Venue of Actions

Resolution in G.R. No. 154338 Universal Robina Corporation vs. Albert Lim
Sandoval-Gutierrez, J.

Petitioner filed a complaint for sum of money with the RTC of Quezon City against the respondents over unpaid grocery
items worth about P808,000. The trial court, however, dismissed motu proprio the complaint on the ground of improper
venue. Since the action is personal, the trial court held that the complaint should have been filed with the court with
jurisdiction over the place where the petitioner or respondent resides. The petitioners office was in Pasig, while the
respondent was a resident of Laoag. Petitioner filed a motion manifesting an agreement with the respondent to have the
case tried in Quezon City. However, after granting the motion, the trial court dismissed the case anew for improper venue.
The Supreme Court ruled that based on the Rules of Court, a trial court cannot dismiss a complaint motu proprio on the
ground of improper venue.

DOCTRINE

Improper venue is not one of the grounds enumerated in Section 1, Rule 9 of the Rules of Court on which a trial court may
dismiss a complaint motu proprio. Thus, it follows that a party to the case must have filed a motion to dismiss on the
ground of improper venue or raised such issue in a responsive pleading, before the trial court may consider dismissing the
complaint on such ground.

FACTS

1. Universal Robina (Petitioner) and Albert Lim (Respondent) executed a contract wherein the former was to deliver
grocery items worth P808,060 to respondent.
2. The respondent failed to pay his obligations.
3. Thereafter, a complaint for sum of money was filed by petitioner against respondent with the RTC of Quezon City.
4. The RTC dismissed the case motu proprio on the ground of improper venue. It found that petitioner held office in
Pasig, while the respondent was a resident of Laoag.
1. Petitioner filed a motion for reconsideration, presenting before the RTC an agreement between it and the respondent
to have the case tried in Quezon City. The motion was granted. Summons were served upon the respondent but he
was unable to file an answer.
2. The trial then directed the petitioner to file a memorandum of authority on whether it can file a complaint in Quezon
City.
3. However, the trial court dismissed motu proprio the case again for improper venue. It denied the petitioners motion for
reconsideration.
5. The petitioner appealed to the Court of Appeals, but it dismissed the petition (for an entirely different reason). The CA
held that since the petitioner failed to explain why copies of the petition were served by registered mail and not by
personal service, in contravention of Sec. 11, Rule 14 of the 1997 Rules of Civil Procedure, the petition was
dismissed.
6. Petitioner then filed a petition for review on certiorari with the Supreme Court under Rule 45

ISSUE with HOLDING

Whether or not the trial court may dismiss motu proprio petitioners complaint on the ground of improper venue

- No. The trial court may only dismiss the complaint on such ground when the same is alleged in a motion to dismiss or
a responsive pleading filed by a party to the case.
- The trial court was correct in holding that a personal action may be filed where the plaintiff or defendant resides, in
accordance with Section 2, Rule 4 of the Rules of Court.

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- The trial court was also correct in granting the petitioners motion showing that the parties have agreed to a venue
other than that prescribed in Section 2. This is allowed under Section 4, which enumerates the exceptions to the
prescribed rules for venue. An agreement between parties is one of those exceptions (Sec. 4 (b), Rule 4).
- However, the trial court erred in dismissing the complaint motu proprio.
o First, the venue was not improper because it was agreed to by the parties. As mentioned, an agreement
between parties as to the venue is an exception to the rules on venue.
o Second, improper venue is not one of the grounds on which the trial court, motu proprio, may dismiss
a claim. Such grounds are enumerated in Section 1, Rule 9 of the Rules of Court. The grounds enumerated
under this provision are lack of jurisdiction over the subject matter, litis pendentia, res judicata and
prescription.
o Hence, since the court cannot dismiss on such ground motu proprio, the trial court should wait for a
motion to dismiss or a responsive pleading from the respondent raising the objection or affirmative
defense of improper venue before dismissing the complaint.

DISPOSITIVE PORTION

Wherefore the instant petition is GRANTED.

DIGESTER: Horace E. Cimafranca

Venue Trial court cannot pre-empt defendants prerogative to object by dismissing the case motu proprio on
the ground of improper venue
A.M. No. RTJ-91-672 Sps. Bang v. Mendez, Sr.
Puno, J.

Administrative case filed by petitioners against respondent-judge for issuing unjust orders in a civil case filed against
them. Among other things, petitioners claimed that respondent-judge took cognizance of the case even though his court
was the improper venue for it (the subject property of the complaint being in another territory).

SC ruled that in this aspect, respondent-judge did not err in acting on the complaint anyway because it would have been
improper for him to dismiss the complaint motu proprio on the ground of improper venue herein petitioners (being the
defendants in the civil case) should have challenged the venue in a motion to dismiss. However, the SC censured
respondent-judge for his other improper acts while handling the case (see other issues below).

DOCTRINE

Where the defendant fails to challenge the venue in a motion to dismiss as provided by Section 4, Rule 4 of the Rules of
Court, and allows the trial to be held and a decision to be rendered, he cannot on appeal or in a special action be
permitted to challenge belatedly the wrong venue, which is deemed waived.

Unless the defendant objects to the venue in a motion to dismiss, the venue cannot be said to be improperly laid, as for all
practical intents and purposes, the venue, though technically wrong, may be acceptable to the parties. The trial court
cannot pre-empt the defendants prerogative to object to the improper laying of the venue by motu propio
dismissing the case.

IMPORTANT PEOPLE
Sps. Jose Sy Bang and Iluminada Tan herein petitioner-spouses; defendants in the civil case
Suarez Agro-Industrial Corp. (Suarez Corp.) plaintiff in the civil case against the Sps. Bang
Judge Antonio Mendez respondent-judge, RTC Gumaca
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FACTS
1. (Background of the civil case) DBP originally owned the two lots in Calauag, Quezon subject of the complaint. It
leased them to Suarez Corp. for 1 year, which was later extended on a monthly basis.
Suarez Corp. stopped paying DBP, incurring about P650,000 in unpaid rentals and refusing to vacate the
premises despite DBPs demands.
DBP then sold the properties to petitioner-spouses, who also demanded that Suarez vacate the properties. It
refused, again.
Petitioner-spouses filed an ejectment suit against Suarez Corp. before RTC Calauag.
o RTC Calauag issued a TRO enjoining Suarez Corp. from operating its ice plant on the properties.
2. Not to be outdone, Suarez Corp. filed an action for specific performance and annulment of sale with preliminary
injunction against DBP and petitioner-spouses before RTC Makati.
Petitioner-spouses filed an MTD for improper venue, which was denied by the RTC. They went up to the CA
on certiorari, which reversed the RTC and ordered the dismissal of the case.
3. While the above case (in #2) was pending before RTC Makati (the reglementary period for an MR not having lapsed
yet), Suarez Corp. filed the same case for specific performance and annulment of sale with preliminary and
prohibitory injunction, this time before RTC Gumaca, presided over by respondent-judge.
Respondent-judge issued a TRO against DBP and petitioner-spouses enjoining them from taking possession
of the property. However, this was not implemented because the petitioner-spouses had already taken
possession of the property.
Petitioner-spouses refused to leave the property claiming that Suarez Corp. had not posted a bond yet.
Both parties presented evidence to resolve whether a preliminary mandatory injunction should be granted.
Respondent-judge considered the case submitted for decision, later granting Suarez Corp. a writ of injunction
upon the filing of a 1M bond.
Petitioner-spouses filed a Manifestation and Motion informing respondent judge of the pending case before
RTC Makati, praying for the dismissal of the Gumaca case. Respondent-judge denied this for being moot and
academic (see Fact#2).
4. Petitioner-spouses filed this administrative case against respondent-judge, charging him with the ff.:
Respondent-judge (as RTC judge of Gumaca) had no jurisdiction to hear and decide cases falling
under the territorial jurisdiction of the RTC of Calauag, Quezon without first securing an authority
from the Supreme Court. (Note that the subject properties are in Calauag.)
Respondent-judge issued a TRO, a preliminary mandatory injunction, and a writ of injunction, which were all
designed to place the subject properties under the control of the corporation without due process and hearing.
The bond approved by the respondent judge for the issuance of the injunction is questionable for it lacks the
bond number and the records do not show that the premiums were paid. Likewise, respondent judge was fully
aware that the insurance company was bankrupt and hence, the injunction remains until now to be
unsupported by an adequate bond.
The Order of respondent-judge to break open the subject premises was issued without any hearing.
The Order of respondent-judge submitting civil case no. 2137-G for decision is highly irregular and premature
for petitioner-spouses have not as yet filed their answer to the complaint nor were they ever declared in
default.

ISSUE with HOLDING

1. W/N respondent-judge should still have acted on the complaint, even though venue was improperly laid
Yes.
Respondent judge committed no infraction in immediately acting on the complaint which was directly filed
before RTC Gumaca, despite the fact that the subject matter of the complaint is located in Calauag which
does not fall within his territorial area, for purposes of venue albeit within the same region.
There is no question that he has jurisdiction (or the power to decide the case on the merits), as distinguished
from venue, which deals merely on the locality, the place where the suit may be had.
What would have been improper was for respondent-judge to dismiss the complaint motu proprio for improper
venue. The petitioner-spouses should have filed an MTD raising the ground of improper venue. (see Doctrine)

1. Other charges against respondent-judge (not relevant to the lesson)

The charge of forum shopping

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 o Forum shopping cant be attributed to respondent-judge, but to Suarez Corp., who filed cases of
the same nature in two different courts (RTC Makati and RTC Gumaca).
o Since the case before RTC Makati was later dismissed for improper venue, Suarez Corp. had a valid
reason for filing the 2nd case before RTC Gumaca. It believed it was entitled to an injunction, but there
was no presiding judge in RTC Calauag (the proper venue) at the time, so it filed the case before
RTC Gumaca.
Being in the same judicial region as Calauag, a writ of injunction issued by RTC Gumaca
would still be enforceable in the subject property located in Calauag.
o What may probably taint the action with forum shopping was the fact that an MR was still pending
before the CA in the case filed before RTC Makati when Suarez Corp. filed the 2 nd case before RTC
Gumaca. (However, the SC still doesnt see how this is respondent-judges fault and not Suarez
Corp.s.)
The impropriety of the preliminary mandatory injunction
o SC: At this writing there is yet no Entry of Judgment, and from our verification, an appeal
on certiorari has been filed with the Supreme Court. The determination of its propriety being judicial in
nature, and sub judice at that, we refrain from making any finding on the propriety of the writ until
the issue is finally decided.
The approval of the defective bond
o Petitioner-spouses aver that respondent-judge improperly approved the bond issued by Suarez Corp.
for the issuance of the preliminary mandatory injunction, despite knowing that the surety company
which issued the bond was already bankrupt and blacklisted.
o SC: Not respondent-judges fault. There was no proof produced by petitioner-spouses that the
surety company was already blacklisted at the time respondent-judge approved the bond. They must
file a petition for the dissolution of the writ of preliminary mandatory injunction based on the
insufficiency of the bond.
Improperly acting on petitioner-spouses MTD before the set date of hearing (see Fact#3, last bullet)
o Respondent-judge immediately denied the spouses MTD, seeking the dismissal of the case on the
ground of the then-pending case before RTC Makati, without a hearing.
o The action of respondent-judge in prematurely denying the MTD before the scheduled date of hearing
without granting petitioner-spouses a chance to be heard on their motion, is highly improper justifiably
giving rise to a perceived partiality.
o By this singular act respondent-judge rendered the totality of his past conduct on the case suspect. To
the petitioner-spouses perception, this is a confirmation of their suspicion that respondent
Judge was partial to Suarez Corp.
o For this manifest partiality, the SC admonishes respondent-judge.

DISPOSITIVE PORTION
Respondent-judge is censured. He is admonished to exercise greater care and be more circumspect in the
performance of his official duties for repetition of the same or similar act in the future shall be dealt with more severely by
this Court.

DIGESTER: Cristelle Elaine Collera

MISSING DIGEST: RUBY SHELTER VS. FORMARAN

Venue of Actions: Real actions

GR 144294 (03/11/2003)
Ramos v Ramos
Panganiban

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A co-owner executed SPA IFO daughter to sell lot. Lot was sold, thus heirs of other co-owners contested
(nadamay shares nila) it via a Complaint for Interpleader. RTC ruled in their favor holding that the sale was
only valid insofar as Narcisa was concerned (invalid ang sale ng ibang shares). CA modified decision ruling
that the sale was valid. No appeal thus final. Three years later they filed a motion to set aside the decision
primarily raising due process. CA denied it. SC affirmed.

DOCTRINE
In personam In rem Quasi In rem

Lodged against a person based Directed against the thing itself Names a person as defendant,
on personal liability instead of the person but its object is to subject that
persons interest in a property to a
corresponding lien or obligation

Here the Complaint filed by respondents with the RTC called for an interpleader to determine the
ownership of the real property in question.
o It forced persons claiming an interest in the land to settle the dispute among themselves as
to which of them owned the property.
o It sought to resolve the ownership of the land and was not directed against the personal
liability of any particular person.
Therefore it is a real action, because it affected title to or possession of real property.
o As such, the Complaint was brought against the deceased registered co-owners: Narcisa,
Mario, Paulino and Antonio Chanliongco, as represented by their respective estates.
o Petitioners merely had inchoate interest thereto as heirs of Paulino. Thus they had no
standing in court with respect to actions over a property of the estate, because the latter
was represented by an executor or administrator.

Rule 45 petition
Nature: Motion to set aside a decision (decision of CA on a Complaint for interpleader)

IMPORTANT PEOPLE
[Petitioner] SOLEDAD CHANLIONGCO RAMOS, FRANCISCO D. CHANLIONGCO, ADELBERTO D.
CHANLIONGCO, ARMANDO D. CHANLIONGCO and FLORENCIO D. CHANLIONGCO
[Respondent] TERESITA D. RAMOS, Spouses TERESITA and EDMUNDO S. MUYOT, Spouses VEDASTA and
FLORENCIO M. DATO, LORETO MUYOT, Spouses TERESITA and ELMER SOLIS, LICERIA TORRES, Spouses
CORAZON and VICENTE MACATUNGAL, Spouses PRECILLA and CRISOSTOMO MUYOT, and Spouses
CARIDAD and SALVADOR PINGOL

FACTS

1. Owners: Petitioners are children of the late Paulino V. Chanliongco Jr (a co-owner of a parcel of land
in Tondo, Manila together with his sister Narcisa, and his brothers Mario and Antonio).
2. Special power of attorney to sell: A SPA executed by co-owners in favor of Narcisa -> her daughter
Adoracion C. Mendoza sold the lot to respondents (September 1986).
a. (Petitioner) Heirs contested: The heirs of the co-owners contested the validity of the sale,
thus filed a Complaint for Interpleader with RTC to resolve the various ownership claims.
3. RTC upheld: RTC upheld the sale insofar as the share of Narcisa was concerned and ruled that
Adoracion had no authority to sell the shares of the other co-owners, because the SPA had been
executed in favor only of her mother, Narcisa.
4. CA modified, upholding the sale: Ordinary appeal to CA modified the RTC decision upholding the
sale even though there was no SPA in favor of Adoracion, because she had been authorized by her
mother to be the latters sub-agent. Thus no need to execute SPA in her favor as sub-agent. Such
not appealed thus became final on August 8, 1996.

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 5. Motion to set aside by petitioners: 3 years later on April 10, 1999, petitioners filed with CA a Motion
to Set Aside the Decision because
a) That they had not been served a copy of either the Complaint or the summons. Neither had
b) That they not been impleaded as parties to the case in the RTC.
Thus it should be set aside because it adversely affected their respective shares in the
property without due process.
6. CA denied: CA cited the grounds raised in respondents Opposition:
a) the Motion was not allowed as a remedy under the 1997 Rules of Civil Procedure;
b) the Decision sought to be set aside had long become final and executory;
c) the movants did not have any legal standing;
d) the Motion was purely dilatory and without merit.
7. Rule 45 to SC

RELATED ISSUE with HOLDING

Whether the Court of Appeals erred in denying petitioners Motion and allowing its Decision dated
September 25, 1995 to take its course, inspite of its knowledge that the lower court did not acquire
jurisdiction over the person of petitioners and passing petitioners property in favor of respondents, hence
without due process of law (or entitlement to summons).
NO The Complaint for Interpleader in this case is a real action since it affected title to or
possession of real property thus no need to serve them the complaint nor summons nor be
impleaded in the RTC case.
(On finality) Decision that has acquired finality becomes immutable and unalterable. A final
judgment may no longer be modified in any respect, even if the modification is meant to correct
erroneous conclusions of fact or law; and whether it will be made by the court that rendered it or by
the highest court in the land. Except the correction of:
o Clerical errors,
o The nunc pro tunc entries which cause no prejudice to any party,
o Void judgments. (In this case, since the court ruled it is a real action thus no need to
implead therefore NOT VOID)
To determine whether the CA Decision is void, the court needs to address the issue on the failure to
implead and to serve summons upon pets.
SC needs to determine if action is in personam, in rem, or quasi in rem since the rules on summons
differ.
In personam In rem Quasi In rem

Lodged against a person based Directed against the thing itself Names a person as defendant,
on personal liability instead of the person but its object is to subject that
persons interest in a property to a
corresponding lien or obligation

Here the Complaint filed by respondents with the RTC called for an interpleader to determine the
ownership of the real property in question.
o It forced persons claiming an interest in the land to settle the dispute among themselves as
to which of them owned the property.
o It sought to resolve the ownership of the land and was not directed against the personal
liability of any particular person.
Therefore it is a real action, because it affected title to or possession of real property.
o As such, the Complaint was brought against the deceased registered co-owners: Narcisa,
Mario, Paulino and Antonio Chanliongco, as represented by their respective estates.
o Petitioners merely had inchoate interest thereto as heirs of Paulino. Thus they had no
standing in court with respect to actions over a property of the estate, because the latter
was represented by an executor or administrator.
Thus, there was no need to implead them as defendants in the case, inasmuch as the estates of the
deceased co-owners had already been made parties.

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At time complaint filed: 1964 Rules of Court were still in effect
1964 RoC 1997 RoC

Section 3 of Rule 3: an executor or Section 3 Rule 3: Requires the joinder of the

administrator may sue or be sued without beneficiary or the party for whose benefit
joining the party for whose benefit the action the action is brought.
is prosecuted or defended
An executor or administrator is allowed to
either sue or be sued alone in that capacity

In the present case, it was the estate of petitioners father Paulino Chanliongco, as represented by
Sebrio Tan Quiming and Associates, that was included as defendant and served summons.
o There was no need to include petitioners as defendants. Not being parties, they were not
entitled to be served summons.
Petitioner Florencio D. Chanliongco, on the other hand, was impleaded in the Complaint, but not
served summons.
o However, the service of summons upon the estate of his deceased father was
sufficient, as the estate appeared for and on behalf of all the beneficiaries and the heirs of
Paulino Chanliongco, including Florencio.
Also the counsel of petitioners. Atty. Felino V. Quiming Jr., is a partner of the law firm that
represented the estate of the deceased father.
o Thus it can reasonably be expected that the service upon the law firm was sufficient notice
to all the beneficiaries of the estate, including Petitioner Florencio D. Chanliongco.
DISPOSITIVE PORTION
Affirmed

DIGESTER: Dino De Guzman

BPI vs Hontanasas
Bersamin

Spouses Silverio, Borbon, Xerxes, Facultad sought the declaration of the nullity of the promissory notes, real estate and
chattel mortgages and continuing surety agreement they had executed in favor of the BPI. BPI opposed the petition and
filed a motion to dismiss saying that the foreclosure of the mortgages was within its legal right to do and that the venue
was improperly laid, and that the legal fees were improperly laid. The RTC denied the motion to dismiss filed by BPI, but
granted the Spouses application for preliminary injunction. The decision was affirmed by the CA. When the case reached
the SC, the Court held that, being a personal action, Civil Case No. CEB-26468 was properly brought in the RTC in Cebu
City, where respondent XM Facultad and Development Corporation, a principal plaintiff, had its address.

DOCTRINE
According to Section 1, Rule 4 of the Rules of Court, a real action is one that affects title to or possession of real property,
or an interest therein. Such action is to be commenced and tried in the proper court having jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated, which explains why the action is also referred to as a
local action. In contrast, the Rules of Court declares all other actions as personal actions. Such actions may include those
brought for the recovery of personal property, or for the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an injury to the person or property. The venue of a personal
action is the place where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the
plaintiff, for which reason the action is considered a transitory one.

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IMPORTANT PEOPLE
BPI Respondents-creditors
Spouses Silverio, Borbon, Xerxes, Facultad Plaintiff (declaration of nullity cases) - debtor

FACTS
Antecedent Facts
1 Spouses Silverio and Zosima Borbon, Spouses Xerxes and Erlinda Facultad, and XM Facultad and Development
Corporation filed a civil case seeking the declaration of the nullity of the promissory notes, real estate and chattel
mortgages and continuing surety agreement they executed in favor of BPI.
7. They further sought damages and attorneys fees, and applied for a temporary restraining order (TRO) or writ of
preliminary injunction to prevent the BPI from foreclosing the mortgaged properties.
8. The complaint alleged:
3.1 they had obtained a loan from the BPI
3.2 they executed promissory notes binding themselves, jointly and severally, to pay the loan
3.3 they had constituted real estate mortgages on several parcels of land in favor of the BPI as security for the
payment of the loan
3.4 they had been made to sign a continuing surety agreement and a chattel mortgage on their Mitsubishi Pajero.
3.5 the amount payable to BPI by virtue of the loan had reached 18M, but theyve been able to pay only P13 Million
because of the Asian economic crisis of 97
JUDICIAL HISTORY
3.6 BPI required them to issue postdated checks to cover the loan under threat of foreclosing on the mortgages thus
forcing them to seek a TRO or a writ of preliminary injunction with RTC Cebu to prevent the threatened foreclosure.
4. BPI filed its answer + Motion to dismiss + counterclaim
4.1 TRO should not be granted because the foreclosure of the mortgages was within its legal right to do.
5. The RTC denied the BPIs motion to dismiss for being unmeritorious, and granted the borrowers application for
preliminary injunction.
6. BPI filed MR. The RTC later denied the petitioners motion for reconsideration.
7. Aggrieved again, BPI filed a petition for certiorari with the CA (Rule 65). However, the CA rendered a decision affirming
the decision of the RTC.
BPI: Complaint should be dismissed for failure to pay correct amount of docket fees as well as failure to file in the
proper venue
CA: BPIs averment of non-payment of the proper docket fee by the borrowers as the plaintiffs in civil case for
declaration of nullity was not substantiated; thus even if the correct docket fee was not in fact paid, the strict application of
the rule thereon could be mitigated in the interest of justice;
Also, such civil case being a personal action, it necessarily follows that it was properly filed in Cebu City where
respondent XM Facultad and Development Corporations principal office was located.
8. BPI filed MR with CA but CA denied it.
9. BPI appealed to SC via rule 65 cert.
ISSUE with HOLDING
1. Dismissal based on improper venue-
Court: The present action is a personal action, not a real one. Being a personal action, it follows that the Civil Case
was properly brought in the RTC in Cebu City, where respondent XM Facultad and Development Corporation, a
principal plaintiff, had its address.
It was a personal action because what they were seeking were the nullification of the promissory notes, continuing
surety agreement, checks and mortgage agreements for being executed against their will and vitiated by irregularities,
not the recovery of the possession or title to the properties burdened by the mortgages. There was no allegation that
the possession of the properties under the mortgages had already been transferred to the petitioner in the meantime.

Personal actions may include those brought for the recovery of personal property, or for the enforcement of some
contract or recovery of damages for its breach, or for the recovery of damages for the commission of an injury to the
person or property

As for real actions, according to Section 1, Rule 4 of the Rules of Court, a real action is one that affects title to or
possession of real property, or an interest therein. Such action is to be commenced and tried in the proper court
having jurisdiction over the area wherein the real property involved, or a portion thereof, is situated, which
explains why the action is also referred to as a local action. In contrast, the Rules of Court declares all other
actions as personal actions.

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 2. Dismissal for improper payment of docket fees
Court: Since this was a personal action, BPIs contention that the filing and docket fees for the complaint should
be based on the assessed values of the mortgaged real does not hold water. Woah, hold water.

3. Was the issuance of the writ of preliminary injunction against the petitioner, its agents and representatives, proper?

BPI: issuance of the writ of preliminary injunction constituted a violation of Administrative Circular (AC) No. 07-99
because it subjected respondent Judge to administrative sanction. To stress, injunction should not issue to enjoin the
prosecution of the criminal offenses because such prosecution was imbued with public interest; and that the petitioner, as
the mortgagee, could not be prohibited from exercising its legal right to foreclose the mortgages because foreclosure of
the mortgages was its proper remedy under the law.

Court: AC No. 07-99 is irrelevant to the case because the civil case did not involve the implementation of
infrastructure projects, or the seizure and forfeiture proceedings by the Bureau of Customs. Thus, the BPIs
position that respondent Judge be held administratively liable for violating AC No. 07-99 was misplaced

HOWEVER, RTCs issuance of the writ of preliminary injunction to enjoin the petitioner from proceeding with the
foreclosure of the mortgages was plainly erroneous and unwarranted because the borrowers themselves had
admitted that they constituted the real estate and chattel mortgages to secure the performance of their loan
obligation to the BPI, and thus showing that they were fully aware of the consequences on their rights in the
properties given as collaterals should the loan secured be unpaid. The foreclosure of the mortgages is the proper
remedy provided by law for the mortgagee to exact payment. In fact, they did not dispute the petitioners allegations that
they had not fully paid their obligation, and that the civil case they had brought (declaration of nullity, fact #1) was precisely
brought by them because they sought to delay the foreclosure.

Thus, the lower court should not have granted the injunction because:

Injunction is proper only when the applicant appears to be entitled to the relief demanded in the complaint, which must
aver the existence of the right and the violation of the right, or whose averments must in the minimum constitute
a prima facie showing of a right to the final relief sought. Accordingly, the conditions for the issuance of the injunctive
writ are: (a) that the right to be protected exists prima facie; (b) that the act sought to be enjoined is violative of that right;
and (c) that there is an urgent and paramount necessity for the writ to prevent serious damage. An injunction will not issue
to protect a right not in esse, or a right which is merely contingent and may never arise; or to restrain an act which does
not give rise to a cause of action; or to prevent the perpetration of an act prohibited by statute. Indeed, a right, to be
protected by injunction, means a right clearly founded on or granted by law or is enforceable as a matter of law.

DISPOSITIVE PORTION
The Court PARTIALLY GRANTS the petition for review on certiorari

DIGESTER: SD

Venue
Go vs UCPB
Chico- Nazario, J.

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Co-owner of mortgaged properties tries to get the real estate mortgage over them cancelled and the properties returned to
him. He tried to argue that it was a personal action, and so the proper venue is where he was residing (Pasig). Court said
no, it was a real action involving title to/interest in property, hence shouldve been filed in a court in the place where the
subject properties were located (Mandaluyong).

DOCTRINE
In a real action, the plaintiff seeks the recovery of real property, or as provided for in Section 1, Rule 4, a real action is an
action affecting title to or possession of real property, or interest therein. These include partition or condemnation of, or
foreclosure of mortgage on, real property. The venue for real actions is the same for regional trial courts and municipal
trial courts -- the court which has territorial jurisdiction over the area where the real property or any part thereof lies.

Personal action is one brought for the recovery of personal property, for the enforcement of some contract or recovery of
damages for its breach, or for the recovery of damages for the commission of an injury to the person or property. The
venue for personal actions is likewise the same for the regional and municipal trial courts -- the court of the place where
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at
the election of the plaintiff, as indicated in Section 2 of Rule 4.

The cancellation of the real estate mortgage, subject of the instant petition, is a real action, considering that a real estate
mortgage is a real right and a real property by itself. An action for cancellation of real estate mortgage is necessarily an
action affecting the title to the property. It is, therefore, a real action which should be commenced and tried in the place
where the subject property lies.

IMPORTANT PEOPLE
Jimmy T. Go petitioner. Co-owner with Alberto Looyuko of Noahs Ark International, Noahs Ark Sugar Carriers, Noahs Ark
Sugar Truckers, Noahs Ark Sugar Repacker, Noahs Ark Sugar Insurers, Noahs Ark Sugar Terminal, Noahs Ark Sugar
Building, and Noahs Ark Sugar Refinery

United Coconut Planters Bank - respondent

FACTS
1 Aug 1996 - The co-owners applied for a n Omnibus credit line with resp UPCB in the amount of P900M.

9. The transaction was secured with Real Estate Mortgages over two parcels of land in Mandaluyong city: one registered
under Looyukos name, the other under Noahs Ark Sugar Refinery.

3. 21 July 1997, the approved Omnibus Line accommodation granted to petitioner was cancelled by UCPB.

4. Jimmy T. Go demanded from UCPB the return of the two TCTs covered by the REMs.. UCPB refused, had them
notarized and registered.

5. 15 June 1999 - UCPB filed with the Office of the Clerk of Court and Ex-Officio Sheriff of Mandaluyong City an
extrajudicial foreclosure of REM covered by TCT 1 (Looyukos) for nonpayment of the obligation secured by said
mortgage. The public auction sale of the mortgaged property was set on 11 April 2000 and 03 May 2000.

6. Jimmy T. Go filed a complaint for Cancellation of Real Estate Mortgage and damages, with prayer for temporary
restraining order and/or writ of preliminary injunction, against respondent bank and its officers, along with Ex-Officio
Sheriff Lydia G. San Juan and Sheriff IV Helder A. Dyangco, at the Regional Trial Court of Pasig City, Branch 266.

- this complaint was afterwards amended to include the following information: Jimmy T. Go was the co-owner of the
property under TCT 1, even though it was registered only under Looyukos name. The bank was aware of this, had him
sign the REM. Also, the omnibus credit line accommodation they applied for never materialized and was cancelled by
UCPB. He demanded the return of the TCTs, but theUCPB refused. He prayed that the auction sale be enjoined, the
mortgages be cancelled and the TCTs returned to him, along with damages and attys fees.

7. MTD
- filed by UCPB, rather than Answer

10
- grounds: 1) that the court has no jurisdiction over the case due to nonpayment of the proper filing and docket fees; 2)
that the complaint was filed in the wrong venue; 3) an indispensable party/real party in interest was not impleaded and,
therefore, the complaint states no cause of action; 4) that the complaint was improperly verified; and 5) that petitioner is
guilty of forum shopping and submitted an insufficient and false certification of non-forum shopping.
8. RTC Order: granted the WPI, auction sales enjoined.

9. RTC Order: denied UCPBs MTD. MR also denied.

10. UCPB filed Petition for Certiorari with the CA.

11. CA Decision:
- set aside RTC orders, ordered complaint be dismissed on ground of improper venue.
- dismissed pets MR.

12. Hence, petition for certiorari with SC.

ISSUE with HOLDING

16 June 2003, the Court gave due course to the petition, and required[19] the parties to file their respective memoranda.
Respondents filed their Joint Memorandum on 27 August 2003, while petitioner filed his on 25 September 2003 upon prior
leave of court for extension. With leave of this Court, private respondents filed their reply to petitioners memorandum.

1. MAIN ISSUE: the issue to be resolved in this case is whether petitioners complaint for cancellation of real estate
mortgage is a personal or real action for the purpose of determining venue

SC: Its a real action. Dismissal based on ground of improper venue was proper.

In a real action, the plaintiff seeks the recovery of real property, or as provided for in Section 1, Rule 4, a real action is
an action affecting title to or possession of real property, or interest therein. These include partition or condemnation
of, or foreclosure of mortgage on, real property. The venue for real actions is the same for regional trial courts and
municipal trial courts -- the court which has territorial jurisdiction over the area where the real property or any part
thereof lies.

Personal action is one brought for the recovery of personal property, for the enforcement of some contract or recovery
of damages for its breach, or for the recovery of damages for the commission of an injury to the person or property.
The venue for personal actions is likewise the same for the regional and municipal trial courts -- the court of the place
where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants
resides, at the election of the plaintiff, as indicated in Section 2 of Rule 4

Controlling factor in determining venue: the primary objective for which said cases are filed.

In this case: petitioner argued that its a case of cancellation of mortgage contract is a personal action. SC held that
no, the case he was citing (Francisco Hernandez vs Rural Bank of Lucena) did not involve titles to the mortgaged lots
since they hadnt been foreclosed yet. Here, he was trying to recover the foreclosed properties from the bank. The
prime objective is to recover said real properties.

Also, the ruling in Hernandez does not apply where the mortgaged property had already been foreclosed. (stated in
Carandang. See notes) Here, UCPB had already initiated extrajudicial foreclosure proceedings, and were it not for the
timely issuance of a restraining order secured by petitioner Go in the lower court, the same would have already been sold
at a public auction.

In a relatively recent case, Asset Privatization Trust v. Court of Appeals, it was succinctly stated that the prayer for the
nullification of the mortgage is a prayer affecting real property, hence, is a real action.

In sum, the cancellation of the real estate mortgage, subject of the instant petition, is a real action, considering
that a real estate mortgage is a real right and a real property by itself. An action for cancellation of real estate
mortgage is necessarily an action affecting the title to the property. It is, therefore, a real action which should be
commenced and tried in Mandaluyong City, the place where the subject property lies.

11
DISPOSITIVE PORTION
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision dated 31 July 2002 and the Order
dated 14 November 2002 denying the motion for reconsideration are hereby AFFIRMED. With costs.

SO ORDERED.

OTHER NOTES
Other examples given by the SC:
It is quite clear then that the controlling factor in determining venue for cases of the above nature is the primary objective
for which said cases are filed. Thus:

1. In Commodities Storage & Ice Plant Corp. v. Court of Appeals,[24] this Court ruled that an action to redeem by the
mortgage debtor affects his title to the foreclosed property. If the action is seasonably made, it seeks to erase from the title
of the judgment or mortgage debtor the lien created by registration of the mortgage and sale. If not made seasonably, it
may seek to recover ownership to the land since the purchasers inchoate title to the property becomes consolidated after
[the] expiration of the redemption period. Either way, redemption involves the title to the foreclosed property. It is a real
action.

2. In Fortune Motors, (Phils.), Inc., v. Court of Appeals,[25] this Court quoting the decision of the Court of Appeals ruled
that since an extrajudicial foreclosure of real property results in a conveyance of the title of the property sold to the highest
bidder at the sale, an action to annul the foreclosure sale is necessarily an action affecting the title of the property sold. It
is therefore a real action which should be commenced and tried in the province where the property or part thereof lies.

3. In Punsalan, Jr. v. Vda. de Lacsamana,[26] this court ruled that while it is true that petitioner does not directly seek
the recovery . . . of the property in question, his action for annulment of sale and his claim for damages are closely
intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the
recovery of which is petitioners primary objective. The prevalent doctrine is that an action for the annulment or rescission
of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is
to recover said real property. It is a real action. Respondent Court, therefore, did not err in dismissing the case on the
ground of improper venue which was timely raised.

4. In Ruiz v. J. M. Tuason Co., Inc., et al.,[27] the court ruled that although [a] complaint is entitled to be one for specific
performance, yet the fact that [complainant] asked that a deed of sale of a parcel of land . . . be issued in his favor and
that a transfer certificate of title covering said land be issued to him, shows that the primary objective and nature of the
action is to recover the parcel of land itself because to execute in favor of complainant the conveyance requested there is
need to make a finding that he is the owner of the land which in the last analysis resolves itself into an issue of ownership.
Hence, the action must be commenced in the province where the property is situated . . . ."

5. In Dr. Antonio A. Lizares, Inc. v. Hon. Hermogenes Caluag,[28] this Court ruled that an action praying that defendant
be ordered `to accept the payment being made by plaintiff for the lot which the latter contracted to buy on installment basis
from the former, to pay plaintiff compensatory damages and attorneys fees and to enjoin defendant and his agents from
repossessing the lot in question, is one that affects title to the land under Section 3 of Rule 5, of the Rules of Court, and
shall be commenced and tried in the province where the property or any part thereof lies, because, although the
immediate remedy is to compel the defendant to accept the tender of payment allegedly made, it is obvious that this relief
is merely the first step to establish plaintiffs title to [the] real property.

6. In Land Tenure Administration, et al. v. The Honorable Higinio B. Macadaeg and Alejandro T. Lim,[29] this Court
ruled that where the lessee seeks to establish an interest in an hacienda that runs with the land and one that must be
respected by the purchaser of the land even if the latter is not a party to the original lease contract, the question of
whether or not the standing crop is immovable property become[s] irrelevant, for venue is determined by the nature of the
principal claim. Since the lessee is primarily interested in establishing his right to recover possession of the land for the
purpose of enabling him to gather his share of the crops, his action is real and must be brought in the locality where the
land is situated.

7. In Espineli & Mojica v. Hon. Santiago and Vda. de Ramirez,[30] the court ruled that although the main relief sought
in the case at bar was the delivery of the certificate of title, said relief, in turn, entirely depended upon who, between the
parties, has a better right to the lot in question. As it is not possible for the court to decide the main relief, without passing

12
upon the claim of the parties with respect to the title to and possession of the lot in question, the claim shall be determined
x x x in the province where [the] said property or any part thereof lies.

The case of Carandang v. Court of Appeals,[31] is more particularly instructive. There, we held that an action for
nullification of the mortgage documents and foreclosure of the mortgaged property is a real action that affects the title to
the property. Thus, venue of the real action is before the court having jurisdiction over the territory in which the property
lies, which is the Court of First Instance of Laguna.

DIGESTER: Insert name.

VIII. Venue of Actions: Personal action vs Real Action

G.R. No. 76431 October 16, 1989
Fortune Motors Phils vs Metrobank
PARAS, J.

A company obtained loans from a bank, secured by a real estate mortgage on their property located in Makati. They failed
to pay when the debt became due, and so the bank foreclosed the mortgaged property and sold it. The company filed a
complaint in the RTC of Manila to annul the sale but the bank opposed it saying that the proper venue should have been
the RTC of Makati, as the property is located in Makati. The company replied that it was a personal action and not a real
action and so the venue was proper but the Court ultimately held that this was still considered a real action and thus the
proper venue is Makati.

DOCTRINE
In a real action:
a. The plaintiff seeks the recovery of real property. It is an action affecting title to real property or for the recovery
of possession or for the partition or condemnation or foreclosure of a mortgage on real property.
b. These actions must be constituted in the CFI of the province where the property or any part thereof lies.
In a personal action:
c. the plaintiff seeks the recovery of personal property, enforcement of a contract or the recovery of damages.
d. These may be instituted:
i. In the CFI where the defendant or any of the defendants resides or may be found; or
ii. Where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.

FACTS
1. Fortune Motors availed of various loans from Metro Bank which were secured by a real estate mortgage on the
Fortune building and lot in Makati, Rizal.
2. Fortune Motors was not able to pay the loan which became due, and so the bank initiated extrajudicial foreclosure
proceedings.
a. The mortgaged property was sold at a public auction.
3. Fortune Motors then filed a complaint for annulment of the extrajudicial foreclosure sale in the RTC of Manila.
They alleged that:
a. The foreclosure was premature because the obligation was not yet due
b. Other defects in the procedure of the sale.
4. The Bank filed a motion to dismiss on the ground that the venue of the action was improperly laid in Manila as the
property is situated in Makati.
a. Therefore the action to annul should be filed in the RTC of Makati.
5. Fortune Motors replied that its action is a personal action and that the issue is the validity of the extrajudicial
foreclosure proceedings so that it may have a new one year period to redeem.
6. The lower court decided not to rule on the Banks motion to dismiss until after trial on the merits as the grounds raised
were not clear and indubitable.
7. The Bank filed a petition for certiorari with the CA.
8. CA granted the certiorari and dismissed Fortunes petition for the annulment of the extrajudicial foreclosure sale.
9. Hence, this petition for review on certiorari.

13
ISSUE with HOLDING
2. WoN the action for annulment of the extrajudicial foreclosure sale of Fortune Building is a personal action or a real
action for venue purposes. Real action.
a. In a real action:
i. The plaintiff seeks the recovery of real property. It is an action affecting title to real property or for the
recovery of possession or for the partition or condemnation or foreclosure of a mortgage on real
property.
ii. These actions must be constituted in the CFI of the province where the property or any part thereof
lies.
b. In a personal action:
i. the plaintiff seeks the recovery of personal property, enforcement of a contract or the recovery of
damages.
ii. These may be instituted:
1. In the CFI where the defendant or any of the defendants resides or may be found; or
2. Where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.
c. In this case, while it is true that Fortune Motors does not directly seek the recovery of title or possession of the
property, the action for annulment of sale and the claim for damages are closely intertwined with the issue of
ownership of the building (which is considered immovable property).
d. In short, Fortunes main objective is still the recovery of the real property.
e. Thus, it is still considered a real action and the proper venue should be where the property is located, i.e.
Makati.

DISPOSITIVE PORTION
PREMISES CONSIDERED, the instant petition is DENIED for lack of merit and the assailed decision of the respondent
Court of Appeals is AFFIRMED.

OTHER NOTES

DIGESTER: Xave Libardo

MISSING DIGEST: ANG VS SPS. ANG

VIII. Venue of Actions: Stipulation of parties on venue of action

G.R. No. 173979 Auction in Malinta, Inc. vs. Warren Embes Luyaben
Ynares-Santiago

Auction in Malinta (petitioner) conducted an auction for a wheel loader. Luyaben (respondent) was declared as the highest
bidder for it. With this auction is a Bidding Agreement that says any litigation must be filed in the Courts of Valenzuela (w/c
is where Auction does its business). Auction couldnt produce said item anymore, so Luyaben filed a complaint for
damages, but he filed it before the RTC Kalinga (where he lives). This then gave rise to the controversy at hand as to the
proper venueValenzuela or Kalinga? The SC ruled in favor of Luyaben, saying that the venue was properly laid in RTC
Kalinga because the said Bidding Agreement did not contain QUALIFYING words. Meaning, it did not expressly and
specifically preclude the parties form filing the case elsewhere. In essence, it merely provided an option as to where to file
a case.

14
DOCTRINE
The mere stipulation on the venue of an action is NOT ENOUGH to preclude parties from bringing a case in other venues.
It must be shown that such stipulation is exclusive. In the absence of qualifying or restrictive words the stipulation should
be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place. Absent qualifying
or restrictive words, the venue shall either be that stated in the law or rule governing the action or the one agreed in the
contract.

General Rule on Venue: Sec. 2, Rule 4, RoC

Exception: Prior agreement between parties as to the exclusive venue
Exception to the exception: When the stipulation lacks qualifying words

IMPORTANT PEOPLE
Petitioner: Auction in Malinta, Inc. (Auction);engaged in public auction of heavy equipment, trucks, and assorted
machineries
Respondent: Warren Embes Luyaben (Luyaben)

Mode: Rule 45; Petition for Review on Certiorari the Decision of the CA
Flow:
i. RTC: Dismissed the complaint of Warren Embes Lubayen in a civil case on the ground of improper venue
ii. CA: Reversed the RTCs Resolution and held that venue was properly laid before the RTC Kalinga
iii. SC: Dismissed the petition of Auction, affirming CAs Resolution.

FACTS
1. RTC, KALINGA Luyaben (resident of Kalinga) filed a Complaint for damages against petitioner Auction (a corp. w/
business address at Malinta, Valenzuela City).
I. Lubayens ALLEGATIONS:
a. In an auction conducted by pet. Auction, he was declared the highest bidder for a wheel loader
b. He tendered payment for said item but Auction could no longer produce the loader.
c. Auction offered to replace it but failed to deliver the same up to the time of the filing of the
complaint
d. Hence, he instituted this case to recover actual, moral, and exemplary damages plus atty.s fees
II. MTD: Auction filed a motion to dismiss
GROUND: Improper venue
ARGUMENT: The correct venue is the RTC of Valenzuela pursuant to the stipulation in the
Bidders Application and Registration Bidding Agreement w/c states that: All court litigation
procedures shall be conducted in the appropriate Court of Valenzuela City, Metro Manila.
I. RESOLUTION: DISMISSED.
HELD: The clear intention of the parties was to limit the venue to the proper court of
Valenzuela

2. CA Luyaben appealed to the Court of Appeals

I. RESOLUTION: RTCs Resolution dismissing the complaint is REVERSED and SET ASIDE
I. MR: Auction filed a Motion for Reconsideration. It was DENIED.
3. SC - So Auction filed a Petition for Review on Certiorari under Rule 45 to assail the Decision of the CA

ISSUE with HOLDING: W/N the stipulation in the parties Bidders Application and Registration Bidding Agreement
effectively limited the venue of the instant case exclusively to the proper court of Valenzuela City. NO.

15
1. Gen. Rule and Exception: Gen. Rule on the venue of personal actions (as in this case for damages) is embodied in
Sec. 2, Rule 41. But this rule doesnt apply where the parties, before the filing of the action, have validly agreed in
writing on an exclusive venue.
1. Qualifier: BUT the mere stipulation on the venue of an action is NOT ENOUGH to preclude parties from bringing a
case in other venues. It must be shown that such stipulation is exclusive. In the absence of qualifying or restrictive
words the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the
specified place. (Examples: exclusively, waiving for this purpose any other venue, to the exclusion of the other
courts)
2. Jurisprudence: This has been the rule since the 1969 case of Polytrade Corporation v. Blanco2.
3. Not restrictive In this case, the stipulation in the parties agreement evidently lacks the restrictive and qualifying
words that will limit venue exclusively to the RTC of Valenzuela City.
i. Hence, the Valenzuela courts should only be considered as an additional choice of venue to those
mentioned under Sec. 2, Rule 4.
ii. Based on this ruling, here are Luyabens OPTIONS where he may file his complaint for damages:
a. RTC Valenzuela as stipulated in the bidding agreement;
b. RTC Kalinga w/c has jurisdiction over his (respondent Luyabens) residence; or
c. RTC Valenzuela w/c has jurisdiction over the business address of petitioner Auction
i Luyabens filing of his complaint before the Kalinga RTC is therefore PROPER.
5. Obsolete In its MTD, Auction cited the case of Hoechst Philippines, Inc. v. Torres (1978). Notably, this case has
already been superseded by current decisions on venue.
4. Proper Venue In sum, we find that the CA correctly declared that venue in the instant case was properly laid w/ the
RTC of Bulanao, Tabuk, Kalinga.

DISPOSITIVE PORTION
WHEREFORE, the petition is DENIED. The Decision of the CA w/c reversed the Resolution of the RTC of Kalinga;
reinstated the complaint; and remanded the case to the said court, is AFFIRMED.

DIGESTER: Viveka

Venue Stipulation Restrictive

G.R. No. 179018 Paglaum v. Union Bank
Sereno, J.

Paglaum secured a credit line with the respondent bank, secured with a REM with stipulation of the venue of the suits
being in Makati or Cebu or where the properties are located. When the Asian financial crisis hit them, they restructured the
agreement and conferred exclusive venue of suits in Makati. Union Bank foreclosed the mortgage, prompting the
petitioner to file a case for annulment of the foreclosure sale and titles. The bank moved to dismiss on the ground of

1 Sec. 2 Venue of personal actions. All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant
or any of the principal defendants resides, or in the case of nonresident defendant, where he may be found, at the election of the plaintiff.

2 It was held therein that the clause [t]he parties agree to sue and be sued in the Courts of Manila, does not preclude the filing of suits in the court which has
jurisdiction over the place of residence of the plaintiff or the defendant. The plain meaning of the said provision is that the parties merely consented to be sued
in Manila considering that there are no qualifying or restrictive words which would indicate that Manila, and Manila alone, is the agreed venue. It simply is permissive
and the parties did not waive their right to pursue remedy in the courts specifically mentioned in Section 2 of Rule 4 of the Rules of Court

16
improper venue, and was sustained up to the CA, but the SC reversed saying that venue was exclusively lodged in Makati
and was properly filed.

DOCTRINE
The general rules on venue of actions shall not apply where the parties, before the filing of the action, have validly agreed
in writing on an exclusive venue. The mere stipulation on the venue of an action, however, is not enough to preclude
parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In the
absence of qualifying or restrictive words, the stipulation should be deemed as merely an agreement on an additional
forum, not as limiting venue to the specified place.

FACTS
1 Petitioner Paglaum is the registered owner of three parcels of land located in the Province of Cebu, and are co-owned
by Benjamin B. Dy, the president of petitioner Health Marketing Technologies, Inc. (HealthTech), and his mother and
siblings.
10. Respondent Union Bank extended HealthTech a credit line in the amount of P 10,000,000.
a. To secure this obligation, PAGLAUM executed three Real Estate Mortgages on behalf of HealthTech and in
favor of Union Bank.
b. The Real Estate Mortgage, on the provision regarding the venue of all suits and actions arising out of or in
connection therewith, originally stipulated that they shall be in either in Makati or in the place where any of the
mortgaged properties is located, at the absolute option of the mortgagee.
i. However, under the two Real Estate Mortgages dated 11 February 1994, the version appeared to be
that the venue would be in Cebu City, Metro Manila or in the place where any of the mortgaged
properties is located, at the absolute option of the Mortgagee.
ii. The same provision in the Real Estate Mortgage dated 22 April 1998 contains that the venue of all
suits and actions arising out of or in connection with the mortgage shall be in _________ or in the
place where any of the mortgaged properties is located, at the absolute option of the Mortgagee.
1. The total amount of debt eventually reached P 36,500,000.
a. According to HealthTech, the 1997 Asian financial crisis adversely affected its business and caused it difficulty
in meeting its obligations with Union Bank.
2. Both parties entered into a Restructuring Agreement, which states that any action or proceeding arising out
of or in connection therewith shall be commenced in Makati City, with both parties waiving any other venue.
a. Despite the Restructuring Agreement, HealthTech failed to pay its obligation, prompting Union Bank to send a
demand letter stating that the latter would be constrained to institute foreclosure proceedings, unless
HealthTech settled its account in full.
11. Since HealthTech defaulted on its payment, Union Bank extra-judicially foreclosed the mortgaged properties.
The bank, as the sole bidder in the auction sale, was then issued a Certificate of Sale, and thereafter, it filed a Petition
for Consolidation of Title.
12. HealthTech filed a Complaint for Annulment of Sale and Titles with Damages and Application for TRO and Writ of
Injunction with the RTC Makati City, Br. 134, praying for:
c. The issuance of a TRO, and later a WPI, directing Union Bank to refrain from exercising acts of ownership
over the foreclosed properties;
d. The annulment of the extra-judicial foreclosure of real properties;
e. The cancellation of the registration of the Certificates of Sale and the resulting titles issued;
f. The reinstatement of PAGLAUMs ownership over the subject properties; and
g. The payment of damages.
13. Union Bank filed a Motion to Dismiss on the following grounds: (a) lack of jurisdiction over the issuance of the
injunctive relief; (b) improper venue; and (c) lack of authority of the person who signed the Complaint.
14. The RTC granted this motion, resulting in the dismissal of the case, as well as the dissolution of WPI. It likewise
denied the subsequent Motion for Reconsideration filed by PAGLAUM and HealthTech.
15. PAGLAUM and HealthTech elevated the case to the CA, which affirmed the order of dismissal and denied the Motion
for Reconsideration.
17
 Arguments before the SC

Petitioner Respondent

The Restructuring Agreement governs the choice of venue The Restructuring Agreement is applicable only to the
between the parties contract of loan, and not to the Real Estate Mortgage

The agreement on the choice of venue must be interpreted The mortgage contracts explicitly state that the choice of
with the convenience of the parties in mind and the view venue exclusively belongs to it.
that any obscurity therein was caused by Union Bank.

ISSUE with HOLDING

Whether Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage Yes, the
stipulation in the Restructuring Agreement was strictly exclusive in conferring venue in Makati. Even if the
restructuring agreement would not be the basis, the real estate mortgages executed were not exclusive in
conferring venue to Cebu, thus could be validly filed in Makati.

- While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his
action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of
the building which, under the law, is considered immovable property, the recovery of which is petitioners
primary objective. It is a real action.
- The mere stipulation on the venue of an action, however, is not enough to preclude parties from bringing a case in
other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or
restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting
venue to the specified place.
- Real actions shall be commenced and tried in the court that has jurisdiction over the area where the property is
situated. In this case, all the mortgaged properties are located in the Province of Cebu. Thus, following the general
rule, PAGLAUM and HealthTech should have filed their case in Cebu, and not in Makati.
o Real actions can also be commenced and tried in a court other than where the property is situated in
instances where the parties have previously and validly agreed in writing on the exclusive venue thereof. In
the case at bar, the parties claim that such an agreement exists.
- The provisions of the Real Estate Mortgages and the later Restructuring Agreement clearly reveal the intention of the
parties to implement a restrictive venue stipulation, which applies not only to the principal obligation, but also to the
mortgages.
o The phrase "waiving any other venue" plainly shows that the choice of Makati City as the venue for actions
arising out of or in connection with the Restructuring Agreement and the Collateral, with the Real Estate
Mortgages being explicitly defined as such, is exclusive.
- Even if this Court were to consider the venue stipulations under the Real Estate Mortgages, those provisions did not
contain words showing exclusivity or restrictiveness.
o The Real Estate Mortgages, parties hereto waiving" from the entire phrase "the parties hereto waiving any
other venue" was stricken from the final executed contract.
o In the absence of qualifying or restrictive words, the venue stipulation should only be deemed as an
agreement on an additional forum, and not as a restriction on a specified place.
- Considering that Makati City was agreed upon by the parties to be the venue for all actions arising out of or in
connection with the loan obligation incurred by HealthTech, as well as the Real Estate Mortgages executed by
PAGLAUM, the CA committed reversible error in affirming the dismissal on the ground of improper venue.

DISPOSITIVE PORTION

18
 WHEREFORE, the Petition for Review is GRANTED. The Decision dated 31 May 2007 and Resolution dated 24
July 2007 in CA-G.R. CV No. 82053 of the Court of Appeals, as well as the Orders dated 11 March 2003 and 19
September 2003 issued by the Regional Trial Court, Makati City, Branch 134, are REVERSED and SET ASIDE.
The Complaint in Civil Case No. 01-1567 is hereby REINSTATED.

DIGESTER: Francis Eldon G. Mabutin

Venue
133240 Rudolf Lietz Holdings Inc, v Registry of Deeds
Ynares Santiago

The petitioner wanted to change its name so it filed for an amendment with the SEC, which granted such change.
However, this necessitated the transferring of titles of various parcels of property. There was confusion as to the venue of
the lots and where the petition should be filed. But the RTC dismissed the case on the ground of improper venue. The SC
ruled that the RTC erred in dismissing the complaint as the lower court confused jurisdiction with venue.

DOCTRINE
The motu proprio dismissal of a complaint by the RTC on the ground of improper venue is plain error. Where the
defendant fails to object to the venue in a MTD, the venue cannot be truly said to have been improperly laid. While the
venue may be technically wrong, it may still be acceptable to the parties for whose convenience the rules on venue had
been devised.

IMPORTANT PEOPLE
Rudolf Lietz (petitioner), Registry of Deeds Paranaque (respondent)

FACTS
1 Rudolf Leitz Inc ameneded its Articles of Incorporation to change its name to Rudolf Lietz Holdings, Inc. The SEC
eventually approved the amendment. As a consequence of changing its name, the petitioner sought the amendment
of the transfer certificates of title over real properties owned by the said corporation, all of which were under the old
name.
16. Thus, they filed a case with the RTC of Paranaque. The petition also impleaded the Registry of Deeds of Pasay
because the Registry of Pasay issued all the titles sought to be amended. Inadvertently, the petitioner alleged in the
body that the lands covered by the titles are located in Pasay.
17. Subsequently, the petitioner learned that the titles are in the custody of the Register of Deeds of Paranaque. And
eventually, it filed an ex-parte motion to admit an amended petition alleging that the lands are located in Paranaque.
18. The RTC dismissed the petition on the ground of improper venue it appearing that the respondent is the Registry of
Deeds of Pasay and the properties are located in Pasay. But before the counsel for the petitioners could receive an
original copy of the order of dismissal, he filed w/ the lower court an MR, which was also denied.
19. Hence, this Rule 45 petition arguing that the RTC erred in dismissing the initiatory pleading for improper venue.

ISSUE with HOLDING

1. W/N the court motu proprio dismiss a complaint on the ground of improper venue NO
a. A distinction between jurisdiction and venue must be made. Only law confers jurisdiction over the subject
matter or nature of an action. It may not be conferred by consent or waiver upon a court, which otherwise
would have no jurisdiction over the subject matter of an action.
b. Venue on the other hand, may be changed by the consent of the parties and an objection on improper venue
may be waived by the failure of the defendant to raise it at the proper time. In such an event, the court may
still render a valid judgment. Venue is procedural, not jurisdictional and hence may be waived. Its purpose is
to provide convenience.
19
 c. Dacoycoy v IAC held that the motu proprio dismissal of a complaint by the RTC on the ground of improper
venue is plain error. Where the defendant fails to object to the venue in a MTD, the venue cannot be truly said
to have been improperly laid. While the venue may be technically wrong, it may still be acceptable to the
parties for whose convenience the rules on venue had been devised.
d. The court cant pre-empt the defendants prerogative to object to the improper laying of the venue. Rule 9,
Sec 1 of the RoC states that defenses and objections not pleaded in an MTD or in the answer are deemed
waived. Further, the court may only dismiss an action motu priprio in case of lack of jurisdiction over the
subject matter, litis pendentia, res judicata, and prescription.
e. In the case at bar, the petitioner correctly invoked the power of the RTC to hear cases regarding amendment
of titles the power was conferred by Sec 2 PD1529. Sec 8 PD 1529 also states that jurisdiction over
amendments is vested with the RTC.
f. Furthermore, the petitioner correctly filed the petition in the place where the lands are situated pursuant to
Rule 4 Sec 1 of the RoC, which provides that actions affecting title to or possession of real property, or
interest therein, shall be commenced and tried in the proper court, which has jurisdiction over the area
wherein the real property involved, or a portion thereof is situated.
g. The trial court should have at least allowed the petitioner to amend its petition allowed to do so as a matter
of right any time before a responsive pleading is served or if there was a reply already, at any time within 10
days after it is served.

DISPOSITIVE PORTION
Petition granted.

DIGESTER: Gab.

Formal requirements of pleadings Who can sign pleadings

G.R. No. 152579 (2009) Sameer Overseas Placement Agency, Inc. v. Santos, et al.
Nachura, J.

Private respondents, who previously worked for Ensure Company, filed a case against petitioner, their agency, for illegal
dismissal, underpayment of salaries, and unauthorized salary deductions. Petitioner Sameer then filed a third party
complaint against private respondent ABST, claiming that Sameers accreditation with Ensure had been transferred to
ASBT. When the case reached the CA, the court ruled in favor of ASBT. Sameer is thus assailing this decision, claiming
that the pleadings filed by ASBT with the CA were signed by someone not a member of the bar, and should thus be
considered unsigned. The Court found this contention without merit, holding that the Rules state that pleadings may be
signed not just by counsel, but by the party itself.

DOCTRINE
The Rules allow pleadings to be signed by either the party to the case or the counsel representing that party.

IMPORTANT PEOPLE
Sameer Overseas Placement Agency, Inc. petitioner
Mildred Santos, in her official capacity as President of ASBT International Management Servince, Inc. private
respondent
Lord Nelson Santos, Danilo Balcita, Nicson Cruz, Pepito Manglicmot, Allan Aranes respondents

FACTS
1 Respondents Santos, Balcita, Cruz, Manglicmot, and Aranes (Santos, et al.) were recruited by petitioner Sameer
Oversease Placement Agency, Inc. (Sameer) as aluminum products manufacturer operators for Ensure Company Ltd.
Of Taiwan (Ensure).
20
20. Santos, et al. were deployed to work for Ensure, but were later repatriated before the expiration of their contracts.
21. Santos, et al. thus filed complaints against Sameer before the NLRC for illegal dismissal, underpayment of
salaries, and unauthorized salary deductions.
22. Sameer filed a third party complaint against private respondent ASBT International Management Service
(ASBT), claiming that the latter should be liable for all the contractual obligations of Ensure, since Sameers
accreditation was already transferred to ASBT.
23. The LA rendered a decision finding Sameer liable for the money claims of Santos, et al. Sameer thus appealed to the
NLRC, alleging that the LA committed grave abuse of discretion in failing to decide the third party complaint.
24. The NLRC rendered a decision absolving Sameer of its liabilities, and finding ASBT liable. ASBT moved for
reconsideration, but this was denied.
25. ASBT elevated the case to the CA (Rule 65); however, the CA dismissed ASBTs petition on the ground that the
attached Verification and Certification of Non-Forum Shopping was signed by Mildred Santos as President of ASBT
without any proof of authority to sign for and bind ASBT in the proceedings. ( Note here that the petition was signed
by Mildred Santos, as corporate president.)
26. ASBT filed an MR (again signed by M. Santos), submitting the necessary board resolution authorizing M. Santos to
represent ASBT. The appellate court granted the motion and reinstated the petition.
27. The CA ruled in favor of ASBT, again making Sameer liable for respondents claims.
Basis of ruling:
Sameer admitted that it hired and deployed Santos, et al.
Sameer received the placement fees without showing that said fees inured to the benefit of ASBT
Santos, et al. were repatriated prior to the supposed transfer of Sameers accreditation to ASBT
POEA letter pronouncing the transfer of accreditation of Yuan Fu Co (argued to be the same entity as Ensure) to
ASBT, without substantial proof that Ensure changed its business name to Yuan Fu.
1 Sameer moved for reconsideration, but it was denied; hence, this petition.

ISSUE with HOLDING

1. W/N the pleadings before the CA, having been signed by Mildred Santos, should be considered unsigned and
thus produce no legal effect NO
Sameer: The petition and the MR filed by ASBT before the CA were signed by Mildred Santos, as corporate
president, who is not a member of the Bar. Sameer contends that this is a violation of Sec. 3, Rule 7 of the Rules
of Civil Procedure, which would mean that the pleadings should be considered unsigned and should produce no
legal effect.
Court:
o Sec. 3, Rule 7 of the Rules of Civil Procedure:
SEC. 3. Signature and address. Every pleading must be signed by the party or counsel representing
him, stating in either case his address which should not be a post office box.

The signature of counsel constitutes a certificate by him that he has read the pleading; that to the best
of his knowledge, information, and belief there is good ground to support it; and that it is not interposed
for delay.

An unsigned pleading produces no legal effect. However, the court ay, in its discretion, allow such
deficiency to be remedied if it shall appear that the same was due to mere inadvertence and not
intended for delay. Counsel who deliberately files an unsigned pleading, or signs a pleading in violation
of this Rule, or alleges scandalous or indecent matter therein, or fails to promptly report to the court a
change of his address, shall be subject to appropriate disciplinary action. (Emphasis supplied.)
o The rule allows the pleadings to be signed by either the party to the case or the counsel
representing that party. In this case, ASBT, petitioner, opted to sign its petitions and its MR in its own
behalf, through its president Mildred Santos, who was duly authorized by ASBTs Board of Directors to
represent the Company. The pleadings, therefore, cannot be considered unsigned and without any legal
effect.

2. W/N ASBT violated the prohibition against forum shopping NO

Sameer: ASBT violated the prohibition against forum shopping, as the transfer of the petition from the Seventh
Division of the CA which initially denied due course and dismissed the petition then reinstated the same in the
former Fourth Division. The grant of ASBTs MR by the Seventh Division, which reinstated the petition, gave rise
to a new petition.

21
 Court:
o Forum shopping is defined as an act of a party, against whom an adverse judgment or order has been
rendered in one forum, of seeking and possibly getting a favorable opinion in another forum, other than by
appeal or special civil action for certiorari. It may also be the institution of two or more actions or proceedings
grounded on the same cause on the supposition that one or the other court would make a favorable
disposition.
o Elements of litis pendentia: (a) identity of parties; (b) identity of rights and relief founded on the same facts; (c)
identity of the two preceding particulars in such that any judgment rendered in the pending case would
amount to res judicata.
o In this case, there is no forum shopping because the reconsideration filed by M. Santos was just a motion for
reconsideration. It was not a new petition. Also, the Seventh and Fourth division cannot be considered
different for a within the ambit of the prohibition. They are mere divisions of one and the same CA. In addition,
there was really only one petition before the Seventh and the Fourth Division. It was the Fourth Division which
promulgated the decision on the petition reinstated by the Seventh Division because of internal
reorganization.

DISPOSITIVE PORTION
WHEREFORE, the petition is DENIED for lack of merit. The assailed December 10, 2001 Decision and the March 12,
2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner. SO ORDERED.

DIGESTER: Alyssa Mateo

Can a court grant relief different from what was prayed for?
G.R. No. 167291 Prince Transport v. Garcia
Peralta, J.

The petitioner company is assailing the decision of the CA which ruled for the reinstatement of the employees
because it was not a relief prayed for by the respondents in their complaint. The SC affirmed the decision of
the CA, ruling that even without the prayer for a specific remedy, proper relief may be granted by the court if
the facts alleged in the complaint and the evidence introduced so warrant.

DOCTRINE

Even without the prayer for a specific remedy, proper relief may be granted by the court if the facts alleged in
the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable
and just in the premises justifies the grant of a relief not otherwise specifically prayed for. In the instant case,
aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such
reliefs which are deemed just and equitable.

FACTS
1. Respondents were employees of Prince Transport Inc. (PTI), a company engaged in the business of
transporting passengers by land.
a. They were hired either as drivers, mechanics or inspectors except for respondent Garcia who was
an Operations Manager

22
2. When their commissions were reduced the respondents and other PTI employees conducted meetings
to discuss the protection of their interests as employees.
3. Petitioner Renato Claros the President of PTI suspected that the respondents are about to form a
union, telling Garcia of his displeasure.
4. When a dispute arose the respondents finally formed a union, leading for PTI to cause the transfer of all
union members to one of its sub-companies (Lubas Transport)
5. This led to the filing of various complaints by the respondents to the LA, charging PTI with illegal dismissal,
unfair labor practice and illegal deductions.
a. Petitioners, on the other hand, denied the allegations, stating that the respondents all transferred at
their own request and that they were their employees.
6. The LA ruled for the respondents declaring that the complainants were illegally dismissed. However, it
ruled that Lubas was the respondents employer and that it is a separate entity from PTI.
7. The respondents filed a partial appeal with the NLRC praying for PTI to be held equally liable.
8. The NLRC modified the decision (but with regard to the pertinent topics, it remained the same). The NLRC
also denied the MR.
9. Thus, the respondents then filed a special civil action for certiorari with the CA.
10. The CA granted the petition, ruling that the petitioners are guilty of unfair labor practice, that Lubas is a
mere instrumentality of PTI, and that petitioners act of transferring respondents employment to Lubas is
indicative of their intent to frustrate the efforts of respondents to organize themselves into a union.
a. Thus, it ordered the respondents to reinstate the petitioners to their former positions without
loss of seniority rights and with full backwages.
11. Hence, this petition for review on certiorari under Rule 45.

ISSUE with HOLDING

1. MAIN ISSUE: WON courts can grant reliefs different from what was prayed for? YES.
a. PTI avers that the CA erred and committed grave abuse of discretion when it ordered petitioners to
reinstate respondents to their former positions, considering that the issue of reinstatement was never
brought up before it and respondents never questioned the award of separation pay to them.
b. The Court ruled that it is clear from the complaints that they are seeking reinstatement.
c. In any case, Section 2(c), Rule 7 of the Rules of Court provides that a pleading shall specify the
relief sought, but may add a general prayer for such further or other reliefs as may be deemed just
and equitable.
i. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is
not specifically sought by the injured party; the inclusion of a general prayer may justify the
grant of a remedy different from or together with the specific remedy sought, if the facts alleged
in the complaint and the evidence introduced so warrant.
ii. This general prayer is broad enough to justify the extension of a remedy different from the
specific remedy sought.
d. Even without the prayer for a specific remedy, proper relief may be granted by the court if the facts
alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other
reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed
for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their
separate complaints, prayed for such reliefs which are deemed just and equitable.

DISPOSITIVE PORTION

23
WHEREFORE, the instant petition is denied. The assailed Decision and Resolution of the Court of Appeals,
dated December 20, 2004 and February 24, 2005, respectively, in CA-G.R. SP No. 80953, are AFFIRMED.

DIGESTER: Jose Mendoza

Pleadings The court shall grant the relief warranted by the allegations and proof even if no such relief is prayed for
G.R. No. 167379 - Primelink Properties and Dev. Corp. vs Lazatin-Magat
Callejo

the parties entered into a joint venture agreement to develop land contributed by the Lazatins. Prime link didnt
comply with their obligation to complete the land development phase and building of housing units so the
Lazatins rescinded the contract. The Lazatins prayed for, among other things, the possession of the land they
contributed and the RTC awarded this as well as possession over the improvements that Primelink introduced
on the property even if this wasnt specifically prayed for. The courts ruled that the RTC was correct in
awarding this (1) considering that they included a general prayer for other reliefs that may be deemed just and
equitable (2) the evidence revealed fraudulent acts conducted by Primelink and (3) the fact that a joint venture
is considered a form of partnership which means that the partner that did not cause the rescission is entitled to
possession over the partnership property in the course of winding up partnership affairs

DOCTRINE
sec. 2(c) Rule 7 ROC provides that a pleading shall specify the relief sought but it may add as a general prayer for
such further or other relief as may be deemed just and equitable. Even without the prayer for a specific remedy,
however, proper relief may be granted by the court if the facts alleged in the complaint and the evidence
introduced so warrant

IMPORTANT PEOPLE
Petitioners: Primelink Properties and Dev. Corp (Primelink), and Rafaelito Lopez as its president
Respondent: Ma. Clara Lazatin-Magat, Jose Serafin Lazatin, Jaime Lazatin, Jose Marcos Lazatin co-owners of 2
adjoining parcels of land in Tagaytay

FACTS
1. March 10, 1994 the Lazatins and Primelink (represented by Lopez) entered into a Joint Venture Agreement (JVA)
for the development of the property into a residential subdivision to be known as Tagaytay Garden Villas where the
Laxations would contribute the land as their share in the JVA while Primelink would contribute money, labor,
personnel, machineries, equipment, and other resources. Specifically, Primelink bound itself to:
a. survey the land and prepare the necessary plans and engineering designs
b. secure and pay for all the licenses, permits and clearances
c. furnish all materials, equipment, labor and services for the development of the land
d. guarantee completion of the land development work if not prevented by force majeure or other unavoidable
circumstances within 3 years (except for the installation of electrical facilities which is MERALCOs task)
e. provide the necessary manpower resources
2. The parties agreed to terms regarding the withdrawal of allowances/advances and their share in profits from the JVA
(60% for Primelink and 40% for the Lazatins). They also agreed to refer any misunderstandings relative to the
interpretation and enforcement of the agreement to Voluntary Arbitration
3. The Lazatins agreed to subject the title over the property to an escrow agreement so the owners duplicate of the title
was deposited with China Banking Corporation.

24
4. April 10, 1997 the Lazatins sent Primelink a letter demanding that they comply with its obligations under the JVA,
this impelled Primelinks officers to meet with the Latinos and review its business records. However, in another letter
(October 22, 1997) the Lazatins informed Primelink that they decided to rescind the JVA and demanded that they
cease from further developing the property
5. January 19, 1998 Lazatins filed a complaint for rescission, accounting and damages with prayer for TRO
and/or preliminary injunction before the RTC against Primelink and Lopez.
a. They alleged:
i. that despite the lapse of almost 4 years from the execution of the JVA and the delivery of the title and
possession of the land to Primelink, they had not completed the land development aspect. neither
had there been any progress in the construction of the housing units
1. only 5 of the 50 planned units had been completed so far and there were complaints by the
owners for poor workmanship and the use of substandard materials in their construction
ii. that Primelink disregarded previously agreed accounting and auditing procedures established to
protect both parties
iii. the scheduled regular meetings were seldom held
iv. Primelink had yet to deliver the P40M that they were entitled to as their share under the JVA
b. They prayed that a decision be rendered: (compare this to what the trial court later awards them)
i. rescinding the JVA
ii. immediately restoring to them possession of the parcels of land
iii. ordering the defendants to render an accounting of all income generated and expenses incurred
iv. make the writ of preliminary injunction permanent
v. order the payment of (1) P40M in actual and/or compensatory damages (2) P2M in exemplary
damages (3) 10% of total amount due for attys fees (4) cost of the suit
vi. other reliefs and such other remedies as are just and equitable are likewise being prayed for
6. Primelink opposed the plea for a writ of preliminary injunction, arguing that the complaint was premature considering
that they had not yet referred their complaint to a voluntary arbitrator
7. Primelink secured a number of extensions but eventually they were declared in default. This led to the RTCs order to
receive the Lazatins evidence ex parte
a. the RTC denied Primelinks motion to set aside the order of default. The CA later also denied their appeal on
the ground that the Orders appealed from were interlocutory and not appealable.
8. the RTC rendered a decision:
i. ordering the rescission of the JVA
ii. ordering Primelink to return possession including all improvements therein, of the real estate
property belonging to the Lazatins
iii. ordering Primelink to turn over all documents that were executed and prepared in connection with
any contract to sell or deed of sale of all the lots/units sold during the effectivity of the JVA
iv. ordering the payment of P1,041,524 (their share of the net income) and attys fees
b. basis for the decision:
i. that they found patent violations by Primelink of the JVA
ii. they found a pattern indicating a scheme to reduce and eventually blot out the net income generated
from the sales of the housing units (fraud, basically) apparently they declared a net income of
P2,603,810 but a subsequent financial report showed only P1,954,216 and later an income
statement indicated a net loss of P5,122,906 which was used to deprive the Lazatins of the share
they were entitled to.
iii. These findings justified the direct recourse to the court instead of to a voluntary arbitrator
9. the RTC issued a motion for execution
10. Primelink appealed the decision to the CA. one of their arguments was that the RTC erred in deciding that the
Lazatins have the right to take over the subdivision and appropriate for themselves all the existing
improvements made even if such a right was not alleged nor prayed for in the complaint not proven during
the ex parte hearing
a. the CA affirmed the RTC ruling:
i. cited Auerbach vs Sanitary Wares Manufacturing Corp. which held that a joint venture is a form of
partnership and is to be governed by the laws of partnership. This means that although the
Lazatins did not specifically pray for their takeover of the property and for the possession of
the improvements, they were still entitled to this relief as a necessary consequence of the
ruling of the RTC in ordering the rescission of the JVA
11. Primelink filed the instant petition for review on certiorari (Rule 45)

25
Primelink: the portion of the decision which unconditionally awards to the Lazatins all improvements on the project
without requiring them to pay its value or reimburse them for all expenses incurred is inherently and essentially illegal and
confiscatory, oppressive and unconscionable. At the time they contributed the land, the properties were only worth P500
per square meter. Before they rescinded the JVA, the property had already been substantially developed. Also, they
invurred expenses amounting to around P40M. They cannot rescind and still retain the consideration received under the
JVA there must be a restoration to the status quo.

Lazatins: (1) reiterated the ratio of the CA (regarding the Auerbach precedent) (2) they were able to establish fraud on the
part of Primelink (3) under Art. 1838 of the Civil Code where a partnership contract is rescinded on the ground of the
fraud or misrepresentation of one of the parties, the party entitled to rescind is without prejudice to any other right, entitled
to a lien on or right of retention of the surplus of the partnership property (4) the land held by Chinabank for safekeeping
pursuant to the Escrow Agreement should be returned as a consequence of the rescission of the contract

ISSUE with HOLDING

1. whether the Lazatins are entitled to the possession of the parcels of land and the improvements introduced
by Primelink as their contribution NO
a. though they did not pray for the possession of the improvements on the land, the RTC was still not precluded
from awarding possession of the improvements to the Lazatins. sec. 2(c) Rule 7 ROC provides that a
pleading shall specify the relief sought but it may add as a general prayer for such further or other
relief as may be deemed just and equitable. (note that they did include a prayer for other reliefs and such
other remedies)
i. even without the prayer for a specific remedy, proper relief may be granted by the court if the
facts alleged in the complaint and the evidence introduced so warrant
ii. the court shall grant relief warranted by the allegations and the proof even if no such relief is
prayed for
iii. the prayer in the complaint for other reliefs equitable and just justifies the grant of a relief not
otherwise specifically prayed for
b. the parcels of land as well as the improvements made were contributed by the parties to the JVA and
therefore formed part of the assets of the joint venture. The RTC declared that the Lazatins were entitled to
the possession of the land and the improvements as a consequence of its finding that Primelink breached
their agreement and defrauded the Lazatins of the net income under the JVA

2. whether Primelink is entitled to reimbursement for the value of the improvements on the land
a. the CA was correct in holding that under Aurbach, a joint venture is a form of partnership and is to be
governed by the laws on partnership
b. then the RTC rescinded the JVA because of breach of the JVA, the partnership was dissolved/cancelled. As a
consequence of this, all authority of any partner to act for the partnership was terminated except insofar as
what may be necessary to wind up the partnership affairs or complete pending transactions. On dissolution, a
partnership continues until the winding up of partnership affairs is completed (i.e. the administration of the
assets of the partnership for the purpose of terminating the business and discharging the obligations of the
partnership)
i. the transfer of the possession of the land and improvements was only to wind up the
partnership affairs and the partition and distribution of the net partnership assets (in line with
Art. 1836 re: the right to wind up partnership affairs)
ii. even if the Lazatins acquired possession of the land and improvements, they remained to be
partnership property, subject to the rights and obligations of the parties, creditors, and third parties
as well as the settlement of the accounts between the parties. Until the partnership accounts are
determined, it cannot be ascertained how much any of the parties is entitled to so it was
premature for Primelink to demand that it be indemnified
iii. under art. 1837: the partner who didnt cause the dissolution wrongfully may decide to continue the
business in the same name by themselves or jointly with others during the agreed term for the
partnership and for that purpose may possess the partnership property provided that they
secure the payment by bond or pay to any partner who has caused the dissolution the value
of his interest in the partnership
iv. the party entitled to rescind is also entitled to the rights under art. 1838

OTHER NOTES

26
Article 1836. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last
surviving partner, not insolvent, has the right to wind up the partnership affairs, provided, however, that any partner, his legal representative or his
assignee, upon cause shown, may obtain winding up by the court. (n)

Article 1837. When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as against his co-partners and
all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to
discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion
of a partner, bona fide under the partnership agreement and if the expelled partner is discharged from all partnership liabilities, either by payment or
agreement under the second paragraph of article 1835, he shall receive in cash only the net amount due him from the partnership.

When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows: (1) Each partner who has not
caused dissolution wrongfully shall have:

(a) All the rights specified in the first paragraph of this article, and

(b) The right, as against each partner who has caused the dissolution wrongfully, to damages breach of the agreement.

(2) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name either by
themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may possess the partnership
property, provided they secure the payment by bond approved by the court, or pay any partner who has caused the dissolution wrongfully,
the value of his interest in the partnership at the dissolution, less any damages recoverable under the second paragraph, No. 1 (b) of this
article, and in like manner indemnify him against all present or future partnership liabilities.

(3) A partner who has caused the dissolution wrongfully shall have:

(a) If the business is not continued under the provisions of the second paragraph, No. 2, all the rights of a partner under the first paragraph, subject to
liability for damages in the second paragraph, No. 1 (b), of this article.

(b) If the business is continued under the second paragraph, No. 2, of this article, the right as against his co- partners and all claiming through them in
respect of their interests in the partnership, to have the value of his interest in the partnership, less any damage caused to his co-partners by the
dissolution, ascertained and paid to him in cash, or the payment secured by a bond approved by the court, and to be released from all existing liabilities
of the partnership; but in ascertaining the value of the partner's interest the value of the good-will of the business shall not be considered. (n)

Article 1838. Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, the party entitled to
rescind is, without prejudice to any other right, entitled:

(1) To a lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership liabilities to third persons for any sum of
money paid by him for the purchase of an interest in the partnership and for any capital or advances contributed by him;

(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any payments made by him in
respect of the partnership liabilities; and

(3) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the partnership. (n)

DIGESTER: Anton Mendoza.

VII. Commencement of Action: D. Parties: Necessary Parties; also on effect of deficient verification
G.R. No. 151900 Chua vs. Torres
Tinga

Herein petitioners are siblings. Brother bought diesel from respondents and issued a check as payment. Said check was
dishonored. Respondent issued a demand letter, but sent it to the sister. Sister ignored such letter because she wasnt the
one who issued the check. Resp filed a case of BP22 against her, and in the process of being served a warrant of arrest,
she experienced humiliation. So she filed a case for damages against respondents, and she impleaded her brother as a
necessary party. Brother didnt sign a certification and execute a verification of non-forum shopping which caused his
sisters complaint to be dismissed. SC here held that the RTC was wrong in dismissing her complaint on the ground that
her brother didnt comply w/ said documentary requirements. This is because he was actually MISJOINEDmeaning he
isnt actually a necessary party. Hence, his action or inaction is inconsequential w/ regard to her complaint.
27
DOCTRINE
Necessary parties
Necessary parties are those whose presence is necessary to adjudicate the whole controversy, but whose interests are so
far separable that a final decree can be made in their absence without affecting them. Sec. 8, Rule 7 says one who is not
indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a
complete determination or settlement of the claim subject of the action. A misjoinder of parties is not fatal to the
complaint. Its not a ground for dismissal and dropping said parties can be done motu propio. (See Sec. 11, Rule 3)

Verification
The verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are
true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good
faith. The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.

Necessary parties and Verification

Does the absence of the signature of the person misjoined as a party plaintiff in either the verification page or certification
against forum shopping a ground for the dismissal of the action? Noa misjoined party plaintiff has no business
participating in the case as a plaintiff in the first place, theres no sense requiring him to comply w/ all the requirements
expected of plaintiffs.

IMPORTANT PEOPLE
Petitioner Christine Chua, the one who was sent a demand letter by Beltran; Jonathan Chua, one who issued the check
Respondents Jorge Torres, owner of the 9 th Avenue Caltex Service Center; Antonio Beltran, head of Sales and
Collection Division of Caltex Service Center

FACTS; Nature: PETITION for review on certiorari of the orders of the RTC Caloocan City, Branch 126

Antecedents (from the allegations in petitioners complaint)

a) Jonathan Chua (Christines brother) issued his personal RCBC check (P9,849.20) in favor of Caltex to pay for diesel oil that he
bought from it.
b) The check was dishonored because the account was closed.
c) Beltran (respondent) sent a demand letter to Christine (petitioner) informing her of the dishonor of the check. She ignored the
demand letter because she was not the one who issued the checkit was her brother Jonathan.
d) So Beltran instituted a case for violation of BP 22 against Christine w/out even ascertaining who had actually issued the check.
e) MTC then issued a warrant of arrest against Christine.
f) They looked for her in her house, in the auto-repair shop of bro Jonathan, and even in her school (MCUshes a med student).
She experienced embarrassment and social humiliation because of this.

1. RTC, Caloocan City

Complaint - From the facts above, Christine filed a COMPLAINT FOR DAMAGES against herein
respondents
Implead - She impleaded her brother Jonathan as a NECESSARY CO-PLAINTIFF
Prayer the Prayer expressly named Christine as the only party w/c the respondents will compensate. No
allegation of any damage or injury sustained by Jonathan.
Jonathan didnt sign any verification or certification against forum shopping.

MTD respondents filed a motion to dismiss the complaint of Christine

*Ground: Jonathan had not executed a certification against forum shopping.
*RTC: Sec. 5, Rule 7 makes no distinction as to what type of party (principal, nominal, necessary) is required to
execute such certification basta kung plaintiff ka you must execute it
*Decision: MTD granted, thus, COMPLAINT of Christine IS DISMISSED.

MR Christine filed a motion for reconsideration

*Decision: DENIED.

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 2. SC The matter was elevated directly to this Court by way of petition for review under Rule 45 (this case right
here)

ISSUE with HOLDING: W/N the absence of the signature in the required verification and certification against
forum-shopping of a party misjoined as a plaintiff is a valid ground for the dismissal of the complaint. NO.

SCs decision here is based on one fundamental premise: Jonathan was misjoined as a party plaintiff in this
case.

1. Note that Jonathan didnt sign as well any verification to the complaint (in violation of Sec. 7, Rule 4). This
requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are true and
correct. Absence of a proper verification makes the pleading as good as unsigned and dismissible 3.

2. So since Jonathan is misjoined, does he still need to execute a verification in respect to Christines
complaint? NO.
i. A civil suit may be prosecuted only in the name of areal party in interest.
ii. Sec. 2, Rule 3 says that a real party in interest is the party who stands to be benefited or injured by the
judgment in the suit. Interest here means material interestan interest in issue and to be affected by the
decree, as opposed to mere interest in the question involved (or mere incidental interest)
iii. Christines complaint doesnt allege that respondents violated any rights of Jonathan
iv. Christine failed to demonstrate how Jonathan can be considered a necessary party, other than by noting that
he was the one who issued the check in controversy. >> if anything, this only proves malice on the part of
the respondents for filing charges against the wrong person, but Jonathans participation isnt really needed

3. What is a necessary party?

i Sec. 8, Rule 7 one who is not indispensable but who ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete determination or settlement of the claim subject of the
action.
iii. Seno v. Mangubat a series of sales between parties, the deed of w/c needed to be reformed into an
equitable mortgage (page 367 in the case, last paragraph)
iv. Nature of the cause of action recall that the complaint filed by Christine is one of damages due to the
humiliation brought by the respondents. The complaint alleged an INJURY PERSONAL to her. Even the relief
prayed for is solely for her benefit.
v. Jonathan may be called by her sister to testify that she didnt issue those checks, no need to implead him

4. RTC erred in dismissing the instant complaint

i. A misjoined party plaintiff has no business participating in the case as a plaintiff in the first place, and it would
make little sense to require the misjoined party in complying w/ all the requirements expected of plaintiffs.
ii. Sec. 11, Rule 3 Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties
may be dropped or added by any stage of the action and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded w/ separately.
iii. Clearly, misjoinder of parties is not fatal to the complaint. While it is erroneous, it may be corrected w/ ease
through amendment, w/out further hindrance to the prosecution of the suit.
iv. Whatever action or inaction the misjoined party may take on the verification or certification against forum-
shopping is inconsequential so it really doesnt matter that Jonathan failed to sign and execute

DISPOSITIVE PORTION
WHEREFORE, the Petition is GRANTED. The Orders of the RTC of Caloocan in the Civil Case are SET ASIDE, and the
Complaint in the aforementioned case is REINSTATED. The lower court is ENJOINED to hear and decide the case with
deliberate dispatch. No pronouncement as to costs.
DIGESTER: Viveka

3 The verification requirement is separate from the certification requirement. It is noted that as a matter of practice, the verification is usually accomplished at the same
time as the certification against forum shopping; hence the term Verification and Certification of Non-Forum Shopping.

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 Effect of deficient Verification and Certification
against non-forum shopping
GR 179488 Cosco Phils. Shipping vs Kemper Insurance
Peralta, J.

Kemper, a private corporation, signed the certificate against non-forum shopping without properly giving authority to its
counsel to represent Kemper in the case. So Cosco filed a MTD on said ground which was granted by the TC. Kemper
argued that subsequent compliance of submitting the authenticated SPA cured the defect. SC held that Kempers counsel
was not properly authorized to sign the certificate because there was no board resolution giving him authority to do so.
While the court in past cases allowed subsequent compliance by allowing parties to submit their counsels SPA, in this
case Kemper failed to prove the same because it did not submit a board resolution. As for the SPA that Kemper submitted,
such had no evidentiary value because the underwriter of the document was also not properly authorized, absent a
showing of a board resolution or a secretarys certificate proving his authority.

DOCTRINE
The lack of certification against forum shopping is generally not curable by mere amendment of the complaint, but shall be
a cause for the dismissal of the case without prejudice. The same rule applies to certifications against forum shopping
signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file
the complaint on behalf of the corporation.

FACTS
1 Kemper is a foreign insurance company based in Illinois, USA with no license to engage in business in the PH.
Kemper insured the shipment of imported frozen boneless beef owned by Genosi which was loaded at a port in
Australia for shipment to the PH.
28. But upon arrival of the cargo, Genosi rejected it by reason of spoilage arising from the alleged temperature
fluctuations of Coscos reefer containers.
29. So Kemper paid the claims of Genosi and was subrogated in its rights. Kemper then sued Cosco for insurance loss
and damages.
30. During the pre-trial. Kempers counsel proffered and marked its exhibits, while Coscos counsel manifested that he
would mark his clients exhibits on the next scheduled pre-trial. But then, Cosco filed a MTD contending that the same
was filed by Atty Lat, who failed to show his authority to sue and sign the certificate against forum shopping.
31. Cosco argued that Lats act of signing the certificate was a clear violation of Sec 5, Rule 7, RoC.
32. TC granted Coscos MTD and dismissed the case without prejudice, ruling that it is mandatory that the certification
must be executed by the petitioner himself, and not by counsel. Since Lat did not have a SPA to act on its behalf,
hence, the certification against forum shopping executed by said counsel was fatally defective and constituted a valid
cause for dismissing the complaint.
33. On appeal to the CA, it agreed with the TC that the certificate was mandatory. However, the factual circumstances of
the case warranted the liberal application of the rules and remanded the case back to the TC. MR denied thus this
Rule 45 petition.
34. Cosco: Since Kemper is a juridical entity, the signatory in the complaint must show proof of his or her authority to sign
on behalf of the corporation. Further, the SPA dated May 11, 2000, submitted by Atty. Lat, which was notarized before
the Consulate General of Chicago, Illinois, USA, was signed by one Brent Healy (respondent's underwriter), who lacks
authorization from its board of directors.
35. Kemper: While it failed to attach the SPA at the beginning, the subsequent compliance of submitting the authenticated
SPA cured the defect.

ISSUE with HOLDING

1. W/N Atty Lat was properly authorized to sign the certificate against non-forum shopping NO

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SC held that the certification against forum shopping must be signed by the principal parties. If, for any reason, the
principal party cannot sign the petition, the one signing on his behalf must have been duly authorized.

With respect to a corporation, the certification against forum shopping may be signed for and on its behalf, by a
specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such document.

A corporation, in order to exercise its powers, acts through its board of directors (BoD) and/or its duly authorized officers
and agents. Thus, it has been observed that the power of a corporation to sue and be sued in any court is lodged with the
board of directors that exercises its corporate powers.

In the present case, since Kemper is a corporation, the certification must be executed by an officer or member of the BoD
or by one who is duly authorized by a resolution of the BoD; otherwise, the complaint will have to be dismissed.

The lack of certification against forum shopping is generally not curable by mere amendment of the complaint, but shall be
a cause for the dismissal of the case without prejudice. The same rule applies to certifications against forum shopping
signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file
the complaint on behalf of the corporation.

There is no proof that Kemper authorized Atty. Lat, through a board resolution, to sign the verification and certification
against forum shopping on its behalf. Thus the case should be dismissed.

While the court said in Republic vs Coalbrine Intl Philippine that:

xxx [w]hile there were instances where we have allowed the filing of a certification against non-forum
shopping by someone on behalf of a corporation without the accompanying proof of authority at the time
of its filing, we did so on the basis of a special circumstance or compelling reason. Moreover, there was a
subsequent compliance by the submission of the proof of authority attesting to the fact that the person
who signed the certification was duly authorized.

In this case, there is no proof of subsequent compliance. Neither was a copy of the board resolution or secretarys
certificate subsequently submitted to the TC. Thus, there is no reason to liberally apply the rules.

As to the SPA dated May 11, 2000, said document was fatally defective and had no evidentiary value. It failed to establish
Healys authority to act in behalf of Kemper, in view of the absence of a resolution from Kempers BoD or secretarys
certificate proving the same.

DISPOSITIVE PORTION
CA reversed and set aside. Trial court reinstated.

DIGESTER: Kharina Mostrales

Pleadings - Formal Requirements: Defective Jurat

176897 ADVANCE PAPER CORP VS ARMA TRADERS CORP
Brion, J

Advance filed a R45 petition with the SC but the verification and certification of non-forum shopping had a defective jurat.
According to the Rules on Notarial Practice, Community Tax Certificates(sedula) are no longer accepted as proof of
identity of the affiant because of its inherent unreliability. Said defect however is not fatal to the petition as it is mere
formal, not a jurisdictional requirement that the SC may waive.

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DOCTRINE
A defective jurat is a mere formal requirement, it is not jurisdictional and therefore waivable by the courts

IMPORTANT PEOPLE
Pets: Advance Paper, George Haw (Pres), Connie Haw (GM)
Resps: Arma Traders, Antonio Tan (former pres), Willy Uy(treasurer), Manuel Ting (VP), Cheng Gui (GM) and Benjamin
Ng (Corp Sec)

FACTS
1. Advance Paper is a domestic corporation engaged in the business of producing, printing, manufacturing,
distributing and selling of various paper products.
a. George is the President while his wife, Connie, is the General Manager.
2. Respondent Arma Traders is also a domestic corporation engaged in the wholesale and distribution of school and
office supplies, and novelty products.
a. Antonio Tan was formerly the President while respondent Willy UY is the Treasurer of Arma Traders. They
represented Arma Traders when dealing with its supplier, Advance Paper, for about 14 years
3. From September to December 1994, Arma Traders purchased on credit notebooks and other paper products
amounting to P7,533,001.49 from Advance Paper.
a. Upon the representation of Tan and Uy, Arma Traders also obtained three loans from Advance Paper in
November 1994 a total of P7,788,796.76.
b. Arma Traders needed the loan to settle its obligations to other suppliers because its own collectibles did
not arrive on time.Because of its good business relations with Arma Traders, Advance Paper extended the
loans.
4. As payment for the purchases on credit and the loan transactions, Arma Traders issued 82 postdated checks
payable to cash or to Advance Paper. Tan and Uy were Arma Traders authorized bank signatories who signed
and issued these checks which had the aggregate amount of P15,130,636.87.15
a. Upon prsentment DAIF or account closed
b. Arma was not able to settle its accounts with Adavn
5. Advance filed a complaint for collection of sum of money with application for preliminary attachment against Arma
Traders, Tan, Uy, Ting, Gui, and Ng.
6. Defs pleadings:
a. Tan did not file answer- RTC held in default
b. Uy: answered, admitted him and TAn in charged and authorized to sign checks for 13 years in behalf of
Arma
c. others resps defense: pointed to Tand and Uy as those who personally contracted the loans and that teo
fraudulently made Arma liable for their personal debts
7. RTC ruled ifo of Advance-
a. Arma is liable and bound by the acts of its representatives.
b. The complaint as to the other defendants (including Tan and UY) were dismissed for lack of evidence
supporting that they bound themselves jointly and severally with Arma to pays its account.
8. Arma file R42 with CA
a. CA reversed RTC ruling, because Advance failed to prove the existence of purchase on credit and the
loans
b. CA did not reverse dismissal of complaint as to individual defs (fact 7b)
9. Hence this R45 by Advance
ISSUE with HOLDING- (digesters note: issue arose only in the SC kasi nga yung R45 petition ng Advance yung may
defective jurat, so no facts relevant to issue in the proceedings with the lower courts :))

1. PROCEDURAL: w/n this petition should be dismissed outright for a defective jurat- NO, while jurat in this case is
defective this is a mere formal requirement and not jurisdictional
a. Advance(pet) filed R45, assailing CAs reversal. Basically arguing for Armas liability
b. Armas (resp) in its pleading before the SC argues: that the Petition for Review should be dismissed
summarily because of the following procedural grounds:
i. (TOPIC)first, for failure to comply with A.M. No. 02-8-13-SC -Directing notary publics to no
longer use the community tax certificate as proof of the affiants identity because of its
inherent unreliability; effective August 1, 2004.

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 i.
second, the CA decision is already final and executory since the petitioners filed their Motion for
Reconsideration out of time. They explain that under the rules of the CA, if the last day for filing of
any pleading falls on a Saturday not a holiday, the same must be filed on said Saturday, as the
Docket and Receiving Section of the CA is open on a Saturday.
c. SUPREME COURT RULED:
i. ON JURAT: the respondents correctly cited A.M. No. 02-8-13-SC dated February 19, 2008
which refer to the amendment of the 2004 Rules on Notarial Practice.
i. (Digesters note: what is a jurat? answer:SUBSCRIBED AND SWORN to before me, this . also found 2004 Rules
on Notarial Practice sec 6 p757 ROC)
1. It deleted the Community Tax Certificate among the accepted proof of identity of the
affiant because of its inherent unreliability.
1. (digesters note: why? answer: because its has no photo of the affiant, so pano sya magiging proof of id :)))
2. IN THIS CASE: The petitioners violated this when they used Community Tax Certificate
No. 05730869 in their Petition for Review.
a. Nevertheless, the defective jurat in the Verification/Certification of Non-
Forum Shopping is not a fatal defect because it is only a formal, not a
jurisdictional, requirement that the Court may waive.
b. Furthermore, we cannot simply ignore the millions of pesos at stake in this case.
To do so might cause grave injustice to a party, a situation that this Court intends
to avoid.
ii. Second, no less than the CA itself waived the rules on the period to file the motion for
reconsideration. A review of the CA Resolution dated March 7, 2007, reveals that the petitioners
Motion for Reconsideration was denied because the allegations were a mere rehash of what the
petitioners earlier argued not because the motion for reconsideration was filed out of time.
2. ON THE MERITS: Advance won, Arma was bound by Tan and Uys acts. The doctrine of apparent authority
provides that a corporation will be estopped from denying the agents authority if it knowingly permits one of its
officers or any other agent to act within the scope of an apparent authority, and it holds him out to the public as
possessing the power to do those acts.
a. The resps actually admitted that for 13 yrs they let Tan and Uy handle the business affairs, the 2 were
given such broad powers without restraint. Also, these 2 together with the other individual resps were
incorporators of the Arma. It is therefore hard to question their authority when they entered into the
assailed acts

DISPOSITIVE PORTION
WHEREFORE, premises considered, we GRANT the petition. The decision dated March 31, 2006 and the resolution
dated March 7, 2007 of the Court of Appeals in CA-G.R. CV No. 71499 are REVERSED and SET ASIDE. The Regional
Trial Court decision in Civil Case No. 94-72526 dated June 18, 2001 is REINSTATED. No costs.

Digester: nikkiminhaj.ds

Pleadings Formal Requirements of Pleadings

G.R. No. 178911 Monsanto v. Lim
Del Castillo, J.

Pag-IBIG Regional Director Menzon wrote a letter to Exec. Judge Monsanto asking him to intervene on an alleged
anomalous auction conducted by Sheriff de Guzman. Judge Monsanto refrained from acting on the letter as a party to the
case was his relative, and re-assigned it to Judge Usman of RTC-Calbatogan Br. 28. The matter was referred to the Office
of the Court Administrator, which later on ordered Judge Usman to take action on the case. The case proceedings went
on, but when it reached the SC, SC dismissed the case. It ruled that the RTC Orders must be declared null and void
because there was not initiatory pleading filed before the RTC. The letter could not be considered as a pleading
because it does not comply with any of the requirements under Rule 7, ROC.

Most of the facts of the case are irrelevant to the topic. I still put them in the digest just in case Sir asks.

DOCTRINE
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A letter-complaint addressed to and Executive Judge does not qualify as an initiatory pleading since there is no
compliance with the requirements prescribed

FACTS
1. Through a letter, Flordelis B. Menzon, Regional Director of the Home Development Mutual Fund (Pag-IBIG),
requested the intervention of Judge Sinforiano A. Monsanto (Judge Monsanto) of RTC-Catbalogan, Samar, on
the alleged anomalous auction sale conducted by Sheriff De Guzman.
a. According to Pag-IBIG, De Guzman previously acceded to its request to move the date of the auction sale to
Jan. 20, 2004; but the sale proceeded as originally scheduled on Jan 15.
b. Pag-IBIG also claimed that the winning bid of Leoncio Lim (Leoncio) in the amount of P500K was grossly
disadvantageous to the government considering that the outstanding loan obligations of the mortgagor,
Eduardo Monsanto (Eduardo), was more than the bid amount.
2. Judge Monsanto refrained from acting on the letter considering that Eduardo is his relative; instead he re-assigned the
same to Judge Usman of Br. 28.
3. Judge Usman issued an Order captioned In the Matter of Extrajudicial Foreclosure of Mortgage Filed by the Pag-
IBIG Fund.
a. declared that Atty. Cesar Lee argued on behalf of Pag-IBIG; and that Pascual Monsanto (Pascual) appeared
on behalf of Eduardo;
b. noted that no formal petition or complaint was actually filed which presents a judicial issue, and that
the acts complained of partake of administrative matter;
c. referred the matter to the Office of the Court Administrator (OCA) for further action.
4. Pet. Pascual filed with the OCA a Motion to Lift Writ of Execution and Notice to Vacate.
a. Pascuals allegations:
i. De Guzman issued a Notice to Vacate; that the same is being enforced with grave threats and
harassment;
ii. the protest of Pag-IBIG remains pending with and unresolved by OCA;
iii. the trial court did not transmit the records of the case to the OCA;
iv. the winning bid of P500K submitted by Leoncio is disadvantangeous to the government;
v. Eduardos loan with Pag-IBIG is being proposed for restructuring; and
vi. the writ of execution and notice to vacate would gravely prejudice their rights.
b. Pascuals prayer:
i. An order be issued lifting the Writ of Execution and the Notice to Vacate;
ii. An order be issued enjoining or restraining the subject Sheriff from enforcing the said Notice to
vacate; and
iii. Court officials or personnel above mentioned be made to explain respecting the handling of the case.
5. The OCA directed Judge Usman to conduct an investigation and take action on the Motion to Lift Writ of Execution
and Notice to Vacate.
6. Pag-IBIG informed the trial court that the loan of Eduardo had been restructured and that Eduardo had commenced
paying monthly amortizations.
a. Pag-IBIG is withdrawing its Petition for Extra-judicial Foreclosure; and that it is no longer interested in
pursuing an administrative action against De Guzman.
7. Resp. Leoncio, the winning bidder in the auction, (just in case nakalimutan niyo na) opposed Pag-IBIGs manifestation
and filed a Manifestation with Ex-Parte Motion for Issuance of Writ of Possession.
a. claimed that the reglementary period had elapsed without Eduardo redeeming the subject property; as such,
he is already entitled to the issuance of a writ of possession.
8. RTC Br. 28 denied pet. Monsantos motion and granted resp. Lims motion ruling that the public auction sale are
in order.
a. The impugned Sheriff De Guzman had accordingly performed his functions.
b. There is no showing that he has abuse[d] his authority during the conduct of the public auction.
9. Eduardo, Pascual, and Pag-IBIG filed motions for reconsideration denied by RTC.
10. Petitioners Monsanto filed a petition for certiorari with the CA claiming that RTC committed GAOD in rendering its
decision.
11. CA found that no GAOD was committed and affirmed RTC ruling.
a. Petitioners filed MR; CA denied.
12. Hence, this present petition for review on certiorari under Rule 45 of the CA decision.

Petitioners Arguments:

34
1. Lims ex parte motion for the issuance of a writ of possession should be under oath, and requires prior notice and
hearing;
2. The mere filing of the sheriffs certificate of sale with the Register of Deeds is not equivalent to registration as required
in order for the one-year redemption period to commence;
3. PD No. 1529 did not repeal Act No. 3135;
4. The occupants of the subject property hold rights adverse to the mortgagor Eduardo; and that the extrajudicial
foreclosure proceedings was attended by numerous irregularities.

Respondent Lims Arguments:

1. Mere filing of the sheriffs Certificate of Sale with the Samar Register of Deeds was equivalent to the registration
thereof;
2. Samar Registrar of Deeds assured him that mere receipt of the Certificate of Sale is tantamount to registration; he
relied upon this representation and assurance in good faith; and
3. Petitioners remedy is to file a separate case for recovery of ownership and possession.

The Court stated that filing the appropriate pleading and the payment of prescribed docket fees vest a trial court
with jurisdiction over a subject matter. These were NOT present in this case.

ISSUE with HOLDING

1. W/N a proper initiatory pleading was filed before the trial court NO
a. No formal complaint or petition was filed in court. The case was commenced through a letter of Pag-IBIG
asking the intervention of Executive Judge Monsanto on the alleged anomalous foreclosure sale conducted
by De Guzman.
b. Section 1, Rule 6 of the Rules of Court defines pleadings as written statements of the respective claims
and defenses of the parties submitted to the court for appropriate judgment. Pag-IBIGs letter could not be
considered as a formal complaint or petition.
i. the parties to the case were not identified pursuant to Section 1,Rule 3 and Section 1, Rule 7;
ii. the so-called claim or cause of action was not properly mentioned or specified;
iii. and letter miserably failed to comply with the requirements of Rule 7, Rules of Court.
1. The letter bore no caption; it was not even assigned a docket number; the parties were not
properly identified; the allegations were not properly set forth; no particular relief is sought; in
fact, only the intervention of Executive Judge Monsanto is requested; it was not signed by a
counsel; and most of all, there is no verification or certification against forum-shopping.
c. Judge Usman of Br. 28 resolved the following incidents: (1) the motion for issuance of writ of possession filed
by Leoncio; and (2) the motion to lift writ of execution and notice to vacate.
i. However, the said Manifestation with Ex Parte Motion for Issuance of Writ of Possession was not
even filed before Br. 28; in fact, it was submitted for consideration of Br. 27.
ii. The Motion to Lift Writ of Execution and Notice to Vacate was filed by Pascual before the OCA; the
RTC Br. 27 and 28 were only furnished copies thereof.
iii. Judge Usman proceeded to take cognizance of the case notwithstanding his prior observation
that no formal petition or complaint was actually filed and which presents a judicial issue.
Judge Usman opined that the acts complained of partake of administrative matter and thus referred
the same to the OCA for further action.
iv. The letter of OCA directing Judge Usman to take action on the Motion to Lift Writ of Execution and
Notice to Vacate could not be interpreted as vesting Judge Usman with the authority and jurisdiction
to take cognizance of the matter.

2. W/N there was payment of docket fees NONE.

a. Section 1, Rule 141, ROC: [u]pon the filing of the pleading or other application which initiates an action or
proceeding, the fees prescribed therefor shall be paid in full.
b. In Far East Bank and Trust Company v. Shemberg Marketing Corporation: A court acquires jurisdiction over a
case only upon the payment of the prescribed fees.
c. The importance of filing fees cannot be gainsaid for these are intended to take care of court expenses in the
handling of cases in terms of costs of supplies, use of equipment, salaries and fringe benefits of personnel,
and others, computed as to man-hours used in the handling of each case.
i. The non-payment or insufficient payment of docket fees can entail tremendous losses to government
in general and to the judiciary in particular.

35
 d. RTC Br. 28 did not acquire jurisdiction over the matter/case. All the proceedings undertaken by the trial court
are null and void, and without force and effect.

DISPOSITIVE PORTION
WHEREFORE, the Petition is DENIED. The assailed Decision and Resolution of the CA are ANNULLED and SET
ASIDE. The Orders of RTC-Calbatogan Br. 28 are declared NULL and VOID.

DIGESTER: Liana

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