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1st Meeting
La Naval Drug Corp v. CA and Yao
Yao is present owner of a commercial bldg a portion of
which is leased to P under a contract of lease which
expired year 1989.
P exercised its option to lease same bldg for another 5
years but P & R disagreed on the rental rate.
P, to resolve controversy, submitted to arbitration pursuant
to RA 876.
R appointed Alamarez as arbitrator while P chose Sabile as
its arbitrator. The confirmation of the appointment of a
third arbitrator Tupang, was held in abeyance because P
instructed Sabile to defer the same until the BoD could
convene approve Tupangs appointment. This was accdg to
R, Ps dilatory tactic in violation of the Arbitration Law and
the governing stipulation.
R prayed that after summary hearing pursuant to Sec. 6 of
the A.Law, Sabile and Alamarez be directed to proceed with
the arbitration in acc with Sec. 7 of the Contract and the
applicable provisions of the law; and that the Board of
Three Arbitrators be ordered to convene and resolve
P denied the averments of petition theorizing that such
petition is premature since there was failure of notice on
the part of R requiring both arbitrators to appoint third
member of the BoA. It gave the arbitrators a free hand in
choosing the third arbitrator, thus, R has no cause of action
against it.
R filed an amended petition for Enforcement of Arbitration
Agreement with Damages; praying that petitioner be
ordered to pay interest on the unpaid rents (prevailing
interest) and exemplary damages.
P answered, contending among others, that amended
petition should be dismissed OTG of non-payment of
requisite filing fees; and it being in the nature of an
ordinary civil action, a full blown and regular trial is
necessary. P presented a Motion to Set Case for
Preliminary Hearing of its special and affirmative defenses
which are grounds for a motion to dismiss.
Resp Court announced that the two arbitrators chose
Narciso as third arbitrator. It also ordered the parties to

submit position papers re: w/n resp Yaos claim for

damages may be litigated upon in the summary
proceeding for enforcement of arbitration agreement.
P argued that respondent court sits as a a special court
exercising limited jurisdiction and not competent to act on
Rs claim for damages which poses an issue litigable in an
ordinary civil action.
Appellate court considered P in estoppel from questioning
the competence of the court to additionally hear and
decide in the summary proceedings Rs claim for damages,
it (P) having itself filed similarly its counterclaim with the
court a quo.

ISSUE: W/N the submission of other issues in a motion to dismiss,

or of an affirmative defense in an answer, would necessarily
foreclose and have the effect of a waiver of, the right of a
defendant to set up the courts lack of jurisdiction over the person
of the defendant?
RULING: Not inevitably. Section 1, Rule 16 of the Rules provides the
grounds for a motion to dismiss. Any of these grounds, except
improper venue, may be pleaded as an affirmative defense (admits
the material allegations of the complaint but has the effect of
preventing recovery by plaintiff) may be had as if a motion to
dismiss had been filed.
It appears that it is not the invocation of any of such defenses, but
the failure to so raise them, that can result in waiver or estoppel.
Lack of jurisdiction over the subject matter of the suit is yet
another matter. Whenever it appears that the court has no
jurisdiction over the subject matter, the action shall be dismissed
(Sec. 2, Rule 9). However, jurisdiction over the nature the action, in
concept, differs from jurisdiction over the subject matter. Lack of
jurisdiction over the nature of the action is the situation that arises
when a court, which ordinarily would have the authority and
competence to take a case, is rendered without it either because a
special law has limited the exercise of its normal jurisdiction on a
particular matter or because the type of action has been reposed
by law in certain other courts or quasi-judicial agencies for


(1) Jurisdiction over the person must be seasonably raised, i.e.,
that it is pleaded in a motion to dismiss or by way of an
affirmative defense in an answer. Voluntary appearance
shall be deemed a waiver of this defense. The assertion,
however, of affirmative defenses shall not be constructed
as an estoppel or as a waiver of such defense.
(2) Where the court itself clearly has no jurisdiction over the
subject matter or the nature of the action, the invocation of
this defense may be done at any time. It is neither for the
courts nor the parties to violate or disregard that rule, let
alone to confer that jurisdiction, this matter being
legislative in character. Barring highly meritorious and
exceptional circumstances, such as hereinbefore
exemplified, neither estoppel nor waiver shall apply.
In the case at bench, the want of jurisdiction by the court is
indisputable, given the nature of the controversy. The arbitration
law explicitly confines the court's authority only to pass upon the
issue of whether there is or there is no agreement in writing
providing for arbitration. In the affirmative, the statute ordains that
the court shall issue an order "summarily directing the parties to
proceed with the arbitration in accordance with the terms thereof."
If the court, upon the other hand, finds that no such agreement
exists, "the proceeding shall be dismissed." The proceedings are
summary in nature.
All considered, the court a quo must then refrain from taking up
the claims of the contending parties for damages, which, upon the
other hand, may be ventilated in separate regular proceedings at
an opportune time and venue.
Atwel v. Concepcion Progressive Asso Inc.
Assemblyman Emilio Melgazo founded and organized
Concepcion Progressive Association (CPA) in Hilongos,
Leyte. The organization aimed to provide livelihood to and
generate income for his supporters.
Melgazo was elected President. He then bought a parcel of
land in behalf of the association. The property was later on
converted into a wet market where agricultural, livestock
and other farm products were sold. It also housed a cockpit
and an area for various forms of amusement. The income

generated from the property, mostly rentals from the wet

market, was paid to CPA.
When Emiliano Melgazo died, his son, petitioner Manuel
Melgazo, succeeded him as CPA president and
administrator of the property. On the other hand,
petitioners Atwel and Pilpil were elected as CPA vicepresident and treasurer, respectively.
While CPA was in the process of registering as a stock
corporation, its other elected officers and members formed
their own group and registered themselves in the SEC
officers and members of respondent Concepcion
Progressive Association, Inc. (CPAI). Petitioners were not
listed either as officers or members of CPAI. Later, CPAI
objected to petitioners' collection of rentals from the wet
market vendors.
CPAI filed a case in the SEC for mandatory injunction.5 With
the passage of RA 8799, the case was transferred to
Branch 24 of the Southern Leyte RTC and subsequently, to
Branch 8 of the Tacloban City RTC. Both were special
commercial courts.
CPAI alleged that it was the owner of the property and
petitioners, without authority, were collecting rentals from
the wet market vendors. Petitioners refuted CPAI's claim
saying that it was preposterous and impossible for the
latter to have acquired ownership over the property in
1968 when it was only in 1997 that it was incorporated and
registered with the SEC. Petitioners was purchased using
the money of petitioner Manuel Melgazo's father (the late
Emiliano Melgazo), it belonged to the latter.
The special commercial court ruled that the deed of sale
covering the property was in the name of CPA, not Emiliano
Melgazo. It also considered CPA to be one and the same as
Petitioners went to the CA and contested the jurisdiction of
the special commercial court over the case. According to
them, they were not CPAI members, hence the case did not
involve an intra-corporate dispute "between and among
members" so as to warrant the special commercial court's
jurisdiction over it.
CPAI, on the other hand, argued that petitioners were
already in estoppel as they had participated actively in the
court proceedings to which the CA agreed.



CA held that the fact that petitioners are admittedly not

members of CPAI, then, the special commercial court
should not have taken cognizance of the case as it
exercises special and limited jurisdiction under R.A. No.
8799. However, as correctly argued and pointed out by
CPAI, the acts of the petitioners, through their counsel, in
participating in the trial of the case...show that they
themselves consider the trial court to have jurisdiction over
the case.
Petitioners essentially argue that estoppel cannot apply
because a court's jurisdiction is conferred exclusively by
the Constitution or by law, not by the parties' agreement or
by estoppel.

1. W/N the court a quo has jurisdiction over the case?
2. Did the doctrine of estoppel bar petitioners from
questioning the jurisdiction of the special commercial
1. NONE. Originally, section 5 of Presidential Decree (PD) 902A13 conferred on the SEC original and exclusive jurisdiction
over intra-corporate controversies. However, the
jurisdiction of the SEC over such and other cases
enumerated under it were later on transferred to the courts
of general jurisdiction pursuant to the enactment of RA
To determine whether a case involves an intra-corporate
controversy to be heard and decided by the RTC, two
elements must concur: (1) the status or relationship of the
parties and; (2) the nature of the question that is subject of
their controversy. These elements were not present in the
case at bar. Moreover, the issue in this case does not
concern the regulation of CPAI or even CPA. The
determination as to who is the true owner of the disputed
property should be threshed out in a regular court. Cases
of this nature are cognizable by the RTC under BP 129.
Therefore, the conflict among the parties here was outside
the jurisdiction of the special commercial court.


NO. The rule remains that estoppel does not confer

jurisdiction on a tribunal that has none over the cause of
action or subject matter of the case. Unfortunately for
CPAI, no exceptional circumstance appears in this case to
warrant divergence from the rule. Jurisdiction by estoppel
is not available here. Consequently, CPAI cannot be
permitted to wrest from petitioners (as the remaining CPA
officers) the administration of the disputed property until
after the parties' rights are clearly adjudicated in the
proper courts. It is neither fair nor legal to bind a party to
the result of a suit or proceeding in a court with no
jurisdiction. The decision of a tribunal not vested with the
appropriate jurisdiction is null and void.

City of Bacolod v. San Miguel

On February 17, 1949, the City Council of Bacolod passed
Ordinance No. 66, series of 1949 imposing upon "any
person, firm or corporation engaged in the manufacturer
bottling of coca-cola, pepsi cola, tru orange, lemonade, and
other soft drinks within the jurisdiction of the City of
Bacolod, ... a fee of ONE TWENTY-FOURTH (1/24) of a
centavo for every bottle thereof," plus "a surcharge of 2%
every month, but in no case to exceed 24% for one whole
year," upon "such local manufacturers or bottler abovementioned who will be delinquent on any amount of fees
due" under the ordinance. This ordinance was
subsequently amended by Ordinance No. 150 by increasing
the fee to 1/8 of a centavo for every bottle thereof.
Such increase was opposed by the appellant San Miguel.
Appellee CoB sued appellant SM. Court rendered judgment
in favor of CoB ordering SM to pay it the sum of P26K and
the tax at the rate of 3 centavos oer case.
Appellant SM appealed from the said decision to this Court
where it pressed the question of the invalidity of the
abovementioned taxing ordinances. In that appeal,
however, the Court affirmed the decision appealed from
and upheld the constitutionality of the questioned
ordinances and the authority of the appellee to enact the
For reasons not extant in the record, it was already after
this decision had become final when appellee moved for



the reconsideration thereof, praying that the same be

amended so as to include the penalties and surcharges
provided for in the ordinances.
Said motion was denied, for the reason that "the decision is
already final and may not be amended." When execution
was had before the lower court, the appellee again sought
the inclusion of the surcharges referred to; and once again
the move was frustrated by the Court of First Instance of
Negros Occidental which denied the motion.
Failing thus in its attempt to collect the surcharge provided
for in the ordinances, appellee filed a second action to
collection the said surcharges (P36K).
Appellant SM filed a motion to dismiss the case on the
grounds that: (1) the cause of action is barred by a prior
judgment, and (2) a party may not institute more than one
suit for a single cause of action. This motion was denied by
the court a quo so appellant filed its answer wherein it
substantially reiterated, as affirmative defenses, the
above-mentioned grounds of its motion to dismiss.
Thereafter, the parties submitted the case for judgment on
the pleadings, whereupon, the court rendered judgment
ordering the defendant San Miguel Brewery, Inc. to pay to
the plaintiff the sum of P36,519.10 representing the
surcharges as provided in section 4 of Ordinance 66, series
of 1949 of the City of Bacolod.

ISSUE: W/N petitioners act of filing another action for surcharges

constitutes splitting of action?
RULING: YES. Appellant SMs position was upheld by the Court.
There is no question that appellee split up its cause of action when
it filed the first complaint seeking the recovery of only the bottling
taxes or charges plus legal interest, without mentioning in any
manner the surcharges.
The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the
Rules of Court of 1940 which were still in force then provided:
SEC. 3. Splitting a cause of action, forbidden. A single
cause of action cannot be split up into two or more parts so
as to be made the subject of different complaints. .
SEC. 4. Effect of splitting. If separate complaints were
brought for different parts of a single cause of action, the

filing of the first may be pleaded in abatement of the

others, and a judgment upon the merits in either is
available as a bar in the others.
Indeed, this rule against the splitting up of a cause of action is an
old one. In fact, it preceded the Rules of Court or any statutory
The classical definition of a cause of action is that it is "a delict or
wrong by which the rights of the plaintiff are violated by the
defendant." Its elements may be generally stated to be (1) a right
existing in favor of the plaintiff; (2) a corresponding obligation on
the part of the defendant to respect such right; and (3) an act or
omission of the plaintiff which constitutes a violation of the
plaintiff's right which defendant had the duty to respect. In the last
analysis, a cause of action is basically an act or an omission or
several acts or omissions. A single act or omission can be violative
of various rights at the same time, as when the act constitutes
juridically a violation of several separate and distinct legal
obligations. On the other hand, it can happen also that several acts
or omissions may violate only one right, in which case, there would
be only one cause of action. Again the violation of a single right
may give rise to more than one relief. In other words, for a single
cause of action or violation of a right, the plaintiff may be entitled
to several reliefs. It is the filing of separate complaints for these
several reliefs that constitutes splitting up of the cause of action.
This is what is prohibited by the rule.
In the case at bar, when appellant failed and refused to pay the
difference in bottling charges such act of appellant in violation of
the right of appellee to be paid said charges in full under the
Ordinance, was one single cause of action, but under the
Ordinance, appellee became entitled, as a result of such nonpayment, to two reliefs, namely: (1) the recovery of the balance of
the basic charges; and (2) the payment of the corresponding
surcharges, the latter being merely a consequence of the failure to
pay the former.
The obligation of appellant to pay the surcharges arose from the
violation by said appellant of the same right of appellee from which
the obligation to pay the basic charges also arose. Upon these
facts, it is obvious that appellee has filed separate complaints for


each of two reliefs related to the same single cause of action,
thereby splitting up the said cause of action.
Jalandoni v. Martir-Guanzon
On January 9, 1947, the appellant spouses began a suit
(Case No. 573) against the appellees Antonio Guanzon, eta
al., for partition of various lots and for recovery of damages
caused by the defendants' unwarranted refusal to
recognize plaintiffs' right and partition said lots, as was to
account for and deliver plaintiff's share in the crops
obtained during the agricultural years from 1941-1942 to
Court of First Instance of Negros Occidental held for
plaintiffs and ordered the partition of the lands involved,
but denied their claim for damages because of failure to
"prove the exact and actual damages suffered by them.
The decision having become final because none of the
parties appealed therefrom, the plaintiffs instituted the
present action seeking recovery from the defendants for
moral and exemplary damages, share of the products of
the property from 1947 until 1955, taxes due unpaid and
attorneys fees.
Upon motion of defendant's, the court a quo dismissed the
second complaint for failure to state a cause of action; and
after their motion to reconsider was denied, plaintiffs
appealed to this Court on points of law.
ISSUE: W/N dismissal was proper?
RULING: YES. The Court found the dismissal of the lower court to
have been correctly entered. Except as concomitant to physical
injuries, moral and corrective damages (allegedly due to suffering,
anguish and axiety caused by the refusal of defendants in 1941 to
partition the common property) were not recoverable under the
Civil Code of 1899 which was the governing law at the time.
Recovery of such damages was established for the first time in
1950 by the new Civil Code, and action not be made to apply
retroactively to acts that occurred character of these damages. The
rule is expressly laid down by paragraph 1 of Article 2257 of the
new Code.

As to the value of the plaintiff's share in the products of the land

during the time that the former action was pending (which are the
damages claimed under the second cause of action), their recovery
is now barred by the previous judgment.
In the same way that plaintiffs claimed for their share of the
produce from 1941 to 1947, these later damages could have been
claimed in the first action, either in the original complaint or else
by supplemental pleading. To allow them to be recovered by
subsequent suit would be a violation of the rule against
multiplicity of suits, and specifically of sections 3 and 4 of
Rules 2 of the Rules of Court, against the splitting of
causes of action, since these damages spring from the
same cause of action that was pleading in the former case
No. 573 between the same parties.
Anent the land taxes allegedly overdue and unpaid, it is readily
apparent that, taxes been due to the government, plaintiffs have
no right to compel payment thereof to themselves. Little need be
said concerning the claim for attorney's fees under the fourth
cause of action. If they be fees for the lawyer's services in the
former case, they are barred from recovery for the reasons already
given; if for services in the present case, there is no jurisdiction
therefor, since no case is made out for the plaintiffs.
Joseph v. Bautista
Respondent Patrocinio Perez is the owner of a cargo truck
for conveying cargoes and passengers for a consideration
from Dagupan City to Manila.
Said cargo truck driven by defendant Domingo Villa was on
its way to Valenzuela, Bulacan from Pangasinan. Petitioner,
with a cargo of livestock, boarded the cargo truck at
Dagupan City. While said cargo truck was negotiating the
National Highway proceeding towards Manila, defendant
Domingo Villa tried to overtake a tricycle likewise
proceeding in the same direction.
At about the same time, a pick-up truck, supposedly owned
by respondents Antonio Sioson and Jacinto Pagarigan, then
driven by respondent Lazaro Villanueva, tried to overtake
the cargo truck thereby forcing the cargo truck to veer
towards the shoulder of the road and to ram a mango tree.



As a result, petitioner sustained a bone fracture in one of

his legs.
Petitioner filed a complaint for damages against
respondent Patrocinio Perez, as owner of the cargo truck,
based on a breach of contract of carriage and against
respondents Antonio Sioson and Lazaro Villanueva, as
owner and driver, respectively, of the pick-up truck, based
on quasi-delict.
Respondent Sioson filed his answer alleging that he is not
and never was an owner of the pick-up truck and neither
would he acquire ownership thereof in the future.
Petitioner, with prior leave of court, filed his amended
complaint impleading respondents Jacinto Pagarigan and a
certain Rosario Vargas as additional alternative defendants.
Petitioner apparently could not ascertain who the real
owner of said cargo truck was, whether respondents
Patrocinio Perez or Rosario Vargas, and who was the real
owner of said pick-up truck, whether respondents Antonio
Sioson or Jacinto Pagarigan.
Respondent Perez filed her amended answer with
crossclaim against her co-defendants for indemnity and
subrogation in the event she is ordered to pay petitioner's
claim, and therein impleaded cross-defendant Alberto
Cardeno as additional alternative defendant.
Respondents Lazaro Villanueva, Alberto Cardeno, Antonio
Sioson and Jacinto Pagarigan, thru their insurer, Insurance
Corporation of the Philippines, paid petitioner's claim for
injuries sustained. And by reason thereof, petitioner
executed a release of claim releasing them from liability.
A few months after, they also paid respondent Patrocinio
Perez' claim for damages to her cargo truck.
Consequently, respondents Sioson, Pagarigan, Cardeno and
Villanueva filed a "Motion to Exonerate and Exclude Defs/
Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio
Sioson and Jacinto Pagarigan on the Instant Case", alleging
that respondents Cardeno and Villanueva already paid
damages to respondent Perez, and alleging further that
respondents Cardeno, Villanueva, Sioson and Pagarigan
paid an amount to petitioner.
Thereafter, respondent Perez filed her "Opposition to Crossdefs.' motion and Counter Motion" to dismiss. The so-called
counter motion to dismiss was premised on the fact that
the release of claim executed by petitioner in favor of the

other respondents inured to the benefit of respondent

Perez, considering that all the respondents are solidarity
liable to herein petitioner.
Respondent judge issued the questioned order dismissing
the case, and a motion for the reconsideration thereof was
Petitioner, by way of appeal, contends that respondent
judge erred in declaring that the release of claim executed
by petitioner in favor of respondents Sioson, Villanueva and

ISSUE: W/N petitioners contention is correct?

RULING: NO. The singleness of a cause of action lies in the
singleness of the- delict or wrong violating the rights of one person.
Nevertheless, if only one injury resulted from several wrongful acts,
only one cause of action arises. In the case at bar, there is no
question that the petitioner sustained a single injury on his person.
That vested in him a single cause of action, albeit with the
correlative rights of action against the different respondents
through the appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only
one cause of action involved although the bases of recovery
invoked by petitioner against the defendants therein were not
necessarily identical since the respondents were not identically
circumstanced. However, a recovery by the petitioner under one
remedy necessarily bars recovery under the other. This, in essence,
is the rationale for the proscription in our law against double
recovery for the same act or omission which, obviously, stems from
the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily
liable to petitioner. On the evidence presented in the court below,
the trial court found them to be so liable. It is undisputed that
petitioner, in his amended complaint, prayed that the trial court
hold respondents jointly and severally liable.
The respondents having been found to be solidarity liable to
petitioner, the full payment made by some of the solidary debtors
and their subsequent release from any and all liability to petitioner
inevitably resulted in the extinguishment and release from liability


of the other solidary debtors, including herein respondent
Patrocinio Perez.
Sarsaba v. Vda. De Te represented by Attorney-in-Fact Faustino
A Decision was rendered in NLRC Case entitled, Patricio
Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to
have been illegally dismissed and ordering Gasing to pay
him his monetary claims in the amount of P43,606.47.
After the Writ of Execution was returned unsatisfied, Labor
Arbiter Newton R. Sancho issued an Alias Writ of Execution,
directing Fulgencio R. Lavarez, Sheriff II of NLRC, to satisfy
the judgment award.
Lavarez, accompanied by Sereno and his counsel,
petitioner Atty. Rogelio E. Sarsaba, levied a Fuso Truck
bearing License Plate No. LBR-514, which at that time was
in the possession of Gasing. Said truck was sold at public
auction, with Sereno appearing as highest bidder.
Meanwhile, respondent Fe Vda. de Te, represented by her
attorney-in-fact, Faustino Castaeda, filed with the RTC a
Complaint for recovery of motor vehicle, damages with
prayer for the delivery of the truck pendente lite against
petitioner, Sereno, Lavarez and the NLRC. She alleged the
ff: (1) she is the wife of the late Pedro Te, the registered
owner of the truck; (2) Gasing merely rented the truck from
her; (3) Lavarez erroneously assumed that Gasing owned
the truck because he was, at the time of the "taking," in
possession of the same; and (4) since neither she nor her
husband were parties to the labor case between Sereno
and Gasing, she should not be made to answer for the
judgment award, much less be deprived of the truck as a
consequence of the levy in execution.
Petitioner filed a Motion to Dismiss on the ff. grounds: (1)
respondent has no legal personality to sue, having no real
interests over the property subject of the instant
complaint; (2) the allegations in the complaint do not
sufficiently state that the respondent has cause of action;
(3) the allegations in the complaint do not contain
sufficient cause of action as against him; and (4) the
complaint is not accompanied by an Affidavit of Merit and

Bond that would entitle the respondent to the delivery of

the truck pendente lite.
The NLRC also filed a Motion to Dismiss on the grounds of
lack of jurisdiction and lack of cause of action.
Meanwhile, Lavarez filed an Answer with Compulsory
Counterclaim and Third-Party Complaint. By way of special
and affirmative defenses, he asserted that the RTC does
not have jurisdiction over the subject matter and that the
complaint does not state a cause of action.
RTC issued an Order denying petitioner's Motion to Dismiss
for lack of merit.
Petitioner denied the material allegations in the complaint.
Lavarez filed a Motion for Inhibition which was opposed by
RTC issued an Order of inhibition and directed the transfer
of the records. RTC issued another Order denying the
separate motions to dismiss filed by NLRC and Lavarez.
Petitioner filed an Omnibus Motion to Dismiss the Case on
the ff grounds: (1) lack of jurisdiction over one of the
principal defendants; and (2) to discharge respondents
attorney-in-fact for lack of legal personality to sue.
Respondent Fe Vda. De Te DIED. Respondent, through her
lawyer, Atty. William G. Carpentero, filed an Opposition,
contending that the failure to serve summons upon Sereno
is not a ground for dismissing the complaint, because the
other defendants have already submitted their respective
responsive pleadings.
RTC issued the assailed Order denying petitioners
Omnibus Motion to Dismiss.
Petitioner then filed a Motion for Reconsideration with
Motion for Inhibition in which he claimed that the judge
who issued the Order was biased and partial.
Petitioner then directly sought recourse from the SC via the
present petition involving purely questions of law, which he
claimed were resolved by the RTC contrary to law and
existing jurisprudence.
Petitioner submits pure questions of law involving the
effect of non-service of summons following the death of the
person to whom it should be served, and the effect of the
death of the complainant during the pendency of the case.
Petitioner argues that, since Sereno died before summons
was served on him, the RTC should have dismissed the



complaint against all the defendants and that the same

should be filed against his estate.
Petitioner asks that the complaint should be dismissed, not
only against Sereno, but as to all the defendants,
considering that the RTC did not acquire jurisdiction over
the person of Sereno.
Petitioner also moves that respondent's attorney-in-fact,
Faustino Castaeda, be discharged as he has no more legal
personality to sue on behalf of Fe Vda. de Te, who passed
away on April 12, 2005, during the pendency of the case
before the RTC.

ISSUE: (Relevant in this topic) Effect of Death of party

RULING: Jurisdiction over a party is acquired by service of
summons by the sheriff, his deputy or other proper court officer,
either personally by handing a copy thereof to the defendant or by
substituted service. On the other hand, summons is a writ by which
the defendant is notified of the action brought against him. Service
of such writ is the means by which the court may acquire
jurisdiction over his person.
Petitioner raises the issue of lack of jurisdiction over the person of
Sereno, not in his Motion to Dismiss or in his Answer but only in his
Omnibus Motion to Dismiss. Having failed to invoke this ground at
the proper time, that is, in a motion to dismiss, petitioner cannot
raise it now for the first time on appeal.
The court's failure to acquire jurisdiction over one's person is a
defense which is personal to the person claiming it. Obviously, it is
now impossible for Sereno to invoke the same in view of his death.
Neither can petitioner invoke such ground, on behalf of Sereno, so
as to reap the benefit of having the case dismissed against all of
the defendants. Failure to serve summons on Sereno's person
will not be a cause for the dismissal of the complaint
against the other defendants, considering that they have
been served with copies of the summons and complaints
and have long submitted their respective responsive
pleadings. In fact, the other defendants in the complaint were
given the chance to raise all possible defenses and objections
personal to them in their respective motions to dismiss and their
subsequent answers.

Patricio Sereno died before the summons, together with a copy of

the complaint and its annexes, could be served upon him.
However, the failure to effect service of summons unto Patricio
Sereno, one of the defendants herein does not render the action
DISMISSIBLE, considering that the three (3) other defendants,
namely, Atty. Rogelio E. Sarsaba, Fulgencio Lavares and the NLRC,
were validly served with summons and the case with respect to the
answering defendants may still proceed independently. Be it
recalled that the three (3) answering defendants have previously
filed a Motion to Dismiss the Complaint which was denied by the
Court. Hence, only the case against Patricio Sereno will be
DISMISSED and the same may be filed as a claim against the
estate of Patricio Sereno, but the case with respect to the three (3)
other accused will proceed.
As for the issue regarding the respondents attorney-in-fact, While
it may be true as alleged by defendants that with the death of
Plaintiff, Fe Vda. de Te, the Special Power of Attorney she executed
empowering the Attorney-in-fact, Faustino Castaeda to sue in her
behalf has been rendered functus officio, however, this Court
believes that the Attorney-in-fact had not lost his personality to
prosecute this case.
Records reveal that the Attorney-in-fact has testified long before in
behalf of the said plaintiff and more particularly during the state
when the plaintiff was vehemently opposing the dismissal of the
complainant. Subsequently thereto, he even offered documentary
evidence in support of the complaint, and this court admitted the
same. When this case was initiated, jurisdiction was vested upon
this Court to try and hear the same to the end. Well-settled is the
rule to the point of being elementary that once jurisdiction is
acquired by this Court, it attaches until the case is decided.
Thus, the proper remedy here is the Substitution of Heirs and not
the dismissal of this case which would work injustice to the
SEC. 16, RULE 3 provides for the substitution of the
plaintiff who dies pending hearing of the case by his/her
legal heirs. As to whether or not the heirs will still continue
to engage the services of the Attorney-in-fact is another
matter, which lies within the sole discretion of the heirs.


Gonzales v. PAGCOR
Ramon A. Gonzales, as a citizen, taxpayer and member of
the Philippine Bar, filed on September 28, 2000 the instant
Petition as a class suit under Section 12, Rule 3 of the Rules
of Court seeking to restrain PAGCOR from continuing its
operations and prohibit it and its co-respondents from
enforcing: (1) the "Grant of an Authority and Agreement for
the Operation of Sports Betting and Internet Gambling"
executed between PAGCOR and SAGE; (2) the "Grant of
Authority to Operate Computerized Bingo Games"4
between PAGCOR and BEST WORLD; and (3) the
"Agreement among PAGCOR, BELLE and FILGAME to
conduct jai-alai operations.
Petition was given due course. Consequently, the parties
were required to submit their respective Memoranda. Only
respondents PAGCOR and SAGE submitted their
Memoranda, on December 6, 2001 and January 24, 2002,
respectively. Gonzales having failed to file his
Memorandum within the prescribed period, this Court
which, in the meantime, was informed of the alleged
demise of Gonzales, required by Resolution 1) respondents
to confirm the death of Gonzales, and 2) the parties to
manifest whether they were still interested in prosecuting
the petition, or whether supervening events had rendered
it moot and academic.
On September 10, 2002, Attys. Manuel B. Imbong and Jo
Aurea M. Imbong filed a Motion for Substitution stating,
among other things, that (1) Gonzales died on January 17,
2002; (2) his heirs are not interested to pursue and
prosecute the present special civil action or be substituted
as petitioners herein; and (3) the petition was instituted by
Gonzales as a class suit in behalf of "all Filipino citizens,
taxpayers and members of the Philippine Bar" and, as
such, survives his death. They thus pray that as they are
among the "Filipino citizens, taxpayers and members of the
Philippine Bar" for whom the herein class suit was
instituted and are both capable of prosecuting the instant
case, they be substituted as petitioners in lieu of Gonzales
and that they be given thirty days from notice within which
to file their memorandum.

By Resolution of December 9, 2002, this Court required

respondents to file their Comments on the Motion for
Substitution filed by Attys. Imbong and Imbong.
In their separate Comments, respondents PAGCOR and
SAGE both argue that, among others things, movants
Attys. Imbong and Imbong may not be substituted for
Gonzales as the former are neither legal representatives
nor heirs of the latter within the purview of Section 16,
Rule 3 of the Rules of Court.
Respondents PAGCOR and SAGE further argue that neither
Gonzales nor movants have substantiated the allegation
that the instant case is a class suit as defined under
Section 12, Rule 3 of the Rules of Court. Hence, so said
respondents argue, the petition should be considered a
personal action which was extinguished with the death of
Movants argue, however, that "unless the herein
substitution is allowed, the citizens and taxpayers
represented by Gonzales in this class suit will be denied
due process."

ISSUE: Duty of counsel upon death of party.

RULING: See Sec. 16, Rule 3 of the Rules of Court.
*Take note that even if the SC in this case were to consider the
Motion for Substitution as a seasonably filed Motion for
Intervention (Sec. 12, Rule 3), instant petition would have to be
dismissed for being moot and academic.
[Bonilla v. Barcena]
x x x The question as to whether an action survives or not depends
on the nature of the action and the damage sued for. If the causes
of action which survive the wrong complained [of] affects primarily
and principally property and property rights, the injuries to the
person being merely incidental, while in the causes of action which
do not survive the injury complained of is to the person the
property and rights of property affected being incidental. x x x
United Overseas Bank v. Rosemoore Mining & Devt Co.
Respondent Rosemoor a Philippine mining corporation with
offices at Quezon City, applied for and was granted by



petitioner Westmont Bank (Bank) a credit facility in the

total amount of P80 million consisting of P50,000,000.00 as
long term loan and P30,000,000.00 as revolving credit line.
To secure the credit facility, a lone real estate mortgage
agreement was executed by Rosemoor and Dr. Lourdes
Pascual (Dr. Pascual), Rosemoors president, as mortgagors
in favor of the Bank as mortgagee in the City of Manila. The
agreement, however, covered six parce;s of land located in
San Miguel, Bulacan, all registered under the name of
Rosemoor and two parcels of land situated in Gapan,
Nueva Ecija (Nueva Ecija properties), owned and registered
under the name of Dr. Pascual.
Rosemoor subsequently opened with the Bank four
irrevocable Letters of Credit (LCs) totaling
To cover payments by the Bank under the LCs, Rosemoor
proceeded to draw against its credit facility and thereafter
executed promissory notes amounting collectively to
P49,862,682.50. Two other promissory notes were also
executed by Rosemoor in the amounts of P10,000,000.00
and P3,500,000.00, respectively, to be drawn from its
revolving credit line.
Rosemoor defaulted in the payment of its various drawings
under the LCs and promissory notes. In view of the default,
the Bank caused the extra-judicial foreclosure of the Nueva
Ecija properties and the Bulacan properties. The Bank was
the highest bidder on both occasions.
The Bank then caused the annotation of the Notarial
Certificate of Sale covering the Nueva Ecija properties on
the certificates of title concerned. Later, the Notarial
Certificate of Sale covering the Bulacan properties was
annotated on the certificates of title of said properties. The
foregoing facts led to Rosemoors filing of separate
complaints against the Bank, one before the Regional Trial
Court of Manila.
Rosemoor and Dr. Pascual filed a Complaint, originally
captioned as one for "Damages, Accounting and Release of
Balance of Loan and Machinery and for Injunction" before
the Manila RTC. Impleaded as defendants were the Bank
and Notary Public Jose Sineneng, whose office was used to
foreclose the mortgage. The complaint was twice
amended, the caption eventually reflecting an action for
"Accounting, Specific Performance and Damages." Through

the amendments, Pascual was dropped as a plaintiff while

several officers of the Bank were included as defendants.
The Bank moved for the dismissal of the original and
amended complaints on the ground that the venue had
been improperly laid. The motion was denied by the trial
court through an Omnibus Resolution.
Plaintiff Rosemoor prayed for the ff: (1) Bank to render an
acctg; (2) actual damages for operational losses; (3)
exemplary damages; (4) indemnity and other relief.
The Bank filed another motion to dismiss the Second
Amended Complaint on the ground of forum-shopping
since, according to it, Rosemoor had filed another petition
earlier before the Malolos RTC. The Bank contended that as
between the action before the Manila RTC and the petition
before the Malolos RTC, there is identity of parties, rights
asserted, and reliefs prayed for, the relief being founded on
the same set of facts. The Bank further claimed that any
judgment that may be rendered in either case will amount
to res judicata in the other case.
Manila RTC denied the motion to dismiss. It also denied the
Banks motion for reconsideration of the order of denial.
The Bank challenged the Manila RTCs denial of the Banks
second motion to dismiss before the Court of Appeals,
through a petition for certiorari. The appellate court
dismissed the petition. The Bank filed a motion for
reconsideration which, however, was denied through a
In the Petition for Review on Certiorari, the Bank argues
that the Court of Appeals erred in holding that no forumshopping attended the actions brought by Rosemoor.

ISSUE: (Central issue) W/N Rosemoor committed forum-shopping in

filing the Malolos case during the pendency of the Manila case?
The rule on venue of real actions is provided in Section 1, Rule 4 of
the 1997 Rules of Civil Procedure, which reads in part:
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.
The venue of the action for the nullification of the foreclosure sale
is properly laid with the Malolos RTC although two of the properties
together with the Bulacan properties are situated in Nueva Ecija.
The venue of real actions affecting properties found in different
provinces is determined by the SINGULARITY or PLURALITY of the
transactions involving said parcels of land. Where said parcels are
the object of one and the same transaction, the venue is in the
court of any of the provinces wherein a parcel of land is situated.
Elements of forum-shopping: (a) identity of parties, or at least such
parties as represent the same interests in both actions; (b) identity
of rights asserted and reliefs prayed for, the reliefs being founded
on the same facts; and (c) the identity with respect to the two
preceding particulars in the two cases is such that any judgment
rendered in the pending cases, regardless of which party is
successful, amount to res judicata in the other case.
(1) As to the existence of identity of parties, several bank
officers and employees impleaded in the Amended
Complaint in the Manila case were not included in the
Malolos case.
(2) As regards the identity of rights asserted and reliefs prayed
for, the main contention of Rosemoor in the Manila case is
that the Bank had failed to deliver the full amount of the
loan, as a consequence of which Rosemoor demanded the
remittance of the unreleased portion of the loan and
payment of damages consequent thereto.
In contrast, the Malolos case was filed for the purpose of
restraining the Bank from proceeding with the
consolidation of the titles over the foreclosed Bulacan
properties because the loan secured by the mortgage had
not yet become due and demandable. Moreover, the
Malolos case is an action to annul the foreclosure sale that
is necessarily an action affecting the title of the property
sold. It is therefore a real action which should be
commenced and tried in the province where the property
or part thereof lies.

The Manila case, on the other hand, is a personal action

involving as it does the enforcement of a contract between
Rosemoor, whose office is in Quezon City, and the Bank,
whose principal office is in Binondo, Manila. Personal
actions may be commenced and tried where the plaintiff or
any of the principal plaintiffs resides, or where the
defendants or any of the principal defendants resides, at
the election of the plaintiff.
Clearly, with the foregoing premises, it cannot be said that
respondents committed forum-shopping.
Magaspi v. Ramolete
On September 16, 1970, the petitioners filed a complaint
for the recovery of ownership and possession of a parcel of
land with damages against The Shell Co. of the Philippines,
Ltd. and/or The Shell Refining Co. (Phil.) Inc., Central
Visayan Realty & Investment Co., Inc. and Cebu City
Savings & Loan Association in the CFI of Cebu. Upon filing
and the payment of P60.00 as docketing fee and P10.00 for
sheriff fees, the case was assigned.
Central Visayan Realty & Investment Co., Inc. and Cebu
City Savings and Loan Assn. filed a motion to compel the
plaintiffs to pay the correct amount for docket fee within
the time prescribed by Court, as properly computed by the
Clerk of Court and failing to pay the same within the
prescribed period to dismiss the case. Further, until such
time as the correct docket fee is paid, the time for filing of
responsive pleadings by the defendants be suspended. The
motion was opposed by the petitioners who claimed that
the main cause of action was the recovery of a piece of
land and on the basis of its assessed valued, P60.00 was
the correct docketing fee and that although the Revised
Rules of Court do not exclude damages in the computation
of the docket fee, damages are nonetheless still to be
On October 5, 1970, the presiding judge ordered the Clerk
of Court to comment on the motion and the opposition
which it assessed that the correct fees shall be fixed at of
P3,164.00 plus P2.00 Legal Research fee (the value of the
land, which is P17,280.00, plus the damages amounting to
P3,390,633.24). Hence, petitioner shall pay P3,104, net of
the P60.00 already paid. However, private respondents



filed their respective answers that the same was exclusive

of exemplary damages must be included in the
computation therein.
On November 3, 1970, the plaintiffs filed a motion for leave
to amend the complaint so as to include the Government of
the Republic of the Philippines as a defendant. Nine days
after, respondents filed an opposition to the admission of
the amended complaint.
On November 16, 1970, Judge Canonoy admitted the
amended complaint although the plaintiffs had not yet
complied with his Order that they should pay an additional
P3,104.00 docket fee. On April 3, 1971, Judge Jose R.
Ramolete who had replaced Judge Canonoy, issued the
same order.

ISSUE: W/N the case may be considered as having been filed and
docketed when P60.00 was paid to the Clerk of Court even on the
assumption that said payment was not sufficient in amount?
RULING: The rule is well-settled that a case is deemed filed only
upon payment of the docket fee regardless of the actual date of its
filing in court. The Court holds that it was docketed upon the
payment of P60.00 although said amount is insufficient.
Accordingly, the trial court had acquired jurisdiction over the case
and the proceedings thereafter had were proper and regular.
The next question is in respect of the correct amount to be paid as
docket fee. Judge Canonoy ordered the payment of P3,104.00 as
additional docket fee based on the original complaint. However,
the petitioners assert as an alternative view, that the docket fee be
based on the amended complaint. The petitioners have a point.
"When a pleading is amended, the original pleading is deemed
abandoned. The original ceases to perform any further function as
a pleading. The case stands for trial on the amended pleading only.
On the basis of the foregoing, the additional docket fee to be paid
by the petitioners should be based on their amended complaint.
WHEREFORE, the petition is hereby granted: the petitioners shall
be assessed a docket fee on the basis of the amended complaint;
and after all of the lawful fees shall have been paid, the
proceedings in Civil Case No. R-11882 shall be resumed.
Manchester Devt v. CA

This was originally a case of an action for torts and damages and
specific performance with a prayer for temporary restraining order.
The damages were not specifically stated in the prayer but the
body of the complaint assessed a P 78.75 M. damages suffered by
the petitioner. The amount of docket fee paid was only P410.00.
The petitioner then amended the complaint and reduced the
damages to P10 M only.
When does a court acquire jurisdiction?
Does an amended complaint vest jurisdiction in the court?
The court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not vest jurisdiction in the court,
much less the payment of the docket fee based on the amounts
sought in the amended pleading. All complaints, petitions, answers
and other similar pleadings should specify the amount of damages
being prayed for. Damages shall be considered in the assessment
of the filing fees in any case.
Sun Insurance v. Asuncion
Petitioner Sun Insurance (or SIOL) filed a complaint for the
annulment of a decision on the consignation of fire
insurance policy.
Subsequently, the Private Respondent (PR) filed a
complaint for the refund of premiums and the issuance of a
writ of preliminary attachment in a civil case against SIOL.
In addition, PR also claims for damages, attorneys fees,
litigation costs, etc., however, the prayer did not state the
amount of damages sought although from the body of the
complaint it can be inferred to be in amount of P 50 million.
Hence, PR originally paid only PhP 210.00 in docket fees.
The complaint underwent a number of amendments to
make way for subsequent re-assessments of the amount of
damages sought as well as the corresponding docket fees.
The respondent demonstrated his willingness to abide by
the rules by paying the additional docket fees as required.


ISSUE: Did the Court acquire jurisdiction over the case even if
private respondent did not pay the correct or sufficient docket
RULING: YES. It was held that it is not simply the filing of the
complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee that vests a trial court with jurisdiction
over the subject matter or nature of the action. Where the filing of
the initiatory pleading is not accompanied by payment of the
docket fee, the court may allow payment of the fee within a
reasonable time but in no case beyond the applicable prescriptive
or reglamentary period. Same rule goes for permissive
counterclaims, third party claims and similar pleadings.
In herein case, obviously, there was the intent on the part of PR to
defraud the government of the docket fee due not only in the filing
of the original complaint but also in the filing of the second
amended complaint. However, a more liberal interpretation of the
rules is called for considering that, unlike in Manchester, the
private respondent demonstrated his willingness to abide by the
rules by paying the additional docket fees as required.
Where a trial court acquires jurisdiction in like manner, but
subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination
by the court, the additional filing fee shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect
the additional fee.
Heirs of the late Ruben Reinoso Jr. v. CA
The rule is that payment in full of the docket fees within the
prescribed period is mandatory.
In Manchester v. Court of Appeals, it was held that a court
acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. The strict application of this rule was,

however, relaxed two (2) years after in the case of Sun Insurance
Office, Ltd. v. Asuncion, wherein the Court decreed that where
the initiatory pleading is not accompanied by the payment of the
docket fee, the court may allow payment of the fee within a
reasonable period of time, but in no case beyond the applicable
prescriptive or reglamentary period. This ruling was made on the
premise that the plaintiff had demonstrated his willingness to abide
by the rules by paying the additional docket fees required. Thus, in
the more recent case of United Overseas Bank v. Ros, the Court
explained that where the party does not deliberately intend to
defraud the court in payment of docket fees, and manifests its
willingness to abide by the rules by paying additional docket fees
when required by the court, the liberal doctrine enunciated in Sun
Insurance Office, Ltd., and not the strict regulations set in
Manchester, will apply. It has been on record that the Court, in
several instances, allowed the relaxation of the rule on nonpayment of docket fees in order to afford the parties the
opportunity to fully ventilate their cases on the merits.
In the case of La Salette College v. Pilotin, the Court stated:
Notwithstanding the mandatory nature of the requirement
of payment of appellate docket fees, we also recognize
that its strict application is qualified by the following: first,
failure to pay those fees within the reglementary period
allows only discretionary, not automatic, dismissal; second,
such power should be used by the court in conjunction with
its exercise of sound discretion in accordance with the
tenets of justice and fair play, as well as with a great deal
of circumspection in consideration of all attendant
While there is a crying need to unclog court dockets on the
one hand, there is, on the other, a greater demand for
resolving genuine disputes fairly and equitably, for it is far
better to dispose of a case on the merit which is a
primordial end, rather than on a technicality that may
result in injustice.
In this case, it cannot be denied that the case was litigated
before the RTC and said trial court had already rendered a
decision. While it was at that level, the matter of non-


payment of docket fees was never an issue. It was only the
CA which motu propio dismissed the case for said reason.
Considering the foregoing, there is a need to suspend the strict
application of the rules so that the petitioners would be able to
fully and finally prosecute their claim on the merits at the appellate
level rather than fail to secure justice on a technicality, for, indeed,
the general objective of procedure is to facilitate the application of
justice to the rival claims of contending parties, bearing always in
mind that procedure is not to hinder but to promote the
administration of justice

As the Court has taken the position that it would be grossly unjust
if Ps claim would be dismissed on a strict application of the
Manchester doctrine, the appropriate action, under ordinary
circumstances, would be for the Court to remand the case to the
CA. Considering, however, that the case at bench has been
pending for more than 30 years and the records thereof are
already before the Court, a remand of the case to the CA would
unnecessarily prolong its resolution. In the higher interest of
substantial justice and to spare the parties from further delay, the
Court will resolve the case on the merits.