REBECCA PACAA-CONTRERAS and ROSALIE
PACAA, Petitioners,
vs.
ROVILA WATER SUPPLY, INC., EARL U KOKSENG, LILIA TORRES,
DALLA P. ROMANILLOS and MARISSA GABUYA,
FACTS
Petitioners Rebecca Pacaa-Contreras et al (children of Lourdes
Teves Pacaa and Luciano Pacaa) filed the present case
against Rovila Inc., Earl, Lilia, Dalla and Marisa for accounting
and damages.
The petitioners claimed that their family has long been known in
the community to be engaged in the water supply business; they
operated the "Rovila Water Supply" from their family residence
and were engaged in the distribution of water to customers in
Cebu City.
petitioners alleged that Lilia was a former trusted employee in the
family business who hid business records and burned and
ransacked the family files. Lilia also allegedly posted security
guards and barred the members of the Pacaa family from
operating their business
claimed ownership over the family business through a corporation
named "Rovila Water Supply, Inc." (Rovila Inc.) Upon inquiry with
the Securities and Exchange Commission (SEC), the petitioners
claimed that Rovila Inc. was surreptitiously formed with the
respondents as the majority stockholders. The respondents did
so by conspiring with one another and forming the respondent
corporation to takeover and illegally usurp the family business
registered name.
In forming the respondent corporation, the respondents allegedly
used the name of Lourdes as one of the incorporators and made
it appear in the SEC documents that the family business was
operated in a place other than the Pacaa residence.
petitioners filed the complaint in their own names although
Rosalie was authorized by Lourdes through a sworn declaration
and special power of attorney (SPA).
respondents filed a first motion to dismiss on the ground that the
RTC had no jurisdiction over an intra-corporate controversy
RTC denied the motion
Lourdes died10 and the petitioners amended their complaint, with
leave of court, on October 2, 2000 to reflect this development.
Luciano also died
respondents filed their Answer
petitioners sister, Lagrimas Pacaa-Gonzales, filed a motion for
leave to intervene and her answer-in-intervention was granted by
the trial court
At the subsequent pre-trial, the respondents manifested to the
RTC that a substitution of the parties was necessary in light of the
deaths of Lourdes and Luciano. They further stated that they
would seek the dismissal of the complaint because the petitioners
are not the real parties in interest to prosecute the case.
The RTC issued a pre-trial order where one of the issues
submitted was whether the complaint should be dismissed for
failure to comply with Section 2, Rule 3 of the Rules of Court
which requires that every action must be prosecuted in the name
of the real party in interest.
respondents again filed a motion to dismiss on the grounds,
among others, that the petitioners are not the real parties in
interest to institute and prosecute the case and that they have no
valid cause of action against the respondents.
RTC denied the respondents motion to dismiss.
= a motion to dismiss based on the grounds invoked by the
respondents may only be filed within the time for, but before, the
filing of their answer to the amended complaint. Thus, even
granting that the defenses invoked by the respondents are
meritorious, their motion was filed out of time as it was filed only
after the conclusion of the pre-trial conference
RTC likewise denied the respondents motion for reconsideration.
respondents filed a petition for certiorari under Rule 65 of the
Rules of Court with the CA, invoking grave abuse of discretion in
the denial of their motion to dismiss. They argued that the
deceased spouses Luciano and Lourdes, not the petitioners,
were the real parties in interest. Thus, the petitioners violated
Section 16, Rule 3 of the Rules of Court on the substitution of
parties
seasonably moved for the dismissal of the case20 and the RTC
never acquired jurisdiction over the persons of the petitioners as
heirs of Lourdes and Luciano
 CA granted petition and rules the RTC committed grave abuse of
discretion as the petitioners are not the real parties in interest and
cannot bring an action in their own names; thus, the complaint
should be dismissed
ISSUE:
CA agreed with the respondents that they alleged the following
issues as affirmative defenses in their answer: 1) the petitioners
are not the real parties in interest; and 2) that they had no legal
right to institute the action in behalf of their parents
Hence this petition
COURTS RULING
PARTIES ARGUMENTS
PETITIONERS
petitioners filed the present petition and argued that, first, in
annulling the interlocutory orders, the CA unjustly allowed the
motion to dismiss which did not conform to the rules
the motion was not filed within the time for, but before the filing
of, the answer to the amended complaint, nor were the grounds
raised in the answer.
even if there is non-joinder and misjoinder of parties or that the
suit is not brought in the name of the real party in interest, the
remedy is not outright dismissal of the complaint, but its
amendment to include the real parties in interest.3
the petitioners sued in their own right because they have actual
and substantial interest in the subject matter of the action as
heirs or co-owners, pursuant to Section 2, Rule 3 of the Rules of
Court. Declaration of heirs not necessary
RESPONDENTS
respondents reiterated in their comment that the petitioners are
not the real parties in interest.
They moved for the dismissal of the case during the pre-trial
conference due to the petitioners procedural lapse in refusing to
comply with a condition precedent, which is, to substitute the
heirs as plaintiffs.
respondents also argued that the grounds invoked in their motion
to dismiss were timely raised, pursuant to Section 2, paragraphs
g and i, Rule 18 of the Rules of Court. Specifically, the nature and
purposes of the pre-trial include, among others, the dismissal of
the action, should a valid ground therefor be found to exist; and
such other matters as may aid in the prompt disposition of the
action. Finally, the special civil action of certiorari was the proper
remedy in assailing the order of the RTC
W/N petitioners are herein paties in interes after death of parents
LUordes and Luciano
W/N motion to dismiss filed within proper time
petition meritorious
Petition for certiorari under Rule 65 is a proper remedy for a
denial of a motion to dismiss attended by grave abuse of
discretion
motion to dismiss in the present case based on failure to state a
cause of action was not timely filed and was thus waived
Applying Rule 16 of the Rules of Court which provides for the
grounds for the dismissal of a civil case, the respondents
grounds for dismissal fall under Section 1(g) and (j), Rule 16 of
the Rules of Court, particularly, failure to state a cause of action
and failure to comply with a condition precedent (substitution of
parties), respectively.
As the respondents motion to dismiss was based on the grounds
which should be timely invoked, material to the resolution of this
case is the period within which they were raised.
Both the RTC and the CA found that the motion to dismiss was
only filed after the filing of the answer and after the pre-trial had
been concluded. Because there was no motion to dismiss before
the filing of the answer, the respondents should then have at least
raised these grounds as affirmative defenses in their answer
RTCs assailed orders did not touch on this particular issue but
the CA ruled that the respondents did, while the petitioners insist
that the respondents did not. In the present petition, the
petitioners reiterate that there was a blatant non-observance of
the rules when the respondents did not amend their answer to
invoke the grounds for dismissal which were raised only during
the pre-trial and, subsequently, in the subject motion to dismiss.
Our examination of the records shows that the CA had no basis in
its finding that the respondents alleged the grounds as affirmative
defenses in their answer. The respondents merely stated in their
 petition for certiorari that they alleged the subject grounds in their
answer. However, nowhere in the petition did they support this
allegation; they did not even attach a copy of their answer to the
petition. It is basic that the respondents had the duty to prove by
substantial evidence their positive assertions. Considering that
the petition for certiorari is an original and not an appellate action,
the CA had no records of the RTCs proceedings upon which the
CA could refer to in order to validate the respondents claim.
Clearly, other than the respondents bare allegations, the CA had
no basis to rule, without proof, that the respondents alleged the
grounds for dismissal as affirmative defenses in the answer. The
respondents, as the parties with the burden of proving that they
timely raised their grounds for dismissal, could have at least
attached a copy of their answer to the petition. This simple task
they failed to do. That the respondents did not allege in their
answer the subject grounds is made more apparent through their
argument, both in their motion to dismiss50 and in their
comment,51 that it was only during the pre-trial stage that they
verbally manifested and invited the attention of the lower court on
their grounds for dismissal. In order to justify such late invocation,
they heavily relied on Section 2(g) and (i), Rule 1852 of the Rules
of Court that the nature and purpose of the pre-trial include,
among others, the propriety of dismissing the action should there
be a valid ground therefor and matters which may aid in the
prompt disposition of the action. The respondents are not correct.
The rules are clear and require no interpretation. Pursuant to
Section 1, Rule 9 of the Rules of Court, a motion to dismiss
based on the grounds invoked by the respondents may be waived
if not raised in a motion to dismiss or alleged in their answer.
The dismissal of the case based on the grounds invoked by the
respondents are specifically covered by Rule 16 and Rule 9 of the
Rules of Court which set a period when they should be raised;
otherwise, they are deemed waived.
the Court cannot uphold the dismissal of the present case based
on the grounds invoked by the respondents which they have
waived for failure to invoke them within the period prescribed by
the Rules. The Court cannot also dismiss the case based on "lack
of cause of action" as this would require at least a preponderance
of evidence which is yet to be appreciated by the trial court.
Therefore, the RTC did not commit grave abuse of discretion in
issuing the assailed orders denying the respondents motion to
dismiss and motion for reconsideration. The Court shall not
resolve the merits of the respondents grounds for dismissal
which are considered as waived.
At the inception of the present case, both the spouses Pacaa
were not impleaded as parties-plaintiffs. The Court notes,
however, that they are indispensable parties to the case as the
alleged owners of Rovila Water Supply. Without their inclusion as
parties, there can be no final determination of the present case.
They possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts
cannot proceed without their presence. Their interest in the
subject matter of the suit and in the relief sought is inextricably
intertwined with that of the other parties
JURISPRUDENCE = the Court acknowledged that the heirs,
whose hereditary rights are to be affected by the case, are
deemed indispensable parties who should have been impleaded
by the trial court. Therefore, to obviate further delay in the
proceedings of the present case and given the Courts authority
to order the inclusion of an indispensable party at any stage of
the proceedings, the heirs of the spouses Pacaa, except the
petirioners who are already parties to the case are Lagrimas
Pacaa-Gonzalez who intervened in the case, are hereby
ordered impleaded as parties-plaintiffs.
PETITION GRANTED
ISMAEL MATHAY, JOSEFINA MATHAY, DIOGRACIAS T. REYES and
S. ADOR DIONISIO, plaintiffs-appellants,
vs.
THE CONSOLIDATED BANK AND TRUST COMPANY, JOSE
FACTS
complaint in this case, filed on December 24, 1963 as a class
suit, under Section 12, Rule 3, of the Rules of Court, contained
six causes of action.
Besides reproducing all the above allegations in the other causes
of action, plaintiffs-appellants further alleged under the second
cause of action that defendants-appellees Antonio P. Madrigal,
Jose P. Madrigal: Fermin Z. Caram, Jr., and Wilfredo C. Tecson
"falsely certified to the calling of a special stockholders' meeting
allegedly pursuant to due notice and call of Defendant Bank"
although plaintiffs-appellants and other CMI stockholders were
 not notified thereof, and amended the Articles of Incorporation
increasing the number of Directors from 6 to 7, and had the
illegally created Position of Director filled up by defendant-
appellee Alfonso Juan Olondriz, who was not competent or
qualified to hold such position.
In the third cause of action, plaintiffs-appellants claimed actual
damages in an amount equivalent to the difference between the
par value of the shares they were entitled, but failed, to acquire
and the higher market value of the same shares. In the fourth
cause of action, Plaintiffs-appellants claimed moral damages; in
the fifth, exemplary damages; and in the sixth, attorney's fees.
Francisco Sevilla, who was one of the original plaintiffs, withdrew.
Cipriano Azada, Maria Cristina Olondriz Pertierra, Maria del Puy
Olondriz de Stevens (who later withdrew as intervenors-
appellants) and Carmen Sievert de Amoyo, filed a motion to
intervene, and to join the plaintiffs-appellants on record, to which
motion defendants-appellees, except Fermin Z. Caram, Jr., filed,
on January 17, 1964 their opposition.
defendants-appellees, except Fermin Z. Caram, Jr., filed a motion
to dismiss on the grounds that (a) plaintiffs-appellants had no
legal standing or capacity to institute the alleged class suit; (b)
that the complaint did not state a sufficient and valid cause of
action; and (c) that plaintiffs-appellants' complaint against the
increase of the number of directors did not likewise state a cause
of action
Plaintiffs-appellants filed their opposition
appellants, plaintiffs and intervenors, filed a verified petition for a
writ of preliminary injunction to enjoin defendants-appellees from
considering or ratifying by resolution, at the meeting of the
stockholders of defendant-appellee Bank to be held the following
day, the unlawful apportionment of the shares of the defendant-
appellee Bank and the illegal amendment to its Articles of
Incorporation increasing the number of Directors
The Court, after hearing, granted the writ, but subsequently set it
aside upon the appellees' filing a counter bond
defendants-appellees, except Fermin Z. Caram, Jr., filed a
supplemental ground for their motion to dismiss, to wit, that
stockholders, except Fermin Z. Caram, Jr., who abstained, had
unanimously, at their regular annual meeting held on March 5,
1964, ratified and confirmed all the actuations of the organizers-
directors in the incorporation, organization and establishment of
the Bank.
the trial court granted the motion to dismiss, holding, among other
things, that the class suit could not be maintained because of the
absence of a showing in the complaint that the plaintiffs-
appellants were sufficiently numerous and representative, and
that the complaint failed to state a cause of action.
appellants, plaintiffs and intervenors, interposed this appeal to
this Court on questions of law and fact, contending that the lower
court erred as follows
ISSUES
(1) whether the instant action could be maintained as a class suit, and
(2) whether the complaint stated a cause of action
ARGUMENTS
APPELLANTS
Appellants contended that the trial court erred in holding that the
present suit could not be maintained as a class suit, and in
support thereof argued that the propriety of a class suit should be
determined by the common interest in the subject matter of the
controversy; that in the instant case there existed such common
interest which consisted not only in the recovery of the shares of
which the appellants were unlawfully deprived, but also in
divesting the individuals-defendants-appellees and the person or
entities chosen by them of control of the appellee Bank.1
the test, in order to determine the legal standing of a party to
institute a class suit, was not one, of number, but whether or not
the interest of said party was representative of the persons in
whose behalf the class suit was instituted; that
granting arguendo, that the plaintiffs-appellants were not
sufficiently numerous and representative, the court should not
have dismissed the action, for insufficiency of number in a class
suit was not a ground for a motion to dismiss, and the court
should have treated the suit as an action under Rule 3, section 6,
of the Rules of Court which permits a joinder of parties.
 DEFENDANTS-APPELLEES
stressed that the instant suit was instituted as a class suit and
the plaintiffs-appellants did not sue in their individual
capacities for the protection of their individual interests; that
the plaintiffs appellants of record could not be considered
numerous and representative
APPELLANTS
In their Reply Brief, appellants insisted that non-compliance
with Section 12, Rule 3, not being one enumerated in Rules
16 and 17, was not a ground for dismissal; that the
requirements for a class had been complied with; that the
required common interest existed even if the interests were
several for there was a common question of law or fact and a
common relief was sought; that the common or general
interest could be in the object of the action, in the result of the
proceedings, or in the question involved in the action, as long
as there was a common right based on the same essential
facts; that plaintiffs-appellants adequately represented the
aggrieved group of bank stockholders, inasmuch as
appellants' interests were not antagonistic to those of the
latter, and appellants were in the same position as the group
in whose behalf the complaint was filed.
RULING
Under sec 12 rule 3 individual interest.
The necessary elements for the maintenance of a class
suit are accordingly: (1) that the subject matter of the
controversy be one of common or general interest to
many persons, and (2) that such persons be so numerous
as to make it impracticable to bring them all to the court.
An action does not become a class suit merely because it
is designated as such in the pleadings. Whether the suit is
or is not a class quit depends upon the attending facts,
and the complaint, or other pleading initiating the class
action should allege the existence of the necessary facts,
to wit, the existence of a subject matter of common
interest, and the existence of a class and the number of
persons in the alleged class
This Court has ruled that a class suit did not lie in an action
for recovery of real property where separate portions of the
same parcel were occupied and claimed individually by
different parties to the exclusion of each other, such that the
different parties had determinable, though undivided interests,
in the property in question
The interest, subject matter of the class suits in the above
cited cases, is analogous to the interest claimed by appellants
in the instant case. The interest that appellants, plaintiffs and
intervenors, and the CMI stockholders had in the subject
matter of this suit the portion of stocks offering of the Bank
left unsubscribed by CMI stockholders who failed to exercise
their right to subscribe on or before January 15, 1963 was
several, not common or general in the sense required by the
statute. Each one of the appellants and the CMI stockholders
had determinable interest; each one had a right, if any, only to
his respective portion of the stocks. No one of them had any
right to, or any interest in, the stock to which another was
entitled
It may be granted that the claims of all the appellants involved
the same question of law. But this alone, as said above, did
not constitute the common interest over the subject matter
indispensable in a class suit. The right to purchase or
subscribe to the shares of the proposed Bank, claimed by
appellants herein, is analogous to the right of preemption that
stockholders have when their corporation increases its
capital. The right to preemption, it has been said, is personal
to each stockholder, 16 and while a stockholder may maintain
a suit to compel the issuance of his proportionate share of
stock, it has been ruled, nevertheless, that he may not
maintain a representative action on behalf of other
stockholders who are similarly situated. 17 By analogy, the
right of each of the appellants to subscribe to the waived
stocks was personal, and no one of them could maintain on
behalf of others similarly situated a representative suit.
Appellants, furthermore, insisted that insufficiency of number
in a class suit was not a ground for dismissal of one action.
This Court has, however, said that where it appeared that no
sufficient representative parties had been joined, the
dismissal by the trial court of the action, despite the
contention by plaintiffs that it was a class suit, was
 correct. 19 Moreover, insofar as the instant case is concerned,
even if it be granted for the sake of argument, that the suit
could not be dismissed on that ground, it could have been
dismissed, nevertheless, on the ground of lack of cause of
action which will be presently discussed. .
Moreover, plaintiffs-appellants did not state in the complaint
the amount of subscription the individual defendant-appellee
were entitled to; hence there was no basis for the court to
determine what amount subscribed to by them was
excessive.
From what has been said, it is clear that the ultimate facts
stated under the first cause of action are not sufficient to
constitute a cause of action.
The further allegations in the second cause of action that the
calling of a special meeting was "falsely certified", that the
seventh position of Director was "illegally created" and that
defendant Alfonso Juan Olondriz was "not competent or
qualified" to be a director are mere conclusions of law, the
same not being necessarily inferable from the ultimate facts
stated in the first and second causes of action. It has been
held in this connection that:
The third, fourth, fifth and sixth causes of action depended on
the first cause of action, which, as has been shown, did not
state ultimate facts sufficient to constitute a cause of action. It
stands to reason, therefore, that said causes of action would
also be fatally defective.
It having been shown that the complaint failed to state
ultimate facts to constitute a cause of action, it becomes
unnecessary to discuss the other assignments of errors.
WHEREFORE, the instant appeal is dismissed
OPOSA vs FACTORAN
The principal plaintiffs therein, now the principal petitioners, are
all minors duly represented and joined by their respective
parents. Impleaded as an additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a domestic, non-stock and non-
profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our
environment and natural resources
original defendant was the Honorable Fulgencio S. Factoran, Jr.,
then Secretary of the Department of Environment and Natural
Resources (DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was subsequently
ordered upon proper motion by the petitioners
complaint2 was instituted as a taxpayers' class suit3 and alleges
that the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's
virgin tropical forests
same was filed for themselves and others who are equally
concerned about the preservation of said resource but are "so
numerous that it is impracticable to bring them all before the
Court." The minors further asseverate that they "represent their
generation as well as generations yet unborn."4 Consequently, it
is prayed for that judgment be rendered
ordering defendant, his agents, representatives and other
persons acting in his behalf to
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing,
renewing or approving new timber license agreements.
complaint starts off with the general averments that the Philippine
archipelago should be utilized and that Public records reveal that
the defendant's, predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the aggregate
area of 3.89 million hectares for commercial logging purposes.
This act of defendant constitutes a misappropriation and/or
impairment of the natural resource property he holds in trust for
the benefit of plaintiff minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced
and healthful ecology and are entitled to protection by the State in
its capacity as the parens patriae.
Defendant, however, fails and refuses to cancel the existing
TLA's to the continuing serious damage and extreme prejudice of
plaintiffs.
The continued failure and refusal by defendant to cancel the
TLA's is an act violative of the rights of plaintiffs, especially
plaintiff minors who may be left with a country that is desertified
(sic), bare, barren and devoid of the wonderful flora, fauna and
indigenous cultures which the Philippines had been abundantly
blessed with.
 19. Defendant's refusal to cancel the aforementioned TLA's is
manifestly contrary to the public policy enunciated in the
Philippine Environmental Policy which, in pertinent part, states
that it is the policy of the State
Finally, defendant's act is contrary to the highest law of
humankind the natural law and violative of plaintiffs' right to
self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law
other than the instant action to arrest the unabated hemorrhage
of the country's vital life support systems and continued rape of
Mother Earth
original defendant, Secretary Factoran, Jr., filed a Motion to
Dismiss the complaint based on two (2) grounds, namely: (1) the
plaintiffs have no cause of action against him and (2) the issue
raised by the plaintiffs is a political question which properly
pertains to the legislative or executive branches of Government
Opposition to the Motion, the petitioners maintain that (1) the
complaint shows a clear and unmistakable cause of action, (2)
the motion is dilatory and (3) the action presents a justiciable
question as it involves the defendant's abuse of discretion
respondent Judge issued an order granting the aforementioned
motion to dismiss - that the complaint states no cause of action
against him and that it raises a political question sustained, the
respondent Judge further ruled that the granting of the relief
prayed for would result in the impairment of contracts which is
prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action
for certiorari under Rule 65 of the Revised Rules of Court and ask
this Court to rescind and set aside the dismissal order on the
ground that the respondent Judge gravely abused his discretion
in dismissing the action.
Petitioners contend that the complaint clearly and unmistakably
states a cause of action as it contains sufficient allegations
concerning their right to a sound environment based on Articles
19, 20 and 21 of the Civil Code
Section 16, Article II of the 1987 Constitution recognizing the right
of the people to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation
embodied in natural law. Petitioners likewise rely on the
respondent's correlative obligation per Section 4 of E.O. No. 192,
to safeguard the people's right to a healthful environment.
further claimed that the issue of the respondent Secretary's
alleged grave abuse of discretion in granting Timber License
Agreements (TLAs) to cover more areas for logging than what is
available involves a judicial question.
Anent the invocation by the respondent Judge of the
Constitution's non-impairment clause, petitioners maintain that
the same does not apply in this case because TLAs are not
contracts. They likewise submit that even if TLAs may be
considered protected by the said clause, it is well settled that they
may still be revoked by the State when the public interest so
requires.
respondents aver that the petitioners failed to allege in their
complaint a specific legal right violated by the respondent
Secretary for which any relief is provided by law. They see
nothing in the complaint but vague and nebulous allegations
concerning an "environmental right" which supposedly entitles the
petitioners to the "protection by the state in its capacity as parens
patriae." Such allegations, according to them, do not reveal a
valid cause of action.
As to the matter of the cancellation of the TLAs, respondents
submit that the same cannot be done by the State without due
process of law. Once issued, a TLA remains effective for a certain
period of time usually for twenty-five (25) years. During its
effectivity, the same can neither be revised nor cancelled unless
the holder has been found, after due notice and hearing, to have
violated the terms of the agreement or other forestry laws and
regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be
violative of the requirements of due process.
RE: CLASS SUIT = As to the matter of the cancellation of the
TLAs, respondents submit that the same cannot be done by the
State without due process of law. Once issued, a TLA remains
effective for a certain period of time usually for twenty-five (25)
years. During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice and
hearing, to have violated the terms of the agreement or other
forestry laws and regulations. Petitioners' proposition to have all
the TLAs indiscriminately cancelled without the requisite hearing
would be violative of the requirements of due process.
Needless to say, every generation has a responsibility to the next
to preserve that rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little differently, the minors'
assertion of their right to a sound environment constitutes, at the
same time, the performance of their obligation to ensure the
protection of that right for the generations to come.
The locus standi of the petitioners having thus been addressed,
ISSUES:
= W/N RESPONDENT JUDGE FACTORAN ACTED WITH GRAVE
ABUSE OF DISCRETIIN IN DISMISSING THE CASE FOR LACK OF
CAUSE OF ACTION AND NOT A PARTY IN INTEREST
RULING
We do not hesitate to find for the petitioners and rule against the
respondent Judge's challenged order for having been issued with
grave abuse of discretion amounting to lack of jurisdiction. The
pertinent portions of the said order reads as follows:
The complaint focuses on one specific fundamental legal right
the right to a balanced and healthful ecology which, for the first
time in our nation's constitutional history, is solemnly incorporated
in the fundamental law.
the right of the petitioners (and all those they represent) to a
balanced and healthful ecology is as clear as the DENR's duty
under its mandate and by virtue of its powers and functions under
E.O. No. 192 and the Administrative Code of 1987 to protect
and advance the said right.
A denial or violation of that right by the other who has the
corelative duty or obligation to respect or protect the same gives
rise to a cause of action. Petitioners maintain that the granting of
the TLAs, which they claim was done with grave abuse of
discretion, violated their right to a balanced and healthful ecology;
hence, the full protection thereof requires that no further TLAs
should be renewed or granted
COA: A cause of action is defined as:
. . . an act or omission of one party in violation of the legal
right or rights of the other; and its essential elements are
legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in
violation of said legal right.
After careful examination of the petitioners' complaint, We find the
statements under the introductory affirmative allegations, as well
as the specific averments under the sub-heading CAUSE OF
ACTION, to be adequate enough to show, prima facie, the
claimed violation of their rights. On the basis thereof, they may
thus be granted, wholly or partly, the reliefs prayed for. It bears
stressing, however, that insofar as the cancellation of the TLAs is
concerned, there is the need to implead, as party defendants, the
grantees thereof for they are indispensable parties.
Finally, it is difficult to imagine, as the trial court did, how the non-
impairment clause could apply with respect to the prayer to enjoin
the respondent Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save in cases
of renewal, no contract would have as of yet existed in the other
instances. Moreover, with respect to renewal, the holder is not
entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is
hereby GRANTED,
Spouses JULITA DE LA CRUZ and FELIPE DE
LA CRUZ, petitioners, vs. PEDRO
JOAQUIN, respondent.
case originated from a Complaint for the recovery of
possession and ownership, the cancellation of title, and
damages, filed by Pedro Joaquin against petitioners in
the Regional Trial Court of Baloc, Sto. Domingo, Nueva
Ecija
Respondent alleged that he had obtained a loan from
them payable after five (5) years. To secure the payment
of the obligation, he supposedly executed a Deed of Sale
in favor of petitioners. The Deed was for a parcel of land
in Pinagpanaan, Talavera, Nueva Ecija, covered by TCT
No. T-111802. The parties also executed another
document entitled Kasunduan
Respondent claimed that the Kasunduan showed the
Deed of Sale to be actually an equitable mortgage
Spouses De la Cruz contended that this document was
merely an accommodation to allow the repurchase of the
property until June 29, 1979, a right that he failed to
exercise
RTC issued a Decision in his favor. The trial court
declared that the parties had entered into a sale with a
 right of repurchase. Respondent made vakiud tender of a
payment
CA RULING: Sustaining the trial court, the CA noted that
petitioners had given respondent the right to repurchase
the property within five (5) years from the date of the
sale
]The appellate court also found no reason to overturn the
finding that respondent had validly exercised his right to
repurchase the land.
CA denied reconsideration and ordered a substitution by
legal representatives, in view of respondents death
Hence this petition
ISSUES
whether the trial court lost jurisdiction over the case upon
the death of Pedro Joaquin, and whether respondent was
guilty of forum shopping
ARGUMENT
Petitioners assert that the RTCs Decision was invalid for
lack of jurisdiction.[19] They claim that respondent died
during the pendency of the case. There being no
substitution by the heirs, the trial court allegedly lacked
jurisdiction over the litigation
RULING
Rule on Substitution
When a party to a pending action dies and the claim is
not extinguished,[21] the Rules of Court require a
substitution of the deceased. The procedure is
specifically governed by Section 16 of Rule 3
The rule on the substitution of parties was crafted to
protect every partys right to due process.[22] The estate of
the deceased party will continue to be properly
represented in the suit through the duly appointed legal
representative.[23] Moreover, no adjudication can be
made against the successor of the deceased if the
fundamental right to a day in court is denied.
This general rule notwithstanding, a formal substitution by
heirs is not necessary when they themselves voluntarily
appear, participate in the case, and present evidence in
defense of the deceased.[27] These actions negate any
claim that the right to due process was violated.
Strictly speaking, the rule on the substitution by heirs is
not a matter of jurisdiction, but a requirement of due
process. Thus, when due process is not violated, as
when the right of the representative or heir is recognized
and protected, noncompliance or belated formal
compliance with the Rules cannot affect the validity of a
promulgated decision.[31] Mere failure to substitute for a
deceased plaintiff is not a sufficient ground to nullify a
trial courts decision. The alleging party must prove that
there was an undeniable violation of due process.
Evidently, the heirs of Pedro Joaquin voluntary
appeared and participated in the case. We stress
that the appellate court had ordered[33] his legal
representatives to appear and substitute for him.
The substitution even on appeal had been ordered
correctly. In all proceedings, the legal
representatives must appear to protect the interests
of the deceased.[34] After the rendition of judgment,
further proceedings may be held, such as a motion
for reconsideration or a new trial, an appeal, or an
execution.[35]
Considering the foregoing circumstances, the
Motion for Substitution may be deemed to have
been granted; and the heirs, to have substituted for
the deceased, Pedro Joaquin. There being no
 violation of due process, the issue of substitution
cannot be upheld as a ground to nullify the trial
courts Decision.
The test for determining the existence of forum shopping
is whether the elements of litis pendentia are present, or
whether a final judgment in one case amounts to res
judicata in another.[41] We note, however, petitioners
claim that the subject matter of the present case has
already been litigated and decided. Therefore, the
applicable doctrine is res judicata
The onus of proving allegations rests upon the party
raising them.[46] As to the matter of forum shopping
and res judicata, petitioners have failed to provide this
Court with relevant and clear specifications that would
show the presence of an identity of parties, subject
matter, and cause of action between the present and the
earlier suits. They have also failed to show whether the
other case was decided on the merits. Instead, they have
made only bare assertions involving its existence without
reference to its facts. In other words, they have alleged
conclusions of law without stating any factual or legal
basis. Mere mention of other civil cases without showing
the identity of rights asserted and reliefs sought is not
enough basis to claim that respondent is guilty of forum
shopping, or that res judicata exists
PETITION DENIED
SPOUSES ANTONIO F. ALGURA and LORENCITA S.J.
ALGURA, petitioners,
vs.
THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA,
FACTS
spouses Antonio F. Algura and Lorencita S.J. Algura filed a
Verified Complaint dated August 30, 19994 for damages against
the Naga City Government and its officers, arising from the
alleged illegal demolition of their residence and boarding house
and for payment of lost income derived from fees paid by their
boarders
petitioners filed an Ex-Parte Motion to Litigate as Indigent
Litigants,5 to which petitioner Antonio Algura's Pay Slip No.
2457360 (Annex "A" of motion) was appended, showing a gross
monthly income
Also attached as Annex "B" to the motion was a July 14, 1999
Certification7 issued by the Office of the City Assessor of Naga
City, which stated that petitioners had no property declared in
their name for taxation purposes.
Finding that petitioners' motion to litigate as indigent litigants was
meritorious, Executive Judge Jose T. Atienza of the Naga City
RTC, granted petitioners' plea for exemption from filing fees
as a result of respondent Naga City Government's demolition of a
portion of petitioners' house, the Alguras allegedly lost a monthly
income of PhP 7,000.00 from their boarders' rentals. With the loss
of the rentals, the meager income from Lorencita Algura's sari-
sari store and Antonio Algura's small take home pay became
insufficient for the expenses of the Algura spouses and their six
(6) children for their basic needs including food, bills, clothes, and
schooling, among others
respondents filed an Answer with Counterclaim arguing that the
defenses of the petitioners in the complaint had no cause of
action, the spouses' boarding house blocked the road right of
way, and said structure was a nuisance per se.
Praying that the counterclaim of defendants (respondents) be
dismissed, petitioners then filed their Reply with Ex-
Parte Request for a Pre-Trial Setting10 before the Naga City RTC
a pre-trial was held wherein respondents asked for five (5) days
within which to file a Motion to Disqualify Petitioners as Indigent
Litigants.
respondents filed a Motion to Disqualify the Plaintiffs for Non-
Payment of Filing Fees == They asserted that in addition to the
more than PhP 3,000.00 net income of petitioner Antonio Algura,
who is a member of the Philippine National Police, spouse
Lorencita Algura also had a mini-store and a computer shop on
the ground floor of their residence. respondents claimed that
petitioners' second floor was used as their residence and as a
boarding house, from which they earned more than PhP 3,000.00
a month. NOT INDIGENT LITIGANTS
petitioners subsequently interposed their Opposition to the
Motion12 to respondents' motion to disqualify them for non-
payment of filing fees.
 the Naga City RTC issued an Order disqualifying petitioners as
indigent litigants on the ground that they failed to substantiate
their claim for exemption from payment of legal fees and to
comply with the third paragraph of Rule 141, Section 18 of the
Revised Rules of Courtdirecting them to pay the requisite filing
fees
petitioners filed a Motion for Reconsideration
On April 28, 2000, petitioners filed a Motion for Reconsideration
of the April 14, 2000 Order. On May 8, 2000, respondents then
filed their Comment/Objections to petitioner's Motion for
Reconsideration.
trial court issued an Order14 giving petitioners the opportunity to
comply with the requisites laid down in Section 18, Rule 141, for
them to qualify as indigent litigants.
petitioners submitted their Compliance15 attaching the affidavits
of petitioner Lorencita Algura16and Erlinda Bangate,17 to comply
with the requirements of then Rule 141, Section 18 of the Rules
of Court and in support of their claim to be declared as indigent
litigants.
IN HER AFFIDAVIT - petitioner Lorencita Algura claimed that the
demolition of their small dwelling deprived her of a monthly
income amounting to PhP 7,000.00. She, her husband, and their
six (6) minor children had to rely mainly on her husband's salary
as a policeman which provided them a monthly amount of PhP
3,500.00, more or less. Also, they did not own any real property
as certified by the assessor's office of Naga City. More so,
according to her, the meager net income from her small sari-sari
store and the rentals of some boarders, plus the salary of her
husband, were not enough to pay the family's basic necessities.
petitioners also submitted the affidavit of Erlinda Bangate, who
attested under oath, that she personally knew spouses Antonio
Algura and Lorencita Algura, who were her neighbors; that they
derived substantial income from their boarders; that they lost said
income from their boarders' rentals when the Local Government
Unit of the City of Naga, through its officers, demolished part of
their house because from that time, only a few boarders could be
accommodated; that the income from the small store, the
boarders, and the meager salary of Antonio Algura were
insufficient for their basic necessities like food and clothing,
considering that the Algura spouses had six (6) children; and that
she knew that petitioners did not own any real property.
Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr.
denied petitioners Mortion for Reconsideration
udge Barsaga ratiocinated that the pay slip of Antonio F. Algura
showed that the "GROSS INCOME or TOTAL EARNINGS of
plaintiff Algura [was] 10,474.00 which amount [was] over and
above the amount mentioned in the first paragraph of Rule 141,
Section 18 for pauper litigants residing outside Metro Manila.
ISSUE
whether petitioners should be considered as indigent litigants who
qualify for exemption from paying filing fees.
RULING
the Naga City RTC, in its April 14, 2000 and July 17, 2000
Orders, incorrectly applied Rule 141, Section 18 on Legal
Feeswhen the applicable rules at that time were Rule 3, Section
21 on Indigent Party which took effect on July 1, 1997 and Rule
141, Section 16 on Pauper Litigants which became effective on
July 19, 1984 up to February 28, 2000.
old Section 16, Rule 141 requires applicants to file an ex-
parte motion to litigate as a pauper litigant by submitting and
affidavit complying with requirements: a) income requirement
the applicants should not have a gross monthly income of more
than PhP 1,500.00, and b) property requirementthey should not
own property with an assessed value of not more than PhP
18,000.00
In the case at bar, petitioners Alguras submitted the Affidavits of
petitioner Lorencita Algura and neighbor Erlinda Bangate, the pay
slip of petitioner Antonio F. Algura showing a gross monthly
income of PhP 10,474.00,21 and a Certification of the Naga City
assessor stating that petitioners do not have property declared in
their names for taxation
Undoubtedly, petitioners do not own real property as shown by
the Certification of the Naga City assessor and so the property
requirement is met. However with respect to the income
requirement, it is clear that the gross monthly income of PhP
10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00
income of Lorencita Algura when combined, were above the PhP
1,500.00 monthly income threshold prescribed by then Rule 141,
Section 16 and therefore, the income requirement was not
satisfied
Unrelenting, petitioners however argue in their Motion for
Reconsideration of the April 14, 2000 Order disqualifying them as
 indigent litigants23 that the rules have been relaxed by relying on
Rule 3, Section 21 of the 1997 Rules of Civil procedure which
authorizes parties to litigate their action as indigents if the court is
satisfied that the party is "one who has no money or property
sufficient and available for food, shelter and basic necessities for
himself and his family." The trial court did not give credence to
this view of petitioners and simply applied Rule 141 but ignored
Rule 3, Section 21 on Indigent Party. Furthermore, Rule 141 on
indigent litigants was amended twice: first on March 1, 2000 and
the second on August 16, 2004; and yet, despite these two
amendments, there was no attempt to delete Section 21 from
said Rule 3. This clearly evinces the desire of the Court to
maintain the two (2) rules on indigent litigants to cover
applications to litigate as an indigent litigant.
Thus, the trial court should have applied Rule 3, Section 21 to the
application of the Alguras after their affidavits and supporting
documents showed that petitioners did not satisfy the twin
requirements on gross monthly income and ownership of real
property under Rule 141. Instead of disqualifying the Alguras as
indigent litigants, the trial court should have called a hearing as
required by Rule 3, Section 21 to enable the petitioners to adduce
evidence to show that they didn't have property and money
sufficient and available for food, shelter, and basic necessities for
them and their family.27 In that hearing, the respondents would
have had the right to also present evidence to refute the
allegations and evidence in support of the application of the
petitioners to litigate as indigent litigants. Since this Court is not a
trier of facts, it will have to remand the case to the trial court to
determine whether petitioners can be considered as indigent
litigants using the standards set in Rule 3, Section 21
Recapitulating the rules on indigent litigants, therefore, if the
applicant for exemption meets the salary and property
requirements under Section 19 of Rule 141, then the grant of the
application is mandatory. On the other hand, when the application
does not satisfy one or both requirements, then the application
should not be denied outright; instead, the court should apply the
"indigency test" under Section 21 of Rule 3 and use its sound
discretion in determining the merits of the prayer for exemption
WHEREFORE, the petition is GRANTED
WHITE LIGHT CORPORATION, TITANIUM CORPORATION
and STA. MESA TOURIST & DEVELOPMENT
CORPORATION, Petitioners,
vs.
CITY OF MANILA
FACTS
City Mayor Alfredo S. Lim (Mayor Lim) signed into law the
Ordinance
SECTION 1. Declaration of Policy. It is hereby the declared policy of the
City Government to protect the best interest, health and welfare, and the
morality of its constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance"
prohibiting short time admission in hotels, motels, lodging houses,
pension houses and similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic],
wash-up rate or other similarly concocted terms, are hereby prohibited in
hotels, motels, inns, lodging houses, pension houses and similar
establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean
admittance and charging of room rate for less than twelve (12) hours at
any given time or the renting out of rooms more than twice a day or any
other term that may be concocted by owners or managers of said
establishments but would mean the same or would bear the same
meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any
provision of this ordinance shall upon conviction thereof be punished by a
fine of Five Thousand (5,000.00) Pesos or imprisonment for a period of
not exceeding one (1) year or both such fine and imprisonment at the
discretion of the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the operation thereof
shall be liable: Provided, further, That in case of subsequent conviction
for the same offense, the business license of the guilty party shall
automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not
consistent with or contrary to this measure or any portion hereof are
hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon
approval.
Enacted by the city Council of Manila at its regular session today,
November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
the Malate Tourist and Development Corporation (MTDC) filed a
complaint for declaratory relief with prayer for a writ of preliminary
injunction and/or temporary restraining order ( TRO)5 with the
Regional Trial Court (RTC) of Manila, impleading as defendant,
herein respondent City of Manila (the City) represented by Mayor
Lim
MTDC prayed that the Ordinance, insofar as it includes motels
and inns as among its prohibited establishments, be declared
invalid and unconstitutional
MTDC claimed that as owner and operator of the Victoria Court in
Malate, Manila it was authorized by Presidential Decree (P.D.)
No. 259 to admit customers on a short time basis as well as to
charge customers wash up rates for stays of only three hours
petitioners White Light Corporation (WLC), Titanium Corporation
(TC) and Sta. Mesa Tourist and Development Corporation
(STDC) filed a motion to intervene and to admit attached
complaint-in-intervention7 on the ground that the Ordinance
directly affects their business interests as operators of drive-in-
hotels and motels in Manila.
RTC granted the motion to intervene. Notified OSG. MTDC
moved to withdraw as plaintiff.11
the RTC granted MTDC's motion to withdraw.12 The RTC issued a
TRO on January 14, 1993, directing the City to cease and desist
from enforcing the Ordinance.
The City filed an Answer dated January 22, 1993 alleging that the
Ordinance is a legitimate exercise of police power
RTC issued a writ of preliminary injunction ordering the city to
desist from the enforcement of the Ordinance.
Solicitor General filed his Comment arguing that the Ordinance is
constitutional
During the pre-trial conference, the WLC, TC and STDC agreed
to submit the case for decision without trial as the case involved a
purely legal question
the RTC rendered a decision declaring the Ordinance null and
void = RTC noted that the ordinance "strikes at the personal
liberty of the individual guaranteed and jealously guarded by the
Constitution."
City later filed a petition for review on certiorari with the Supreme
Court.20
the Court treated the petition as a petition for certiorari and
referred the petition to the Court of Appeals
Before the Court of Appeals, the City asserted that the Ordinance
is a valid exercise of police power pursuant to Section 458 (4)(iv)
of the Local Government Code which confers on cities, among
other local government units, the power:
[To] regulate the establishment, operation and maintenance of
cafes, restaurants, beerhouses, hotels, motels, inns, pension
houses, lodging houses and other similar establishments,
including tourist guides and transports
The Ordinance, it is argued, is also a valid exercise of the power
of the City under Article III, Section 18(kk) of the Revised Manila
Charter, thus:
"to enact all ordinances it may deem necessary and proper for the
sanitation and safety, the furtherance of the prosperity and the
promotion of the morality, peace, good order, comfort,
convenience and general welfare of the city and its inhabitants,
and such others as be necessary to carry into effect and
discharge the powers and duties conferred by this Chapter; and
to fix penalties for the violation of ordinances which shall not
exceed two hundred pesos fine or six months imprisonment, or
both such fine and imprisonment for a single offense
Petitioners argued that the Ordinance is unconstitutional and void
since it violates the right to privacy and the freedom of movement;
it is an invalid exercise of police power; and it is an unreasonable
and oppressive interference in their business.
Court of Appeals reversed the decision of the RTC and affirmed
the constitutionality of the Ordinance = First, it held that the
 Ordinance did not violate the right to privacy or the freedom of
movement, as it only penalizes the owners or operators of
establishments that admit individuals for short time stays.
Second, the virtually limitless reach of police power is only
constrained by having a lawful object obtained through a lawful
method. The lawful objective of the Ordinance is satisfied since it
aims to curb immoral activities. There is a lawful method since the
establishments are still allowed to operate. Third, the adverse
effect on the establishments is justified by the well-being of its
constituents in general. Finally, as held in Ermita-Malate Motel
Operators Association v. City Mayor of Manila, liberty is regulated
by law
TC, WLC and STDC come to this Court via petition for review on
certiorari.
ISSUES
W/N these establishments have the requisite standing to please
for protection of their patrons equal protection rights
analysis, challengers to government action are in effect permitted
to raise the rights of third parties. Generally applied to statutes
infringing on the freedom of speech, the overbreadth doctrine
applies when a statute needlessly restrains even constitutionally
guaranteed rights.39 In this case, the petitioners claim that the
Ordinance makes a sweeping intrusion into the right to liberty of
their clients. We can see that based on the allegations in the
petition, the Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the
constitutional rights of their clients to patronize their
establishments for a "wash-rate" time frame.
The Ordinance needlessly restrains the operation of the
businesses of the petitioners as well as restricting the rights of
their patrons without sufficient justification. The Ordinance rashly
equates wash rates and renting out a room more than twice a day
with immorality without accommodating innocuous intentions.
Petition is GRANTED.

RULING

Standing or locus standi is the ability of a party to demonstrate to

the court sufficient connection to and harm from the law or action
challenged to support that party's participation in the case
The requirement of standing is a core component of the judicial
system derived directly from the Constitution.27 The constitutional
component of standing doctrine incorporates concepts which
concededly are not susceptible of precise definition.28 In this
jurisdiction, the extancy of "a direct and personal interest"
presents the most obvious cause, as well as the standard test for
a petitioner's standing
Nonetheless, the general rules on standing admit of several
exceptions such as the overbreadth doctrine, taxpayer suits, third
party standing and, especially in the Philippines, the doctrine of
transcendental importance
Herein, it is clear that the business interests of the petitioners are
likewise injured by the Ordinance. They rely on the patronage of
their customers for their continued viability which appears to be
threatened by the enforcement of the Ordinance.
Assuming arguendo that petitioners do not have a relationship
with their patrons for the former to assert the rights of the latter,
the overbreadth doctrine comes into play. In overbreadth