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Petitioners assert that the RTCs Decision was invalid for Evidently, the heirs of Pedro Joaquin voluntary
lack of jurisdiction.[19] They claim that respondent died appeared and participated in the case. We stress
during the pendency of the case. There being no that the appellate court had ordered[33] his legal
substitution by the heirs, the trial court allegedly lacked representatives to appear and substitute for him.
jurisdiction over the litigation The substitution even on appeal had been ordered
correctly. In all proceedings, the legal
RULING
representatives must appear to protect the interests
of the deceased.[34] After the rendition of judgment,
Rule on Substitution further proceedings may be held, such as a motion
for reconsideration or a new trial, an appeal, or an
execution.[35]
When a party to a pending action dies and the claim is
not extinguished,[21] the Rules of Court require a Considering the foregoing circumstances, the
substitution of the deceased. The procedure is Motion for Substitution may be deemed to have
specifically governed by Section 16 of Rule 3 been granted; and the heirs, to have substituted for
The rule on the substitution of parties was crafted to the deceased, Pedro Joaquin. There being no
protect every partys right to due process.[22] The estate of
violation of due process, the issue of substitution alleged illegal demolition of their residence and boarding house
and for payment of lost income derived from fees paid by their
cannot be upheld as a ground to nullify the trial boarders
courts Decision. petitioners filed an Ex-Parte Motion to Litigate as Indigent
Litigants,5 to which petitioner Antonio Algura's Pay Slip No.
The test for determining the existence of forum shopping 2457360 (Annex "A" of motion) was appended, showing a gross
is whether the elements of litis pendentia are present, or monthly income
whether a final judgment in one case amounts to res Also attached as Annex "B" to the motion was a July 14, 1999
judicata in another.[41] We note, however, petitioners Certification7 issued by the Office of the City Assessor of Naga
claim that the subject matter of the present case has City, which stated that petitioners had no property declared in
already been litigated and decided. Therefore, the their name for taxation purposes.
applicable doctrine is res judicata Finding that petitioners' motion to litigate as indigent litigants was
The onus of proving allegations rests upon the party meritorious, Executive Judge Jose T. Atienza of the Naga City
RTC, granted petitioners' plea for exemption from filing fees
raising them.[46] As to the matter of forum shopping
as a result of respondent Naga City Government's demolition of a
and res judicata, petitioners have failed to provide this portion of petitioners' house, the Alguras allegedly lost a monthly
Court with relevant and clear specifications that would income of PhP 7,000.00 from their boarders' rentals. With the loss
show the presence of an identity of parties, subject of the rentals, the meager income from Lorencita Algura's sari-
matter, and cause of action between the present and the sari store and Antonio Algura's small take home pay became
earlier suits. They have also failed to show whether the insufficient for the expenses of the Algura spouses and their six
other case was decided on the merits. Instead, they have (6) children for their basic needs including food, bills, clothes, and
schooling, among others
made only bare assertions involving its existence without
respondents filed an Answer with Counterclaim arguing that the
reference to its facts. In other words, they have alleged defenses of the petitioners in the complaint had no cause of
conclusions of law without stating any factual or legal action, the spouses' boarding house blocked the road right of
basis. Mere mention of other civil cases without showing way, and said structure was a nuisance per se.
the identity of rights asserted and reliefs sought is not Praying that the counterclaim of defendants (respondents) be
enough basis to claim that respondent is guilty of forum dismissed, petitioners then filed their Reply with Ex-
shopping, or that res judicata exists Parte Request for a Pre-Trial Setting10 before the Naga City RTC
PETITION DENIED a pre-trial was held wherein respondents asked for five (5) days
within which to file a Motion to Disqualify Petitioners as Indigent
Litigants.
respondents filed a Motion to Disqualify the Plaintiffs for Non-
Payment of Filing Fees == They asserted that in addition to the
SPOUSES ANTONIO F. ALGURA and LORENCITA S.J. more than PhP 3,000.00 net income of petitioner Antonio Algura,
ALGURA, petitioners, who is a member of the Philippine National Police, spouse
vs. Lorencita Algura also had a mini-store and a computer shop on
THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA, the ground floor of their residence. respondents claimed that
petitioners' second floor was used as their residence and as a
FACTS boarding house, from which they earned more than PhP 3,000.00
a month. NOT INDIGENT LITIGANTS
spouses Antonio F. Algura and Lorencita S.J. Algura filed a petitioners subsequently interposed their Opposition to the
Verified Complaint dated August 30, 19994 for damages against Motion12 to respondents' motion to disqualify them for non-
the Naga City Government and its officers, arising from the payment of filing fees.
the Naga City RTC issued an Order disqualifying petitioners as udge Barsaga ratiocinated that the pay slip of Antonio F. Algura
indigent litigants on the ground that they failed to substantiate showed that the "GROSS INCOME or TOTAL EARNINGS of
their claim for exemption from payment of legal fees and to plaintiff Algura [was] 10,474.00 which amount [was] over and
comply with the third paragraph of Rule 141, Section 18 of the above the amount mentioned in the first paragraph of Rule 141,
Revised Rules of Courtdirecting them to pay the requisite filing Section 18 for pauper litigants residing outside Metro Manila.
fees
petitioners filed a Motion for Reconsideration ISSUE
On April 28, 2000, petitioners filed a Motion for Reconsideration
of the April 14, 2000 Order. On May 8, 2000, respondents then whether petitioners should be considered as indigent litigants who
filed their Comment/Objections to petitioner's Motion for qualify for exemption from paying filing fees.
Reconsideration.
trial court issued an Order14 giving petitioners the opportunity to RULING
comply with the requisites laid down in Section 18, Rule 141, for
them to qualify as indigent litigants.
the Naga City RTC, in its April 14, 2000 and July 17, 2000
petitioners submitted their Compliance15 attaching the affidavits
Orders, incorrectly applied Rule 141, Section 18 on Legal
of petitioner Lorencita Algura16and Erlinda Bangate,17 to comply
Feeswhen the applicable rules at that time were Rule 3, Section
with the requirements of then Rule 141, Section 18 of the Rules
21 on Indigent Party which took effect on July 1, 1997 and Rule
of Court and in support of their claim to be declared as indigent
141, Section 16 on Pauper Litigants which became effective on
litigants.
July 19, 1984 up to February 28, 2000.
IN HER AFFIDAVIT - petitioner Lorencita Algura claimed that the
old Section 16, Rule 141 requires applicants to file an ex-
demolition of their small dwelling deprived her of a monthly
parte motion to litigate as a pauper litigant by submitting and
income amounting to PhP 7,000.00. She, her husband, and their
affidavit complying with requirements: a) income requirement
six (6) minor children had to rely mainly on her husband's salary
the applicants should not have a gross monthly income of more
as a policeman which provided them a monthly amount of PhP
than PhP 1,500.00, and b) property requirementthey should not
3,500.00, more or less. Also, they did not own any real property
own property with an assessed value of not more than PhP
as certified by the assessor's office of Naga City. More so,
18,000.00
according to her, the meager net income from her small sari-sari
store and the rentals of some boarders, plus the salary of her In the case at bar, petitioners Alguras submitted the Affidavits of
husband, were not enough to pay the family's basic necessities. petitioner Lorencita Algura and neighbor Erlinda Bangate, the pay
slip of petitioner Antonio F. Algura showing a gross monthly
petitioners also submitted the affidavit of Erlinda Bangate, who
income of PhP 10,474.00,21 and a Certification of the Naga City
attested under oath, that she personally knew spouses Antonio
assessor stating that petitioners do not have property declared in
Algura and Lorencita Algura, who were her neighbors; that they
their names for taxation
derived substantial income from their boarders; that they lost said
income from their boarders' rentals when the Local Government Undoubtedly, petitioners do not own real property as shown by
Unit of the City of Naga, through its officers, demolished part of the Certification of the Naga City assessor and so the property
their house because from that time, only a few boarders could be requirement is met. However with respect to the income
accommodated; that the income from the small store, the requirement, it is clear that the gross monthly income of PhP
boarders, and the meager salary of Antonio Algura were 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00
insufficient for their basic necessities like food and clothing, income of Lorencita Algura when combined, were above the PhP
considering that the Algura spouses had six (6) children; and that 1,500.00 monthly income threshold prescribed by then Rule 141,
she knew that petitioners did not own any real property. Section 16 and therefore, the income requirement was not
satisfied
Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr.
denied petitioners Mortion for Reconsideration Unrelenting, petitioners however argue in their Motion for
Reconsideration of the April 14, 2000 Order disqualifying them as
indigent litigants23 that the rules have been relaxed by relying on WHITE LIGHT CORPORATION, TITANIUM CORPORATION
Rule 3, Section 21 of the 1997 Rules of Civil procedure which and STA. MESA TOURIST & DEVELOPMENT
authorizes parties to litigate their action as indigents if the court is CORPORATION, Petitioners,
satisfied that the party is "one who has no money or property vs.
sufficient and available for food, shelter and basic necessities for CITY OF MANILA
himself and his family." The trial court did not give credence to
this view of petitioners and simply applied Rule 141 but ignored FACTS
Rule 3, Section 21 on Indigent Party. Furthermore, Rule 141 on
indigent litigants was amended twice: first on March 1, 2000 and City Mayor Alfredo S. Lim (Mayor Lim) signed into law the
the second on August 16, 2004; and yet, despite these two Ordinance
amendments, there was no attempt to delete Section 21 from
said Rule 3. This clearly evinces the desire of the Court to
SECTION 1. Declaration of Policy. It is hereby the declared policy of the
maintain the two (2) rules on indigent litigants to cover
City Government to protect the best interest, health and welfare, and the
applications to litigate as an indigent litigant.
morality of its constituents in general and the youth in particular.
Thus, the trial court should have applied Rule 3, Section 21 to the
application of the Alguras after their affidavits and supporting
documents showed that petitioners did not satisfy the twin SEC. 2. Title. This ordinance shall be known as "An Ordinance"
requirements on gross monthly income and ownership of real prohibiting short time admission in hotels, motels, lodging houses,
property under Rule 141. Instead of disqualifying the Alguras as pension houses and similar establishments in the City of Manila.
indigent litigants, the trial court should have called a hearing as
required by Rule 3, Section 21 to enable the petitioners to adduce SEC. 3. Pursuant to the above policy, short-time admission and rate [sic],
evidence to show that they didn't have property and money wash-up rate or other similarly concocted terms, are hereby prohibited in
sufficient and available for food, shelter, and basic necessities for hotels, motels, inns, lodging houses, pension houses and similar
them and their family.27 In that hearing, the respondents would establishments in the City of Manila.
have had the right to also present evidence to refute the
allegations and evidence in support of the application of the SEC. 4. Definition of Term[s]. Short-time admission shall mean
petitioners to litigate as indigent litigants. Since this Court is not a admittance and charging of room rate for less than twelve (12) hours at
trier of facts, it will have to remand the case to the trial court to any given time or the renting out of rooms more than twice a day or any
determine whether petitioners can be considered as indigent other term that may be concocted by owners or managers of said
litigants using the standards set in Rule 3, Section 21 establishments but would mean the same or would bear the same
Recapitulating the rules on indigent litigants, therefore, if the meaning.
applicant for exemption meets the salary and property
requirements under Section 19 of Rule 141, then the grant of the SEC. 5. Penalty Clause. Any person or corporation who shall violate any
application is mandatory. On the other hand, when the application provision of this ordinance shall upon conviction thereof be punished by a
does not satisfy one or both requirements, then the application fine of Five Thousand (5,000.00) Pesos or imprisonment for a period of
should not be denied outright; instead, the court should apply the not exceeding one (1) year or both such fine and imprisonment at the
"indigency test" under Section 21 of Rule 3 and use its sound discretion of the court; Provided, That in case of [a] juridical person, the
discretion in determining the merits of the prayer for exemption president, the manager, or the persons in charge of the operation thereof
WHEREFORE, the petition is GRANTED shall be liable: Provided, further, That in case of subsequent conviction
for the same offense, the business license of the guilty party shall
automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not Solicitor General filed his Comment arguing that the Ordinance is
consistent with or contrary to this measure or any portion hereof are constitutional
hereby deemed repealed. During the pre-trial conference, the WLC, TC and STDC agreed
to submit the case for decision without trial as the case involved a
SEC. 7. Effectivity. This ordinance shall take effect immediately upon purely legal question
approval. the RTC rendered a decision declaring the Ordinance null and
void = RTC noted that the ordinance "strikes at the personal
Enacted by the city Council of Manila at its regular session today, liberty of the individual guaranteed and jealously guarded by the
November 10, 1992. Constitution."
City later filed a petition for review on certiorari with the Supreme
Court.20
the Court treated the petition as a petition for certiorari and
Approved by His Honor, the Mayor on December 3, 1992. referred the petition to the Court of Appeals
Before the Court of Appeals, the City asserted that the Ordinance
is a valid exercise of police power pursuant to Section 458 (4)(iv)
the Malate Tourist and Development Corporation (MTDC) filed a
of the Local Government Code which confers on cities, among
complaint for declaratory relief with prayer for a writ of preliminary
other local government units, the power:
injunction and/or temporary restraining order ( TRO)5 with the
Regional Trial Court (RTC) of Manila, impleading as defendant,
herein respondent City of Manila (the City) represented by Mayor [To] regulate the establishment, operation and maintenance of
Lim cafes, restaurants, beerhouses, hotels, motels, inns, pension
MTDC prayed that the Ordinance, insofar as it includes motels houses, lodging houses and other similar establishments,
and inns as among its prohibited establishments, be declared including tourist guides and transports
invalid and unconstitutional
MTDC claimed that as owner and operator of the Victoria Court in The Ordinance, it is argued, is also a valid exercise of the power
Malate, Manila it was authorized by Presidential Decree (P.D.) of the City under Article III, Section 18(kk) of the Revised Manila
No. 259 to admit customers on a short time basis as well as to Charter, thus:
charge customers wash up rates for stays of only three hours
petitioners White Light Corporation (WLC), Titanium Corporation "to enact all ordinances it may deem necessary and proper for the
(TC) and Sta. Mesa Tourist and Development Corporation sanitation and safety, the furtherance of the prosperity and the
(STDC) filed a motion to intervene and to admit attached promotion of the morality, peace, good order, comfort,
complaint-in-intervention7 on the ground that the Ordinance convenience and general welfare of the city and its inhabitants,
directly affects their business interests as operators of drive-in- and such others as be necessary to carry into effect and
hotels and motels in Manila. discharge the powers and duties conferred by this Chapter; and
RTC granted the motion to intervene. Notified OSG. MTDC to fix penalties for the violation of ordinances which shall not
moved to withdraw as plaintiff.11 exceed two hundred pesos fine or six months imprisonment, or
the RTC granted MTDC's motion to withdraw.12 The RTC issued a both such fine and imprisonment for a single offense
TRO on January 14, 1993, directing the City to cease and desist
from enforcing the Ordinance. Petitioners argued that the Ordinance is unconstitutional and void
The City filed an Answer dated January 22, 1993 alleging that the since it violates the right to privacy and the freedom of movement;
Ordinance is a legitimate exercise of police power it is an invalid exercise of police power; and it is an unreasonable
RTC issued a writ of preliminary injunction ordering the city to and oppressive interference in their business.
desist from the enforcement of the Ordinance. Court of Appeals reversed the decision of the RTC and affirmed
the constitutionality of the Ordinance = First, it held that the
Ordinance did not violate the right to privacy or the freedom of analysis, challengers to government action are in effect permitted
movement, as it only penalizes the owners or operators of to raise the rights of third parties. Generally applied to statutes
establishments that admit individuals for short time stays. infringing on the freedom of speech, the overbreadth doctrine
Second, the virtually limitless reach of police power is only applies when a statute needlessly restrains even constitutionally
constrained by having a lawful object obtained through a lawful guaranteed rights.39 In this case, the petitioners claim that the
method. The lawful objective of the Ordinance is satisfied since it Ordinance makes a sweeping intrusion into the right to liberty of
aims to curb immoral activities. There is a lawful method since the their clients. We can see that based on the allegations in the
establishments are still allowed to operate. Third, the adverse petition, the Ordinance suffers from overbreadth.
effect on the establishments is justified by the well-being of its We thus recognize that the petitioners have a right to assert the
constituents in general. Finally, as held in Ermita-Malate Motel constitutional rights of their clients to patronize their
Operators Association v. City Mayor of Manila, liberty is regulated establishments for a "wash-rate" time frame.
by law The Ordinance needlessly restrains the operation of the
TC, WLC and STDC come to this Court via petition for review on businesses of the petitioners as well as restricting the rights of
certiorari. their patrons without sufficient justification. The Ordinance rashly
equates wash rates and renting out a room more than twice a day
ISSUES with immorality without accommodating innocuous intentions.
Petition is GRANTED.
W/N these establishments have the requisite standing to please
for protection of their patrons equal protection rights
RULING