G.
R. No. 171365 October 6, 2010
ERMELINDA C. MANALOTO, AURORA J. CIFRA, FLORDELIZA J. ARCILLA, LOURDES
J. CATALAN, ETHELINDA J. HOLT, BIENVENIDO R. JONGCO, ARTEMIO R. JONGCO,
JR. and JOEL JONGCO, Petitioners,
vs.
ISMAEL VELOSO III, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before Us is a Petition for Review on Certiorari of the Decision1 dated January 31, 2006 of
the Court Appeals in CA-G.R. CV No. 82610, which affirmed with modification the
Resolution2 dated September 2, 2003 of Branch 227 of the Regional Trial Court (RTC-
Branch 227) of Quezon City in Civil Case No. Q-02-48341.
We partly reproduce below the facts of the case as culled by the Court of Appeals from the
records:
This case is an off-shoot of an unlawful detainer case filed by [herein petitioners] Ermelinda
C. Manaloto, Aurora J. Cifra, Flordeliza J. Arcilla, Lourdes J. Catalan, Ethelinda J. Holt,
Bienvenido R. Jongco, Artemio R. Jongco, Jr. and Joel Jongco against [herein respondent].
In said complaint for unlawful detainer, it was alleged that they are the lessors of a residential
house located at No. 42 Big Horseshoe Drive, Horseshoe Village, Quezon City [subject
property] which was leased to [respondent] at a monthly rental of ₱17,000.00. The action was
instituted on the ground of [respondent's] failure to pay rentals from May 23, 1997 to
December 22, 1998 despite repeated demands. [Respondent] denied the non-payment of
rentals and alleged that he made an advance payment of ₱825,000.00 when he paid for the
repairs done on the leased property.
After trial, the Metropolitan Trial Court (MeTC) decided in favor of [petitioners] by ordering
[respondent] to (a) vacate the premises at No. 42 Big Horseshoe Drive, Horseshoe Village,
Quezon City; (b) pay [petitioners] the sum of ₱306,000.00 corresponding to the rentals due
from May 23, 1997 to November 22, 1998, and the sum of ₱17,000.00 a month thereafter
until [respondent] vacates the premises; and (c) pay [petitioners] the sum of ₱5,000.00 as
attorney's fees.
On appeal to the Regional Trial Court (RTC) [Branch 88, Quezon City], the MeTC decision
was reversed. [Respondent] was ordered to pay arrearages from May 23, 1997 up to the date
of the decision but he was also given an option to choose between staying in the leased
property or vacating the same, subject to the reimbursement by [petitioners] of one-half of the
value of the improvements which it found to be in the amount of ₱120,000.00. [Respondent]
was also given the right to remove said improvements pursuant to Article 1678 of the Civil
Code, should [petitioners] refuse to pay ₱60,000.00.
When both parties moved for the reconsideration of the RTC decision, the RTC issued an
Order dated February 23, 2001 modifying its previous ruling by increasing the value of the
improvements from ₱120,000.00 to ₱800,000.00.
After successive appeals to the Court of Appeals and the Supreme Court, the decision of the
RTC dated November 29, 2000 which reversed the decision of the MeTC, became final and
executory.3
Whilst respondent's appeal of the Metropolitan Trial Court (MeTC) judgment in the unlawful
detainer case was pending before the RTC-Branch 88, respondent filed before the RTC-
Branch 227 on November 26, 2002 a Complaint for Breach of Contract and Damages4
against the petitioners, docketed as Civil Case No. Q-02-48341. The said complaint alleged
two causes of action. The first cause of action was for damages because the respondent
supposedly suffered embarrassment and humiliation when petitioners distributed copies of
the above-mentioned MeTC decision in the unlawful detainer case to the homeowners of
Horseshoe Village while respondent's appeal was still pending before the Quezon City RTC-
Branch 88. The second cause of action was for breach of contract since petitioners, as
lessors, failed to make continuing repairs on the subject property to preserve and keep it
tenantable. Thus, respondent sought the following from the court a quo:
PRAYER
WHEREFORE, premises considered, it is respectfully prayed that after hearing the court
render a decision against the [herein petitioners] and in favor of the [herein respondent] by -
1. Ordering [petitioners] to pay [respondent] the following amounts:
a) ₱1,500,000.00 as moral damages and consequential damages;
b) ₱500,000.00 as exemplary damages;
c) ₱425,000.00 representing the difference of the expenses of the improvements of
₱825,000.00 and ₱400,000.00 pursuant to Art. 1678 of the Civil Code;
d) ₱594,000.00 representing interest for three (3) years from 1998 to 2000 on the
₱825,000.00 advanced by the [respondent] at the rate of 24% per annum;
e) ₱250,000.00 as compensation for the [respondent's] labor and efforts in overseeing and
attending the needs of contractors the repair/renovation of the leased premises;
f) ₱250,000.00, plus 20% of all recoveries from [petitioners] and ₱2,500.00 per hearing as
attorney's fees;
g) Cost of suit.
[Respondent] further prays for such other reliefs and remedies which are just and equitable
under the premises.5
The petitioners filed an Omnibus Motion6 on February 18, 2003 praying for, among other
reliefs, the dismissal of respondent's complaint in Civil Case No. Q-02-48341. Petitioners
argued that respondent had no cause of action against them because the MeTC decision in
the unlawful detainer case was a matter of public record and its disclosure to the public
violated no law or any legal right of the respondent. Moreover, petitioners averred that the
respondent's present Complaint for Breach of Contract and Damages was barred by prior
judgment since it was a mere replication of respondent's Answer with Compulsory
Counterclaim in the unlawful detainer case before the MeTC. The said unlawful detainer case
was already judicially decided with finality.
On September 2, 2003, the RTC-Branch 227 issued a Resolution dismissing respondent's
complaint in Civil Case No. Q-02-48341 for violating the rule against splitting of cause of
action, lack of jurisdiction, and failure to disclose the pendency of a related case. The RTC-
Branch 227 adjudged that Civil Case No. Q-02-48341 involved the same facts, parties, and
causes of action as those in the unlawful detainer case, and the MeTC had already properly
taken cognizance of the latter case.
Respondent received a copy of the RTC-Branch 227 decision in Civil Case No. Q-02-48341
on September 26, 2003. He filed a Motion for Reconsideration7 of said judgment on October
10, 2003, which RTC-Branch 227 denied in an Order8 dated December 30, 2003.
Respondent received a copy of the RTC-Branch 227 order denying his Motion for
Reconsideration on February 20, 2004, and he filed his Notice of Appeal9 on March 1, 2004.
However, the RTC-Branch 227, in an Order10 dated March 23, 2004, dismissed respondent's
appeal for being filed out of time.
Respondent received a copy of the RTC-Branch 27 order dismissing his appeal on April 30,
2004 and he filed a Motion for Reconsideration11 of the same on May 3, 2004. The RTC-
Branch 227, in another Order12 dated May 31, 2004, granted respondent's latest motion
because it was "convinced that it is but appropriate and fair to both parties that this matter of
whether or not the Appeal was filed on time, be resolved by the appellate court rather than by
this Court." The RTC-Branch 227 then ordered that the records of the case be forwarded as
soon as possible to the Court of Appeals for further proceedings.
The Court of Appeals, in a Resolution13 dated February 8, 2005, resolved to give due course
to respondent's appeal. Said appeal was docketed as CA-G.R. CV No. 82610.
On January 31, 2006, the Court of Appeals rendered its Decision in CA-G.R. CV No. 82610.
The Court of Appeals fully agreed with the RTC-Branch 227 in dismissing respondent's
second cause of action (i.e., breach of contract) in Civil Case No. Q-02-48341. The appellate
court, however, held that RTC-Branch 227 should have proceeded with the trial on the merits
of the first cause of action (i.e., damages) in Civil Case No. Q-02-48341, because "[a]lthough
[herein respondent] may have stated the same factual antecedents that transpired in the
unlawful detainer case, such allegations were necessary to give an overview of the facts
leading to the institution of another case between the parties before the RTC acting in its
original jurisdiction."14
The Court of Appeals then went on to find that petitioners were indeed liable to respondent
for damages:
No doubt, distributing the copies was primarily intended to embarrass [herein respondent] in
the community he mingled in. We are not unmindful of the fact that court decisions are public
documents and the general public is allowed access thereto to make inquiries thereon or to
secure a copy thereof. Nevertheless, under the circumstances of this case, although court
decisions are public documents, distribution of the same during the pendency of an appeal
was clearly intended to cause [respondent] some form of harassment and/or humiliation so
that [respondent] would be ostracized by his neighbors. The appeal may have delayed the
attainment of finality of the determination of the rights of the parties and the execution in the
unlawful detainer case but it did not justify [herein petitioners'] pre-emption of the outcome of
the appeal. By distributing copies of the MeTC decision, [petitioners] appeared to have
assumed that the MeTC decision would simply be affirmed and therefore they tried to cause
the early ouster of [respondent] thinking that a humiliated [respondent] would scurry out of the
leased premises. Clearly, there was evident bad faith intended to mock [respondent's] right to
appeal which is a statutory remedy to correct errors which might have been committed by the
lower court.
Thus, moral damages may be awarded since [petitioners] acted in bad faith. Bad faith does
not simply connote bad judgment or negligence, it imports a dishonest purpose or some
moral obliquity and conscious doing of a wrong, a breach of known duty through some motive
or interest or ill will that partakes of the nature of fraud. However, an award of moral damages
would require certain conditions to be met, to wit: (1) first, there must be an injury, whether
physical, mental or psychological, clearly sustained by the claimant; (2) second, there must
be culpable act or omission factually established; (3) third, the wrongful act or omission of the
defendant is the proximate cause of the injury sustained by the claimant; and (4) fourth, the
award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code.
But it must again be stressed that moral damages are emphatically not intended to enrich a
plaintiff at the expense of the defendant. When awarded, moral damages must not be
palpably and scandalously excessive as to indicate that it was the result of passion, prejudice
or corruption on the part of the trial court judge. For this reason, this Court finds an award of
₱30,000.00 moral damages sufficient under the circumstances.
On the other hand, to warrant the award of exemplary damages, the wrongful act must be
accompanied by bad faith, and an award of damages would be allowed only if the guilty party
acted in a wanton, fraudulent, reckless or malevolent manner. Accordingly, exemplary
damages in the amount of ₱10,000.00 is appropriate.15
In the end, the Court of Appeals decreed:
WHEREFORE, the decision of the Regional Trial Court is AFFIRMED with the
MODIFICATION that the case is dismissed only as to the second cause of action. As to the
first cause of action, [herein petitioners] are ordered to pay [herein respondent] moral
damages of ₱30,000.00 and exemplary damages of ₱10,000.00.16
Hence, the instant Petition for Review.
Petitioners assert that respondent's appeal of the RTC-Branch 227 Resolution dated
September 2, 2003, which dismissed the latter's complaint in Civil Case No. Q-02-48341, was
filed out of time. Respondent received a copy of the said resolution on September 26, 2003,
and he only had 15 days from such date to file his appeal, or until October 11, 2003.
Respondent, instead, filed a Motion for Reconsideration of the resolution on October 10,
2003, which left him with only one more day to file his appeal. The RTC-Branch 227
subsequently denied respondent's Motion for Reconsideration in an Order dated December
30, 2003, which the respondent received on February 20, 2004. Respondent only had until
the following day, February 21, 2004, to file the appeal. However, respondent filed his Notice
of Appeal only on March 1, 2004. Hence, petitioners conclude that the dismissal of
respondent's complaint in Civil Case No. Q-02-48341 already attained finality.
Petitioners argue in the alternative that the award of damages in respondent's favor has no
factual and legal bases. They contend that the Court of Appeals erred in awarding moral and
exemplary damages to respondent based on the bare and unproven allegations in the latter's
complaint and without the benefit of any hearing or trial. While the appellate court declared
that RTC-Branch 227 should have proceeded with the trial on the merits involving the action
for damages, it surprisingly went ahead and ruled on petitioners' liability for said damages
even without trial. Even assuming for the sake of argument that respondent's allegations in
his complaint are true, he still has no cause of action for damages against petitioners, for the
disclosure of a court decision, which is part of public record, did not cause any legal and
compensable injury to respondent.
Respondent, on the other hand, maintains that his appeal of the September 2, 2003
Resolution of the RTC-Branch 227 to the Court of Appeals was timely filed and that the same
was aptly given due course. In addition, respondent asserts that the appellate court was
correct in holding petitioners liable for damages even without any hearing or trial since
petitioners, in filing their omnibus motion praying for the dismissal of respondent's complaint
on the ground of "no cause of action," were deemed to have hypothetically admitted as true
the allegations in said complaint.
The petition is partly meritorious.
We note, at the outset, that the propriety of the dismissal by the RTC-Branch 227 of
respondent's second cause of action against petitioners (e.g., for breach of contract) was no
longer disputed by the parties. Thus, the present appeal pertains only to respondent's first
cause of action (e.g., for damages), and in connection therewith, we are called upon to
resolve the following issues: (1) whether respondent timely filed his appeal of the Resolution
dated September 2, 2003 of the RTC-Branch 227 before the Court of Appeals; and (2)
whether respondent is entitled to the award of moral and exemplary damages.
We answer the first issue on the timeliness of respondent's appeal affirmatively.
Jurisprudence has settled the "fresh period rule," according to which, an ordinary appeal from
the RTC to the Court of Appeals, under Section 3 of Rule 41 of the Rules of Court, shall be
taken within fifteen (15) days either from receipt of the original judgment of the trial court or
from receipt of the final order of the trial court dismissing or denying the motion for new trial or
motion for reconsideration. In Sumiran v. Damaso,17 we presented a survey of the cases
applying the fresh period rule:
As early as 2005, the Court categorically declared in Neypes v. Court of Appeals that by
virtue of the power of the Supreme Court to amend, repeal and create new procedural rules
in all courts, the Court is allowing a fresh period of 15 days within which to file a notice of
appeal in the RTC, counted from receipt of the order dismissing or denying a motion for new
trial or motion for reconsideration. This would standardize the appeal periods provided in the
Rules and do away with the confusion as to when the 15-day appeal period should be
counted. Thus, the Court stated:
To recapitulate, a party-litigant may either file his notice of appeal within 15 days from receipt
of the Regional Trial Court's decision or file it within 15 days from receipt of the order (the
"final order") denying his motion for new trial or motion for reconsideration. Obviously, the
new 15-day period may be availed of only if either motion is filed; otherwise, the decision
becomes final and executory after the lapse of the original appeal period provided in Rule 41,
Section 3.
The foregoing ruling of the Court was reiterated in Makati Insurance Co., Inc. v. Reyes, to wit:
Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14 September 2005
while the present Petition was already pending before us. x x x.
xxxx
With the advent of the "fresh period rule" parties who availed themselves of the remedy of
motion for reconsideration are now allowed to file a notice of appeal within fifteen days from
the denial of that motion.
The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the Revised Rules of
Court which states that the appeal shall be taken "within fifteen (15) days from notice of
judgment or final order appealed from." The use of the disjunctive word "or" signifies
disassociation and independence of one thing from another. It should, as a rule, be construed
in the sense which it ordinarily implies. Hence, the use of "or" in the above provision
supposes that the notice of appeal may be filed within 15 days from the notice of judgment or
within 15 days from notice of the "final order," x x x.
xxxx
The "fresh period rule" finally eradicates the confusion as to when the 15-day appeal period
should be counted - from receipt of notice of judgment or from receipt of notice of "final order"
appealed from.
Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we set aside the denial of
a notice of appeal which was purportedly filed five days late. With the fresh period rule, the
15-day period within which to file the notice of appeal was counted from notice of the denial of
the therein petitioner's motion for reconsideration.
We followed suit in Elbiña v. Ceniza, wherein we applied the principle granting a fresh period
of 15 days within which to file the notice of appeal, counted from receipt of the order
dismissing a motion for new trial or motion for reconsideration or any final order or resolution.
Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands, we held that a
party-litigant may now file his notice of appeal either within fifteen days from receipt of the
original decision or within fifteen days from the receipt of the order denying the motion for
reconsideration.
In De los Santos v. Vda. de Mangubat, we applied the same principle of "fresh period rule,"
expostulating that procedural law refers to the adjective law which prescribes rules and forms
of procedure in order that courts may be able to administer justice. Procedural laws do not
come within the legal conception of a retroactive law, or the general rule against the
retroactive operation of statutes. The "fresh period rule" is irrefragably procedural, prescribing
the manner in which the appropriate period for appeal is to be computed or determined and,
therefore, can be made applicable to actions pending upon its effectivity, such as the present
case, without danger of violating anyone else's rights.18 (Emphases supplied.)
Also in Sumiran, we recognized the retroactive application of the fresh period rule to cases
pending and undetermined upon its effectivity:
The retroactivity of the Neypes rule in cases where the period for appeal had lapsed prior to
the date of promulgation of Neypes on September 14, 2005, was clearly explained by the
Court in Fil-Estate Properties, Inc. v. Homena-Valencia, stating thus:
The determinative issue is whether the "fresh period" rule announced in Neypes could
retroactively apply in cases where the period for appeal had lapsed prior to 14 September
2005 when Neypes was promulgated. That question may be answered with the guidance of
the general rule that procedural laws may be given retroactive effect to actions pending and
undetermined at the time of their passage, there being no vested rights in the rules of
procedure. Amendments to procedural rules are procedural or remedial in character as they
do not create new or remove vested rights, but only operate in furtherance of the remedy or
confirmation of rights already existing.19 (Emphases supplied.)
In the case before us, respondent received a copy of the Resolution dated September 2,
2003 of the RTC-Branch 227 dismissing his complaint in Civil Case No. Q-02-48341 on
September 26, 2003. Fourteen days thereafter, on October 10, 2003, respondent filed a
Motion for Reconsideration of said resolution. The RTC-Branch 227 denied respondent's
Motion for Reconsideration in an Order dated December 30, 2003, which the respondent
received on February 20, 2004. On March 1, 2004, just after nine days from receipt of the
order denying his Motion for Reconsideration, respondent already filed his Notice of Appeal.
Clearly, under the fresh period rule, respondent was able to file his appeal well-within the
prescriptive period of 15 days, and the Court of Appeals did not err in giving due course to
said appeal in CA-G.R. CV No. 82610.
We likewise agree with the Court of Appeals that the RTC-Branch 227 should not have
dismissed respondent's complaint for damages on the ground of failure to state a cause of
action.
According to Rule 2, Section 2 of the Rules of Court, a cause of action is the act or omission
by which a party violates a right of another.
When the ground for dismissal is that the complaint states no cause of action, such fact can
be determined only from the facts alleged in the complaint and from no other, and the court
cannot consider other matters aliunde. The test, therefore, is whether, assuming the
allegations of fact in the complaint to be true, a valid judgment could be rendered in
accordance with the prayer stated therein.20
Respondent made the following allegations in support of his claim for damages against
petitioners:
FIRST CAUSE OF ACTION
28. After the promulgation of the Metropolitan Trial Court of its Decision dated August 3,
1999, ordering the [herein respondent] and all person claiming rights under him to -
(a) Vacate the leased premises;
(b) pay the [herein petitioners] the sum of ₱306,000.00 as unpaid rentals from May 23, 1997
to November 22, 1998; and
(c) pay the sum of ₱5,000.00 as attorneys fees;
But while said Decision was still pending appeal with the Regional Trial Court, the
[petitioners], through [petitioner] Manaloto, already distributed copies of said Decision to
some of the homeowners of Horseshoe Village, who personally know the [respondent]. This
act is a direct assault or character assassination on the part of the [respondent] because as
stated in the said decision, [respondent] has been staying in the premises but did not or
refused to pay his monthly rentals for a long period of time when in truth and in fact was
untrue.

29. That from the time the said decision was distributed to said members homeowners, the
[respondent] became the subject of conversation or talk of the town and by virtue of which
[respondent's] good name within the community or society where he belongs was greatly
damaged; his reputation was besmirched; [respondent] suffered sleepless night and serious
anxiety. [Respondent], who is the grandson of the late Senator Jose Veloso and
Congressman Ismael Veloso, was deprived of political career and to start with was to run as
candidate for Barangay Chairman within their area which was being offered to him by the
homeowners but this offer has started to fade and ultimately totally vanished after the
distribution of said Decision. Damages to his good names and reputations and other
damages which he suffered as a consequence thereof, may be reasonably compensated for
at least ₱1,500,000.00 as moral and consequential damages.
30. In order to deter [petitioners] and others from doing as abovementioned, [petitioners]
should likewise be assessed exemplary damages in the amount of ₱500,000.00.21
A cause of action (for damages) exists if the following elements are present: (1) a right in
favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an
obligation on the part of the named defendant to respect or not to violate such right; and (3)
an act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of defendant to the plaintiff for which the latter may
maintain an action for recovery of damages.22 We find that all three elements exist in the
case at bar. Respondent may not have specifically identified each element, but it may be
sufficiently determined from the allegations in his complaint.
First, respondent filed the complaint to protect his good character, name, and reputation.
Every man has a right to build, keep, and be favored with a good name. This right is
protected by law with the recognition of slander and libel as actionable wrongs, whether as
criminal offenses or tortuous conduct.23
Second, petitioners are obliged to respect respondent's good name even though they are
opposing parties in the unlawful detainer case. As Article 19 of the Civil Code requires,
"[e]very person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith." A violation of such
principle constitutes an abuse of rights, a tortuous conduct. We expounded in Sea
Commercial Company, Inc. v. Court of Appeals24 that:
The principle of abuse of rights stated in the above article, departs from the classical theory
that "he who uses a right injures no one." The modern tendency is to depart from the classical
and traditional theory, and to grant indemnity for damages in cases where there is an abuse
of rights, even when the act is not illicit.
Article 19 was intended to expand the concept of torts by granting adequate legal remedy for
the untold number of moral wrongs which is impossible for human foresight to provide
specifically in statutory law. If mere fault or negligence in one's acts can make him liable for
damages for injury caused thereby, with more reason should abuse or bad faith make him
liable. The absence of good faith is essential to abuse of right. Good faith is an honest
intention to abstain from taking any unconscientious advantage of another, even through the
forms or technicalities of the law, together with an absence of all information or belief of fact
which would render the transaction unconscientious. In business relations, it means good
faith as understood by men of affairs.
While Article 19 may have been intended as a mere declaration of principle, the "cardinal law
on human conduct" expressed in said article has given rise to certain rules, e.g. that where a
person exercises his rights but does so arbitrarily or unjustly or performs his duties in a
manner that is not in keeping with honesty and good faith, he opens himself to liability. The
elements of an abuse of rights under Article 19 are: (1) there is a legal right or duty; (2) which
is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.25
Petitioners are also expected to respect respondent's "dignity, personality, privacy and peace
of mind" under Article 26 of the Civil Code, which provides:
ART. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place
of birth, physical defect, or other personal condition.
Thus, Article 2219(10) of the Civil Code allows the recovery of moral damages for acts and
actions referred to in Article 26, among other provisions, of the Civil Code.
In Concepcion v. Court of Appeals,26 we explained that:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The
Code Commission stressed in no uncertain terms that the human personality must be
exalted. The sacredness of human personality is a concomitant consideration of every plan
for human amelioration. The touchstone of every system of law, of the culture and civilization
of every country, is how far it dignifies man. If the statutes insufficiently protect a person from
being unjustly humiliated, in short, if human personality is not exalted - then the laws are
indeed defective. Thus, under this article, the rights of persons are amply protected, and
damages are provided for violations of a person's dignity, personality, privacy and peace of
mind.
It is petitioner's position that the act imputed to him does not constitute any of those
enumerated in Arts. 26 and 2219. In this respect, the law is clear. The violations mentioned in
the codal provisions are not exclusive but are merely examples and do not preclude other
similar or analogous acts. Damages therefore are allowable for actions against a person's
dignity, such as profane, insulting, humiliating, scandalous or abusive language. Under Art.
2217 of the Civil Code, moral damages which include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury, although incapable of pecuniary computation, may be
recovered if they are the proximate result of the defendant's wrongful act or omission.27
And third, respondent alleged that the distribution by petitioners to Horseshoe Village
homeowners of copies of the MeTC decision in the unlawful detainer case, which was
adverse to respondent and still on appeal before the RTC-Branch 88, had no apparent lawful
or just purpose except to humiliate respondent or assault his character. As a result,
respondent suffered damages - becoming the talk of the town and being deprived of his
political career.1avvphi1
Petitioners reason that respondent has no cause of action against them since the MeTC
decision in the unlawful detainer case was part of public records.
It is already settled that the public has a right to see and copy judicial records and
documents.28 However, this is not a case of the public seeking and being denied access to
judicial records and documents. The controversy is rooted in the dissemination by petitioners
of the MeTC judgment against respondent to Horseshoe Village homeowners, who were not
involved at all in the unlawful detainer case, thus, purportedly affecting negatively
respondent's good name and reputation among said homeowners. The unlawful detainer
case was a private dispute between petitioners and respondent, and the MeTC decision
against respondent was then still pending appeal before the RTC-Branch 88, rendering
suspect petitioners' intentions for distributing copies of said MeTC decision to non-parties in
the case. While petitioners were free to copy and distribute such copies of the MeTC
judgment to the public, the question is whether they did so with the intent of humiliating
respondent and destroying the latter's good name and reputation in the community.
Nevertheless, we further declare that the Court of Appeals erred in already awarding moral
and exemplary damages in respondent's favor when the parties have not yet had the chance
to present any evidence before the RTC-Branch 227. In civil cases, he who alleges a fact has
the burden of proving it by a preponderance of evidence. It is incumbent upon the party
claiming affirmative relief from the court to convincingly prove its claim. Bare allegations,
unsubstantiated by evidence are not equivalent to proof under our Rules. In short, mere
allegations are not evidence.29
At this point, the finding of the Court of Appeals of bad faith and malice on the part of
petitioners has no factual basis. Good faith is presumed and he who alleges bad faith has the
duty to prove the same. Good faith refers to the state of the mind which is manifested by the
acts of the individual concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another. Bad faith, on the other hand, does
not simply connote bad judgment to simple negligence. It imports a dishonest purpose or
some moral obliquity and conscious doing of a wrong, a breach of known duty due to some
motive or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or spite
and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable
harm.30
We cannot subscribe to respondent's argument that there is no more need for the
presentation of evidence by the parties since petitioners, in moving for the dismissal of
respondent's complaint for damages, hypothetically admitted respondent's allegations. The
hypothetical admission of respondent's allegations in the complaint only goes so far as
determining whether said complaint should be dismissed on the ground of failure to state a
cause of action. A finding that the complaint sufficiently states a cause of action does not
necessarily mean that the complaint is meritorious; it shall only result in the reinstatement of
the complaint and the hearing of the case for presentation of evidence by the parties.
WHEREFORE, in view of all the foregoing, the petition is PARTIALLY GRANTED. The
Decision dated January 31, 2006 of the Court of Appeals in CA-G.R. CV No. 82610 is
AFFIRMED WITH MODIFICATIONS. The award of moral and exemplary damages made by
the Court of Appeals in favor of respondent Ismael Veloso III is DELETED. The complaint of
respondent Ismael Veloso III in Civil Case No. Q-02-48341 is hereby REINSTATED before
Branch 227 of the Regional Trial Court of Quezon City only in so far as the first cause of
action is concerned. The said court is DIRECTED to hear and dispose of the case with
dispatch.
SO ORDERED.
G.R. No. 133775 January 20, 2000
FIDEL DABUCO, FELICIANO EBINA, MELICIO BOLO, AURELIO CABAJAR, EUSTIQUIO
CABATUAN, RAFAEL OCAREZA, SAMUEL RECO, ALEJANDRO IBONALO
TEMPLATURA, NEMESIO OBESO, ALEJANDRA CABILES, JULIAN RESPONDE,
CATALINO BORDAS, FELECISIMA BALILI, FELIX PAGATPAT, NOLI BALILI,
BONIFACIO BORDAS, VICENTE GONZAGA, EUGENIO HABONITA, ARSENIO
BALDADO, DOMINADOR BORDAS, JUANA CABILES, DINDO PAGATPAT, LUZVIMINDA
LACERNA, ANTONIA TEE LADRAZO AND VICENTE CABILES, petitioners,
vs.
COURT OF APPEALS AND GABI MULTI PURPOSE COOPERATIVE, REPRESENTED BY
MARIA QUISUMBING ALVAREZ AND COL. SOLOMON DALID, RET., respondents.
KAPUNAN, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45, with a prayer for
issuance of a Restraining Order or Writ of Preliminary Injunction. The Petition assails the
Decision1 dated October 6, 1997 and the Order, dated April 30, 1998, both of the Court of
Appeals. The issue raised in the petition before the Court of Appeals was whether the
dismissal of Civil Case No. CEB-16217 by the Regional Trial Court of Cebu City, Branch 15,
was proper.

The case in the trial court, Civil Case No. CEB-16217, was an action for quieting of title,
accion publiciana and damages involving agricultural lands located in Gabi, Sudlon, Cebu
City. Private respondent GABI Multi Purpose Cooperative (GABI, for brevity) was the plaintiff
in the case below, while petitioners were the defendants.
As an incident to the instant petition, petitioners filed an Urgent Motion, dated June 10, 1998,
for the issuance of a Restraining Order or Writ of Preliminary Injunction, wherein they alleged
that GABI had commenced to enter the disputed lands. On July 17, 1998, an Opposition by
GABI to petitioners' Urgent Motion was received by the Court. Petitioners filed a Reply to the
Opposition on July 28, 1998, and a Rejoinder, dated August 28, 1998 was filed by GABI.
GABI filed a 2-page Comment,2 wherein GABI dismissed petitioners' contentions as a mere
rehash of its arguments in the appellate court. The Solicitor General also filed a Comment3 in
behalf of the respondent Court of Appeals. On February 18, 1999, the Court received
petitioners' Reply to the Comment of the Solicitor General.
The antecedent facts are summarized in the assailed Decision of the Court of Appeals. We
quote the pertinent portions below:
The Lazarrabal [sic] family were the registered owners of the properties, subject matter of this
case.
In 1991, on different occasions, the subject properties were sold to Ruben Baculi, Editha
Belocura, Lira Puno, Rafael Lapuz, Ladrioro Montealto, Joel Masecampo, Delsa N. Manay,
Ilderim Castañares, Maria Theresa Puno, [and] Jill Mendoza. On June 27, 1994, plaintiff
[herein private respondent GABI Multi-Purpose Cooperative], a registered non-stock, non-
profit cooperative filed a civil complaint against defendants [herein petitioners] who were
found residing and/or tilling the subject properties. Plaintiff alleged therein that it is the owner
in fee simple of the subject properties; that defendants without any authority, resided, tilled,
sow [sic] in the subject properties; that defendants refused to vacate inspite [sic] notice.
Plaintiff prays for the issuance of preliminary mandatory injunction to require defendants to
remove the barricade constructed by them and for the issuance of a writ of injunction to
restrain defendants from preventing plaintiff in developing the subject properties.
On July 20, 1997, the trial court issued a Temporary Restraining Order, enjoining defendants
to desist from further stopping plaintiffs development of the properties. The trial court further
required defendants to show cause why no writ of preliminary or mandatory injunction be
issued against them.
On July 27, 1997, after hearing, the trial court lifted and dissolved the temporary restraining
order it earlier issued upon failure of the plaintiff to prove its title over the subject properties.
On July 29, 1994, defendants filed their answer alleging that plaintiff has no personality to file
this case since plaintiff does not appear to be the buyer of the properties neither were the
properties titled in its name; that the subject properties are part of the forest reserve which
cannot be privately acquired.
On August 3, 1994, defendants filed a Motion to Dismiss the complaint on the ground of lack
of cause of action, plaintiff has no personality to sue; and lack of jurisdiction.
Plaintiff moved for the striking out of defendants' motion to dismiss, alleging that at this stage
defendants could no longer file the said motion.
On August 18, 1994, the assailed order dismissing the complaint on the ground that plaintiff
has no real interest in the case, was rendered.
Plaintiff filed a motion for reconsideration of the said order, but the trial court denied the
same. The dispositive portion of the order dated January 9, 1995, of the trial court denying
plaintiffs motion for reconsideration reads:
WHEREFORE, finding the Motion for Reconsideration to be without merit, the same is hereby
denied. Notify counsel accordingly.
IT IS SO ORDERED.4
GABI appealed to the Court of Appeals. Thereafter, the respondent court issued its assailed
decision, the dispositive portion of which reads:
WHEREFORE, foregoing considered, the appealed order is hereby REVERSED and SET-
ASIDE. A new one is hereby issued ordering the trial court to reinstate the complaint and to
proceed with deliberate speed with the trial of the case.5
Petitioners' Motion for Reconsideration was denied by the appellate court in its assailed
Order, dated April 30, 1998. They then filed the instant petition praying that the dismissal of
Civil Case No. CEB-16217 by the trial court be affirmed, and the decision by the appellate
court reversing such dismissal be set aside.
The success of this petition rests on the validity of the dismissal by the trial court. Petitioners
assert that there was sufficient reason to dismiss the action below on the ground that GABI
had no cause of action against petitioners. They also aver in the alternative that the
Complaint by GABI was properly dismissed on the ground that it failed to state a cause of
action.
As a preliminary matter, we wish to stress the distinction between the two grounds for
dismissal of an action: failure to state a cause of action, on the one hand, and lack of cause
of action, on the other hand. The former refers to the insufficiency of allegation in the
pleading, the latter to the insufficiency of factual basis for the action. Failure to state a cause
may be raised in a Motion to Dismiss under Rule 16,6 while lack of cause may be raised any
time.7 Dismissal for failure to state a cause can be made at the earliest stages of an action.
Dismissal for lack of cause is usually made after questions of fact have been resolved on the
basis of stipulations, admissions or evidence presented.8
We find no merit in petitioners' first contention that dismissal was proper on the ground of lack
of cause of action. We note that the issue of sufficiency of GABI's cause of action does not
appear to have been passed upon by the appellate court in its assailed decision. However,
inasmuch as this issue was raised in the trial court as an affirmative defense by petitioners
and is now assigned in error, we resolve the same.1âwphi1.nêt
The pertinent portions of the trial court Order dismissing the action are reproduced below:
The court was confronted with plaintiff's Motion to Strike Out defendants' pleading entitled:
Motion to Dismiss, after the court allowed the same to be filed on the ground alleged in the
affirmative defenses, that the plaintiff has no real interest in the property in question.
Inasmuch as the action in this case was instituted by the Gabi Multi-Purpose Cooperative
which is not the titled owner, nor the holder of the title to the property in question, therefore, it
has no legal capacity to sue in this case for lack of interest, not being the real party in interest
of the property involved in this litigation. Plaintiff's motion to strike out defendants' motion to
dismiss is therefore denied for lack of merit, on the ground that the court has already resolved
in the July 27, 1994 Order that if until today the plaintiff cannot produce and to show to this
court the title in the name of Gabi Multi-Purpose Cooperative, the court will proceed to
dismiss this case.
xxx xxx xxx
WHEREFORE, in view of all the foregoing arguments and considerations, this court hereby
resolves to dismiss this case as it is hereby dismissed.9
It appears that the trial court dismissed the case on the ground that GABI was not the owner
of the lands or one entitled to the possession thereof, and thus had no cause of action. In
dismissal for lack of cause of action, the court in effect declared that plaintiff is not entitled to
a favorable judgment inasmuch as one or more elements of his cause of action do not exist in
fact.
Because questions of fact are involved, courts hesitate to declare a plaintiff as lacking in
cause of action. Such declaration is postponed until the insufficiency of cause is apparent
from a preponderance of evidence. Usually, this is done only after the parties have been
given the opportunity to present all relevant evidence on such questions of fact.
We do not here rule on whether GABI has a cause of action against petitioners. What we are
saying is that the trial court's ruling, to the effect that GABI had no title to the lands and thus
had no cause of action, was premature. Indeed, hearings were conducted. And the view of
the Court of Appeals was that such hearings were sufficient. In its assailed decision, the
appellate court stated the following:
Records show that plaintiff-appellant was afforded the preliminary hearing required by law
before the dismissal of the complaint based on the ground raised in the affirmative defenses.
xxx xxx xxx
Procedurally, therefore, the complaint was properly dismissed.10
The Court disagrees with the appellate court's ruling. The hearing of July 27, 1994 was on the
propriety of lifting the restraining order. At such preliminary hearing, the trial court required
GABI to produce Certificates of Title to the lands in its name. GABI admitted that it did not
have such Certificates, only Deeds of Sale from the registered owners. The order of the trial
court dated July 27, 1994, reads in part:
To begin with, the discussions started with the court asking whether the parties are present,
and asked the defendants whether they have evidence to show why the temporary restraining
order should not be continued, and not ripen into a preliminary injunction and they answered
that the plaintiff, Gabi Multi Purpose Cooperative has no locus standi with Col. Solomon
Dalid, to appear and litigate in this case, not being the actual registered owner of the property
in question and therefore not the real party in interest.
In view thereof, the court asked the plaintiffs counsel to show to the court titles to prove that
they are really the owners of the properties in question. And they could [not] show any,
inasmuch as from the records before this court, only Deeds of Sale from the original owners
of the properties in favor of individual persons appear.
WHEREFORE, as this hearing was called for the purpose of determining whether the
temporary restraining order should ripen into a permanent injunction or in the alternative be
lifted this afternoon, for failure of the plaintiffs to show titles to the properties in their names,
and they have miserably failed the court hereby resolves to lift and dissolve the temporary
restraining order it has issued. However, the defendants are hereby allowed, upon their own
request, to file a motion to dismiss questioning the legal personality of Gabi Multi Purpose
Cooperative within 15 days from today.11
Instead, GABI offered to present evidence to prove its title in the ordinary course of trial. The
pertinent portions of the Transcript of Stenographic Notes quoted by petitioners in their
Manifestation and Motion, dated September 29, 1998, are reproduced below:
COURT:
What we are saying, because it has been raised by counsel for the defendants[,] is: what
personality has Gabi to sue in this case[.] They are saying that you have no locus standing
[sic] in court. You need the proper party in interest. You are not the owners according to the
titles. And you are suing, claiming that you are the owners and you have been in possession
and that you have been molested by the defendants because you are the owner. But where
does it show these? Of course, you alleged that. But where is the proof? We want the proof
that you are really the owner. (TSN, 27 July 1994, at 9)

We are asking a question of how does Gabi become the owner of this property such that
Gabi is now trying to claim this property against the defendants. Such as [to] exclude the
defendants from cultivating or tilting [sic] this property. There is no question about it. We are
not questioning your existence as a corporation[,] as a corporate entity. We are asking the
question, where lies the tight of the ownership of Gabi? How can you prove that you own the
property, adverse or against these defendants? And you did not show it to this court. I am
afraid you have no cause of action. (TSN, id., at 9-10).
ATTY. P. FLORES:
. . . in due time, we are going to present the document.
COURT:
But you have to present that now. Otherwise, I lift the injunction. I lift the temporary
restraining order. And I have said and do [sic] it.
ATTY. P. FLORES:
Your Honor, please, the incident this afternoon is for the defendants to show cause why the
injunction cannot be issued.
COURT:
When the court made a mistake in giving you this petition, the court cannot order another
procedure. If the court commit[s] an error, it is the inherent power of this court to see to it that
no injustice is committed. I am not bound by my own error. Only the dead and fools don't
change their minds. (TSN, id., at 10)
ATTY. FLORES:
First of all, your Honor, it is not [sic] an error to say that the Gabi Cooperative is not the owner
because as a matter of fact, it is the owner. It is just bad enough that [they] were not able to
bring with them the documents.12
On August 18, 1994, another hearing was conducted wherein GABI was again required to
show Certificates of Title to the property in its name. On the basis of GABI's failure to show
such Certificates at this second preliminary hearing, the trial court concluded that GABI had
no title and thereafter dismissed the case.13 Such action by the trial court was premature
inasmuch as the issues of fact pertaining to GABI's title had not yet been adequately
ventilated at that preliminary stage.
Anent petitioners' thesis that dismissal of the complaint by the trial court was proper of failure
to state a cause of action, we, likewise, find no valid basis to sustain the same.
Dismissal of a Complaint for failure to state a cause of action is provided for by the Rules of
Court.14
In dismissal for failure to state a cause, the inquiry is into the sufficiency, not the veracity, of
the material allegations.15 The test is whether the material allegations, assuming these to be
true, state ultimate facts which constitute plaintiff's cause of action, such that plaintiff is
entitled to a favorable judgment as a matter of law.16 The general rule is that inquiry is
confined to the four corners of the complaint, and no other.17
This general rule was applied by the Court of Appeals. Said court stated:
It is a well-settled rule that in determining the sufficiency of the cause of action, ONLY the
facts alleged in the complaint and no others, should be considered. In determining the
existence of a cause of action, only the statements in the complaint may properly be
considered. If the complaint furnish sufficient basis by which the complaint may be
maintained, the same should not be dismissed regardless of the defenses that may be
assessed [sic] by defendants-appellees.18
The appellate court, relying on the general rule, made the following conclusion:
A reading of the above-quoted complaint would readily show that plaintiff-appellant has
sufficient cause of action as against defendants-appellees.
In the complaint, it is alleged that plaintiff-appellant is the owner of the subject properties,
thus, entitled to be respected in its possession and ownership. This is the first element.
Defendants-appellees are mere squatters of the subject properties who should vacate the
premises upon demand by plaintiff-appellant. This is the second element.
Defendants-appellees unjustly refused to vacate the subject premises, thus, depriving
plaintiff-appellant possession of the same. This is the third element.
In this case therefore, plaintiff-appellant has sufficient cause of action.19
There are well-recognized exceptions to the rule that the allegations are hypothetically
admitted as true and inquiry is confined to the face of the complaint. There is no hypothetical
admission of the veracity of allegations if their falsity is subject to judicial notice,20 or if such
allegations are legally impossible, or if these refer to facts which are inadmissible in evidence,
or if by the record or document included in the pleading these allegations appear
unfounded.21 Also, inquiry is not confined to the complaint if there is evidence which has
been presented to the court by stipulation of the parties,22 or in the course of hearings
related to the case.23
Petitioners invoke these exceptions to justify the dismissal by the RTC. They particularly rely
on the ruling of this Court in Tan vs. Director of Forestry.24 As in this case, Tan involved the
issue of whether the dismissal for failure to state a cause of action was proper. A hearing was
conducted on Tan's prayer for preliminary injunction, wherein evidence was submitted by the
parties and extensive discussion held. The trial court then resolved the Motion to Dismiss and
dismissed Tan's petition for failure to state a cause of action. The trial court held that, on the
basis of the evidence presented in the hearings, the timber license relied upon by Tan was
null and void. Such license being void, Tan's allegation that his right had been violated was
false. On appeal, this Court ruled that the trial court was correct in considering the evidence
already presented and in not confining itself to the allegations in Tan's petition.
The theory behind Tan is that the trial court must not rigidly apply the device of hypothetical
admission of allegations when, on the basis of evidence already presented, such allegations
are found to be false. Thus, findings of fact are not postponed until after trial, but are made at
the preliminary stage because there is sufficient evidence available.
We find, however, that Tan is not applicable in this case. Unlike in Tan where the parties
were given ample opportunity in the preliminary hearing to present evidence on their
contentions, GABI did not have sufficient chance to prove its allegation of ownership. Thus,
the conclusion that GABI's allegation of ownership is false and that its complaint stated no
cause of action, appears to be without basis.
Petitioners also invoke Drilon vs. Court of Appeals.25 Yet, a close reading of Drilon reveals
that petitioners' contention is weakened rather than strengthened by said case. Drilon also
involved the issue of whether the dismissal for failure to state a cause of action was proper.
However, the Court applied the general rule that inquiry is confined to the face of the
complaint and no other.26
In sum, as appears from the available records, the Court of Appeals was correct in ruling that
the dismissal by the trial court of GABI's complaint was incorrect. The case should, therefore,
proceed to trial where the parties may adduce evidence to support their claims and defenses.
IN VIEW OF THE FOREGOING, the Court resolved to DENY the Petition.
SO ORDERED.1âwphi1.nêt
Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago, JJ., concur.
[A.M. No. RTJ-02-1696. June 20, 2002
MELISSA DOMONDON, ALMIRA BASALO, and CLEO VILLAREIZ, complainants, vs.
JUDGE PERCIVAL MANDAP LOPEZ, respondent.
DECISION
MENDOZA, J.:
This is an administrative complaint against Judge Percival Mandap Lopez of the Regional
Trial Court, Branch 78, Quezon City for undue delay and gross ignorance of the law in the
resolution of a case filed by complainants.
Complainants were students of the AMA Computer College in Quezon City and members of
the editorial board of the official school publication called Dataline. It appears that on
December 7, 1996, complainants published a spoof edition of the Dataline, which they called
Amable Tonite. After conducting an investigation, the student Disciplinary Tribunal of the
college recommended the expulsion of complainants from the school.1cräläwvirtualibräry
On March 14, 1997, complainants and other members of the Dataline editorial board filed a
complaint for damages with prayer for the issuance of a writ of preliminary mandatory
injunction against AMA Computer College and Mauricia Herrera, Dean of Student Affairs. The
case was filed in the Regional Trial Court of Quezon City, where it was docketed as Civil
Case No. Q-97-30549 and assigned to respondent judge of Branch 78. Complainants alleged
that they had been expelled from the defendant school in a despotic and oppressive manner
in violation of their constitutional rights to due process and to free speech as well as the
provisions of R.A. No. 7079, otherwise known as the Campus Journalism Act of 1991. They
sought an award of damages in their favor and the issuance of a temporary preliminary
mandatory injunction to enjoin the defendant school in the meantime to allow them to attend
their classes and take their examinations.2cräläwvirtualibräry
On March 25, 1997, AMA Computer College and Mauricia Herrera filed an Opposition,
contending that the articles in the spoof edition which complainants had published were
slanderous and derogatory; that R.A. No. 7079 itself enjoins student publications to observe
the pertinent laws and school policies in the selection of articles for publication; that
complainants had been given the opportunity to controvert the charges against them before
they were expelled; and that complainants were guilty of using indecent language, committing
vulgar and obscene acts, libel, and unauthorized disbursement of Dataline funds in the
amount of P25,000.00.3cräläwvirtualibräry
On April 3, 1997, complainants filed a reply, contending that the issue in the case was not the
alleged defamatory nature of the questioned publication but the legality of their expulsion
because they were expelled solely on the basis of their activities as members of the editorial
board of Dataline and claiming that they were deprived of their right to due
process.4cräläwvirtualibräry
On June 2, 1997, defendants AMA Computer College and Mauricia Herrera filed a rejoinder,
opposing complainants prayer for the issuance of a writ of preliminary injunction. They
contended that, under R.A. No. 7079, editorial policies of the student publication should take
into account the pertinent laws as well as the school policies in the selection of articles for
publication; that the Amable Tonite was not a legitimate issue of the Dataline; and that
complainants could have submitted their grievances to the Commission on Higher Education
(CHED) but the fact was that their complaint was dismissed because of their failure to attend
a hearing previously set.5cräläwvirtualibräry
On June 7, 1997, complainants pressed their request for the immediate resolution of their
application for preliminary mandatory injunction before the end of the enrollment period. They
alleged that the delay in the resolution of the writ was due to the defendants failure to submit
their rejoinder within the period given to them as the rejoinder was actually filed more than a
month after the prescribed period had lapsed.6cräläwvirtualibräry
On June 14, 1997, on the basis of the pleadings of the parties, respondent judge issued a
resolution dismissing the case itself after finding that the expulsion of the complainants from
the school was for cause and was effected only after an investigation during which they were
duly heard.
Complainants moved for a reconsideration on the ground that the dismissal of the complaint
could not be made solely on the basis of the parties pleadings and affidavits and that trial
must first be conducted to receive the evidence of the parties before the case was decided.
They reiterated their allegation that a writ of preliminary injunction was necessary because
they were expelled from the school solely on the basis of the articles published in their
lampoon edition.7cräläwvirtualibräry
Complainants then sought the disqualification of respondent judge on the following grounds:
(a) that he had deliberately delayed the resolution of the injunctive writ which tended to
arouse suspicion as to his ability to decide the case with fairness and integrity; (b) that he
dismissed their complaint without legal or procedural basis and thus deprived them of their
day in court; and (c) that they filed an administrative case against him with this
Court.8cräläwvirtualibräry
On September 26, 1997, respondent judge denied complainants motion for reconsideration
and motion to inhibit him for lack of merit. Respondent judge said he had conducted a hearing
on the motion for preliminary mandatory injunction after which the parties were given time to
file their pleadings and only after that did he resolve the case.9cräläwvirtualibräry
Complainants blame respondent Judge Lopez for allowing the question of whether an
injunction should be issued become moot by failing to resolve their motion before the start of
the enrollment period on the first week of June 1997. In addition, they charge respondent
judge with gross ignorance of the law in dismissing their case considering that: (a) no answer
or motion to dismiss had been filed by the defendant school; (b) the pleadings and evidence,
if any, on record referred only to the issuance of a temporary preliminary mandatory
injunction and none of the defendants pleadings which averred additional factual matters was
verified; and (c) they were not given an opportunity to present their
evidence.10cräläwvirtualibräry
In his comment, respondent judge denied that he was guilty of undue delay in resolving
complainants application for injunction. He claimed that it took him only eight days to render
his resolution after the issue of the injunction was submitted for resolution on June 6, 1997,
the date of the filing of the defendants rejoinder. He denied that he acted with malice in
resolving the matter, claiming that he saw no urgency for the writ of preliminary injunction
because (a) complainants expulsion was for cause, the articles written by complainants being
indecent and obscene; (b) complainants had been duly heard before they were expelled; (c)
not all of the complainants were graduating students; and (d) the status quo at that point was
that complainants were already expelled from the defendant school and such should not be
disturbed in the absence of proof of their claims. As for his dismissal of the case on the
merits, respondent judge justified his decision on the ground that the defendants rejoinder
contained a prayer for the same. He contends that this was tantamount to a motion to dismiss
filed on the ground of lack of cause of action on the part of the
complainants.11cräläwvirtualibräry
Complainants filed a Supplement to the Complaint for Dismissal/Separation from Service,
dated November 19, 1998, insisting that no hearing had actually been held on March 31,
1997 as both respondent judge and the defendants counsel failed to appear during the said
date and that respondent judge did not show up despite being contacted by his clerk of court
by telephone. Moreover, complainants claim that, although the resolution dismissing their
case was dated September 26, 1997, it was actually received by them only on February 19,
1998, almost five months after its supposed issuance, raising the suspicion that the resolution
had been antedated by respondent judge to make it appear that it was issued prior to the
filing of the present administrative complaint.12cräläwvirtualibräry
Respondent judge filed his comment, making a general denial of the charges against
him.13cräläwvirtualibräry
The Office of the Court Administrator (OCA), to which this case was referred, found
respondent judge guilty of undue delay and gross ignorance of the law in his handling of Civil
Case No. Q-97-30549 and recommended that he be ordered to pay a fine of P2,000.00 with
warning that repetition of the same or similar offenses shall be dealt with more severely.
We find the recommendation, except as to the penalty, to be on the main well taken.
First. As regards the charge of delay in resolving the injunction issue raised by complainants,
respondent judge says that the Rules of Court does not provide a period within which to
resolve a prayer for a preliminary injunction. However, as the OCA well observed:
Judge Lopez cannot invoke the absence of any provision prescribing a period within which to
resolve an application for a writ of injunction. He should have been guided by the exigencies
of the situation. He knew that complainants were seeking the writ of preliminary mandatory
injunction precisely because they wanted to be readmitted by the college and for them to be
able to enroll in the first trimester of school year 1997-1998. This is evident from the affidavit
of Merit attached to the complaint. (Rollo, pp. 15-16) The least that respondent Judge could
have done was to resolve immediately the application for injunctive relief after the defendants
failed to submit their Rejoinder on time so as to allow the complainants enough time to seek
recourse to a higher court. As it is, even if he granted the application, considering that it was
done only on June 14, the same would have been useless because complainants could no
longer enroll since, according to them, the period to enroll expires on the second week of
June 1997. (Rollo, p. 17)14cräläwvirtualibräry
We agree with this observation and only add that Canon 3, Rule 3.05 of the Code of Judicial
Conduct in fact enjoins judges to dispose of the courts business promptly and decide cases
within the required periods.15 That respondent judge found the application for mandatory
injunction to be without merit is of no moment. What was important is that he should have
resolved the matter before the start of the enrollment for the first semester of the school year
1997-1998 so that complainants could avail themselves of other remedies if they were not
satisfied with the ruling. Complainants repeatedly urged respondent judge to resolve the
issue of the injunctive writ with utmost dispatch considering the little time left for them to enroll
for the coming semester. But respondent judge failed to heed their plea.
Respondent judge says that the delay was due to the defendants failure to file their rejoinder
on time but he lost no time promulgating his resolution dismissing the complaint as it was in
fact issued only eight days after the filing of the rejoinder. This contention has no merit. If this
excuse of respondent judge were accepted, all it would do for a party favored by a delay
would be to mark time before filing his pleading until an event (e.g., the end of the enrollment
period) supervenes to render the issue moot.
As respondent judge admits, the defendants rejoinder was filed only on June 2, 1997,
although the last day for submission of the same was on May 9, 1997.16 Respondent judge
should have considered the defendants to have waived the filing of their rejoinder and
resolved the issue of injunction promptly. Respondent judges procrastination only opens him
to suspicion that he was favoring the defendants.17cräläwvirtualibräry
Second. It is undisputed that no trial was ever conducted by respondent judge before issuing
his resolution, dated June 14, 1997, dismissing the complaint in Civil Case No. Q-97-30549
for lack of merit. Respondent judge, however, justifies his action on the ground that the
defendants rejoinder sought the dismissal of the case for lack of merit and the same was in
the nature of a motion to dismiss the case for lack of cause of action.
To be sure, the defendants did not file a motion to dismiss. What they filed was an
Opposition, dated March 25, 1997, in which they raised factual matters and affirmative
defenses to answer the allegations in the complaint against them and prayed for the denial of
the writ prayed for. The fact that the defendants filed a responsive pleading seeking
affirmative relief and setting up defenses18 negates the intent on their part to file a motion to
dismiss.
It is apparent that respondent judge failed to distinguish between a motion to dismiss for
failure of the complaint to state a cause of action and a motion to dismiss based on lack of
cause of action. The first is governed by Rule 16, 1(g), while the second by Rule 33 of the
1997 Revised Rules of Civil Procedure.19 The distinction between these two has been
explained thus:
. . . The first [situation where the complaint does not allege a sufficient cause of action] is
raised in a motion to dismiss under Rule 16 before a responsive pleading is filed and can be
determined only from the allegations in the initiatory pleading and not from evidentiary or
other matters aliunde. The second [situation where the evidence does not sustain the cause
of action alleged] is raised in a demurrer to evidence under Rule 33 after the plaintiff has
rested his case and can be resolved only on the basis of the evidence he has presented in
support of his claim. The first does not concern itself with the truth and falsity of the
allegations while the second arises precisely because the judge has determined the truth and
falsity of the allegations and has found the evidence wanting.20cräläwvirtualibräry
Hence, a motion to dismiss based on lack of cause of action is filed by the defendant after the
plaintiff has presented his evidence on the ground that the latter has shown no right to the
relief sought. While a motion to dismiss under Rule 16 is based on preliminary objections
which can be ventilated before the beginning of the trial, a motion to dismiss under Rule 33 is
in the nature of a demurrer to evidence on the ground of insufficiency of evidence and is
presented only after the plaintiff has rested his case.21cräläwvirtualibräry
As the rejoinder filed by the defendants was not based on the failure of the complaint to state
a cause of action but on factual and legal matters allegedly excusing them from liability, the
same could not be considered a motion to dismiss under Rule 16, 1(g).
Actually, what respondent judge did was to render a decision. Thus, in his so-called
resolution, he stated:
Pertinent provisions of Republic Act No. 7099 provides that a set of guidelines by which a
student publication is operated and managed, taking into account pertinent laws as well as
the school administrations policies. Said guidelines shall determine the frequency of
publication, the manner of selecting articles and features and other similar matters, (section
3(c) thereof); and students who are members of the editorial board shall not be suspended or
expelled solely on the basis of articles he or she has written, or on the basis of the
performance of his or her duties in the student publication, (section 7 thereof) (underscoring
supplied).
The plaintiffs, who are all members of the editorial board, were not expelled solely on the
basis of the articles they wrote in the alleged spoof publication of Dataline. They violated the
Manual of the school with regard to the manner of selecting articles and features they are
supposed to write or feature therein. . . . What they wrote is not in consonance with the
principle of the State to promote campus journalism. . . but degrading and insulting to the
tenets of professional journalism in the level of campus journalism.
Defendant school, through its Dean of Student Affairs, conducted an investigation and
subsequently a hearing on December 9 and 10, 1996. During these hearings, plaintiffs
admitted that they have knowledge of and consented to the publication of the tabloid or the
spoof edition of the Dataline and their purpose for publishing such spoof edition is merely to
entertain the studentry of AMACC. This was likewise not disputed nor denied by the plaintiffs
in their verified Reply. On December 17, 1996, plaintiffs, through their Editor-In-Chief Ian
Dexter R. Marquez, filed a complaint before the Commission of Higher [Education] against
the administration of AMA Computer College for the malicious, arbitrary dismissal or
expulsion of plaintiffs herein which was detrimental to students rights and welfare, in violation
of Republic Act No. 7079, (Annex 2, Rejoinder). However, said complaint was dismissed for
failure on the part of the plaintiffs themselves to comply with the Order of the Commission
dated February 19, 1997 for a formal hearing. Hence, this instant case.
....
. . . . Also, the Manual of Regulation for Private Schools provides that the school or university
can impose penalty for cause after due investigation having been conducted. The exclusion
by the AMACC of plaintiffs from the roll of students to be admitted is warranted and in
accordance with the law and in consonance with its regulatory and supervisory power so that
the spirit of the law is observed.22cräläwvirtualibräry
Respondent judge could not do this since there were issues of facts which had to be
resolved. Respondent could dismiss Civil Case No. Q-97-30549 for lack of cause of action
only after a trial on the merits. The manner in which the hearing before the disciplinary
tribunal was held, whether complainants were expelled on the sole basis of the articles
written in Amable Tonite, and whether or not Mauricia Herrera, who was one of the
complainants in the disciplinary tribunal, was indeed a member thereof are factual issues
which require the presentation of evidence before respondent judge could determine the
veracity of the parties claims. As admitted in his comment, dated October 23, 1997,
respondent judge simply accepted as facts the affirmative defenses raised by the defendants,
namely: (1) that complainants had given cause for their expulsion with the publication of the
spoof edition of the Dataline; (2) that the articles in the said spoof edition, as selectively
reproduced by the defendants in their Opposition, contained obscene and indecent language;
and (3) that complainants were given due process before their expulsion.23
Without evidence as to their truthfulness or veracity, the allegations in the opposition filed by
the defendants remained mere allegations and did not rise to the dignity of proof.24 There is
thus no factual support for respondent judges resolution. Indeed, all that was submitted to
respondent judge for resolution was merely the issue of whether or not to grant a preliminary
mandatory injunction to compel the defendant school to allow complainants to enroll for the
school year 1997-1998.
Only ignorance of basic procedure can account for the bizarre proceedings before
respondent judge. When the law is elementary, not to be aware of it constitutes gross
ignorance thereof. Judges are expected to have more than just a modicum of acquaintance
with the statutes and procedural rules.25 Truly, respondent judge failed to live up to the
demands of his position as a member of the bench.
Third. Complainants also claim that respondent judges resolution, dated September 26, 1997,
denying their motion for reconsideration and motion to inhibit him was received by them only
on February 19, 1998, or almost five months after its supposed issuance.26 Respondent
judge does not deny this allegation by complainants in his comment.27cräläwvirtualibräry
This is not the first time a charge of this nature has been made against respondent judge. In
A.M. No. RTJ-92-840, entitled Atty. Arturo V. Miranda v. Judge Percival Lopez, Regional Trial
Court, Branch 78, Quezon City, respondent judge was reprimanded by this Court for undue
delay in the service of his decision in a civil case upon the parties. Respondent judge was
thus not above covering up his shortcomings by making it appear that he timely resolved a
matter before him. Considering that counsel for complainants maintains his office only in
Makati City28 while respondent judge presides over a court located in Quezon City, it is hard
to believe that the supposed September 27, 1997 resolution took five months before it could
be served on complainants and their counsel. In any event, it is incumbent upon a judge to
manage his court in such manner as to promote prompt and convenient disposition of its
business.29 Hence, the responsibility for the delay in the service of the resolution, dated
September 26, 1997, on the complainants in this case lies only with respondent judge.
We now consider the penalty to be imposed on respondent judge. In a recent case30 decided
by this Court, a judge was fined in the amount of P1,000.00 for having incurred a delay of four
months in resolving the issue of injunctive writ. On the other hand, a fine of P2,000.00 was
imposed by this Court in previous cases31 where judges were found guilty of gross ignorance
of the law. In this case, where we find respondent judge guilty of undue delay in the resolution
of a motion, gross ignorance of the law, and failure to heed a prior warning from this Court, a
fine of P5,000.00 with warning of a more drastic sanction should he repeat the same offenses
is appropriate.
WHEREFORE, this Court finds respondent Judge Percival Mandap Lopez, of the Regional
Trial Court, Branch 78, Quezon City, GUILTY of gross ignorance of the law, undue delay in
the resolution of the writ of preliminary mandatory injunction in Civil Case No. Q-97-30549,
and failure to heed a prior warning by this Court and hereby imposes on him a FINE of
P5,000.00, with warning that repetition of the same or similar offenses will be dealt with more
severely.
SO ORDERED.
Bellosillo, (Acting C.J.,), (Chairman), and Corona, JJ., concur.
Quisumbing, J., abroad, on official business.
G.R. No. 129928 August 25, 2005
MISAMIS OCCIDENTAL II COOPERATIVE, INC., Petitioners,
vs.
VIRGILIO S. DAVID, Respondent.
DECISION
Tinga, J.:
In this Petition for Review1 under Rule 45 of the 1997 Rules of Civil Procedure, petitioner
Misamis Occidental II Electric Cooperative, Inc. (hereinafter, MOELCI II) seeks the reversal of
the Decision2 of the Court of Appeals, Former Ninth Division in C.A. G.R. SP No. 41626 and
its Resolution3 denying MOELCI II’s motion for reconsideration. The questioned Decision
dismissed MOELCI II’s petition for certiorari under Rule 65 and effectively affirmed the trial
court’s orders dated 16 November 19954 and 13 March 19965 which respectively denied
petitioner’s Motion (For Preliminary Hearing of Affirmative Defenses and Deferment of Pre-
Trial Conference)6 and Motion for Reconsideration.7
The antecedents are as follows:
Private respondent Virgilio S. David (hereinafter, David), a supplier of electrical hardware,8
filed a case for specific performance and damages against MOELCI II, a rural electric
cooperative in Misamis Occidental, docketed as Civil Case No. 94-69402 entitled "Virgilio
David v. Misamis Occidental II Electric Cooperative, Inc. (MOELCI II)." The said case, which
was essentially a collection suit, pending before Judge Felixberto Olalia (hereinafter, Judge
Olalia) of the Regional Trial Court of Manila, Branch 8 (the trial court), was predicated on a
document attached as Annex "A" to the Amended Complaint9 that according to David is the
contract pursuant to which he sold to MOELCI II one (1) unit of 10 MVA Transformer.10
MOELCI II filed its Answer to Amended Complaint11 which pleaded, among others,
affirmative defenses which also constitute grounds for dismissal of the complaint. These
grounds were lack of cause of action, there being allegedly no enforceable contract between
David and MOELCI II under the Statute of Frauds pursuant to Section 1 (g) and (i), Rule 16 of
the Rules of Court, and improper venue.12
In accordance with Section 5, Rule 16 of the Rules of Court,13 (now Section 6, Rule 16 of the
1997 Rules of Civil Procedure) MOELCI II filed with the trial court a Motion (For Preliminary
Hearing of Affirmative Defenses and Deferment of Pre-Trial Conference)14 (hereinafter
referred to as Motion). In said Motion, MOELCI II in essence argued that the document
attached as Annex "A" to the Amended Complaint was only a quotation letter and not a
contract as alleged by David. Thus, it contends that David’s Amended Complaint is
dismissible for failure to state a cause of action.15
In his opposition to MOELCI II’s Motion, David contended in the main that because a motion
to dismiss on the ground of failure to state a cause of action is required to be based only on
the allegations of the complaint, the "quotation letter," being merely an attachment to the
complaint and not part of its allegations, cannot be inquired into.16
MOELCI II filed a rejoinder to the opposition in which it asserted, citing extensively the ruling
of the Court in World Wide Insurance & Surety Co., Inc. v. Macrohon,17 that a complaint
cannot be separated from its annexes; hence, the trial court in resolving a motion to dismiss
on the ground of failure to state a cause of action must consider the complaint’s annexes.18
After the parties filed their respective memoranda, Judge Olalia issued an order dated 16
November 1995 denying MOELCI II’s motion for preliminary hearing of affirmative defenses.
MOELCI II’s motion for reconsideration of the said order was likewise denied in another order
issued by Judge Olalia on 13 March 1996.19
MOELCI II elevated this incident to the Court of Appeals by way of a special civil action for
certiorari, alleging grave abuse of discretion on the part of Judge Olalia in the issuance of the
two aforesaid orders.
On 14 March 1997, the Court of Appeals dismissed MOELCI II’s petition holding that the
allegations in David’s complaint constitute a cause of action. With regard to MOELCI II’s
contention that David’s Amended Complaint is dismissible as the document, attached thereto
as Annex "A," upon which David’s claim is based is not a contract of sale but rather a
quotation letter, the Court of Appeals ruled that the interpretation of the document requires
evidence aliunde which is not allowed in determining whether or not the complaint states a
cause of action. The appellate court further declared that when the trial court is confronted
with a motion to dismiss on the ground of lack of cause of action, it is mandated to confine its
examination for the resolution thereof to the allegations of the complaint and is specifically
enjoined from receiving evidence for that purpose.20
With the denial of its Motion for Reconsideration, petitioner is now before this Court seeking a
review of the appellate court’s pronouncements. MOELCI II asserts that the Court of Appeals
committed serious error in: (1) ruling that the resolution of its motion to dismiss on the ground
of lack of cause of action necessitated hearings by the trial court with the end in view of
determining whether or not the document attached as Annex "A" to the Amended Complaint
is a contract as alleged in the body of said pleading; and (2) not ordering the trial court to
dismiss the Amended Complaint on the ground of lack of cause of action.21 Anent the first
ground, MOELCI II further claims that with the denial of its Petition, the appellate court in
effect exhorted the trial court to defer the resolution of its motion to dismiss until after the
hearing of the case on the merits contrary to Rule 1622 of the Rules of Court and well-settled
jurisprudence.23
In his comment,24 David counters that a sufficient cause of action exists. He also points out
that he and MOELCI II differ in the interpretation of the construction of the document attached
as Annex "A" of the Amended Complaint; hence, there is a need to conduct hearings thereon.
He likewise contends that the trial court did not defer the resolution of petitioner’s motion to
dismiss. On the contrary, the trial court denied squarely the motion "to abbreviate the
proceedings and for the parties to proceed to trial and avoid piece meal resolution of
issues."25
In its Reply,26 MOELCI II reiterates its position that the document attached as Annex "A" of
the Amended Complaint clearly is a quotation letter and not a perfected contract of sale as
alleged by David. The absence of doubt or ambiguity of the contents and import of the
document leaves no room for its interpretation.
At issue is whether the Court of Appeals erred in dismissing the petition for certiorari and in
holding that the trial court did not commit grave abuse of discretion in denying petitioner’s
Motion.
We find no error in the ruling of the Court of Appeals.
In Municipality of Biñan, Laguna v. Court of Appeals,27 decided under the old Rules of Court,
we held that a preliminary hearing permitted under Section 5, Rule 16, is not mandatory even
when the same is prayed for. It rests largely on the sound discretion of the court, thus:
SEC. 5. Pleading grounds as affirmative defenses.- Any of the grounds for dismissal provided
for in this rule, except improper venue, may be pleaded as an affirmative defense, and a
preliminary hearing may be had thereon as if a motion to dismiss had been filed.
The use of the word "may" in the aforequoted provision shows that such a hearing is not
mandatory but discretionary. It is an auxiliary verb indicating liberty, opportunity, permission
and possibility.28
Such interpretation is now specifically expressed in the 1997 Rules of Civil Procedure.
Section 6, Rule 16 provides that a grant of preliminary hearing rests on the sound discretion
of the court, to wit-
SEC. 6. Pleading grounds as affirmative defenses.- If no motion to dismiss has been filed,
any of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative
defense in the answer and, in the discretion of the court, a preliminary hearing may be had
thereon as if a motion to dismiss had been filed. …
Based on the foregoing, a preliminary hearing undeniably is subject to the discretion of the
trial court. Absent any showing that the trial court had acted without jurisdiction or in excess
thereof or with such grave abuse of discretion as would amount to lack of jurisdiction, as in
the present case, the trial court’s order granting or dispensing with the need for a preliminary
hearing may not be corrected by certiorari.29
Moreover, consistent with our ruling in The Heirs of Juliana Clavano v. Genato,30 as MOELCI
II’s Motion is anchored on the ground that the Complaint allegedly stated no cause of action,
a preliminary hearing thereon is more than unnecessary as it constitutes an erroneous and
improvident move. No error therefore could be ascribed to the trial court in the denial of such
Motion. The Court ruled in the cited case, thus:
. . . . respondent Judge committed an error in conducting a preliminary hearing on the private
respondent’s affirmative defenses. It is a well-settled rule that in a motion to dismiss based on
the ground that the complaint fails to state a cause of action, the question submitted to the
court for determination is the sufficiency of the allegations in the complaint itself. Whether
those allegations are true or not is beside the point, for their truth is hypothetically admitted by
the motion. The issue rather is: admitting them to be true, may the court render a valid
judgment in accordance with the prayer of the complaint? Stated otherwise, the sufficiency of
the cause of action must appear on the face of the complaint in order to sustain a dismissal
on this ground. No extraneous matter may be considered nor facts not alleged, which would
require evidence and therefore must be raised as defenses and await the trial. In other words,
to determine the sufficiency of the cause of action, only the facts alleged in the complaint, and
no other should be considered.
The respondent Judge departed from this rule in conducting a hearing and in receiving
evidence in support of the private respondent’s affirmative defense, that is, lack of cause of
action.31
To determine the existence of a cause of action, only the statements in the complaint may be
properly considered. It is error for the court to take cognizance of external facts or hold
preliminary hearings to determine their existence. If the allegations in a complaint furnish
sufficient basis by which the complaint can be maintained, the same should not be dismissed
regardless of the defenses that may be averred by the defendants.32
The test of sufficiency of facts alleged in the complaint as constituting a cause of action is
whether or not admitting the facts alleged, the court could render a valid verdict in
accordance with the prayer of said complaint.33
In the case at bar, the Amended Complaint states in paragraphs 3, 4, 5, and 6, thus:
FIRST CAUSE OF ACTION
3. On June 8 1992 the parties entered into a contract for the sale by the plaintiff to the
defendant of one (1) unit 10 MVA Power transformer with accessories for a total price of
₱5,200,000.00 plus 69 KV Line Accessories for a total price of ₱2,169,500.00 under the
following relevant terms and conditions:
1. Fifty percent (50%) downpayment upon signing of contract.
Fifty percent (50%) upon delivery
2. Delivery- Ninety (90) working days upon receipt of your Purchase Order and Downpayment
Copy of the contract is hereto attached as Annex "A."
4. Because of the standing relationship between the parties and the urgent need on the part
of the defendant for the power transformer to remedy the electric supply deficiency in its area
of coverage the plaintiff waived the 50% downpayment and delivered soon thereafter the 10
MVA transformer with accessories evidence (sic) by a copy of the sales invoice hereto
attached as Annex "B".
5. Despite demands however, verbal and written, since December 1992, the defendant has
failed to pay the price thereof of ₱5,200,000.00 plus the custom duties and incidental
expenses of ₱272,722.27.
SECOND CAUSE OF ACTION
6. Apart from the above transaction, the plaintiff has been, on a regular basis, delivering
various electrical hardware to the defendant which, as of 31 January 1994, despite demands,
has an outstanding balance of ₱281,939.76.34

And David prayed as follows:
WHEREFORE, it is respectfully prayed that judgment render ordering the defendant to pay
the plaintiff:
ON THE FIRST CAUSE OF ACTION
1. The total sum of ₱5,472,722.27 plus the stipulated interest at 24% per annum from
December 1992 until fully paid.
ON THE SECOND CAUSE OF ACTION
2. The balance of ₱281,939.76 plus the stipulated interest at 24% per annum from due dates
until fully paid.
COMMON PROPER (sic)
3. Attorney’s fee at 25% of the foregoing amounts plus expenses of litigation and not less
than ₱100,000.00 with costs.
4. Other reliefs as may be just and equitable in the premises.35
It has been hypothetically admitted that the parties had entered into a contract sale David
bound himself to supply MOELCI II (1) unit 10 MVA Power transformer with accessories for a
total price of ₱5,200,000.00 plus 69 KV Line Accessories for a total price of ₱2,169,500.00;
that despite written and verbal demands, MOELCI II has failed to pay the price thereof plus
the custom duties and incidental expenses of ₱272,722.27; and that apart from the previously
stated contract of sale, David regularly delivered various electrical hardware to MOELCI II
which, despite demands, has an outstanding balance of ₱281,939.76.
We believe all the foregoing sufficiently lay out a cause of action. Even extending our scrutiny
to Annex "A," which is after all deemed a part of the Amended Complaint, will not result to a
change in our conclusion.
Contrary to MOELCI II’s assertion, Annex "A" is not an "undisguised quotation letter."36
While Annex "A" is captioned as such, the presence of the signatures of both the General
Manager and the Chairman of the Committee of Management immediately below the word
"CONFORME" appearing on the document’s last page37 lends credulity to David’s contention
that there was, or might have been, a meeting of minds on the terms embodied therein. Thus,
the appendage of Annex "A" does not entirely serve to snuff out David’s claims.
In fact, the ambiguity of the import and nature of Annex "A" which necessitates a resort to its
proper interpretation, fortifies the propriety of the trial court’s
denial of MOELCI II’s Motion. The interpretation of a document requires introduction of
evidence which is precisely disallowed in determining whether or not a complaint states a
cause of action. The Court of Appeals therefore correctly dismissed MOELCI II’s petition and
upheld the trial court’s ruling.
Now, whether in truth Annex "A" is, as entitled, a mere quotation letter is a matter that could
best be proven during a full-blown hearing rather than through a preliminary hearing as this
may involve extensive proof. Verily, where a preliminary hearing will not suffice, it is
incumbent upon the trial court to deny a motion for preliminary hearing and go on to trial. The
veracity of the assertions of the parties can be ascertained at the trial of the case on the
merits.38
Finally, we do not agree with MOELCI II’s contention that the Court of Appeals sanctioned the
trial court’s deferment of the resolution of MOELCI II’s Motion. The trial court squarely denied
the Motion and not merely deferred its resolution.39 Thus, there is no deferment to speak of
that should be enjoined.
WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated 14
March 1997 and its Resolution dated 14 July 1997 are AFFIRMED. Costs against petitioner.
SO ORDERED.
DANTE O. TINGA Associate Justice
G.R. No. 198680 July 8, 2013
HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON, ERUDITA Y. BARON,
CICERO YPON, WILSON YPON, VICTOR YPON, AND HINIDINO Y. PEÑALOSA,
PETITIONERS,
vs.
GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO E. YPON," AND THE
REGISTER OF DEEDS OF TOLEDO CITY, RESPONDENTS.
RESOLUTION
PERLAS-BERNABE, J.:
This is a direct recourse to the Court from the Regional Trial Court of Toledo City, Branch 59
(RTC), through a petition for review on certiorari1 under Rule 45 of the Rules of Court, raising
a pure question of law. In particular, petitioners assail the July 27, 20112 and August 31,
20113 Orders of the RTC, dismissing Civil Case No. T-2246 for lack of cause of action.
The Facts
On July 29, 2010, petitioners, together with some of their cousins,4 filed a complaint for
Cancellation of Title and Reconveyance with Damages (subject complaint) against
respondent Gaudioso Ponteras Ricaforte a.k.a. "Gaudioso E. Ypon" (Gaudioso), docketed as
Civil Case No. T-2246.5 In their complaint, they alleged that Magdaleno Ypon (Magdaleno)
died intestate and childless on June 28, 1968, leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-
J which were then covered by Transfer Certificates of Title (TCT) Nos. T-44 and T-77-A.6
Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-
Adjudication and caused the cancellation of the aforementioned certificates of title, leading to
their subsequent transfer in his name under TCT Nos. T-2637 and T-2638,7 to the prejudice
of petitioners who are Magdaleno’s collateral relatives and successors-in-interest.8
In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a)
his certificate of Live Birth; (b) two (2) letters from Polytechnic School; and (c) a certified true
copy of his passport.9 Further, by way of affirmative defense, he claimed that: (a) petitioners
have no cause of action against him; (b) the complaint fails to state a cause of action; and (c)
the case is not prosecuted by the real parties-in-interest, as there is no showing that the
petitioners have been judicially declared as Magdaleno’s lawful heirs.10
The RTC Ruling
On July 27, 2011, the RTC issued the assailed July 27, 2011 Order,11 finding that the subject
complaint failed to state a cause of action against Gaudioso. It observed that while the
plaintiffs therein had established their relationship with Magdaleno in a previous special
proceeding for the issuance of letters of administration,12 this did not mean that they could
already be considered as the decedent’s compulsory heirs. Quite the contrary, Gaudioso
satisfactorily established the fact that he is Magdaleno’s son – and hence, his compulsory
heir – through the documentary evidence he submitted which consisted of: (a) a marriage
contract between Magdaleno and Epegenia Evangelista; (b) a Certificate of Live Birth; (c) a
Letter dated February 19, 1960; and (d) a passport.13
The plaintiffs therein filed a motion for reconsideration which was, however, denied on August
31, 2011 due to the counsel’s failure to state the date on which his Mandatory Continuing
Legal Education Certificate of Compliance was issued.14
Aggrieved, petitioners, who were among the plaintiffs in Civil Case No. T-2246,15 sought
direct recourse to the Court through the instant petition.
The Issue Before the Court
The core of the present controversy revolves around the issue of whether or not the RTC’s
dismissal of the case on the ground that the subject complaint failed to state a cause of action
was proper.
The Court’s Ruling
The petition has no merit.
Cause of action is defined as the act or omission by which a party violates a right of
another.16 It is well-settled that the existence of a cause of action is determined by the
allegations in the complaint.17 In this relation, a complaint is said to assert a sufficient cause
of action if, admitting what appears solely on its face to be correct, the plaintiff would be
entitled to the relief prayed for.18Accordingly, if the allegations furnish sufficient basis by
which the complaint can be maintained, the same should not be dismissed, regardless of the
defenses that may be averred by the defendants.19
As stated in the subject complaint, petitioners, who were among the plaintiffs therein, alleged
that they are the lawful heirs of Magdaleno and based on the same, prayed that the Affidavit
of Self-Adjudication executed by Gaudioso be declared null and void and that the transfer
certificates of title issued in the latter’s favor be cancelled. While the foregoing allegations, if
admitted to be true, would consequently warrant the reliefs sought for in the said complaint,
the rule that the determination of a decedent’s lawful heirs should be made in the
corresponding special proceeding20 precludes the RTC, in an ordinary action for cancellation
of title and reconveyance, from granting the same. In the case of Heirs of Teofilo Gabatan v.
CA,21 the Court, citing several other precedents, held that the determination of who are the
decedent’s lawful heirs must be made in the proper special proceeding for such purpose, and
not in an ordinary suit for recovery of ownership and/or possession, as in this case:
Jurisprudence dictates that the determination of who are the legal heirs of the deceased must
be made in the proper special proceedings in court, and not in an ordinary suit for recovery of
ownership and possession of property.1âwphi1 This must take precedence over the action for
recovery of possession and ownership. The Court has consistently ruled that the trial court
cannot make a declaration of heirship in the civil action for the reason that such a declaration
can only be made in a special proceeding. Under Section 3, Rule 1 of the 1997 Revised
Rules of Court, a civil action is defined as one by which a party sues another for the
enforcement or protection of a right, or the prevention or redress of a wrong while a special
proceeding is a remedy by which a party seeks to establish a status, a right, or a particular
fact. It is then decisively clear that the declaration of heirship can be made only in a special
proceeding inasmuch as the petitioners here are seeking the establishment of a status or
right.
In the early case of Litam, et al. v. Rivera, this Court ruled that the declaration of heirship
must be made in a special proceeding, and not in an independent civil action. This doctrine
was reiterated in Solivio v. Court of Appeals x x x:
In the more recent case of Milagros Joaquino v. Lourdes Reyes, the Court reiterated its ruling
that matters relating to the rights of filiation and heirship must be ventilated in the proper
probate court in a special proceeding instituted precisely for the purpose of determining such
rights. Citing the case of Agapay v. Palang, this Court held that the status of an illegitimate
child who claimed to be an heir to a decedent's estate could not be adjudicated in an ordinary
civil action which, as in this case, was for the recovery of property.22 (Emphasis and
underscoring supplied; citations omitted)
By way of exception, the need to institute a separate special proceeding for the determination
of heirship may be dispensed with for the sake of practicality, as when the parties in the civil
case had voluntarily submitted the issue to the trial court and already presented their
evidence regarding the issue of heirship, and the RTC had consequently rendered judgment
thereon,23 or when a special proceeding had been instituted but had been finally closed and
terminated, and hence, cannot be re-opened.24
In this case, none of the foregoing exceptions, or those of similar nature, appear to exist.
Hence, there lies the need to institute the proper special proceeding in order to determine the
heirship of the parties involved, ultimately resulting to the dismissal of Civil Case No. T-2246.
Verily, while a court usually focuses on the complaint in determining whether the same fails to
state a cause of action, a court cannot disregard decisions material to the proper appreciation
of the questions before it.25 Thus, concordant with applicable jurisprudence, since a
determination of heirship cannot be made in an ordinary action for recovery of ownership
and/or possession, the dismissal of Civil Case No. T-2246 was altogether proper. In this light,
it must be pointed out that the RTC erred in ruling on Gaudioso’s heirship which should, as
herein discussed, be threshed out and determined in the proper special proceeding. As such,
the foregoing pronouncement should therefore be devoid of any legal effect.
WHEREFORE, the petition is DENIED. The dismissal of Civil Case No. T-2246 is hereby
AFFIRMED, without prejudice to any subsequent proceeding to determine the lawful heirs of
the late Magdaleno Ypon and the rights concomitant therewith.
SO ORDERED.
Carpio, (Chairperson), Del Castillo, Perez, and Mendoza,* JJ., concur.
[G.R. No. 36799. September 13, 1934.]
NICOLAS SANTOS, Plaintiff-Appellant, v. LAZARO DE LEON, ET AL., Defendants-
Appellees.
Gregorio Perfecto for Appellant.
Manuel Jose and Marcelo M. Bobadilla for Appellees.
SYLLABUS
1. INJUNCTION; JURISDICTION. — This court has often held that injunction will not be
granted to take property out of the possession or control of one party and place it in that of
another whose title has not been clearly established. The doctrine proceeds on the familiar
rule that the writ of injunction is an equitable relief, and that the determination of title is a legal
remedy. In jurisdictions where courts of equity are separate and distinct from courts of law,
such distinction is a matter of jurisdiction, for courts of equity, by their nature, can only
administer equity.
2. ID.; ID. — Where, as in this jurisdiction, courts are not divided into that of equity and of law,
but are vested with power to administer both law and equity, the distinction between an
equitable relief and a remedy at law is not jurisdictional.
3. ID.; ID. — Under the law and practice in this jurisdiction, plaintiff is allowed to pray for all
legal as well as equitable remedies, and defendant to set up all special defenses,
counterclaims and cross-complaints, irrespective of whether they are of legal or equitable
nature. Consequently, when a party commences an action for injunction, whatever may be
the defense, counterclaim or cross- complaint which defendant may care to make, whether of
legal or equitable nature, our courts will proceed to determine the case whenever possible
and convenient, in order to avoid multiplicity of suits between the same parties.
DECISION
ABAD SANTOS, J.:
This is an action for injunction and damages instituted by Nicolas Santos, plaintiff and
appellant, against Elias Cruz and his codefendants and appellees. Both Nicolas Santos and
Elias Cruz claimed ownership and possession of the land in question. Before trial, a
preliminary injunction was issued at the instance of the plaintiff. After trial, the lower court
found that said land belonged originally to Lazaro de Leon, who sold it to Elias Cruz on July
12, 1928 and the deed of sale was registered on July 16, 1928. Before this sale, however,
Nicolas Santos had obtained judgment against Lazaro de Leon, on account of which the land
in question was levied on execution and sold at public auction on May 23, 1929, to the
judgment creditor. No redemption having been effected within the legal period, Santos
obtained the corresponding certificate of sale which was registered on June 4, 1930, and on
June 21, 1930, he was placed in possession of the property by order of the court.
Upon the foregoing facts, the court below held that, although, under the circumstances of the
case, the sale in favor of the defendant Elias Cruz was presumed to be fraudulent, the action
instituted was improper, in view of the fact that Cruz took possession of the land on July 12,
1928. The court, therefore, rendered judgment dismissing the action and allowed the
defendant the sum of P175 as damages by reason of the issuance of the preliminary
injunction. From this judgment the plaintiff appealed.
The whole controversy in this case centers on the question of jurisdiction of the court below to
grant injunctive relief. This court, on more than one occasion, has held that injunction will not
be granted to take property out of the possession or control of one party and place it in that of
another whose title has not been clearly established by law. (Devesa v. Arbes, 13 Phil., 273;
Palafox v. Madamba, 19 Phil., 444; Evangelista v. Pedreños, 27 Phil., 648.) The doctrine
proceeds on the familiar rule that the writ of injunction is an equitable relief, and that the
determination of title is a legal remedy. In jurisdictions where courts of equity are separate
and distinct from courts of law, such distinction is by no means a matter of indifference.
Indeed, it is a matter of jurisdiction, for courts of equity, by their nature, can only administer
equity. Thus, following this principle, this court has further held that, where the defendant
raised the question of title, injunction is not the proper remedy. (Asombra v. Dorado and
Gesmundo, 36 Phil., 883; Liongson v. Martinez, 36 Phil., 948.)
It is at once clear, however, that where, as in this jurisdiction, courts are not divided into that
of equity and of law, but are vested with power to administer both law and equity, such
jurisdictional question is out of place. (21 C. J., 27; Montilla v. Van Syckel, 8 Porto Rico, 153,
155.) Under the law and practice in this jurisdiction, the plaintiff is allowed to pray for all legal
as well s equitable remedies, and the defendant to set up all special defenses, including
counterclaims and cross-complaints, irrespective of whether they are of legal or equitable
nature. Consequently, when a party commences an action for injunction, and the facts
averred in the complaint would confer jurisdiction, whatever may be the defense,
counterclaim or cross-complaint which the defendant may care to make, whether of legal or
equitable nature, our courts will proceed to determine the case whenever possible and
convenient, in order to avoid multiplicity of suits between the same parties.
Upon the foregoing considerations, the trial court could have properly tried and determined
this case in the light of the pleadings and the evidence presented by the parties. This was
intimated in both the Devesa and Rustia cases, and, in a way, it was done in the Evangelista
case, wherein, by considering the complaint therein as amended in this instance, this court
allowed possession and damages in favor of the plaintiff. This shifting of an action from,
technically, one of equity to one of law, or vice versa, or the joining of legal and equitable
causes of action has long been in practice in American jurisdiction where joinder of causes of
action arising out of the same transaction or transactions connected with the same subject of
action, is authorized by law. (1 C. J., 1007, 1060, 1088, 1089, 1130.)
After all, this appeal presents several equitable features for the application of the precedent
established in the Evangelista case. In the first place, we have the possession enjoyed by the
plaintiff since July 26, 1930 by reason of the preliminary injunction issued ex parte in this
case. In the second place, we cannot shut our eyes to the evidence of record which shows
that, in the eyes of the law, plaintiff is the lawful owner of the property, because the contract
relied upon by defendants is null and void and without effect. In the third place, there is strong
equity in protecting plaintiff from paying damages suffered by a party who, in the eyes of the
law, is a fraudulent grantee of the property in question. It is evident, therefore, that, as the
parties now stand, to shift anew the possession from the plaintiff to the defendants, would
entail grave consequences for which the tardy and inadequate process of the law would fail to
afford full and complete relief.
In view of the foregoing considerations, the judgment appealed from must be reversed, and
the writ of preliminary injunction issued by the court below made permanent, without special
pronouncement as to costs in both instances. So ordered.
Street, Imperial, Butte and Diaz, JJ., concur.
[G.R. NO. 170750 : April 7, 2009]
HEIRS OF TOMAS DOLLETON, HERACLIO ORCULLO, REMEDIOS SAN PEDRO, HEIRS
OF BERNARDO MILLAMA, HEIRS OF AGAPITO VILLANUEVA, HEIRS OF HILARION
GARCIA, SERAFINA SP ARGANA, and HEIRS OF MARIANO VILLANUEVA, Petitioners,
v. FIL-ESTATE MANAGEMENT INC., ET AL. AND THE REGISTER OF DEEDS OF LAS
PIÑAS CITY, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing (1)
the Decision1 dated 16 September 2005, rendered by the Court of Appeals in CA-G.R. CV
No. 80927, which affirmed the Resolutions2 dated 8 September 2000 and 30 June 2003, of
the Regional Trial Court (RTC), Branch 253, of Las Piñas City, dismissing the Complaints in
Civil Cases No. LP-97-0228, No. LP-97-0229, No. LP-97-0230, No. LP-97-0231, No. LP-97-
0236, No. LP-97-0237, No. LP-97-0238, and No. LP-97-0239; and (2) the Resolution dated 9
December 2005 of the same court denying petitioners' Motion for Reconsideration.
In October 1997, petitioners Heirs of Tomas Dolleton,3 Heraclio Orcullo, Remedios San
Pedro, et al.,4 Heirs of Bernardo Millama, et al.,5 Heirs of Agapito Villanueva, et al.,6 Heirs of
Hilarion Garcia, et al.,7 Serafina SP Argana, et al.,8 and Heirs of Mariano Villanueva, et al.9
filed before the RTC separate Complaints for Quieting of Title and/or Recovery of Ownership
and Possession with Preliminary Injunction/Restraining Order and Damages against
respondents Fil-Estate Management Inc., Spouses Arturo E. Dy and Susan Dy, Megatop
Realty Development, Inc.,10 and the Register of Deeds of Las Piñas. The Complaints,
which were later consolidated, were docketed as follows:
1. Civil Case No. L-97-0228, which was filed by the Heirs of Tomas Dolleton covering a
parcel of land with an area of 17,681 square meters, located in Magasawang Mangga, Barrio
Pugad Lawin, Las Piñas, Rizal under Psu-235279 approved by the Director of the Bureau of
Lands on 20 February 1959;
2. Civil Case No. L-97-0229, which was filed by Heraclio Orcullo covering two (2) parcels of
land with the total areas of 14,429 square meters and 2,105 square meters, respectively,
located in Magasawang Mangga, Barrio Pugad Lawin, Las Piñas, Rizal under Lots 1 and 2,
Psu-169404 approved by the Director of the Bureau of Lands on 4 December 1959;
3. Civil Case No. L-97-0230, which was filed by Remedios San Pedro, et al., covering a
parcel of land with an area of 17,159 square meters, located in Barrio Pugad Lawin, Las
Piñas, Rizal under Psu-96901 approved by the Director of the Bureau of Lands on 21 July
1933;
4. Civil Case No. L-97-0231, which was filed by the Heirs of Bernardo Millama, et al.,
covering a parcel of land with an area of 23,359 square meters, located in Magasawang
Mangga, Barrio Pugad Lawin, Las Piñas, Rizal under Psu-96905 approved by the Director
of the Bureau of Lands on 16 January 1933;
5. Civil Case No. L-97-0236, which was filed by the Heirs of Agapito Villanueva covering a
parcel of land with an area of 10,572 square meters, located in Magasawang Mangga, Barrio
Pugad Lawin, Las Piñas, Rizal;
6. Civil Case No. L-97-0237, which was filed by the Heirs of Hilarion Garcia, et al., covering a
parcel of land with an area of 15,372 square meters, located in Magasawang Mangga, Barrio
Pugad Lawin, Las Piñas, Rizal under Psu-96920 approved by the Director of the Bureau of
Lands on 16 January 1933;
7. Civil Case No. L-97-0238, which was filed by Serafina SP Argana, et al., covering a parcel
of land with an area of 29,391 square meters, located in Magasawang Mangga, Barrio Pugad
Lawin, Las Piñas, Rizal under Psu-96909 approved by the Director of the Bureau of Lands
on 18 January 1933; andcralawlibrary
8. Civil Case No. L-97-0239, which was filed by the Heirs of Mariano Villanueva, et al.,
covering a parcel of land with an area of 7,454 square meters, located in Magasawang
Mangga, Barrio Pugad Lawin, Las Piñas, Rizal under Psu-96910 approved by the Director
of the Bureau of Lands on 16 January 1933.
The eight Complaints11 were similarly worded and contained substantially identical
allegations. Petitioners claimed in their Complaints that they had been in continuous, open,
and exclusive possession of the afore-described parcels of land (subject properties) for more
than 90 years until they were forcibly ousted by armed men hired by respondents in 1991.
They had cultivated the subject properties and religiously paid the real estate taxes for the
same. Respondents cannot rely on Transfer Certificates of Title (TCTs) No. 9176, No. 9177,
No. 9178, No. 9179, No. 9180, No. 9181 and No. 9182,12 issued by the Registry of Deeds of
Las Piñas in their names, to support their claim over the subject properties since, petitioners
averred, the subject properties were not covered by said certificates. Petitioners also alleged
that said TCTs, purportedly derived from Original Certificate of Title (OCT) No. 6122, issued
in favor of Jose Velasquez, were spurious.
To support their narration of facts, petitioners cited Vda. de Cailles v. Mayuga13 and Orosa v.
Migrino,14 which both involved the parcel of land referred to as Lot 9, Psu-11411, Amd-2. In
these cases, the Court adjudicated said piece of land to Dominador Mayuga, who later
transferred it to Marciano Villanueva, who sold it to Nicolas Orosa. Pending a controversy
between the Heirs of Nicolas Orosa and Jose Velasquez, Delta Motors Corporation somehow
acquired the rights over their conflicting claims to the land and managed to obtain certificates
of title over the same. Delta Motors Corporation sold the land to Goldenrod, Inc., which finally
transferred it to a consortium composed of respondents, Peaksun Enterprises and Export
Corporation, and Elena Jao.
Petitioners stressed, however, that in Vda. de Cailles and Orosa, the land that was
transferred was Lot 9, Psu-11411, Amd-2, measuring 53 hectares, which was only a portion
of the entire Lot 9, Psu-11411, with a total area of 119.8 hectares. And respondents' TCTs,
derived from OCT No. 6122 in the name of Jose Velasquez, covered only 26.44 hectares or
roughly half of Lot 9, Psu-11411, Amd-2. Petitioners averred that the subject properties were
not included in the 53 hectares of Lot 9, Psu-11411, adjudicated to Dominador Mayuga.
Petitioners thus sought from the RTC that an order be issued enjoining respondents from
making any developments on the subject properties, and that after hearing, judgment be
rendered as follows:
A. [Herein respondents] be ordered to recognize the rights of [herein petitioners]; to vacate
the subject lot and peacefully surrender possession thereof to [petitioners]; and that Transfer
Certificate of Title Numbers 9176, 9177, 9178, 9179, 9180 and 9182 be cancelled by the
Register of Deeds for Las Pinas, Metro Manila, insofar as they are or may be utilized to
deprive [petitioners] of the possession and ownership of said lot.
B. Making the preliminary injunctions permanent.
C. An order be issued directing [respondents] to pay [petitioners] the sums of:
A. P500,000.00 as moral damages;
b. P150,000.00 as exemplary damages;
c. P100,000.00 as attorney's fees; and,
d. Cost of suit.
[Petitioners] further pray for such other affirmative reliefs as are deemed just and equitable in
the premises.15
Respondents filed before the RTC a Motion to Dismiss and Opposition to Application for a
Temporary Restraining Order/Writ of Preliminary Injunction.16 They moved for the dismissal
of the eight Complaints on the grounds of (1) prescription; (2) laches; (3) lack of cause of
action; and (4) res judicata.17
Respondents argued that the Complaints sought the annulment of the certificates of title that
were issued in their names. Section 32 of Presidential Decree No. 1529, otherwise known as
the Property Registration Decree,18 provides that the decree of registration and the
certificate of title issued pursuant thereto can only be nullified on the ground of fraud within
one year after the entry of such decree of registration. Respondents' TCTs could be traced
back to the decree/s of registration entered in 1966/1967, which resulted in the issuance of
OCT No. 6122 in the name of Jose Velasquez, respondents' predecessor-in-interest. Hence,
the filing of the Complaints only in October 1997 was made beyond the prescription period for
assailing a decree of registration and/or the certificate of title issued pursuant thereto.
Additionally, petitioners' Complaints were actions for reconveyance of the subject properties
based on implied trust, the filing of which prescribes after 10 years from the time said
properties were first registered under the Torrens system, in accordance with Articles 1144
and 1456 of the Civil Code.19 Since the subject properties were first registered in 1966/1967,
then the actions for their reconveyance, instituted only in 1997 or 30 years later, should be
dismissed on the ground of prescription.20
Respondents also contended that petitioners were guilty of laches. Despite their alleged
possession of the subject properties for 90 years, petitioners failed to take any steps to
oppose the land registration cases involving the same properties or to seek the nullification of
the decrees of registration and certificates of title which were entered and issued as early as
1966 and 1967.21
Moreover, respondents maintained that the Complaints should be dismissed for failure to
state a cause of action. Even assuming that petitioners were able to prove their allegations of
longtime possession and payment of realty taxes on the subject properties, and to submit a
sketch plan of the same, these cannot defeat a claim of ownership over the parcels of land,
which were already registered under the Torrens system in the name of respondents and the
other consortium members.22
Lastly, respondents insisted that the Complaints should be dismissed on the ground of res
judicata.23 By virtue of the decided cases Vda. de Cailles and Orosa, which petitioners
themselves cited in their Complaints, any claims to all portions of Lot 9, Psu 11411, Amd-2
are barred by res judicata. In said cases, respondents' predecessors-in-interest were
declared owners of Lot 9, Psu 11411, Amd-2. Respondents also referred to a Decision24
dated 17 December 1991 rendered by the Metropolitan Trial Court (MTC) of Las Piñas,
Branch 79, in Civil Case No. 3271, entitled Heirs of Benito Navarro v. Fil-Estate Management
Inc.25 In its Decision, the MTC declared that therein plaintiffs were not in possession of the
land, which it found to belong to respondent Fil-Estate Management Inc.
On 11 June 1998, the Heirs of Jose Velasquez (intervenors) filed a Motion for Intervention
with Leave of Court and a Complaint-in-Intervention, alleging that the subject properties,
covered by TCTs No. 9176, No. 9177, No. 9178, No. 9179, No. 9180, and No. 9181, were
once owned by the Spouses Jose Velasquez and Loreto Tiongkiao. Without settling the
conjugal partnership after the death of his wife Loreto Tiongkiao, and without obtaining the
intervenors' consent, Jose Velasquez, together with J.V. Development Corporation, Delta
Motors Corporation, and Nicolas Orosa, transferred all their rights to the subject properties to
Goldenrod, Inc., from which respondents acquired the same. The intervenors sought the
cancellation and nullification of respondents' certificates of title insofar as their mother's share
in the subject properties was concerned.26
On 8 September 2000, the RTC issued a Resolution27 in Civil Case No. LP-97-0228 granting
respondents' Motion to Dismiss. The trial court determined that the subject properties were
already registered in the names of respondents, and that petitioners were unable to prove by
clear and convincing evidence their title to the said properties. The dispositive part of the RTC
Resolution reads:
On the basis of the foregoing reasons alone, the instant complaint should immediately be
DISMISSED. Accordingly, the prayer for a temporary restraining order and preliminary
injunction is DENIED. This, however, is without prejudice to the complaint-in-intervention filed
by intervenors over the disputed properties, their undivided interests being intertwined and
attached to the disputed properties wherever it goes and whoever is in possession of the
same, their right to bring action to pursue the same being imprescriptible.28
On 12 August 2002, respondents filed a Motion for Clarification29 asking the RTC whether
the order of dismissal of Civil Case No. LP-97-0228, included Civil Cases No. LP-97-0229,
No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and
No. LP-97-0239. In a Resolution30 dated 30 June 2003, the RTC reiterated its Resolution
dated 8 September 2000 dismissing the Complaint of petitioners Heirs of Tomas Dolleton in
Civil Case No. LP-97-0228; and declared that the other cases - Civil Cases No. LP-97-0229,
No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and
No. LP-97-0239 - were similarly dismissed since they involved the same causes of action as
Civil Case No. LP-97-0228.
On 9 July 2003, petitioners filed a consolidated Notice of Appeal questioning the 30 June
2003 Resolution of the RTC.31 They accordingly filed an appeal of the said Resolution of the
trial court with the Court of Appeals, docketed as CA-G.R. CV No. 80927.
In its Decision dated 16 September 2005 in CA-G.R. CV No. 80927, the Court of Appeals
denied petitioners' appeal and affirmed the RTC Resolutions dated 8 September 2000 and 30
June 2003. The appellate court found that respondents' titles to the subject properties were
indefeasible because they were registered under the Torrens system. Thus, petitioners could
not say that any claim on the subject properties casts a cloud on their title when they failed to
demonstrate a legal or an equitable title to the same. The Court of Appeals also ruled that
petitioners' actions had already prescribed. Section 32 of Presidential Decree No. 1529
requires that an action assailing a certificate of title should be filed within one year after its
issuance. Moreover, actions assailing fraudulent titles should be filed within 10 years after the
said titles were issued. The appellate court further decreed that the cases for quieting of title
should be dismissed based on the allegation of petitioners themselves that the parcels of land
covered by respondents' certificates of title were not the subject properties which petitioners
claimed as their own.32
Petitioners filed a Motion for Reconsideration of the afore-mentioned Decision,33 which the
Court of Appeals denied in a Resolution dated 9 December 2005.34
Hence, the present Petition, where petitioners made the following assignment of errors:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE
RESOLUTION OF THE COURT A QUO, DATED SEPTEMBER 8, 2000 AND THE
RESOLUTION DATED JUNE 30, 2003, BASED PURELY ON THE TECHNICALITY OF THE
LAW RATHER THAN THE LAW THAT PROTECT[S] THE PROPERTY RIGHTS OF THE
PETITIONERS WHO WERE FORCIBLY EVICTED FROM THEIR RESPECTIVE
LANDHOLDINGS BY THE USED (sic) OF BRUTE FORCE OF ARMED MEN ON THE
BASIS OF THE TITLES OF THE PRIVATE RESPONDENTS, IN VIOLATION OF THEIR
PROPERTY RIGHTS AND OF DUE PROCESS.
II
THAT THE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE
RESOLUTION OF THE COURT A QUO, DESPITE THE FACT THAT A FULL BLOWN
HEARING ON THE MERIT[S] IS NECESSARY TO DETERMINE THE ACTUAL LOCATION
ON THE ACTUAL GROUND [OF] THE LOTS COVERED BY THE PRIVATE RESPONDENT
(sic) TITLES, LOTS COVERED BY ITS TITLES ARE MORE THAN THREE HUNDRED (300
m) METERS AWAY TO THE WEST-NORTHWEST FROM THE CONSOLIDATED LOTS OF
THE HEREIN PETITIONERS AND THEREFORE PRIVATE RESPONDENTS BRUTAL
ACTION IN FORCIBLY EVICTING THE PETITIONERS FROM THEIR RESPECTIVE
LANDHOLDINGS BY THE USED (sic) OF BRUTE FORCE OF ARMED MEN, ARE PURELY
CASES OF LANDGRABBING.35
This Petition is meritorious.
The main issue in this case is whether the RTC properly granted respondents' motion to
dismiss. This Court finds that the trial court erred in dismissing petitioners' Complaints.
Complaints sufficiently stated a cause of action.
Respondents seek the dismissal of petitioners' Complaints for failure to state a cause of
action. Even assuming as true that the subject properties have been in the possession of
petitioners and their predecessors-in-interest for 90 years; that petitioners have been paying
the realty taxes thereon; and that petitioners are able to submit a sketch plan of the subject
properties, respondents maintain that their ownership of the subject properties, evidenced by
certificates of title registered in their names, cannot be defeated. This contention is untenable.
Respondents mistakenly construe the allegations in petitioners' Complaints. What petitioners
alleged in their Complaints was that while the subject properties were not covered by
respondents' certificates of title, nevertheless, respondents forcibly evicted petitioners
therefrom. Hence, it is not simply a question of whether petitioners' possession can defeat
respondents' title to registered land. Instead, an initial determination has to be made on
whether the subject properties were in fact covered by respondents' certificates of title.
Section 2, Rule 2 of the Rules of Civil Procedure defines a cause of action as the act or
omission by which a party violates the right of another. Its essential elements are as follows:
(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not to violate such
right; and (3) an act or omission on the part of such defendant in violation of the right of the
plaintiff or constituting a breach of the obligation of the defendant to the plaintiff, for which the
latter may maintain an action for recovery of damages or other appropriate relief.36
The elementary test for failure to state a cause of action is whether the complaint alleges
facts which if true would justify the relief demanded. The inquiry is into the sufficiency, not the
veracity, of the material allegations. If the allegations in the complaint furnish sufficient basis
on which it can be maintained, it should not be dismissed regardless of the defense that may
be presented by the defendant.37
This Court is convinced that each of the Complaints filed by petitioners sufficiently stated a
cause of action. The Complaints alleged that petitioners are the owners of the subject
properties by acquisitive prescription. As owners thereof, they have the right to remain in
peaceful possession of the said properties and, if deprived thereof, they may recover the
same. Section 428 of the Civil Code provides that:
Article 428. The owner has the right to enjoy and dispose of a thing without other limitations
than those established by law.
The owner has also a right of action against the holder and possessor of the thing in order to
recover it.
Petitioners averred that respondents had violated their rights as owner of the subject
properties by evicting the former therefrom by means of force and intimidation. Respondents
allegedly retained possession of the subject properties by invoking certificates of title covering
other parcels of land. Resultantly, petitioners filed the cases before the RTC in order to
recover possession of the subject properties, to prevent respondents from using their TCTs to
defeat petitioners' rights of ownership and possession over said subject properties, and to
claim damages and other reliefs that the court may deem just and equitable.
The Court notes that petitioners' prayer for the cancellation of respondents' certificates of title
are inconsistent with their allegations. Petitioners prayed for in their Complaints that, among
other reliefs, judgment be rendered so that "Transfer Certificate of Title Numbers 9176, 9177,
9178, 9179, 9180, 9181, and 9182 be cancelled by the Register of Deeds for Las Piñas,
Metro Manila, insofar as they are or may be utilized to deprive plaintiffs of possession and
ownership of said lot." Yet, petitioners also made it plain that the subject properties, of which
respondents unlawfully deprived them, were not covered by respondents' certificates of title.
It is apparent that the main concern of petitioners is to prevent respondents from using or
invoking their certificates of title to deprive petitioners of their ownership and possession over
the subject properties; and not to assert a superior right to the land covered by respondents'
certificates of title. Admittedly, while petitioners can seek the recovery of the subject
properties, they cannot ask for the cancellation of respondents' TCTs since petitioners failed
to allege any interest in the land covered thereby. Still, the other reliefs sought by petitioners,
i.e., recovery of the possession of the subject properties and compensation for the damages
resulting from respondents' forcible taking of their property, are still proper.

Petitioners' Complaints should not have been dismissed despite the seeming error made by
petitioners in their prayer. To sustain a motion to dismiss for lack of cause of action, the
complaint must show that the claim for relief does not exist, rather than that a claim has been
defectively stated, or is ambiguous, indefinite or uncertain.38
Complaints are not barred by prescription and laches.
In their Motion to Dismiss, respondents argued that petitioners' cases were barred by
prescription, in accordance with Section 32 of the Property Registration Decree and Articles
1144(2) and 1456 of the Civil Code. Respondents relied on the premise that the actions
instituted by petitioners before the RTC were for the reopening and review of the decree of
registration and reconveyance of the subject properties.
Section 32 of the Property Registration Decree provides that a decree of registration may be
reopened when a person is deprived of land or an interest therein by such adjudication or
confirmation obtained by actual fraud. On the other hand, an action for reconveyance
respects the decree of registration as incontrovertible but seeks the transfer of property,
which has been wrongfully or erroneously registered in other persons' names, to its rightful
and legal owners, or to those who claim to have a better right.39 In both instances, the land
of which a person was deprived should be the same land which was fraudulently or
erroneously registered in another person's name, which is not the case herein, if the Court
considers the allegations in petitioners' Complaints.
As previously established, petitioners' main contention is that the subject properties from
which they were forcibly evicted were not covered by respondents' certificates of title. Stated
differently, the subject properties and the land registered in respondents' names are not
identical. Consequently, petitioners do not have any interest in challenging the registration of
the land in respondents' names, even if the same was procured by fraud.
While petitioners improperly prayed for the cancellation of respondents' TCTs in their
Complaints, there is nothing else in the said Complaints that would support the conclusion
that they are either petitions for reopening and review of the decree of registration under
Section 32 of the Property Registration Decree or actions for reconveyance based on implied
trust under Article 1456 of the Civil Code. Instead, petitioners' Complaints may be said to be
in the nature of an accion reivindicatoria, an action for recovery of ownership and possession
of the subject properties, from which they were evicted sometime between 1991 and 1994 by
respondents. An accion reivindicatoria may be availed of within 10 years from
dispossession.40 There is no showing that prescription had already set in when petitioners
filed their Complaints in 1997.
Furthermore, the affirmative defense of prescription does not automatically warrant the
dismissal of a complaint under Rule 16 of the Rules of Civil Procedure. An allegation of
prescription can effectively be used in a motion to dismiss only when the Complaint on its
face shows that indeed the action has already prescribed.41 If the issue of prescription is one
involving evidentiary matters requiring a full-blown trial on the merits, it cannot be determined
in a motion to dismiss.42 In the case at bar, respondents must first be able to establish by
evidence that the subject properties are indeed covered by their certificates of title before
they can argue that any remedy assailing the registration of said properties or the issuance of
the certificates of title over the same in the names of respondents or their predecessors-in-
interest has prescribed.
Neither can the Court sustain respondents' assertion that petitioners' Complaints were barred
by laches.
Laches has been defined as the failure of or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due diligence, could or should have been done
earlier; or to assert a right within reasonable time, warranting a presumption that the party
entitled thereto has either abandoned it or declined to assert it. Thus, the doctrine of laches
presumes that the party guilty of negligence had the opportunity to do what should have been
done, but failed to do so. Conversely, if the said party did not have the occasion to assert the
right, then, he cannot be adjudged guilty of laches. Laches is not concerned with the mere
lapse of time; rather, the party must have been afforded an opportunity to pursue his claim in
order that the delay may sufficiently constitute laches.43
Again, going back to petitioners' chief claim that the subject properties are distinct from the
land covered by respondents' certificates of title, then, petitioners would have no standing to
oppose the registration of the latter property in the names of respondents or their
predecessors-in-interest, or to seek the nullification of the certificates of title issued over the
same.
It also appears from the records that the RTC did not conduct a hearing to receive evidence
proving that petitioners were guilty of laches. Well-settled is the rule that the elements of
laches must be proven positively. Laches is evidentiary in nature, a fact that cannot be
established by mere allegations in the pleadings and cannot be resolved in a motion to
dismiss. At this stage, therefore, the dismissal of petitioners' Complaints on the ground of
laches is premature. Those issues must be resolved at the trial of the case on the merits,
wherein both parties will be given ample opportunity to prove their respective claims and
defenses.44
Complaints are not barred by res judicata.
Lastly, respondents argued in their Motion to Dismiss that petitioners' Complaints are barred
by res judicata, citing Vda. de Cailles and Orosa. Likewise, petitioners are barred from
instituting any case for recovery of possession by the MTC Decision in Civil Case No. 3271.
Res judicata refers to the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits
on all points and matters determined in the former suit. Res judicata has two concepts: (1)
"bar by prior judgment" as enunciated in Rule 39, Section 47 (b) of the Rules of Civil
Procedure; and (2) "conclusiveness of judgment" in Rule 39, Section 47 (c).
There is "bar by prior judgment" when, as between the first case where the judgment was
rendered, and the second case that is sought to be barred, there is identity of parties, subject
matter, and causes of action. But where there is identity of parties and subject matter in the
first and second cases, but no identity of causes of action, the first judgment is conclusive
only as to those matters actually and directly controverted and determined and not as to
matters merely involved therein. There is "conclusiveness of judgment." Under the doctrine of
conclusiveness of judgment, facts and issues actually and directly resolved in a former suit
cannot again be raised in any future case between the same parties, even if the latter suit
may involve a different claim or cause of action. The identity of causes of action is not
required but merely identity of issues.45
Vda. de Cailles and Orosa cannot bar the filing of petitioners' Complaints before the RTC
under the doctrine of conclusiveness of judgment, since they involve entirely different subject
matters. In both cases, the subject matter was a parcel of land referred to as Lot 9 Psu-11411
Amd-2, while subject matter of the petitioners' Complaints are lots which are not included in
the said land.
It follows that the more stringent requirements of res judicata as "bar by prior judgment" will
not apply to petitioners' Complaints. In Vda. de Cailles, the Court confirmed the ownership of
Dominador Mayuga over a 53-hectare parcel of land located in Las Piñas, Rizal, more
particularly referred to as Lot 9, Psu-11411, Amd-2. The Court also recognized that Nicolas
Orosa was Dominador Mayuga's successor-in-interest. However, the judgment in said case
was not executed because the records of the Land Registration Authority revealed that the
property had previously been decreed in favor of Jose T. Velasquez, to whom OCT No. 6122
was issued. During the execution proceedings, Goldenrod Inc. filed a motion to intervene, the
granting of which by the trial court was challenged in Orosa. The Court held in Orosa that
Goldenrod, Inc., despite having acquired the opposing rights of Nicolas Orosa and Jose T.
Velasquez to the property sometime in 1987, no longer had any interest in the same as would
enable it to intervene in the execution proceedings, since it had already sold its interest in
February 1989 to the consortium composed of respondents, Peaksun Enterprises and Export
Corporation, and Elena Jao.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The adjudication of the land to respondents' predecessors-in-interest in Vda. de Cailles and
Orosa is not even relevant to petitioners' Complaints. According to petitioners' allegations in
their Complaints, although the subject properties were derived from the 119.8-hectare parcel
of land referred to as Lot 9, Psu-11411, they are not included in the 53-hectare portion
thereof, specifically identified as Lot 9, Psu-11411, Amd-2, subject of Vda. de Cailles and
Orosa. This was the reason why petitioners had to cite Vda. de Cailles and Orosa: to
distinguish the subject properties from the land acquired by respondents and the other
members of the consortium. There clearly being no identity of subject matter and of parties,
then, the rulings of this Court in Vda. de Cailles and Orosa do not bar by prior judgment Civil
Cases No. LP-97-0228, No. LP-97-0229, No. LP-97-0230, No. LP-97-0231, No. LP-97-0236,
No. LP-97-0237, No. LP-97-0238, and No. LP-97-0239 instituted by petitioners in the RTC.
The Court is aware that petitioners erroneously averred in their Complaints that the subject
properties "originated from Psu-11411, Lot 9, Amd-2," instead of stating that the said
properties originated from Psu-11411, Lot 9. However, this mistake was clarified in later
allegations in the same Complaints, where petitioners stated that "Psu-114, Lot 9 consists of
1, 198,017 square meters," or 119.8 hectares when converted, while Psu-11411, Lot 9, Amd-
2 referred to a 53-hectare parcel. Petitioners pointed out that in Vda. de Cailles and Orosa,
the Court acknowledged "the ownership [of respondents' predecessor-in-interest] only over a
fifty-three (53) hectare parcel, more particularly referred to as Lot 9 Psu-11411, Amd-2."
Thus, petitioners argued that the rights which respondents acquired from Mayuga and Orosa
"cover[ed] only 531, 449 square meters or 53 hectares of Psu-11411, Lot 9. They do not
extend to the latter's other portion of 1,198, 017 square meters part of which [petitioners] had
been occupying until they were forcibly evicted by [respondents]." Accordingly, the single
statement in the Complaints that the subject properties originated from Lot 9, Psu-11411,
Amd-2, is an evident mistake which cannot prevail over the rest of the allegations in the same
Complaints.
Similarly, the Decision dated 17 December 1991 of the MTC in Civil Case No. 3271 cannot
bar the filing of petitioners' Complaints before the RTC because they have different subject
matters. The subject matter in Civil Case No. 3271 decided by the MTC was the parcel of
land covered by TCTs No. 9176, No. 9177, No. 9178, No. 9179, No. 9180, and No. 9181, in
the name of respondents and the other consortium members; while, according to petitioners'
allegations in their Complaints, the subject matters in Civil Cases No. LP-97-0228, No. LP-97-
0229, No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238,
and No. LP-97-0239, before the RTC, are the subject properties which are not covered by
respondents' certificates of title.
The MTC, in its 17 December 1991 Decision in Civil Case No. 3271 found that:
The subject parcels of land are covered by (TCT) Nos. 9176, 9177, 9178, 9179, [9180],
[9181] and 9182 (Exhs. "1" to "7", Defendants) all issued in the name of defendant Fil-Estate
Management, Inc. It appears from the evidence presented that defendant Fil-Estate
purchased the said property from Goldenrod, Inc. It also appears from the evidence that the
subject property at the time of the purchase was then occupied by squatters/intruders. By
reason thereof, the Municipality of Las Piñas conducted in 1989 a census of all
structures/shanties on subject property. Those listed in the census were relocated by
defendant, which relocation program started in 1990 up to the present. Interestingly, however,
all of the plaintiffs herein except the Almas, were not listed as among those in possession of
defendant's land as of November 1989.
xxx
In fine, plaintiffs have not clearly established their right of possession over the property in
question. They claim ownership, but no evidence was ever presented to prove such fact.
They claim possession from time immemorial. But the Census prepared by Las Piñas
negated this posture.46 (Emphasis provided.)
The determination by the MTC that petitioners were not occupants of the parcels of land
covered by TCTs No. 9176, No. 9177, No. 9178, No. 9179, No. 9180, and No. 9181 cannot
bar their claims over another parcel of land not covered by the said TCTs. It should also be
noted that petitioners Heirs of Agapito Villanueva do not appear to be plaintiffs in Civil Case
No. 3271 and, therefore, cannot be bound by the MTC Decision therein.

In all, this Court pronounces that respondents failed to raise a proper ground for the dismissal
of petitioners' Complaints. Petitioners' claims and respondents' opposition and defenses
thereto are best ventilated in a trial on the merits of the cases.

IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The Decision dated 16
September 2005 and Resolution dated 9 December 2005 of the Court of Appeals in CA-G.R.
CV No. 80927 are REVERSED and SET ASIDE. Let the records of the case be remanded for
further proceedings to the Regional Trial Court, Branch 253, of Las Piñas City, which is
hereby ordered to try and decide the case with deliberate speed.

SO ORDERED.
G.R. No. 147593 July 31, 2006
GERONIMO Q. QUADRA, petitioner,
vs.
THE COURT OF APPEALS and the PHILIPPINE CHARITY SWEEPSTAKES OFFICE,
respondents.
DECISION
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No. 55634
dated December 29, 2000 and its resolution dated March 26, 2001. The Court of Appeals
reversed and set aside the decision of the National Labor Relations Commission (NLRC) in
NLRC NCR Case No. 4312-ULP which affirmed the decision of the Labor Arbiter granting
moral and exemplary damages to petitioner Geronimo Q. Quadra in connection with his
dismissal from the service.
Petitioner Geronimo Q. Quadra was the Chief Legal Officer of respondent Philippine Charity
Sweepstakes Office (PCSO) when he organized and actively participated in the activities of
Philippine Charity Sweepstakes Employees Association (CUGCO), an organization
composed of the rank and file employees of PCSO, and then later, the Association of
Sweepstakes Staff Personnel and Supervisors (CUGCO) (ASSPS [CUGCO]). In April 1964,
he was administratively charged before the Civil Service Commission with violation of Civil
Service Law and Rules for neglect of duty and misconduct and/or conduct prejudicial to the
interest of the service. On July 14, 1965, the Civil Service Commission rendered a decision
finding petitioner guilty of the charges and recommending the penalty of dismissal. The
following day, on July 15, 1965, the General Manager of PCSO, Ignacio Santos Diaz, sent
petitioner a letter of dismissal, in accordance with the decision of the Civil Service
Commission. Petitioner filed a motion for reconsideration of the decision of the Civil Service
Commission on August 10, 1965. At the same time, petitioner, together with ASSPS
(CUGCO), filed with the Court of Industrial Relations (CIR) a complaint for unfair labor
practice against respondent PCSO and its officers. The case was docketed as Case No.
4312-ULP.
On November 19, 1966, the CIR issued its decision finding respondent PCSO guilty of unfair
labor practice for having committed discrimination against the union and for having dismissed
petitioner due to his union activities. It ordered the reinstatement of petitioner to his former
position with full backwages and with all the rights and privileges pertaining to said position.1
Respondent PCSO complied with the decision of the CIR. But while it reinstated petitioner to
his former position and paid his backwages, it also filed with the Supreme Court a petition for
review on certiorari entitled "Philippine Charity Sweepstakes Office, et al. v. The Association
of Sweepstakes Staff Personnel, et al." assailing the decision of the CIR in Case No. 4312-
ULP. The petition was docketed as G.R. No. L-27546.2
On March 16, 1967, during the pendency of the case in the Supreme Court, petitioner filed
with the CIR a "Petition for Damages." He prayed for moral and exemplary damages in
connection with Case No. 4312-ULP. He cited the decision of the Supreme Court in Rheem
of the Philippines, Inc., et al. v. Ferrer, et al.3 where it upheld the jurisdiction of the CIR over
claims for damages incidental to an employee's dismissal.
Respondent PCSO moved to dismiss the petition for damages on the following grounds: (1)
the CIR has no jurisdiction to award moral and exemplary damages; (2) the cause of action is
barred by prior judgment, it appearing that two complaints are brought for different parts of a
single cause of action; and (3) the petition states no valid cause of action.
Petitioner resigned from PCSO on August 18, 1967.
The petition for damages and the motion to dismiss, however, remained pending with the CIR
until it was abolished and the NLRC was created. On April 25, 1980, the Labor Arbiter
rendered a decision awarding moral and exemplary damages to petitioner in the amount of
P1.6 million. The dispositive portion of the decision stated:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered
awarding to complainant Geronimo Q. Quadra moral damages consisting of the following
sum: Three Hundred Fifty Thousand Pesos (P350,000.00) for besmirched reputation; Three
Hundred Fifty Thousand Pesos (P350,000.00) for social humiliation; One Hundred Thousand
Pesos (P100,000.00) for mental anguish; One Hundred Thousand Pesos (P100,000.00) for
serious anxiety; One Hundred Thousand Pesos (P100,000.00) for wounded feelings; One
Hundred Thousand Pesos (P100,000.00) for moral shock; and the further sum of
P500,000.00 as exemplary damages, on account of the arbitrary and unlawful dismissal
effected by respondents. Consequently, respondents are therefore ordered to pay
complainant Quadra the total sum of One Million Six Hundred Thousand Pesos
(P1,600,000.00) within ten (10) days after this Decision becomes final.
SO ORDERED.4
The NLRC affirmed the decision of the Labor Arbiter,5 prompting respondent PCSO to file a
petition for certiorari with the Court of Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that there was no basis for
the grant of moral and exemplary damages to petitioner as his dismissal was not tainted with
bad faith. It was the Civil Service Commission that recommended petitioner's dismissal after
conducting an investigation. It also held that the petition claiming moral and exemplary
damages filed by petitioner after respondent PCSO had complied with the CIR decision of
reinstatement and backwages amounted to splitting of cause of action.6
Petitioner filed a motion for reconsideration of the decision of the Court of Appeals, but the
same was denied for lack for merit.7
Petitioner now seeks the Court to review the ruling of the Court of Appeals. He basically
argues:
First: The ruling of the Court of Appeals that the PCSO did not act in bad faith when it
dismissed the petitioner is contrary to the already final and executory decision of the CIR
dated November 1[9], 1966 finding the PCSO guilty of bad faith and unfair labor practice in
dismissing the petitioner. The decision of the CIR was affirmed by the High Court in the case
of PCSO, et al. v. Geronimo Q. Quadra, et al., 115 SCRA 34. The Court of Appeals has no
jurisdiction to amend the final and executory decision of November 1[9], 1966 of the CIR
which was affirmed by the High Court. Once a decision has become final [and] executory, it
could no longer be amended or altered.
Second: The ruling of the Court of Appeals that the claims for moral and exemplary damages
of the petitioner is allegedly "tantamount to splitting of cause of action under Sec. 4, Rule 2 of
the 1997 Rules of Civil Procedure" is contrary to law. When petitioner filed with the CIR his
complaint for illegal dismissal and unfair labor practice, the prevailing law and jurisprudence
was that the CIR did not have jurisdiction to grant moral and exemplary damages. Petitioner's
claim for moral damages was filed with the CIR in the same case by virtue of the ruling of the
High Court in Rheem v. Ferrer, 19 SCRA 130 holding that the CIR has jurisdiction to award
moral and exemplary damages arising out of illegal dismissal and unfair labor practice.8
The petition is impressed with merit.
A dismissed employee is entitled to moral damages when the dismissal is attended by bad
faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to
good morals, good customs or public policy. Exemplary damages may be awarded if the
dismissal is effected in a wanton, oppressive or malevolent manner.9 It appears from the
facts that petitioner was deliberately dismissed from the service by reason of his active
involvement in the activities of the union groups of both the rank and file and the supervisory
employees of PCSO, which unions he himself organized and headed. Respondent PCSO first
charged petitioner before the Civil Service Commission for alleged neglect of duty and
conduct prejudicial to the service because of his union activities. The Civil Service
Commission recommended the dismissal of petitioner. Respondent PCSO immediately
served on petitioner a letter of dismissal even before the latter could move for a
reconsideration of the decision of the Civil Service Commission. Respondent PCSO may not
impute to the Civil Service Commission the responsibility for petitioner's illegal dismissal as it
was respondent PCSO that first filed the administrative charge against him. As found by the
CIR, petitioner's dismissal constituted unfair labor practice. It was done to interfere with,
restrain or coerce employees in the exercise of their right to self-organization. It stated:
Upon the entire evidence as a whole (sic), the [c]ourt feels and believes that complainant
Quadra was discriminatorily dismissed by reason of his militant union activities, not only as
President of PCSEA, but also as President of the ASSPS.10
In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, et al. v. NLRC,
et al.,11 we found it proper to award moral and exemplary damages to illegally dismissed
employees as their dismissal was tainted with unfair labor practice. The Court said:
Unfair labor practices violate the constitutional rights of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management, including
their right to bargain collectively and otherwise deal with each other in an atmosphere of
freedom and mutual respect; and disrupt industrial peace and hinder the promotion of healthy
and stable labor-management relations. As the conscience of the government, it is the
Court's sworn duty to ensure that none trifles with labor rights.
For this reason, we find it proper in this case to impose moral and exemplary damages on
private respondent. x x x
On the second issue, we agree with petitioner that the filing of a petition for damages before
the CIR did not constitute splitting of cause of action under the Revised Rules of Court. The
Revised Rules of Court prohibits parties from instituting more than one suit for a single cause
of action. Splitting a cause of action is the act of dividing a single cause of action, claim or
demand into two or more parts, and bringing suit for one of such parts only, intending to
reserve the rest for another separate action. The purpose of the rule is to avoid harassment
and vexation to the defendant and avoid multiplicity of suits.12
The prevailing rule at the time that the action for unfair labor practice and illegal dismissal
was filed and tried before the CIR was that said court had no jurisdiction over claims for
damages. Hence, petitioner, at that time, could not raise the issue of damages in the
proceedings. However, on January 27, 1967, the Supreme Court rendered its ruling in
Rheem of the Philippines, Inc., et al. v. Ferrer, et al.13 upholding the jurisdiction of the CIR
over claims for damages incidental to an employee's illegal dismissal. Petitioner properly filed
his claim for damages after the declaration by the Court and before the ruling on their case
became final. Such filing could not be considered as splitting of cause of action.
IN VIEW WHEREOF, the assailed decision and resolution of the Court of Appeals are
REVERSED and SET ASIDE. The decision of the NLRC in NLRC NCR Case No. 4312-ULP
is REINSTATED.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna, Garcia, J.J., concur.
[G.R. No. 123555. January 22, 1999]
PROGRESSIVE DEVELOPMENT CORPORATION, INC., Petitioner, v. COURT OF
APPEALS and WESTIN SEAFOOD MARKET, INC., Respondents.
DECISION

BELLOSILLO, J.:
May the lessee which instituted before the Metropolitan Trial Court an action for forcible entry
with damages against its lessor file a separate suit with the Regional Trial Court against the
same lessor for moral and exemplary damages plus actual and compensatory damages
based on the same forcible entry?
On grounds of litis pendencia and forum-shopping, petitioner invokes established
jurisprudence that a party cannot by varying the form of action or adopting a different method
ofpresenting his case evade the principle that the same cause of action shall not be litigated
twice between the same parties or their privies.1 Petitioner therefore prays for reversal of the
decision of the Court of Appeals dated 27 May 1995, as well as its Resolution dated 17
January 1996 denying reconsideration, which upheld the denial by the Regional Trial Court of
petitioner's motion to dismiss private respondent's damage suit.
The antecedents: On 27 May 1991 petitioner leased to private respondent Westin Seafood
Market, Inc., a parcel of land with a commercial building thereon located at Araneta Center,
Cubao, Quezon City, for a period of nine (9) years and three (3) months, i.e., from 2 January
1989 to 30 April 1998, with a monthly rental of approximately P600,000.00. The contract
contained, among others, the following pertinent terms and conditions:
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions contained in this Contract shall be deemed
as conditions, as well as covenants, and that this Contract shall be automatically terminated
and cancelled without resorting to court action should LESSEE violate any or all said
conditions, including the payment of Rent, CUSA and other charges indicated in the FLP
when due within the time herein stipulated and in any such cases, LESSEE hereby
irrevocably appoints LESSOR, its authorized agents, employees and/or representatives as
his duly authorized attorney-in-fact, even after the termination, expiration or cancellation of
this Contract, with full power and authority to open, enter, repossess, secure, enclose, fence
and otherwise take full and complete physical possession and control of the leased premises
and its contents without resorting to court action and/or to summarily disconnect electrical
and/or water services thereof, and that LESSEE hereby irrevocably empowers LESSOR, his
authorized agents, employees and/or representatives to take inventory and possession of
whatever equipment, furniture, articles, merchandise, appliances, etc., found therein
belonging to LESSEE, consignors and/or to any other persons and to place the same in
LESSORs warehouse or any other place at LESSORs discretion for safekeeping; charging
LESSEE the corresponding storage fees therefor; that in case LESSEE fails to claim said
equipment, furniture, articles, merchandise, appliances, etc. from storage and simultaneously
liquidate any liability with LESSOR within seven (7) days from date of said transfer to
LESSORs warehouse, LESSOR is likewise hereby expressly authorized and empowered by
LESSEE to dispose of said property/properties in a public sale through a Notary Public of
LESSORs choice and to apply the proceeds thereof to whatever liability and/or indebtedness
LESSEE may have to LESSOR plus reasonable expenses for the same, including storage
fees, and the balance, if any, shall be turned over to LESSEE; that LESSEE hereby expressly
agrees that any or all acts performed by LESSOR, his authorized agents, employees and/or
representatives under the provisions of this Section may not be the subject of any petition for
a Writ of Preliminary Injunction or Mandatory Injunction in court, and that LESSOR and/or his
authorized agents, employees, and/or representatives shall be free from any civil and/or
criminal liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
26. Upon the automatic termination of this lease contract, as the case may be, LESSEE shall
immediately vacate and redeliver physical possession of the leased premises, including the
keys appertaining thereto, to LESSOR in good, clean and sanitary condition, reasonable wear
and tear excepted, devoid of all occupants, equipment, furniture, articles, merchandise, etc.,
belonging to LESSEE or to any other person except those belonging to LESSOR; that should
LESSEE fail to comply with this provision, LESSOR is hereby given the same rights and
power to proceed against LESSEE as expressly granted in the immediately preceding
section.
Private respondent failed to pay rentals despite several demands by petitioner. As of 19
October 1992 the arrearages amounted to P8,608,284.66. Admittedly, non-payment of
rentals constituted breach of their contract; thus, pursuant to the express authority granted
petitioner under the above-quoted Secs. 25 and 26 of the lease agreement, petitioner on 31
October 1992 repossessed the leased premises, inventoried the movable properties found
within and owned by private respondent and scheduled public auction for the sale of the
movables on 19 August 1993 with notice to private respondent.
On 26 November 1992 private respondent filed with the Metropolitan Trial Court of Quezon
City a complaint against petitioner for forcible entry with damages and a prayer for a
temporary restraining order and/or writ of preliminary injunction.2 The case was raffled to
Branch 40 presided over by Judge Guillermo L. Loja Jr. who issued a temporary restraining
order enjoining petitioner from selling private respondents properties at a public auction.
On 9 December 1992 Judge Loja inhibited himself from trying the case and directed its
transfer to Branch 34 presided over by Judge Joselito SD Generoso. Soon after, petitioner
filed an urgent motion for the inhibition of Judge Generoso and the immediate reraffle of the
case arguing that the summary transfer of the case to Judge Generoso was irregular as it
was not done by raffle.
The motion was granted and the case went to Branch 36 presided over by Judge Francisco
D. Villanueva. Thereafter, on 22 December 1992, at the continuation of the hearing on the
issuance of a writ preliminary mandatory injunction, the parties agreed, among others, on the
following: (a) private respondent would deposit with the Philippine Commercial and Industrial
Bank in the name of the Metropolitan Trial Court, Branch 36, the amount of P8,000,000.00 to
guarantee the payment of its back rentals; (b) petitioner would defer the sale of the personal
properties of the Westin Seafood Market, Inc., until a final settlement of the case had been
arrived at; (c) petitioner shall allow private respondent to retrieve all the perishable goods
from inside the leased premises like frozen meat, vegetables and fish, all properly receipted
for; (d) petitioner shall allow three (3) maintenance personnel of private respondent to enter
the premises at reasonable working hours to maintain the restaurant equipment; and (e) the
parties shall negotiate for the restoration of the premises to private respondent, and if no
settlement be arrived at on or before January 8, 1993, the hearing on the merits of the case
shall proceed and the disposition of the amount deposited representing the rental arrearages
shall be left to the discretion of the court.
This agreement was incorporated in the order of the court dated 22 December 19923 which
in effect terminated for all intents and purposes the incident on the issuance of a preliminary
writ of injunction.
Private respondent did not comply with its undertaking to deposit with the designated bank
the amount representing its back rentals. Instead, with the forcible entry case still pending
with the MeTC, private respondent instituted on 9 June 1993 another action for damages
against petitioner with the Regional Trial Court of Quezon City. The case was raffled to
Branch 101 presided over by Judge Pedro T. Santiago.4cräläwvirtualibräry
Petitioner filed a motion to dismiss the damage suit on the ground of litis pendencia and
forum shopping. On 2 July 1993, instead of ruling on the motion, Judge Santiago issued an
order archiving the case pending the outcome of the forcible entry case being heard at the
MeTC for the reason that "the damages is (sic) principally anchored on whether or not the
defendants (petitioner herein) have committed forcible entry."5 On 2 August 1993 petitioner
moved for reconsideration of the order and reiterated its motion to dismiss the suit for
damages.
Before petitioner's motion to dismiss could be resolved, private respondent filed with the RTC
on 18 August 1993 an amended complaint for damages. On 14 September 1993 it also filed
an Urgent Ex-Parte Motion for the Issuance of a Temporary Restraining Order and Motion for
the Grant of a Preliminary Prohibitory and Preliminary Mandatory Injunction. On the very
same day, Judge Santiago issued an order (a) denying petitioner's motion to dismiss, (b)
admitting private respondent's amended complaint, and (c) granting private respondent's
application for a temporary restraining order against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action for certiorari and
prohibition on the ground that Judge Santiago acted in excess of his jurisdiction and/or
committed grave abuse of discretion amounting to lack of jurisdiction in admitting the
amended complaint of private respondent and issuing a restraining order against petitioner; in
allowing private respondent to engage in forum shopping; and, taking cognizance of the
action for damages despite lack of jurisdiction.6cräläwvirtualibräry
But the Court of Appeals dismissed the petition due to the failure of petitioner to file a motion
for reconsideration of Judge Santiago's order of 14 September 1993 which, it explained, was
a prerequisite to the institution of a petition for certiorari and prohibition. It also found that the
elements of litis pendencia were lacking to justify the dismissal of the action for damages with
the RTC because despite the pendency of the forcible entry case with the MeTC the only
damages recoverable thereat were those caused by the loss of the use and occupation of the
property and not the kind of damages being claimed before the RTC which had no direct
relation to loss of material possession. It clarified that since the damages prayed for in the
amended complaint with the RTC were those caused by the alleged high-handed manner
with which petitioner reacquired possession of the leased premises and the sale of private
respondents movables found therein, the RTC and not the MeTC had jurisdiction over the
action of damages.7cräläwvirtualibräry
Petitioner, aggrieved by the decision of the appellate court, filed the instant petition for review
on certiorari under Rule 45 of the Rules of Court alleging that it erred in (a) finding that
petitioner failed to avail of its plain, speedy and adequate remedy of a prior motion for
reconsideration with the RTC; (b) ruling that the trial judge did not act with grave abuse of
discretion in taking cognizance of the action for damages and injunction despite the pendency
of the forcible entry case with the MeTC; and, (c) ruling that private respondent did not
commit forum shopping since the causes of action before the RTC and MeTC were not
identical with each other.
There is merit in the petition. While generally a motion for reconsideration must first be filed
before resorting to certiorari in order to give the lower court an opportunity to correct the
errors imputed to it8 this rule admits of exceptions and is not intended to be applied without
considering the circumstances of the case.9 The filing of the motion for reconsideration
before availing of the remedy of certiorari is not sine qua non when the issue raised is one
purely of law,10 or where the error is patent or the disputed order is void,11 or the questions
raised on certiorari are the same as those already squarely presented to and passed upon by
the lower court.
In its motion for dismissal of the action for damages with the RTC petitioner raised the ground
that another action for forcible entry was pending at the MeTC between the same parties
involving the same matter and cause of action. Outrightly rejected by the RTC, the same
issue was elevated by petitioner on certiorari before the Court of Appeals. Clearly, under the
prevailing circumstance, any motion for reconsideration of the trial court would have been a
pointless exercise.12cräläwvirtualibräry
We now turn to the issue of whether an action for damages filed with the Regional Trial Court
by the lessee against the lessor should be dismissed on the ground of pendency of another
action for forcible entry and damages earlier filed by the same lessee against the same lessor
before the Metropolitan Trial Court.
Section 1 of Rule 70 of the Rules of Court provides that any person deprived of the
possession of any land or building by force, indimidation, threat, strategy or stealth, or against
whom the possession of any land or building is unlawfully withheld, may bring an action in the
proper Municipal Trial Court against the person or persons unlawfully withholding or depriving
of possession, together with damages and costs. The mandate under this rule is categorical:
that all cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial
Court which shall include not only the plea for restoration of possession but also all claims for
damages and costs arising therefrom. Otherwise expressed, no claim for damages arising out
of forcible entry or unlawful detainer may be filed separately and independently of the claim
for restoration of possession.
This is consistent with the principle laid down in Sec. 1, par. (e), of Rule 16 of the Rules of
Court which states that the pendency of another action between the same parties for the
same cause is a ground for dismissal of an action. Res adjudicata requires that there must be
between the action sought to be dismissed and the other action the following elements: (a)
identity of parties or at least such as representing the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts;
and, (c) the identity in the two (2) preceding particulars should be such that any judgment
which may be rendered on the other action will, regardless of which party is successful,
amount to res adjudicata in the action under consideration.13cräläwvirtualibräry
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that a
party may not institute more than one suit for a single cause of action. Under Sec. 4 of the
same Rule, if two or moresuits are instituted on the basis of the same cause of action, the
filing of one or a judgment uponthe merits in any one is available as a ground for the
dismissal of the other or others. "Cause of action" is defined by Sec. 2 of Rule 2 as the act of
omission by which a party violates a right of another.14 These premises obtaining, there is no
question at all that private respondent's cause of action in the forcible entry case and in the
suit for damages is the alleged illegal retaking of possession of the leased premises by the
lessor, petitioner herein, from which all legal reliefs arise. Simply stated, the restoration of
possession and demand for actual damages in the case before the MeTC and the demand
for damages with the RTC both arise from the same cause of action, i.e., the forcible entry by
petitioner into the leased premises.
A comparative study of the two (2) complaints filed by private respondent against petitioner
before the two (2) trial courts shows that not only are the elements of res adjudicata present,
at least insofar as the claim for actual and compensatory damages is concerned, but also that
the claim for damages - moral and exemplary in addition to actual and compensatory -
constitutes splitting a single cause of action. Since this runs counter to the rule against
multiplicity of suits, the dismissal of the second action becomes imperative.
The complaint for forcible entry contains the following pertinent allegations -
2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC over a
property designated as Ground Floor, Seafood Market (hereinafter Subject Premises)
situated at the corner of EDSA corner MacArthur Street, Araneta Center, Cubao, Quezon
City, for a period of ten (10) years from 02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the Subject Premises,
plaintiff established and now operates thereon the now famous Seafood Market Restaurant.
Since then, plaintiff had been in actual, continuous, and peaceful physical possession of the
Subject Premises until 31 October 1992.
xxxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation
and enjoyment of the Subject Premises to the exclusion of all others, including defendants
herein.
3.03 Defendants resort to strong arms tactics to forcibly wrest possession of the Subject
Premises from plaintiff and maintain possession thereof through the use of force, threat,
strategy and intimidation by the use of superior number of men and arms amounts to the
taking of the law into their own hands.
3.04 Thus, defendants act of unlawfully evicting out plaintiff from the Subject Premises it is
leasing from defendant PDC and depriving it of possession thereof through the use of force,
threat, strategy and intimidation should be condemned and declared illegal for being contrary
to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and
be ordered to vacate the Subject Premises and restore possession thereof, together with its
contents, to plaintiff.
xxxx
4.07 Considering that defendants act of forcibly grabbing possession of the Subject Premises
from plaintiff is illegal and null and void, defendant should be adjudged liable to plaintiff for all
the aforedescribed damages which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges basically the same
factual circumstances and issues as bases for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a
period of ten years or from January 2, 1989 up to April 30, 1998 over a property designated
as Ground Floor, Seafood Market (hereinafter referred to as Subject Premises) situated at the
corner of EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A copy of the
lease contract is attached hereto as Annex A.
5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises,
and established thereon the now famous Seafood Market Restaurant.
xxxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ of
possession or any lawful court order and with the aid of approximately forty (40) armed
security guards and policemen under the supervision of defendant Tejam, forcibly entered the
subject premises through force, intimidation, threats and stealth and relying on brute force
and in a thunderboltish manner and against plaintiffs will, unceremoniously drew away all of
plaintiffs men out of the subject premises, thereby depriving herein plaintiff of its actual,
physical and natural possession of the subject premises. The illegal, high-handed manner
and gestapo like take-over by defendants of subject premises is more particularly described
as follows: x x x
8. To date, defendants continue to illegally possess and hold the Subject Premises, including
all the multi-million improvements, fixtures and equipment therein owned by plaintiff, all to the
damage and prejudice of plaintiff. The actuations of defendants constitute an unlawful
appropriation, seizure and taking of property against the will and consent of plaintiff. Worse,
defendants are threatening to sell at public auction and without the consent of plaintiff and
without lawful authority, the multi-million fixtures and equipment of plaintiff and at prices way
below the market value thereof. Plaintiff hereby attaches as Annex B the letter from
defendants dated August 6, 1993 addressed to plaintiff, informing the latter that the former
intends to sell at an auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff
presently in defendants possession.
xxxx
12. Defendants unlawful takeover of the premises constitutes a violation of its obligation
under Art. 1654 of the New Civil Code requiring the lessor to maintain the lessee in peaceful
and adequate enjoyment of the lease for the entire duration of the contract. Hence, plaintiff
has filed the present suit for the recovery of damages under Art. 1659 of the New Civil Code x
xxx
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the
alleged unlawful entry by petitioner into the leased premises out of which three (3) reliefs
(denominated by private respondent as its causes of action) arose: (a) the restoration by the
lessor (petitioner herein) of the possession of the leased premises to the lessee; (b) the claim
for actual damages due to the losses suffered by private respondent such as the deterioration
of perishable foodstuffs stored inside the premises and the deprivation of the use of the
premises causing loss of expected profits; and, (c) the claim for attorney's fees and costs of
suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a)
moral damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual
damages of P20,000,000.00 and compensatory damages of P1,000,000.00 representing
unrealized profits; and, (c) P200,000.00 for attorney's fees and costs, all based on the alleged
forcible takeover of the leased premises by petitioner. Since actual and
compensatorydamages were already prayed for in the forcible entry case before the MeTC, it
is obvious that this cannot be relitigated in thedamage suit before the RTC byreason of res
adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that
these sprung from the main incident being heard before the MeTC. Jurisprudence is
unequivocal that when a single delict or wrong is committed - like the unlawful taking or
detention of the property of another - there is but one single cause of action regardless of the
number of rights that may have been violated, and all such rights should be alleged in a
single complaint as constituting one single cause of action.15 In a forcible entry case, the real
issue is the physical possession of the real property. The question of damages is merely
secondary or incidental, so much so that the amount thereof does not affect the jurisdiction of
the court. In other words, the unlawful act of a deforciant in taking possession of a piece of
land by means of force and intimidation against the rights of the party actually in possession
thereof is a delict or wrong, or a cause of action that gives rise to two (2) remedies, namely,
the recovery of possession and recovery of damages arising from the loss of possession, but
only to one action. For obvious reasons, both remedies cannot be the subject of two (2)
separate and independent actions, one for recovery of possession only, and the other, for the
recovery of damages. That would inevitably lead to what is termed in law as splitting up a
cause of action.16 In David v. de la Cruz17 we observed -
Herein tenants have but one cause of action against their landlord, their illegal ejectment or
removal from their landholdings, which cause of action however entitles them to two (2)
claims or remedies - for reinstatement and damages. As both claims arise from the same
cause of action, they should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of damages may be
recovered in one case and the rest, in another.18 In Bachrach v. Icarangal19 we explained
that the rule was aimed at preventing repeated litigations between the same parties in regard
to the same subject of the controversy and to protect the defendant from unnecessary
vexation. Nemo debet bis vexari pro una et eadem causa.
What then is the effect of the dismissal of the other action? Since the rule is that all such
rights should be alleged in a single complaint, it goes without saying that those not therein
included cannot be the subject of subsequent complaints for they are barred forever.20If a
suit is brought for a part of a claim, a judgment obtained in that action precludes the plaintiff
from bringing a second action for the residue of the claim, notwithstanding that the second
form of action is not identical with the first or different grounds for relief are set for the second
suit. This principle not only embraces what was actually determined, but also extends to
every matter which the parties might have litigated in the case.21This is why the legal basis
upon which private respondent anchored its second claim for damages, i.e., Art. 1659 in
relation to Art. 1654 of the Civil Code,22not otherwise raised and cited by private respondent
in the forcible entry case, cannot be used as justification for the second suit for damages. We
note, not without some degree of displeasure, that by filing a second suit for damages, private
respondent was not only able to press a claim for moral and exemplary damages which by its
failure to allege the same in its suit before the MeTC foreclosed its right to sue on it, but it
was also able to obtain from the RTC, by way of another temporary restraining order, a
second reprieve from an impending public auction sale of its movables which it could not
anymore secure from the MeTC before which the matter of the issuance of a preliminary writ
of injunction was already closed.
The foregoing discussions provide sufficient basis to petitioner's charge that private
respondent and its counsel in the trial courts committed forum shopping. In Crisostomo v.
Securities and Exchange Commission23we ruled -
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies
x x x with respect to suits filed in the courts x x x in connection with litigations commenced in
the court x x x in anticipation of an unfavorable x x x ruling and a favorable case where the
court in which the second suit was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v. National Labor Relations
Commission24 that there is forum shopping when the actions involve the same transactions,
the same essential facts and circumstances. The reason behind the proscription of forum
shopping is obvious. This unnecessarily burdens our courts with heavy caseloads, unduly
taxes the manpower and financial resources of the judiciary and trifles with and mocks our
judicial processes, thereby adversely affecting the efficient administration of justice. This
condemnable conduct has prompted the Court to issue circulars25 ordering among others
that a violation thereof shall be cause for the dismissal of the case or cases without prejudice
to the taking of appropriate action against the counsel or party concerned.
The records ineluctably show that the complaint lodged by private respondent with the
Regional Trial Court of Quezon City contained no certification of non-forum shopping. When
petitioner filed a motion to dismiss the case raising among others the ground of forum
shopping it pointed out the absence of the required certification. The amended complaint, as
well as the second and third amended complaints, attempted to rectify the error by invariably
stating that there was no other action pending between the parties involving the same causes
of action although there was actually a forcible entry case pending before the MTC of Quezon
City. By its admission of a pending forcible entry case, it is obvious that private respondent
was indulging in forum shopping. While private respondent conveniently failed to inform the
RTC that it had likewise sought damages in the MTC on the basis of the same forcible entry,
the fact remains that it precisely did so, which stratagem was being duplicated in the second
case. This is a compelling reason to dismiss the second case.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the Court of Appeals
dated 27 September 1995 and the Order of the Regional Trial Court of Quezon City dated 24
September 1993 are REVERSED and SET ASIDE.The Regional Trial Court of Quezon City is
directed to dismiss Civil Case No. Q-93-16409, "Westin Seafood Market, Inc. v. Progressive
Development Corporation, et al.," and the Metropolitan Trial Court of Quezon City to proceed
with the proper disposition of Civil Case No. 6589, "Westin Seafood Market, Inc. v.
Progressive Development Corporation, et al.," with dispatch considering the summary nature
of the case. Treble costs against private respondent.
SO ORDERED.
Puno, Mendoza, Quisumbing, and Buena, JJ., concur.
G.R. Nos. 175277 & 175285 September 11, 2013
UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J. MARTINEZ, Petitioners,
vs.
RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE REGIONAL TRIAL
COURT OF PASIG CITY, BRANCH 168, Respondents.
x-----------------------x
G.R. No. 192073
RAFAEL JOSE CONSING, JR., Petitioner,
vs.
HON. MARISSA MACARAIG-GUILLEN, in her capacity as the Presiding Judge of the
Regional Trial Court of Makati City, Branch 60 and UNICAPITAL, INC., Respondents.
DECISION
PERLAS-BERNABE, J.:
Before the Court are consolidated petitions for review on certiorari1 assailing separate
issuances of the Court of Appeals (CA) as follows:
(a) The petitions in G.R. Nos. 175277 and 175285 filed by Unicapital, Inc., (Unicapital),
Unicapital Realty, Inc. (URI), and Unicapital Director and Treasurer Jaime J. Martirez
(Martirez)assail the CA’s Joint Decision2 dated October 20, 2005 and Resolution3 dated
October 25, 2006 in CA-G.R. SP Nos. 64019and 64451 which affirmed the Resolution4 dated
September 14,1999 and Order5 dated February 15, 2001 of the Regional Trial Court (RTC) of
Pasig City, Branch 68 (RTC-Pasig City) in SCA No. 1759, upholding the denial of their motion
to dismiss; and
(b) The petition in G.R. No. 192073 filed by Rafael Jose Consing, Jr. (Consing, Jr.) assails
the CA’s Decision6 dated September 30, 2009 and Resolution7 dated April 28, 2010 inCA-
G.R. SP No. 101355 which affirmed the Orders dated July16, 20078 and September 4, 20079
of the RTC of Makati City, Branch 60 (RTC-Makati City) in Civil Case No. 99-1418,upholding
the denial of his motion for consolidation.
The Facts
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela Cruz (Dela Cruz),
obtained an ₱18,000,000.00 loan from Unicapital,₱12,000,000.00 of which was acquired on
July 24, 1997 and the remaining₱6,000,000.00 on August 1, 1997. The said loan was
secured by Promissory Notes10 and a Real Estate Mortgage11 over a 42,443 square meter-
parcel of land located at Imus, Cavite, registered in the name of Dela Cruz as per Transfer
Certificate of Title (TCT) No. T-687599 (subject property).12 Prior to these transactions, Plus
Builders, Inc. (PBI), a real estate company, was already interested to develop the subject
property into a residential subdivision.13 In this regard, PBI entered into a joint venture
agreement with Unicapital, through its real estate development arm, URI. In view of the
foregoing, the loan and mortgage over the subject property was later on modified into an
Option to Buy Real Property14 and, after further negotiations, Dela Cruz decided to sell the
same to Unicapital and PBI. For this purpose, Dela Cruz appointed Consing, Jr. as her
attorney-in-fact.15
Eventually, Unicapital, through URI, purchased one-half of the subject property for a
consideration of ₱21,221,500.00 (against which Dela Cruz’s outstanding loan obligations
were first offset), while PBI bought the remaining half for the price of ₱21,047,000.00.16 In
this relation, Dela Cruz caused TCT No. T-687599 to be divided into three separate titles as
follows: (a) TCT No. T-851861 for URI;17 (b) TCT No. T-851862 for PBI;18 and (c)TCT No.
T-51863 which was designated as a road lot.19 However, even before URI and PBI were
able to have the titles transferred to their names, Juanito Tan Teng (Teng) and Po Willie Yu
(Yu) informed Unicapital that they are the lawful owners of the subject property as evidenced
by TCT No.T-114708;20 that they did not sell the subject property; and that Dela Cruz’s title,
i.e., TCT No. T-687599, thereto was a mere forgery.21 Prompted by Teng and Yu’s
assertions, PBI conducted further investigations on the subject property which later revealed
that Dela Cruz's title was actually of dubious origin. Based on this finding, PBI and Unicapital
sent separate demand letters22 to Dela Cruz and Consing, Jr., seeking the return of the
purchase price they had paid for the subject property.
From the above-stated incidents stemmed the present controversies as detailed hereunder.
The Proceedings Antecedent to G.R. Nos. 175277 & 175285
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex Action for
Declaratory Relief23 and later amended to Complex Action for Injunctive Relief24 (Consing,
Jr.’s complaint) before the RTC-Pasig City against Unicapital, URI, PBI, Martirez, PBI
General Manager Mariano Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA
No. 1759. In his complaint, Consing, Jr. claimed that the incessant demands/recovery efforts
made upon him by Unicapital and PBI to return to them the purchase price they had paid for
the subject property constituted harassment and oppression which severely affected his
personal and professional life.25 He also averred that he was coerced to commit a violation
of Batas Pambansa Blg. 2226 as Unicapital and PBI, over threats of filing acase against him,
kept on forcing him to issue a post-dated check in the amount sought to be recovered,
notwithstanding their knowledge that he had no funds for the same.27 He further alleged that
Unicapital and URI required him to sign blank deeds of sale and transfers without cancelling
the old one sin violation of the laws on land registration and real estate development.28
Likewise, Consing, Jr. added that Unicapital and PBI’s representatives were" speaking of him
in a manner that was inappropriate and libelous,"29 and that some John Does "deliberately
engaged in a fraudulent scheme to compromise Consing, Jr.’s honor, integrity and fortune x x
x consisting of falsifying or causing to be falsified, or attempting to present as falsified certain
transfers of Land Titles and Deeds for profit,"30 classifying the foregoing as ultra vires acts
which should warrant sanctions under the corporation law, Revised Securities Act and related
laws.31 Accordingly, Consing, Jr. prayed that: (a) he be declared as a mere agent of Dela
Cruz, and as such, devoid of any obligation to Unicapital, URI, and PBI for the transactions
entered into concerning the subject property; (b) Unicapital, URI, and PBI be enjoined from
harassing or coercing him, and from speaking about him in a derogatory fashion; and (c)
Unicapital, URI, and PBI pay him actual and consequential damages in the amount of
₱2,000,000.00, moral damages of at least ₱1,000,000.00, exemplary damages of
₱1,000,000.00, all per month, reckoned from May 1, 1999 and until the controversy is
resolved, and attorney's fees and costs of suit.32
For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate Motions to
Dismiss33 Consing, Jr.’s complaint (Unicapital, et al.’s motion to dismiss) on the ground of
failure to state a cause of action, considering that: (a) no document was attached against
which Consing, Jr. supposedly derived his right and against which his rights may be as
certained; (b) the demands to pay against Consing, Jr. and for him to tender post-dated
checks to cover the amount due were well within the rights of Unicapital as an unpaid
creditor, as Consing, Jr. had already admitted his dealings with them; (c) the utterances
purportedly constituting libel were not set out in the complaint; and (d) the laws supposedly
violated were not properly identified. Moreover, Unicapital, et al. posited that the RTC-
PasigCity did not acquire jurisdiction over the case given that Consing, Jr. failed to pay the
proper amount of docket fees. In the same vein, they maintained that the RTC-Pasig City had
no jurisdiction over their supposed violations of the Corporation Code and Revised Securities
Act, which, discounting its merits, should have been supposedly lodged with the Securities
and Exchange Commission. Finally, they pointed out that Consing, Jr.’s complaint suffers
from a defective verification and, thus, dismissible.34
Similar to Unicapital et al.’s course of action, PBI and its General Manager, Martinez
(Unicapital and PBI, et al.), sought the dismissal of Consing, Jr.’s complaint on the ground
that it does not state a cause of action. They also denied having singled out Consing, Jr.
because their collection efforts were directed at both Consing, Jr. and Dela Cruz, which
should be deemed as valid and, therefore, should not be restrained.35
On September 14, 1999, the RTC-Pasig City issued a Resolution36 denying the above
mentioned motions to dismiss, holding that Consing, Jr.’s complaint sufficiently stated a
cause of action for tort and damages pursuant to Article 19 of the Civil Code. It ruled that
where there is abusive behavior, a complainant, like Consing, Jr., has the right to seek refuge
from the courts. It also noted that the elements of libel in a criminal case are not the same as
those for a civil action founded on the provisions of the Civil Code, and therefore,
necessitates a different treatment. It equally refused to dismiss the action on the ground of
non-payment of docket fees, despite Consing, Jr.’s escalated claims for damages therein, as
jurisdiction was already vested in it upon the filing of the original complaint. Moreover, it
resolved to apply the liberal construction rule as regards the subject complaint’s verification
and certification, despite its improper wording, considering further that such defect was not
raised at the first opportunity. Consequently, it ordered Unicapital and PBI, et al. to file their
Answer and, in addition, to submit" any Comment or Reaction within five (5) days from receipt
hereof on the allegations of Consing, Jr. in his rejoinder of September 9, 1999regarding the
supposed filing of an identical case in Makati City,"37 i.e., Civil Case No. 99-1418.
Unperturbed, Unicapital and PBI, et al. moved for reconsideration therefrom which was,
however, denied by the RTC-Pasig City in an Order38 dated February 15, 2001 for lack of
merit. Aggrieved, they elevated the denial of their motions to dismiss before the CA via a
petition for certiorari and prohibition,39 docketed as CA-G.R. SP Nos. 64019 and 64451.

On October 20, 2005, the CA rendered a Joint Decision40 holding that no grave abuse of
discretion was committed by the RTC-Pasig City in refusing to dismiss Consing, Jr.'s
complaint.1âwphi1 At the outset, it ruled that while the payment of the prescribed docket fee
is a jurisdictional requirement, its non-payment will not automatically cause the dismissal of
the case. In this regard, it considered that should there be any deficiency in the payment of
such fees, the same shall constitute a lien on the judgment award.41 It also refused to
dismiss the complaint for lack of proper verification upon a finding that the copy of the
amended complaint submitted to the RTC-Pasig City was properly notarized.42 Moreover, it
upheld the order of the RTC-Pasig City for Unicapital and PBI, et al. to submit their comment
due to the alleged existence of a similar case filed before the RTC-Makati City.43
Anent the substantive issues of the case, the CA concurred with the RTC-Pasig City that
Consing Jr.'s complaint states a cause of action. It found that Unicapital and PBI, et al.’s
purportedly abusive manner in enforcing their claims against Consing, Jr. was properly
constitutive of a cause of action as the same, if sufficiently proven, would have subjected him
to "defamation of his name in business circles, the threats and coercion against him to
reimburse the purchase price, fraud and falsification and breach of fiduciary obligation." It
also found that the fact that Consing Jr.'s complaint contains "nebulous" allegations will not
warrant its dismissal as any vagueness therein can be clarified through a motion for a bill of
particulars."44 Furthermore, it noted that Consing, Jr. does not seek to recover his claims
against any particular provision of the corporation code or the securities act but against the
actions of Unicapital and PBI, et al.; hence, Consing, Jr.’s complaint was principally one for
damages over which the RTC has jurisdiction, and, in turn, there lies no misjoinder of causes
of action.45
Dissatisfied, only Unicapital, et al. sought reconsideration therefrom but the same was denied
by the CA in a Resolution46 dated October 25,2006. Hence, the present petitions for review
on certiorari in G.R. Nos.175277 and 175285.
The Proceedings Antecedent to G.R. No. 192073
On the other hand, on August 4, 1999, Unicapital filed a complaint47 for sum of money with
damages against Consing, Jr. and Dela Cruz before the RTC-Makati City, docketed as Civil
Case No. 99-1418, seeking to recover (a) the amount of ₱42,195,397.16, representing the
value of their indebtedness based on the Promissory Notes (subject promissory notes) plus
interests; (b) ₱5,000,000.00 as exemplary damages; (c) attorney's fees; and (d) costs of
suit.48
PBI also filed a complaint for damages and attachment against Consing, Jr. and Dela Cruz
before the RTC of Manila, Branch 12, docketed as Civil Case No. 99-95381, also predicated
on the same set of facts as above narrated.49 In its complaint, PBI prayed that it be allowed
to recover the following: (a) ₱13,369,641.79, representing the total amount of installment
payments made as actual damages plus interests; (b) ₱200,000.00 as exemplary damages;
(c) ₱200,000.00 as moral damages; (d) attorney's fees; and (e) costs of suit.50 Civil Case
No. 99-95381 was subsequently consolidated with SCA No. 1759 pending before the RTC-
Pasig City.51
For his part, Consing, Jr. filed a Motion to Dismiss Civil Case No. 99-1418 which was,
however, denied by the RTC-Makati City in an Order52 dated November 16, 1999.
Thereafter, he filed a Motion for Consolidation53 (motion for consolidation) of Civil Case No.
99-1418 with his own initiated SCA No. 1759 pending before the RTC-Pasig City.
In an Order54 dated July 16, 2007, the RTC-Makati City dismissed Consing, Jr.’s motion for
consolidation and, in so doing, ruled that the cases sought to be consolidated had no identity
of rights or causes of action and the reliefs sought for by Consing, Jr. from the RTC-Pasig
City will not bar Unicapital from pursuing its money claims against him. Moreover, the RTC-
Makati City noted that Consing, Jr. filed his motion only as an after thought as it was made
after the mediation proceedings between him and Unicapital failed. Consing, Jr.'s motion for
reconsideration therefrom was denied in an Order55 dated September 4, 2007. Hence, he
filed a petition for certiorari before the CA, docketed as CA-G.R. SP No. 101355, ascribing
grave abuse of discretion on the part of the RTC-Makati City in refusing to consolidate Civil
Case No. 99-1418 with SCA No. 1759 in Pasig City.
On September 30, 2009, the CA rendered a Decision56 sustaining the Orders dated July 16,
2007 and September 4, 2007 of the RTC-Makati City which denied Consing, Jr.’s motion for
consolidation. It held that consolidation is a matter of sound discretion on the part of the trial
court which could be gleaned from the use of the word "may" in Section 1, Rule38 of the
Rules of Court. Considering that preliminary steps (such as mediation) have already been
undertaken by the parties in Civil Case No.99-1418 pending before the RTC-Makati City, its
consolidation with SCA No. 1759 pending before the RTC-Pasig City "would merely result in
complications in the work of the latter court or squander the resources or remedies already
utilized in the Makati case."57 Moreover, it noted that the records of the consolidated Pasig
and Manila cases, i.e., SCA No. 1759 and Civil Case No. 99-95381, respectively, had already
been elevated to the Court, that joint proceedings have been conducted in those cases and
that the pre-trial therein had been terminated as early as October 23, 2007.Therefore, due to
these reasons, the consolidation prayed for would be impracticable and would only cause a
procedural faux pas. Undaunted, Consing, Jr. filed a motion for reconsideration therefrom but
was denied by the CA in a Resolution58 dated April 28, 2010. Hence, the present petition for
review on certiorari in G.R. No. 192073.
The Proceedings Before the Court
After the filing of the foregoing cases, the parties were required to file their respective
comments and replies. Further, considering that G.R. No.192073 (Makati case) involves the
same parties and set of facts with those in G.R. Nos. 175277 & 175285 (Pasig case), these
cases were ordered consolidated per the Court's Resolution59 dated November 17, 2010. On
March 9, 2011, the Court resolved to give due course to the instant petitions and required the
parties to submit their respective memoranda.60
The Issues Before the Court

The essential issues in these cases are as follows: (a) in G.R. Nos.175277 and 175285,
whether or not the CA erred in upholding the RTC-Pasig City’s denial of Unicapital, et al.’s
motion to dismiss; and (b) in G.R. No. 192073, whether or not the CA erred in upholding the
RTC-Makati City’s denial of Consing, Jr.’s motion for consolidation.
The Court’s Ruling
A. Propriety of the denial of
Unicapital, et al.’s motion to
dismiss and ancillary issues.
A cause of action is defined as the act or omission by which a party violates a right of
another.61 It is well-settled that the existence of a cause of action is determined by the
allegations in the complaint.62 In this relation, a complaint is said to sufficiently assert a
cause of action if, admitting what appears solely on its face to be correct, the plaintiff would
be entitled to the relief prayed for.63 Thus, if the allegations furnish adequate basis by which
the complaint can be maintained, then the same should not be dismissed, regardless of the
defenses that may be averred by the defendants.64 As edified in the case of Pioneer
Concrete Philippines, Inc. v. Todaro,65 citing Hongkong and Shanghai Banking Corporation,
Limited. v. Catalan66 (HSBC):
The elementary test for failure to state a cause of action is whether the complaint alleges
facts which if true would justify the relief demanded. Stated otherwise, may the court render a
valid judgment upon the facts alleged therein? The inquiry is into the sufficiency, not the
veracity of the material allegations. If the allegations in the complaint furnish sufficient basis
on which it can be maintained, it should not be dismissed regardless of the defense that may
be presented by the defendants.67 (Emphasis supplied)
Stated otherwise, the resolution on this matter should stem from an analysis on whether or
not the complaint is able to convey a cause of action; and not that the complainant has no
cause of action. Lest it be misunderstood, failure to state a cause of action is properly a
ground for a motion to dismiss under Section 1(g), Rule 1668 of the Rules of Court(Rules),
while the latter is not a ground for dismissal under the same rule.
In this case, the Court finds that Consing, Jr.’s complaint in SCA No.1759 properly states a
cause of action since the allegations there insufficiently bear out a case for damages under
Articles 19 and 26 of the Civil Code.
Records disclose that Consing, Jr.’s complaint contains allegations which aim to demonstrate
the abusive manner in which Unicapital and PBI, et al. enforced their demands against him.
Among others, the complaint states that Consing, Jr. "has constantly been harassed and
bothered by Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x has had
constant meetings with them variously, and on a continuing basis, such that he is unable to
attend to his work as an investment banker."69 In the same pleading, he also alleged that
Unicapital and PBI, et al.’s act of "demanding a postdated check knowing fully well that he
does not have the necessary funds to cover the same, nor is he expecting to have them is
equivalent to asking him to commit a crime under unlawful coercive force."70 Accordingly,
these specific allegations, if hypothetically admitted, may result into the recovery of damages
pursuant to Article 19 of the Civil Code which states that "every person must, in the exercise
of his rights and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith." As explained in the HSBC case:
When a right is exercised in a manner which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal wrong is thereby committed for which the
wrongdoer must beheld responsible. But a right, though by itself legal because it is
recognized or granted by law as such, may nevertheless become the source of some
illegality. A person should be protected only when he acts in the legitimate exercise of his
right, that is, when he acts with prudence and in good faith; but not when he acts with
negligence or abuse. There is an abuse of right when it is exercised for the only purpose of
prejudicing or injuring another. The exercise of a right must be in accordance with the
purpose for which it was established, and must not be excessive or unduly harsh; there must
be no intention to injure another.71 (Emphasis supplied)
Likewise, Consing, Jr.’s complaint states a cause of action for damages under Article 26 of
the Civil Code which provides that:
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of
his neighbors and other persons. The following and similar acts, though they may not
constitute a criminal offense, shall produce a cause of action for damages, prevention and
other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place
of birth, physical defect, or other personal condition.
The rationale therefor was explained in the case of Manaloto v. Veloso III,72 citing
Concepcion v. CA,73 to wit:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The
Code Commission stressed in no uncertain terms that the human personality must be
exalted. The sacredness of human personality is a concomitant consideration of every plan
for human amelioration. The touchstone of every system of law, of the culture and civilization
of every country, is how far it dignifies man. If the statutes insufficiently protect a person from
being unjustly humiliated, in short, if human personality is not exalted - then the laws are
indeed defective. Thus, under this article, the rights of persons are amply protected, and
damages are provided for violations of a person's dignity, personality, privacy and peace of
mind.74
To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral
damages under Article 2219(10)75 of the Civil Code.
Records reveal that Consing, Jr., in his complaint, alleged that "he has come to discover that
Unicapital and PBI, et al. are speaking of him in a manner that is inappropriate and libelous;
and that they have spread their virulent version of events in the business and financial
community such that he has suffered and continues to suffer injury upon his good name and
reputation which, after all, is the most sacred and valuable wealth he possesses - especially
considering that he is an investment banker."76 In similar regard, the hypothetical admission
of these allegations may result into the recovery of damages pursuant to Article 26, and even
Article2219(10), of the Civil Code.
Corollary thereto, Unicapital, et al.’s contention77 that the case should be dismissed on the
ground that it failed to set out the actual libelous statements complained about cannot be
given credence. These incidents, as well as the specific circumstances surrounding the
manner in which Unicapital and PBI, et al. pursued their claims against Consing, Jr. may be
better ventilated during trial. It is a standing rule that issues that require the contravention of
the allegations of the complaint, as well as the full ventilation, in effect, of the main merits of
the case, should not be within the province of a mere motion to dismiss,78 as in this case.
Hence, as what is only required is that the allegations furnish adequate basis by which the
complaint can be maintained, the Court – in view of the above-stated reasons – finds that the
RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss on the ground of failure to
state a cause of action was not tainted with grave abuse of discretion which would
necessitate the reversal of the CA’s ruling. Verily, for grave abuse of discretion to exist, the
abuse of discretion must be patent and gross so as to amount to an evasion of a positive duty
or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law.79
This the Court does not perceive in the case at bar.
Further, so as to obviate any confusion on the matter, the Court equally finds that the causes
of action in SCA No. 1759 were not – as Unicapital, et al. claim – misjoined even if Consing,
Jr. averred that Unicapital and PBI, et al. violated certain provisions of the Corporation Law
and the Revised Securities Act.80
The rule is that a party’s failure to observe the following conditions under Section 5, Rule 2 of
the Rules results in a misjoinder of causes of action:81
SEC. 5. Joinder of causes of action . - A party may in one pleading assert, in the alternative
or otherwise, as many causes of action as he may have against an opposing party, subject to
the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues
or jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the
causes of action falls within the jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money the
aggregate amount claimed shall be the test of jurisdiction. (Emphasis supplied)
A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold Unicapital
and PBI, et al. liable for any specific violation of the Corporation Code or the Revised
Securities Act. Rather, he merely sought damages for Unicapital and PBI, et al.’s alleged acts
of making him sign numerous documents and their use of the same against him. In this
respect, Consing, Jr. actually advances an injunction and damages case82 which properly
falls under the jurisdiction of the RTC-Pasig City.83 Therefore, there was no violation of
Section 5, Rule 2 of the Rules, particularly, paragraph (c) thereof. Besides, even on the
assumption that there was a misjoinder of causes of action, still, such defect should not result
in the dismissal of Consing, Jr.’s complaint. Section 6, Rule 2 of the Rules explicitly states
that a "misjoinder of causes of action is not a ground for dismissal of an action" and that "a
misjoined cause of action may, on motion of a party or on the initiative of the court, be
severed and proceeded with separately."
Neither should Consing, Jr.’s failure to pay the required docket fees lead to the dismissal of
his complaint.1âwphi1 It has long been settled that while the court acquires jurisdiction over
any case only upon the payment of the prescribed docket fees, its non-payment at the time of
the filing of the complaint does not automatically cause the dismissal of the complaint
provided that the fees are paid within a reasonable period.84 Consequently, Unicapital, et
al.’s insistence that the stringent rule on non-payment of docket fees enunciated in the case
of Manchester Development Corporation v. CA85 should be applied in this case cannot be
sustained in the absence of proof that Consing, Jr. intended to defraud the government by his
failure to pay the correct amount of filing fees. As pronounced in the case of Heirs of Bertuldo
Hinog v. Hon. Melicor:86
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its
non-payment at the time of filing does not automatically cause the dismissal of the case, as
long as the fee is paid within the applicable prescriptive or reglementary period, more so
when the party involved demonstrates a willingness to abide by the rules prescribing such
payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no
intention to defraud the government, the Manchester rule does not apply.87 (Emphasis and
italics in the original)
Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing, Jr.'s
"metered" claim for damages to the tune of around ₱2,000,000.00 per month88 may balloon
to a rather huge amount by the time that this case is finally disposed of, still, any amount that
may by then fall due shall be subject to assessment and any additional fees determined shall
constitute as a lien against the judgment as explicitly provided under Section 2,89 Rule 141 of
the Rules.
Finally, on the question of whether or not Consing, Jr.'s complaint was properly verified,
suffice it to state that since the copy submitted to the trial court was duly notarized by one
Atty. Allan B. Gepty and that it was only Unicapital, et al.’s copy which lacks the notarization,
then there was sufficient compliance with the requirements of the rules on pleadings.90
In fine, the Court finds no reversible error on the part of the CA in sustaining the RTC-Pasig
City’s denial of Unicapital et al.’s motion to dismiss. As such, the petitions in G.R. Nos.
175277 and 175285 must be denied.
B. Propriety of the denial of
Consing, Jr.’s motion for
consolidation.
Civil Case No. 99-1418 is a collection and damages suit based on actionable documents, i.e.,
the subject promissory notes. In particular, SCA No. 1759 deals with whether or not
Unicapital and BPI, et al, abused the manner in which they demanded payment from
Consing, Jr., while Civil Case No. 99-1418 deals with whether or not Unicapital may demand
payment from Consing, Jr. based on the subject promissory notes. Clearly, a resolution in
one case would have no practical effect as the core issues and reliefs sought in each case
are separate and distinct from the other.
Likewise, as the CA correctly pointed out, the RTC-Makati City could not have been failured
in retaining Civil Case No. 99-1418 in its dockets since pre-trial procedures have already
been undertaken therein and, thus, its consolidation with SCA No. 1759 pending before the
RTC-Pasig City would merely result in complications on the part of the latter court or
squander the resources or remedies already utilized in Civil Case No. 99-1418.93 In this light,
aside from the perceived improbability of having conflicting decisions, the consolidation of
SCA No. 1759 and Civil Case No. 99-1418 would, contrary to its objective, only delay the
proceedings and entail unnecessary costs.

The crux of G.R. No. 192073 is the propriety of the RTC-Makati City’s denial of Consing, Jr.’s
motion for the consolidation of the Pasig case, i.e., SCA No. 1759, and the Makati case, i.e.,
Civil Case No. 99-1418.Records show that the CA upheld the RTC-Makati City’s denial of the
foregoing motion, finding that the consolidation of these cases was merely discretionary on
the part of the trial court. It added that it was "impracticable and would cause a procedural
faux pas
"if it were to "allow the RTC-Pasig City to preside over the Makati case."91
The CA’s ruling is proper.
All told, the Court finds the consolidation of SCA No. 1759 and Civil Case No. 99-1418 to be
improper, impelling the affirmance of the CA’s ruling. Consequently, the petition in G.R. No.
192073 must also be denied.
WHEREFORE, the petitions in G.R. Nos. 175277, 175285 and 192073 are DENIED.
Accordingly, the Court of Appeals’ Joint Decision dated October 20, 2005 and Resolution
dated October 25, 2006 in CA-G.R. SP Nos. 64019 and 64451 and the Decision dated
September 30, 2009 and Resolution dated April 28, 2010 in CA-G.R. No. 101355 are hereby
AFFIRMED.

It is hornbook principle that when or two or more cases involve the same parties and affect
closely related subject matters, the same must be consolidated and jointly tried, in order to
serve the best interest of the parties and to settle the issues between them promptly, thus,
resulting in a speedy and inexpensive determination of cases. In addition, consolidation
serves the purpose of avoiding the possibility of conflicting decisions rendered by the courts
in two or more cases, which otherwise could be disposed of in a single suit.92 The governing
rule is Section 1, Rule 31 of the Rules which provides:

SEC. 1. Consolidation. - When actions involving a common question of law or fact are
pending before the court, it may order a joint hearing or trial of any or all the matters in issue
in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay.

In the present case, the Court observes that the subject cases, i.e., SCA No. 1759 and Civil
Case No. 99-1418, although involving the same parties and proceeding from a similar factual
milieu, should remain unconsolidated since they proceed from different sources of obligations
and, hence, would not yield conflicting dispositions. SCA No. 1759 is an injunction and
damages case based on the Civil Code provisions on abuse of right and defamation, while