Gentle Supreme Philippines vs. Ricardo Consulta, G.R.

183182, 1 Sep 2010 Facts Gentle Supreme filed a collection case with application for a writ of preliminary injuction against Consar Trading Corp, through the latters president Ricardo Consulta and VP Norberto Sarayba. On 11 Oct 2005, sheriff failed to serve the summons and copies of the complaint on any of the CTCs authorized officers as well as on Consulta and Sarayba. Hence, he left copies of such documents with AGNES CANAVE, who, according to the Sheriffs Return, was Saraybas secretary and an authorized representative of both defendants. However, none of the defendants filed an answer. Thus, they were declared in default and the Court proceeded to hear GSPs evidence ex parte. Sheriff also attached a registered land belonging to Consulta. The court rendered decision declaring defendants as solidarily liable to GSP. Consulta filed a petition for annulment of the RTCs decision before the CA. He alleged that there was improper service of summons, hence, the proceeding was void, the decision was likewise void. CA rendered decision holding that there was an improper service of summons. GSP, in this petition, alleged that the service of summons was valid on the ground that the sheriff garnished CTCs bank accounts on the day the summons was served. As company president, it was incredulous that Consulta was unaware of the garnishment and the reason for it; that as per statement of CTC, Canave was in charge of the office, Consultas regular place of business, signifying proper service of the summons on him and that CTC faxed GSP a letter proposing a schedule of payment for the adjudged amounts in the RTC decision.

ISSUE: WON there was proper service of summon to the defendant. SCs Ruling: YES It is true that this Court emphasized the importance of strict and faithful compliance in effecting substituted service. It must, however, be reiterated that when the rigid application of rules becomes a conduit for escaping ones responsibility, the Court will intervene to set things right according to the rules. There is valid substituted service of summons on Consulta at his place of business with some competent person in charge thereof. According to the sheriffs return, which is prima facie evidence of the facts it states,19 he served a copy of the complaint on Canave, an authorized representative of both Consulta and Sarayba. Consulta did not present evidence to rebut the presumption of regularity on the manner that the sheriff performed his official duty. Further, this Court has ruled that "it is not necessary that the person in charge of the defendants regular place of business be specifically authorized to receive the summons. It is enough that he appears to be in charge." In this case, Canave, a secretary whose job description necessarily includes receiving documents and other correspondence, would have the semblance of authority to accept the court documents.

Robinson vs. Miralles, G.R. No. 163584, 12 Dec 2006 Facts

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Miralles filed a complaint against Robinson for sum of money. The former alleged that latter borrowed $20,054 from her and when she demanded payment, the latter refused to pay. Summons was served on Robinsons address, however, per return of service the sheriff indicated that Robinson is no longer residing at such address. Hence, an alias summons was issued by the court. The same was served in the petitioners new address, but for some reason, the security guard was instructed by the petitioner not to let anybody proceed to her house. Hence, the sheriff proceeded to substituted service of summon after several attempts to serve the same through personal service, but still failed. He left the said documents in the security guard. Petitioner contested that there was improper service of summons since the security guard was not a competent person sufficient in age and discretion as the latter is neither related to her nor staying at her residence.

ISSUE: WON there is proper substituted service of summons. SCs RULING: YES. Personal service is generally preferred over substituted service, the latter mode of service being a method extraordinary in character. For substituted service to be justified he following circumstances must be clearly established: (a) personal service of summons within a reasonable time was impossible; (b) efforts were exerted to locate the party (c) the summons was served upon a person of sufficient age and discretion residing at the partys residence or upon a competent person in charge of the partys office or place of business We have ruled that the statutory requirements of substituted service must be followed strictly, faithfully, and fully and any substituted service other than that authorized by the Rules is considered ineffective. However, we frown upon an overly strict application of the Rules. It is the spirit, rather than the letter of the procedural rules, that governs. Obviously, it was impossible for the sheriff to effect personal or substituted service of summons upon petitioner. We note that she failed to controvert the sheriffs declaration. Nor did she deny having received the summons through the security guard. Considering her strict instruction to the security guard, she must bear its consequences. Thus, we agree with the trial court that summons has been properly served upon petitioner and that it has acquired jurisdiction over her.

Sps. Santiago vs. BPI, G.R. No. 163749, 26 Sep 2008 Facts Sps. Santiago mortgaged three parcels of land to Sps. Deloria The same property were sold to Sps. Lim wherein they (sps. Lim) mortgaged it to FEBTC (which later merged with BPI). When Sps. Lim defaulted in payment of the loan. FEBTC moved for an extra-judicial foreclosure of real estate mortgage. Prior to the public auction, petitioner filed with the RTC a complaint for injunction, damages and accounting with prayer for preliminary injunction to restrain BPI from conducting the auction sale. Summons and the copy of the complaint were served on BPIs BRANCH MANAGERS located in San Jose St. and Percedes St., Dumaguete City. Page 2

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During the hearing BPI questioned the courts jurisdiction over the person of the defendant as the summons were served on its branch managers and NOT ON ANY ONE OF THOSE PERSONS enumerated under Sec11 of Rule 14 of the 1997 Rules of Procedure. RTC issued its order, dismissing the restraining order since there was improper service of summons. CA affirmed.

ISSUE: WON the service of summons on the branch managers of private respondent's two separate branches in Dumaguete City constitutes substantial compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure. SCs Ruling: No. Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise, the service is insufficient. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. We discarded the trial court's basis for denying the motion to dismiss, namely, private respondent's substantial compliance with the rule on service of summons, and fully agreed with petitioner's assertions that the enumeration under the new rule is restricted, limited and exclusive, following the rule in statutory construction that expressio unios est exclusio alterius. At this juncture, it is worth emphasizing that notice to enable the other party to be heard and to present evidence is not a mere technicality or a trivial matter in any administrative or judicial proceedings. The service of summons is a vital and indispensable ingredient of due process.

Abubakar Afdal vs. Romeo Carlos, G.R. No. 173379, 1 Dec 2010 Facts Carlos filed a case for unlawful detainer against Afdal and several others. He alleged that the subject land was sold to him by Afdal but he allowed the latter to stay in the property by mere tolerance. According to the records, it appeared that there were three attempts to serve the summons and the copy of the complaint. However Afdal failed to file an answer. MTC rendered a decision in favor of the Carlos. Accordingly, a petition for relief was filed before the RTC by the Afdal. He alleged that he never received a demand letter from Carlos nor he received the summons and the copy of the complaint. Thus, the decision of the MTC is null and void since it did not acquire jurisdiction over his person as there was improper service of summons.

ISSUE: WON there was proper service of summons. SCs Ruling: no An accion interdicatal is both a real action and in personam, because the plaintiff seeks to enforce a personal obligation on the defendant for the latter to vacate the property subject of the action, hence, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. Page 3

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Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants voluntary appearance in court. If the defendant does not voluntarily appear in court, jurisdiction can be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the Rules of Court. Service of summons upon the defendant shall be by personal service first and only when the defendant cannot be promptly served in person will substituted service be availed of. In this case, the indorsements failed to state that prompt and personal service on petitioners was rendered impossible. It failed to show the reason why personal service could not be made. It was also not shown that efforts were made to find petitioners personally and that said efforts failed. These requirements are indispensable because substituted service is in derogation of the usual method of service. It is an extraordinary method since it seeks to bind the defendant to the consequences of a suit even though notice of such action is served not upon him but upon another whom the law could only presume would notify him of the pending proceedings. Failure to faithfully, strictly, and fully comply with the statutory requirements of substituted service renders such service ineffective. Moreover, in the return it does not indicate that GARY ACOB is a person of suitable age and discretion. In Manotoc vs. CA, the court ruled that, The sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and specifically described in the Return of Summons. Here, the process server failed to specify Gary Acobs age, his relationship to petitioners and to ascertain whether he comprehends the significance of the receipt of the summons and his duty to deliver it to petitioners or at least notify them of said receipt of summons.

E. B Villarosa vs. Hon. Benito and Imperial Development Corp., G.R. No. 136426, 6 Aug 1999 Facts E.B is is a limited partnership with principal office address at 102 Juan Luna St., Davao City and with branch offices at 2492 Bay View Drive, Tambo, Paraaque, Metro Manila and Kolambog, Lapasan, Cagayan de Oro City. E.B and Imperial Development executed a deed of sale with Development Agreement wherein the former agreed to develop parcels of land located in CDO belonging to the latter into a housing subdivision for the construction of low cost housing units. As E.B defaulted, Imperial filed a complaint for breach of contract and damages against the former. The summons and the copy of the complaint were served at E.Bs address at Kolambog, Lapasan, CDO, received by its branch manager, Engr. Wendell Sabulbero. But in the Return it appears therein that it was served to Engr. Sabulbero at their now office address in Villa Gonzalo, Nazareth, CDO. E.B filed a motion to dismiss on the ground that the Court did not acquire jurisdiction over their person since there was improper service of summons invoking Sec11,Rule14. E.B

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alleged that the Engr. Sabulbero was a mere EE and not one of the person indicated in the aforecited rule. RTC- dismissed E.Bs motion; stated that since the summons and copy of the complaint were in fact received by the corporation through its branch manager Wendell Sabulbero, there was substantial compliance with the rule on service of summons and consequently, it validly acquired jurisdiction over the person of the defendant.

Issue: WON there was proper service of summons. SCs Ruling: No Under the new rule, the enumeration of persons to whom summons may be served is "restricted, limited and exclusive" following the rule on statutory construction expressio unios est exclusio alterius. In the former rule, be it noted that it allowed service of summon to a corporations AGENT. Notably, under the new Rules, service of summons upon an agent of the corporation is no longer authorized. The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now limited and more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states "general manager" instead of only "manager"; "corporate secretary" instead of "secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of its directors" is conspicuously deleted in the new rule. Ret. Justice Herrera: The rule must be strictly observed. Service must be made to one named in (the) statute. A strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, "to bring home to the corporation notice of the filing of the action. Accordingly, the filing of a motion to dismiss, whether or not belatedly filed by the defendant, his authorized agent or attorney, precisely objecting to the jurisdiction of the court over the person of the defendant can by no means be deemed a submission to the jurisdiction of the court. There being no proper service of summons, the trial court cannot take cognizance of a case for lack of jurisdiction over the person of the defendant. Any proceeding undertaken by the trial court will consequently be null and void.

BPI vs. Sps. Santiago and Centrogen, G.R. No. 169116, 28 March 2007 Facts Centrogen is a domestic corporation engaged in pharmaceutical business, duly organized and existing as such under the Philippine laws and represented in this act by its President, Edwin Santiago, son of private respondents Spouses Ireneo M. Santiago and Liwanag P. Santiago. On several occasion, Centrogen obtained loans from FEBTC in different amounts which reach the total amount of P4.650.000. As security for the loan obligation, Ireneo executed Page 5

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a real estate mortgage. When Centrogen defaulted in payment, FEBTC filed a extra-judicial foreclosure of the real estate mortgage. Thereafter, a Notice of Sale was issued by the Provincial Sheriff. Meanwhile FEBTC merged with BPI, the latter being the assignee of all the rights, privileges and obligation of the former. Sps. Santiago, upon receiving the Notice of Sale, filed a COMPLAINT seeking the issuance of a TRO and Preliminary and Final Injunction, for the ANNULMENT OF THE REAL ESTATE MORTGAGE. They alleged that the initial loan was already paid as evidenced by Union Bank Check dated 20Dec2001, with BPI as the payee. The summons was served to BPIs BRANCH MANAGER in Sta. Cruz, Laguna Branch, MS. GLONA RAMOS, as indicated in the sheriffs return, on 27 Feb 2003. BPI, instead of filing an answer, filed a MOTION TO DISMISS on the ground of lack of jurisdiction over the person of the defendant since the summons was served to the branch manager, not one of those authorized by Sec11, Rule14. RTC- denied the motion to dismiss; it ruled that because of the presence of extreme urgency wherein the Court has jurisdiction to act on the TRO despite lack of proper service of summons. RTC proceeded with the summary hearing on the application for TRO; it issued an ORDER enjoining the Provincial Sheriff from proceeding with the extra-judicial foreclosure sale of the subject property until the propriety of granting a preliminary injunction is ascertained. RTC the application for Preliminary Injunction is set for hearing on 10 March 2003, but on 6March2003, it ordered the service of new summons to BPI in accordance with the provisions of the Revised Rules of Court. In the return it stated therein that summons was served to the CORPORATE SECRETARY.

ISSUE: WON there was proper service of summons. SCs RULING: YES. Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise, the service is insufficient. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In this case, we rule that the service of summons on BPIs Branch Manager did not bind the corporation for the branch manager is not included in the enumeration of the statute of the persons upon whom service of summons can be validly made in behalf of the corporation. Such service is therefore void and ineffectual. However, upon the issuance and the proper service of new summons on 11 March 2003, before the Writ of Preliminary Injunction was issued on 20 March 2003, whatever defect attended the service of the original summons, was promptly and accordingly cured. The subsequent service of summons was neither disputed nor was it mentioned by BPI except in a fleeting narration of facts and therefore enjoys the presumption that official duty has been regularly performed.20 The Process Servers Certificate of Service of Summons is a prima facie evidence of facts set out in that certificate. Page 6

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Inarguably, before the Order granting the application for Writ of Preliminary Injunction was issued, the RTC already acquired jurisdiction over the person of BPI by virtue of the new summons validly served on the Corporate Secretary. The fact that the original summons was invalidly served is of no moment since jurisdiction over BPI was subsequently acquired by the service of a new summons.

Margarita Romualdez-Licaros vs. Abelardo Licaros, G.R. No. 150656, 29 April 2003 Facts Abelardo commenced a civil case for Declaration of Nullity of his Marriage with Margarita based on psychological incapacity. Margarita was then residing abroad (96 Mulberry Lane, Atherton, CA, USA). The trial court ordered that the summons with the copy of the complaint be served by PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION ONCE A WEEK FOR 2 CONSECUTIVE WEEKS, at the same time furnishing respondent a copy of the order, as well as the corresponding summons and a copy of the petition at the given address in the United States through the Department of Foreign Affairs, all at the expense of Abelardo. Respondent was given sixty (60) days after publication to file a responsive pleading. In the RETURN it indicated therein that summons and the complaint was sent by mail c/o DFA thru Pat Martines, receiving Clerk of DFA a person authorized to receive this kind of process who acknowledged the receipt thereof. Margarita alleged that the trial court never acquired jurisdiction over her person since she was never validly served with summons, neither did she appear in the court to submit voluntarily to its jurisdiction. Abelardo - argues that jurisdiction over the person of a non-resident defendant in an action in rem or quasi in rem is not necessary. The trial and appellate courts made a clear factual finding that there was proper summons by publication effected through the Department of Foreign Affairs as directed by the trial court. Thus, the trial court acquired jurisdiction to render the decision declaring the marriage a nullity.

ISSUE: WON Margarita was properly served with summons. SCs RULING: YES As a rule, when the defendant does not reside and is not found in the Philippines, Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. But when the case is one of actions in rem or quasi in rem enumerated in Section 15, Rule 14 of the Rules of Court, Philippine courts have jurisdiction to hear and decide the case. In such instances, Philippine courts have jurisdiction over the res, and jurisdiction over the person of the non-resident defendant is not essential. Actions in personam - are directed against specific persons and seek personal judgments; Actions in rem and quasi-in rem - are directed against the thing or property or status of a person and seek judgments with respect thereto as against the whole world.

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The trial courts prescribed mode of extraterritorial service does not fall under the first or second mode specified in Section 15 of Rule 14, but under the third mode. This refers to "any other means that the judge may consider sufficient." The Process Servers Return of 15 July 1991 shows that the summons addressed to Margarita together with the complaint and its annexes were sent by mail to the Department of Foreign Affairs with acknowledgment of receipt. The Process Servers certificate of service of summons is prima facie evidence of the facts as set out in the certificate.16 Before proceeding to declare the marriage between Margarita and Abelardo null and void, the trial court stated in its Decision dated 8 November 1991 that "compliance with the jurisdictional requirements hav(e) (sic) been duly established." We hold that delivery to the Department of Foreign Affairs was sufficient compliance with the rule. After all, this is exactly what the trial court required and considered as sufficient to effect service of summons under the third mode of extraterritorial service pursuant to Section 15 of Rule 14.

Palma vs. Hon. Galvez and Psyche Agudo, G.R. No. 165273, 10 March 2010 Facts Palma filed a action for damages against Philippine Heart Center , Dr. Giron and Dr. Cruz. She alleged that the defendants committed professional fault, negligence and omission for having removed her right ovary against her will. She subsequently filed a Motion for Leave to Admit Amended Complaint praying the inclusion of additional defendants who were all nurses at the PHC, including, herein defendant AGUDO. The summons and the copy of the complaint were served to Agudos husband ALFREDO AGUDO, the latter signed the same as Psyche was out of the country. Thereafter, the counsel of the Agudo filed a Notice of Appearance and a Motion for Extension of Time to File Answer on the ground that the defendant was out of the country and the period to file and Answer is already due. Another motion for extension of time to file an answer was filed for the purposes of clarification by Psyche, hence, a draft answer will be sent to Ireland. Thereafter, Agudo filed a motion to dismiss on ground that the court had not acquired jurisdiction over her as there was improper service of summons as she was temporarily out of the country, hence, SUBSTITUTED SERVICE of summons to her husband is not binding. Petitioner conteded that substituted service of summons on the part of the Psyches husband was valid and that service of summons under Section 16, Rule 14 was not exclusive and may be effected by other modes of service, i.e., by personal or substituted service. RTC granted the motion of Agudo; it ruled that substituted service could not be resorted to since it was established that private respondent was out of the country, thus, Section 16, Rule 14 provides for the service of summons on her by publication.

ISSUE: WON there was proper service of summons to the defendant. SCs RULING: YES, there was a proper service of summons. Sec 16, Rule 14 applies to defendant who is a Filipino but temporarily out of the Philippines at the time of the service of summons. Page 8

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Sec. 16. Residents temporarily out of the Philippines. When an action is commenced against a defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out of the Philippines, as under the preceding section. In the abovequoted provision, it uses the words MAY and ALSO which suggest that it is NOT MANDATORY. Other methods of service of summons allowed under the Rules may also be availed of by the serving officer on a defendant-resident who is temporarily out of the Philippines. This includes - substituted service set forth in section 7 - personal service outside the country, with leave of court - service by publication, also with leave of court - in any other manner the court may deem sufficient. Section 7 also designates the persons with whom copies of the process may be left. The rule presupposes that such a relation of confidence exists between the person with whom the copy is left and the defendant and, therefore, assumes that such person will deliver the process to defendant or in some way give him notice thereof. This case, the Sheriff's Return stated that private respondent was out of the country; thus, the service of summons was made at her residence with her husband, Alfredo P. Agudo, acknowledging receipt thereof. Alfredo was presumably of suitable age and discretion, who was residing in that place and, therefore, was competent to receive the summons on private respondent's behalf. In addition, we agree with petitioner that the RTC had indeed acquired jurisdiction over the person of private respondent when the latter's counsel entered his appearance on private respondent's behalf, without qualification and without questioning the propriety of the service of summons, and even filed two Motions for Extension of Time to File Answer. We have held that the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court. Agudo is hereby estopped.

Rule 16 Pilar Vda. De Manalo vs. Manalo, G.R. No. 129242, 16 Jan 2001 Facts Respondents are surviving children of the late Troadio Manalo while petitioner is the surviving spouse and children of the deceased. The former filed a Petition for the Judicial Settlement of the Estate of their late father. The Court issued an Order which resolved that the court has acquired jurisdiction over the person of the Oppositors (petitioners) and to set the application of Romeo Manalo for appointment as regular administrator in the intestate of the deceased. The petitioner filed a motion to dismiss but was denied. Petitioners filed a petition for certiorari under R65 before the CA. They prayed that the Order of the RTC be denied considering that there was o earnest efforts towards compromise among members of the same family. The same was denied by the CA.

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Petitioners argued that should be dismissed under Rule 16, Section 1(j) of the Revised Rules of Court which provides that a motion to dismiss a complaint may be filed on the ground that a condition precedent for filing the claim has not been complied with, that is, that the petitioners therein failed to aver in the petition in SP. PROC. No. 92-63626, that earnest efforts toward a compromise have been made involving members of the same family prior to the filing of the petition pursuant to Article 222[14] of the Civil Code of the Philippines.

ISSUE: WON Court of Appeals erred in upholding the questioned orders of the respondent trial court which denied their motion for the outright dismissal of the petition for judicial settlement of estate despite the failure of the petitioners therein to aver that earnest efforts toward a compromise involving members of the same family have been made prior to the filing of the petition but that the same have failed. SCs Ruling: No. It is a fundamental rule that, in the determination of the nature of an action or proceeding, the averments and the character of the relief sought in the complaint, or petition, as in the case at bar, shall be controlling. The case at bar is not an ORDINARY CIVIL ACTION, although it contains averments which may be typical in an ordinary civil action. It is our view that herein petitioners may not be allowed to defeat the purpose of the essentially valid petition for the settlement of the estate of the late Troadio Manalo by raising matters that are irrelevant and immaterial to the said petition. It must be emphasized that the trial court, sitting, as a probate court, has limited and special jurisdiction and cannot hear and dispose of collateral matters and issues which may be properly threshed out only in an ordinary civil action.

Art. 222. No suit shall be filed or maintained between members of the same family unless it should appear that earnest efforts toward a compromise have been made, but that the same have failed, subject to the limitations in Article 2035. The above-quoted provision of the law is applicable only to ordinary civil actions. . This is clear from the term suit that it refers to an action by one person or persons against another or others in a court of justice in which the plaintiff pursues the remedy which the law affords him for the redress of an injury or the enforcement of a right, whether at law or in equity. Lastly, . The Petition for Issuance of Letters of Administration, Settlement and Distribution of Estate in SP. PROC. No. 92-63626 is a special proceeding and, as such, it is a remedy whereby the petitioners therein seek to establish a status, a right, or a particular fact.

UCPB vs. Beluso (2007) (NOT MY OWN DIGEST) Facts: In 1996, UCPB granted the spouses Beluso a Promissory Notes Line under a Credit Agreement whereby the latter could avail from the former credit of up to a maximum amount of P1.2 Million pesos for a term ending in April 1997. In addition to the promissory notes, the spouses Beluso also constituted a real estate mortgage over parcels of land in Roxas City. Subsequently, the said Credit Arrangement was amended to extend the amount of the Promissory Notes Line to a maximum of P2.35 Million pesos and to extend the term thereof to February 1998. The spouses executed three promissory notes which were renewed several times. In 1997, the payment of the principal and interest of the latter two promissory notes were debited from the spouses Belusos account with UCPB; yet, a consolidated loan for P1.3 Million was again released to the spouses Beluso under onepromissory note with a due date of 28 February 1998. Civil Procedure R 14,15,16 (PECAs Digest) Page 10

To completely avail themselves of the P2.35 Million credit lineextended to them by UCPB, the spouses Beluso executed two morepromissory notes for a total of P350 thousand. However, the spouses Beluso alleged that the amounts covered by these last twopromissory notes were never released or credited to their account and, thus, claimed that the principal indebtedness was only P2 Million. In any case, UCPB applied interest rates on the different promissory notes ranging from 18% to 34%. During the term of these promissory notes, the Belusos were able to pay the total sum of about P760 thousand. However, they failed to pay for the interest and penalty on their obligations. As a result, UCPB demanded that they pay their total obligation of P2.9 millionbut the spouses Beluso failed to comply therewith. Thereafter, UCPB foreclosed the properties mortgaged by the spouses Beluso to secure their credit line, which, by that time, already ballooned to nearly P3.8 million. Two months after the foreclosure, the spouses Beluso filed a Petition for Annulment, Accounting and Damages against UCPB with the RTC of Makati City. UCPB moved to dismiss the case on the ground that the spouses Beluso instituted another case before the RTC of Roxas City, involving the same parties and issues. UCPB claims that while the Roxas City case initially appears to be a different action, as it prayed for the issuance of a temporary restraining order and/or injunction to stop foreclosure of spouses Belusos properties, it poses issues which are similar to those of the present case. The spouses Beluso claim that the issue in the Roxas City case is the propriety of the foreclosure before the true account of spouses Beluso is determined. On the other hand, the issue in the Makati case is the validity of the interest rate provision. The spouses Beluso claim that the Roxas City case has become moot because, before RTC Roxas City could act on the restraining order, UCPB proceeded with the foreclosure and auction sale. As the act sought to be restrained has already been accomplished, the spouses Beluso had to file a different action, that of Annulment of the Foreclosure Sale with RTC Makati. RTC ruled in favor of the Belusos. CA affirmed. Issue: Whether or not the case should be dismissed due to forum shopping
Held: YES. Even if it is assumed for the sake of argument, however, that only one cause of action is involved in the two civil actions, namely, the violation of the right of the spouses Beluso not to have their property foreclosed for an amount they do not owe, the Rules of Court nevertheless allows the filing of the second action. The case in Roxas City was dismissed before the filing of the case with RTC Makati, since the venue of litigation as provided for in the Credit Agreement is in Makati City. Rule 16, Section 5 bars the refiling of an action previously dismissed only in the following instances: (a) That the cause of action is barred by a prior judgment or by the statute of limitations; (b) That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or otherwise extinguished; and (c) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds. When an action is dismissed on the motion of the other party, it is only when the ground for the dismissal of an action is either of those aforementioned that the action cannot be refiled. As regards all the other grounds, the complainant is allowed to file same action, but should take care that, this time, it is filed with the proper court or after the accomplishment of the erstwhile absent condition precedent, as the case may be. The MR filed by the Belusos in the Roxas City case that has not yet been resolved upon the filing of the Makati case does not change the SCs findings. It is indeed the general rule that in cases where there are two pending actions between the same parties on the same issue, it should be the later case that should be dismissed. However, this rule is not absolute. In the case of Allied Banking v. CA, it was ruled that:

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Even if this is not the purpose for the filing of the first action, it may nevertheless be dismissed if the later action is the more appropriate vehicle for the ventilation of the issues between the parties. Applying the said ruling in the case at bar, the Court found that the Makati City case is the more proper action in view of the execution of the foreclosure sale. Moreover, Makati is the proper venue of the action as mandated by the Credit Agreement. Hence, the Court deemed that the Makati Case is the more appropriate vehicle for litigating the issues between the parties, as compared to the Roxas City case.

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