SALVADOR O. MOJAR, EDGAR B. BEGONIA, Heirs of the late JOSE M. CORTEZ, RESTITUTO GADDI, VIRGILIO M. MONANA, FREDDIE RANCES, and EDSON D. TOMAS,Petitioners,   - versus -   AGRO COMMERCIAL SECURITY SERVICE AGENCY, INC., et al.,[1]

Respondents.

G. R. No. 187188  Present: CARPIO, J., Chairperson,BRION,PEREZ,SERENO, andREYES, JJ.  Promulgated: June 27, 2012

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N SERENO, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to annul the entire proceedings before the Court of Appeals (CA) in CA-G.R. SP No. 102201, in which it issued its Decision dated 21 July 2008 and Resolution dated 16 March 2009.[2]

 Statement of Facts and of the CasePetitioners were employed as security guards by respondent and assigned to the various branches of the Bank of Commerce in Pangasinan, La Union and Ilocos Sur.In separate Office Orders dated 23 and 24 May 2002, petitioners were relieved from their respective posts and directed to report to their new assignments in Metro Manila effective 3 June 2002. They, however, failed to report for duty in their new assignments, prompting respondent to send them a letter dated 18 June 2002. It required a written explanation why no disciplinary action should be taken against them, but the letter was not heeded.On 15 February 2005, petitioners filed a Complaint for illegal dismissal against respondent and the Bank of Commerce, Dagupan Branch, before the National Labor Relations Commission (NLRC). Petitioners claimed, among others, that their reassignment was a scheme to sever the employer-employee relationship and was done in retaliation for their pressing their claim for salary differential, which they had earlier filed against respondent and the Bank of Commerce before the NLRC. They also contended that the transfer to Manila was inconvenient and prejudicial, since they would incur additional expenses for board and lodging.On 22 May 2006, the Labor Arbiter (LA) rendered a Decision [3] finding that petitioners were illegally dismissed. The dispositive portion reads:WHEREFORE, premises considered, judgment is hereby rendered ordering respondents to reinstate all the complainants to their former assignment in Pangasinan with full backwages and if reinstatement is no longer possible, to pay separation pay of one month for every year of service each of the seven complainant security guards. (A detailed computation of the judgment award is attached as Annex A.)[4](Italicized in the original)On appeal, the NLRC affirmed the LAs ruling, with the modification that the Complaint against the Bank of Commerce was dismissed.[5] The dispositive portion provides:WHEREFORE, premises considered, the appeal of Agro Commercial Security Service Agency, Inc. is hereby DISMISSED for lack of merit. The Appeal of Bank of Commerce is GRANTED for being impressed with merit. Accordingly, judgment is hereby rendered MODIFYING the Decision of the Labor Arbiter dated May 22, 2006 by DISMISSING the complaint against Bank of Commerce-Dagupan. All other dispositions of the Labor Arbiter not so modified, STAYS.[6]

On 23 January 2008, respondent filed a Motion for Extension to file a Petition for Certiorari before the CA. In a Resolution dated 20 February 2008, the latter granted the Motion for Extension, allowing respondent until 10 February 2008 within which to file its Petition. On 9 February 2008, respondent filed its Petition for Certiorari before the appellate court.On 30 June 2008, the CA issued a Resolution noting that no comment on the Petition had been filed, and stating that the case was now deemed submitted for resolution.On 21 July 2008, the CA rendered its Decision. Finding merit in the Petition, it found the Orders transferring petitioners to Manila to be a valid exercise of management prerogative. The records were bereft of any showing that the subject transfer involved a diminution of rank or salaries. Further, there was no showing of bad faith or ill motive on the part of the employer. Thus, petitioners refusal to comply with the transfer orders constituted willful disobedience of a lawful order of an employer and abandonment, which were just causes for termination under the Labor Code. However, respondent failed to observe the due process requirements in terminating them. The dispositive portion of the CA Decision provides:

WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision and Resolution of the NLRC dated July 31, 2007 and October 31, 2007[,] respectively, in NLRC NCR CA No. 046036-05 are REVERSED and SET ASIDE. The complaints of private respondents for illegal dismissal are hereby DISMISSED. However, petitioner is ordered to pay private respondents the sum of ₱10,000.00 each for having violated the latters right to statutory due process.[7]

On 1 August 2008, petitioner Mojar filed a Manifestation [8] before the CA, stating that he and the other petitioners had not been served a copy of the CA Petition. He also said that they were not aware whether their counsel before the NLRC, Atty. Jose C. Espinas, was served a copy thereof, since the latter had already been bedridden since December 2007 until his demise on 25 February 2008.[9] Neither could their new counsel, Atty. Mario G. Aglipay, enter his appearance before the CA, as petitioners failed to get [the] folder from the office of Atty. Espinas, as the folder can no longer be found.[10]

Thereafter, petitioners filed a Motion to Annul Proceedings [11] dated 9 September 2008 before the CA. They moved to annul the proceedings on the ground of lack of jurisdiction. They argued that the NLRC Decision had already attained finality, since the Petition before the CA was belatedly filed, and the signatory to the Certification of non-forum shopping lacked the proper authority.In a Resolution dated 16 March 2009, the CA denied the Motion to Annul Proceedings.Hence, this Petition.The Petition raised the following arguments: (1) There was no proof of service attached to the Motion for Extension to file a Petition for Certiorari before the CA; thus, both the Motion and the Petition were mere scraps of paper. (2) Respondent purposely intended to exclude petitioners from the proceedings before the CA by omitting their actual addresses in the CA Petition, a mandatory requirement under Section 3, Rule 46; in relation to Section 1, Rule 65 of the Rules of Court. Further, respondent failed to prove the valid service of its CA Petition upon petitioners former counsel of record. (3) The CA was grossly ignorant of the law in ignoring jurisprudence, which states that when the floating status of an employee lasts for more than six months, the latter may be considered to have been constructively dismissed.On 3 September 2009, respondent filed its Comment on the Petition, pursuant to this Courts 29 June 2009 Resolution. In its Comment, it argued that the CA Decision had already become final and executory, inasmuch as the Motion to Annul Proceedings, a procedural approach not provided for in the Rules, was filed some 44 days after the service of the CA Decision on the counsel for petitioners. Further, Atty. Aglipay had then no legal standing to appear as counsel, considering that there was still no substitution of counsel at the time he filed the Motion to Annul Proceedings. In any case, petitioners are bound by the actions of their counsel, Atty. Espinas.On 1 March 2010, this Court issued a Resolution requiring petitioners to file their reply, which petitioners complied with on 26 April 2010. In their Reply, petitioners state among others that the records of the CA case showed that there was a deliberate violation of their right to due process. The CA Petition did not contain the required affidavit of service, which alone should have caused the  motu proprio dismissal thereof. Further, the instant Petition before this Court is an appropriate mode to contest the CA Decision and Resolution, which petitioners contend are void judgments. They also argue that there is no rule on the clients substitution in case of the death of counsel. Instead, the reglementary period to file pleadings in that case must be suspended and made more lenient, considering that the duty of substitution is transferred to a non-lawyer.On 30 March 2011, respondent filed a Motion for Early Resolution of the case. Petitioners likewise filed a Motion for Leave (For the Admission of the Instant Comment on Private Respondents Motion for Early Resolution), stating that they were joining respondent in moving for the early resolution of the case.This Court will resolve the issues raised in seriatim.Actual Addresses of PartiesPetitioners contend that the CA should not have taken cognizance of the Petition before it, as their actual addresses were not indicated therein as required under Section 3, Rule 46[12] of the Rules of Court, and pursuant to Cendaa v. Avila.[13] In the 2008 case Cendaa, this Court ruled that the requirement that a petition for certiorari must contain the actual addresses of all the petitioners and the respondents is mandatory. The failure to comply with that requirement is a sufficient ground for the dismissal of a petition.This rule, however, is not absolute. In the 2011 case Santos v. Litton Mills Incorporated,[14] this Court ruled that where the petitioner clearly mentioned that the parties may be served with the courts notices or processes through their respective counsels, whose addresses have been clearly specified as in this case, this act would constitute substantial compliance with the requirements of Section 3, Rule 46. The Court further observed that the notice required by law is notice to counsel if the party has already appeared by counsel, pursuant to Section 2, Rule 13 of the Rules of Court.In its Petition before the CA, respondent clearly indicated the following:THE PARTIES2.0. The petitioner AGRO COMMERCIAL SECURITY SERVICE AGENCY, INC. (hereafter petitioner AGRO), is a corporation existing under Philippine laws, and may be served with process thru counsel, at his address hereunder indicated; private respondents (1) SALVADOR O. MOJAR; (2) EDGAR B. BEGONIA; (3) JOSE M. CORTEZ; (4) FREDDIE RANCES; (5) VIRGILIO MONANA; (6) RESTITUTU [sic] GADDI; and, (7) EDSON D. TOMAS, are all of age, and during the material period, were in the employ of petitioner AGRO as security guards; said respondents may be served with process thru their common counsel, ATTY. JOSE C. ESPINAS at No. 51 Scout Tuazon, Quezon City; on the other hand, respondent National Labor Relations Commission, 1st Division, Quezon City, is the agency having jurisdiction over labor disputes in the Philippines and may be served with process at offices in Quezon City;[15]

The foregoing may thus be considered as substantial compliance with Section 3, Rule 46. In any case, and as will be discussed further below, the CA had sufficient reason to take cognizance of the Petition.Affidavit of ServiceSection 3, Rule 46 provides that the petition for certiorari should be filed together with the proof of service thereof on the respondent. Under Section 13, Rule 13 of the Rules of Court, if service is made by registered mail, as in this case, proof shall be made by an affidavit of the person mailing and the registry receipt issued by the mailing office. Section 3, Rule 46 further provides that the failure to comply with any of the requirements shall be sufficient ground for the dismissal of the petition.Petitioners allege that no affidavit of service was attached to the CA Petition. Neither is there any in the copy of the CA Petition attached to the instant Petition. In its Comment, respondent claims that petitioners through their counsel, Atty. Aglipay can be charged with knowledge of the pendency of the CA Petition. It says that on April 2008, Atty. Aglipay filed before the NLRC an Entry of Appearance and Motion for Execution Pending Appeal.[16] However, petitioners merely indicated therein that they were respectfully mov[ing] for the execution pending appeal of the Labor Arbiters decision dated 22 May 2006 affirmed by the NLRC. [17] There was no indication that they had been served a copy of the CA Petition. No other proof was presented by respondent to show petitioners actual receipt of the CA Petition. In any case, this knowledge, even if presumed, would not and could not take the place of actual service and proof of service by respondent.In Ferrer v. Villanueva,[18] petitioner therein failed to append the proof of service to his Petition for Certiorari. Holding that this failure was a fatal defect, the Court stated:There is no question that petitioner herein was remiss in complying with the foregoing Rule. In  Cruz v. Court of Appeals, we ruled that with respect to motions, proof of service is a mandatory requirement. We find no cogent reason why this dictum should not apply and

with more reason to a petition for certiorari, in view of Section 3, Rule 46 which requires that the petition shall be filed  together with proof of service thereof. We agree with the Court of Appeals that the lack of proof of service is a fatal defect. The utter disregard of the Rule cannot be justified by harking to substantial justice and the policy of liberal construction of the Rules. Technical rules of procedure are not meant to frustrate the ends of justice. Rather, they serve to effect the proper and orderly disposition of cases and thus effectively prevent the clogging of court dockets. (Emphasis in the original) Indeed, while an affidavit of service is required merely as proof that service has been made on the other party, it is nonetheless essential to due process and the orderly administration of justice.[19]

Be that as it may, it does not escape the attention of this Court that in the CA Resolution dated 16 March 2009, the appellate court stated that their records revealed that Atty. Espinas, petitioners counsel of record at the time, was duly served a copy of the following: CA Resolution dated 20 February 2008 granting respondents Motion for Extension of Time to file the CA Petition; CA Resolution dated 24 April 2008 requiring petitioners to file their Comment on the CA Petition; and CA Resolution dated 30 June 2008, submitting the case for resolution, as no comment was filed.Such service to Atty. Espinas, as petitioners counsel of record, was valid despite the fact he was already deceased at the time. If a party to a case has appeared by counsel, service of pleadings and judgments shall be made upon his counsel or one of them, unless service upon the party is specifically ordered by the court. It is not the duty of the courts to inquire, during the progress of a case, whether the law firm or partnership representing one of the litigants continues to exist lawfully, whether the partners are still alive, or whether its associates are still connected with the firm.[20]

It is the duty of party-litigants to be in contact with their counsel from time to time in order to be informed of the progress of their case. It is likewise the duty of parties to inform the court of the fact of their counsels death. [21] Their failure to do so means that they have been negligent in the protection of their cause.[22] They cannot pass the blame to the court, which is not tasked to monitor the changes in the circumstances of the parties and their counsel.Substitution of CounselPetitioners claim that Atty. Espinas passed away on 8 February 2008. They further claim that he was already bedridden as early as December 2007, and thus they failed to get any information whether [he] was served with a copy of the [CA Petition]. [23]

Petitioners were negligent in the conduct of their litigation. Having known that Atty. Espinas was already bedridden as early as December 2007, they should have already obtained new counsel who could adequately represent their interests. The excuse that Atty. Aglipay could not enter his appearance before the CA because [petitioners] failed to get [their] folder from the office of Atty. Espinas[24] is flimsy at best.The requirements for a valid substitution of counsel have been jurisprudentially settled in this wise:Under Section 26, Rule 138 of the Rules of Court and established jurisprudence, a valid substitution of counsel has the following requirements: (1) the filing of a written application for substitution; (2) the client's written consent; (3) the consent of the substituted lawyer if such consent can be obtained; and, in case such written consent cannot be procured, (4) a proof of service of notice of such motion on the attorney to be substituted in the manner required by the Rules. Where death of the previous attorney is the cause of substitution of the counsel, a verified proof of the death of such attorney (usually a death certificate) must accompany the notice of appearance of the new counsel.[25]

 The fact that petitioners were unable to obtain their folder from Atty. Espinas is immaterial. Proof of service upon the lawyer to be substituted will suffice where the lawyers consent cannot be obtained. With respect to the records of the case, these may easily be reconstituted by obtaining copies thereof from the various courts involved.Petitioners allegedly went to the CA sometime prior to 31 July 2008, or the date of filing of their Manifestation before the CA, to inquire about the status of their case. Allegedly, they always visited the Court of Appeals for [the] development of their case. [26] It is doubtful that a person who regularly follows up the status of his case before a court would not be told, first, that a petition has been filed against him; and, second, that the courts resolutions have been sent to his counsel. It is questionable why, knowing these matters, petitioners did not seek the replacement of their counsel, if the latter was unable to pursue their case. Further, despite their manifestation that, sometime prior to 31 July 2008, they were already aware that the case had been submitted for resolution, they still waited until 9 September 2008 or until they allegedly had knowledge of the CA Decision before they filed the Motion to Annul Proceedings.In Ampo v. Court of Appeals,[27] this Court explained the vigilance that must be exercised by a party:We are not persuaded by petitioners argument that he was not aware that his counsel had died or that an adverse judgment had already been rendered until he received the notice of promulgation from the RTC of Butuan City on April 20, 2005. Time and again we have stated that equity aids the vigilant, not those who slumber on their rights. Petitioner should have taken it upon himself to periodically keep in touch with his counsel, check with the court, and inquire about the status of the case. Had petitioner been more prudent, he would have found out sooner about the death of his counsel and would have taken the necessary steps to prevent his present predicament.x x x x x x x xxLitigants who are represented by counsel should not expect that all they need to do is sit back, relax and await the outcome of their cases. Relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence. The circumstances of this case plainly show that petitioner only has himself to blame. Neither can he invoke due process. The essence of due process is simply an opportunity to be heard. Due process is satisfied when the parties are afforded a fair and reasonable opportunity to explain their respective sides of the controversy. Where a party, such as petitioner, was afforded this opportunity to participate but failed to do so, he cannot complain of deprivation of due process. If said opportunity is not availed of, it is deemed waived or forfeited without violating the constitutional guarantee.In this case, petitioners must bear the fruits of their negligence in the handling of their case. They may not decry the denial of due process, when they were indeed afforded the right to be heard in the first place.Substantive Issue: Illegal DismissalPetitioners argue that they were illegally dismissed, based on the 1989 case Agro Commercial Security Services Agency, Inc. v. NLRC.,[28] which holds that when the floating status of employees lasts for more than six (6) months, they may be considered to have been illegally dismissed from the service.Unfortunately, the above-mentioned case is not applicable here. In Agro, the service contracts of the security agency therein with various corporations and government agencies to which the security guards were previously assigned were terminated, generally due to the sequestration of the said offices. Accordingly, many of the security guards were placed on floating status. Floating status means an indefinite period of time when one does not receive any salary or financial benefit provided by law.[29] In this case, petitioners were actually reassigned to new posts, albeit in a different location from where they resided. Thus, there can be no floating status or indefinite period to speak of. Instead, petitioners were the ones who refused to report for work in their new assignment.

In cases involving security guards, a relief and transfer order in itself does not sever the employment relationship between the security guards and their agency. Employees have the right to security of tenure, but this does not give them such a vested right to their positions as would deprive the company of its prerogative to change their assignment or transfer them where their services, as security guards, will be most beneficial to the client.[30]

An employer has the right to transfer or assign its employees from one office or area of operation to another in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause. [31]

While petitioners may claim that their transfer to Manila will cause added expenses and inconvenience, we agree with the CA that, absent any showing of bad faith or ill motive on the part of the employer, the transfer remains valid.WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated 21 July 2008 and Resolution dated 16 March 2009 in CA-G.R. SP No. 102201 are hereby AFFIRMED

G.R. No. 206728, November 12, 2014

APO CEMENT CORPORATION, Petitioner, v. MINGSON MINING INDUSTRIES CORPORATION,Respondent.

R E S O L U T I O N

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated June 13, 2012 and the Resolution3 dated April 23, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 100456 which affirmed the Decision4 dated July 31, 2007 of the Department of Environment and Natural Resources (DENR) Mines Adjudication Board (MAB) in MAB Case No. 02-96 (POA Case No. CEB-001).

The Facts

The instant case arose from a dispute involving the mining claims known as “Allied 1 and 2” and “Lapulapu 31 and 32” (subject mining claims) between petitioner Apo Cement Corporation (Apocemco) and respondent Mingson Mining Industries Corporation (Mingson).5

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For the supposed failure of the old locators to develop and put to productive use the mineral properties found in the area, Apocemco submitted a Mineral Production Sharing Agreement (MPSA) proposal on June 19, 1991 before the DENR,6 essentially seeking to take over their current holder, Luvimin Cebu Mining Corporation (Luvimin).7

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On August 18, 19928 and March 2, 1993,9 the DENR - Central Visayas, Region 7 Office (DENR Regional Office) declared the subject mining claims, among others, abandoned and open for location to other interested parties,10 prompting Luvimin to file an appeal.11

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Similarly, Mingson assailed the aforementioned declarations on the ground that its own mining claims,i.e., “Yellow Eagle I to VII,” overlapped with the subject mining claims. Particularly, Mingson averred that its “Yellow Eagle IV” claim was registered on February 7, 1983 and was found to have overlapped with the “Allied 1 and 2” claims, while its “Yellow Eagle III” claim was registered on April 12, 1982 and overlapped with the “Lapulapu 31 and 32” claims.12

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The DENR Proceedings

In an Order13 dated March 1, 1995, the DENR Regional Office decreed that portions of the subject mining claims be awarded to Mingson, considering that said claims have encroached its Yellow Eagle I to VII claims.

However, upon Apocemco’s motion for reconsideration,14 the DENR Regional Office’s Legal Division issued a Resolution15 dated September 5, 1995, recommending that the subject mining claims be awarded, instead, to Apocemco, subject, however, to the outcome of Luvimin’s appeal. In an Order16dated September 20, 1995, the DENR Regional Director affirmed the foregoing resolution, but subject to the review and concurrence of the Mines and Geosciences Bureau Region 7 - Panel of Arbitrators (POA), considering that pursuant to Section 21817of DENR Department Administrative Order No. (DAO) 95-23, Series of 1995,18 the POA has been mandated to resolve, among others, disputes involving rights to mining areas.

In a Decision19 dated May 3, 1996, the POA upheld the September 5, 1995 Resolution and the September 20, 1995 Order, reiterating the findings therein made, without, however, requiring the parties to file any pleading or setting the matter for hearing.

Aggrieved, Mingson appealed20 the POA’s Decision before the DENR MAB, averring that the said Decision was not supported by facts and the evidence on record, and that it was arbitrary and issued with grave abuse of authority.21 Subsequently, in Mingson’s letter22 dated August 8, 1996, it claimed denial of due process.

In a Decision23 dated July 31, 2007, the DENR MAB granted Mingson’s appeal and thereby reversed and set aside the POA’s Decision. It found that the POA merely conducted a review of the case and Mingson, in particular, was not given an opportunity to be heard, which is repugnant to due process.24

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Dissatisfied, Apocemco elevated the matter to the CA.

The CA Ruling

In a Decision25cralawred dated June 13, 2012, the CA dismissed Apocemco’s appeal and sustained the DENR MAB’s finding that Mingson was not afforded by the

POA its right to due process, given that none of the applicable procedures found in DENR DAO 95-23 were followed.26 As an added ground for dismissal, the CA held that Apocemco failed to perfect its appeal in accordance with the Rules of Court, considering that the DENR MAB was not served a copy of its petition.27

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Unconvinced, Apocemco filed a motion for reconsideration28 which was, however, denied in a Resolution29 dated April 23, 2013, hence, the petition.

The Issue Before the Court

The primordial issue in this case is whether or not the CA correctly ordered the dismissal of Apocemco’s appeal.

The Court’s Ruling

The petition is devoid of merit.

Sections 22330 (on preliminary conference), 22431 (on hearing), and 22732 (on the proceedings before the POA), as well as Sections 22133 (on due course) and 22234 (on answers) of DENR DAO 95-23, or the Implementing Rules of the Philippine Mining Act of 1995,35 clearly require that the parties involved in mining disputes be given the opportunity to be heard. These rules – which were already in effect36 during the time the dispute between the parties arose – flesh out the core requirement of due process; thus, a stark and unjustified contravention of the same would oust the errant tribunal of its jurisdiction and, in effect, render its decision null and void. As explained in PO2 Montoya v. Police Director Varilla:37

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The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted from their jurisdiction. The violation of a party’s right to due process raises a serious jurisdictional issue which cannot be glossed over or disregarded at will. Where the denial of the

fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction.38 (Emphases supplied)

Here, it has been established that the POA proceeded to resolve the present mining dispute without affording either party any fair and reasonable opportunity to be heard in violation of the aforementioned provisions of DENR DAO 95-23. Thus, as correctly ruled by the DENR MAB and later affirmed by the CA, Mingson’s due process rights were violated, thereby rendering the POA’s Decision null and void.

In this relation, the Court finds it apt to clarify that the DENR MAB did not err in taking cognizance of the due process issue. While such issue was not assigned as an error in Mingson’s Appeal39 dated July 27, 1996, the same was squarely raised in Mingson’s August 8, 1996 letter40 to the DENR MAB. Given the lack of any formal procedure on appeals at that time,41 the DENR MAB cannot be faulted for considering the letter and the issues raised therein as part of Mingson’s appeal. It must be added that the DENR MAB is not a court of law but an administrative body; hence, it is not bound by strict rules of procedure and evidence, and is allowed to use all reasonable means to ascertain the facts of each case speedily and objectively without resort to technical rules,42 as in this case.

Besides, an apparent lack of due process may be raised by a party at any time since due process is a jurisdictional requisite that all tribunals, whether administrative or judicial, are duty bound to observe. In Salva v. Valle,43 the Court pronounced that “[a] decision rendered without due process is void ab initio and may be attacked at anytime directly or collaterally by means of a separate action, or by resisting such decision in any action or proceeding where it is invoked.” The Court sees no defensible reason as to why this principle should not be herein applied.

That being said, and considering too Apocemco’s failure to comply with Sections 5 and 7, 44 Rule 43 of the Rules of Court in the proceedings before the appellate court, the instant petition is hereby denied and the rulings of the CA are affirmed.

WHEREFORE, the petition is DENIED. The Decision dated June 13, 2012 and the Resolution dated April 23, 2013 of the Court of Appeals in CA-G.R. SP No. 100456 are hereby AFFIRMED.

SO ORDERED.

G.R. No. 183035               January 9, 2013

OPTIMA REALTY CORPORATION, Petitioner, vs.HERTZ PHIL. EXCLUSIVE CARS, INC., Respondent.D E C I S I O NSERENO, CJ.:Before us is a Rule 45 Petition assailing the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-GR SP No. 99890, which reversed the Decision3 and Resolution4 of the Regional Trial Court (RTC), Branch 13 7, Makati City in Civil Case No. 06-672. The RTC had affirmed in toto the 22 May 2006 Decision5 of the Metropolitan Trial Court (MeTC), Branch 64, Makati City in Civil Case No. 90842 evicting respondent Hertz Phil.Exclusive Cars, Inc. (Hertz) and ordering it to pay back rentals and other arrearages to petitioner Optima Realty Corporation (Optima).Optima is engaged in the business of leasing and renting out commercial spaces and buildings to its tenants. On 12 December 2002, it entered into a Contract of Lease with respondent over a 131-square-meter office unit and a parking slot in the Optima Building for a period of three years commencing on 1 March 2003 and ending on 28 February 2006. 6 On 9 March 2004, the parties amended their lease agreement by shortening the lease period to two years and five months, commencing on 1 October 2003 and ending on 28 February 2006.7

Renovations in the Optima Building commenced in January and ended in November 2005.8 As a result, Hertz alleged that it experienced a 50% drop in monthly sales and a significant decrease in its personnel’s productivity. It then requested a 50% discount on its rent for the months of May, June, July and August 2005.9

On 8 December 2005, Optima granted the request of Hertz.10 However, the latter still failed to pay its rentals for the months of August to December of 2005 and January to February 2006,11 or a total of seven months. In addition, Hertz likewise failed to pay its utility bills for the months of November and December of 2005 and January and February of 2006,12 or a total of four months.On 8 December 2005, Optima wrote another letter to Hertz,13 reminding the latter that the Contract of Lease could be renewed only by a new negotiation between the parties and upon written notice by the lessee to the lessor at least 90 days prior to the termination of the lease period.14 As no letter was received from Hertz regarding its intention to seek negotiation and extension of the lease contract within the 90-day period, Optima informed it that the lease would expire on 28 February 2006 and would not be renewed.15

On 21 December 2005, Hertz wrote a letter belatedly advising Optima of the former’s desire to negotiate and extend the lease.16 However, as the Contract of Lease provided that the notice to negotiate its renewal must be given by the lessee at least 90 days prior to the expiration of the contract, petitioner no longer entertained respondent’s notice.On 30 January 2006, Hertz filed a Complaint for Specific Performance, Injunction and Damages and/or Sum of Money with prayer for the issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction (Complaint for Specific Performance) against Optima. In that Complaint, Hertz prayed for the issuance of a TRO to enjoin petitioner from committing acts that would tend to disrupt respondent’s peaceful use and possession of the leased premises; for a Writ of Preliminary Injunction ordering petitioner to reconnect its utilities; for petitioner to be ordered to renegotiate a renewal of the Contract of Lease; and for actual, moral and exemplary damages, as well as attorney’s fees and costs.On 1 March 2006, Optima, through counsel, wrote Hertz a letter requiring the latter to surrender and vacate the leased premises in view of the expiration of the Contract of Lease on 28 February 2006.17 It likewise demanded payment of the sum of ₱420,967.28 in rental arrearages, unpaid utility bills and other charges.18 Hertz, however, refused to vacate the leased premises.19 As a result, Optima was constrained to file before the MeTC a Complaint for Unlawful Detainer and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction (Unlawful Detainer Complaint) against Hertz.20

On 14 March 2006, Summons for the Unlawful Detainer Complaint was served on Henry Bobiles, quality control supervisor of Hertz, who complied with the telephone instruction of manager Rudy Tirador to receive the Summons.21

On 28 March 2006, or 14 days after service of the Summons, Hertz filed a Motion for Leave of Court to file Answer with Counterclaim and to Admit Answer with Counterclaim (Motion for Leave to File Answer).22 In that Motion, Hertz stated that, "in spite of the defective service of summons, it opted to file the instant Answer with Counterclaim with Leave of Court."23 In the same Motion, it likewise prayed that, in the interest of substantial justice, the Answer with Counterclaim attached to the Motion for Leave to File Answer should be admitted regardless of its belated filing, since the service of summons was defective.24

On 22 May 2006, the MeTC rendered a Decision,25 ruling that petitioner Optima had established its right to evict Hertz from the subject premises due to nonpayment of rentals and the expiration of the period of lease.26 The dispositive portion of the Decision reads:WHEREFORE, premises considered, the Court hereby renders judgment for the plaintiff and against the defendant, ordering:1. the defendant corporation and all persons claiming rights from it to immediately vacate the leased premises and to surrender possession thereof to the plaintiff;2. the defendant corporation to pay the plaintiff the amount of Four Hundred Twenty Thousand Nine Hundred Sixty Seven Pesos and 28/100 (P420,967.28) representing its rentals arrearages and utility charges for the period of August 2005 to February 2006, deducting therefrom defendant’s security deposit;3. the defendant corporation to pay the amount of Fifty Four Thousand Two Hundred Pesos (P54,200.00) as a reasonable monthly compensation for the use and occupancy of the premises starting from March 2006 until possession thereof is restored to the plaintiff; and4. the defendant corporation to pay the amount of Thirty Thousand Pesos (P30,000.00) as and for attorney’s fees; and5. the cost of suit.SO ORDERED.27

Hertz appealed the MeTC’s Decision to the RTC.28

Finding no compelling reason to warrant the reversal of the MeTC’s Decision, the RTC affirmed it by dismissing the appeal in a Decision29 dated 16 March 2007.On 18 June 2007, the RTC denied respondent’s Motion for Reconsideration of its assailed Decision.30

Hertz thereafter filed a verified Rule 42 Petition for Review on Certiorari with the CA.31

On appeal, the CA ruled that, due to the improper service of summons, the MeTC failed to acquire jurisdiction over the person of respondent Hertz. The appellate court thereafter reversed the RTC and remanded the case to the MeTC to ensure the proper service of summons. Accordingly, the CA issued its 17 March 2008 Decision, the fallo of which reads:WHEREFORE, premises considered, the May 22, 2006 Decision of the Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842, and both the March 16, 2007 Decision, as well as the June 18, 2007 Resolution, of the Regional Trial Court of Makati City, Branch 137, in Civil Case No. 06-672, are hereby REVERSED, ANNULLED and SET ASIDE – due to lack of jurisdiction over the person of the defendant corporation HERTZ. This case is hereby REMANDED to the Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842, which is DIRECTED to ensure that its Sheriff properly serve summons to only those persons listed in Sec. 11, Rule 14 of the Rules of Civil Procedure in order that the MTC could acquire jurisdiction over the person of the defendant corporation HERTZ.SO ORDERED.32

Petitioner’s Motion for Reconsideration of the CA’s Decision was denied in a Resolution dated 20 May 2008.33

Aggrieved by the ruling of the appellate court, petitioner then filed the instant Rule 45 Petition for Review on Certiorari with this Court.34

THE ISSUESAs culled from the records, the following issues are submitted for resolution by this Court:1. Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz;2. Whether the unlawful detainer case is barred by litis pendentia; and3. Whether the ejectment of Hertz and the award of damages, attorneys fees and costs are proper.THE COURT’S RULINGWe grant the Petition and reverse the assailed Decision and Resolution of the appellate court.IThe MeTC acquired jurisdiction over the person of respondent Hertz.In civil cases, jurisdiction over the person of the defendant may be acquired either by service of summons or by the defendant’s voluntary appearance in court and submission to its authority.35

In this case, the MeTC acquired jurisdiction over the person of respondent Hertz by reason of the latter’s voluntary appearance in court.In Philippine Commercial International Bank v. Spouses Dy,36 we had occasion to state:Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person, or his voluntary appearance in court. As a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, is considered voluntary submission to the court's jurisdiction. This, however, is tempered by the concept of conditional appearance, such that a party who makes a special appearance to challenge, among others, the court's jurisdiction over his person cannot be considered to have submitted to its authority.Prescinding from the foregoing, it is thus clear that:(1) Special appearance operates as an exception to the general rule on voluntary appearance;(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly made, i.e., set forth in an unequivocal manner; and(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instances where a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution. (Emphases supplied)In this case, the records show that the following statement appeared in respondent’s Motion for Leave to File Answer:In spite of the defective service of summons, the defendant opted to file the instant Answer with Counterclaim with Leave of Court, upon inquiring from the office of the clerk of court of this Honorable Court and due to its notice of hearing on March 29, 2005 application for TRO/Preliminary Mandatory Injunction was received on March 26, 2006. (Emphasis supplied)37

Furthermore, the Answer with Counterclaim filed by Hertz never raised the defense of improper service of summons. The defenses that it pleaded were limited to litis pendentia, pari delicto, performance of its obligations and lack of cause of action. 38 Finally, it even asserted its own counterclaim against Optima.39

Measured against the standards in Philippine Commercial International Bank, these actions lead to no other conclusion than that Hertz voluntarily appeared before the court a quo. We therefore rule that, by virtue of the voluntary appearance of respondent Hertz before the MeTC, the trial court acquired jurisdiction over respondent’s.IIThe instant ejectment case is not barred by litis pendentia. Hertz contends that the instant case is barred by litis pendentia because of the pendency of its Complaint for Specific Performance against Optima before the RTC.We disagree.Litis pendentia requires the concurrence of the following elements:(1) Identity of parties, or at least their representation of the same interests in both actions;(2) Identity of rights asserted and reliefs prayed for, the relief being founded on the same facts; and(3) Identity with respect to the two preceding particulars in the two cases, such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case.40

Here, while there is identity of parties in both cases, we find that the rights asserted and the reliefs prayed for under the Complaint for Specific Performance and those under the present Unlawful Detainer Complaint are different. As aptly found by the trial court:The Complaint for Specific Performance] seeks to compel plaintiff-appellee Optima to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the leased premises; and (3) pay damages. On the other hand, the unlawful detainer case sought the ejectment of defendant-appellant Hertz from the leased premises and to collect arrears in rentals and utility bills.41

As the rights asserted and the reliefs sought in the two cases are different, we find that the pendency of the Complaint for Specific Performance is not a bar to the institution of the present case for ejectment.IIIThe eviction of respondent and the award of damages,attorney’s fees and costs were proper.We find that the RTC’s ruling upholding the ejectment of Hertz from the building premises was proper. First, respondent failed to pay rental arrearages and utility bills to Optima; and, second, the Contract of Lease expired without any request from Hertz for a renegotiation thereof at least 90 days prior to its expiration.On the first ground, the records show that Hertz failed to pay rental arrearages and utility bills to Optima. Failure to pay timely rentals and utility charges is an event of default under the Contract of Lease,42 entitling the lessor to terminate the lease.Moreover, the failure of Hertz to pay timely rentals and utility charges entitles the lessor to judicially eject it under the provisions of the Civil Code.43

On the second ground, the records likewise show that the lease had already expired on 28 February 2006 because of Hertz’s failure to request a renegotiation at least 90 days prior to the termination of the lease period.The pertinent provision of the Contract of Lease reads:x x x. The lease can be renewed only by a new negotiation between the parties upon written notice by the LESSEE to be given to the LESSOR at least 90 days prior to termination of the above lease period.44

As the lease was set to expire on 28 February 2006, Hertz had until 30 November 2005 within which to express its interest in negotiating an extension of the lease with Optima. However, Hertz failed to communicate its intention to negotiate for an extension of the lease within the time agreed upon by the parties. Thus, by its own provisions, the Contract of Lease expired on 28 February 2006.1âwphi1Under the Civil Code, the expiry of the period agreed upon by the parties is likewise a ground for judicial ejectment.45

As to the award of monthly compensation, we find that Hertz should pay adequate compensation to Optima, since the former continued to occupy the leased premises even after the expiration of the lease contract. As the lease price during the effectivity of the lease contract was P54,200 per month, we find it to be a reasonable award.Finally, we uphold the award of attorney's fees in the amount of P30,000 and judicial costs in the light of Hertz's unjustifiable and unlawful retention of the leased premises, thus forcing Optima to file the instant case in order to protect its rights and interest.From the foregoing, we find that the MeTC committed no reversible error in its 22 May 2006 Decision, and that the RTC committed no reversible error either in affirming the MeTC's Decision.WHEREFORE, in view of the foregoing, the instant Rule 45 Petition for Review is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 99890 are hereby REVERSED and SET ASIDE. The Decision of the Regional Trial Court, Branch 13 7, Makati City in Civil Case No. 06-672 affirming in toto the Decision of the Metropolitan Trial Court, Branch 64, Makati City in Civil Case No. 90842 is hereby REINSTATED and AFFIRMED.SO ORDERED.MARIA LOURDES P. A. SERENOChief JusticeChairperson

G.R. No. 182970               July 23, 2014EMILIANO S. SAMSON, Petitioner, vs.SPOUSES JOSE and GUILLERMINA GABOR, TANAY RURAL BANK, INC., and REGISTER OF DEEDS OF MORONG, RIZAL, Respondents.D E C I S I O NPERALTA, J.:Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Order1 dated August 18, 2006 of the Regional Trial Court (RTC) of Pasig City in Civil Case No. 70750 and Decision2 dated May 9, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 88335.The antecedents of the case are as follows:Respondent spouses Jose and Guillermina Gabor are the registered owners of a parcel of land with an area of Sixty-One Thousand Eighty-Five (61,085) square meters, more or less, situated at Barrio Mapunso, Tanay, Rizal Province, and covered by Transfer Certificate of Title (TCT) No. M-25565 issued by the Register of Deeds of Morong.3

On November 14, 1985, the Spouses Gabor executed a Deed of Assignment transferring Twenty Thousand Six Hundred Thirty-One (20,631) square meters undivided portion of the aforementioned parcel of land in favor of petitioner Emiliano S. Samson as attorney’s fees in payment for the services rendered by the latter for the former.On October 22, 1987, petitioner Samson executed a Deed of Assignment transferring the same undivided portion in favor of Ma. Remedios P. Ramos. Upon learning of the sale, respondent spouses filed an action for legal redemption with the RTC of Tanay, Rizal. Immediately thereafter, petitioner Samson and Ramos executed an Agreement of Rescission revoking the transfer of the undivided portion.4 On July 25, 1989, the RTC dismissed the suit for legal redemption. On appeal, however, the CA, in CA-G.R. CV No. 25530, reversed the decision of the RTC and upheld the Spouses Gabor’s right of legal redemption. No further appeals were pursued.Instead, during the pendency of CA-G.R. CV No. 25530, petitioner Samson filed an action for Partition of Real Property and Damages5 against respondent spouses with the RTC of Morong, Rizal, which dismissed the same on the ground that the finalityof CA-G.R. CV No. 25530 effectively barred the action for partition.6 Agreeing with the RTC, the CA, in CA-G.R. CV No. 38373,7 upheld the lower court’s decision, in the following wise:The appeal is not meritorious. In view of the final and executory decision in CA-G.R. No. 25530 upholding the right of defendantsappellees to exercise their right oflegal redemption over the 20,631 square meters involved, plaintiff-appellant is devoid of any legal right or personality to ask for partition of [the] subject property formerly owned in common. Having assigned his undivided share therein to Ma. Remedios P. Ramos, plaintiff-appellant ceased to be a co-owner. By exercising their right of legal redemption, which thisCourt upheld by final judgment, defendants-appellees now own the entire area covered by TCT No. M-25565.The subsequent execution of the Agreement of Rescission by plaintiff-appellant and Ma. Remedios P. Ramos did not divest defendantsappellees of the right of legal redemption vested in them upon the consummation of the assignment plaintiff-appellant made to Ma. Remedios P. Ramos. x x xWhen the pending appeal in CA-G.R. No. CV 25530 was decided and judgment therein became final and executory, the lower court had to follow what was adjudged by this Court,and while plaintiff-appellant was not a party in the said Civil CaseNo. 125-T and CA-G.R. CV No. 25530, plaintiff-appellant is bound by the judgment therein because he was fully aware of the pendency of such cases. Asa matter of fact, he testified in Civil Case No. 125-T. Therefore, the Agreement of Rescission he later entered into with Ma. Remedios P. Ramos during the pendency of the said case, did not deprive defendants-appellees of their right of legal redemption. The supposed re-acquisition by plaintiff-appellant of his undivided share in question, having been effected pendente lite, the same was subject to the outcome of the case.8

Petitioner Samson then appealed to this Court via petition for review on certiorari,but the same was dismissed in a minute resolution9 dated June 8, 1994 for failure to submit an affidavit of service. This court further denied Samson’s motion for reconsideration with finality in its Resolution10 dated July 25, 1994 for having no compelling reason to warrant the reconsideration sought.On April 4, 2006, petitioner Samson filed a Complaint11 before the RTC of Pasig City for Recovery of Property or its Value against respondent spouses, Tanay Rural Bank, Inc., and the Register of Deeds of Morong, Rizal, claiming that he had been payinghis one-third (1/3) share of realty taxes covering the subject portion of land for the years 2002 to 2004. In 2005, however, his payment was rejected by the Municipal Treasurer of Tanay, Rizal, at such time he discovered that respondent spouses had already mortgaged the entire property in favor of respondent Bank back in November 2002.On August 18, 2006, the RTC of Pasig City dismissed the complaint on the grounds of improper venue, res judicata, and that the complaint states no cause of action.12 It held that the suit is a real action which should be filed in the RTC of Morong, Rizal, where the property subject of the case is situated. Moreover, the lower court pointed out that as early as 1991, herein petitioner had already filed a Complaint for Partition of Real Property and Damages involving the same subject property against the same parties, which complaint was already dismissed by this Court with finality. Thus, the principle of res judicataapplies. Finally, the trial court held that petitioner’s complaint states no cause ofaction against herein respondent Bank as it does not allege any details as to the liability or any violation of petitioner’s rights.Claiming that the lower court erred in dismissing his complaint, petitioner Samson filed an appeal with the CA, which likewise dismissed the same for having been improperly brought before it. The appellate court ruled in its Decision 13 dated May 9, 2008 that since petitioner’s appeal raised only issues purely of law, it should be dismissed outright.Undaunted, petitioner filed the instant petition invoking the following arguments:I.THE COURT OF APPEALS HAS JURISDICTION OVER PETITIONER’S APPEAL FROM THE ORDER OF THE REGIONAL TRIAL COURT OF PASIG CITY.II.SINCE THE PETITIONER’S COMPLAINT IS BOTH REAL AND PERSONAL, IT WAS PROPERLY FILED WITH THE REGIONAL TRIAL COURT OF PASIG CITY.III.PETITIONER’S COMPLAINT STATES A CAUSE OF ACTION.IV.PETITIONER’S COMPLAINT IS NOT BARRED BY RES JUDICATA.The petition lacks merit.We agree with the CA’s decision to dismiss petitioner’s appeal, pursuant to Section 2, Rule 50 of the 1997 Rules of Civil Procedure which mandates the dismissal of an appeal that raises only questions of law. 14 The appeal of petitioner, as correctly held by the CA, essentially raised issues purely of law.Time and again, this Court has distinguished cases involving pure questions of law from those of pure questions of fact in the following manner:

A question of fact exists when a doubt or difference arises as to the truth or falsity of alleged facts. If the query requires a re-evaluation of the credibility of witnesses or the existence or relevance of surrounding circumstances and their relation to each other, the issue in that query is factual. On the other hand, there is a question of law when the doubt or difference arises as to what the law is on certain state of facts and which does not call for an existence of the probative value of the evidence presented by the parties-litigants. In a case involving a question of law, the resolution of the issue rests solely on what the law provides on the given set of circumstances. Ordinarily, the determination of whether an appeal involves only questions of law or both questions of law and fact is best left to the appellate court.All doubts as to the correctness of the conclusions of the appellate court will be resolved in favor of the CA unless it commits an error or commits a grave abuse of discretion.15

In the instant case, petitioner appealed the Order of the trial court which dismissed his complaint for improper venue, lack of cause of action, and res judicata.16 Dismissals based on these grounds do not involve a review of the facts of the case but merely the application of the law, specifically in this case, Rule 16 of the Revised Rules of Civil Procedure. The issue to be resolved is limited towhether or not saidrule was properly applied, which will only involve a reviewof the complaint, the motions to dismiss, and the trial court’s order of dismissal, but not the probative value of the evidence submitted nor the truthfulness or falsity of the facts. Considering, therefore, that the subjectappeal raised only questions of law, the CA committed no error in dismissing the same.We, likewise, agree with the decision of the RTC of Pasig City dismissing petitioner’s complaint on the ground that the same should have been filed in the RTC of Morong, Rizal, where the property subject of this case is situated. Petitioner claims that as shown by the caption of his complaint which reads "For Recovery of Property or its Value," his cause of action is in the alternative, both real and personal. As such, his action may be commenced and tried where the petitioner resides or where any of the respondents resides, at the election of the petitioner.17Petitioner’s argument is misplaced. In Latorre v. Latorre,18 we ruled that:Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure provide an answer to the issue of venue. Actions affecting title to or possession of real property or an interest therein (real actions) shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides. x x x.In this jurisdiction, we adhere to the principle that the nature of an action is determined by the allegations in the Complaint itself, rather than by its title or heading. Itis also a settled rule that what determines the venue of a case is the primary objective for the filing of the case. x x x19 While the complaint of the petitioner was denominated as one for "Recovery of Property or its Value," all of his claims are actually anchored on his claim of ownership over the one-third (1/3) portion of the subject property. In his complaint, petitioner sought the return of the portion of the subject property or its value on the basis of his co-ownership thereof. Necessarily, his alternative claim for the value of the property is still dependent on the determination of ownership, which is an action affecting title to or possession of real property or an interest therein. Clearly, petitioner’s claim is a realaction which should have been filed in the court where the property lies, which in this case, is the RTC of Morong, Rizal.We further agree with the RTC of Pasig City when it dismissed petitioner’s complaint on the ground that the same states no cause of action in the following wise:The complaint states no cause of action as herein defendant was impleaded without stating any details ofits liabilities nor any allegation of its violations to the plaintiff’s rights. The only allegation of the rights violated are Articles 19, 20, and 21 of the Civil Code. More importantly, there are no allegations in the complaint that defendant TRB has violated the aforesaid laws. There is no detailon why the defendant TRB has been impleaded in the instant case.20

A perusal of the complaint would show that aside from the fact that respondent spouses had mortgaged the property subject herein to respondent bank, there is no other allegation of an act or omission on the part of respondent Bank in violation ofa right of petitioner. In Spouses Zepeda v. China Banking Corporation,21 We had occasion to discuss the definition of the term "cause of action," to wit:A cause of action is a formal statement of the operative facts that give rise to a remedial right. The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant. Thus it "must contain a concise statement of the ultimate or essential facts constituting the plaintiff’s cause of action." Failure to make a sufficient allegation of a cause of action in the complaint "warrants its dismissal."As defined in Section 2, Rule 2 of the Rules of Court, a cause of action is the act or omission by which a party violates the right of another. Its essential elements are as follows:1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;2. An obligation on the part of the named defendant to respect or not to violate such right; and3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. In determining whether an initiatory pleading states a cause ofaction, "the test is as follows: admitting the truth of the facts alleged, can the court render a valid judgment in accordance with the prayer?" To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters aliundeare not considered. The court may consider in addition to the complaint the appended annexes or documents, other pleadings of the plaintiff, or admissions in the records.22

As already mentioned, there is nothing in the complaint herein which states specific overt acts to show thatrespondent Bank acted in disregard of the petitioner’s rights. Nowhere in the complaint was it alleged that respondent Bank had knowledge nor could have known with the exercise of due diligence that respondent spouses had acted illegally, in order to commit a wrong against the petitioner. Petitioner should have at least specified the details of his cause of action against respondent Bank. The complaint of petitioner in Nacua-Jao v. China Banking Corporation,23 sheds light on the specific allegations which must at least bestated to constitute a statement of cause of action, to wit:We are unable to subscribe to the foregoing view of the CA. Even a cursory reading of the Complaint readily reveals a clear statement of the cause of action of petitioner. The Complaint reads:"x x x           x x x          x x x3. That plaintiff is the lawfulowner of Lot No. 561 and its improvements xxx covered by Title No. T-525552 issued in her name xxx.x x x           x x x          x x x9. That sometime this year, plaintiff was only shocked to learn that a falsified and fraudulent Deed of Absolute Sale executed on January 19, 1996 was presented to the Register of Deeds xxx in order to cause the cancellation of plaintiff's title x x x.10. That consequently, TCT No. T-525552 xxx was illegally cancelled and replaced by TCT No. T-602202 in the name of defendant Gan spouses x x x.x x x           x x x          x x x12. That Lot No. 561, now covered by TCT No. T-602202 (Annex "H") in the name of defendantGan spouses is presently mortgaged to defendant China Banking Corporation in the amount of P1,600,000.00; the mortgage is annotated at the backof Annex "H" and the annotation is marked as Annex "H-1"; all the proceeds thereof went to defendant Gan Spouses.

13. That on knowing the falsification and the illegal cancellation of her title, plaintiff wrote defendant Jackson Gan and defendant China Banking Corporation protesting against the unlawful transactions that not onlyinvolved Lot No. 561 at Ternate, Cavite but also Lot No. 9, Blk. 89 at Parañaque, Metro Manila; machine copies of the letter-protestsare hereto attached as Annexes "I" and "J", respectively, and made integral parts hereof;x x x           x x x          x x x15. That from the foregoing, therefore, it is very evident that defendants had connived and conspired to effect the so-called sale and mortgage of Lot No. 561 and the transfer of the title thereof to Gan spouses' name. (Emphasis ours)x x x xIt appears that the aforementioned properties were unlawfully and criminally mortgaged to your Bankby one Jackson Gan xxx who forged or caused to be forged and/or falsified or caused to be falsified two (2) separate instruments of sale in his favor, covering the aforesaid properties making it appear that the said instruments were signed by our client when in truth and in fact were not."In sum, the Complaint recites that (1) petitioner was the registered owner of the subject property; (2) she was defrauded of her rights to the property when title thereto was transferred in the name of Spouses Gan based on a forged deed of sale; and (3) she was further defrauded of her rights to the property when respondentaccepted the same as security for the payment of a loan acquiredby Spouses Gan even when the latter's title to the property is void.x x x24

In contrast, the most that petitioner’s complaint herein stated was Articles 19, 20, and 21 of the Civil Code and that "he found out that in November 2002, defendants Gabor mortgaged the whole property x x x in favor of the defendant bank."25 Said bare allegation is insufficient to establish any right or cause of action in favor of the petitioner.Going now to the fourth and final argument, petitioner insists that his current action for Recovery of Property or its Value is not barred by res judicata. He claims that not all the elements of the principle of res judicata are present in this case, since the decision of this Court in the prior partition case was not a judgment on the merits but due to sheer technicality and that the cause of action in the prior case is partition while the cause of action herein is for recovery of property.26

We disagree. In order for res judicata to bar the institution of a subsequent action, the following requisites must concur: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, causes of action as are present in the civil cases below. The foundation principle upon which the doctrine of res judicatarests is that parties ought not to be permitted to litigate the same issue more than once; that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long asit remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate.27

In Selga v. Brar,28 we held that:Res judicatameans "a matter adjudged; a thing judicially acted upon or decided; a thing ormatter settled by judgment." It lays the rule that an existing final judgment or decree rendered on the merits, without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive ofthe rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit.It must be remembered that it is to the interest of the public that there should be an end to litigation by the parties over a subject fully and fairly adjudicated. The doctrine of res judicatais a rule that pervades every well-regulated system of jurisprudence and is founded upon two grounds embodied in various maxims of the common law, namely: (1) public policy and necessity, which dictates that it would be in the interest of the State that there should be an end to litigation – republicae ut sit litium; and (2) the hardship on the individual that he should be vexed twice for the same cause – nemo debet bis vexari pro una et eadem causa. A contrary doctrine would subject public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition on the part ofsuitors to the preservation of public tranquility and happiness.Res judicatahas two concepts. The first is bar by prior judgment under Rule 39, Section 47(b), and the second is conclusiveness of judgment under Rule 39, Section 47(c).These concepts differ as to the extent of the effect of a judgment or final order as follows:SEC. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:x x x x(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors-in-interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.Jurisprudence taught uswell that res judicata under the first concept or as a bar against the prosecution of a second action exists when there is identity of parties, subject matter and cause of action in the first and second actions. The judgment in the first action is final as to the claim or demand in controversy, including the parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose and of all matters that could have been adjudged in that case. In contrast, res judicata under the second concept or estoppel by judgment exists when there is identity of parties and subject matter but the causes of action are completely distinct. The first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved herein.29

Guided by the above discussion, Weobserve that the case at hand satisfies the essential requisites of res judicataunder the first concept. With respect to the first three (3) requisites,We find that the judgment sought to bar the instant case was a judgment on the merits by a court having jurisdiction over the subject matter and the parties, which properly obtained its finality. As the records reveal, the decision to dismiss petitioner’s earlier complaint for Partition ofReal Property and Damages30 was rendered by the RTC of Morong, Rizal, having jurisdiction over the subject matter and the parties, after a consideration of the evidence or stipulations submitted by the parties at the trial of the case. Saidjudgment was rendered based on the evidence and witnesses presented by the parties who were given ample opportunity to be heard as well as a valid judgment by the CA, in the separate legal redemption case upholding spouses Gabor’s right of legal redemption, which became final and executory upon the expiration of the period of appealing the same, the parties pursuing no further appeal.In the same way, petitioner’s complaint for partition likewise obtained finality when it was dismissed by this Court of last resort.1âwphi1 Petitioner contends that his Petition for Review on Certiorari was dismissed in a minute resolution31dated June 8, 1994 for failure to submit an affidavit of service, a sheer technicality, which is not a judgment on the merits. He failed to mention, however, that this Court further denied his motion for reconsideration with finality in its Resolution32 dated July 25, 1994 for having no compelling reason to warrantthe reconsideration sought. Thus, while this Court initially dismissed petitioner’s appeal on a mere technicality, it had sufficient opportunity to reverse its dismissal on motion for reconsideration if it found that any error or injustice

has been committed. It, however, did not and in fact evenaffirmed the dismissal by further denying petitioner’s motion for reconsideration. There is no question, therefore, that the dismissal of petitioner’s partition case is final and executory.Anent the fourth and final requisite, it is undisputed that there exists an identity of the parties and subjectmatter between the prior action for partition and the instant subsequent action for recovery of property, the same being filed by herein petitioner against the same spouses Gabor over the same portion of land in Tanay, Rizal. The fact that respondents Bank and Register of Deeds were only impleaded in the subsequent case is of no moment since absolute identity of parties is not required; mere substantial identity of parties, or a community of interests between the party in the first case and the party in the subsequent case, shall suffice.33

Petitioner, however, contends that the causes of action in both cases differ inasmuch as in the prior case, the cause of action is partition while in the case at hand, the cause of action is the recovery of property or its value.34

Petitioner is mistaken. In Philippine National Bank v. Gateway Property Holdings, Inc.,35 we have laid down certain guidelines in determining whether there is identity of causes of action in the following manner:The crux of the controversy in the instant case is whether there is an identity of causes of action inCivil Case Nos. TM-1022 and TM-1108.Section 2, Rule 2 of the Rules of Court defines a cause of action as "the act or omission by which a party violates a right of another." Section 3 of Rule 2 provides that "[a] party may not institute more than one suit for a single cause of action." Anent the act of splitting a single cause of action, Section 4 of Rule 2 explicitly states that "[i]f 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."Apropos, Carlet v. Court of Appealsstates that:As regards identity of causes ofaction, the test often used in determining whether causes of action are identical is to ascertain whether the same evidence which is necessary to sustain the second action would have been sufficient toauthorize a recovery in the first, even if the forms or nature of the two actions be different. If the same facts or evidence would sustain both actions, the two actions are considered the same within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not.36

Applying the above guideline to the instant case, while the two cases are captioned differently, petitioner cannot claim that there is no res judicata by simply changing the title of the action from "Complaint for Partition of Real Property and Damages" to a "Complaint for Recovery of Property or its Value." The records clearlyreveal that the evidence submitted by the parties in both cases are identical. Petitioner, in claiming that he had either the right to partition or to recover the subject property, submitted the same Deed of Assignment37 transferring in his favor the subject property as payment for his legal services as well as the same Agreement of Rescission of his earlier transfer of the subject property to Ms. Ramos. As previously mentioned, all of his claims in both actions are actually anchored on his claim of ownership over the one-third (1/3) portion of the subject property. If it be proven that he is not a co-owner of the subject portion, he will neither have the right to partition in the prior action nor will he have the right to recover the subject property or its value in the subsequentaction. Hence, the ultimate question which the trial court had to resolve in both cases was whether or not petitioner is a co-owner ofthe subject property.Contrary to petitioner’s allegation thatan action of partition is merely a possessory action which could not bar a subsequent action, the issue of ownership or co-ownership is necessarilyresolved before the trial court may issue an order of partition,as we have held in Reyes-De Leon v. Del Rosario,38 viz.:The issue of ownership or co-ownership, to be more precise, must first be resolved in order to effect a partition of properties. This should be done in the action for partition itself.As held in the case of Catapusan v. Court of Appeals:In actions for partition, the court cannot properly issue an order to divide the property, unless it first makes a determination as to the existence of co -ownership. The court must initially settle the issue of ownership, the first stage in an action for partition. Needless to state, an action for partition will not lie if the claimant has no rightful interest over the subject property.In fact, Section 1 of Rule 69 requires the party filing the action to state in his complaint the "nature and extent of his title" to the real estate. Until and unless the issue of ownership is definitely resolved, it would be premature to effect a partition of the properties. x x x.39

Considering, therefore, that the RTC of Morong had long before resolved the issue of co-ownership against petitioner in his complaint for Partition of Real Property, which was affirmed with finality by this Court, no less, petitioner’s subsequent claim for Recovery ofProperty or its Value must likewise necessarily fail. To reiterate, even if the forms or nature of actions in both cases are different, since the issues raised essentially involve the claim of ownership over the subjectproperty, there isidentity of the causes of action.40

It is, therefore, clear from the discussion above that since all of the elements of res judicata are present, the instant suit for Recovery of Property or its Value is barred by said principle. As we have consistently held, a udgment which has acquired finality becomes immutable and unalterable, hence, may no longer be modified in any respect except to correct clerical errors or mistakes, all the issues between the parties being deemed resolved and laid to rest.41 It is a fundamental principle in our judicial system that every litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the verdict.42

Exceptions to the immutability of final judgment are allowed only under the most extraordinary of circumstances.43Yet, when petitioner is given ample opportunity to be heard, unbridled access to the appellate comis, as well as unbiased judgments rendered after a consideration of evidence presented by the parties, as in the case at hand, We cannot recklessly reverse the findings of the courts below.In view of the foregoing, we find no compelling reason to disturb the findings of the RTC of Pasig City and CA. The RTC of Pasig City correctly dismissed the complaint on the grounds of improper venue, res judicata, and that the complaint states no cause of action. The CA likewise correctly dismissed petitioner's appeal for raising only issues purely of law.WHEREFORE, premises considered, the instant petition is DENIED. The Order dated August 18, 2006 of the Regional Trial Court of Pasig City in Civil Case No. 70750 and Decision dated May 9, 2008 of the Court of Appeals in CA-G.R. CV No. 88335 are hereby AFFIRMED.SO ORDERED.DIOSDADO M. PERALTA

ELSA D. MEDADO,Petitioner, - versus -  HEIRS OF THE LATE ANTONIOCONSING, as represented by DR.SOLEDAD CONSING,Respondents.

G.R. No. 186720 Present: CARPIO, J.,Chairperson,BRION,PEREZ,SERENO, andREYES, JJ. Promulgated: February 8, 2012 

x----------------------------------------------------------------------------------------x  DECISION REYES, J.:  This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, which seeks to annul and set asidethe following issuances of the Court of Appeals (CA) in the case docketed as CA-G.R. SP No. 02660, entitled Heirs of the Late Antonio Consing as represented by Dra. Soledad Consing v. Hon. Renato D. Muez, Presiding Executive Judge, Regional Trial Court, Branch 60, Cadiz City, Spouses Meritus Rey Medado, the Sheriff IV, Balbino B. Germinal, Regional Trial Court, Branch 60, Cadiz City and Land Bank of the Philippines:   (1) the Decision[1] dated September 26, 2008, reversing and setting aside the order[2] of the Regional Trial Court (RTC), Branch 60, Cadiz City, in Civil Case No. 797-C, an action for injunction; and (2) the Resolution[3] dated January 21, 2009, denying the motion for reconsideration of the decision dated September 26, 2008. The Factual Antecedents Sometime in 1996, petitioner Meritus Rey Medado and Elsa Medado (Spouses Medado) and the estate of the late Antonio Consing (Estate of Consing), as represented by Soledad Consing (Soledad), executed Deeds of Sale with Assumption of Mortgage for the former's acquisition from the latter of the property in Cadiz City identified as Hacienda Sol. Records indicate that the sale included the parcels of land covered by OCT No. P-498, TCT No. T-31275, TCT No. T-31276 and TCT No. T-31277. As part of the deal, Spouses Medado undertook to assume the estate's loan with Philippine National Bank (PNB). Subsequent to the sale, however, the Estate of Consing offered the subject lots to the government via the Department of Agrarian Reform's Voluntary Offer to Sell (VOS) program. On November 22, 2000, the Estate of Consing also instituted with the RTC, Branch 44 of Bacolod City an action for rescission and damages, docketed as Civil Case No. 00-11320 against Spouses Medado, PNB and the Register of Deeds of Cadiz City, due to the alleged failure of the spouses to meet the conditions in their agreement. In the meantime that Civil Case No. 00-11320 for rescission was pending, Land Bank of the Philippines (LBP) issued in favor of the Estate of Consing a certificate of deposit of cash and agrarian reform bonds, as compensation for the lots covered by the VOS. Spouses Medado feared that LBP would release the full proceeds thereof to the Estate of Consing. They claimed to be the ones entitled to the proceeds considering that they had bought the properties through the Deeds of Sale with Assumption of Mortgage which they and the Estate of Consing had earlier executed. The foregoing prompted Spouses Medado to institute Civil Case No. 797-C, an action for injunction with prayer for the issuance of a temporary restraining order, with the RTC, Branch 60 of Cadiz City. They asked that the following be issued by the trial court: (a) writ of prohibitory injunction to restrain LBP from releasing the remaining amount of the VOS proceeds of the lots offered by the Estate of Consing, and restraining the Estate of Consing from receiving these proceeds; and (b) writ of mandatory injunction to compel LBP to release the remaining amount of the VOS to the spouses. On March 9, 2007, the RTC of Cadiz City issued an Order[4] granting Spouses Medado's application for the issuance of writs of preliminary prohibitory and mandatory injunction. The order's dispositive portion reads: WHEREFORE, finding the application for the issuance of a writ of preliminary prohibitory injunction and preliminary mandatory injunction of the plaintiffs to be MERITORIOUS, the same is hereby GRANTED. 

Let therefore a Writ of Preliminary Prohibitory and Mandatory Injunction be issued against defendant Land Bank, its agents, lawyers and all other persons acting in its behalf to cease and desist from releasing the balance of the VOS Proceeds to defendant Heirs of the Late Antonio Consing as represented by Dra. Soledad Consing and restraining said defendant Consing, her agents, lawyers, successors-in-interest, and all other persons acting in its behalf from receiving the same and to maintain the STATUS QUO ANTE BELLUM while defendant Land Bank of the Philippines is hereby ordered to release and pay the whole of the remaining balance of the VOS Proceeds held by the said defendant to the plaintiffs after the posting of a bond by the plaintiffs in the amount of FIVE MILLION PESOS (P5,000,000.00) executed in favor of the defendants conditioned upon the payment to the said defendants by the plaintiffs [of] all damages which the former may sustain by reason of the issuance of the writ of preliminary prohibitory and mandatory injunction in case this Court should finally decide that the plaintiffs are not entitled thereto. Furnish copies of this Order to all counsels and parties. SO ORDERED.[5]

 Feeling aggrieved, the heirs of the late Antonio Consing (Consing) questioned the RTC's order via a petition for certiorari filed with the CA, against Hon. Renato D. Muez, Presiding Executive Judge, RTC, Branch 60 of Cadiz City, Spouses Medado, Sheriff IV Balbino B. Germinal of RTC, Branch 60 of Cadiz City and LBP. They sought, among other reliefs, the dismissal of the complaint for injunction for violation of the rules on litis pendentia and forum shopping. On the matter of the absence of a motion for reconsideration of the trial court's order before resorting to a petition for certiorari, the heirs explained that the implementation of the questioned writs through LBP's release of the VOS proceeds' balance to the sheriff on March 29, 2007, notwithstanding: (a) the pendency of motions for reconsideration and dissolution of the writs filed by the heirs, and (b) the fact that the writs were immediately implemented even if a hearing on the motions was already scheduled for March 30, 2007, prompted the heirs' withdrawal of their motions for being already moot and academic. The heirs argued that their case was within the exceptions to the general rule that a petition under Rule 65 will not lie unless a motion for reconsideration is first filed before the lower court. In their comment on the petition, Spouses Medado questioned, among other matters, the authority of Soledad to sign the petition's certification of non-forum shopping on behalf of her co-petitioners.    The Ruling of the CA  On September 26, 2008, the CA rendered the assailed decision,[6] the dispositive portion of which reads: WHEREFORE, the petition being impressed with merit is GRANTED. The assailed Order dated March 9, 2007 is NULLIFIED and SET ASIDE and the complaint in Civil Case No. 797-C DISMISSED. Private respondents are directed to return P3,743,825.88 to Land Bank of the Philippines to await a final ruling in Civil Case No. 00-1320. No costs. SO ORDERED.[7]

  The CA ruled that the RTC gravely abused its discretion in taking cognizance of Civil Case No. 797-C for injunction during the pendency of Civil Case No. 00-11320 for rescission and damages as this violates the rule against forum shopping. Spouses Medado's motion for reconsideration of the decision of September 26, 2008 was denied by the CA via its Resolution[8]dated January 21, 2009. Hence, this petition.  The Present Petition  This petition was instituted by petitioner Elsa Medado without naming her husband as co-petitioner, due to their alleged separationde facto.[9] It presents the following issues for this Court's determination:

I. Whether or not the CA correctly admitted the petition for certiorari filed before it, notwithstanding alleged deficiencies in its verification and certification against forum shopping; II. Whether or not the CA correctly admitted the petition for certiorari filed before it even if no motion for reconsideration of the RTCs Order dated March 9, 2007 was filed with the lower court; and III. Whether or not the CA correctly held that the rule against forum shopping was violated by the filing of the complaint forinjunction during the pendency of the action for rescission and damages. In their comment on the petition, the respondents also raise as an issue the failure of the petitioner to join her husband as a party to the petition, considering that the action affects conjugal property.  This Court's Ruling  After due study, this Court finds the petition bereft of merit.  

The requirements for verification and certification against forum shopping in the CA petition were substantially complied with, following settled jurisprudence.  Before us, the petitioner contended that the consolidated verification and certification against forum shopping of the petition filed with the CA was defective: first, for being signed only by Soledad, instead of by all the petitioners, and second, its jurat cites a mere community tax certificate of Soledad, instead of a government-issued identification card required under the 2004 Rules on Notarial Practice. The second ground was never raised by herein petitioner in her comment on the CA petition, thus, it cannot be validly raised by the petitioner at this stage.

As regards the first ground, records show that Soledad signed the verification and certification against forum shopping on behalf of her co-petitioners by virtue of a Special Power of Attorney[10] (SPA) attached to the petition filed with the CA. The SPA, signed by her co-heirs Ma. Josefa Consing Saguitguit, Ma. Carmela Consing Lopez, Ma. Lourdes Consing Gonzales and Mary Rose Consing Tuason, provides that their attorney-in-fact Soledad is authorized: To protect, sue, prosecute, defend and adopt whatever action necessary and proper relative and with respect to our right, interest and participation over said properties, particularly those described in previous titles under TCT No. T-498, TCT No. T-31275, TCT No. T-31276 and TCT No. T-31277 of the [R]egister of Deeds, Cadiz City, covering a total area of 73.6814 square meters, and declared in the name of said Antonio Consing and located in Brgy. Magsaysay, Cadiz City, Negros Occidental, the same parcels of land are the subject of judicial litigation before the [R]egional Trial [Court], Branch 44, Bacolod City, docketed as Civil [C]ase No. 11320, entitled Soledad T. Consing, for herself and as Administratix of the estate of Antonio Consing, plaintiffs, versus, Spouses Meritus Rey and Elsa Medado, et.al., defendants, and Regional Trial Court, Branch 60, Cadiz City and docketed as Civil Case No. 797-C, entitled, []Spouse[s] Meritus Rey Medado and Elsa Medado, plaintiffs, versus, Land Bank of the Philippines and heirs of the Late Antonio Consing as represented by Dra. Soledad Consing, defendants; pending in said court and which cases may at anytime be elevated to the Court of Appeals and/or Supreme Court as the circumstances so warrant;[11]

 As may be gleaned from the foregoing, the authority of Soledad includes the filing of an appeal before the CA, including the execution of a verification and certification against forum shopping therefor, being acts necessary to protect, sue, prosecute, defend and adopt whatever action necessary and proper in relation to their rights over the subject properties. In addition, the allegations and contentions embodied in the CA petition do not deviate from the claims already made by the heirs in Civil Case Nos. 00-11320 and 797-C, both specifically mentioned in the SPA. We emphasize that the verification requirement is simply intended to secure an assurance that the allegations in the pleading are true and correct, and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith.[12] We rule that there was no deficiency in the petition's verification and certification against forum shopping filed with the CA. In any case, we reiterate that where the petitioners are immediate relatives, who share a common interest in the property subject of the action, the fact that only one of the petitioners executed the verification or certification of forum shopping will not deter the court from proceeding with the action. In Heirs of Domingo Hernandez, Sr. v. Mingoa, Sr.,[13] we held: Even if only petitioner Domingo Hernandez, Jr. executed the Verification/Certification against forum-shopping, this will not deter us from proceeding with the judicial determination of the issues in this petition. As we ratiocinated in Heirs of Olarte v. Office of the President: The general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in a case and the signature of only one of them is insufficient. However, the Court has also stressed that the rules on forum shopping were designed to promote and facilitate the orderly administration of justice and thus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance may be availed of with respect to the contents of the certification. This is because the requirement of strict compliance with the provisions regarding the certification of non-forum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. Thus, under justifiable circumstances, the Court has relaxed the rule requiring the submission of such certification considering that although it is obligatory, it is not jurisdictional. In HLC Construction and Development Corporation v. Emily Homes Subdivision Homeowners Association, it was held that the signature of only one of the petitioners in the certification against forum shopping substantially complied with [the] rules because all the petitioners share a common interest and invoke a common cause of action or defense. The same leniency was applied by the Court in Cavile v. Heirs of Cavile, because the lone petitioner who executed the certification of non-forum shopping was a relative and co-owner of the other petitioners with whom he shares a common interest. x x x x x xHere, all the petitioners are immediate relatives who share a common interest in the land sought to be reconveyed and a common cause of action raising the same arguments in support thereof. There was sufficient basis, therefore, for Domingo Hernandez, Jr. to speak for and in behalf of his co-petitioners when he certified that they had not filed any action or claim in another court or tribunal involving the same issues. Thus, the Verification/Certification that Hernandez, Jr. executed constitutes substantial compliance under the Rules.[14] (citations omitted) Furthermore, we have consistently held that verification of a pleading is a formal, not a jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true and correct. Thus, the court may simply order the correction of unverified pleadings or act on them and waive strict compliance with the rules. It is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification; and when matters alleged in the petition have been made in good faith or are true and correct.[15] It was based on this principle that this Court had also allowed herein petitioner, via our Resolution[16] dated April 22, 2009, a chance to submit a verification that complied with Section 4, Rule 7 of the Rules of Court, as amended, instead of us dismissing the petition outright.

There are recognized exceptions permitting resort to a special civil action of certiorarieven without first filing a motion for reconsideration.  On the second issue, the CA did not err in accepting the petition for certiorari even if the motion for reconsideration of the RTC Order of March 9, 2007 was withdrawn by herein respondents before the RTC could act thereon. It is settled that the requirement on the filing of a motion for reconsideration prior to the institution of a petition for certiorari under Rule 65 of the Rules of Court admits of several exceptions, such as when the filing of a motion appears to be useless given the circumstances attending the action. Thus, we have repeatedly held: The general rule is that a motion for reconsideration is a condition sine qua non before a petition for certiorari may lie, its purpose being to grant an opportunity for the court a quo to correct any error attributed to it by re-examination of the legal and factual circumstances of the case. There are, however, recognized exceptions permitting a resort to the special civil action for certiorari without first filing a motion for reconsideration. In the case of Domdom v. Sandiganbayan, it was written: The rule is, however, circumscribed by well-defined exceptions, such as where the order is a patent nullity because the courta quo had no jurisdiction; where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; where there is an urgent necessity for the resolution of the question, and any further delay would prejudice the interests of the Government or of the petitioner, or the subject matter of the action is perishable; where, under the circumstances, a motion for reconsideration would be useless; where the petitioner was deprived of due process and there is extreme urgency of relief; where, in a criminal case, relief from an order of arrest is urgent and the grant of such relief by the trial court is improbable; where the proceedings in the lower court are a nullity for lack of due process; where the proceedings were ex parte or in which the petitioner had no opportunity to object; and where the issue raised is one purely of law or where public interest is involved.[17] (emphasis supplied, and citations and underscoring omitted)  As correctly held by the CA, a motion for reconsideration, or the resolution of the trial court thereon, had become useless given that the particular acts which the movants sought to prevent by the filing of the motion were already carried out. Significantly, the heirs of the late Consing had filed a motion for reconsideration of the RTC's order, but withdrew it only after the trial court had decided to implement the writs notwithstanding the pendency of the motion and just a day before the scheduled hearing on said motion. Forum-shopping exists when the elements of litis pendentia concur. On the third issue, there is forum shopping when the elements of litis pendentia are present, i.e., between actions pending before courts, there exist: (1) identity of parties, or at least such parties as represent the same interests in both actions, (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration; said requisites are also constitutive of the requisites for auter action pendant or lis pendens.[18] Applying the foregoing, there was clearly a violation of the rule against forum shopping when Spouses Medado instituted Civil Case No. 797-C for injunction notwithstanding the pendency of Civil Case No. 00-11320 for rescission of contract and damages. All elements of litis pendentia are present with the filing of the two cases. There is no dispute that there is identity of parties representing the same interests in the two actions, both involving the estate and heirs of the late Consing on one hand, and Spouses Medado on the other. The rescission case names Soledad T. Consing, for herself and as administratrix of the estate of Antonio Consing as plaintiff, with Spouses Meritus Rey and Elsa Medado, [PNB] and the Register of Deeds of Cadiz City as respondents.The injunction case, on the other hand, was instituted by Spouses Medado, against (LBP) and the Heirs of the Late Antonio Consing, as represented by Dra. Soledad Consing. The primary litigants in the two action, and their interests, are the same.

The two other elements are likewise satisfied. There is an identity of rights asserted and reliefs prayed for in the two cases, with the reliefs being founded on the same set of facts. In both cases, the parties claim their supposed right as owners of the subject properties. They all anchor their claim of ownership on the deeds of absolute sale which they had executed, and the law applicable thereto. They assert their respective rights, with Spouses Medado as buyers and the heirs as sellers, based on the same set of facts that involve the deeds of sale's contents and their validity. Both actions necessarily involve a ruling on the validity of the same contract as against the same parties. Thus, the identity of the two cases is such as would render the decision in the rescission case res judicata in the injunction case, and vice versa. It does not even matter that one action is for the enforcement of the parties' agreements, while the other action is for the rescission thereof. In the similar case of Victronics Computers, Inc. v. RTC, Branch 63, Makati,[19] we discussed: Civil Case No. 91-2069 actually involves an action for specific performance; it thus upholds the contract and assumes its validity. Civil Case No. 91-2192, on the other hand, is for the nullification of the contract on the grounds of fraud and vitiated consent. While ostensibly the cause of action in one is opposite to that in the other, in the final analysis, what is being determined is the validity of the contract. x x x Thus, the identity of rights asserted cannot be disputed. Howsoever viewed, it is beyond cavil that regardless of the decision that would be promulgated in Civil Case No. 91-2069, the same would constitute res judicata on Civil Case No. 91-2192 and vice versa.[20] (emphasis supplied) This was further explained in Casil v. CA,[21] where we ruled: The Court of Appeals held that there can be no res adjudicata because there is no identity of causes of action between the two cases. We do not agree. In the two cases, both petitioner and private respondent brought to fore the validity of the agreement dated May 4, 1994. Private respondent raised this point as an affirmative defense in her answer in the First Case. She brought it up again in her complaint in the Second Case. A single issue cannot be litigated in more than one forum. As held in Mendiola vs. Court of Appeals: 

The similarity between the two causes of action is only too glaring. The test of identity of causes of action lies not in the form of an action but on whether the same evidence would support and establish the former and the present causes of action. The difference of actions in the aforesaid cases is of no moment. In Civil Case No. 58713, the action is to enjoin PNB from foreclosing petitioner's properties, while in Civil Case No. 60012, the action is one to annul the auction sale over the foreclosed properties of petitioner based on the same grounds. Notwithstanding a difference in the forms of the two actions, the doctrine of res judicata still applies considering that the parties were litigating for the same thing, i.e. lands covered by TCT No. 27307, and more importantly, the same contentions and evidence as advanced by herein petitioner in this case were in fact used to support the former cause of action.[22]

  The CA was then correct in ordering the dismissal of the complaint in Civil Case No. 797-C for violation of the rule against forum shopping. The issue on the validity of the subject deeds of absolute sale can best be addressed in the action for rescission, as against the case for injunction filed by Spouses Medado. In a line of cases, we have set the relevant factors that courts must consider when they have to determine which case should be dismissed, given the pendency of two actions, to wit: (1) the date of filing, with preference generally given to the first action filed to be retained; (2) whether the action sought to be dismissed was filed merely to preempt the latter action or to anticipate its filing and lay the basis for its dismissal; and  (3) whether the action is the appropriate vehicle for litigating the issues between the parties.[23]

 We emphasize that the rules on forum shopping are meant to prevent such eventualities as conflicting final decisions. [24] This Court has consistently held that the costly consequence of forum shopping should remind the parties to ever be mindful against abusing court processes.[25] In addition, the principle of res judicata requires that stability be accorded to judgments. Controversies once decided on the merits shall remain in repose for there should be an end to litigation which, without the doctrine, would be endless. [26]

 Given the foregoing grounds already warranting the denial of this petition, we deem it no longer necessary to take any action or to now rule on the issue of the non-joinder of the petitioner's husband in the petition. WHEREFORE, premises considered, the instant petition for review on certiorari is hereby DENIED. Accordingly, the Court of Appeals Decision dated September 26, 2008, which reversed and set aside the order of the Regional Trial Court, Branch 60, Cadiz City, dated March 09, 2007, is perforce AFFIRMED. SO ORDERED

G.R. No. 196750, March 11, 2015MA. ELENA R. DIVINAGRACIA, AS ADMINISTRATRIX OF THE ESTATE OF THE LATE SANTIAGO C. DIVINAGRACIA, Petitioner, v. CORONACION PARILLA, CELESTIAL NOBLEZA, CECILIA LELINA, CELEDONIO NOBLEZA, AND MAUDE NOBLEZA, Respondent.D E C I S I O NPERLAS-BERNABE, J.:Assailed in this petition for review on certiorari1 are the Decision2 dated March 26, 2009 and the Resolution3 dated April 6, 2011 of the Court of Appeals (CA) in CA-G.R. CV. No. 80167, which set aside the Decision 4 dated November 29, 2002 and the Order5 dated April 4, 2003 of the Regional Trial Court of Iloilo City, Branch 31 (RTC) in Civil Case No. 19003 and, consequently, dismissed Santiago C. Divinagracia’s (Santiago) complaint for judicial partition.The Facts

Conrado Nobleza, Sr. (Conrado, Sr.) owned a 313-square meter parcel of land located at Cor. Fuentes-Delgado Streets, Iloilo City denominated as Lot 133-B-1-A and covered by Transfer Certificate of Title (TCT) No. T-12255 (subject land). 6 During his lifetime, he contracted two marriages: (a) the first was with Lolita Palermo with whom he had two (2) children, namely, Cresencio and Conrado, Jr.; and (b) the second was with Eusela Niangar with whom he had seven (7) children, namely, Mateo, Sr., Coronacion, Cecilia, Celestial, Celedonio, Ceruleo,7 and Cebeleo, Sr. Conrado, Sr. also begot three (3) illegitimate children, namely, Eduardo, Rogelio, and Ricardo.8Mateo, Sr. pre-deceased Conrado, Sr. and was survived by his children Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord. Cebeleo, Sr. also pre-deceased his father and was survived by his wife, Maude, and children Cebeleo, Jr. and Neobel.9

According to Santiago, upon Conrado, Sr.’s death, Cresencio, Conrado, Jr., Felcon (in representation of his father, Mateo, Sr., and his siblings), Coronacion, Celestial, Cecilia, Rogelio, Eduardo, and Ricardo sold their respective interests over the subject land to Santiago for a consideration of P447,695.66, as embodied in a Deed of Extrajudicial Settlement or Adjudication with Deed of Sale 10dated November 22, 1989 (subject document),11 which was, however, not signed by the other heirs who did not sell their respective shares, namely, Ceruleo, Celedonio, and Maude (in representation of his husband, Cebeleo, Sr., and their children).12 On December 22, 1989, the same parties executed a Supplemental Contract13 whereby the vendors-heirs and Santiago agreed that out of the aforesaid consideration, only P109,807.93 will be paid up front, and that Santiago will only pay the remaining balance of P337,887.73 upon the partition of the subject land.14 However, Santiago was not able to have TCT No. T-12255 cancelled and the subject document registered because of Ceruleo, Celedonio, and Maude’s refusal to surrender the said title. This fact, coupled with Ceruleo, Celedonio, and Maude’s failure to partition the subject land, prompted Santiago to file a Complaint15 dated January 3, 1990 for judicial partition and for receivership.16

For their part, Ceruleo, Celedonio, and Maude maintained that Santiago had no legal right to file an action for judicial partition nor compel them to surrender TCT No. T-12255 because, inter alia: (a) Santiago did not pay the full purchase price of the shares sold to him; and (b) the subject land is a conjugal asset of Conrado Sr. and Eusela Niangar and, thus, only their legitimate issues may validly inherit the same.17

The RTC Ruling

In a Decision18 dated November 29, 2002, the RTC ordered, among others, the partition of the subject land between Santiago on the one hand, and Ceruleo, Celedonio, Maude, and the heirs of Mateo, Sr. (i.e., Felcon, et al.) on the other hand and, consequently, the cancellation of TCT No. T-12255 and the issuance of a new owner’s duplicate certificate in favor of Santiago and the group of Ceruleo, Celedonio, Maude, and the heirs of Mateo, Sr.19 The RTC found that through the subject document, Santiago became a co-owner of the subject land and, as such, has the right to demand the partition of the same. However, the RTC held that 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.20

On reconsideration21 of Ceruleo and herein respondents Celedonio, Maude, Celestial, Coronacion, and Cecilia (respondents), the RTC issued an Order22 dated April 4, 2003 further ordering Santiago to comply with the provisions of the Supplemental Contract dated December 22, 1989 by paying the amount of P337,887.73 upon the partition of the subject land.

Dissatisfied, respondents appealed23 to the CA. Records are bereft of any showing that the other heirs made similar appeals thereto.The CA Ruling

In a Decision24 dated March 26, 2009, the CA set aside the RTC Rulings and, consequently, dismissed Santiago’s complaint for judicial partition.25 It held that Felcon’s siblings, as well as Maude’s children, are indispensable parties to the judicial partition of the subject land and, thus, their non-inclusion as defendants in Santiago’s complaint would necessarily result in its dismissal.26

Aggrieved, the heirs of Santiago27 moved for reconsideration28 which was, however, denied in a Resolution29 dated April 6, 2011, hence, this petition instituted by herein petitioner, Ma. Elena R. Divinagracia, as administratrix of Santiago’s estate.The Issues Before the Court

The issues for the Court’s resolution are whether or not the CA correctly: (a) ruled that Felcon’s siblings and Cebeleo, Sr. and Maude’s children are indispensable parties to Santiago’s complaint for judicial partition; and (b) dismissed Santiago’s complaint for his failure to implead said omitted heirs.The Court’s Ruling

The petition is partly meritorious.

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. 30 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.31

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. (Emphasis and underscoring supplied)

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.32

In the instant case, records reveal that Conrado, Sr. has the following heirs, legitimate and illegitimate, who are entitled to a pro-indiviso share in the subject land, namely: Conrado, Jr., Cresencio, Mateo, Sr., Coronacion, Cecilia, Celestial, Celedonio, Ceruleo, Cebeleo, Sr., Eduardo, Rogelio, and Ricardo. However, both Mateo, Sr. and Cebeleo, Sr. pre-deceased Conrado, Sr. and, thus, pursuant to the rules on representation under the Civil Code,33 their respective interests shall be represented by their children, namely: (a) for Mateo, Sr.: Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord; and (b) for Cebeleo, Sr.: Cebeleo, Jr. and Neobel.34

The aforementioned heirs – whether in their own capacity or in representation of their direct ascendant – have vested rights over the subject land and, as such, should be impleaded as indispensable parties in an action for partition thereof. 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 97235 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.

Santiago’s contention that he had already bought the interests of the majority of the heirs and, thus, they should no longer be regarded as indispensable parties deserves no merit. As correctly noted by the CA, in actions for partition, the court cannot properly issue an order to divide the property, unless it first makes a determination as to the existence of co-ownership. The court must initially settle the issue of ownership, which is the first stage in an action for partition. 36 Indubitably, therefore, until and unless this issue of co-ownership is definitely and finally resolved, it would be premature to effect a partition of the disputed properties. 37

In this case, while it is conceded that Santiago bought the interests of majority of the heirs of Conrado, Sr. as evidenced by the subject document, as a vendee, he merely steps into the shoes of the vendors-heirs. Since his interest over the subject land is merely derived from that of the vendors-heirs, the latter should first be determined as co-owners thereof, thus necessitating the joinder of all those who have vested interests in such land, i.e., the aforesaid heirs of Conrado, Sr., in Santiago’s complaint.

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.38 Therefore, the CA correctly set aside the November 29, 2002 Decision and the April 4, 2003 Order of the RTC.

However, the CA erred in ordering the dismissal of the complaint on account of Santiago’s failure to implead all the indispensable parties in his complaint. In Heirs of Mesina v. Heirs of Fian, Sr.,39 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, to wit:The non-joinder of indispensable parties is not a ground for the dismissal of an action . At any 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.The remedy is to implead the non-party claimed to be indispensable. x x x40(Underscoring supplied; emphases in the original)

In view of the foregoing, the correct course of action in the instant case is to order its remand to the RTC for the inclusion of those indispensable parties who were not impleaded and for the disposition of the case on the merits. 41

WHEREFORE, the petition is PARTLY GRANTED. Accordingly, the Decision dated March 26, 2009 and the Resolution dated April 6, 2011 of the Court of Appeals in CA-G.R. CV. No. 80167, setting aside the Decision dated November 29, 2002 and the Order dated April 4, 2003 of the Regional Trial Court of Iloilo City, Branch 31 in Civil Case No. 19003, are hereby AFFIRMED with MODIFICATION REMANDING the instant case to the court a quo, which is hereby DIRECTED to implead all indispensable parties and, thereafter, PROCEED with the resolution of the case on the merits WITH DISPATCH.

SO ORDERED.

G.R. No. 176598               July 9, 2014PETRONIO CLIDORO, DIONISIO CLIDORO, LOLITA CLIDORO, CALIXTO CARD ANO, JR., LOURDES CLIDORO-LARIN, MATEO CLIDORO and MARLIZA CLIDORO-DE UNA, Petitioners, vs.AUGUSTO JALMANZAR, GREGORIO CLIDORO, JR., SENECA CLIDORO-CIOCSON, MONSERAT CLIDORO-QUIDAY, CELESTIAL CLIDORO-BINASA, APOLLO CLIDORO, ROSALIE CLIDORO-CATOLICO, SOPHIE CLIDORO, and JOSE CLIDORO, JR., Respondents.D E C I S I O NPERALTA, J.:This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that the Decision 1of the Court of Appeals (CA), dated October 17, 2006, and its Resolution2 dated February 6, 2007, denying herein petitioner's motion for reconsideration of the Decision, be reversed and set aside.The antecedent facts, as set forth in the CA Decision, are undisputed, to wit:The instant appeal stemmed from a complaint, docketed as Civil Case No. T-2275 for revival of judgment filed by Rizalina Clidoro, et al. against Onofre Clidoro, et al., praying that the Decisiondated November 13, 1995 of the Court of Appeals (CA) in CA-G.R. CV No. 19831, which affirmed with modification the RTC Decision dated March 10, 1988 in Civil Case No. T-98 for partition, berevived and that the corresponding writ of execution be issued. The dispositive portion ofthe CA Decision reads:The estate of the late Mateo Clidoro, excepting that described in paragraph (i) of the Complaint, is hereby ordered partitioned in the following manner:1. One-fifth portion to the Plaintiffs-Appellees, by right of representation to the hereditary share of Gregorio Clidoro, Sr.;2. One-fifth portion to Defendant-Appellant Antonio Clidoro or his legal heirs;3. One-fifth portion to Appellant Josaphat Clidoro;4. One-fifth portion to Appellant Aida Clidoro; 5. One-tenth portion to Gregoria Clidoro, as her legitime in the hereditary share of Onofre Clidoro; and6. One-tenth portion to Catalino Morate, as successor-ininterest to the legitime of Consorcia Clidoro.SO ORDERED.On September 3, 2003, defendants-appellees except Gregoria Clidoro-Palanca, moved to dismiss the said complaint on the following grounds: "1.) The petition, not being brought up against the real partiesin-interest, is dismissible for lack of cause of action; 2.) The substitution of the parties defendant is improper and is not in accordance with the rules; 3.) Even if the decision is ordered revived, the same cannot be executed since the legal requirements of Rule 69, Section 3 of the 1997 Rules of Civil Procedure has not been complied with; and 4.) The Judgment of the Honorable Court ordering partition is merely interlocutory as it leaves something more to be done to complete the disposition of the case."After the filing of plaintiffs-appellants' Comment/Opposition to the Motion to Dismiss, defendants-appellees' Reply, plaintiffs-appellants' Rejoinder and defendants-interestedparties' Sur-Rejoinder, the RTC issued the assailed Order dated December 8, 2003 dismissing the instant complaint for lack of cause of action, the pertinent portion of which reads:" x x xThe complaint shows that most of the parties-plaintiffs, partiesdefendants and interested parties are already deceased and have no more natural or material existence. This is contrary to the provision of the Rules (Sec. 1, Rule 3, 1997 Rules of Civil Procedure). They could no longer be considered as the real parties-in-interest. Besides, pursuant to Sec. 3, Rule 3 (1997 Rules of Civil Procedure), where the action is allowed to be prosecuted or defended by a representative or someone acting in fiduciary capacity, the beneficiary shall be included in the title of the case. In the instant case the beneficiaries are already deceased persons. Also, the Complaint states thatthey were the original parties in Civil Case No. T-98 for Partition, but this is not so (paragraph 2). Some of the parties are actually not parties to the original case, but representing the original parties who are indicated as deceased.From the foregoing, the Court finds the instant complaint to be flawed in form and substance. The suit is not brought by the real parties-ininterest, thus a motion to dismiss on the ground that the complaint states no cause of action is proper (Section 1(g), Rule 16).WHEREFORE, the instant complaint is ordered DISMISSED for lack of cause of action.SO ORDERED."Plaintiffs-appellants moved for reconsideration of the foregoing Order with prayer to admit the attached Amended Complaint impleading the additional heirs of the interested party Josaphat Clidoro and the original plaintiffs Rizalina Clidoro-Jalmanzar, Cleneo Clidoro and Aristoteles Clidoro. The same was,however, denied in the second assailed order. x x x3

Respondents then appealed to the CA, and on October 17, 2006, the CA promulgated its Decision reversing and setting aside the Orders of the RTC, and remanding the case to the RTC for further proceedings. Petitioners’ motion for reconsideration of the Decision was denied per Resolution dated February 6, 2007.Hence, the present petition where the following issues are raised:A. THE HONORABLE COURT OF APPEALS FAILED TO CONSIDER THAT THERE WAS NO PROPER SUBSTITUTION OF PARTIES IN THE INSTANT ACTION FOR REVIVAL OF JUDGMENT.B. THE HONORABLE COURT OF APPEALS ERRED IN CONSIDERING THE RESPONDENTS AS WELL AS THE PETITIONERS AS THE REAL PARTIES-IN-INTEREST.C. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT AMENDMENT TO PLEADINGS WAS PROPERLY MADE AND IS APPLICABLE TO THE INSTANT ACTION.D. THE HONORABLE COURT OFAPPEALS ERRED IN RULING THAT THERE WAS MERE MISJOINDER OF PARTIES IN THE INSTANT ACTION.4

The petition deserves scant consideration.Reduced to its essence, the pivotal issue here is whether the complaint for revival of judgment may be dismissed for lack of cause of action as it was not brought by or against the real parties-in-interest.First of all, the Court emphasizes that lack of cause of action is not enumerated under Rule 16 of the Rules of Court as one of the grounds for the dismissal of a complaint. As explained in Vitangcol v. New Vista Properties, Inc.,5 to wit:

Lack of cause of action is, however, not a ground for a dismissal of the complaint through a motion to dismiss under Rule 16 of the Rules of Court, for the determination of a lack of cause of action can only be made during and/or after trial. What is dismissible via that mode is failure of the complaint to state a cause of action. Sec. 1(g) of Rule 16 of the Rules of Court provides that a motion may be made on the ground "that the pleading asserting the claim states no cause of action."The rule is that in a motion to dismiss, a defendant hypothetically admits the truth ofthe material allegations of the ultimate facts contained in the plaintiff's complaint. When a motion to dismiss is grounded on the failure tostate a cause of action, a ruling thereon should, as rule, be based only on the facts alleged in the complaint.x x xx x x xIn a motion to dismiss for failureto state a cause of action, the focus is on the sufficiency, not the veracity, of the material allegations. The test of sufficiency of facts alleged in the complaint constituting a cause of action lies on whether or not the court, admitting the facts alleged, could render a valid verdict in accordance with the prayer of the complaint.x x x6

Again, in Manaloto v. Veloso III,7 the Court reiterated as follows:When the ground for dismissal is that the complaint states no cause of action, such fact can be determined only from the facts alleged in the complaint and fromno other, and the court cannot consider other matters aliunde. The test, therefore, is whether, assuming the allegations of fact in the complaint to be true, a valid judgment could be rendered in accordance withthe prayer stated therein.8

In this case, it was alleged in the complaint for revival of judgment that the parties therein were also the parties inthe action for partition. Applying the foregoing test of hypothetically admitting this allegation in the complaint, and not looking into the veracity of the same, it would then appear that the complaint sufficiently stated a cause of action as the plaintiffs in the complaint for revival of judgment (hereinafter respondents), as the prevailing parties in the action for partition, had a right to seek enforcement of the decision in the partition case.It should be borne in mind that the action for revival of judgment is a totally separate and distinct case from the original Civil Case No. T-98 for Partition. As explained in Saligumba v. Palanog,9 to wit:An action for revival of judgment is no more than a procedural means of securing the execution of a previous judgment which has become dormant after the passage of five years without it being executed upon motion of the prevailing party. It isnot intended to re-open any issue affecting the merits of the judgment debtor's case nor the propriety or correctness of the first judgment. An action for revival of judgment is a new and independent action, different and distinct fromeither the recovery of property case or the reconstitution case [in this case, the original action for partition], wherein the cause of action is the decision itself and not the merits of the action upon which the judgment sought to be enforced is rendered. x x x10

With the foregoing in mind, it is understandable that there would be instances where the parties in the original case and in the subsequent action for revival of judgment would not be exactly the same. The mere fact that the names appearing as parties in the the complaint for revival of judgment are different from the names of the parties in the original case would not necessarily mean that theyare not the real parties-in-interest. What is important is that, as provided in Section 1, Rule 3 of the Rules of Court, they are "the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit." Definitely, as the prevailing parties in the previous case for partition, the plaintiffs in the case for revival of judgment would be benefited by the enforcement of the decision in the partition case.Moreover, it would appear that petitioners are mistaken in alleging that respondents are not the real parties-in-interest. The complaint for revival of judgment impleaded the following parties:[[reference - http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/july2014/176598.pdf]]

PLAINTIFFS DEFENDANTS

1. Rizalina Clidoro (deceased)rep. herein by Augusto Jalmanzar

1. Onofre Clidoro (deceased) rep.by Gregoria Clidoro-Palanca(daughter)

2. Gregorio Clidoro, Jr. 2. Antonio Clidoro (deceased)herein rep. by Petronio Clidoro,

3. Urbana Costales (deceased) 3. Carmen Clidoro-Cardano, rep.by Calixto Cardano, Jr. (husband)

4. Cleneo Clidoro (deceased) 4. Dionisio Clidoro

5. Seneca Clidoro Ciocson 5. Lourdes Clidoro-Lari

6. Monserrat Clidoro 6. Lolita Clidoro

7. Celestial Clidoro 7. Mateo Clidoro

8. Aristoteles Clidoro (deceased) INTERESTED PARTIES

9. Apollo Clidoro 1. AidaClidoro (deceased)

10. Rosalie Clidoro 2. Josaphat Clidoro (deceased),herein rep. by Marliza Clidoro-DeUna

11. Sophie Clidoro  

12. Jose Clidoro, Jr.  On the other hand, the parties to the original case for partition are named as follows:[[reference - http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/july2014/176598.pdf]]

PLAINTIFFS DEFENDANTS

1. Rizalina Clidoro 1. Onofre Clidoro

2. Gregorio Clidoro, Jr. 2. Antonio Clidoro

3. Sofia Cerdena INTERESTED PARTIES

4. Urbana Costales 1. Aida Clidoro

5. Cleneo Seneca 2. Josaphat Clidoro

6. Monserrat Clidoro  

7. Celestial Clidoro  

8. Aristoteles Clidoro  

9. Apollo Clidoro  

10. Rosalie Clidoro  A comparison of the foregoing would show that almost all of the plaintiffs in the original case for partition, in whose favor the court adjudged certain shares in the estate of deceased Mateo Clidoro, are also the plaintiffs in the action for revival of judgment. Meanwhile, the defendants impleaded in the action for revival are allegedly the representatives of the defendants in the original case, and this appears to hold water, as Gregoria ClidoroPalanca, named as the representative of defendant Onofre Clidoro in the complaint for revival of judgment, was also mentioned and awarded a portion of the estate in the judgment in the original partition case. In fact, the trial court itself stated in its Order11 of dismissal dated December 8, 2003, that "[s]ome of the parties are actually not parties to the original case, but representing the original parties who are indicated as deceased."In Basbas v. Sayson,12 the Court pointed out that even just one of the co-owners, by himself alone, can bring an action for the recovery of the coowned property, even through an action for revival of judgment, because the enforcement of the judgment would result in such recovery of property. Thus, as in Basbas, it is not necessary in this case that all of the parties, in whose favor the case for partition was adjudged, be made plaintiffs to the action for revival of judgment. Any which one of said prevailing parties, who had an interest in the enforcement of the decision, may file the complaint for revival of judgment, even just by himself.Verily, the trial court erred in dismissing the complaint for revival of judgment on the ground of lack of, or failure to state a cause of action. The allegations in the complaint, regarding the parties' interest in having the decision in the partition case executed or implemented, sufficiently state a cause of action. The question of whether respondents were the real partiesin-interest who had the right to seek execution of the final and executory judgment in the partition case should have been threshed out in a full-blown trial.WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals, dated October 17, 2006, and its Resolution dated February 6, 2007 in CA-G.R. No. 82209, are hereby AFFIRMED in toto.SO ORDERED.DIOSDADO M. PERALTAAssociate Justic

UNITED PULP AND PAPER CO., INC.,Petitioner,    - versus    ACROPOLIS CENTRAL GUARANTY CORPORATION,Respondent.

  G.R. No. 171750 Present: CORONA,* CJ,VELASCO, JR., J., Chairperson,ABAD,MENDOZA, andPERLAS-BERNABE, JJ.   Promulgated: January 25, 2012

 x --------------------------------------------------------------------------------------- x D E C I S I O N  MENDOZA, J.: This is a petition for review under Rule 45 praying for the annulment of the November 17, 2005 Decision[1] and the March 2, 2006 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 89135 entitled Acropolis Central Guaranty Corporation (formerly known as the Philippine Pryce Assurance Corp.) v. Hon. Oscar B. Pimentel, as Presiding Judge, RTC of Makati City, Branch 148 (RTC), and United Pulp and Paper Co., Inc. The Facts On May 14, 2002, United Pulp and Paper Co., Inc. (UPPC) filed a civil case for collection of the amount of P42,844,353.14 against Unibox Packaging Corporation (Unibox) and Vicente Ortega (Ortega) before the Regional Trial Court of Makati, Branch 148 (RTC).[3] UPPC also prayed for a Writ of Preliminary Attachment against the properties of Unibox and Ortega for the reason that the latter were on the verge of insolvency and were transferring assets in fraud of creditors.[4] On August 29, 2002, the RTC issued the Writ of Attachment[5] after UPPC posted a bond in the same amount of its claim. By virtue of the said writ, several properties and assets of Unibox and Ortega were attached.[6]

 On October 10, 2002, Unibox and Ortega filed their Motion for the Discharge of Attachment,[7] praying that they be allowed to file a counter-bond in the amount of P42,844,353.14 and that the writ of preliminary attachment be discharged after the filing of such bond. Although this was opposed by UPPC, the RTC, in its Order dated October 25, 2002, granted the said motion for the discharge of the writ of attachment subject to the condition that Unibox and Ortega file a counter-bond.[8] Thus, on November 21, 2002, respondent Acropolis Central Guaranty Corporation (Acropolis) issued the Defendants Bond for Dissolution of Attachment[9] in the amount of P42,844,353.14 in favor of Unibox. Not satisfied with the counter-bond issued by Acropolis, UPPC filed its Manifestation and Motion to Discharge the Counter-Bond[10] dated November 27, 2002, claiming that Acropolis was among those insurance companies whose licenses were set to be cancelled due to their failure to put up the minimum amount of capitalization required by law. For that reason, UPPC prayed for the discharge of the counter-bond and the reinstatement of the attachment. In its December 10, 2002 Order,[11] the RTC denied UPPCs Motion to Discharge Counter-Bond and, instead, approved and admitted the counter-bond posted by Acropolis. Accordingly, it ordered the sheriff to cause the lifting of the attachment on the properties of Unibox and Ortega. On September 29, 2003, Unibox, Ortega and UPPC executed a compromise agreement,[12] wherein Unibox and Ortega acknowledged their obligation to UPPC in the amount of P35,089,544.00 as of August 31, 2003, inclusive of the principal and the accrued interest, and bound themselves to pay the said amount in accordance with a schedule of payments agreed upon by the parties. Consequently, the RTC promulgated its Judgment[13] dated October 2, 2003 approving the compromise agreement. For failure of Unibox and Ortega to pay the required amounts for the months of May and June 2004 despite demand by UPPC, the latter filed its Motion for Execution[14] to satisfy the remaining unpaid balance. In the July 30, 2004 Order,[15] the RTC acted favorably on the said motion and, on August 4, 2004, it issued the requested Writ of Execution.[16]

 The sheriff then proceeded to enforce the Writ of Execution. It was discovered, however, that Unibox had already ceased its business operation and all of its assets had been foreclosed by its creditor bank. Moreover, the responses of the selected banks which were served with notices of garnishment indicated that Unibox and Ortega no longer had funds available for garnishment. The sheriff also proceeded to the residence of Ortega to serve the writ but he was denied entry to the premises. Despite his efforts, the sheriff reported in his November 4, 2008 Partial Return[17] that there was no satisfaction of the remaining unpaid balance by Unibox and Ortega. On the basis of the said return, UPPC filed its Motion to Order Surety to Pay Amount of Counter-Bond[18] directed at Acropolis. On November 30, 2004, the RTC issued its Order[19] granting the motion and ordering Acropolis to comply with the terms of its counter-bond and pay UPPC the unpaid balance of the judgment in the amount of P27,048,568.78 with interest of 12% per annum from default. Thereafter, on December 13, 2004, Acropolis filed its Manifestation and Very Urgent Motion for Reconsideration,[20]arguing that it could not be made to pay the amount of the counter-bond because it did not receive a demand for payment from UPPC. Furthermore,

it reasoned that its obligation had been discharged by virtue of the novation of its obligation pursuant to the compromise agreement executed by UPPC, Unibox and Ortega. The motion, which was set for hearing on December 17, 2004, was received by the RTC and UPPC only on December 20, 2004.[21] In the Order dated February 22, 2005, the RTC denied the motion for reconsideration for lack of merit and for having been filed three days after the date set for the hearing on the said motion.[22]

 Aggrieved, Acropolis filed a petition for certiorari before the CA with a prayer for the issuance of a Temporary Restraining Order and Writ of Preliminary Injunction.[23] On November 17, 2005, the CA rendered its Decision[24] granting the petition, reversing the February 22, 2005 Order of the RTC, and absolving and relieving Acropolis of its liability to honor and pay the amount of its counter-attachment bond. In arriving at said disposition, the CA stated that, firstly, Acropolis was able to comply with the three-day notice rule because the motion it filed was sent by registered mail on December 13, 2004, four days prior to the hearing set for December 17, 2004;[25] secondly, UPPC failed to comply with the following requirements for recovery of a judgment creditor from the surety on the counter-bond in accordance with Section 17, Rule 57 of the Rules of Court, to wit: (1) demand made by creditor on the surety, (2) notice to surety and (3) summary hearing as to his liability for the judgment under the counter-bond;[26] and, thirdly, the failure of UPPC to include Acropolis in the compromise agreement was fatal to its case.[27]

 UPPC then filed a motion for reconsideration but it was denied by the CA in its Resolution dated March 1, 2006.[28]

 Hence, this petition.  The Issues For the allowance of its petition, UPPC raises the following GROUNDSI.The Court of Appeals erred in not holding respondent liable on its counter-attachment bond which it posted before the trial court inasmuch as: A. The requisites for recovering upon the respondent-surety were clearly complied with by petitioner and the trial court, inasmuch as prior demand and notice in writing was made upon respondent, by personal service, of petitioners motion to order respondent surety to pay the amount of its counter-attachment bond, and a hearing thereon was held for the purpose of determining the liability of the respondent-surety.B. The terms of respondents counter-attachment bond are clear, and unequivocally provide that respondent as surety shall jointly and solidarily bind itself with defendants to secure and pay any judgment that petitioner may recover in the action. Hence, such being the terms of the bond, in accordance with fair insurance practices, respondent cannot, and should not be allowed to, evade its liability to pay on its counter-attachment bond posted by it before the trial court. II.The Court of Appeals erred in holding that the trial court gravely abused its discretion in denying respondents manifestation and motion for reconsideration considering that the said motion failed to comply with the three (3)-day notice rule under Section 4, Rule 15 of the Rules of Court, and that it had lacked substantial merit to warrant a reversal of the trial courts previous order.[29]

 Simply put, the issues to be dealt with in this case are as follows: (1)       Whether UPPC failed to make the required demand and notice upon Acropolis; and (2)       Whether the execution of the compromise agreement between UPPC and Unibox and Ortega was tantamount to a novation which had the effect of releasing Acropolis from its obligation under the counter-attachment bond. The Courts Ruling UPPC complied with the twin requirements of notice and demand On the recovery upon the counter-bond, the Court finds merit in the arguments of the petitioner.UPPC argues that it complied with the requirement of demanding payment from Acropolis by notifying it, in writing and by personal service, of the hearing held on UPPCs Motion to Order Respondent-Surety to Pay the Bond.[30] Moreover, it points out that the terms of the counter-attachment bond are clear in that Acropolis, as surety, shall jointly and solidarily bind itself with Unibox and Ortega to secure the payment of any judgment that UPPC may recover in the action.[31]

 Section 17, Rule 57 of the Rules of Court sets forth the procedure for the recovery from a surety on a counter-bond: Sec. 17. Recovery upon the counter-bond. When the judgment has become executory, the surety or sureties on any counter-bond given pursuant to the provisions of this Rule to secure the payment of the judgment shall become charged on such counter-bond and bound to pay the judgment obligee upon demand the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing on the same action. From a reading of the abovequoted provision, it is evident that a surety on a counter-bond given to secure the payment of a judgment becomes liable for the payment of the amount due upon: (1) demand made upon the surety; and (2) notice and summary hearing on the same action. After a careful scrutiny of the records of the case, the Court is of the view that UPPC indeed complied with these twin requirements. This Court has consistently held that the filing of a complaint constitutes a judicial demand.[32] Accordingly, the filing by UPPC of the Motion to Order Surety to Pay Amount of Counter-Bond was already a demand upon Acropolis, as surety, for the payment of the

amount due, pursuant to the terms of the bond. In said bond, Acropolis bound itself in the sum of ₱42,844,353.14 to secure the payment of any judgment that UPPC might recover against Unibox and Ortega.[33]

 Furthermore, an examination of the records reveals that the motion was filed by UPPC on November 11, 2004 and was set for hearing on November 19, 2004.[34] Acropolis was duly notified of the hearing and it was personally served a copy of the motion onNovember 11, 2004,[35] contrary to its claim that it did not receive a copy of the motion. On November 19, 2004, the case was reset for hearing on November 30, 2004. The minutes of the hearing on both dates show that only the counsel for UPPC was present. Thus, Acropolis was given the opportunity to defend itself. That it chose to ignore its day in court is no longer the fault of the RTC and of UPPC. It cannot now invoke the alleged lack of notice and hearing when, undeniably, both requirements were met by UPPC. No novation despite compromise agreement; Acropolis still liable under the terms of the counter-bond UPPC argues that the undertaking of Acropolis is to secure any judgment rendered by the RTC in its favor. It points out that because of the posting of the counter-bond by Acropolis and the dissolution of the writ of preliminary attachment against Unibox and Ortega, UPPC lost its security against the latter two who had gone bankrupt.[36] It cites the cases of Guerrero v. Court of Appeals[37] and Martinez v. Cavives[38] to support its position that the execution of a compromise agreement between the parties and the subsequent rendition of a judgment based on the said compromise agreement does not release the surety from its obligation nor does it novate the obligation.[39]

 Acropolis, on the other hand, contends that it was not a party to the compromise agreement. Neither was it aware of the execution of such an agreement which contains an acknowledgment of liability on the part of Unibox and Ortega that was prejudicial to it as the surety. Accordingly, it cannot be bound by the judgment issued based on the said agreement.[40] Acropolis also questions the applicability of Guerrero and draws attention to the fact that in said case, the compromise agreement specifically stipulated that the surety shall continue to be liable, unlike in the case at bench where the compromise agreement made no mention of its obligation to UPPC.[41]

 On this issue, the Court finds for UPPC also.The terms of the Bond for Dissolution of Attachment issued by Unibox and Acropolis in favor of UPPC are clear and leave no room for ambiguity: WHEREAS, the Honorable Court in the above-entitled case issued on _____ an Order dissolving / lifting partially the writ of attachment levied upon the defendant/s personal property, upon the filing of a counterbond by the defendants in the sun of PESOS FORTY TWO MILLION EIGHT HUNDRED FORTY FOUR THOUSAND THREE HUNDRED FIFTY THREE AND 14/100 ONLY (P 42,844,353.14) Philippine Currency. NOW, THEREFORE, we UNIBOX PACKAGING CORP. as Principal and PHILIPPINE PRYCE ASSURANCE CORP., a corporation duly organized and existing under and by virtue of the laws of the Philippines, as Surety, in consideration of the dissolution of said attachment, hereby jointly and severally bind ourselves in the sum of FORTY TWO MILLION EIGHT HUNDRED FORTY FOUR THOUSAND THREE HUNDRED FIFTY THREE AND 14/100 ONLY (P 42,844,353.14) Philippine Currency, in favor of the plaintiff to secure the payment of any judgment that the plaintiff may recover against the defendants in this action.[42] [Emphasis and underscoring supplied] Based on the foregoing, Acropolis voluntarily bound itself with Unibox to be solidarily liable to answer for ANY judgment which UPPC may recover from Unibox in its civil case for collection. Its counter-bond was issued in consideration of the dissolution of the writ of attachment on the properties of Unibox and Ortega. The counter-bond then replaced the properties to ensure recovery by UPPC from Unibox and Ortega. It would be the height of injustice to allow Acropolis to evade its obligation to UPPC, especially after the latter has already secured a favorable judgment. This issue is not novel. In the case of Luzon Steel Corporation v. Sia,[43] Luzon Steel Corporation sued Metal Manufacturing of the Philippines and Jose Sia for breach of contract and damages. A writ of preliminary attachment was issued against the properties of the defendants therein but the attachment was lifted upon the filing of a counter-bond issued by Sia, as principal, and Times Surety & Insurance Co., as surety. Later, the plaintiff and the defendants entered into a compromise agreement whereby Sia agreed to settle the plaintiffs claim. The lower court rendered a judgment in accordance with the terms of the compromise. Because the defendants failed to comply with the same, the plaintiff obtained a writ of execution against Sia and the surety on the counter-bond. The surety moved to quash the writ of execution on the ground that it was not a party to the compromise and that the writ was issued without giving the surety notice and hearing. Thus, the court set aside the writ of execution and cancelled the counter-bond.On appeal, this Court, speaking through the learned Justice J.B.L. Reyes, discussed the nature of the liability of a surety on a counter-bond: Main issues posed are (1) whether the judgment upon the compromise discharged the surety from its obligation under its attachment counterbond and (2) whether the writ of execution could be issued against the surety without previous exhaustion of the debtor's properties. Both questions can be solved by bearing in mind that we are dealing with a counterbond filed to discharge a levy on attachment. Rule 57, section 12, specifies that an attachment may be discharged upon the making of a cash deposit or filing a counterbond in an amount equal to the value of the property attached as determined by the judge; that upon the filing of the counterbond the property attached ... shall be delivered to the party making the deposit or giving the counterbond, or the person appearing on his behalf, the deposit or counterbond aforesaid standing in place of the property so released.  The italicized expressions constitute the key to the entire problem. Whether the judgment be rendered after trial on the merits or upon compromise, such judgment undoubtedly may be made effective upon the property released; and since the counterbond merely stands in the place of such property, there is no reason why the judgment should not be made effective against the counterbond regardless of the manner how the judgment was obtained. 

x x x As declared by us in Mercado v. Macapayag, 69 Phil. 403, 405-406, in passing upon the liability of counter sureties in replevin who bound themselves to answer solidarily for the obligations of the defendants to the plaintiffs in a fixed amount of₱912.04, to secure payment of the amount that said plaintiff be adjudged to recover from the defendants, the liability of the sureties was fixed and conditioned on the finality of the judgment rendered regardless of whether the decision was based on the consent of the parties or on the merits. A judgment entered on a stipulation is nonetheless a judgment of the court because consented to by the parties.[44]

 [Emphases and underscoring supplied] The argument of Acropolis that its obligation under the counter-bond was novated by the compromise agreement is, thus, untenable. In order for novation to extinguish its obligation, Acropolis must be able to show that there is an incompatibility between the compromise agreement and the terms of the counter-bond, as required by Article 1292 of the Civil Code, which provides that: Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other. (1204)   Nothing in the compromise agreement indicates, or even hints at, releasing Acropolis from its obligation to pay UPPC after the latter has obtained a favorable judgment. Clearly, there is no incompatibility between the compromise agreement and the counter-bond. Neither can novation be presumed in this case. As explained in Dugo v. Lopena:[45]

 Novation by presumption has never been favored. To be sustained, it need be established that the old and new contracts are incompatible in all points, or that the will to novate appears by express agreement of the parties or in acts of similar import. [46]

  All things considered, Acropolis, as surety under the terms of the counter-bond it issued, should be held liable for the payment of the unpaid balance due to UPPC. Three-day notice rule, not a hard and fast rule Although this issue has been obviated by our disposition of the two main issues, the Court would like to point out that the three-day notice requirement is not a hard and fast rule and substantial compliance is allowed. Pertinently, Section 4, Rule 15 of the Rules of Court reads: Sec. 4. Hearing of motion. Except for motions which the court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant.Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to insure its receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on shorter notice. [Emphasis supplied] The law is clear that it intends for the other party to receive a copy of the written motion at least three days before the date set for its hearing. The purpose of the three (3)-day notice requirement, which was established not for the benefit of the movant but rather for the adverse party, is to avoid surprises upon the latter and to grant it sufficient time to study the motion and to enable it to meet the arguments interposed therein.[47] In Preysler, Jr. v. Manila Southcoast Development Corporation,[48] the Court restated the ruling that the date of the hearing should be at least three days after receipt of the notice of hearing by the other parties. It is not, however, a hard and fast rule. Where a party has been given the opportunity to be heard, the time to study the motion and oppose it, there is compliance with the rule. This was the ruling in the case of Jehan Shipping Corporation v. National Food Authority,[49] where it was written: Purpose Behind theNotice Requirement This Court has indeed held time and time again that, under Sections 4 and 5 of Rule 15 of the Rules of Court, mandatory is the notice requirement in a motion, which is rendered defective by failure to comply with the requirement. As a rule, a motion without a notice of hearing is considered pro forma and does not affect the reglementary period for the appeal or the filing of the requisite pleading. As an integral component of procedural due process, the three-day notice required by the Rules is not intended for the benefit of the movant. Rather, the requirement is for the purpose of avoiding surprises that may be sprung upon the adverse party, who must be given time to study and meet the arguments in the motion before a resolution by the court. Principles of natural justice demand that the right of a party should not be affected without giving it an opportunity to be heard. The test is the presence of the opportunity to be heard, as well as to have time to study the motion and meaningfully oppose or controvert the grounds upon which it is based. Considering the circumstances of the present case, we believe that the requirements of procedural due process were substantially complied with, and that the compliance justified a departure from a literal application of the rule on notice of hearing.[50] [Emphasis supplied] In the case at bench, the RTC gave UPPC sufficient time to file its comment on the motion. On January 14, 2005, UPPC filed its Opposition to the motion, discussing the issues raised by Acropolis in its motion. Thus, UPPCs right to due process was not violated because it was afforded the chance to argue its position. 

WHEREFORE, the petition is GRANTED. The November 17, 2005 Decision and the March 1, 2006 Resolution of the Court of Appeals, in CA-G.R. SP No. 89135, are hereby REVERSED and SET ASIDE. The November 30, 2004 Order of the Regional Trial Court, Branch 148, Makati City, ordering Acropolis to comply with the terms of its counter-bond and pay UPPC the unpaid balance of the judgment in the amount of P27,048,568.78 with interest of 12% per annum from default is REINSTATED.   G.R. No. 205179               July 18, 2014GERVE MAGALLANES, Petitioner, vs.PALMER ASIA, INC., Respondent.D E C I S I O NCARPIO, J.:The CaseThis is a petition for review that seeks to set aside the Decision1 dated 17 September 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 111314 and the Resolution2 dated 14 January 2013 which denied the Motion for Reconsideration dated 25 September 2012.The FactsAndrews International Product, Inc. (Andrews) is a domestic corporation that manufactures and sells fire extinguishers. Gerve Magallanes (Magallanes) was employed by Andrews as a Sales Agent.3

Magallanes negotiated with three (3) prospective buyers of Andrews fire extinguishers: Cecile Arboleda, Jose Cruz, and Proceso Jarobilla, who all issued checks payable to Andrews. These checks, however, bounced.4

Angel Palmiery (Palmiery), the President of Andrews, returned the bum checks to Magallanes. Desirous of obtaining his accrued commissions, and upon the advice of Palmiery, Magallanes signed Sales Invoices covering the fire extinguishers that were intended to be sold to the prospective buyers, and he also issued five (5) checks covering the purchase price of the items:

BankChecknumber

Date of check Date deposited Amount

Citytrust BankingCorp.

000721

28 July 1993 25 January 1994 P17,740.00

Citytrust BankingCorp.

000743

2 September 1993

25 January 1994 P16,440.00

Prudential Bank 001579

7 January1994 7 January 1994 P49,230.00

Prudential Bank 001582

9 January1994 18 January 1994 P19,880.00

Prudential Bank 001585

15 January 1994 17 January 1994 P

45,440.00

Total P148,800.20

However, Magallanes’ checks weredishonored upon presentment to the bank.Sometime in 1995, Andrews and another corporation, Palmer Asia, Inc. (Palmer), entered into an agreement whereby all the business of Andrews was going to be handled byPalmer. As explained by Palmer:a change of name was in order to appeal to a bigger and more sophisticated market. Hence, Palmer Asia was born. Being a family corporation and since the change of name was more of a marketing strategy, all legal niceties were dispensed with. Andrews x x x thus ceased to be active in the business.5

Thus, Andrews remained to be existing, but not operational. It was neither dissolved nor liquidated. There was no transfer of assets and liabilities in the legal sense. Palmer simply took over the business of Andrews.6

According to Magallanes, Andrews demanded payment of the value of the checks. Since the demands wereunheeded, Magallanes was charged with several counts of violation of Batas Pambansa Bilang 22 (B.P. 22) under several informations all dated 28 March 1997. The cases were docketed as Criminal Case Nos. 211340-44 in Branch 62 of the Metropolitan Trial Court of Makati City (MeTC Branch 62). Palmiery was authorized to file suiton behalf of Andrews.7 Upon being arraigned on 13 November 1997, Magallanes pled not guilty.8

On 16 March 1998, Escudero Marasigan Sta. Ana & E.H. Villareal (EMSAVILL), the counsel of Andrews, entered its appearance as counsel for Palmer in Criminal Case Nos. 217336-44 entitled Palmer Asia, Inc. v. Gerve Magallanes, filed before Branch 67 ofthe Metropolitan Trial Court of Makati City (MeTC Branch 67). The docket numbers as stated in the Entry of Appearance differ fromthe docket numbers of the cases filed by Andrews. Also, the Entry of Appearance was filed before Branch 67 of the MeTC and not Branch 62, where the cases were previously filed. Furthermore, there was no mention of the relationship between Andrews and Palmer. Lastly, there was no registry receipt or stamp or signature or any other mark which could indicate that Magallanes was furnished a copy of the document.9

On 10 August 2003, Palmiery appeared before the MeTC Branch 62 and explained that Andrews transferred its assets, and relinquished control of its operations to Palmer. Thus, on 16September 2004, Magallanes filed an Omnibus Motion to Disqualify PrivateProsecutor and to Strike Out Testimony of Angel Palmiery (Omnibus Motion). According to Magallanes, since the assets and credits of Andrews were transferred to Palmer, the real party in interest in this case is Palmer and not Andrews. Therefore, the criminal case should have been instituted by Palmer. Magallanes also asserted that:[i]ndeed the private prosecutor was hired by Palmer x x x solely for its own account and not by Andrews x x x for otherwise how can the Private Prosecutor explain the alleged direct payment of Palmer x x x of its attorney’s fees in the present case. The problem however is that Palmer x x x has no right to participate in the present case ‒as the recitals of the information refer to Andrews x x x. Hence, the private prosecutor should be thereupon disqualified x x x.10

Thus, Palmer filed its Opposition to Magallanes’ motion, claiming that:

3.01.4 As a marketing strategy, Andrews International’s business thus operated under the banner of Palmer Asia. Palmer Asia had exactly the same officers, occupied the samebusiness office, retained all its employees and agents, had the same customers and sold the same products.x x x x3.01.6 Seen another way, Palmer Asiacan be seen as in effect, for purposes of this litigation, an agent of Andrews International. x x x [A]n agency can be constituted in any form, even by sheer implication derived from the conduct of the parties.11

In its Joint Order dated 8 March 2005, the MeTC Branch 62 denied the motion filed by Magallanes for lack of merit.12 It also acquitted Magallanes, but held him civilly liable.The dispositive portion of the Joint Decision13 dated 10 December 2008 reads:WHEREFORE, foregoing considered, the accused GERVE MAGALLANES is ACQUITTED of the offense charged for lack of proof beyond reasonable doubt in Criminal Cases No. 211340, 211341, 211341, 211342, 211343 and 211344. He is ordered to pay the private complainant, the corresponding face value of the checks subject of the Criminal Cases No. 211340, 211341, 211342, 211343 and 211344, by way of civil liability, with 12% interest per annum counted from June 10, 1994, until the amount shall have been paid; attorney’s fees at 10% of the total face value of the subject checks; and to pay the costs.In case of execution of civil liability, the Clerk of Court is directed to determine and enforce collection of any unpaid docket or other lawful fees in accordance with Rule 111, Sec. 1-b in relation to Rule 141.SO ORDERED.14

Magallanes filed a Partial Appeal before Branch 61 of the Regional Trial Court of Makati (RTC Branch 61). According to Magallanes, the checks were not issued for valuable consideration since the Sales Invoices, as well as the transactions reflectedin the invoices were simulated and fictitious. He also claimed that as a Sales Agent, he is not liable for the bum checks issued by the prospective buyers of Andrews.15 Andrews, as the private complainant mentioned in the Joint Decision of MeTC Branch 62, did not file any appeal.When the parties were required by the RTC Branch 61 to submit their respective memoranda, the memorandum for the complainant was filed by Palmer, and not Andrews. The memorandum was prepared by EMSAVILL 16 and received by Magallanes on 9 March 2009.17

The RTC Branch 61, in its Decision18 dated 25 May 2009, held that Magallanes was not civilly liable for the value of the checks because "the x x x complaining juridical entity has not fully established the existence of a debt by Mr. Magallanes in its favor." 19 Thus, Palmer filed a motion for reconsideration on 15 June 2009,20 which was denied by the RTC in its Resolution dated 14 October 2009.21 Andrews did not file a motion for reconsideration.Thus, Palmer filed a petition for review under Rule 42 of the Rules of Civil Procedure before the CA. It alleged that the RTC erred in reversing the decision of the MeTC Branch 62 and absolving Magallanes from civil liability. Andrews did not file a petition for review with the CA.Magallanes then filed his Comments to Petition for Review (ad cautelam) with Motion to Dismiss Due to Finality of Judgment, wherein he alleged that:The Decision of the Regional Trial Court of Makati City dated 25 May 2003 has already attained finalitythere being no appeal interposed by Andrews International Products, Inc.Petitioner Palmer Asia, Inc. is not, can not and has never been a party plaintiff litigant in the civil aspect of Criminal Case Nos. 211340, 211341, 211342, 211343, 21134[4] before the Metropolitan Trial Court of Makati, Branch 62 for alleged violation of Batas [Pambansa] Bilang 22 and in the appealed Criminal Cases 09-031 to 035 [before the] Regional Trial Court of Makati City, Branch 61.22

The Ruling of the CAThe CA ruled against Magallanes. It held that Magallanes issued the checks for a consideration because hederived pecuniary benefit from it (collection of accrued commissions). According to the court a quo:The Supreme Court [has] held thatupon issuance of a check, in the absence of evidence to the contray, it is presumed that the same was issued for valuable consideration which may consist either in some right, interest, profit or benefit accruing to the party who makes the contract, or some forebearance, detriment, loss or some responsibility, to act, or labor, or service given, suffered or undertaken by the other side. Under the Negotiable Instruments Law, it is presumed that every party to an instrument acquires the same for a consideration or for value. In the instant case, respondent failed topresent convincing evidence to overthrow the presumption and prove that the checks were indeed issued without valuable consideration. In fact, respondent categorically admitted that he issued the subject bum checks in order for him to collect his pending commissions with petitioner.23

Aggrieved, Magallanes then filed the instant petition before this Court.IssuesThe petition alleges that the CA erred in not dismissing Palmer’s petition for review under Rule 42 based on lack of jurisdiction and finality of judgment of the RTC’s Joint Decision24 and in ruling that Magallanes failed to rebut the presumption of consideration in the issuance of the checks.25 The Ruling of this CourtWe grant the petition. The RTC Decision absolving Magallanes from civil liability has attained finality, since no appeal was interposed by the private complainant, Andrews. WhilePalmer filed a petition for review before the CA, it is not the real party in interest; it was never a party to the proceedings at the trial court.Under our procedural rules, "a case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-ininterest, hence grounded on failure to state a cause of action."26 In the instant case, Magallanes filed a motion to dismiss in accordance with the Rules of Court, wherein he claimed that:x x x the obvious and only real party in interest in the filing and prosecution of the civil aspect impliedlyinstituted with x x x the filing of the foregoing Criminal Cases for B.P. 22 is Andrews International Products, Inc.The alleged bounced checks issued by x x x Magallanes were issued payable in the name of Andrews International Products, Inc. The [n]arration of [facts] in the several Informations for violation of B.P. 22 filed against Magallanes solely mentioned the name of Andrews International Products, Inc.27

The real party in this case is Andrews, not Palmer. Section 2 of Rule 3 of the Rules of Court provides: Sec. 2.Parties in interest.– A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.In Goco v. Court of Appeals,28 we explained that:This provision has two requirements: 1) to institute an action, the plaintiff must be the real party in interest; and 2) the action must be prosecuted in the name of the real party in interest. Interest within the meaning of the Rules of Court means material interest or an interest in issue to be affected by the decree or judgment of the case, as distinguished from mere curiosity about the question involved. One having no material interest to protect cannot invoke the jurisdiction of the court as the plaintiff in an action.Parties who are not the real parties in interest may be included in a suit in accordance with the provisions of Section 3 of Rule 3 of the Rules of Court:Sec. 3. Representatives as parties. Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorizedby law or these

Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.The CA erred in stating that Palmer and Andrews are the same entity. 29 These are two separate and distinct entities claiming civil liability against Magallanes. Andrews was the payee of the bum checks, and the former employer of Magallanes. It filed the complaint for B.P. 22 before MeTC Branch 62. Thus when the MeTC Branch 62 ordered Magallanes to "pay the private complainant the corresponding face value of the checks x x x",30 it was referring to Andrews, not Palmer.Palmer, on the other hand, was first mentioned in an Entry of Appearance filed by its counsel EMSAVILL (also the counsel of Andrews) before MeTC Branch 67 in connection with Palmer Asia, Inc. v. Gerve Magallanes.Palmer also filed the Memorandum required by the RTC.Although Andrews relinquished control of its business to Palmer, it was never dissolved and thus remained existing. This was stated in Palmer’s Comment and Opposition.31 Quoting the Order dated 8 March 2005 of the MeTC Branch 62 denying Magallanes’ Omnibus Motion, Palmer explained that:Under the Corporation Code, specifically Sections 117, 118 120 and 121, a corporation can only be dissolved in two ways, voluntary and involuntary. In the case of Andrews International, no document was presented that majority of its Board of Directors passed a [r]esolution terminationg its corporate life. No complaint was also filed with the Securities and Exchange Commission to involuntarilyterminate the same, thus, for all intents and purposes, it is still existing although not operational. 32 (Emphasis in the original)Given the foregoing facts, it is clear that the real party in interest here is Andrews. Following the Rules of Court, the action should be in the name of Andrews. As previously mentioned, Andrews instituted the action before the MeTC Branch 62 but it was Palmer which filed a petition for review before the CA. In fact, the case at the CA was entitled Palmer Asia, Inc. v. Gerve Magallanes.In NM Rothschild & Sons (Australia) Limited v. Lepanto Consolidated Mining Company,33 NM Rothschild changed its name to Investec Australia Limited, in accordance with Australian law, pending resolution of its petition before this Court. Thus, when we required the parties to file memoranda, NM Rothschild referred to itself as Investec Australia Limited (formerly "NM Rothschild & Sons [Australia] Limited"). Lepanto sought the dismissal of the case because the petition was not filed by the real party in interest. We held that:[The] submissions of petitioner on the change of its corporate name [are] satisfactory and [we] resolve not to dismiss the present Petition for Review on the ground of not being prosecuted under the name of the real party in interest. While we stand by our pronouncement in Philips Exporton the importance of the corporate name to the very existence of corporations and the significance thereof in the corporation’s right to sue, we shall not go so far as to dismiss a case filed by the proper party using its former name when adequate identification is presented. A real party in interest isthe party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. There is no doubt in our minds thatthe party who filed the present Petition, having presented sufficient evidence of its identity and being represented by the same counsel as that of the defendant in the case sought to be dismissed, is the entity that will be benefited if this Court grants the dismissal prayed for.34

This case is different, however, because it involves two separate and distinct entities. The corporation thatinitiated the complaint for B.P. 22 is different from the corporation that filed the memorandum at the RTC and the petition for review before the CA. It appears that Palmer is suing Magallanes in its own right, not as agent of Andrews, the real party in interest.Even assuming arguendothat Palmer is correct in asserting that it is the agent of Andrews, the latter should have been included in the title of the case, in accordance withprocedural rules.Admittedly, in his Omnibus Motion filed before the MeTC Branch 62, Magallanes concluded differently sayingthat the real party in interest is Palmer and not Andrews. This conclusion was based on Palmiery’s testimony dated 10 August 2003 that Andrews transferred all its "assets and credits" to Palmer.35

Procedural rules forbid parties tochange the theory of the case on appeal. In Bote v. Spouses Veloso,36 we defined the theory of the case as:[a] comprehensive and orderly mental arrangement of principle and facts, conceived and constructed for the purpose of securing a judgment or decree of a court in favor of a litigant; the particular line of reasoning of either party to a suit, the purpose being to bring together certain facts of the case in a logical sequence and to correlate them in a way that produces in the decision maker’s minda definite result or conclusion favored by the advocate.The rationale for this rule was discussed in the earlier case of Goyanko, Jr. v. United Coconut Planters Bank:37

[Changing the theory of the case] violates basic rules of fair play, justice and due process.1âwphi1 Our rulings are clear - "a party who deliberately adopts a certain theory upon which the case was decided by the lower court will not be permitted to change [it] on appeal"; otherwise, the lower courts will effectively be deprived of the opportunity todecide the merits of the case fairly. Besides, courts of justice are devoid of jurisdiction to resolve a question not in issue.However, the change in Magallanes’posture was due to the confusing testimony of Palmiery. We quote below portions of Palmiery’s testimony dated 16 September 2004, the same date the Omnibus Motion was filed:Atty. Bermudez: Mr. Palmiery, the last hearing you undertook to bring before this Court the Deed of Assignment and Liabilities of Andrews to Palmer Asia, do you have it with you now?A: No, Sir.Q: Why?A: There is no assignment.Q: There was no assignment?A: Yes, because it was mentioned by our lawyer a while ago it was not a legal transfer, it was a marketing transfer because the owners, the office, the line of business are exactly the same.38 (Emphasis supplied)EMSAVILL, counsel for Palmer and Andrews, even clarified in their Opposition to Magallanes' Omnibus Motion that:x x x [A]ccused loses sight of the fact that Mr. Palmiery is an ordinary layman, not versed with the technicalities of the law. Expectedly, ordinary laymen, such as Mr. Palmiery, do not fully appeciate and understand the legal implications of x x x technicaJ and legal term[s] such as "transfer of assets and liabilities."39

Thus, since Magallanes timely filed a motion to dismiss based on valid grounds, we rule that the CA erred in denying the said motion.WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated 17 September 2012 and the Resolution dated 14 January 2013 are hereby REVERSED and SET ASIDE. The Decision of the Makati Regional Trial Court, Branch 61, is hereby REINSTATED.SO ORDERED.ANTONIO T. CARPIO

G.R. No. 170026               June 20, 2012SHIMIZU PHILIPPINES CONTRACTORS, INC., Petitioner, vs.MRS. LETICIA B. MAGSALIN, doing business under the trade name "KAREN'S TRADING," FGU INSURANCE CORPORATION, GODOFREDO GARCIA, CONCORDIA GARCIA, and REYNALDO BAETIONG,Respondents.D E C I S I O NBRION, J.:We resolve the petition for review on certiorari1 filed by Shimizu Philippines Contractors, Inc. (petitioner) to challenge the twin resolutions of the Court of Appeals (CA)2 in CA-G.R. CV No. 83096 which dismissed the appeal of the petitioner on the ground of lack of jurisdiction3 and denied the petitioner’s subsequent motion for reconsideration.4 The appeal in CA-G.R. CV No. 83096 had sought to nullify the December 16, 2003 order5 of the Regional Trial Court (RTC) dismissing the petitioner’s complaint for sum of money and damages on the ground ofnon prosequitur.The AntecedentsThe antecedent facts of the petition before us are not disputed.An alleged breach of contract was the initial event that led to the present petition. The petitioner claims that one Leticia Magsalin, doing business as "Karen’s Trading," had breached their subcontract agreement for the supply, delivery, installation, and finishing of parquet tiles for certain floors in the petitioner’s Makati City condominium project called "The Regency at Salcedo." The breach triggered the agreement’s termination. When Magsalin also refused to return the petitioner’s unliquidated advance payment and to account for other monetary liabilities despite demand, the petitioner sent a notice to respondent FGU Insurance Corporation (FGU Insurance) demanding damages pursuant to the surety and performance bonds the former had issued for the subcontract.On April 30, 2002, the petitioner filed a complaint docketed as Civil Case No. 02-488 against both Magsalin and FGU Insurance. It was raffled to Branch 61 of the RTC of Makati City. The complaint sought Two Million Three Hundred Twenty-Nine Thousand One Hundred Twenty Four Pesos and Sixty Centavos (P2,329,124.60) as actual damages for the breach of contract.FGU Insurance was duly served with summons. With respect to Magsalin, however, the corresponding officer’s return declared that both she and "Karen’s Trading" could not be located at their given addresses, and that despite further efforts, their new addresses could not be determined.In August 2002, FGU Insurance filed a motion to dismiss the complaint. The petitioner filed its opposition to the motion. The motion to dismiss was denied as well as the ensuing motion for reconsideration, and FGU Insurance was obliged to file an answer.In October 2002, in an effort to assist the RTC in acquiring jurisdiction over Magsalin, the petitioner filed a motion for leave to serve summons on respondent Magsalin by way of publication. In January 2003, the petitioner filed its reply to FGU Insurance’s answer.In February 2003, FGU Insurance filed a motion for leave of court to file a third-party complaint. Attached to the motion was the subject complaint,6 with Reynaldo Baetiong, Godofredo Garcia and Concordia Garcia named as third-party defendants. FGU Insurance claims that the three had executed counter-guaranties over the surety and performance bonds it executed for the subcontract with Magsalin and, hence, should be held jointly and severally liable in the event it is held liable in Civil Case No. 02-488.The RTC admitted the third-party complaint and denied the motion to serve summons by publication on the ground that the action against respondent Magsalin was in personam.In May 2003, the RTC issued a notice setting the case for hearing on June 20, 2003. FGU Insurance filed a motion to cancel the hearing on the ground that the third-party defendants had not yet filed their answer. The motion was granted.In June 2003, Baetiong filed his answer to the third-party complaint. He denied any personal knowledge about the surety and performance bonds for the subcontract with Magsalin.7 Of the three (3) persons named as third-party defendants, only Baetiong filed an answer to the third-party complaint; the officer’s returns on the summons to the Garcias state that both could not be located at their given addresses. Incidentally, the petitioner claims, and Baetiong does not dispute, that it was not served with a copy of Baetiong’s answer. The petitioner now argues before us that FGU Insurance, which is the plaintiff in the third-party complaint, had failed to exert efforts to serve summons on the Garcias. It suggests that a motion to serve summons by publication should have been filed for this purpose. The petitioner also asserts that the RTC should have scheduled a hearing to determine the status of the summons to the third-party defendants.8

The Order Of DismissalWith the above procedural events presented by both parties as the only backdrop, on December 16, 2003 the RTC issued a tersely worded order9 dismissing Civil Case No. 02-488. For clarity, we quote the dismissal order in full:O R D E RFor failure of [petitioner] to prosecute, the case is hereby DISMISSED.SO ORDERED.The RTC denied the petitioner’s motion for reconsideration,10 prompting the latter to elevate its case to the CA via a Rule 41 petition for review.11

The Ruling of the Appellate CourtFGU Insurance moved for the dismissal of the appeal on the ground of lack of jurisdiction. It argued that the appeal raised a pure question of law as it did not dispute the proceedings before the issuance of the December 16, 2003 dismissal order.The petitioner, on the other hand, insisted that it had raised questions of fact in the appeal.12 Thus -While, the instant appeal does not involve the merits of the case, the same involves questions of fact based on the records of the case. It must be emphasized that the lower court’s dismissal of the case based on alleged failure to prosecute on the part of plaintiff-appellant was too sudden and precipitate. This being the case, the facts [sic] to be determined is whether based on the records of the case, was there a definite inaction on the part of plaintiff-appellant? A careful examination of all pleadings filed as well as the orders of the lower court vis-à-vis the rules should now be made in order to determine whether there was indeed a "failure to prosecute" on the part of plaintiff-appellant[.]13 (emphases supplied)

The CA agreed with FGU Insurance and dismissed the appeal, and denied as well the subsequent motion for reconsideration. 14 The petitioner thus filed the present petition for review on certiorari.The Present PetitionThe petitioner pleads five (5) grounds to reverse the CA’s resolutions and to reinstate Civil Case No. 02-488. In an effort perhaps to make sense of the dismissal of the case (considering that the trial court had not stated the facts that justify it), the petitioner draws this Court’s attention to certain facts and issues that we find to be of little materiality to the disposition of this petition:Grounds/ Statement of Matters InvolvedI. The Appellate Court has jurisdiction to determine the merits of the Appeal as the matters therein involve both questions of law and fact.II. The lower court erred in declaring that petitioner failed to prosecute the case despite the fact that petitioner never received a copy of the Answer of Third-party defendant-respondent Reynaldo Baetiong.III. The lower court erred in declaring that petitioner failed to prosecute the case despite the fact that there is no joinder of indispensable parties and issues yet because defendant-respondent Leticia B. Magsalin as well as third-party defendant-respondents Godofredo and Concordia Garcia’s whereabouts were unknown, hence no service yet on them of the copy of the summons and complaint with annexes[.]IV. The lower court erred in declaring that Petitioner failed to prosecute the case despite the fact that it was party respondent FGU which caused the cancellation of the hearing.V. It is evident that the lower court’s dismissal of the case is a clear denial of due process.15

In our Resolution dated February 13, 2006,16 we required the respondents to comment. FGU Insurance’s comment17 alleges that the present petition is "fatally defective" for being unaccompanied by material portions of the record. It reiterates that the appeal in CA-G.R. CV No. 83096 was improperly filed under Rule 41 and should have been filed directly with this Court under Rule 45 of the Rules of Court. Baetiong, in his comment,18 asserts that the dismissal of the appeal was in accord with existing laws and applicable jurisprudence.The Ruling Of The CourtPreliminarily, we resolve the claim that the petition violates Rule 45 of the Rules of Court on the attachment of material portions of the record. We note that FGU Insurance fails to discharge its burden of proving this claim by not specifying the material portions of the record the petitioner should have attached to the petition. At any rate, after a careful perusal of the petition and its attachments, the Court finds the petition to be sufficient. In other words, we can judiciously assess and resolve the present petition on the basis of its allegations and attachments.After due consideration, we resolve to grant the petition on the ground that the December 16, 2003 dismissalorder  is null and void for violation of due process. We are also convinced that the appeal to challenge the dismissal order was properly filed under Rule 41 of the Rules of Court. We further find that the dismissal of Civil Case No. 02-488 for failure to prosecute is not supported by facts, as shown by the records of the case.The Dismissal Order is VoidThe nullity of the dismissal order is patent on its face. It simply states its conclusion that the case should be dismissed for  non prosequitur, a legal conclusion, but does not state the facts on which this conclusion is based.Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section 3, Rule 17 of the Rules of Court. A plain examination of the December 16, 2003 dismissal order shows that it is an unqualified order and, as such, is deemed to be a dismissal with prejudice. "Dismissals of actions (under Section 3) which do not expressly state whether they are with or without prejudice are held to be with prejudice[.]"19 As a prejudicial dismissal, the December 16, 2003 dismissal order is also deemed to be a judgment on the merits so that the petitioner’s complaint in Civil Case No. 02-488 can no longer be refiled on the principle of  res judicata. Procedurally, when a complaint is dismissed for failure to prosecute and the dismissal is unqualified, the dismissal has the effect of an adjudication on the merits.20

As an adjudication on the merits, it is imperative that the dismissal order conform with Section 1, Rule 36 of the Rules of Court on the writing of valid judgments and final orders. The rule states:RULE 36Judgments, Final Orders and Entry ThereofSection 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court.The December 16, 2003 dismissal order clearly violates this rule for its failure to disclose how and why the petitioner failed to prosecute its complaint. Thus, neither the petitioner nor the reviewing court is able to know the particular facts that had prompted the prejudicial dismissal. Had the petitioner perhaps failed to appear at a scheduled trial date? Had it failed to take appropriate actions for the active prosecution of its complaint for an unreasonable length of time? Had it failed to comply with the rules or any order of the trial court? The December 16, 2003 dismissal order does not say.We have in the past admonished trial courts against issuing dismissal orders similar to that appealed in CA-G.R. CV No. 83096. A trial court should always specify the reasons for a complaint’s dismissal so that on appeal, the reviewing court can readily determine the prima facie justification for the dismissal.21 A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark and is especially prejudicial to the losing party who is unable to point the assigned error in seeking a review by a higher tribunal.22

We thus agree with the petitioner that the dismissal of Civil Case No. 02-488 constituted a denial of due process. Elementary due process demands that the parties to a litigation be given information on how the case was decided, as well as an explanation of the factual and legal reasons that led to the conclusions of the court.23Where the reasons are absent, a decision (such as the December 16, 2003 dismissal order) has absolutely nothing to support it and is thus a nullity.24

For this same reason, we are not moved by respondent FGU Insurance’s statement that the disposition of the present petition must be limited to the issue of whether the CA had correctly dismissed the appeal in CA-G.R. CV No. 83096.25 This statement implies that we cannot properly look into the validity of the December 16, 2003 dismissal order in this Rule 45 petition. A void decision, however, is open to collateral attack. While we note that the validity of the dismissal order with respect to Section 1, Rule 36 of the Rules of Court was never raised by the petitioner as an issue in the present petition, the Supreme Court is vested with ample authority to review an unassigned error if it finds that consideration and resolution are indispensable or necessary in arriving at a just decision in an appeal.26 In this case, the interests of substantial justice warrant the review of an obviously void dismissal order.The appeal was properly filedunder Rule 41 of the Rules of CourtWhile the nullity of the December 16, 2003 dismissal order constitutes the ratio decidendi for this petition, we nevertheless rule on the contention that the appeal was erroneously filed.27

In dismissing the appeal, the CA relied on the premise that since the facts presented in the petitioner’s appeal were admitted and not disputed, the appeal must thereby raise a pure question of law proscribed in an ordinary appeal. This premise was effectively the

legal principle articulated in the case of Joaquin v. Navarro,28 cited by the CA in its April 8, 2005 resolution. Respondent FGU Insurance thus contends that the proper remedy to assail the dismissal of Civil Case No. 02-488 was an appeal filed under Rule 45 of the Rules of Court.The reliance on Joaquin is misplaced as it is based on the conclusion the appellate court made in its April 8, 2005 resolution — i.e., that the pleading of undisputed facts is equivalent to a prohibited appeal. The reliance is inattentive to both the averments of the subject appeal and to the text of the cited case. The operative legal principle in Joaquin is this: "[W]here a case is submitted upon an agreement of facts, or where all the facts are stated in the judgment and the issue is the correctness of the conclusions drawn therefrom, the question is one of law which [is properly subject to the review of this Court.]" 29 In this case, as already pointed out above, the facts supposedly supporting the trial court’s conclusion of non prosequitur were not stated in the judgment. This defeats the application of Joaquin.At any rate, we believe that the filing of the appeal in CA-G.R. CV No. 83096 under Rule 41 of the Rules of Court was proper as it necessarily involved questions of fact.An authority material to this case is the case of Olave v. Mistas.30 Directly addressed in Olave was the CA’s jurisdiction over an ordinary appeal supported by undisputed facts and seeking the review of a prejudicial order of dismissal. In this case, a complaint was filed before the RTC in Lipa City to nullify an instrument titled "Affidavit of Adjudication By The Heirs of the Estate of Deceased Persons With Sale." The RTC dismissed the complaint, with prejudice, after the plaintiffs had moved to set the case for pre-trial only after more than three (3) months had lapsed from the service and filing of the last pleading in the case. The plaintiffs thereafter went to the CA on a Rule 41 petition, contending, among others, that the trial court had erred and abused its discretion. As in the present case, the defendants moved to dismiss the appeal on the ground that the issues therein were legal; they pointed out that the circumstances on record were admitted.31 They argued that the proper remedy was a petition for review on certiorari under Rule 45 of the Rules of Court.The CA denied the motion and entertained the appeal. It rendered a decision reinstating the complaint on the ground that there was no evidence on record that the plaintiffs had deliberately failed to prosecute their complaint.When the case was elevated to this court on a Rule 45 petition, we squarely addressed the propriety of the plaintiffs’ appeal. Though mindful that the circumstances pleaded in the appeal were all admitted, we categorically held in  Olave that the appeal was correctly filed. We observed that despite undisputed records, the CA, in its review, still had to respond to factual questions such as the length of time between the plaintiffs’ receipt of the last pleading filed up to the time they moved to set the case for pre-trial, whether there had been any manifest intention on the plaintiffs’ part not to comply with the Rules of Court, and whether the plaintiffs’ counsel was negligent.Significantly, in Olave, we agreed with the plaintiffs that among the critical factual questions was whether, based on the records, there had been factual basis for the dismissal of the subject complaint. This same question is particularly significant in the present case given that the order appealed from in CA-G.R. CV No. 83096 does not even indicate the factual basis for the dismissal of Civil Case No. 02-488. Due to the absence of any stated factual basis, and despite the admissions of the parties, the CA, in CA-G.R. CV No. 83096, still had to delve into the records to check whether facts to justify the prejudicial dismissal even exist. Since the dismissal of Civil Case No. 02-488 appears to have been rendered motu proprio (as the December 16, 2003 dismissal order does not state if it was issued upon the respondents’ or the trial court’s motion), the facts to be determined by the CA should include the grounds specified under Section 3, Rule 17 of the Rules of Court. A court could only issue a motu proprio dismissal pursuant to the grounds mentioned in this rule and for lack of jurisdiction over the subject matter.32 These grounds are matters of facts. Thus, given that the dismissal order does not disclose its factual basis, we are thus persuaded that the petitioner had properly filed its appeal from the dismissal order under Rule 41 of the Rules of Court.The Dismissal of Civil Case No. 02-488 is not Supported by the Facts of the CaseWe also find that the dismissal of Civil Case No. 02-488 is not warranted. Based on available records and on the averments of the parties, the following events were chronologically proximate to the dismissal of Civil Case No. 02-488: (a) on March 24, 2003, the court admitted FGU Insurance’s third-party complaint; (b) the trial court cancelled the June 20, 2003 hearing upon FGU Insurance’s motion; and (c) on June 16, 2003, Baetiong filed hisAnswer to the third-party complaint but did not serve it upon the petitioner.None of these events square with the grounds specified by Section 3, Rule 17 of the Rules of Court for the  motu proprio dismissal of a case for failure to prosecute. These grounds are as follows:(a) Failure of the plaintiff, without justifiable reasons, to appear on the date of the presentation of his evidence in chief;(b) Failure of the plaintiff to prosecute his action for an unreasonable length of time;(c) Failure of the plaintiff to comply with the Rules of Court; or(d) Failure of the plaintiff to obey any order of the court.In our view, the developments in the present case do not satisfy the stringent standards set in law and jurisprudence for a non prosequitur.33 The fundamental test for non prosequitur is whether, under the circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude.34 There must be unwillingness on the part of the plaintiff to prosecute.35

In this case, the parties’ own narrations of facts demonstrate the petitioner’s willingness to prosecute its complaint.1âwphi1 Indeed, neither respondents FGU Insurance nor Baetiong was able to point to any specific act committed by the petitioner to justify the dismissal of their case.While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The repressive or restraining effect of the rule amounting to adjudication upon the merits may cut short a case even before it is fully litigated; a ruling of dismissal may forever bar a litigant from pursuing judicial relief under the same cause of action. Hence, sound discretion demands vigilance in duly recognizing the circumstances surrounding the case to the end that technicality shall not prevail over substantial justice.36

This court is thus of the opinion that the dismissal of Civil Case No. 02-488 is not warranted. Neither facts, law or jurisprudence supports the RTC’s finding of failure to prosecute on the part of the petitioner.Wherefore, premises considered, the instant petition is Granted. The resolutions of the Court of Appeals dated April 8, 2005 and October 4, 2005 are REVERSED and SET ASIDE. The order dated December 16, 2003 of the Regional Trial Court, Branch 61, Makati City, in Civil Case No. 02-488 is declared NULL and VOID, and the petitioner’s complaint therein is ordered REINSTATED for further proceedings. No costs.SO ORDERED.ARTURO D. BRION

G.R. No. 197442               October 22, 2014MAJESTIC FINANCE AND INVESTMENT CO., INC., Petitioner, vs.JOSE D. TITO, Respondent.x - - - - - - - - - - - - - - - - - - - - - - - xORNELIO MENDOZA and PAULINA CRUZ, Petitioners-Intervenors, vs.JOSE NAZAL and ROSITA NAZAL, Respondents-Intervenors.D E C I S I O NPERLAS-BERNABE, J.:Assailed in this petition for review on certiorari1 are the Decision2 dated October 30, 2008 and the Resolution3dated June 22, 2011 of the Court of Appeals (CA) in CA-G.R. CV. No. 81814, which reversed and set aside the Order4 dated July 28, 2003 of the Regional Trial Court of Pasig City, Branch 67 (RTC) in Civil Case No. 27958, and remanded the case to the court a quo for further proceedings.The FactsPetitioner Majestic Finance and Investment Co., Inc. (Majestic) was the judgment obligee in Civil Case No. 20538, a case for rescission of contract (rescission case) filed before the Court of First Instance of Rizal, Branch 21 (CFI), now the RTC. In order to satisfy the judgment by default, the Sheriff levied upon the property of the judgment obligor, Thomas D. Cort (Cort), covered by Transfer Certificate of Title (TCT) No. 1104725 (subject property), and sold the same at a public auction to Paulina Cruz (Cruz), the highest bidder, for a total bid price of 54,460.00. After the redemption period had lapsed, Cruz secured TCT No. 241118 on January 4, 1978 in her name and, thereafter, soldthe subject property to Cornelio Mendoza (Mendoza) who was issued TCT No. 241177 on January 9, 1978.6

On November 21, 1977, respondent Jose D. Tito (Tito) filed with the same CFI against Majestic a petition to declare the proceedings and the Decision in the rescission case null and void, docketed as Civil Case No. 27958 (annulment case).7 He contended that the court did not acquire jurisdiction over the person of his predecessor-in-interest, Cort,8 who had passed away on July 9, 1970, or almost five years (5) prior to the filing of the rescission case on January 5, 1975.9 His standing to file the annulment case was based on his purported ownership of the subject property, which he allegedly inherited from Cort by way of a devise under his Last Will and Testament dated June 4, 197010 that was later probated and allowed in Westmoreland County, Pennsylvania, United States of America.11

Prior to the institution of the annulment case, Tito had, however, already transmitted his interest over the subject property to spouses Jose and Rosita Nazal (Sps. Nazal) on September 13, 1977,12 prompting the latter to join him in the proceedings as intervenors, impleading Cruz and Mendoza on April 25, 1979.13 Earlier, or on January 5,1979, Mendoza filed against Sps. Nazal a case for forcible entry and another case for recovery of possession, which were dismissed on February 22, 197914 and archived pending the resolution ofthe annulment case,15respectively.On August 16, 1979, the CFI allowed the intervention of Sps. Nazal in the annulment case, 16 which order eventually attained finality as shown by the entry of judgment issued by the Court on August 29, 1985 in G.R. No. L-69353. 17 In the interim, the proceedings in the annulment case were indefinitely suspended.18

On December 9, 1987, Sps. Nazal moved that the annulment case be set for pre-trial but the motion was not acted upon. 19 It appears that the records were among those gutted by fire on June 11, 1988, and none of the parties or the court did anything for a period of almost eleven (11) years.20 Meanwhile, Sps. Nazal remained in possession of the subject property.21 Sometime in 1998, Sps. Nazal received summons in an unlawful detainer case filed by the new registered owners of the subject property, spouses Mariano and Rhodora Lim (Sps. Lim),22which apparently prompted Sps. Nazal to set the annulment case for hearing. Learning of the loss of the records, Sps. Nazal moved for reconstitution23 of judicial records and for revival24 of the proceedings in the annulment case, which was opposed by Majestic. Later, Majestic filed an Urgent Motion to Declare Case as already Closed and Terminated with Opposition to Revive the Case,25 contending, among others, that Tito, the principal petitioner in the annulment case, had lost interest in prosecuting the case and that Sps. Nazal have no personality to further prosecute the same.26

In another proceeding, Sps. Nazal opposed the unlawful detainer case filed by Sps. Lim all the way tothe Court, but to no avail.27

The RTC ProceedingsIn an Order28 dated February 2, 2000 (February 2, 2000 Order), the RTC dismissed the annulment case withprejudice, and declared it closed and terminated for failure of Tito and Sps. Nazal to prosecute their claim for an unexplained and unreasonable length of time.29 It held that while it was incumbent upon the Clerk of Court to include the case in the trial calendar, set the date for trial, and notify the parties thereof, these did not relieve the plaintiff of his duty to prosecute the case diligently and to call the attention of the court to calendar the case if the latter has neglected to do so because of the numerous cases it has to attend to.30

Upon Sps. Nazal’s motion for reconsideration,31 however, the RTC, in an Order32 dated August 23, 2002 (August 23,2002 Order), set aside its earlier dismissal order "in the interest of justice." It held that as both Majestic and Sps. Nazal were guilty of inaction since

1987 after the latter’s Motion to Set Case for Pre-Trial was filed, no one should be allowed to benefit from the other and the case must be allowed to proceed on the merits,33 especially in this case where Sps. Nazal has a material interest such that it would be them, not Tito, who would be benefited or injured by the judgment in the said case.34

Dissatisfied, Majestic moved for reconsideration35 on September 27, 2002, which was granted in an Order36 dated July 28, 2003 (July 28, 2003 Order), declaring the February 2, 2000 Order to be final and executory. The RTC ruled that an intervention is regarded as mere collateral or accessory, or ancillary to the original action, suchthat the dismissal of the original case necessarily includes that of the petition-in-intervention.37 It further held that even if Sps. Nazal were to be consideredas real parties-in-interest, the better remedy for them is to file a separate action, as principal plaintiffs, against Majestic.38

Aggrieved, Sps. Nazal elevated the matter before the CA.39

The CA RulingIn a Decision40 dated October 30, 2008, the CA reversed and set aside the RTC’s July 28, 2003 Order, holding that Sps. Nazal are entitled to proceed with the prosecution of their cause of action against Majestic after having been duly allowed to intervene in the annulment case.41 It further held that to require Sps. Nazal to refile another case for the settlement of their claim will result in unnecessary delay and expense, and will entail multiplicity of suits, hence, defeat the very purpose of intervention, i.e., to hear and determine at the same timeall conflicting claims which may be made on the subject matter in litigation,and to expedite litigation and settle in one action and by a single judgment the whole controversy among the persons involved. 42 Accordingly, it remanded the case to the RTC for further proceedings.43

Majestic’s motion for reconsideration44 was denied by the CA in a Resolution45 dated June 22, 2011, hence, the instant petition.The Issue Before the CourtThe essential issue for the Court’s resolution is whether or not the CA erred in allowing Sps. Nazal to prosecute their claim against Majestic.The Court’s RulingThe petition is meritorious.Sps. Nazal, who were joined as intervenors in the proceedings, had already lost their right to participate therein, in view of the RTC’s dismissal of the main action which was decreed pursuant to Section 3, Rule 17 of the Rules of Court,46 stemming from the failure of the putative plaintiff, Tito, to diligently and expeditiously prosecutethe same for an unjustified and unreasonable length of time. Case law states that intervention is never an independent action, but is merely ancillary and supplemental to the existing litigation.1âwphi1 Its purpose is not to obstruct or unnecessarily delay the placid operation of the machinery of trial, but merely to afford one not an original party, who is claiming a certain right or interest in the pending case, the opportunity to appear and be joined so he could assert or protect such right or interests. In other words, the right of an interven or should only be in aid of the right of the original party. Thus, as a general rule,47 where the right of the latter has ceased to exist, there is nothing to aid or fight for and, consequently, the right of intervention ceases.48

It bears pointing out that, despite having been joined in the annulment case as intervenors, Sps. Nazal should have actually been deemed as the case’s plaintiffs considering that Titohad already transferred his interest over the disputed property to the former, even prior to the institution of the proceedings. Verily, where a transfer of interest was effected before the commencement of the suit – as in this case – the transferee must necessarily be the plaintiff (or defendant, as the case may be)49 as it is he who stands to be benefited or injured by the judgment in the suit.50 Thus, on the supposition that they were the case’s plaintiffs, Sps. Nazal should bear the obligation imputed by the RTC upon Tito to diligently and expeditiously prosecute the action within a reasonable length of time. The RTC, however, pointed out that Sps. Nazal failed in this regard. As the records would bear, while Sps. Nazal moved to set the case for pre-trial on December 9, 1987, no further action was taken by them after the court a quo failed to calendar the case and set the same for pre-trial. Disconcerting is the fact that it took Sps. Nazal almost eleven (11) years, or on October 20, 1998 to move for the setting of the case for hearing, as they were apparently compelled to act only upon the threat of being dispossessed of the subject property with the filing of the unlawful detainer case by the new registered owners, Sps. Lim. Notably, while under both the present51 and the old52 Rules of Court, the clerk of court has the duty to set the case for pre-trial, the same does not relieve the plaintiffsof their own duty to prosecute the case diligently.53 Truth be told, the expeditious disposition of cases is as much the duty of the plaintiff as the court.54

Furthermore, the Court has perused the records and found no sufficient justification for Sps. Nazal's inordinately long inaction over the annulment case. Other than the allegation that their counsel assured them that their claim of ownership was well-founded,55 they failed to even offer an explanation as to why they had to wait for more than a decade to proceed with the case. As the Court sees it, this is an unreasonably long time for the defendant to wait for the outcome of a trial that has yet to commence, especially as the case had been filed by their predecessor-in-interest, Tito, as early as November 21, 1977.56

All told, whether one treats Sps. Nazal as mere intervenors or, properly speaking, as the plaintiffs in the annulment case, the Court finds no cogent reason as to why the same should not be dismissed. In fine, Sps. Nazal are precluded from prosecuting their claim against Majestic. WHEREFORE, the petition is GRANTED. The Decision dated October 30, 2008 and the Resolution dated June 22, 2011 of the Court of Appeals in CA-G.R. CV. No. 81814 are hereby REVERSED and SET ASIDE. A new judgment is entered DISMISSING Civil Case No. 27958. SO ORDERED.ESTELA M. PERLAS-BERNABEAssociate Justic

G.R. No. 204444, January 14, 2015

VIRGILIO C. BRIONES, Petitioner, v. COURT OF APPEALS AND CASH ASIA CREDIT CORPORATION, Respondents.

D E C I S I O N

PERLAS-BERNABE, J.:

Assailed in this petition for certiorari1 are the Decision2 dated March 5, 2012 and the Resolution3 dated October 4, 2012 of the Court of Appeals(CA) in CA-G.R. SP No. 117474, which annulled the Orders dated September 20, 20104 and October 22, 20105 of the Regional Trial Court of Manila, Branch 173 (RTC) in Civil Case No. 10-124040, denying private respondent Cash Asia Credit Corporation’s (Cash Asia) motion to dismiss on the ground of improper venue.cralawred

The Facts

The instant case arose from a Complaint6 dated August 2, 2010 filed by Virgilio C. Briones (Briones) for Nullity of Mortgage Contract, Promissory Note, Loan Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of Title (TCT) No.290846, and Damages against Cash Asia before the RTC.7 In his complaint, Briones alleged that he is the owner of a property covered by TCT No. 160689 (subject property),and that, on July 15, 2010, his sister informed him that his property had been foreclosed and a writ of possession had already been issued in favor of Cash Asia.8 Upon investigation, Briones discovered that: (a) on December 6, 2007, he purportedly executed a promissory note,9 loan agreement,10 and deed of real estate mortgage11covering the subject property (subject contracts) in favor of Cash Asia in order to obtain a loan in the amount of P3,500,000.00 from the latter;12 and (b) since the said loan was left unpaid, Cash Asia proceeded to foreclose his property.13 In this relation, Briones claimed that he never contracted any loans from Cash Asia as he has been living and working in Vietnam since October 31, 2007. He further claimed that he only went back to the Philippines on December 28, 2007 until January 3, 2008 to spend the holidays with his family, and that during his brief stay in the Philippines, nobody informed him of any loan agreement entered into with Cash Asia. Essentially, Briones assailed the validity of the foregoing contracts claiming his signature to be forged.14

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For its part, Cash Asia filed a Motion to Dismiss15 dated August 25, 2010, praying for the outright dismissal of Briones’s complaint on the ground of improper venue.16 In this regard, Cash Asia pointed out the venue stipulation in the subject contracts stating that “all legal actions arising out of this notice in connection with the Real Estate Mortgage subject hereof shall only be brought in or submitted to the jurisdiction of the proper court of Makati City.”17 In view thereof, it contended that all actions arising out of the subject contracts may only be exclusively brought in the courts of Makati City, and as such, Briones’s complaint should be dismissed for having been filed in the City of Manila.18

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In response, Briones filed an opposition,19 asserting, inter alia, that he should not be covered by the venue stipulation in the subject contracts as he was never a party therein. He also reiterated that his signatures on the said contracts were forgeries.20

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The RTC Ruling

In an Order21 dated September 20, 2010, the RTC denied Cash Asia’s motion to dismiss for lack of merit. In denying the motion, the RTC opined that the parties must be afforded the right to be heard in view of the substance of Briones’s cause of action against Cash Asia as stated in the complaint.22

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Cash Asia moved for reconsideration23 which was, however, denied in an Order24 dated October 22, 2010. Aggrieved, it filed a petition for certiorari25 before the CA.cralawred

The CA Ruling

In a Decision26 dated March 5, 2012, the CA annulled the RTC Orders, and accordingly, dismissed Briones’s complaint without prejudice to the filing of the same before the proper court in Makati City.27It held that the RTC gravely abused its discretion in denying Cash Asia’s motion to dismiss, considering that the subject contracts clearly provide that actions arising therefrom should be exclusively filed before the courts of Makati City only.28 As such, the CA concluded that Briones’s complaint should have been dismissed outright on the ground of improper venue,29 this, notwithstanding Briones’s claim of forgery.

Dissatisfied, Briones moved for reconsideration,30 which was, however, denied in a Resolution31 dated October 4, 2012, hence, this petition.

The Issue Before the Court

The primordial issue for the Court’s resolution is whether or not the CA gravely abused its discretion in ordering the outright dismissal of Briones’s complaint on the ground of improper venue.

The Court’s Ruling

The petition is meritorious.

At the outset, the Court stresses that “[t]o justify the grant of the extraordinary remedy of certiorari, [the petitioner] must satisfactorily show that the court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner that is tantamount to lack of jurisdiction. To be considered ‘grave,’ discretion must be exercised in a despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.”32

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Guided by the foregoing considerations, the Court finds that the CA gravely abused its discretion in ordering the outright dismissal of Briones’s complaint against Cash Asia, without prejudice to its re-filing before the proper court in Makati City.

Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit: chanroblesvirtuallawlibrary

Rule 4VENUE OF ACTIONS

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

Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated.

SEC. 2. Venue of personal actions. — All other actions may be commenced and tried 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 non-resident defendant where he may be found, at the election of the plaintiff.

SEC. 3. Venue of actions against nonresidents. — If any of the defendants does not reside and is not found in the Philippines, and the action affects the personal status of the plaintiff, or any property of said defendant located in the Philippines, the action may be commenced and tried in the court of the place where the plaintiff resides, or where the property or any portion thereof is situated or found.

SEC. 4. When Rule not applicable. — This Rule shall not apply –

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

(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof.

Based therefrom, the general rule is that the venue of real actions is the court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated; while the venue of personal actions is the court which has jurisdiction where the plaintiff or the defendant resides, at the election of the plaintiff. As an exception, jurisprudence in Legaspi v. Rep. of the Phils.33 instructs that the parties, thru a written instrument, may either introduce another venue where actions arising from such instrument may be filed, or restrict the filing of said actions in a certain exclusive venue, viz.:chanroblesvirtuallawlibrary

The parties, however, are not precluded from agreeing in writing on an exclusive venue, as qualified by Section 4 of the same rule. Written stipulations as to venue may be restrictive in the sense that the suit may be filed only in the place agreed upon, or merely permissive in that   the parties may file their suit not only in the place agreed upon but also in the places fixed by law . As in any other agreement, what is essential is the ascertainment of the intention of the parties respecting the matter.

As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown that such stipulation is exclusive. In the absence of qualifying or restrictive words, such as “exclusively,” “waiving for this purpose any other venue,” “shall only” preceding the designation of venue, “to the exclusion of the other courts,” or words of similar import, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place.34 (Emphases and underscoring supplied)

In this relation, case law likewise provides that in cases where the complaint assails only the terms, conditions, and/or coverage of a written instrument and not its validity, the exclusive venue stipulation contained therein shall still be binding on the parties, and thus, the complaint may be properly dismissed on the ground of improper venue.35 Conversely, therefore, a complaint directly assailing the validity of the written instrument itself should not be bound by the exclusive venue stipulation contained therein and should be filed in accordance with the general rules on venue.To be sure, it would be inherently consistent for a complaint of this nature to recognize the exclusive venue stipulation when it, in fact, precisely assails the validity of the instrument in which such stipulation is contained.

In this case, the venue stipulation found in the subject contracts is indeed restrictive in nature, considering that it effectively limits the venue of the actions arising therefrom to the courts of Makati City. However, it must be emphasized that Briones’s complaint directly assails the validity of the subject contracts, claiming forgery in their execution. Given this circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation, as his compliance therewith would mean an implicit recognition of their validity. Hence, pursuant to the general rules on venue, Briones properly filed his complaint before a court in the City of Manila where the subject property is located.

In conclusion, the CA patently erred and hence committed grave abuse of discretion in dismissing Briones’s complaint on the ground of improper venue.chanrobleslaw

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated March 5, 2012 and the Resolution dated October 4, 2012 of the Court of Appeals in CA-G.R. SP No. 117474 are herebyANNULLED and SET ASIDE. The Orders dated September 20, 2010 and October 22, 2010 of the Regional Trial Court of Manila, Branch 173 in Civil Case No. 10-124040 are REINSTATED.

SO ORDERED.cralawlawlibrary

G.R. No. 190253               June 11, 2014JUAN TRAJANO a.k.a. JOHNNY TRAJANO, Petitioner, vs.UNIWIDE SALES WAREHOUSE CLUB, Respondent.D E C I S I O NBRION, J.:We resolve the petition for review on certiorari,1 filed by petitioner Juan Trajano, to challenge the July 29, 2009 decision2 and the October 28, 2009 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 101815.The Factual AntecedentsThis petition originated from Uniwide Sales Warehouse Club, Inc.’s (Uniwide’s) complaint against Golden Sea Overseas Sales Corp. (Golden Sea) and Trajano for a sum of money and damages with prayer for the issuance of a temporary restraining order and a writ of preliminary injunction before the Regional Trial Court (RTC) of Parañaque.4

Uniwide alleged that it entered into a sales arrangement with Golden Sea and Trajano for the importation of goods from China in 2001. Under this arrangement, Uniwide ordered merchandise from Golden Sea, which delivered the goods to Uniwide. Since Uniwide was under corporate rehabilitation at that time, Trajano allegedly "guarantee[d] the payment"5 of the goods to Golden Sea. In turn, Uniwide delivered to Trajano and a certain Vicente Kua post-dated checks payable to "Golden Universal/Cash" or "Golden Sea/Cash" whose face value represented the goods’ purchase price plus a monetary interest rate of 36% per annum.6

From January 2002 until the filing of the complaint, Golden Sea delivered P178,199,054.60 worth of unsaleable, defective and/or damaged goods as well as merchandise that Uniwide did not agree to purchase. Thus, Golden Sea allegedly agreed to credit in Uniwide’s account the price of these goods, upon which Uniwide requested for credit amounting to  P163,199,054.60 in its favor. However, Golden Sea did not heed Uniwide’s request; instead, Golden Sea and Trajano encashed all the post-dated checks Uniwide issued (except those maturing from July 2005 to September 2006), which totaled to P86,284.028.00.7 Aggrieved, Uniwide filed the complaint to get the refund of the total value of misdelivered, unsaleable, defective and/or damaged goods, and to enjoin Golden Sea and Trajano from encashing the remaining post-dated checks in their possession.8

The complaint, docketed as Civil Case No. 05-0265, was raffled to RTC of Parañaque – Branch 274, which was presided by Judge Fortunito Madrona.9 On August 11, 2005, the RTC issued a writ of preliminary injunction prohibiting Golden Sea and Trajano from encashing the postdated checks.10 Trajano moved to reconsider the issuance of the writ for lack of factual basis.11 Subsequently, Trajano filed a motion to post counterbond to lift the writ of preliminary injunction. 12 Uniwide opposed this,13 and filed a motion for ocular inspection of the goods to support its opposition to the motion to post counterbond.14

On December 22, 2005, the RTC issued an order: (1) sustaining the issuance of the writ of preliminary injunction; (2) granting Uniwide’s motion for ocular inspection; and (3) deferring the resolution of Trajano’s motion to post counterbond pending the ocular inspection of the subject goods.15

On January 11, 2006, Trajano sought a partial reconsideration of the December 22, 2005 order insofar as the RTC held that his motion to post counterbond would only be resolved after the ocular inspection. Trajano claimed that Uniwide entered into a contract of sale with Golden Sea for the importation of merchandise. On the other hand, Uniwide entered into a contract of loan with Trajano for the payment of these imported goods. Consequently, the determination of whether Golden Sea should credit in Uniwide’s account the total value of misdelivered, unsaleable, defective and/or damaged goods was a separate matter from Uniwide’s contractual obligation to pay Trajano the matured loan. The condition of the purchased goods was irrelevant with respect to Uniwide’s obligation to pay him the overdue loan. Trajano thus prayed that he be allowed to post a counter bond and to encash the post-dated checks. 16 On the same date, Golden Sea and Trajano also separately moved for the voluntary inhibition of Judge Madrona for his alleged bias towards Uniwide.17

On January 12, 2006, Trajano filed a supplemental motion to his motion for partial reconsideration dated January 11, 2006.In his supplemental motion, Trajano called the trial court’s attention to the statement of Uniwide’s counsel during the August 5, 2005 hearing that the agreement for the credit of misdelivered, unsaleable, defective and/or damaged goods only involved Uniwide and Golden Sea.18

On February 15, 2006, Judge Madrona recused himself from the case,19 but Uniwide moved to reconsider his voluntary inhibition. Thereafter, the case was re-raffled to the RTC of Parañaque – Branch 195, which was presided by Judge Aida Estrella Macapagal. Uniwide contested the re-raffling of the case due to its pending motion for reconsideration of Judge Madrona’s voluntary inhibition. On June 30, 2006, Judge Madrona denied Uniwide’s motion for reconsideration and the records of the case were subsequently transferred to Branch 195.20On March 17, 2006, Trajano filed a petition for certiorari with prayer for the issuance of a temporary restraining order and a writ of preliminary injunction docketed as CA-G.R. SP No. 93492before the CA. In his petition, Trajano sought to dissolve the writ enjoining him from encashing the post-dated checks.21 On January 22, 2008, the CA dissolved the writ of preliminary injunction with respect to Trajano for lack of factual basis.22 The CA held that Uniwide failed to prove that it had a clear and unmistakable right to be protected that warrants the issuance of the writ.23 This decision eventually became final and entry of judgment was made on February 27, 2008.24

Meanwhile, on March 29, 2006, Trajano filed before the RTC motions to resolve his motion to post counterbond and for partial reconsideration dated January 11, 2006.25 Trajano reiterated his motion to resolve on May 22, 2007.26

On August 28, 2006, Uniwide assailed Judge Madrona’s inhibition from the case27 in a petition for certiorari docketed as CA-G.R. SP No. 95885 before the CA.28 Uniwide argued that Judge Madrona’s perceived bias in its favor was unfounded, and that the preservation of the parties’ trust and confidence was an insufficient ground for Judge Madrona’s inhibition.29

The RTC RulingDue to the pendency of CA-G.R. SP No. 95885, the RTC issued an order dated June 19, 2007 deferring the resolution of Trajano’s motions to post counterbond and for partial reconsideration dated January 11, 2006.The RTC held that the issue of whether Judge Madrona should hear Civil Case No. 05-0265 presented a jurisdictional question that prevented Branch 195 from resolving Trajano’s pending motions.30

After the RTC denied31 Trajano’s motion for reconsideration32 in an order dated October 15, 2007, he filed a petition for certiorari assailing the June 19 and October 15, 2007 orders before the CA.33 The case was docketed as CA-G.R. SP No. 101815.The CA Ruling in CA-G.R. SP No. 101815In a decision dated July 29, 2009,the CA upheld the RTC rulings deferring the resolution of Trajano’s motions and suspending the proceedings in Civil Case No. 05-0265 during the pendency of CA-G.R. SP No. 95885. Citing Eternal Gardens Memorial Park v. Court of Appeals34 , the CA ruled that judicial courtesy prompted the RTC to await the final determination of CA-G.R. SP No. 95885 before taking cognizance of Trajano’s motions and continuing with the proceedings in Civil Case No. 05-0265.35

Trajano filed the present petition36 after the CA denied37 its motion for reconsideration.38

The PetitionIn the present petition, Trajano insists that the RTC should decide on his pending motions since the propriety of a judge’s inhibition does not determine the RTC’s jurisdiction over the subject matter of the case. He points out that jurisdiction is vested in the court, not in its branch or in the judge presiding the case. Trajano also opines that whether Judge Madrona correctly recused himself from the case merely involves the exercise of jurisdiction, not of jurisdiction itself. Trajano further asserts that the CA incorrectly applied the principle of judicial courtesy since the disposition of his motions before the RTC would not render the propriety of Judge Madrona’s voluntary inhibition moot.39

The Respondent’s PositionIn its Comment,40 Uniwide claims that Trajano’s petition is in fact an appeal from the June 19 and October 15, 2007 orders of the RTC since he did not raise the issue of "whether the CA correctly found that Judge Macapagal did not commit grave abuse of discretion" in deferring the resolution of Trajano’s pending motions. Thus, Trajano incorrectly availed of a Rule 45 petition in assailing the RTC’s interlocutory orders. Uniwide also points out that Trajano failed to show that Judge Macapagal gravely abused his discretion in issuing the June 19 and October 15, 2007 orders. Lastly, Uniwide prays for the outright denial of the petition because it lacks competent evidence of Trajano’s identity in its verification page.Proceedings in CA-G.R. SP No. 95885 and G.R. No. 193972In a decision dated May 5, 2010, the CAruled that the events that had transpired before Branch 274 of the Parañaque RTC provoked the parties’ suspicions that Judge Madrona prejudged the case, which warranted his inhibition.41 The CA also denied Uniwide’s motion for reconsideration,42 prompting Uniwide to elevate the case before the Supreme Court in Uniwide Sales Warehouse Club, Inc. v. Golden Sea Overseas Sales Corp., docketed as G.R. No. 193972, before the Court’s First Division.43

The IssuesThis case presents to us the following issues:(1) Whether the petition should be denied outright for procedural infirmities; in particular:(a) Whether the petition lacks proper verification; and(b) Whether the petition availed of the proper remedy in appealing the CA decision dated January 3, 2008 and resolution dated October 28, 2009;(2) Whether the resolution of Trajano’s motion to post counterbond,44 motion for partial reconsideration,45and supplemental motion to the motion for partial reconsideration46 is already moot and academic; and(3) Whether the CA erred in not finding that the RTC committed grave abuse of discretion in suspending the proceedings in Civil Case No. 05-0265.The Court’s RulingWe find the petition partly meritorious.I. The petition is not procedurally infirmA. The petition contains proper verificationContrary to Uniwide’s claim, the records of the case show that the petition’s verification page containsTrajano’s competent evidence of identity, specifically, Passport No. XX041470.47 Trajano’s failure to furnish Uniwide a copy of the petition containing his competent evidence of identity is a minor error that this Court may and chooses to brush aside in the interest of substantial justice. This Court has, in proper instances, relaxed the application of the Rules of Procedure when the party has shown substantial compliance with it.48 In these cases, we have held that the rules of procedure should not be applied in a very technical sense when it defeats the purpose for which it had been enacted, i.e., to ensure the orderly, just and speedy dispensation of cases.49 We maintain this ruling in this procedural aspect of this case.B. Trajano properly availed of a Rule 45 petition in assailing the January 3, 2008 decision and the October 28, 2009 resolution of the Court of AppealsWe also see no merit in Uniwide’s claim that Trajano improperly availed of the present petition for review on certiorari in assailing the RTC orders dated June 19 and October 15, 2007. The body of the petition clearly and unequivocably challenges the CA decision dated January 3, 2008 and resolution dated October 28, 2009. A petition for review on certiorari under Rule 45 of the Rules of Court invokes the Court’s appellate jurisdiction over questions of law that has been decided by the lower courts with finality. The CA decision assailed by the present petition involves its final order regarding the alleged grave abuse of discretion involved in the RTC’s interlocutory orders.1âwphi1This CA decision should not be confused with the RTC’s interlocutory orders that had been disputed before the CA, which was correctly contested by Trajano through a petition for certiorari. In J.L. Bernardo Construction v. Court of Appeals,50 we stated that a petition for certiorari is an appropriate remedy to assail an interlocutory order: (1) when the tribunal issued such order without or in excess of jurisdiction or with grave abuse of discretion and (2) when the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief.Thus, Trajano correctly filed a petition for certiorari before the CA in order to strike down the RTC’s interlocutory orders that he claims to have been issued with grave abuse of discretion. In the same vein, Trajano’s present petition for review on certiorari is also the proper remedy, as it questions the CA’s final order regarding the RTC’s interlocutory orders.II. The issue of whether the CA erred in finding no jurisdictional error in the June 19 and October 15, 2007 orders of the RTC is already moot and academicAmidst the myriad of procedures that the parties had taken before the lower courts and this Court, the main focus of the controversy — i.e., whether the CA erred in not finding a jurisdictional error on the June 19 and October 15, 2007 orders of the RTC — no longer presents a justiciable controversy. The CA and the parties have overlooked the crucial fact that the CA, in CA-G.R. SP No. 93492, had

already dissolved the writ of preliminary injunction that enjoined Trajano from encashing the subject post-dated checks. Moreover, the dissolution of the writ had long become final and executory on February 27, 2008.In its June 19 and October 15, 2007 orders, the RTC deferred the resolution of Trajano’s motions to post counterbond and for partial reconsideration dated January 11, 2006. These motions were filed to lift the writ of preliminary injunction. In addition, the motion for partial reconsideration questioned the RTC’s suspension of its ruling on the motion to post counterbond pending its ocular inspection of the subject goods. In turn, the order commanding the examination of the goods stemmed from Uniwide’s motion for ocular inspection in support of its opposition to Trajano’s motion to post counterbond.In other words, the gist of the controversy in CA-G.R. SP No. 101815 that are now the subject of the present petition pertains to the posting of counterbond to dissolve the writ of preliminary injunction, which had already been lifted with respect to Trajano in CA-G.R. SP No. 93492. Thus, Trajano is no longer entitled to any substantial relief on his pending motions before the RTC as the writ of preliminary injunction itself had already been dissolved with finality.We also note that Trajano himself admitted that the subject post-dated checks had already become stale. 51 A stale check is one which has not been presented for payment within a reasonable time after its issue; it is valueless and, therefore, should not be paid.52 For these reasons, we hold that this issue has been rendered moot and academic.III. The RTC should continue with the proceedings in Civil Case No. 05-0265 during the pendency of G.R. No. 193972Trajano alleges in his petition that the RTC did not set the case for Trial53 due to the pendency of CA-G.R. SP No. 95885 and subsequently, G.R. No. 193972. The mere pendency of a special civil action for certiorari commenced in relation to a case pending before a lower court does not automatically interrupt the proceedings in the lower court. A petition for certiorari does not divest the lower courts of jurisdiction validly acquired over the case pending before them. A petition for certiorari, unlike an appeal, is an original action; it is not a continuation of the proceedings in the lower court. It is designed to correct only errors of jurisdiction, including grave abuse of discretion amounting to lack or excess of jurisdiction.54

Under Section 7, Rule 65 of the Rules of Court, the higher court should issue against the public respondent a temporary restraining order or a writ of preliminary injunction in order to interrupt the course of the principal case.55 The petitioner in a Rule 65 petition has the burden of proof to show that there is a meritorious ground for the issuance of an injunctive writ or order to suspend the proceedings before the public respondent. He should show the existence of an urgent necessity for the writ or order, so that serious damage may be prevented. Nonetheless, even if an injunctive writ or order is issued, the lower court retains jurisdiction over the principal case.56

Indeed, we introduced in Eternal Gardens Memorial Park v. Court of Appeals57 the principle of judicial courtesy to justify the suspension of the proceedings before the lower court even without an injunctive writ or order from the higher court. In that case, we pronounced that "[d]ue respect for the Supreme Court and practical and ethical considerations should have prompted the appellate court to wait for the final determination of the petition [for certiorari] before taking cognizance of the case and trying to render moot exactly what was before this [C]ourt."58We subsequently reiterated the concept of judicial courtesy in Joy Mart Consolidated Corp. v. Court of Appeals.59

We, however, have qualified and limited the application of judicial courtesy in Go v. Abrogar60 and Republic v. Sandiganbayan.61 In these cases, we expressly delimited the application of judicial courtesy to maintain the efficacy of Section 7, Rule 65 of the Rules of Court, and held that the principle of judicial courtesy applies only "if there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court." Through these cases, we clarified that the principle of judicial courtesy remains to be the exception rather than the rule.62

From these perspectives, the appellate court erroneously applied the principle of judicial courtesy in the current case. There is no strong probability that the issue of the propriety of Judge Madrona’s voluntary inhibition in CA-G.R. SP No. 95885 would be rendered moot and academic by the continuation of the proceedings in the trial court.Furthermore, whether Judge Madrona properly inhibited himself from the case does not pose any jurisdictional problem in resolving the issues in Civil Case No. 05-0265. We agree with Trajano that jurisdiction vests in the trial court, not in the judges. We also point out in this respect that the various branches of the RTC of Parañaque are coordinate and co-equal courts whose totality constitutes only one RTC. Each of the RTC's branches is not a court separate and distinct from the other branches. When a complaint is filed before one branch or judge, jurisdiction does not attach to this branch or judge alone, to the exclusion of the others. Trial may be had or proceedings may continue by and before another branch or judge. The different branches in the RTC of Parañaque do not possess jurisdictions independent of and incompatible with each other.63

WHEREFORE, premises considered, we PARTLY GRANT the petition. The resolution of petitioner Juan Trajano's motion to post counterbond dated September 9, 2005, motion for partial reconsideration of the order allowing ocular inspection dated January 11, 2006, and supplemental motion to the motion for partial reconsideration dated January 12, 2006 is hereby declared MOOT AND ACADEMIC. The Regional Trial Court of Parañaque - Branch 195 is hereby ordered to CONTINUE with the proceedings in Civil Case No. 05-0265.SO ORDERED

G.R. No. 204796, February 04, 2015

REICON REALTY BUILDERS CORPORATION, Petitioner, v. DIAMOND DRAGON REALTY AND MANAGEMENT, INC., Respondent.

D E C I S I O N

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Resolutions dated May 21, 20122 and November 21, 20123 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 116845 which dismissed outright petitioner Reicon Realty Builders Corporation’s (Reicon) certiorari petition on procedural grounds.

The Facts

Reicon is the owner of a parcel of land and the one-storey building erected thereon located at the corner of Aurora Boulevard and Araneta Avenue, Sta. Mesa, Quezon City,4 covered by Transfer Certificate of Title No. 330668 (subject property).5 On January 9, 1991, Reicon and respondent Diamond Dragon Realty and Management, Inc. (Diamond) entered into a Contract of Lease6 (January 9, 1991 Contract), whereby Reicon leased the subject property to Diamond for a period of twenty (20) years, from January 15, 1991 to January 15, 2011, for a monthly rental of P75,000.00, subject to periodical increments.7 In turn, Diamond sublet portions of the subject property to Jollibee Foods Corporation8 (Jollibee) and Maybunga U.K. Enterprises (Maybunga), represented by its proprietor, Andrew D. Palangdao (Andrew).9

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Beginning June 2006, Diamond failed to pay the monthly rentals due, and the checks it had issued by way of payments from June 2006 to December 2006 were all dishonored upon presentment.10 This prompted Reicon to send, through counsel, a letter11 dated July 23, 2007 demanding the payment of the accrued rentals and terminating the January 9, 1991 Contract.12 Thereafter, it entered into separate contracts with Jollibee13 and Maybunga14 over the portions of the subject property they respectively occupy.

On December 14, 2009, Diamond filed a complaint15 for breach of contract with damages against Reicon, Jollibee, Maybunga, Andrew, and a certain Mary Palangdao (Mary) (defendants) before the Regional Trial Court of Pasig City, Branch 166 (RTC), docketed as Civil Case No. 72319, alleging that the January 9, 1991 Contract did not provide for its unilateral termination by either of the parties.16 It also alleged that the act of defendants in entering into separate contracts, despite the existence of the January 9, 1991 Contract, constitutes unlawful interference,17 for which they must be held solidarily liable for damages. As such, Diamond prayed that the unilateral termination of the January 9, 1991 Contract effected by Reicon, as well as the separate contracts of lease it entered into with Jollibee and Maybunga, be declared invalid and illegal.18 Further, it sought the award of unpaid rentals from Jollibee and Maybunga starting July 23, 2007 up to the present, moral and exemplary damages, and attorney’s fees.19

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By way of special appearance, Reicon filed a motion to dismiss20 the complaint on the following grounds: (a) lack of jurisdiction over its person, considering that the summons was not served upon its president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel, as required by the Rules of Court (Rules),21 but upon a certain Fernando Noyvo, a houseboy/gardener, at a residence located at 1217 Acacia St., Dasmariñas Village, Makati City, which is not the principal office of Reicon;22 (b) lack of legal capacity to sue as a juridical person on the part of Diamond, its certificate of registration having already been revoked by the Securities and Exchange Commission (SEC) as early as September 29, 2003, per certifications23 issued by the latter;24 and (c) lack of cause of action, in the absence of the requisite allegations of the ultimate facts constituting bad faith and malice on the part of the defendants as would support the cause of action of “unlawful interference.”25

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Opposing Reicon’s motion to dismiss, Diamond argued26 that, even assuming that summons was not properly served upon Reicon, improper service is not a ground to dismiss its complaint.27 It also insisted that it has legal capacity to sue,28 as the corporation whose certificate of registration was revoked was “Diamond Dragon Realty and Mgt. Inc.,” while its name, per its General Information Sheet29 for 2009, was “Diamond Dragon Realty & Management, Inc.” Moreover, it claimed that its legal existence cannot be attacked except in a quo warranto petition.30

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In its reply,31 Reicon pointed out, inter alia, that the corporation whose certificate of registration was revoked by the SEC on September 29, 200332 was registered under SEC No. 144830.33 Per the SEC’s Certificate of Corporate Filing/Information34 dated February 1, 2010 which referred to“Diamond Dragon Realty & Mgt. Inc.” as well as Certificate of Corporate Filing/Information35 dated March 2, 2010 which referred to “Diamond Dragon Realty and Management, Inc.,” both corporations were registered under SEC No. 144830, which can only mean that it is one and the same corporation. Reicon also reiterated its previous arguments in its motion to dismiss.

For its part, Jollibee filed a separate motion to dismiss36 the complaint on the ground of lack of jurisdiction over its person, the summons having been improperly served; lack of jurisdiction over the subject matter, as Diamond failed to allege the value of the subject property, which is required in an

action involving title to, or possession of, real property, as in this case; and improper venue.37 As for Maybunga, records do not show that they filed a similar motion for the dismissal of the complaint.

The RTC Ruling

In an Order38 dated June 9, 2010, the RTC denied Reicon’s (and Jollibee’s) motion to dismiss, ratiocinating that improper service of summons is not among the grounds enumerated under Section 1,39 Rule 16 of the Rules allowing for the dismissal of a complaint. With regard to the legal capacity of Diamond to sue as a juridical person, the RTC cited Section 2040 of the Corporation Code,41 in relation to Sections 142 and 543 of Rule 66 of the Rules, in ruling that Diamond’s legal existence can only be impugned in a quo warranto proceeding.

Reicon moved for reconsideration44 thereof which was, however, denied in an Order45 dated September 16, 2010.

The Proceedings Before the CA

Aggrieved, Reicon elevated the matter to the CA via petition for certiorari46  taken under Rule 65 of the Rules, ascribing grave abuse of discretion upon Presiding Judge Rowena De Juan Quinagoran (Judge Quinagoran) of the RTC in not dismissing Diamond’s complaint on the grounds discussed in Reicon’s motion to dismiss, particularly the issue respecting Diamond’s lack of legal capacity to sue.47Reicon filed its certiorari petition on November 18, 2010, entitled “Reicon Realty Builders Corporation v. Hon. Rowena De Juan-Quinagoran and Diamond Dragon Realty and Management, Inc.,” docketed as CA-G.R. SP No. 116845.

In a Resolution48 dated March 28, 2011, however, the CA required Reicon to show cause as to why its petition for certiorari should not be dismissed for its failure to acquire jurisdiction over the person of Diamond, as private respondent, as required under Section 4,49 Rule 46 of the Rules. It appears that the CA’s earlier Resolution dated January 5, 2011 addressed to Diamond, with address at “Suite 305, AIC Burgundy Empire Tower, ADB Ave., cor[.] Garnet50 Road, Ortigas Center 1605 Pasig City” was returned to it, with the notation “RTS-Moved Out.”51

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In its Compliance,52 Reicon stated that the address “Suite 305, AIC Burgundy Empire Tower, ADB Avenue corner Garnet Road, Ortigas Center, Pasig City” was Diamond’s address on record in Civil Case No. 72319, the civil case from which the certiorari petition originated. From the institution thereof up to the filing of Reicon’s petition before the CA, Diamond has not submitted any paper or pleading notifying the RTC of any change in its address. As such, Reicon maintained that the service of its petition to Diamond’s address as above-indicated should be deemed effective. In the alternative, it proffered that Diamond may be served through its counsel of record in Civil Case No. 72319, Atty. Anselmo A. Marqueda (Atty. Marqueda) of A.A. MARQUEDA LAW OFFICES, at the latter’s office address.53

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Alleging that it received a copy of Reicon’s Compliance, Diamond, through its counsel, Atty. Marqueda, filed a manifestation,54 under a special appearance, averring that Reicon’s petition forcertiorari must be dismissed outright for its failure to serve a copy thereof on its counsel of record (i.e., Atty. Marqueda).55 It cited the rule that when a party is represented by counsel, notice of proceedings must be served upon said counsel to constitute valid service.56

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In a Resolution57 dated May 21, 2012, the CA dismissed Reicon’s certiorari petition without passing upon its merits based on the following grounds: (a) non-compliance with the requirements of proof of service of the petition on Diamond pursuant to Section 3,58 Rule 46 of the Rules, and (b) non-compliance with the rule on service upon a party through counsel under Section 2, Rule 13 of the Rules.

Reicon’s motion for reconsideration59 was denied in a Resolution60 dated November 21, 2012, hence, this petition.

The Issues Before the Court

The sole issue to resolve is whether or not Reicon’s certiorari petition before the CA was properly served upon the person of Diamond.

The Court’s Ruling

The petition is meritorious.

I.

Sections 3 and 4, Rule 46 of the Rules, which covers cases originally filed61 before the CA, provide as follows: chanRoblesvirtualLawlibrary

SEC. 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.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto. x x x.cralawred

x x x x

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition.

SEC. 4. Jurisdiction over the person of respondent, how acquired. – The court shall acquire jurisdiction over the person of the respondent by the service on him of its order or resolution indicating its initial action on the petition or by his voluntary submission to such jurisdiction. (Emphases and underscoring supplied)

A punctilious review of the records, particularly of the certiorari petition filed by Reicon before the CA, shows that it contains the registry numbers corresponding to the registry receipts62 as well as the affidavit of service and/or filing63 of the person who filed and served the petition via registered mail on behalf of Reicon. These imply that a copy of Reicon’s certiorari petition had been served to the RTC as well as to Diamond through its address at “Suite 305 AIC Burgundy Empire Tower, ADB Avenue corner Garnet Road, Ortigas Center, Pasig City,”64 in compliance with Section 13,65 Rule 13 of the Rules on proof of service as well as with Sections 3 and 4 of Rule 46 above-quoted.66

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On this score, the Court notes that Diamond declared the aforesaid address as its business address67in its complaint before the RTC, and that there is dearth of evidence to show that it had since changed its address or had moved out. Hence, Reicon cannot be faulted for adopting the said address in serving a copy of its certiorari petition to Diamond in light of the requirement under Sections 3 and 4, Rule 46 of the Rules as above-cited, which merely entails service of the petition upon the respondent itself, not upon his counsel.

The underlying rationale behind this rule is that a certiorari proceeding is, by nature, an original and independent action, and, therefore not considered as part of the trial that had resulted in the rendition of the judgment or order complained of.68 Hence, at the preliminary point of serving thecertiorari petition, as in other initiatory pleadings, it cannot be said that an appearance for respondent has been made by his counsel. Consequently, the requirement under Section 2,69 Rule 13 of the Rules, which provides that if any party has appeared by counsel, service upon him shall be made upon his counsel, should not apply.

Thus, the CA erred when it dismissed Reicon’s certiorari petition outright for non-compliance with Section 3, Rule 46 of the Rules as well as the rule on service upon a party through counsel under Section 2, Rule 13 of the Rules. The service of said pleading upon the person of the respondent, and not upon his counsel, is what the rule properly requires, as in this case.

II.

On a related note, the Court further observes that jurisdiction over the person of Diamond had already been acquired by the CA through its voluntary appearance by virtue of the Manifestation dated May 5, 2011, filed by its counsel, Atty. Marqueda, who, as the records would show, had consistently represented Diamond before the proceedings in the court a quo and even before this Court. To restate, Section 4, Rule 46 of the Rules provides: chanRoblesvirtualLawlibrary

SEC. 4. Jurisdiction over person of respondent, how acquired. — The court shall acquirejurisdiction over the person of the respondent by the service on him of its order or resolution indicating its initial action on the petition or by his voluntary submission to such jurisdiction. (Emphasis and underscoring supplied)

Hence, while the CA’s resolution indicating its initial action on the petition, i.e., the Resolution dated January 5, 2011 requiring Diamond to comment, was returned with the notation “RTS-Moved Out,” the alternative mode of Diamond’s voluntary appearance was enough for the CA to acquire jurisdiction over its person. Diamond cannot escape this conclusion by invoking the convenient excuse of limiting its manifestation as a mere “special appearance,” considering that it affirmatively sought therein the dismissal of the certiorari petition. Seeking an affirmative relief is inconsistent with the position that no voluntary appearance had been made, and to ask for such relief, without the proper objection, necessitates submission to the Court’s jurisdiction. Here, Diamond’s special appearance cannot be treated as a specific objection to the CA’s jurisdiction over its person for the reason that the argument it pressed on was about the alleged error in the service of Reicon’s certiorari petition, and not the CA’s service of its resolution indicating its initial action on the said pleading. Properly speaking, this argument does not have anything to do with the CA’s acquisition of jurisdiction over Diamond for it is the service of the appellate court’s resolution indicating its initial action, and not of the certiorari petition itself, which is material to this analysis.

Note that the conclusion would be different if Diamond had actually objected to the CA’s service of its resolution indicating its initial action; if such were the case, then its special appearance could then be treated as a proper conditional appearance challenging the CA’s jurisdiction over its person. To parallel, in ordinary civil cases, a conditional appearance to object to a trial court’s jurisdiction over the person of the defendant may be made when said party specifically objects to the service of summons, which is an issuance directed by the court, not the complainant. If the defendant, however, enters a special appearance but grounds the same on the service of the complainant’s initiatory pleading to him, then that would not be considered as an objection to the court’s jurisdiction over his person. It must be underscored that the service of the initiatory pleading has nothing to do with how courts acquire jurisdiction over the person of the defendant in an ordinary civil action. Rather, it is the propriety of the trial court’s service of summons – same as the CA’s service of its resolution indicating its initial action on the certiorari petition – which remains material to the matter of  the court’s acquisition jurisdiction over the defendant’s/respondents’ person.

In Philippine Commercial International Bank v. Spouses Dy,70 it was ruled that “[a]s a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, is considered voluntary submission to the court’s jurisdiction. This, however, is tempered by the concept of conditional appearance, such that a party who makes a special appearance to challenge, among others, the court’s jurisdiction over his person cannot be considered to have submitted to its authority.

Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court,especially in instances where a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution.”71

Considering that the tenor of Diamond’s objection in its special appearance had actually no legal bearing on the CA’s jurisdiction over its person (that is, since it objected to the propriety of Reicon’s service of its petition, and not the CA’s service of its order indicating its initial action), it cannot be said that the proper objection to the appellate court’s jurisdiction, as above-discussed, had been made by Diamond. Thus, by asking for an affirmative relief, i.e., the dismissal of Reicon’s certioraripetition, bereft of the proper jurisdictional objection, the Court therefore concludes that Diamond had submitted itself to the jurisdiction of the appellate court.

In fine, the proper course of action would be for the CA to reinstate Reicon’s certiorari petition, docketed as CA-G.R. SP No. 116845, given that it had already acquired jurisdiction over Diamond’s person. In order to ensure that Diamond’s due process rights are protected, Reicon should, however, be directed to submit proof that the service of its petition had actually been completed in accordance with Rule 1372 of the Rules.73 Diamond, in the meantime, should be ordered to furnish the CA the details of its current address and confirm whether or not Atty. Marqueda would be representing it as its counsel of record in the main (and not only through special appearance); if Diamond will be represented by a different counsel, it must so notify the appellate court. Henceforth, all pleadings and papers should be addressed to such counsel and would equally bind Diamond as client. Throughout the proceedings, the CA is exhorted to bear in mind the judicial policy to resolve the present controversy with utmost dispatch in order to avoid further delay.

WHEREFORE, the petition is GRANTED. The Resolutions dated May 21, 2012 and November 21, 2012 of the Court of Appeals (CA) are REVERSED and SET ASIDE. Accordingly, the CA isDIRECTED to REINSTATE the petition for certiorari, docketed as CA-G.R. SP No. 116845 under the parameters discussed in this Decision.

SO ORDERED

G.R. No. 206653               February 25, 2015YUK LING ONG, Petitioner, vs.BENJAMIN T. CO, Respondent.D E C I S I O NMENDOZA, J.:In court proceedings, there is no right more cherished than the right of every litigant to be given an opportunity to be heard. This right begins at the very moment that summons is served on the defendant. The Rules of Court places utmost importance in ensuring that the defendant personally grasp the weight of responsibility that will befall him. Thus, it is only in exceptional circumstances that constructive notification, or substituted service of summons, is allowed. If the server falls short of the rigorous requirements for substituted service of summons, then the Court has no other option but to strike down a void judgment, regardless of the consequences. This is a petition for review on certiorari seeking to reverse and set aside the June 27, 2012 Decision1 and the March 26, 2013 Resolution2 of the Court of Appeals (CA)in CA-G.R. SP No. 106271, which denied the petition for annulment of judgment.The FactsPetitioner Yuk Ling Ong (petitioner), a British-Hong Kong national, and respondent Benjamin Co (respondent), a Filipino citizen, were married on October 3, 1982 at Ellinwood-Malate Church.3

Sometime in November 2008, petitioner received a subpoena from the Bureau of Immigration and Deportation (BID)directing her to appear before the said agency because her permanent residence visa was being subjected to cancellation proceedings. Reportedly, her marriage with respondent was nullified by the court.When petitioner appeared before the BID, she was furnished with the copies of the following documents: (1) petition for declaration of nullity of marriage filed as Civil Case No. CV-01-0177; (2) petition for declaration of nullity of marriage docketed as Civil Case No. 02-0306; (3) Decision,4 dated December 11, 2002, in Civil Case No. 02-0306 of the Regional Trial Court, Branch 260 (RTC), Parañaque City, declaring the marriage between petitioner and respondent as void ab initio; and (4) their marriage contract 5 with the subject decision annotated thereon. Petitioner was perplexed that her marriage with respondent had been declared void ab initio. The above documents showed that on April 26, 2001, respondent filed a petition for declaration of nullity 6 on the ground of psychological incapacity before the RTC, which was docketed as Civil Case No. CV-01-0177. Respondent stated that petitioner’s address was 600 Elcano St., Binondo, Manila. There was no showing of its status, whether pending, withdrawn or terminated. On July 19, 2002, respondent filed another petition for declaration of Nullity7 on the ground of psychological incapacity before the RTC, docketed as Civil Case No. 02-0306. Respondent indicated that petitioner’s address was 23 Sta. Rosa Street, Unit B-2 Manresa Garden Homes, Quezon City. On July 29, 2002, the RTC issued summons.8 In his Server’s Return,9 process server Rodolfo Torres, Jr. stated that, on August 1, 2002, substituted service of summons with the copy of the petition was effected after several futile attempts to serve the same personally on petitioner. The said documents were received by Mr. Roly Espinosa, a security officer.On December 11, 2002, the RTC rendered a decision10 in Civil Case No. 02-0306 finding respondent’s marriage with petitioner as void ab initio on the ground of psychological incapacity under Article 36 of the Family Code. It stated that summons was served on petitioner on August 1, 2002, but she failed to file her responsive pleading within the reglementary period. The public prosecutor also stated that there were no indicative facts to manifest collusion. Thus, the RTC concluded that petitioner was psychologically incapacitated to perform her essential marital obligations.Consequently, petitioner filed a petition for annulment of judgment11 under Rule 47 of the Rules of Court before the CA on November 24, 2008, claiming that she was never notified of the cases filed against her. She prayed that the RTC decision, dated December 11, 2002, in Civil Case No. 02-0306, be nullified on the grounds of extrinsic fraud and lack of jurisdiction. Petitioner alleged that first, respondent committed extrinsic fraud because, as seen in Civil Case No. CV-01-0177, he deliberately indicated a wrong address to prevent her from participating in the trial; second, jurisdiction over her person was not acquired in Civil Case No. 02-0306 because of an invalid substituted service of summons as no sufficient explanation, showing impossibility of personal service, was stated before resorting to substituted service of summons; third, the alleged substituted service was made on a security guard of their townhouse and not on a member of her household; and fourth, she was not psychologically incapacitated to perform her marital obligations.12

Ruling of the Court of AppealsOn June 27, 2012, the CA rendered the assailed decision finding the petition for annulment of judgment to be devoid of merit. It held that there was no sufficient proof to establish that respondent employed fraud to insure petitioner’s non-participation in the trial of Civil Case No. CV-01-0177.Relying on Robinson v. Miralles,13 the CA further ruled that the substituted service of summons in Civil Case No. 02-0306 was valid. It found that there was a customary practice in petitioner’s townhouse that the security guard would first entertain any visitors and receive any communication in behalf of the homeowners. With this set-up, it was obviously impossible for the process server to personally serve the summons upon petitioner. It also declared that the process server’s return carries with it the presumption of regularity in the discharge of a public officer’s duties and functions.Petitioner moved for reconsideration, but her motion was denied by the CA in its Resolution,14 dated March 26, 2013.Hence, this petition, anchored on the followingISSUES1. Whether or not the Trial Court in Civil Case No. 02-0306 validly acquired jurisdiction over the person of the petitioner.2. Whether or not the facts proven by the petitioner constitute extrinsic fraud within the purview of Rule 47 of the Rules of Court.15

Petitioner argues that there was an invalid substituted service of summons.1âwphi1 The process server’s return only contained a general statement that substituted service was resorted to "after several futile attempts to serve the same personally," 16 without stating the dates and reasons of the failed attempts. Petitioner also reiterates her argument that extrinsic fraud was employed.In his Comment,17 filed on July 9, 2014, respondent contended that the server’s return satisfactorily stated the reason for the resort to a substituted service of summons on August 1, 2002; and it was improbable that petitioner failed to receive the summons because it was sent to the same address which she declared in this present petition.Petitioner filed her Reply18 on October 8, 2014 reiterating her previous arguments.The Court’s RulingThe Court finds merit in the petition.Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy. Rule 47 of the 1997 Rules of Civil Procedure, as amended, governs actions for annulment of judgments or final orders and resolutions, and Section 2 thereof explicitly provides only two grounds for annulment of judgment, that is, extrinsic fraud and lack of jurisdiction.19 Annulment of judgment is an equitable principle not because it allows a party-litigant another opportunity to reopen a judgment that has long lapsed into finality but because it enables him to be discharged from the burden of being bound to a judgment that is an absolute nullity to begin with.20

Petitioner raises two grounds to support her claim for annulment of judgment: (1) extrinsic fraud and (2) lack of jurisdiction. Her contention on the existence of extrinsic fraud, however, is too unsubstantial to warrant consideration. The discussion shall then focus on the ground of lack of jurisdiction.Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner. The former is a matter of substantive law because statutory law defines the jurisdiction of the courts over the subject matter or nature of the action. The latter is a matter of procedural law, for it involves the service of summons or other processes on the petitioner.21

In the present case, petitioner contends that there was lack of jurisdiction over her person because there was an invalid substituted service of summons. Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant's voluntary appearance in court.22 If the defendant does not voluntarily appear in court, jurisdiction can be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the Rules of Court, which state:Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant's residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with some competent person in charge thereof.The landmark case of Manotoc v. CA (Manotoc)23 thoroughly discussed the rigorous requirements of a substituted service of summons, to wit: xxx(1) Impossibility of Prompt Personal Servicex x xFor substituted service of summons to be available, there must be several attempts by the sheriff to personally serve the summons within a reasonable period of one month which eventually resulted in failure to prove impossibility of prompt service. "Several attempts" means at least three (3) tries, preferably on at least two different dates. In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that impossibility of service can be confirmed or accepted.(2) Specific Details in the ReturnThe sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted personal service. The efforts made to find the defendant and the reasons behind the failure must be clearly narrated in detail in the Return. The date and time of the attempts on personal service, the inquiries made to locate the defendant, the name/s of the occupants of the alleged residence or house of defendant and all other acts done, though futile, to serve the summons on defendant must be specified in the Return to justify substituted service.(3) A Person of Suitable Age and Discretionx x xThe sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipient's relationship with the defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and specifically described in the Return of Summons. (Emphases and underscoring supplied)The pronouncements of the Court in Manotoc have been applied to several succeeding cases. In Pascual v. Pascual, 24 the return of summons did not show or indicate the actual exertion or positive steps taken by the officer or process server in serving the summons personally to the defendant. Similarly, in Spouses Afdal v. Carlos,25 the process server’s indorsements therein failed to state that the personal service on the defendants was rendered impossible and that efforts were made to find them personally. In both those cases, the Court ruled that the meticulous requirements for substituted service of summons were not met.There are cases, however, in which Manotoc was applied, but, nevertheless, it was ruled that there was no lack of jurisdiction over the person of the defendant. In Sagana v. Francisco,26 the diligent efforts exerted by the sheriff to locate the respondent were determined, not only based on the sheriff's return, but also on the process server's notation and case records. In the case of Wong v. Factor-Koyama,27 on the other hand, even if the sheriff performed an invalid substituted service of summons, jurisdiction over the person of defendant was obtained because the latter had actively participated in trial, amounting to a voluntary appearance under Section 20 of Rule 14.28

In the case at bench, the summons in Civil Case No. 02-030629 was issued on July 29, 2002. In his server’s return,30 the process server resorted to substituted service of summons on August 1, 2002. Surprisingly, the process server immediately opted for substituted service of summons after only two (2) days from the issuance of the summons. The server’s return stated the following:SERVER’S RETURNTHIS IS TO CERTIFY THAT on August 1, 2002, substituted service of summons with copy of petition, were effected to respondent, Yuk Ling H. Ong, at the Unit B-2, No. 23 Sta. Rosa St., Manresa Garden Homes, Manresa Garden City, Quezon City, after several futile attempts to serve the same personally. The said documents were received by Mr. Roly Espinosa of sufficient age and discretion, the Security Officer thereat.Therefore, respectfully returning to Court, original copy of summons, Duly Served, this 2nd day of August, 2002.RODOLFO P. TORRES, JR.Process Server(Emphasis supplied)The server’s return utterly lacks sufficient detail of the attempts undertaken by the process server to personally serve the summons on petitioner. The server simply made a general statement that summons was effected after several futile attempts to serve the

same personally. The server did not state the specific number of attempts made to perform the personal service of summons; the dates and the corresponding time the attempts were made; and the underlying reason for each unsuccessful service. He did not explain either if there were inquiries made to locate the petitioner, who was the defendant in the case. These important acts to serve the summons on petitioner, though futile, must be specified in the return to justify substituted service.The server’s return did not describe in detail the person who received the summons, on behalf of petitioner. It simply stated that the summons was received "by Mr. Roly Espinosa of sufficient age and discretion, the Security Officer thereat." It did not expound on the competence of the security officer to receive the summons.Also, aside from the server’s return, respondent failed to indicate any portion of the records which would describe the specific attempts to personally serve the summons. Respondent did not even claim that petitioner made any voluntary appearance and actively participated in Civil Case No. 02-0306.The case of Robinson v. Miralles, cited by the CA, is not applicable. In that case, the return described in thorough detail how the security guard refused the sheriff’s entry despite several attempts. The defendant in the said case specifically instructed the guard to prevent anybody to proceed to her residence. In the present case, the attempts made by the process server were stated in a broad and ambiguous statement.The CA likewise erred in ruling that the presumption of regularity in the performance of official duty could be applied in the case at bench. This p resumption of regularity, however, was never intended to be applied even in cases where there are no showing of substantial compliance with the requirements of the rules of procedure. Such presumption does not apply where it is patent that the sheriff's or server's return is defective.31 As earlier explained, the server's return did not comply with the stringent requirements of substituted service of summons.Given that the meticulous requirements in Manotoc were not met, the Court is not inclined to uphold the CA's denial of the petition for annulment of judgment for lack of jurisdiction over the person of petitioner because there was an invalid substituted service of summons. Accordingly, the decision in Civil Case No. 02-0306 must be declared null and void.The stricter rule in substituted service of summons was meant to address "[t]he numerous claims of irregularities in substituted service which have spawned the filing of a great number of unnecessary special civil actions of certiorari and appeals to higher courts, resulting in prolonged litigation and wasteful legal expenses."32

Although the decision in Civil Case No. 02-0306 was promulgated as early as December 11, 2002, the Court must strike it down for lack of jurisdiction over the person of petitioner. The favorable judgment enjoyed by respondent cannot be categorized as a genuine victory because it was fought against an adversary, who was ignorant of the existing dispute. Whatever prize bestowed upon the victor in such a void decision must also be undone. Respondent, if he wishes to pursue, must start from scratch and institute his action for declaration of nullity again; this time with petitioner fully aware and ready for litigation.WHEREFORE, the petition is GRANTED. The June 27, 2012 Decision and the March 26, 2013 Resolution of the Court of Appeals in CAG.R. SP No. 106271 are hereby REVERSED and SET ASIDE. The December 11, 2002 Decision of the Regional Trial Court, Branch 260, Parañaque City is hereby declared VOID.SO ORDERED.JOSE CATRAL MENDOZA