, as
amended, with a prayer for the issuance of a writ of preliminary injunction, assailing the court a quo’s order
denying its motion to dismiss.
The CA dismissed the petition as well as CBC’s subsequent motion for reconsideration through its resolution
dated September 30, 1998.
SC CBC wen to SC on a Petition for Review, docketed as G.R. no. 135796 which the court denied on October 3,
2002, through Associate Justice Leonardo A. Quisimbing for lack of merit.
Meanwhile at the lower court, Oliver filed a motion to declare defendant bank in default. This was granted
after the court a quo found that CBC failed to file an answer within the reglementary period and that the
filing of the petition for certiorari did not toll the running of the period. The case was then submitted for
decision based on the complaint.
The trial court ruled in favor of the respondent and against the petitioner. CBC went to the CA again, this
time on appeal and CA dismissed the appeal but modified the trial court decision by deleting the award for
damages and order to issue another owner’s duplicate copy of the TCT to Oliver.
ISSUE 4. Whether or not the mortgagor who goes by the name of Mercedes M. Oliver an indispensable party in the
case? NO.
5. Whether or not Section 7, Rule 3 of the 1997 Rules of Civil Procedure apply in this case? NO
RULING
3. NO. An Indispensable party is a party in interest, without whom no final determination can be had of an
action. It is true that mortgagor Oliver One is a party in interest, for she will be affected by the outcome of the case.
She stands to be benefited in case the mortgage is declared valid or injured in case her title is declared fake. However,
mortgagor Oliver One’s absence from the case does not hamper the trial court in resolving the dispute between
respondent Oliver Two and petitioner. A perusal of Oliver Two’s allegations in the complaint below shows that it was
for annulment of mortgage due to petitioner’s negligence in not determining the actual ownership of the property,
resulting in the mortgage’s annotation on TCT No. S-50195 in the Registry of Deed’s custody. To support said
allegations, respondent Oliver Two had to prove (1) that she is the real Mercedes M. Oliver referred to in the TCT, and
(2) that she is not the same person using that name who entered into a deed of mortgage with the petitioner. This,
respondent Oliver Two can do in her name complaint without necessarily impleading the mortgagor Oliver One. Hence,
Oliver One is not an indispensable party in the case filed by Oliver Two.
A party is not indispensable to the suit if his interest in the controversy or subject matter is distinct and divisible from
the interest of the other parties and will not necessarily be prejudiced by a judgement which does not complete justice
to the parties in court. In this case, China bank has interest in the loan which, however, is distinct and divisible from
the mortgagor’s interest, which involves the land uses as collateral for the loan.
4. NO. Since mortgagor Oliver One is not an indispensable party, Section 7, Rule 3 of the 1997 Rules of Civil
Procedure, which requires compulsory joinder of indispensable parties in a case, does not apply. Instead, It is Section
11, Rule 3, that applies. Non Joinder of parties is not a ground for dismissal of an action. Parties may be added by
order of the court, either on its own initiative or on motion of the parties. Hence, the Court of Appeals committed no
error when it found no abuse of discretion on the part o the trial court for denying China bank’s motion to dismiss and,
instead, suggested that petitioner file an appropriate action against mortgagor Oliver One. A Person who is not a party
to an action may be impleaded by the defendant either on the basis of liability to himself or on the ground of direct
liability to the plaintiff.
Dispositive Portion: Petition for Review is DENIED for lack of merit. The assailed decision dated June 1, 1998 and the resolution dated
September 30, 1998 of the CA are AFFIRMED. Costs against petitioner.
LOTTE PHIL. VS. DELA CRUZ – LASALA
CASE TITLE Lotte Phils. Co Inc vs De La Cruz

APPLICABLE Rule 3 Section 7 Compulsory joinder of Indispensable Parties
RULE
FACTS On December 14, 1995 and yearly thereafter until the year 2000, 7J Maintenance and Janitorial Services (7J) entered into a contract
with petitioner Lotte Phil Co Inc(Lotte) to provide manpower for needed maintenance,utility, janitorial and other services to the
latter. In compliance with the terms and conditions of the service contract, and to accommodate the needs of Lotte for
personnel/workers to do and perform piece works,respondents Dela Cruz, Mamauag, Cauba, etc,, among others, were hired and
assigned to Lotte as repackers or sealers. However, either in October, 1999 or on February 9, 2000, Lotte dispensed with their
services allegedly due to the expiration/termination of the service contract by Lotte with 7J. Respondents were never called back
again.
REMEDIAL Labor A labor complaint was filed by respondents against both Lotte and 7J, for illegal dismissal, regularization, payment of
MATTERS Arbiter corresponding backwages and related employment benefits, 13th month pay, service incentive leave, moral and
exemplary damages and attorneys fees based on total judgment award. Labor Arbiter Cresencio G. Ramos, Jr. rendered
judgment declaring 7J as employer of respondents and finding 7J guilty of illegal dismissal.
NLRC Respondents appealed to the National Labor Relations Commission (NLRC) praying that Lotte be declared as their direct
employer because 7J is merely a labor-only contractor. NLRC affirmed the ruling that 7J is the employer of respondents
and solely liable for their claims. NLRC denied respondent’s MR.
CA Lotte prayed that the petition for certiorari filed by respondents in the Court of Appeals be dismissed for failure to
implead 7J who is a party interested in sustaining the proceedings in court, pursuant to Section 3, Rule 46 of the
Revised Rules of Civil Procedure.Court of Appeals reversed and set aside the rulings of the Labor Arbiter and the NLRC
and declared Lotte as the real employer of respondents and that 7J who engaged in labor-only contracting was merely
the
agent of Lotte. Respondents who performed activities directly related to Lottes business were its regular employees
under Art. 280 of the Labor Code. As such, they must be accorded security of tenure and their services terminated only
on just and authorized causes.
ISSUE Whether or not 7J is an indispensable party and should have been impleaded in respondent’s petition in the Court of Appeals?
RULING YES. An indispensable party is a party in interest without whom no final determination can be had of an action, and who shall be
joined either as plaintiffs or defendants. The joinder of indispensable parties is mandatory. The presence of indispensable parties is
necessary to vest the court with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case. Thus,
without the presence of indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality. The absence of
an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent
parties but even as to those present.
In the case at bar, 7J is an indispensable party. It is a party in interest because it will be affected by the
outcome of the case. The Labor Arbiter and the NLRC found 7J to be solely liable as the employer of
respondents. The Court of Appeals however rendered Lotte jointly and severally liable with 7J who was not impleaded by holding
that the former is the real employer of respondents. Plainly, its decision directly affected 7J. Although 7J was a co-party in the case
before the Labor Arbiter and the NLRC, respondents failed to include it in their petition for certiorari in the Court of Appeals. Hence,
the Court of Appeals did not acquire jurisdiction over 7J. No final ruling on this matter can be had without impleading 7J, whose
inclusion is necessary for the effective and complete resolution of the case and in order to accord all parties with due process and

fair play.
CARABEO VS. DINGCO – DE LOS SANTOS
CASE TITLE DOMINGO CARABEO vs. SPOUSES NORBERTO and SUSAN DINGCO
APPLICABLE RULE / Parties/Death of Party
SECTION / TOPIC
FACTS Domingo Carabeo (petitioner) entered into a contract denominated as "Kasunduan sa Bilihan ng Karapatan sa Lupa
with Spouses Norberto and Susan Dingco (respondents) whereby petitioner agreed to sell his rights over a 648 square
meter parcel of unregistered land situated in Bataan to respondents for ₱38,000.
Respondents were able to give initial payments to petitioner. However, when respondents tendered their payment of
the balance to petitioner, the latter refused. This prompted the respondents to file a complaint before the
Katarangungang Pambarangay, however, no settlement was reached. Hence they filed a complaint for specific
performance before the Regional Trial Court (RTC) of Balanga, Bataan against petitioner.
After the case was submitted for decision, petitioner passed away. The records do not show that petitioner’s counsel
informed Branch 1 of the Bataan RTC, where the complaint was lodged, of his death and that proper substitution was
effected in accordance with Section 16, Rule 3, Rules of Court. Trial court rendered a decision in favor of respondents.
Notice of appeal was filed. CA affirmed the decision of the trial court. Petitioner’s motion for reconsideration was
denied, hence the present petition for review was filed by Antonio Carabeo, petitioner’s son.

RTC Complaint for specific performance
CA / CTA Notice of appeal
SC Petition for Review
ISSUE WON the death of herein petitioner causes the dismissal of the action filed by respondents; respondents’
cause of action being an action in personam?
RULING NO. The question as to whether an action survives or not depends on the nature of the action and the damage sued
for. In the causes of action which survive, the wrong complained of affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive,
the injury complained of is to the person, the property and rights of property affected being incidental.
In the present case, respondents are pursuing a property right arising from the kasunduan, whereas petitioner is
invoking nullity of the kasunduan to protect his proprietary interest. Assuming arguendo, however, that the kasunduan
is deemed void, there is a corollary obligation of petitioner to return the money paid by respondents, and since the
action involves property rights it survives.
It bears noting that trial on the merits was already concluded before petitioner died. Since the trial court was not
informed of petitioner’s death, it may not be faulted for proceeding to render judgment without ordering his
substitution. Its judgment is thus valid and binding upon petitioner’s legal representatives or successors-in-interest,
insofar as his interest in the property subject of the action is concerned.
In another vein, the death of a client immediately divests the counsel of authority. Thus, in filing a Notice of Appeal,
petitioner’s counsel of record had no personality to act on behalf of the already deceased client who, it bears
reiteration, had not been substituted as a party after his death. The trial court’s decision had thereby become final and
executory, no appeal having been perfected.
DELA CRUZ VS. JOAQUIN - MAGADA

(This is to be revised. Napulot ko lang ‘to sa net. Thanks!)
De La Cruz vs Joaquin : 162788 : July 28, 2005

FACTS: The case originated from a Complaint for the recovery of possession and ownership, the cancellation of title, and damages, filed by Pedro
Joaquin against petitioners in the RTC. The RTC ruled in favor of respondent ordering herein petitioners to reconvey the property upon his payment.
Petitioners assert that the RTC’s Decision was invalid for lack of jurisdiction claiming that respondent died during the pendency of the case and there
being no substitution by the heirs, the trial court allegedly lacked jurisdiction over the litigation.
ISSUE: WON the trial court lost jurisdiction over the case upon the death of Pedro Joaquin?
HELD: NO. When a party to a pending action dies and the claim is not extinguished, the Rules of Court require a substitution of the deceased. The
procedure is specifically governed by Section 16 of Rule 3. The rule on the substitution of parties was crafted to protect every party’s right to due
process. The estate of the deceased party will continue to be properly represented in the suit through the duly appointed legal representative. A formal
substitution by heirs is not necessary when as in the present case, they themselves voluntarily appear, participate in the case, and present evidence in
defense of the deceased. These actions negate any claim that the right to due process was violated. The records of the present case contain a “Motion
for Substitution of Party Plaintiff” filed before the CA. The rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due
process. Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or belated

formal compliance with the Rules cannot affect the validity of a promulgated decision. Mere failure to substitute for a deceased plaintiff is not a
sufficient ground to nullify a trial court’s decision. The alleging party must prove that there was an undeniable violation of due process.
NAVARRO VS. ESCOBIDO – DESALISA
CASE TITLE ROGER V. NAVARRO, Petitioner,

vs.
HON. JOSE L. ESCOBIDO, Presiding Judge, RTC Branch 37, Cagayan de Oro City, and KAREN T. GO, doing
business under the name KARGO ENTERPRISES, Respondents
APPLICABLE RULE / PARTIES TO CIVIL ACTIONS
from the syllabus)
FACTS Karen T. Go filed two complaints before the RTC for replevin and/or sum of money with damages against Navarro. In
these complaints, Karen Go prayed that the RTC issue writs of replevin for the seizure of two (2) motor vehicles in
Navarro’s possession. In his Answers, Navarro alleged as a special affirmative defense that the two complaints stated
no cause of action, since Karen Go was not a party to the Lease Agreements with Option to Purchase. RTC dismissed
the case on the ground that the complaints did not state a cause of action.
The RTC issued another order setting aside the order of dismissal. Acting on the presumption that Glenn Go’s leasing
business is a conjugal property, the RTC held that Karen Go had sufficient interest in his leasing business to file the
action against Navarro. However, the RTC held that Karen Go should have included her husband, Glenn Go, in the
complaint based on Section 4, Rule 3 of the Rules of Court (Rules). Thus, the lower court ordered Karen Go to file a
motion for the inclusion of Glenn Go as co-plaintiff.
When the RTC denied Navarro’s motion for reconsideration, Navarro filed a petition for certiorari with the CA,
contending that the RTC committed grave abuse of discretion when it reconsidered the dismissal of the case and
directed Karen Go to amend her complaints by including her husband Glenn Go as co-plaintiff. According to Navarro, a
complaint which failed to state a cause of action could not be converted into one with a cause of action by mere
amendment or supplemental pleading.
Navarro alleges that even if the lease agreements were in the name of Kargo Enterprises, since it did not have the
requisite juridical personality to sue, the actual parties to the agreement are himself and Glenn Go. Since it was Karen
Go who filed the complaints and not Glenn Go, she was not a real party-in-interest and the complaints failed to state a
cause of action. Navarro posits that the RTC erred when it ordered the amendment of the complaint to include Glenn
Go as a co-plaintiff, instead of dismissing the complaint outright because a complaint which does not state a cause of
action cannot be converted into one with a cause of action by a mere amendment or a supplemental pleading. In
effect, the lower court created a cause of action for Karen Go when there was none at the time she filed the
complaints.
REMEDIAL MATTERS MTC ------
17. Provide the description RTC Karen filed for a replevin and/or sum of money with damages against Navarro
of the initial complaint CA / CTA petition for certiorari (CA) : DENIED
at the court a quo.
18. Let us be accurate as to Others
the remedy used in (Quasi Judicial
each court (i.e. petition Agencies, if
for certiorari, appeal, any)
etc.).
ISSUE WON KAREN GO IS A REAL PARTY IN INTEREST HENCE SHE HAS A CAUSE OF ACTION.
RULING YES. The 1997 Rules of Civil Procedure requires that every action must be prosecuted or defended in the name of the
(If possible, highlight or real party-in-interest, i.e., the party who stands to be benefited or injured by the judgment in the suit, or the party
underline the doctrine) entitled to the avails of the suit.
Although Navarro admits that Karen Go is the registered owner of the business name Kargo Enterprises, he still insists
that Karen Go is not a real party-in-interest in the case. According to Navarro, while the lease contracts were in Kargo
Enterprises’ name, this was merely a trade name without a juridical personality, so the actual parties to the lease
agreements were Navarro and Glenn Go, to the exclusion of Karen Go.
As the registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be injured by a
judgment in this case. Thus, contrary to Navarro’s contention, Karen Go is the real party-in-interest, and it is legally
incorrect to say that her Complaint does not state a cause of action because her name did not appear in the Lease
Agreement that her husband signed in behalf of Kargo Enterprises. Whether Glenn Go can legally sign the Lease
Agreement in his capacity as a manager of Kargo Enterprises, a sole proprietorship, is a question we do not decide, as
this is a matter for the trial court to consider in a trial on the merits.
In the fairly recent cases of Baloloy v. Hular and Adlawan v. Adlawan , the court held that, in a co-ownership, co-
owners may bring actions for the recovery of co-owned property without the necessity of joining all the other co-
owners as co-plaintiffs because the suit is presumed to have been filed for the benefit of his co-owners. In the latter

case and in that of De Guia v. Court of Appeals , it was also held that Article 487 of the Civil Code, which provides that
any of the co-owners may bring an action for ejectment, covers all kinds of action for the recovery of possession.
In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the
Civil Code and relevant jurisprudence, any one of them may bring an action, any kind of action, for the recovery of co-
owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of
the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are
not even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the
suit is presumed to have been filed for the benefit of all co-owners. Under this ruling, either of the spouses Go may
bring an action against Navarro to recover possession of the Kargo Enterprises-leased vehicles which they co-own.
LAND BANK VS. CACAYURAN – MANGUNI
CASE TITLE Landbank vs. Cacayuran (April 22, 2015)

APPLICABLE RULE / Rule 3, Section 7 Indispensable Parties
from the syllabus)
FACTS The instant case arose from two (2) loans entered into by the Municipality with LBP in order to finance the
redevelopment plan of the Agoo Public Plaza. Through a resolution the Sangguniang Bayan (SB) authorized its then
Mayor Eriguel to enter into a 4 Million loan with LBP, the proceeds of which were used to construct kiosks at the Public
Plaza. Around a year later, the SB issued another resolution this time authorizing Mayor Eriguel to obtain a 28 Million
loan from LBP for the construction of a commercial center within the premises of the public plaza.
In order to secure the Subject Loans, the Municipality used as collateral, among others, a lot situated at the public
plaza. However, a group of residents, led by Cacayuran (respondent) opposed the redevelopment of the Public Plaza,
as well as the funding therefor thru the Subject Loans, claiming, among others, that these were violative of the law.
Further, Cacayuran requested the municipal officers to furnish him with the various documents relating to the Public
Plaza's redevelopment, which, however, went unheeded. Thus, Cacayuran, invoking his right as a taxpayer, filed a
complaint against LBP and various officers of the Municipality, including Mayor Eriguel (but excluding the
Municipality itself as party-defendant), assailing the validity of the aforesaid loan agreements.
Initially, the municipal officers moved for the outright dismissal of the complaint, which was denied, thus constraining
them to file their respective answers. For its part, LBP asserted, that Cacayuran did not have any cause of action
since he was not privy to the loan agreements entered into by LBP and the Municipality.
During the pendency of the proceedings, the construction of the Agoo People's Center was completed. Later on, SB
passed an ordinance declaring the area where such building stood as patrimonial property.
REMEDIAL MATTERS RTC Declared the Subject Loans null and void. As such, it pronounced that the Municipality was not
19. Provide the description bound by the Subject Loans and that the municipal officers should, instead, be held personally liable
of the initial complaint for the same. Further, it ruled that since the Plaza Lot is a property for public use, it cannot be used
at the court a quo. as collateral for the Subject Loans.
the remedy used in Aggrieved, LBP and the municipal officers appealed to the CA. However, the appeal of the
each court (i.e. petition municipal officers was deemed abandoned and dismissed for their failure to file an appellants' brief
for certiorari, appeal, despite due notice. Thus, only LBP's appeal was given due course by the CA.
etc.). CA Affirmed the ruling of the RTC, with modification excluding then-Vice Mayor from personal liability
arising from the Subject Loans. It held that:
(a) Cacayuran had locus standi to file the instant complaint, considering that he is a resident of the
Municipality and the issue at hand involved public interest of transcendental importance;
(b) Resolutions were invalidly passed due to non-compliance with certain provisions of Local
Government Code
(c) the Plaza Lot is property of public dominion, and thus, cannot be used as
collateral; and
(d) the procurement of the Subject Loans were ultra vires acts for having been entered into without
proper authority and that the collaterals used therefor constituted improper disbursement of public
funds.
Dissatisfied, LBP filed a petition for review on certiorari with SC.
ISSUE WON the Municipality should be deemed as an indispensable party to the instant case, and thus, be ordered
(based from the syllabus) impleaded herein. YES
RULING SC Decision dated April 17, 2013

(If possible, highlight or Denied LBP's petition, and affirmed the ruling of the CA.
Undaunted, LBP moved for reconsideration, Meanwhile, the Municipality filed a Motion for Leave to Intervene with
Pleading-In-Intervention Attached and a Motion for Reconsideration in-Intervention of even date, praying that it be
included as a party-litigant to the instant case. It contends that as a contracting party to the Subject Loans, it is an
indispensable party to the action filed by Cacayuran.
As such, there cannot be any "real disposition" of the instant suit by reason of its exclusion from the same.
SC Amended Decision
The Court rules in the affirmative.
Section 7, Rule 3 of the Rules of Court mandates that all indispensable parties should be joined in a suit, "An
indispensable party is one whose interest will be affected by the court's action in the litigation, and without
whom no final determination of the case can be had. The party's interest in the subject matter of the suit
and in the relief sought are so inextricably intertwined with the other parties' that his legal presence as a
party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution of the dispute
of the parties before the court which is effective, complete, or equitable."
Thus, the absence of an indispensable party renders all subsequent actions of the court null and void, for want of
authority to act, not only as to the absent parties but even as to those present. Nevertheless, it must be stressed that
the failure to implead any indispensable party to a suit does not necessarily result in the outright dismissal of the
complaint. In Heirs of Mesina v. Heirs of Fian, Sr. , the Court definitively explained that in instances of non-joinder of
indispensable parties, the proper remedy is to implead them and not to dismiss the case.
In this case, a judicious review of the records reveals that Cacayuran's complaint against LBP and the municipal
officers primarily prays that the commercialization of the Public Plaza be enjoined and also, that the Subject Loans be
declared null and void for having been unlawfully entered into by the said officers. However, Cacayuran failed to
implead in his complaint the Municipality, a real party-in-interest and an indispensable party that stands to be directly
affected by any judicial resolution on the case, considering that: (a) the contracting parties to the Subject Loans are
LBP and the Municipality; and (b) the Municipality owns the Public Plaza as well as the improvements constructed
thereon, including the Agoo People's Center.
The Court observes that it is only now that the issue of the Municipality's exclusion from the instant case, despite its
status as an indispensable party, became apparent. This recent finding may be credited to the fact that the initial
parties before the Court, i.e., LBP and Cacayuran, have dissimilar interests from that of the Municipality, and, hence,
had no incentive to raise the issue of the latter's status as an indispensable party. On the one hand, Cacayuran's
interest to the case is centered on the declaration of nullity of the Subject Loans, as well as the enjoinment of the
commercialization of the Public Plaza; and on the other hand, LBP's interest to the case is anchored on its capacity as
creditor to the Subject Loans. To the mind of the Court, the municipal officers would have been in the best position to
raise this issue; however, they were unable to do so because their appeal before the CA was deemed abandoned for
their failure to file an appellants' brief on time.
Be that as it may, the Court is not precluded from taking cognizance of the Municipality's status as an indispensable
party even at this stage of the proceedings. Indeed, the presence of indispensable parties is necessary to vest the
court with jurisdiction and, corollarily, the issue on jurisdiction may be raised at any stage of the proceedings. Thus, as
it has now come to the fore that any resolution of this case would not be possible and, hence, not attain any real
finality due to the non-joinder of the Municipality, the Court is constrained to set aside all subsequent actuations of the
courts a quo in this case, including that of the Court's, and remand the case all the way back to the RTC for the
inclusion of all indispensable parties to the case and its immediate disposition on the merits. With this, the propriety of
the Municipality's present intervention is now mooted.
DIVINAGRACIA VS. PARILLA - EBAJAN
CASE TITLE MA. ELENA R. DIVINAGRACIA VS CORONACION PARILLA, ET AL.

G.R. No. 196750, March 11, 2015
APPLICABLE RULE / TOPIC: Indispensable Party
SECTION / TOPIC Collateral Doctrine: The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any
(based from the syllabus) stage of a judicial proceeding and/or at such times as are just, parties may be added on the motion of a party or on
the initiative of the tribunal concerned. If the plaintiff refuses to implead an indispensable party despite the order of
the court, that court may dismiss the complaint for the plaintiff’s failure to comply with the order.
FACTS Decedent owned a parcel of land in Iloilo City. During his lifetime, he contracted two marriages in which he had two
children in his first marriage and seven in his second in which two of his children predeceased him. Besides that, he
also had three illigitimate children.
According to Santiago, upon the decedent’s death, he was able to acquire interets over the subject land when some of
the heirs including Felcon (in representation of his father who predeceased the decedent and his siblings) sold their
respective interests to him as embodied in a Deed of Extrajudicial Settlement or Adjudication with Deed of Sale, which,
however, was not signed by the other heirs who did not sell their respective shares, namely, Ceruleo, Celedonio, and
Maude. Subsequently, the same parties executed a Supplemental Contract whereby the vendors-heirs and Santiago
agreed that Santiago would only pay the remaining balance upon the partition of the subject land. However, Santiago
was not able to have the Transfer of Certificate of Title (TCT) cancelled and the subject document registered because
of Ceruleo, Celedonio, and Maude’s refusal to surrender the said title prompting the filing of a complaint for judicial
partition and for receivership.

21. Provide the RTC The RTC found that through the subject document, Santiago became a co-owner of the subject land
description of the and, as such, had the right to demand the partition of the same. However, the RTC held that
initial complaint at Santiago did not validly acquire Mateo, Sr.’s share over the subject land, considering that Felcon
admitted the lack of authority to bind his siblings with regard to Mateo, Sr.’s share thereon.
the court a quo.
22. Let us be accurate as CA The CA set aside the RTC Rulings and, consequently, dismissed Santiago’s complaint for judicial
partition. It held that Felcon’s siblings, as well as Maude’s children, are indispensable parties to the
to the remedy used judicial partition of the subject land and, thus, their non-inclusion as defendants in Santiago’s
in each court (i.e. complaint would necessarily result in its dismissal. The heirs of Santiago moved for reconsideration
petition for certiorari, contending that Santiago had already bought the interests of the majority of the heirs and, thus,
appeal, petition for they should no longer be regarded as indispensable parties, but to no avail, hence, this case.
review, etc.). Others
(Quasi
Judicial
Agencies, if
any)
ISSUE Whether Felcon’s siblings and Cebeleo, Sr. and Maude’s children were indispensable parties to Santiago’s complaint for
(based from the syllabus) judicial partition.
RULING Ruling: Yes, an indispensable party is one whose interest will be affected by the court’s action in the litigation, and
(If possible, highlight or without whom no final determination of the case can be had. The party’s interest in the subject matter of the suit and
underline the doctrine) in the relief sought are so inextricably intertwined with the other parties’ that his legal presence as a party to the
proceeding is an absolute necessity. In his absence, there cannot be a resolution of the dispute of the parties before
the court which is effective, complete, or equitable. Thus, the absence of an indispensable party renders all
subsequent actions of the court null and void, for want of authority to act, not only as to the absent parties but even
as to those present.
With regard to actions for partition, Section 1, Rule 69 of the Rules of Court requires that all persons
interested in the property shall be joined as defendants, viz.:
SEC. 1. Complaint in action for partition of real estate. – A person having the right to compel the partition of real
estate may do so as provided in this Rule, setting forth in his complaint the nature and extent of his title and an
adequate description of the real estate of which partition is demanded and joining as defendants all other persons
interested in the property.
Thus, all the co-heirs and persons having an interest in the property are indispensable parties; as such, an action for
partition will not lie without the joinder of the said parties.
In the instant case, however, a reading of Santiago’s complaint shows that as regards Mateo, Sr.’s interest, only
Felcon was impleaded, excluding therefrom his siblings and co-representatives. Similarly, with regard to Cebeleo, Sr.’s
interest over the subject land, the complaint impleaded his wife, Maude, when pursuant to Article 972 of the Civil
Code; the proper representatives to his interest should have been his children, Cebeleo, Jr. and Neobel. Verily,
Santiago’s omission of the aforesaid heirs renders his complaint for partition defective.
In fine, the absence of the aforementioned indispensable parties in the instant complaint for judicial partition
renders all subsequent actions of the RTC null and void for want of authority to act, not only as to the absent parties,
but even as to those present. Therefore, the CA correctly set aside the November 29, 2002 Decision and the April 4,
2003 Order of the RTC.
PACIFIC CONSULTANTS VS. SCHONFELD – MATEO
CASE TITLE PACIFIC CONSULTANTS INTERNATIONAL ASIA, INC. and JENS PETER HENRICHSEN, Petitioners, vs.
KLAUS K. SCHONFELD, Respondent
APPLICABLE RULE / Venue of Actions: Real / Personal Action
SECTION / TOPIC (based Distinction Jurisdiction and Venue
from the syllabus)
FACTS Respondent is a Canadian citizen and was a resident of New Westminster, British Columbia, Canada. He had been a
consultant in the field of environmental engineering and water supply and sanitation. Pacicon Philippines, Inc. (PPI) is a
corporation duly established and incorporated in accordance with the laws of the Philippines. It is a subsidiary of Pacific
Consultants International of Japan (PCIJ). The president of PPI, Jens Peter Henrichsen, who was also the director of
PCIJ, was based in Tokyo, Japan. , PCIJ decided to engage in consultancy services for water and sanitation in the
Philippines. Respondent was employed by PCIJ, through Henrichsen. PCIJ decided to engage in consultancy services
for water and sanitation in the Philippines. Respondent was employed by PCIJ, through Henrichsen, as Sector Manager
of PPI in its Water and Sanitation Department. However, PCIJ assigned him as PPI sector manager in the Philippines.
His salary was to be paid partly by PPI and PCIJ.

Respondent arrived in the Philippines and assumed his position as PPI Sector Manager. He was accorded the status of
a resident alien. Respondent received his compensation from PPI. He was also reimbursed by PPI for the expenses he
incurred in connection with his work as sector manager. He reported for work in Manila except for occasional
assignments abroad, and received instructions from Henrichsen. Respondent received a letter from Henrichsen
informing him that his employment had been terminated for the reason that PCIJ and PPI had not been successful in
the water and sanitation sector in the Philippines. Respondent filed with PPI several money claims, including unpaid
salary, leave pay, air fare from Manila to Canada, and cost of shipment of goods to Canada. PPI partially settled some
of his claims but refused to pay the rest. Respondent filed a Complaint for Illegal Dismissal against petitioners PPI and
Henrichsen with the Labor Arbiter. Petitioners filed a Motion to Dismiss the complaint on the following grounds: (1) the
Labor Arbiter had no jurisdiction over the subject matter; and (2) venue was improperly laid. It averred that
respondent was a Canadian citizen, a transient expatriate who had left the Philippines. He was employed and dismissed
by PCIJ, a foreign corporation with principal office in Tokyo, Japan. Since respondent’s cause of action was based on
his letter of employment executed in Tokyo, Japan under the principle of lex loci contractus, the complaint should have
been filed in Tokyo, Japan. Petitioners claimed that respondent did not offer any justification for filing his complaint
against PPI before the NLRC in the Philippines. Moreover, under Section 12 of the General Conditions of Employment
appended to the letter of employment dated January 7, 1998, complainant and PCIJ had agreed that any employment-
related dispute should be brought before the London Court of Arbitration. Since even the Supreme Court had already
ruled that such an agreement on venue is valid, Philippine courts have no jurisdiction. Respondent opposed the Motion,
contending that he was employed by PPI to work in the Philippines under contract separate from his contract of
employment with PCIJ. He insisted that his employer was PPI, a Philippine-registered corporation; it is inconsequential
that PPI is a wholly-owned subsidiary of PCIJ because the two corporations have separate and distinct personalities;
and he received orders and instructions from Henrichsen who was the president of PPI. He further insisted that the
principles of forum non conveniens and lex loci contractus do not apply, and that although he is a Canadian citizen,
Philippine Labor Laws apply in this case.

1. Provide the RTC
description of the initial CA / CTA
complaint at the court a
quo. Others (Quasi Labor Arbiter rendered a decision granting petitioners’ Motion to Dismiss. The latter affirmed the
2. Let us be accurate Judicial decision in toto. Respondent then filed a petition for certiorari under Rule 65 with the CA. The CA
as to the remedy used Agencies, if on the issue of venue, the appellate court declared that, even under the January 7, 1998 contract
in each court (i.e. any) of employment, the parties were not precluded from bringing a case related thereto in other
petition for certiorari, venues. While there was, indeed, an agreement that issues between the parties were to be
appeal, petition for resolved in the London Court of Arbitration, the venue is not exclusive, since there is no stipulation
review, etc.). that the complaint cannot be filed in any other forum other than in the Philippines.
ISSUE Whether or not LA has jurisdiction over the case. Yes.

RULING The settled rule on stipulations regarding venue, as held by this Court in the vintage case of Philippine Banking
(If possible, highlight or Corporation v. Tensuan, is that while they are considered valid and enforceable, venue stipulations in a contract do
underline the doctrine) not, as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying
or restrictive words. They should be considered merely as an agreement or additional forum, not as limiting venue to
the specified place. They are not exclusive but, rather permissive. If the intention of the parties were to restrict venue,
there must be accompanying language clearly and categorically expressing their purpose and design that actions
between them be litigated only at the place named by them.

In the instant case, no restrictive words like "only," "solely," "exclusively in this court," "in no other court save —,"
"particularly," "nowhere else but/except —," or words of equal import were stated in the contract.33 It cannot be said
that the court of arbitration in London is an exclusive venue to bring forth any complaint arising out of the employment
contract.

Petitioners contend that respondent should have filed his Complaint in his place of permanent residence, or where the
PCIJ holds its principal office, at the place where the contract of employment was signed, in London as stated in their
contract. By enumerating possible venues where respondent could have filed his complaint, however, petitioners
themselves admitted that the provision on venue in the employment contract is indeed merely permissive.

WHEREFORE, the petition is DENIED.
BIACO VS. COUNTRYSIDE RURAL BANK - ESPANOLA
CASE TITLE MA. TERESA CHAVES BIACO, Petitioner, vs. PHILIPPINE COUNTRYSIDE RURAL BANK, Respondent.
APPLICABLE RULE / D. Venue of Actions: real actions, personal actions
SECTION / TOPIC(based Distinction between Jurisdiction and Venue
from the syllabus) ( In this case: jurisdiction over the res; jurisdiction over the person of the petitioner; service of valid summons)
FACTS Ernesto Biaco, husband of petitioner, employed in the Philippine Countryside Rural Bank (PCRB) as a branch manager
who obtained several loans from the respondent bank as evidenced by promissory notes and a real estate mortgage
was executed as a security.
When he failed to settle the said loans on its due date, a written demand was sent to him on September 28, 1999. The
amount due already reached ONE MILLION EIGHTY THOUSAND SIX HUNDRED SEVENTY SIX AND FIFTY CENTAVOS
(₱1,080,676.50)
REMEDIAL MATTERS MTC --------- NA ---------

23. Provide the description
of the initial complaint RTC o Respondent bank filed a complaint for foreclosure of mortgage before the RTC of Misamis
at the court a quo. Oriental. Ernesto received the summons but for unknown reasons, he failed to file an answer.
24. Let us be accurate as to Hence, spouses declared in default upon motion of the respondent bank.
the remedy used in
each court (i.e. petition The respondent bank was allowed to present its evidence ex parte before the Branch Clerk of
for certiorari, appeal, Court who was then appointed by the court as Commissioner.
etc.). Respondent judge ruled in favor of the Respondent Bank and it ordered spouses to pay
within a period of not less than ninety (90) days nor more than one hundred (100) days from
receipt of this decision the loan of ONE MILLION TWO HUNDRED SIXTY THOUSAND THREE
HUNDRED FOUR PESOS and THIRTY THREE CENTAVOS (₱1,260,304.33) plus litigation
expenses in the amount of SEVEN THOUSAND SIX HUNDRED FORTY PESOS (₱7,640.00) and
attorney’s fees in the amount of TWO HUNDRED FIFTY TWO THOUSAND THIRTY PESOS and
FORTY THREE CENTAVOS (₱252,030.43) and cost of this suit. In case of non-payment, the
Sheriff of this Court is ordered to sell at public auction the mortgaged Lot and the surplus if
there be any should be delivered to the spouses. In the event however[,] that the proceeds of
the auction sale of the mortgage[d] property is not enough to pay the outstanding obligation,
the defendants are ordered to pay any deficiency of the judgment as their personal liability.
On July 12, 2000, the sheriff personally served the above-mentioned judgment to Ernesto Biaco at
his office. The spouses Biaco did not appeal.
o On October 13, 2000, the respondent bank filed an ex parte motion for execution to direct
the sheriff to sell the mortgaged lot at public auction and alleged that the period of 90 days had
passed.
October 20, 2000 Trial Court granted the motion for execution.
On October 31, 2000, the sheriff served a copy of the writ of execution to the spouses and it was
personally received by Ernesto. By virtue of the writ of execution, the mortgaged property was sold
at public auction in favor of the respondent bank in the amount of ONE HUNDRED FIFTY THOUSAND
PESOS (₱150,000.00)
o The respondent bank filed an "ex parte motion for judgment" praying for the issuance of a writ
of execution against the other properties of the spouses.
Trial Court granted the motion and ordered that a writ of execution be issued to enforce
and satisfy the judgment of the court for the balance of ONE MILLION THREE HUNDRED SIXTY
NINE THOUSAND NINE HUNDRED SEVENTY FOUR PESOS AND SEVENTY CENTAVOS
(₱1,369,974.70).
The sheriff executed two (2) notices of levy against properties registered under the name of
petitioner Ma. Teresa Chaves Biaco. However, the notices of levy were denied registration
because Ma. Teresa had already sold the two (2) properties to their daughters.
CA / CTA o Petitioner Ma. Teresa Biaco filed a petition for annulment of the decision rendered by the RTC
before the CA.
She alleged that extrinsic fraud prevented her from participating in the judicial foreclosure
proceedings. That she came to know about the judgment in the case only after the lapse of
more than six (6) months after its finality. She claimed that extrinsic fraud was perpetrated
against her because the bank failed to verify the authenticity of her signature on the real estate
mortgage and did not inquire into the reason for the absence of her signature on the
promissory notes. She moreover asserted that the trial court failed to acquire jurisdiction
because summons were served on her through her husband without any explanation as to why
personal service could not be made.
CA ruled in favor of the Respondent Bank As to the validity of the service of summons, the
appellate court ruled that judicial foreclosure proceedings are actions quasi in rem. As such,
jurisdiction over the person of the defendant is not essential as long as the court acquires
jurisdiction over the res. Noting that the spouses Biaco were not opposing parties in the case,
the Court of Appeals further ruled that the fraud committed by one against the other cannot be
considered extrinsic fraud.
o Petitioner filed MR. However, denied.
o Thus, petitioner filed the instant Petition for Review before SC

Others
(Quasi Judicial
Agencies, if -------------------- NA ----------------------
any)
ISSUE
(based from the syllabus) 1. WON Trial Court has jurisdiction over the res. (YES)
2. WON Trial Court exceeded its jurisdiction as regards to its decision granting respondent PCRB’s ex-parte motion
for deficiency judgment and ordered the issuance of a writ of execution against the spouses Biaco to satisfy the
remaining balance of the award without serving valid summons to the petitioner herein. (YES)
RULING
(If possible, highlight or 1. YES. In this case, the judicial foreclosure proceeding instituted by respondent PCRB undoubtedly vested the
underline the doctrine) trial court with jurisdiction over the res. A judicial foreclosure proceeding is an action quasi in rem. As such,
jurisdiction over the person of petitioner is not required, it being sufficient that the trial court is vested with
jurisdiction over the subject matter.
That question of jurisdiction of Trial Court in the case at hand depends on the nature of the action, i.e., whether
the action is in personam, in rem, or quasi in rem. The rules on service of summons under Rule 14 of the Rules
of Court likewise apply according to the nature of the action.
Action in personam Action in rem Action quasi in rem
against a person on the basis of action against the thing itself action wherein an individual is
his personal liability. instead of against the person. named as defendant and the
purpose of the proceeding is to
subject his interest therein to the
obligation or lien burdening the
property.
jurisdiction over the person of the jurisdiction over the person of the defendant is not a prerequisite
defendant is necessary for the to confer jurisdiction on the court provided that the court acquires
court to validly try and decide the jurisdiction over the res. Jurisdiction over the res is acquired either
case. (1) by the seizure of the property under legal process, whereby it is
brought into actual custody of the law; or (2) as a result of the
institution of legal proceedings, in which the power of the court is
recognized and made effective. Nonetheless, summons must be
served upon the defendant not for the purpose of vesting the court
with jurisdiction but merely for satisfying the due process
requirements.
2. YES. While the trial court acquired jurisdiction over the res, its jurisdiction is limited to a rendition of judgment
on the res. It cannot extend its jurisdiction beyond the res and issue a judgment enforcing petitioner’s personal
liability. In doing so without first having acquired jurisdiction over the person of petitioner, as it did, the trial court
violated her constitutional right to due process, warranting the annulment of the judgment rendered in the case.
The violation of petitioner’s constitutional right to due process arising from want of valid service of summons on
her warrants the annulment of the judgment of the trial court.
A resident defendant who does not voluntarily appear in court, such as petitioner in this case, must be personally
served with summons as provided under Sec. 6, Rule 14 of the Rules of Court. If she cannot be personally served
with summons within a reasonable time, substituted service may be effected (1) by leaving copies of the
summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or
(2) by leaving the copies at defendant’s office or regular place of business with some competent person in charge
thereof in accordance with Sec. 7, Rule 14 of the Rules of Court.
BPI SAVINGS VS. SPS. YUJUICO - MIGUEL
CASE TITLE BPI Family Savings Bank, Inc. vs. Spouses Yujuico
G.R. No. 175796. July 22, 2015.
APPLICABLE RULE / Rule 4. Venue; real vs. personal actions
SECTION / TOPIC
FACTS BPI extrajudicially foreclosed the mortgage constituted on the two parcels of land subject of the Spouses Yujuico’s
loan. Because there was a deficiency, BPI sued the spouses to recover such deficiency in the Makati RTC (where the
principal office of BPI is located). The spouses filed a Motion to Dismiss the complaint on several grounds, namely:
that the suit was barred by res judicata; that the complaint stated no cause of action; and that the plaintiff’s claim had
been waived, abandoned, or extinguished. Makati RTC denied the Motion. The spouses filed a Motion for
Reconsideration while BPI filed its comment/opposition to the Motion. The respondents then filed their reply, in which
they raised for the first time their objection on the ground of improper venue. They contended that the action for the
recovery of the deficiency, being a supplementary action of the extrajudicial foreclosure proceedings, was a real action
that should have been brought in the Manila RTC because Manila was the place where the properties were located.
RTC Makati RTC denied the MR
CA / CTA CA reversed the ruling of the RTC opining that a suit for recovery of the deficiency after the
foreclosure of a mortgage is in the nature of a mortgage action because its purpose is precisely to
enforce the mortgage contract. As such, the venue of an action for recovery of deficiency must
necessarily be the same venue as that of the extrajudicial foreclosure of mortgage. Thus, the suit for
judgment on the deficiency filed by BPI against the spouses, being an action emanating from the
foreclosure of the real estate mortgage contract between them, must necessarily be filed also at the
RTC of Manila, not at the RTC of Makati.
Others
(Quasi Judicial
Agencies, if
any)
ISSUE Whether or not the venue was properly laid?
RULING Yes. It is basic that the venue of an action depends on whether it is a real or a personal action.
Section 1, Rule 4 of the Rules of Court, a real action is one that affects title to or possession of real property, or an
interest therein. Real action is to be commenced and tried in the proper court having jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated, which explains why the action is also referred to
as a local action. In contrast, the venue of a personal action is the place where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the
case of a nonresident defendant where he may be found, at the election of the plaintiff, for which reason the action is
considered a transitory one.
Based on the distinctions between real and personal actions, an action to recover the deficiency after the extrajudicial
foreclosure of the real property mortgage is a personal action, for it does not affect title to or possession of real
property, or any interest therein. Accordingly, the proper venue in this case is in Makati RTC because Makati was the
place where the main office of BPI was located.
Moreover, even assuming that the venue was improperly laid, it would be improper to dismiss the case
considering that the spouses had not raised such ground in their Motion to Dismiss. As earlier indicated,
they came to raise the objection of improper venue for the first time only in their reply to the petitioner’s comment on
their Motion for Reconsideration. They did so belatedly. In civil proceedings, venue is procedural, not jurisdictional,
and may be waived by the defendant if not seasonably raised either in a motion to dismiss or in the answer. In other
words, unless the defendant seasonably objects, any action may be tried by a court despite its being the improper
venue.

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RULES 1-5

(Coverage for August 30)

ALDAY VS. FGU INSURANCE – AGUSTINES

CASE TITLE Alday vs. FGU Insurance

ISSUE I. Is the counterclaim of petitioner permissive or compulsory?

Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 1

KOREA TECHNOLOGIES VS. LERMA – ABEJUELA

MERCADO VS. CA – AMBROCIO

CASE TITLE LEONIDES MERCADO, represented by his heirs: RACQUEL D. MERCADO, JIMMY D. MERCADO,

PROTON PILIPINAS VS. BANQUE NATIONALE DE PARIS – ALVARADO

CASE TITLE PROTON PILIPINAS CORPORATION vs. BANQUE NATIONALE DE PARIS

Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 4

Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 5

RUBY SHELTER VS. FORMARAN - ANCIRO

Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 6

ST. LOUIS UNIVERSITY VS. COBARUBBIAS – AU

CASE TITLE ST. LOUIS UNIVERSITY vs. COBARRUBIAS

REMEDIAL MATTERS MTC

GIPA VS. SOUTHERN LUZON INSTITUTE – ARISTON

CASE TITLE Gipa v. Southern Luzon Institute

Remedial Law I – Case Digest – ‘1819 – 1st Semester – TH 5:30 PM-9:30 PM | 8

3. Defendants then filed a

2. No, Sec 4, Rule 41 of the RoC provides that:

REYES VS. PEOPLE - AUSTRIA

CASE TITLE RODGING REYES, petitioner, vs. PEOPLE OF THE PHILIPPINES

APPLICABLE RULE / Note: Covers Docket Fees

Reyes appealed to RTC.

CA dismissed the petition. The Resolution partly reads, as follows:

1. Filed beyond the reglementary period;

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 10

NTC VS. HEIRS OF EBESA – CAPURCOS

CASE TITLE NATIONAL TRANSMISSION CORPORATION, Petitioner, v. HEIRS OF TEODULO EBESA, NAMELY:

REMEDIAL MATTERS MTC

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 12

VARGAS VS. OGSOS - RAYOSO

CASE TITLE Vargas vs. Ogsos

Basis for Counterclaim

REMEDIAL MATTERS MTC

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 13

Petitioner and Kathryn filed their motion for reconsideration, denied.

CAMASO VS. TSM SHIPPING – DE LEON

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 14

On appeal to NLRC, the complaint was dismissed for lack of merit.

DYNAMIC BUILDERS VS. PRISBITERO - CARITOS

CASE TITLE G.R. No. 174202 April 7, 2015

DYNAMIC BUILDERS & CONSTRUCTION CO. (PHIL.), INC., Petitioner,

REMEDIAL MATTERS MTC

RELUCIO VS. LOPEZ – DORADO

CASE TITLE RELUCIO VS. LOPEZ

RULING Relucio is neither an indespensable party nor a necessary party.

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 16

DE CASTRO VS. CA – CATUBAY

a) P303,606.24 representing unpaid commission;

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 17

ORQUIOLA VS. CA - ECO

REMEDIAL MATTERS MTC

During the pendency of the action, Tandang Sora Development Corporation

(a) to solidarily pay the plaintiff Tandang Sora Dev.

Remedial Law I – Case Digest – ‘1819 – 1 st Semester – TH 5:30 PM-9:30 PM | 18