RULE 4

VENUE

THE MANILA RAILROAD COMPANY vs. THE ATTORNEY-GENERAL

20 Phil. 523

FACTS: Manila Railroad Company filed with the Court of First Instance for the condemnation of certain real estate in the Province of Tarlac. The land sought to be condemned is 69, 910 square meters in
area. After filing and duly serving the complaint of plaintiff, pursuant to law and pending final determination of the action, Manila Railroad Company took possession of and occupied the lands described in
the complaint, building its line and putting the same in operation. Later, plaintiff gave notice to the defendants a motion would be made to the court to dismiss the action upon the ground that the court had
no jurisdiction of the subject matter, It having just been ascertained by the plaintiff that the land sought to be condemned was situated in the Province of Nueva Ecija, instead of the Province of Tarlac. The
motion was hear and, after due consideration, the trial court dismissed the action upon the ground presented by Manila Railroad Company. Hence, this petition for certiorari.

ISSUE: Whether or not the Regional Trial Court correctly dismissed the complaint because it has no jurisdiction, power or authority where the land is located in another province, and that no such power,
authority, or jurisdiction can be conferred by the parties

HELD: The court held that the discussion of the effect of section 377 relative to the jurisdiction of Courts of First Instance over lands is applicable generally to the sections of law just quoted. The
provisions regarding the place and method of trial are procedural. They touched not the authority of the court over the land but, rather, the powers which it may exercise over the parties. They relate not to
the jurisdictional power of the court over the subject matter but to the place where that jurisdiction is to be exercised. In other words, the jurisdiction is assured, whatever the place of its exercise. The
jurisdiction is the thing; the place of exercise its incident. These special laws contain nothing which in any way indicates an intention of the legislature to alter the nature or extent of the jurisdiction of
Courts of First Instance granted by Act No. 136. As we said in discussing the provisions of section 277 of the Code of Civil Procedure, the court cannot hold that jurisdiction to be limited unless by express
provision or clear intendment. We have thus far drawn an analogy between section 377 of the code of Civil Procedure and section 3 of Act No. 1258, asserting that neither the one nor the other was
intended to restrict, much less deprive, the Courts of First Instance of the jurisdiction over lands in the Philippine Islands conferred upon them by Act No. 136. We, therefore, hold that section 377 of the
Code of Civil Procedure is not applicable to actions by railroad corporations to condemn lands; and that, while with the consent of defendants express or implied the venue may be laid and the action tried
in any province selected by the plaintiff nevertheless the defendants whose lands lie in one province, or any one of such defendants, may, by timely application to the court, require the venue as to their, or,
if one defendant, his, lands to be changed to the province where their or his lands lie. In such case the action as to all of the defendants not objecting would continue in the province where originally begun.
It would be severed as to the objecting defendants and ordered continued before the court of the appropriate province or provinces. While we are of that opinion and so hold it can not affect the decision in
the case before us for the reason that the defendants are not objecting to the venue and are not asking for a change thereof. They have not only expressly submitted themselves to the jurisdiction of the
court but are here asking that that jurisdiction be maintained against the efforts of the plaintiff to remove it.

ANTONIO PUNSALAN, JR., vs. REMEDIOS VDA. DE LACSAMANA

Gr no. 55729 March 28, 1983

FACTS: Antonio Punsalan owns a parcel of land in Tarlac. He mortgaged said lot to PNB an amount of P10,000.00 and later were not able to pay such amount which caused the foreclosure of the
property. PNB gained the highest bidder in the auction. However, the bank secured its title thereto only on 1970. In the meantime, in 1974, while the properly was still in the alleged possession of
petitioner and with the alleged acquiescence of respondent PNB (Tarlac Branch), and upon securing a permit from the Municipal Mayor, petitioner constructed a warehouse on said property. Petitioner
declared said warehouse for tax purposes for which he was issued Tax Declaration No. 5619. Petitioner then leased the warehouse to one Hermogenes Sibal for a period of 10 years starting January
1975. On 1978, PNB and Lacsamana executed a Deed of Sale on the said property which later acquired by PNB. The contract later was amended which include the building and improvements thereon. In
short, Lacsamana secured a title. On 1979, Punsalan commenced a suit seeking to annul the Deed of Sale which includes the building on the Amended Contract between PNB and Lacsamana with
damages in the CFI.

In its answer, Lacsamana averred the affirmative defense of lack of cause of action in that she was a purchaser for value and invoked the principle in Civil Law that the "accessory follows the
principal". On March 14, 1980, respondent PNB filed a Motion to Dismiss on the ground that venue was improperly laid considering that the building was real property under article 415 (1) of the New Civil
Code and therefore section 2(a) of Rule 4 should apply. Opposing said Motion to Dismiss, petitioner contended that the action for annulment of deed of sale with damages is in the nature of a personal
action, which seeks to recover not the title nor possession of the property but to compel payment of damages, which is not an action affecting title to real property. Later, the court moved to dismiss the
case for lack of venue. In his Motion for Reconsideration of the aforestated Order, petitioner reiterated the argument that the action to annul does not involve ownership or title to property but is limited to
the validity of the deed of sale and emphasized that the case should proceed with or without respondent PNB as respondent Lacsamana had already filed her Answer to the Complaint and no issue on
venue had been raised by the latter. On September 1, 1980,.respondent Court denied reconsideration for lack of merit. Petitioner then filed a Motion to Set Case for Pre-trial, in so far as respondent
Lacsamana was concerned, as the issues had already been joined with the filing of respondent Lacsamana's Answer. However, the court again denied the Motion.

ISSUE: Whether or not respondent Court erred in denying the Motion to Set Case for Pre-trial with respect to respondent Remedios Vda. de Lacsamana as the case had been dismissed on the ground of
improper venue upon motion of co-respondent Philippine National Bank (PNB)

HELD: The warehouse claimed to be owned by petitioner is an immovable or real property as provided in article 415(l) of the Civil Code. Buildings are always immovable under the Code. A building
treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no
wise changed its character as immovable property. 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 petitioner's 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 (Section 2, Rule 4), which was timely raised (Section 1, Rule 16)

Petitioner's other contention that the case should proceed in so far as respondent Lacsamana is concerned as she had already filed an Answer, which did not allege improper venue and,
therefore, issues had already been joined, is likewise untenable. Respondent PNB is an indispensable party as the validity of the Amended Contract of Sale between the former and respondent
Lacsamana is in issue. It would, indeed, be futile to proceed with the case against respondent Lacsamana alone.

LIZARES vs. CALUAG

Gr no. L- 17699 March 30, 1962

FACTS: Flaviano Cacnio instituted Civil Case for Possession of RealProperty of against AntonioLizares. Cacnio alleged that he bought from Lizares, on installment, Lot 4, Block 1 of the Sinkang
Subdivision in Bacolod City, making therefor a downpayment of P1,206, the balance of P10,858 to be paid in ten (10) yearly installments of P1,085.80 each, with interest thereon at the rate of 6% per
annum; that Cacnio received from petitioner a letter demanding payment of P7,324.69, representing arrears in the payment of installments plus "regular and overdue" interest, as well as "land taxes up to
70% of 1960"; that the sum then due from Cacnio by way of arrears amounted only to P5,824.69, he having paid P1,500 to petitioner "sometime in 1958"; that in view of the aforementioned demand of
petitioner, Cacnio sent thereto a check for P5,824.69, dated May 26, 1960, drawn by one Antonino Bernardo in favor of said petitioner, in payment of the amount due from Cacnio by way of arrears.
Petitioner returned said check and "refused the tender of payment". Cacnio alsoalleged that by reason of said illegal act of Lizares, he is entitled to compensatory damages and attorney's fees.

Lizares moved to dismiss the complaint upon the ground that "venue is improperly laid," for the action affects the title to or possession of real property located in Bacolod City, which was the
subject matter of a contract, between petitioner and Cacnio, made in said City. The motion was denied by the CFI Rizal, Quezon City Branch upon the ground that the action was in personam. Petitioner
filed a petition with the Court of Appeals praying that said order be set aside and that a writ of prohibition be issued commanding respondent Hon. Hermogenes Caluag, as Judge of said Court, to desist
from taking cognizance of said Civil Case No. Q-5197. The Court of Appeals dismissed said petition.

ISSUE: Whether or not the venue was improperly laid.

HELD: The real property in dispute is located in Bacolod City therefore it should be filed in RTC Bacolod. Sec.3, Rule 5 of the Rules of Court provides that “Actions affecting title to, or for recovery of
possession, or for partition or condemnation of, or foreclosure of mortgage on, real property, shall be commenced and tried in the province where the property or any part thereof lies.” In the case at bar,
the immediate remedy sought by Cacnio is to compel Lizares to accept the tender of payment allegedly made by the Cacnio, it is obvious that this relief is merely the first step to establish Cacnio's title to
the real property. Moreover, Cacnio's complaint is a means resorted to by him in order that he could retain the possession of said property. In short, venue in the main case was improperly laid and the CFI
Quezon City should have granted the motion to dismiss.
Therefore, venue in the main case was improperly laid. The decision appealed from is reversed and another one shall be entered directing respondent Judge to desist from taking further cognizance of
Civil Case No. Q-5197 of said court.

PAULINO NAVARRO vs. THE HONORABLE ANTONIO G. LUCERO, et al.

100 Phil. 147

FACTS: Respondent Barredo purchased from Ana Brodeck a lot situated in the municipality of Pasay, province of Rizal covered by TCT No. 16372 subject to redemption within two (2) years. Upon the
filing of the corresponding deed of conditional sale with the Office of the Register of Deeds, a TCT was issued in Barredo’s name, with an annotation of said option to repurchase. Defendant Ignacio de
Guzman (one Respondents herein) claiming to be the only child and legal heir of Brodek, filed a petition with CFI Rizal for the reconstitution of said TCT No. 16372, alleging that its original and the owner’s
duplicate had been destroyed or lost and could no longer be found although he knew that this was not true. Said court declared said TCT No. 16372 reconstituted, and ordered the Register of Deeds of
Rizal to issue its corresponding owner’s duplicate. Thereafter, De Guzman executed an affidavit adjucating said land to himself as the only child and sole heir of Ana Brodek. Based upon said affidavit, de
Guzman obtained from said court an order directing the Register of Deeds of Rizal to cancel the “reconstituted” TCT No. 16372 and to issue, in lieu thereof, another certificate of title to his name so said
Register of Deeds issued TCT No. 380-A 49002 in De Guzman’s name.

Acting in connivance with Alfredo Edward Fawcett (one of the Defendants in said case and Respondent herein), who was aware of the aforementioned conditional sale by Ana Brodek (his
wife), to Barredo, De Guzman executed in favor of Fawcett, a deed of conditional sale of the lot in question, which deed was filed with the office of the Register of Deeds of Rizal, and annotated on said
TCT No. 380-A 49002. Fawcett fraudulently consolidated his ownership upon said lot and caused TCT No. 862 to be issued in his name, free from liens and encumbrances, in lieu of said TCT No. 380 —
A 49002. Fawcett also, conveyed the property to Amado Acayan, and, as a consequence, said TCT No. 862, was cancelled, and another one, bearing No. 863, was issued in favor of Acayan, free from all
liens and encumbrances. Thereafter Acayan assigned the property to herein Petitioner, Paulino Navarro, in whose name TCT No. 1371 was issued free from all liens and encumbrances upon cancellation
of said TCT No. 863. Owing to the fraudulent reconstitution of TCT No. 16372, and the subsequent conveyances of the lot in dispute, there are now two (2) certificates of title thereon, namely, TCT No.
76578, in Barredo’s name, and TCT No. 1371 in Navarro’s name.

Barredo then filed to the CFI Manila praying that TCT 1371 issued by the Register of Deeds of Rizal City in the name of Paulino Navarro, be declared null and void, and Transfer Certificate
No. 76578 in the name of Plaintiff Manuel H. Barredo, as valid certificate of title over the land in question and in the event that Plaintiff is deprived of, or has lost his title or ownership of the land in
question, Defendant Ignacio de Guzman and Alfredo E. Fawcett be ordered to pay damages and attorney’s fees.

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 Navarro moved to dismiss Barredo’s amended complaint upon the ground “that venue is improperly laid.” The motion was denied as well as the reconsideration filed thereafter. Hence, the
present action, in which Petitioner assails the jurisdiction of the Court of First Instance of Manila to hear and decide said Civil Case No. 17061, the property in question being located in Pasay City.

ISSUE: Whether or not the venue was properly laid.

HELD: Venue is improperly laid in this case. Rule 5, sections 1 and 3, of the Rules of Court provides that “Civil action in Courts of First Instance may be commenced and tried where the Defendant or any
of the Defendants resides or may be found, or where thePlaintiff or any of the Plaintiffs resides, at the election of the Plaintiff. Actions affecting title to, or for recovery of possession, or for partition or
condemnation of, foreclosure of mortgage on, real property shall be commenced and tried in the province where the property or any part thereof lies.” In the case at bar, the principal relief prayed for in
Barredo’s amended complaint is that TCT No. 1371 issued by the Register of Deeds of Rizal in the name of Paulino Navarro be declared null and void. This is only one cause of action.

Actions in personam are transitory. However, if besides said actions, the complaint sets up a real action, or even an action quasi in rem, such as foreclosure of a real estate mortgage (in
which Plaintiff seeks principally the recovery of a sum of money, the foreclosure are to take place only in the event of failure of the Defendant to voluntarily pay said sum), the case “shall be commenced
and tried in the province where the property or any part thereof lies.” Therefore, venue is improperly laid in the case at bar.the venue should be in the CFI Rizalwhere the location of the property in dispute
is situated. The petition is granted, and the CFI Manila is hereby enjoined from hearing and deciding the aforementioned Civil Case No. 17061.

FRANCISCO HERNANDEZ and JOSEFA ATIENZA vs. RURAL BANK OF LUCENA, INC.
81 SCRA 75 (1978)

FACTS: Spouses Francisco S. Hernandez and Josefa U. Atienza obtained from the Rural Bank of Lucena, Inc. a loan of P6,000 which was payable on for 1 year. The loan was cured by a mortgage on
their two lots situated in Cubao, Quezon City with a total area of 600 square meters. About three months after that loan was obtained, the Lucena Bank became a distress bank. Thereafter, the Monetary
Board advised the stockholders to reorganize the Lucena bank by electing a new board of directors and directed that bank (a) not to grant new loans or renewals; (b) not to accept deposits from new
depositors; (c) to service only the existing deposit accounts and (d) not to issue drafts or make any disbursements without the prior approval of Central Bank examiners.

Before the expiration of the one-year term of the loan, Hernandez went to the Lucena bank and offered to pay the loan by means of a check for P6,000 but was returned by the bank.
Hernandez again sent to the bank a photostat of the check and a letter inquiring whether the bank would honor the check and when he should go personally to the bank for that purpose. The executive
vice-president wrote to Hernandez and informed him that the check could not be honored for the time being because of adverse events that had disrupted the bank's operations so for the meantime, the
Lucena bank were suspended. In another date, he again offered to pay by means of check but the vice-president said that when Hernandez presented the check, the Lucena bank was no longer in a
position to honor withdrawals and that had Hernandez paid cash, his payment would have been accepted. Payment by check was a disbursement which is not allowed without the consent of the Central
Bank examiners. Hernandez sent letters many times offering to pay the loan but always returned. Hernandez filed an action in the CFI Lipa City to compel the Rural Bank of Lucena, Inc., to accept the
check and to execute the cancellation of the real estate mortgage. The Central Bank filed a motion to dismiss contending that there was improper venue because, as the action allegedly involved title to
real property, it should have been instituted in Quezon City where the encumbered lots are situated.
CFI Lipa City rendered decision ordering the Lucena Bank or the Central Bank, as liquidator, to accept the honor the check, to cancel the mortage. Hence, this appeal.

ISSUE: Whether or not the trial court erred in not holding that the venue was improperly laid.

HELD: Venue was improperly laid in this case. Section 2(a), Rule 4 of the Rules of Court provides that "actions affecting title to, or for recovery of possession, or for partition or condemnation of, or
foreclosure of mortgage on, real property, shall be commenced and tried in the province where the property or any part thereof lies". The venue of plaintiffs' personal action is the place where the
defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Sec. 2[b], Rule 4). In this case, the plaintiffs alleged in their
complaint that they were residents of San Juan, Batangas, which in their brief they characterize as their legal residence and which appears to be their domicile of origin. On the other hand, it is indicated
in the promissory note and mortgage signed by them and in the Torrens title covering the mortgaged lots that their residence is at 11 Chicago Street, Cubao, Quezon City, which apparently is the place
where the said lots are located. We hold that the trial court should have dismissed the action because the venue thereof was improperly laid in Batangas. The term "resides" in section 2[b] of Rule 4 refers
to the place of actual residence or domicile. San Juan, Batangas might be the place where the plaintiffs have their domicile or legal residence but there is no question that 11 Chicago Street, Cubao,
Quezon City is their place of abode or the place where they actually reside. So, the action in this case, which is a personal action to compel the defendants to honor the check in question and to Cancel
the mortgage, should have been filed in Quezon City if the plaintiffs intended to use their residence as the basis for their choice of venue.

DANGWA vs. SARMIENTO

75 SCRA 124

FACTS: Private respondent Lawrence Heller is an American citizen, an Airman First Class of the United States Air Force, and presently assigned and stationed at Clark Air Base Pampanga, Philippines.
As a consequence of the injuries sustained by him when his motorcycle was bumped by a bus of the Dangwa Transportation Co., Inc., he filed an action with the Court of First Instance of
Pampanga, against petitioners James G. Gayot, the bus driver, and Dangwa Transportation Co., Inc., owner of the bus. Defendant James G. Gayot is a resident of Engineer's Hill, Baguio City and the
other defendant Dangwa Bus Company is a juridical person or corporation organized and existing in accordance with the laws of the Republic of the Philippines, with business address at Trinidad Valley,
Banquet Mountain Province. The petitioners filed a motion to dismiss on the ground that venue was improperly laid with the Court of First Instance of Pampanga for private respondent, an American
citizen, is not a resident of Clark Air Base, Pampanga. Respondent Judge Malcolm G. Sarmiento issued an Order denying petitioners' motion to dismiss, and stating that private respondent's actual
residence is in Clark Air Base, Pampanga, and his action, therefore, was properly instituted in said province.

ISSUE: Whether or not the motion to dismiss should be granted on the ground of improper venue

HELD: There is no question that respondent Lawrence Heller has his fixed place of abode at Clark Air Base, Pampanga. The term "resides" as employed in the rule on venue on personal actions filed with
courts of first instance means the place of abode, whether permanent or temporary, of the plaintiff or the defendant, as distinguished from "domicile" which denotes a fixed permanent residence to which,
when absent, one has the intention of returning. There is a difference between domicide and residence. Residence is used to indicate a place of abode, whether permanent or temporary: domicile denotes
a fixed permanent residence to which when absent, one has the intention of returning. A man may have a residence in one place and a domicile in another. Residence is not domicile, but domicile is
residence coupled with the intention to remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous places of residence. His place
of residence generally is his place of domicile, but is not any means, necessarily so since no length of residence without intention of remaining will constitute domicile.

IRENE MARCOS-ARANETA vs. COURT OF APPEALS

Gr no. 154096 August 22, 2008

FACTS: Benedicto Group is a group consisting of Roberto S. Benedicto and his business associates which organized Far East Managers and Investors, Inc. (FEMII) and Universal Equity Corporation
(UEC). Benedicto, as trustor, placed in his name and in the name of his associates, as trustees, the shares of stocks of FEMII and UEC with the obligation to hold those shares and their fruits in trust and
for the benefit of Irene Araneta to the extent of 65% of such shares.Irene demanded the reconveyance of said 65% stockholdings, but the Benedicto Group refused to oblige. Irene thereupon
instituted before the RTC of Batac, Ilocos Norte, two similar complaints for conveyance of shares of stock, accounting and receivership against the Benedicto Group. RTC dismissed both complaints.
Pending resolution of her motion for reconsideration, Irene filed a Motion (to Admit Amended Complaint),attaching therewith a copy of the Amended Complaint in which the names of Daniel Rubio, Orlando
G. Reslin, and Jose G. Reslin appeared as additional plaintiffs. As stated in the amended complaint, the added plaintiffs, all from Ilocos Norte, were Irene’s new trustees. The RTC granted the motion.
Respondents appealed the order to the Court of Appeals. The Court found in favour of respondents holding that the complaint cannot be amended because its dismissal by the RTC was already final.

ISSUE: Whether or not proper venue is laid when a complaint is heard in the residence of a co-plaintiff who is not a principal plaintiff

HELD: No. The court declared Irene as not a resident of Batac, Ilocos Norte. Withal, that court was an improper venue for her conveyance action. The Court can concede that Irene’s three co-plaintiffs are
all residents of Batac, Ilocos Norte. But it ought to be stressed in this regard that not one of the three can be considered as principal party-plaintiffs, included as they were in the amended complaint as
trustees of the principal plaintiff. As trustees, they may be accorded, by virtue of Sec. 3 of Rule 3, the right to prosecute a suit, but only on behalf of the beneficiary who must be included in the title of the
case and shall be deemed to be the real party-in-interest. In the final analysis, the residences of Irene’s co-plaintiffs cannot be made the basis in determining the venue of the subject suit. This conclusion
becomes all the more forceful considering that Irene herself initiated and was actively prosecuting her claim against Benedicto, his heirs, assigns, or associates, virtually rendering the impleading of the
trustees unnecessary.

EASTERN ASSURANCE and SURETY CORP vs. CUI, et al.

Gr no. 54452 July 20, 1981

FACTS: Transunion Corporation and Rey M. Pan doing business under the name of Pan Phil. Trading entered into a dealership agreement for the sale of merchandise. Pursuant thereto Pan Phil. Trading
had to file a P 20,000 surety bond and it complied by presenting a surety bond of Eastern Assurance & Surety Corporation, herein petitioner. Transunion filed a complaint against Rey M. Pan, Pan Phil.
Trading and Eastern Assurance & Surety Corporation for the full payment of merchandise delivered in the amount of P 10,841.54. After Eastern Assurance & Surety Corporation had filed its Answer with
cross-claim, it filed a motion to file a third-party complaint against Loreta B. Pan, wife of Rey M. Pan. The reason given in the motion is that movant has a legal right against Loreta B. Pan. It appears that in
consideration of the surety bond, the Pan spouses executed an Indemnity Agreement in favor of Eastern Assurance & Surety Corporation. The respondent judge granted the motion and admitted the third-
party complaint. Subsequently, Loreta B. Pan filed a motion to dismiss the third-party complaint on the ground that venue was improperly laid. She invoked paragraph 7 of the Indemnity Agreement where
it was agreed upon that she is waiving her right to proper venue in case any question may arise in relation thereto. The respondent judge dismissed the third-party complaint.

ISSUE: Whether or not a third-party complaint may be heard in the same court where the main case is filed notwithstanding it being under another court’s jurisdiction, without violating the rule on proper
venue

HELD: It has to be remembered that a third-party complaint is but ancillary to the main action and is a procedural device to avoid multiplicity of suits. Because of its nature the prescriptions on jurisdiction
and venue applicable to ordinary suits may not apply. Thus a third-party complaint has to yield to the jurisdiction and venue of the main action. The third-party complaint is an ancillary suit which depends
on the jurisdiction of the court over the main action. Since the trial court had acquired jurisdiction over the complaint, it necessarily follows that it likewise had jurisdiction over the third-party complaint

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which is but an incident thereof. This must be so because jurisdiction over the main case embraces all incidental matters arising therefrom and connected therewith. A contrary rule would result in 'split
jurisdiction which is not favored, and in multiplicity of suits, a situation obnoxious to the orderly administration of justice. The court acquired jurisdiction over the third-party complaint, provided it had
jurisdiction over the main case, for the reason that the third-party complaint is but a continuation thereof, its purpose being to seek 'contribution, indemnity, subrogation or any other relief, in respect to his
opponent's claim.'

ADELAIDA INFANTE vs. ARAN BUILDERS, INC.,

Gr no. 156596 August 24, 2007

FACTS: An action for revival of judgment filed on June 6, 2001 by Aran Builders, Inc. against Adelaida Infante. The judgment sought to be revived was rendered by the Regional Trial Court of Makati City
in an action for specific performance and damages. Petitioner filed a motion to dismiss the action (for revival of judgment) on the grounds that the Muntinlupa RTC has no jurisdiction over the persons of
the parties and that venue was improperly laid. Private respondent opposed the motion. On August 12, 2002, the CA promulgated its Decision ruling in favor of herein private respondent. The CA held that
since the judgment sought to be revived was rendered in an action involving title to or possession of real property, or interest therein, the action for revival of judgment is then an action in rem which should
be filed with the Regional Trial Court of the place where the real property is located. Petitioner moved for reconsideration of the CA Decision but the motion was denied per Resolution dated January 7,
2003.

ISSUE: Where is the proper venue of the present action for revival of judgment?

HELD: The proper venue depends on the determination of whether the present action for revival of judgment is a real action or a personal action. Applying the afore-quoted rules on venue, if the action for
revival of judgment affects title to or possession of real property, or interest therein, then it is a real action that must be filed with the court of the place where the real property is located. If such action does
not fall under the category of real actions, it is then a personal action that may be filed with the court of the place where the plaintiff or defendant resides. The court affirms the decision of the CA.

POLYTRADE CORPORATION vs. VICTORIANO BLANCO

Gr no. L-270033 October 31, 1969

FACTS: A Suit before the Court of First Instance of Bulacan on four causes of action to recover the purchase price of rawhide delivered by plaintiff to defendant. Plaintiff corporation has its principal office
and place of business in Makati, Rizal. Defendant is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue. He claims that by contract suit may only be
lodged in the courts of Manila. The Bulacan court overruled him. He did not answer the complaint. In consequence, a default judgment was rendered against him on September 21, 1966. Defendant
places his case upon Section 3 of Rule 4 just quoted. According to defendant, plaintiff and defendant, by written contracts covering the four causes of action, stipulated that: "The parties agree to sue and
be sued in the Courts of Manila." This agreement is valid. Defendant says that because of such covenant he can only be sued in the courts of Manila. No such stipulation appears in the contracts covering
the first two causes of action. The general rule set forth in Section 2 (b), Rule 4, governs, and as to said two causes of action, venue was properly laid in Bulacan, the province of defendant's residence.

ISSUE: Whether or not venue was properly laid in the province of Bulacan where defendant is a resident.

HELD: Venue here was properly laid. "The parties agree to sue and be sued in the Courts of Manila," does not preclude the filing of suits in the residence of plaintiff or defendant. The plain meaning is that
the parties merely consented to be sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila alone is the venue are totally absent therefrom. We cannot read into that
clause that plaintiff and defendant bound themselves to file suits with respect to the last two transactions in question only or exclusively in Manila. For, that agreement did not change or transfer venue. It
simply is permissive. The parties solely agreed to add the courts of Manila as tribunals to which they may resort. They did not waive their right to pursue remedy in the courts.

UNIMASTERS CONGLOMERATION, INC. vs. COURT OF APPEALS

Gr no. 119657 February 7, 1997

FACTS: On October 8, 1988 Kubota Agri-Machinery Philippines, Inc. (hereafter, simply KUBOTA) and Unimasters Conglomeration, Inc. (hereafter, simply UNIMASTERS) entered into a "Dealership
Agreement for Sales and Services" of the former's products in Samar and Leyte Provinces. The contract contained, among others: a stipulation reading: ". . . All suits arising out of this Agreement shall be
filed with/in the proper Courts of Quezon City,". Some five years later, or more precisely on December 24, 1993, UNIMASTERS filed an action in the Regional Trial Court of Tacloban City against KUBOTA,
a certain Reynaldo Go, and Metropolitan Bank and Trust Company-Tacloban Branch (hereafter, simply METROBANK) for damages for breach of contract, and injunction with prayer for temporary
restraining order. On January 4, 1994 KUBOTA filed-two motions. One prayed for dismissal of the case on the ground of improper venue. The other prayed for the transfer of the injunction hearing to
January 11, 1994 because its counsel was not available on January 10 due to a prior commitment before another court.

ISSUE: Where is the proper venue for the action be filed.

HELD: Rule 4 of the Rules of Court sets forth the principles generally governing the venue of actions, whether real or personal, or involving persons who neither reside nor are found in the Philippines or
otherwise. Agreements on venue are explicitly allowed. "By written agreement of the parties the venue of an action may be changed or transferred from one province to another ." Parties may by stipulation
waive the legal venue and such waiver is valid and effective being merely a personal privilege, which is not contrary to public policy or prejudicial to third persons. It is a general principle that a person may
renounce any right which the law gives unless such renunciation would be against public policy. Written stipulations as to venue may be restrictive in the sense that the suit may be filed only in the place
agreed upon, or merely permissive in that the parties may file their suit not only in the place agreed upon but also in the places fixed by law (Rule 4, specifically). As in any other agreement, what is
essential is the ascertainment of the intention of the parties respecting the matter. Since convenience is the raison d'etre of the rules of venue, stipulations designating venues other than those assigned by
Rule 4 should be interpreted as designed to make it more convenient for the parties to institute actions arising from or in relation to their agreements; that is to say, as simply adding to or expanding the
venues indicated in said Rule 4. On the other hand, because restrictive stipulations are in derogation of this general policy, the language of the parties must be so clear and categorical as to leave no
doubt of their intention to limit the place or places, or to fix places other than those indicated in Rule 4, for their actions. Absent additional words and expressions definitely and unmistakably denoting the
parties' desire and intention that actions between them should be ventilated only at the place selected by them, Quezon City — or other contractual provisions clearly evincing the same desire and
intention — the stipulation should be construed, not as confining suits between the parties only to that one place, Quezon City, but as allowing suits either in Quezon City or Tacloban City, at the option of
the plaintiff (UNIMASTERS in this case).

AUCTION IN MALINTA, INC., vs. WARREN EMBES LUYABEN

Gr no. 173979 February 12, 2007

FACTS: Warren Embes Luyaben filed a complaint for damages against Auction in Malinta, Inc. (AIMI) in RTC-Kalinga where Luyaben resides after the herein petitioner conducted an auction and
declaring the herein respondent the highest bidder for a wheel loader, respondent tendered the payment for the said item but petitioner could no longer produce the loader. It offered a replacement but
failed to deliver the same up to the filing of the complaint. AIMI moved to dismiss the complaint on the ground of improper venue by invoking the following stipulation in theiragreement: ALL
COURT LITIGATION PROCEDURES SHALL BE CONDUCTED IN THE APPROPRIATE COURTS OF VALENZUELA CITY, METRO MANILA.

ISSUE: Whether or not the stipulation in the Agreement effectively limit the venue of the case exclusively to the proper court of Valenzuela City

HELD: 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, such as “exclusively” and “waiving for this purpose any other venue, “shall only” preceding the designation of venue, “to the exclusion of the other courts,” or words of similar import,
the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place.

SWEET LINES, INC., vs. TEVES

Gr no. 37750 May 19, 1978

FACTS: Private respondents Atty. LeovigildoTandog and Rogelio Tiro, a contractor by professions, bought tickets for Voyage 90 on at the branch office of petitioner, a shipping company transporting inter-
islandpassengers and cargoes, at Cagayan de Oro City. Respondents were to board petitioner's vessel, M/S "Sweet Hope" bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel
was not proceeding to Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the branch office for proper relocation to M/S "Sweet Town". Because the said
vessel was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." Private respondents alleged that they were,
during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits," and that the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored
and they were constrained to pay for other tickets. In view thereof, private respondents sued petitioner for damages and for breach of contract of carriage in the alleged sum of P10,000.00 before
respondents Court of First Instance of MisamisOriental.Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised on the condition printed at the back of the
tickets, i.e., Condition No. 14, which reads: It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be
filed in the competent courts in the City of Cebu.

ISSUE: Whether or not the “stipulation “any action arising out of the conditions and provisions can be filed only in competent court of cebucity”in the ticket valid and enforceable.

HELD: There is no question that there was a valid contract of carriage entered into by petitioner and private respondents and that the passage tickets, upon which the latter based their complaint, are the
best evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and object, are present. To the same effect and import, and, in recognition of the character of
contracts of this kind, the protection of the disadvantaged is expressly enjoined by the New Civil Code — In all contractual property or other relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for his protection. Considered in the light Of the foregoing norms and
in the context Of circumstances Prevailing in the inter-island shipping industry in the country today, The Supreme Court find and hold that Condition No. 14 printed at the back of the passage tickets should
be held as void and unenforceable for the following reasons first, under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions
printed at the back of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature,
since the same will prejudice rights and interests of innumerable passengers in different parts of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of Cebu. It
is also hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hours, for conditions that may be printed much
charge them with having consented to the conditions, so printed, especially if there are a number of such conditions in fine print, as in this case.

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 PILIPINO TELEPHONE CORPORATION vs. TECSON
Gr no. 156966 May 7, 2004

FACTS: On various dates in 1996, Delfino C. Tecson applied for six (6) cellular phone subscriptions with petitioner Pilipino Telephone Corporation (PILTEL), a company engaged in the telecommunications
business, which applications were each approved and covered, respectively, by six mobiline service agreements. On 05 April 2001, respondent filed with the Regional Trial Court of Iligan City, Lanao Del
Norte, a complaint against petitioner for a “Sum of Money and Damages.” Petitioner moved for the dismissal of the complaint on the ground of improper venue, citing a common provision in the mobiline
service agreements to the effect that - “Venue of all suits arising from this Agreement or any other suit directly or indirectly arising from the relationship between PILTEL and subscriber shall be in the
proper courts of Makati, Metro Manila. Subscriber hereby expressly waives any other venues.” The RTC dismissed the petitioner’s motion to dismiss which was later affirmed by the Court of Appeals thus
the present case.

ISSUE: Whether or Not the stipulation between the parties binds them to file a suit exclusively in the proper court of Makati, Metro Manila.

HELD: Section 4, Rule 4, of the Revised Rules of Civil Procedure allows the parties to agree and stipulate in writing, before the filing of an action, on the exclusive venue of any litigation between
them. Such an agreement would be valid and binding provided that the stipulation on the chosen venue is exclusive in nature or in intent, that it is expressed in writing by the parties thereto, and that it is
entered into before the filing of the suit. The provision contained in paragraph 22 of the “Mobile Service Agreement,” a standard contract made out by petitioner PILTEL to its subscribers, apparently
accepted and signed by respondent, states that the venue of all suits arising from the agreement, or any other suit directly or indirectly arising from the relationship between PILTEL and subscriber, “shall
be in the proper courts of Makati, Metro Manila.” The added stipulation that the subscriber “expressly waives any other venue” should indicate, clearly enough, the intent of the parties to consider the
venue stipulation as being preclusive in character In the case at bar, respondent secured six (6) subscription contracts for cellular phones on various dates. It would be difficult to assume that, during each
of those times, respondent had no sufficient opportunity to read and go over the terms and conditions embodied in the agreements. Respondent continued, in fact, to acquire in the pursuit of his business
subsequent subscriptions and remained a subscriber of petitioner for quite some time.

UNIWIDE HOLDINGS, INC., vs. ALEXANDER M. CRUZ

529 SCRA 664

FACTS: Petitioner, Uniwide Holdings, Inc. (UHI), whose office is located in Parañaque City, entered into a Franchise Agreementgranting respondent, Alexander M. Cruz (Cruz), a 5 year franchise to adopt
and use the "Uniwide Family Store System" for the establishment and operation of a "Uniwide Family Store" along Marcos Highway, Sta. Cruz, Cogeo, Marikina City. Cruz had purchased goods from UHI’s
affiliated companies First Paragon Corporation (FPC) and Uniwide Sales Warehouse Club, Inc. (USWCI). FPC and USWCI executed Deeds of Assignmentin favor of UHI assigning all their rights and
interests over Cruz’s accounts payable to them. Cruz had outstanding obligations with UHI, FPC, and USWCI drawing UHI to send him a letter to settle his accounts. His receipt of the letter
notwithstanding, Cruz’s accounts remained unsettled. UHI filed a complaint for collection of sum of money before the Regional Trial Court (RTC) of Parañaque against Cruz on the following causes of
action: … Second and Third Cause of Action: Being the assignee of the receivable of FPC and USWCI, which receivable defendant failed to pay despite demand, plaintiff suffered actual damages….
Cruz filed a motion to dismiss on the ground of improper venue, he invoking Article 27.5 of the agreement which reads: Venue Stipulation – The Franchisee consents to theexclusive jurisdiction of the
courts of Quezon City. Branch 258 of the Parañaque RTC, granted Cruz’s motion to dismiss. UHI filed a petition contending that nowhere in the agreement is there a mention of FPC and USWCI, and
neither are the two parties thereto, hence, they cannot be bound to the stipulation on "exclusive venue."

ISSUE: Whether or not a case based on several causes of action is dismissible on the ground of improper venue where only one cause of action arises from a contract with exclusive venue stipulation.

HELD: In joinder of causes of action, where there is stipulation of exclusive venue in one cause, the stipulation cannot be expanded to precluded bringing the action in other venues. The assignment of
rights given to UHI by FPC and USWI is separate and distinct. FPC and USWI was never been a party into the agreement entered into between UHI and Cruz. RTC of Parañaque has therefore jurisdiction
over the venue of the case and should have not dismissed the case.

PHILIPPINE BANK OF COMMUNICATIONS vs. ELENA LIM and RAMON CALDERON

455 SCRA 714

FACTS: Philippine Bank of Communications (PBC (petitioners) filed a complaint against Respondents Elena Lim et.al. with the Regional Trial Court of Manila for the collection of a deficiency amounting
to P4,014,297.23 exclusive of interest. PBC alleged that [respondents] obtained a loan and executed a continuing surety agreement (SA) in favor of PBC for all loans, credits, etc., that were extended or
may be extended in the future to [respondents]. PBC granted a renewal of said loan upon [respondent’s] request, as evidenced by Promissory Note (PN). It was expressly stipulated therein that the
venue for any legal action that may arise out of said promissory note shall be Makati City. Respondents allegedly failed to pay said obligation upon maturity. PBC foreclosed the real estate mortgage
executed by respondents.Respondents moved to dismiss the complaint on the ground of improper venue, invoking the stipulation contained in the last paragraph of the promissory note with respect to the
restrictive/exclusive venue. The trial court denied the motion asseverating that PBC had separate causes of action arising from the promissory note and the continuing surety agreement. Thus, [under]
Rule 4, Section 2, of the 1997 Rules of Civil Procedure, as amended, x x x venue was properly laid in Manila. The trial court supported its order with cases where venue was held to be merely permissive.
A motion for reconsideration of said order was likewise denied. Respondents appealed to the CA and ruled that respondents’ alleged debt was based on the PN, which had provided an exclusionary
stipulation on venue “to the exclusion of all other courts. The parties’ Surety Agreement, though silent as to venue, was an accessory contract that should have been interpreted in consonance with the
Promissory Note. The CA annulled the decision of the RTC. PBC filed a petition for review to the SC.

ISSUE: Whether or not the SA and PN is distinct and separate causes of action which affect the venue of the action.

HELD: SA and PN constitute one cause of action. The surety agreement (SA) is merely an accessory to the principal loan agreement embodied in the promissory note (PN). Hence, the enforcement of
the former depends upon the latter. The complaint should be filed in Makati City and not in Manila.The cause of action, however, does not affect the venue of the action. The vital issue in the present case
is whether the action against the sureties is covered by the restriction on venue stipulated in the PN. As earlier stated, the answer is affirmative. Since the cases pertaining to both causes of action are
restricted to Makati City as the proper venue, petitioner cannot rely on Section 5 of Rule of the Rules of Court. (the “complementary-contracts-construed-together” doctrine under Article 1374 of the Civil
Code.

SPOUSES HERMES P. OCHOA and ARACELI D. OCHOA vs. CHINA BANKING CORPORATION
646 SCRA 414 (2011)

FACTS: This case involves petitioners' mortgaged real property located in Paranaque City over which respondent bank was granted a special power to foreclose extra-judicially. The bank extrajudicially
foreclosed the mortgaged property at the trial court of Paranaque City. Petitioner assailed that the petition for extrajudicial foreclosure of mortgage should be filed at Makati City invoking Section 4 of Rule
4: Exception to the rule, where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof. Upon appeal, the CA ruled that the stipulated exclusive venue of
Makati City is binding only on petitioners' complaint for Annulment of Foreclosure, Sale, and Damages filed before the Regional Trial Court of Paranaque City, but not on respondent bank's Petition for
Extrajudicial Foreclosure of Mortgage, which was filed with the same court.
The SC affirmed the decision of the CA. The petitioners filed a motion for reconsideration.

ISSUE: Whether or not the venue of extrajudicial foreclosure may be governed by Section 4, Rule 4 of Rules of Court.

HELD: The exclusive venue of Makati City, as stipulated by the parties and sanctioned by Section 4, Rule 4 of the Rules of Court, cannot be made to apply to the Petition for Extrajudicial Foreclosure filed
by respondent bank because the provisions of Rule 4 pertain to venue of actions, which an extrajudicial foreclosure is not. Extrajudicial foreclosures are not judicial proceedings, actions or suits. "Action
means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong." The stipulated exclusive venue of
Makati City is relevant only to actions arising from or related to the mortgage, such as petitioners' complaint for Annulment of Foreclosure, Sale, and Damages.The venue of extrajudicial foreclosure sales,
Act No. 3135, as amended, applies, it being a special law dealing particularly with extrajudicial foreclosure sales of real estate mortgages, and not the general provisions of the Rules of Court on Venue of
Actions.

RULE 6
PLEADINGS

FRANCISCO S. TANTUICO, JR, vs. REPUBLIC OF THE PHILIPPINES

Gr no. 89114 December 2, 1991

FACTS: A case was filed with the Sandiganbayan by the Republic of the Philippines, represented by the PCGG, and assisted by the Office of the Solicitor General for reconveyance, reversion, accounting,
restitution and damages against Benjamin (Kokoy) Romualdez, Ferdinand E. Marcos and Imelda R. Marcos. Petitioner Francisco S. Tantuico, Jr. was included as defendant on the theory that he
collaborated and aided the Marcoses in concealing the ill-gotten wealth. After Tantuico’s motion for production and inspection of documents was denied by the Sandiganbayan, petitioner filed a Motion for
a Bill of Particulars, alleging inter alia that he is sued for acts allegedly committed by him as (a) a public officer-Chairman of the Commission on Audit, (b) as a private individual, and (c) in both capacities,
in a complaint couched in too general terms and shorn of particulars that would inform him of the factual and legal basis thereof, and that to enable him to understand and know with certainty the particular
acts allegedly committed by him and which he is now charged with culpability, it is necessary that plaintiff furnish him the particulars sought therein relative to the averments in paragraphs 2, 9(a), 15, 7
and 17 of the Second Amended Complaint so that he can intelligently prepare his responsive pleading and prepare for trial. The Solicitor General, opposed the motion and the Sandiganbayan
promulgated a resolution denying the petitioner's motion for a bill of particulars on the ground that the particulars sought by petitioner are evidentiary in nature. Petitioner moved for reconsideration but was
denied.

ISSUE: Whether or not the respondent Sandiganbayan acted with grave abuse of discretion in issuing the disputed resolutions.

HELD: A complaint is defined as a concise statement of the ultimate facts constituting the plaintiff's cause or causes of action. Like all other pleadings allowed by the Rules of Court, the complaint shall
contain in a methodical and logical form a plain, concise and direct statement of the ultimate facts on which the plaintiff relies for his claim, omitting the statement of mere evidentiary facts. Its office,
purpose or function is to inform the defendant clearly and definitely of the claims made against him so that he may be prepared to meet the issues at the trial. The complaint should inform the defendant of
all the material facts on which the plaintiff relies to support his demand; it should state the theory of a cause of action which forms the bases of the plaintiff's claim of liability. The rules on pleading speak of
two (2) kinds of facts: the first, the "ultimate facts", and the second, the "evidentiary facts." The term "ultimate facts" as used in Sec. 3, Rule 3 of the Rules of Court, means the essential facts constituting
the plaintiffs cause of action.

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 A fact is essential if it cannot be stricken out without leaving the statement of the cause of action insufficient. . . . (Moran, Rules of Court, Vol. 1, 1963 ed., p. 213). Ultimate facts are important
and substantial facts which either directly form the basis of the primary right and duty, or which directly make up the wrongful acts or omissions of the defendant. The term does not refer to the details of
probative matter or particulars of evidence by which these material elements are to be established. It refers to principal, determinate, constitutive facts, upon the existence of which, the entire cause of
action rests. Where the complaint states ultimate facts that constitute the three (3) essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the
defendant, and (3) the act or omission of the defendant in violation of said legal right, the complaint states a cause of action, otherwise, the complaint must succumb to a motion to dismiss on that ground
of failure to state a cause of action. Where the allegations of the complaint are vague, indefinite, or in the form of conclusions, the proper recourse would be, not a motion to dismiss, but a motion for a bill
of particulars.

The allegations in the complaint, pertaining to petitioner are, deficient in that they merely articulate conclusions of law and presumptions unsupported by factual premises. Hence, without the
particulars prayed for in petitioner's motion for a bill of particulars, it can be said the petitioner cannot intelligently prepare his responsive pleading and for trial. Furthermore, the particulars prayed for, such
as, names of persons, names of corporations, dates, amounts involved, specification of property for identification purposes, the particular transactions involving withdrawals and disbursements, and a
statement of other material facts as would support the conclusions and inferences in the complaint, are not evidentiary in nature. On the contrary, those particulars are material facts that should be clearly
and definitely averred in the complaint in order that the defendant may, in fairness, be informed of the claims made against him to the end that he may be prepared to meet the issues at the trial.

FAR EAST MARBLE (PHILS.) vs. HONORABLE COURT OF APPEALS

Gr no. 94093 August 10, 1993

FACTS: Respondent BPI filed a complaint for foreclosure of chattel mortgage with replevin against petitioner Far East Marble (Phils.), Inc., Ramon A. Tabuena and Luis R. Tabuena, Jr. in the RTC Branch
XIV of the National Capital Judicial Region stationed in Manila.The complaint pertinently alleged that defendant Far East received from Commercial Bank and Trust Company (now merged with BPI)
several loans evidenced by promissory notes and Trust receipts. Said promissory notes and Trust Receipts have long matured but despite repeated requests and demands for payment with interests and
related charges due, Far East has failed and refused to pay. The account due on said promissory notes with interests and related charges is P4,471,854.32 while that on the Trust receipts is
P2,170,476.62. Far East executed in favor of plaintiff Bank a Chattel Mortgage to secure the payment of its loan obligations including interests and related charges. Defendants Ramon A. Tabuena and
Luis R. Tabuena, Jr. on the other hand, executed in favor of plaintiff Bank a "continuing guaranty" whereby they bind themselves, jointly and severally, to answer for the loan obligations to the Bank of
defendant Far East.

However, despite requests and demands for their payment of Far East's long past due accounts, defendants failed and refused to pay said Far East accounts and have already defaulted in
their solidary obligation under said "continuing Guaranty." Far East filed an answer with compulsory counterclaim admitting the genuineness and due execution of the promissory notes but alleging further
that said notes became due and demandable on November 19, 1976, respectively. Far East thereupon raised the affirmative defenses of prescription and lack of cause of action as it denied the allegation
of the complaint that BPI had made previous repeated requests and demands for payment. Far East claimed that during the more than 10 years which elapsed from the dates of maturity of said obligations
up to the time the action for foreclosure of the chattel mortgage securing said obligations was filed, it had not received from BPI or its predecessor any demand for payment and thus, it had "labored under
the belief that they have already been written off" in the books of BPI. Far East denied the genuineness and due execution of the trust receipts and of the Statement of Account A motion to hear affirmative
defenses was attached to the answer. BPI filed an opposition to the motion to hear affirmative defenses, alleging that its cause of action against Far East have not prescribed, since within 10 years from
the time its cause of action accrued, various written extrajudicial demands were sent by BPI and received by Far East. BPI maintained, the 10 years prescriptive period to enforce its written contract had
not only been interrupted, but was renewed. BPI also filed a motion for summary judgment on the ground that since Far East had admitted the genuineness and due execution of the promissory notes and
the deed of chattel mortgage annexed to its complaint, there was no genuine issue as to any material fact, thus entitling BPI to a favorable judgment as a matter of law in regard to its causes of action and
on its right to foreclose the chattel mortgage. The trial court dismissed the complaint against the defendant Far East for lack of cause of action and on grounds of prescription.

On appeal, the CA rendered a decision setting aside the order of the RTC and remanding the case to said court for further proceedings, "including the resolution anew of plaintiff's motion for
summary judgment reception of the evidence of the parties and, thereafter, to decide the case as the facts may warrant." Hence, the instant petition for review on certiorari filed by Far East, anchored on
the following assigned errors:

ISSUE: Whether or not the general allegation of BPI that "despite repeated requests and demands for payment, Far East has failed to pay" is sufficient to establish BPI's cause of action.

HELD: Section 3 of Rule 6 state that a "complaint is a concise statement of the ultimate facts constituting the plaintiff's cause or causes of action." Section 1 of Rule 8 declares that every pleading,
including, of course, a complaint, "shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts . . . omitting the statement of mere evidentiary facts." "Ultimate
facts" are the essential and substantial facts which either form the basis of the primary right and duty or which directly make up the wrongful acts or omissions of the defendant (Tantuico, Jr. vs. Republic of
the Phil., et al., 204 SCRA 428 [1991]), while "evidentiary facts" are those which tend to prove or establish said ultimate facts. Basically, a cause of action consists of three elements, namely: (1) the legal
right of the plaintiff; (2) the correlative obligation of the defendant; and (3) the act or omission of the defendant in violation of said legal right. These elements are manifest in BPI's complaint, particularly
when it was therein alleged that: (1) for valuable consideration, BPI granted several loans, evidenced by promissory notes, and extended credit facilities in the form of trust receipts to Far East
(photocopies of said notes and receipts were duly attached to the Complaint); (2) said promissory notes and trust receipts had matured; and (3) despite repeated requests and demands for payment
thereof, Far East had failed and refused to pay. A complaint is sufficient if it contains sufficient notice of the cause of action even though the allegation may be vague or indefinite, for in such case, the
recourse of the defendant would be to file a motion for a bill of particulars (Ramos vs. Condez, 20 SCRA 1146 [1967]). In the case at bar, the circumstances of BPI extending loans and credits to Far East
and the failure of the latter to pay and discharge the same upon maturity are the only ultimate facts which have to be pleaded, although the facts necessary to make the mortgage valid enforceable must
be proven during the trial (Ortiz v. Garcia, 15 Phil. 192 [1910]).

SPOUSES ARENAS vs. THE HON. COURT OF APPEALS

Gr no. 126640 November 23, 2000

FACTS: Respondent Rosalina B. Rojas was the co-owner of a two-story building located in Calasiao, Pangasinan. She entered into a verbal contract of lease with petitioner Marcelo B. Arenas over one
stall located at the ground floor of the building, on a month to month basis in 1970. Petitioner Arenas used the leased premises as an optical clinic. In 1990, respondent Rojas wanted to demolish and
reconstruct the building and terminated her lease contract with petitioner Arenas. Respondents sent petitioners a notice of termination and a demand to vacate the premises on or before January 2, 1991.
However, petitioners refused to vacate the premises.Respondent Rojas filed with the MTC, Calasiao, Pangasinan, a complaint for "Unlawful Detainer and Damages" against petitioner Arenas. Petitioner
Arenas filed his answer to the complaint and counterclaim for moral damages amounting to P50,000.00, exemplary damages totaling P30,000.00 and attorney’s fees, stating that the case was maliciously
filed.

The MTC, decided against Arenas and ordered him to vacate the premises leased. The counterclaim of defendant is dismissed for lack of evidence. Petitioner Arenas appealed the decision
to the RTC, Dagupan City, but was denied. Before petitioners Arenas received a copy of the decision in Civil Case No. 658, they filed with the RTC, Pangasinan, Lingayen an action for "Damages,
Certiorari with a Writ of Preliminary Injunction and/or Restraining Order" against respondents Rojas. The RTC of Lingayen issued a TRO enjoining the MTC of Calasiao, Pangasinan from hearing Civil
Case No. 658. The TRO also directed respondents to cease and desist from "committing acts of disturbances" against the stall of petitioners. Invoking the rule against "multiplicity of suits," respondents
moved the trial court to dismiss the case. The trial court denied the motion to dismiss for lack of merit. The RTC decided the case in favor of petitioners. Respondents Rojas’appealed to the CA which
rendered a decision reversing that of the RTC and dismissing petitioner’s complaint.

ISSUE: Whether or not the causes of action complained of in the Regional Trial Court were in the nature of compulsory counterclaims that must be pleaded in Civil Case No. 658 of the Municipal Trial
Court.

HELD: The court agrees with petitioners that the causes of action pleaded in Civil Case No. 16890 are different from those in Civil Case No. 658, and that such causes could not have been raised as
compulsory counterclaims therein. Rule 11 of the 1997 Rules of Civil Procedure provides that a compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be
contained therein. A counterclaim is compulsory where: (1) it arises out of, or is necessary connected with, the transaction or occurrence that is the subject matter of the opposing party’s claim; (2) it does
not require the presence of third parties of whom the court cannot acquire jurisdiction; and (3) the trial court has jurisdiction to entertain the claim. The following are the tests by which the compulsory
nature of a counterclaim can be determined: (1) Are the issues of fact and law raised by the claim and counterclaim largely the same? (2) Would res judicata bar a subsequent suit on defendant’s claim
absent the compulsory counterclaim rule? (3) Will substantially the same evidence support or refute plaintiff’s claim as well as defendant’s counterclaim? (4) Is there any logical relation between the claim
and counterclaim?

TAN vs. KAAKBAY FINANCE CORPORATION

Gr no. 146595 June 20, 2003

FACTS: Petitioner Carlo A. Tan applied for and was granted a loan of four million pesos (P4,000,000.00) by private respondent Kaakbay Finance Corporation (Kaakbay), as represented by its president,
private respondent Dennis S. Lazaro. As collateral, a real estate mortgage on petitioner Tan’s parcel of land located at Calamba, Laguna. Petitioner alleged that the stipulated interest was 12% per annum
until fully paid, which amount however, was not stated in the mortgage when he signed it. The amount loaned was released to him in two installments of P2,500,000.00 and P1,500,000.00. Petitioner
failed to pay his obligation. He claimed that Kaakbay never furnished him a copy of the real estate mortgage; that, according to Kaakbay, his obligation had now reached P5,570,000.00 because the
actual interest was 0.3925% for a period of less than one year instead of the agreed-upon interest of 12% per annum. Petitioner further alleged that he negotiated with Kaakbay for a further extension of
time to pay his obligation, which the latter agreed to. It was agreed that petitioner and Kaakbay would sign, execute, and acknowledge a Deed of Sale UnderPacto de Retro upon the expiration of a two-
year period.

Petitioner filed a complaint for Declaration of Nullity, Invalidity and Unenforceability or Annulment of the Promissory Notes purportedly attached to the Real Estate Mortgage dated November
16, 1995, the usurious and void rates of interest and other fees therein appearing, and the Deed of Sale Under Pacto De Retro purportedly dated February 5, 1998, and damages, with prayer for
Preliminary Injunction and/or Temporary Restraining Order against respondents Kaakbay Finance Corporation, Dennis S. Lazaro and Roldan M. Noynay. Through the new counsel, filed their Answer with
Counterclaim, praying that petitioner pay them four million pesos (P4,000,000.00) representing the principal amount of the loan, nine million three hundred thirty three thousand seven hundred fifty pesos
(P9,333,750.00) representing the ‘compounded monthly interest and annual penalty interest’, two hundred fifty thousand pesos ( P250,000.00) as litigation expenses, and five hundred thousand pesos
(P500,000.00) as attorney’s fees. In addition, respondents filed a Motion for Admission of Counterclaim Without Payment of Fees, on the ground that their counterclaim is compulsory in nature, hence it
may be admitted without payment of fees.

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ISSUE: Whether or not the counterclaim is compulsory.

HELD: A counterclaim is compulsory where: (1) it arises out of, or is necessarily connected with the transaction or occurrence that is the subject matter of the opposing party’s claim; (2) it does not require
the presence of third parties of whom the court cannot acquire jurisdiction; and (3) the trial court has jurisdiction to entertain the claim. To determine whether a counterclaim is compulsory or not, we have
devised the following tests: (1) Are the issues of fact or law raised by the claim and the counterclaim largely the same? (2) Would res judicata bar a subsequent suit on defendant’s claims absent the
compulsory counterclaim rule? (3) Will substantially the same evidence support or refute plaintiff’s claim as well as the defendant’s counterclaim? and (4) Is there any logical relation between the claim and
the counterclaim? A “compelling test of compulsoriness” is whether there is “a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of
the parties would entail a substantial duplication of effort and time by the parties and the court.Respondents’ counterclaims are compulsory in nature.

It thus appears that the evidence required to prove petitioner’s claims is similar or identical to that needed to establish respondents’ demands for the payment of unpaid loan from petitioner
such as amount of interest rates. In other words, petitioner’s claim is so related logically to respondents’ counterclaim, such that conducting separate trials for the claim and the counterclaim would result
in the substantial duplication of the time and effort of the court and the parties. Clearly, this is the situation contemplated under the “compelling test of compulsoriness.” The counterclaims of respondents
herein are obviously compulsory, not permissive. In this light, considering that the counterclaims of respondents are compulsory in nature, payment of docket fees is not required. The CA did not err in
holding that the trial court had acquired jurisdiction on the matter.

BUNGCAYAO vs. FORT ILOCANDIA PROPERTIES

Gr no. 170483 April 19, 2010

FACTS: Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs who introduced improvements on the foreshore area of Calayab Beach in 1978 when Fort Ilocandia Hotel started
its construction in the area. Thereafter, other entrepreneurs began setting up their own stalls in the foreshore area. They later formed themselves into the D’Sierto Beach Resort Owner’s Association, Inc.
(D’Sierto). In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred, ceded, and conveyed to the Philippine Tourism Authority (PTA) pursuant to Presidential Decree No. 1704.
Fort Ilocandia Resort Hotel was erected on the area. In 1992, petitioner and other D’Sierto members applied for a foreshore lease with the Community Environment and Natural Resources Office
(CENRO) and was granted a provisional permit. On 31 January 2002, Fort Ilocandia Property Holdings and Development Corporation (respondent) filed a foreshore application over a 14-hectare area
abutting the Fort Ilocandia Property, including the 5-hectare portion applied for by D’Sierto members. The foreshore applications became the subject matter of a conflict case, docketed Department of
Environment and Natural Resources (DENR) Case No. 5473, between respondent and D’Sierto members.

In an undated Order, DENR Regional Executive Director Victor J. Ancheta denied the foreshore lease applications of the D’Sierto members, including petitioner, on the ground that the subject
area applied for fell either within the titled property or within the foreshore areas applied for by respondent. The D’Sierto members appealed the denial of their applications. In a Resolution dated 21
August 2003, then DENR Secretary Elisea G. Gozun denied the appeal on the ground that the area applied for encroached on the titled property of respondent based on the final verification plan.
Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting, manifested that he still had to consult his parents about the offer but upon the undue pressure exerted by Atty. Marcos,
he accepted the payment and signed the Deed of Assignment, Release, Waiver and Quitclaim in favor of respondent. Petitioner then filed an action for declaration of nullity of contract before the Regional
Trial Court of Laoag. Petitioner alleged that his son had no authority to represent him and that the deed was void and not binding upon him. the trial court confirmed the agreement of the parties to cancel
the Deed of Assignment, Release, Waiver and Quitclaim and the return of P400,000 to respondent. Petitioner’s counsel, however, manifested that petitioner was still maintaining its claim for damages
against respondent. Petitioner and respondent agreed to consider the case submitted for resolution on summary judgment. the trial court considered the case submitted for resolution. Petitioner filed a
motion for reconsideration, alleging that he manifested in open court that he was withdrawing his earlier manifestation submitting the case for resolution. Respondent filed a Motion for Summary
Judgment.

ISSUE: Whether or not the counterclaim is compulsory.

HELD: A compulsory counterclaim is any claim for money or any relief, which a defending party may have against an opposing party, which at the time of suit arises out of, or is necessarily connected
with, the same transaction or occurrence that is the subject matter of the plaintiff's complaint. It is compulsory in the sense that it is within the jurisdiction of the court, does not require for its adjudication
the presence of third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the same case. Any other counterclaim is
permissive. The Court has ruled that the compelling test of compulsoriness characterizes a counterclaim as compulsory if there should exist a logical relationship between the main claim and the
counterclaim.

The Court further ruled that there exists such a relationship when conducting separate trials of the respective claims of the parties would entail substantial duplication of time and effort by the
parties and the court; when the multiple claims involve the same factual and legal issues; or when the claims are offshoots of the same basic controversy between the parties. The only counterclaim that
remained was for the recovery of possession of the subject property. While this counterclaim was an offshoot of the same basic controversy between the parties, it is very clear that it will not be barred if
not set up in the answer to the complaint in the same case. Respondent's second counterclaim, contrary to the findings of the trial court and the Court of Appeals, is only a permissive counterclaim. It is not
a compulsory counterclaim. It is capable of proceeding independently of the main case. The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the counterclaimant is bound to
pay the prescribed docket fees. Any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court. In this case, respondent did not dispute
the non-payment of docket fees. Respondent only insisted that its claims were all compulsory counterclaims. As such, the judgment by the trial court in relation to the second counterclaim is considered
null and void without prejudice to a separate action which respondent may file against petitioner.

CALIBRE TRADERS, INC., vs. BAYER PHILIPPINES, INC.

633 SCRA 34

FACTS: Calibre Traders, Inc. (Calibre) was one of Bayerphil’s distributors/dealers of its agricultural chemicals within the provinces of Pangasinan and Tarlac. Their last distributorship agreement was
effective from June 1989 to June 1991. However, Bayerphil stopped delivering stocks to Calibre on July 31, 1989 after the latter failed to settle its unpaid accounts in the total amount of P1,751,064.56. As
Bayerphil’s authorized dealer, Calibre then enjoyed discounts and rebates. Subsequently, however, the parties had a disagreement as to the entitlement and computations of these discounts. Calibre,
although aware of the deadline to pay its debts with Bayerphil, nevertheless withheld payment to compel Bayerphil to reconcile its accounts. Calibre requested Bayerphil for a reconciliation of accounts.
Bayerphil’s credit and collection officer, Leon Abesamis, conferred with Calibre’s General Manager Mario Sebastian (Sebastian). The attempt to settle failed. Again, Bayerphils’ Sales Manager of the Agro
Division, Lingan, met with Sebastian. The results of their discussion were put in writing in Bayerphil’s letter. Sebastian expressed discontent in Bayerphil’s refusal to credit his claims in full and
underscored the alleged inaction of Bayerphil in reconciling Calibre’s accounts.This was followed by a demand letter requiring Bayerphil to pay for the damages it had allegedly caused to Calibre.
Bayerphil replied, reminding that Calibre owed it P1,272,103.07 as of December 31, 1989.

Accusing Bayerphil of maliciously breaching the distributorship agreement by manipulating Calibre’s accounts, withholding discounts and rebates due it, charging unwarranted penalties,
refusing to supply goods, and favoring the new distributors/dealers to drive it out of business, Calibre filed a suit for damages before the RTC of Pasig. In its Answer with Counterclaim, Bayerphil denied its
alleged wanton appointment of other distributors, reasoning that it could not be faulted for a difference in treatment between a paying dealer and a non-paying one. It maintained that Calibre filed the
damage suit to avoid paying its overdue accounts. Considering that those purchased on credit remained unpaid, Bayerphil had to refuse to further supply Calibre with its products. On the other hand,
Bayerphil contended that both causes of action arose from the same contract of distributorship, and that the Sebastians’ inclusion is necessary for a full adjudication of Bayerphil’s counterclaim to avoid
duplication of suits. In its October 24, 1990 Resolution, the trial court rejected Calibre’s arguments and granted the motion to implead the Sebastians as co-defendants in the counterclaim. The spouses
then filed their answer to Bayerphil’s counterclaim. Adopting all the allegations and defenses of Calibre. They raised the issue that the counterclaim against them is permissive, and since Bayerphil failed
to pay the required docket fees, the trial court has no jurisdiction over the counterclaim.

ISSUE: Whether or not the counterclaim is compulsory.

HELD: It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of
the action.Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. Where the trial court acquires
jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the
same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee. In accordance with the rules on payment of docket fees, the trial court upon a determination that Bayerphil’s counterclaim was permissive,
should have instead ordered Bayerphil to pay the required docket fees for the permissive counterclaim, giving it reasonable time but in no case beyond the reglementary period. At the time Bayerphil filed
its counter-claim against Calibre and the spouses Sebastian without having paid the docket fees up to the time the trial court rendered its Decision on December 6, 1993, Bayerphil could still be ordered to
pay the docket fees since no prescription has yet set in. A counterclaim is compulsory and is considered barred if not set up where the following circumstances are present: 1) that it arises out of the, or is
necessarily connected with the transaction or occurrence that is the subject matter of the opposing party’s claim, 2) that it does not require for its adjudication the presence of third parties of whom the
court cannot acquire jurisdiction, and 3) that the court has jurisdiction to entertain the claim.

FLORENTINO NAVARRO vs. HON. ELOY BELLO

102 Phil. 1019

FACTS: This is a petition for certiorari and mandamus with preliminary injunction seeking the annulment of a decision of the Court of First Instance dismissing the complaint adjudging the respondents-
defendants owners of two parcels of land described in the complaint, and awarding damages to the latter for the unlawful usurpation of the disputed lots by the petitioners. It appears that petitioners-
plaintiffs filed a complaint with the Court of First Instance praying for the annulment of transfer certificates of title and the corresponding deeds of sale executed by respondents Florencio Galicia and
Consolacion Bautista in favor of respondents Juan Cabuang and Florentino Bautista, claiming ownership and alleging actual possession. Respondents filed their answer , also claiming ownership over the
questioned lots with a counterclaim for the damages allegedly arising out of the unlawful usurpation of the possession of the described parcels of land by the petitioners through force and intimidation. No
answer to the counterclaim, the petitioners were declared in default in an order of the lower court, and the same order commissioned the deputy clerk of court to receive the evidence of the defendants. No
notice of this order was furnished the petitioners of their counsel. The court rendered decision adjudicating the defendant's counterclaim for damages, declaring the respondents owners of the disputed
parcels of land, and dismissing the complaint.

The petitioners filed their first motion for reconsideration to set aside the decision and order of default; it was denied. A second motion for reconsideration was filed , having been also denied
by the lower court, notice of appeal was filed on the same day and they asked for a fifteen-day extension within which to file appeal and appeal bond, which was granted. But upon objection interposed by
the respondents, the court in its order of October 26, 1956, denied the approval of the record on appeal on the ground that the decision sought to be reviewed has become final and that the plaintiffs
having been declared in default, they have no right to appeal unless and until the order of default is revoked and set aside.

ISSUE: Whether or not there is need for the petitioner to answer respondents counterclaim

HELD: There was no need for petitioners to answer respondents' counterclaim, considering that plaintiffs, in their complaint, claimed not only ownership of, but also the right to possess, the parcels in
question, alleging that sometime in May, 1954, defendants through force and intimidation, wrested possession thereof from their tenants, and that it was upon a writ of possession issued by the Court of
First Instance of Pangasinan that they were placed back in possession by the provincial sheriff. These averments were denied by defendants in their answer, wherein they asserted ownership in

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themselves and illegal deprivation of their possession by plaintiffs, and as counterclaim, prayed for damages allegedly suffered because of plaintiffs' alleged usurpation of the premises. It thus appears that
the issues of the counterclaim are the very issues raised in the complaint and in the answer, and said counterclaim is based on the very defenses pleaded in the answer. To answer such counterclaim
would require plaintiffs to re-plead the same facts already alleged in their complaint.

ALEJANDRO AGASEN and FORTUNATA CALONGE-AGASEN vs. THE HON. COURT OF APPEALS
Gr no. 115508 February 15, 2000

FACTS: Petra Bilog filed a complaint for Recovery of Possession and Ownership with the Regional Trial Court parcel of land registered in her name. She alleged that sometime in 1964 or 1965,
petitioners took possession and assumed ownership of the said property, appropriating the fruits therefrom. She alleged that despite demands on them to vacate the land, petitioners refused to do so and
even filed a case for Annulment of TCT and/or Reconveyance with Damages before the same court, which case was, however, dismissed. Thus, in her complaint, private respondent prayed that she be
declared the true and absolute owner of the subject land and petitioners be ordered to turn over possession thereof to her. In their Answer,Agasen asserted that the subject land used to form part of land
owned in common by the five (5) Bilog siblings, Petra Bilog being one of them. Petitioners claimed that they became the owners of the portion of the subject land which belonged to private respondent as
her share therein, by virtue ofthe sale in their favor by Leonora Calonge, sister Agasen, and the sale in their favor by private respondent of the remaining square meter by virtue of a notarized Partition with
Sale. Petitioners also affirmed that they had been in possession of the subject land since the time of the sale transactions, with a house of strong materials built thereon. By way of counterclaim, petitioners
charged private respondent with having fraudulently caused title to the subject land to be issued in her name, following the subdivision of the original land between her and her co-heirs/owners, in violation
of their rights over the subject land. Thus, petitioners prayed for the annulment of title in private respondent’s name and for the dismissal of the complaint.

ISSUE: Whether or not failure of petitioners to register the Partition with Sale was fatal.

HELD: The Court of Appeals also found petitioners’ claim of ownership to be unsubstantiated, in contrast to that of private respondent who presented tax declarations and certification of tax payments in
her favor. As pointed out by petitioners, however, the tax declarations in the name of private respondent for the year 1978 were issued only in 1977, and only after she had secured title to the property in
her name. Such a belated declaration has been held to be indicative of an absence of a real claim of ownership over the subject land prior to the declaration. On the other hand, the real estate tax
payments certified as paid by the Municipal Treasurer refers to the entire mother Lot No. 2192 before it was subdivided or partitioned into five (5) equal lots. Private respondent cannot be said to have paid
taxes on the subject property during the period when petitioners claimed that the property had already been sold to them.

The court also noted that, far from being unsubstantiated, petitioners’ claim of ownership is backed by their long years of possession of the subject parcels of land. There is no dispute that
petitioners had occupied the subject land since the sale in their favor, i.e., since 1964 in the case of the Deed of Absolute Sale and since 1968 in the case of the Partition with Sale. They have also built a
concrete house which has long been standing thereon. Then, too, petitioners have adequately explained why they have not pursued their action for annulment of title against private respondent, which the
Court of Appeals viewed as having "further darkened the cloud of suspicion which hovered over the questioned documents." Private respondent herself admits that petitioners were the first to assert their
right, by filing an action for annulment of title and/or for reconveyance with damages against private respondent which complaint was, however, dismissed without prejudice. On the other hand, the
complaint of private respondent was filed two months after the dismissal of their complaint, prompting them to merely interpose their cause of action as a compulsory counterclaim in the lower court.
Finally, the Court of Appeals is likewise in error in holding that private respondent’s title was "vested with the garment of indefeasibility." The rule on indefeasibility of torrens title --- i.e., that torrens title can
be attacked only for fraud, within one year after the date of the issuance of the decree of registration --- applies only to original titles and not to subsequent registration. An action for annulment of title
and/or reconveyance which was previously filed by petitioners and interposed in their counterclaim is an action open to them to attack private respondent’s fraudulently acquired title. Neither may the
compulsory counterclaim of petitioners challenging the title of private respondent be brushed aside as merely a collateral attack which would bar a ruling on the validity of the said title.

FIRESTONE TIRE AND RUBBER COMPANY OF THE PHILIPPINE, vs. FERNANDO TEMPONGKO
27 SCRA 418 (1968)

FACTS: In a collection action instituted in the City Court of Manila, defendant in the course of the presentation of his evidence, obtained leave to file a third-party complaint against the third-party
defendant. After proper proceedings, the City Court rendered judgment on the original complaint in favor of plaintiff, and on the third-party complaint in favor of defendant, as third-party plaintiff. The trial
court ruled in favor of the plaintiff. On the third party complaint, judgment is hereby rendered in favor of the third party plaintiff and against the third party defendant, ordering the latter to pay the former
whatever amount the said third party plaintiff is ordered to pay the plaintiff in this case; plus an additional sum of P200.00 as and for attorney's fees. The third-party defendant's counterclaim is hereby
dismissed. Only the third-party defendant appealed in due course from the judgment rendered against him in the third-party complaint.

When the records were elevated to the Court of First Instance of Manila, plaintiff filed a Motion to Remand Case to the lower court, for execution of its judgment against defendant, alleging in
substance that by virtue of defendant's failure to appeal, its judgment against defendant had become final and executory and was in no way affected by the appeal filed by third party defendant from the
judgment in favor of defendant in the third-party complaint. The Court of First Instance overruled defendant's opposition to plaintiff's motion and issued an Order granting the motion for the remand of the
case to the City Court for execution of its decision against defendant, directing that thereafter the records be sent back to it "for trial de novo insofar as the third-party plaintiff and the third-party defendant
are concerned."

ISSUE: Whether or not the third party complaint is proper

HELD: Defendant and third-party plaintiff-appellant's appeal is without merit. The third-party complaint is a procedural device whereby a "third party" who is neither a party nor privy to the act or deed
complained of by the plaintiff, may be brought into the case with leave of court, by the defendant, who acts as third-party plaintiff to enforce against such third-party defendant a right for contribution,
indemnity, subrogation or any other relief, in respect of the plaintiff's claim. The third-party complaint is actually independent of and separate and distinct from the plaintiff's complaint. Were it not for this
provision of the Rules of Court, it would have to be filed independently and separately from the original complaint by the defendant against the third-party. But the Rules permit defendant to bring in a third-
party defendant or so to speak, to litigate his separate cause of action in respect of plaintiff's claim against a third party in the original and principal case with the object of avoiding circuitry of action and
unnecessary proliferation of lawsuits and of disposing expeditiously in one litigation the entire subject matter arising from one particular set of facts.
Prior leave of Court is necessary, so that where the allowance of a third-party complaint would delay the resolution of the original case, such as when the third-party defendant cannot be
located or where matters extraneous to the issue of possession would unnecessarily clutter a case of forcible entry, or the effect would be to introduce a new and separate controversy into the action, the
salutary object of the rule would not be defeated, and the court should in such cases require the defendant to institute a separate action. When leave to file the third-party complaint is properly granted, the
Court renders in effect two judgments in the same case, one on the plaintiff's complaint and the other on the third-party complaint. When he finds favorably on both complaints, as in this case, he renders
judgment on the principal complaint in favor of plaintiff against defendant and renders another judgment on the third-party complaint in favor of defendant as third-party plaintiff, ordering the third-party
defendant to reimburse the defendant whatever amount said defendant is ordered to pay plaintiff in the case. Failure of any of said parties in such a case to appeal the judgment as against him makes
such judgment final and executory. By the same token, an appeal by one party from such judgment does not inure to the benefit of the other party who has not appealed nor can it be deemed to be an
appeal of such other party from the judgment against him.

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION vs. COURT OF APPEALS

Gr no. 160242 May 12, 2005

FACTS: Monark Equipment Corporation (MEC) filed a Complaintfor a sum of money with damages against the Asian Construction and Development Corporation (ACDC) with the Regional Trial Court
(RTC) of Quezon City. ACDC filed a motion to file and admit answer with third-party complaint against Becthel Overseas Corporation (Becthel). In its answer, ACDC admitted its indebtedness to MEC in
the amount ofP5,071,335.86. ACDC prayed that judgment be rendered in its favor dismissing the complaint and ordering the third-party defendant (Becthel) to pay P456,666.67 plus interest thereon and
attorney’s fees. MEC opposed the motion of ACDC to file a third-party complaint against Becthel on the ground that the defendant had already admitted its principal obligation to MEC in the amount
of P5,071,335.86; the transaction between it and ACDC, on the one hand, and between ACDC and Becthel, on the other, were independent transactions. Furthermore, the allowance of the third-party
complaint would result in undue delays in the disposition of the case. MEC then filed a motion for summary judgment, alleging therein that there was no genuine issue as to the obligation of ACDC to MEC
in the total amount of P5,071,335.86, the only issue for the trial court’s resolution being the amount of attorney’s fees and costs of litigation.

ACDC opposed the motion for summary judgment, alleging that there was a genuine issue with respect to the amount of P5,071,335.86 being claimed by MEC, and that it had a third-party
complaint against Becthel in connection with the reliefs sought against it which had to be litigated. In its reply, MEC alleged that the demand of ACDC in its special and affirmative defenses partook of the
nature of a negative pregnant, and that there was a need for a hearing on its claim for damages. Thereafter, the trial court issued a Resolution denying the motion of ACDC for leave to file a third-party
complaint and granting the motion of MEC, which the trial court considered as a motion for a judgment on the pleadings. ACDC appealed the resolution to the Court of Appeals. The CA rendered judgment
dismissing the appeal and affirming the assailed decision. The appellate court ruled that since MEC had prayed for judgment on the pleadings, it thereby waived its claim for damages other than the
amount of P5,071,335.86; hence, there was no longer a genuine issue to be resolved by the court which necessitated trial. The appellate court sustained the disallowance of the third-party complaint of
ACDC against Becthel on the ground that the transaction between the said parties did not arise out of the same transaction on which MEC’s claim was based.

ISSUE: Whether or not the third-party complaint is proper

HELD: The purpose of Section 11, Rule 6 of the Rules of Court is to permit a defendant to assert an independent claim against a third-party which he, otherwise, would assert in another action, thus
preventing multiplicity of suits.The right to file a third-party complaint against a third-party rests in the discretion of the trial court. The third-party complaint is actually independent of, separate and distinct
from the plaintiff’s complaint, such that were it not for the rule, it would have to be filed separately from the original complaint. A prerequisite to the exercise of such right is that some substantive basis for a
third-party claim be found to exist, whether the basis be one of indemnity, subrogation, contribution or other substantive right. 17 The bringing of a third-party defendant is proper if he would be liable to the
plaintiff or to the defendant or both for all or part of the plaintiff’s claim against the original defendant, although the third-party defendant’s liability arises out of another transaction. There must be a causal
connection between the claim of the plaintiff in his complaint and a claim for contribution, indemnity or other relief of the defendant against the third-party defendant. The third-party complaint does not
have to show with certainty that there will be recovery against the third-party defendant, and it is sufficient that pleadings show possibility of recovery. In determining the sufficiency of the third-party
complaint, the allegations in the original complaint and the third-party complaint must be examined that led to contribution, indemnity, subrogation or other relief from the third-party defend. In case at bar,
the claims of the respondent against the petitioner, arose out of the contracts of lease and sale; such transactions are different and separate from those between Becthel and the petitioner as third-party
plaintiff for the construction of the latter’s project in Mauban, Quezon, where the equipment leased from the respondent was used by the petitioner. The controversy between the respondent and the
petitioner, on one hand, and that between the petitioner and Becthel, on the other, are thus entirely distinct from each other. There is no showing in the proposed third-party complaint that the respondent
knew or approved the use of the leased equipment by the petitioner for the said project in Quezon. Becthel cannot invoke any defense the petitioner had or may have against the claims of the respondent
in its complaint, because the petitioner admitted its liabilities to the respondent for the amount of P5,075,335.86. The barefaced fact that the petitioner used the equipment it leased from the respondent in
connection with its project with Bectheldoes not provide a substantive basis for the filing of a third-party complaint against the latter. There is no causal connection between the claim of the respondent for
the rental and the balance of the purchase price of the equipment and parts sold and leased to the petitioner, and the failure of Becthel to pay the balance of its account to the petitioner after the

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completion of the project in Quezon. Indeed, it goes without saying that the denial of the petitioner’s motion with leave to file a third-party complaint against Becthel is without prejudice to its right to file a
separate complaint against the latter.

ARTURO BALBASTRO vs. COURT OF APPEALS

Gr no. L- 33255 November 29, 1972

FACTS: Chiu KengIong, Lim Bun Kong and Rajindar Singh, lessees of three doors of a 10-door apartment, filed a complaint for interpleader and consignation with the respondent Court of First Instance of
Rizal against respondent Francisco E. Fernandez and Angela M. Butte, each of whom was claiming ownership over the aforementioned 10-door apartment and of the right to collect the rents therefrom. In
their complaint, plaintiffs alleged that they have no means of knowing definitely to whom they should pay rentals — whether to defendant Angela M. Butte or defendant Francisco E. Fernandez. However,
Fernandez alleged among others that pending determination of the conflicting claims involved in the case, he was granted an ad interim authority to collect and deposit with the court the rentals due on the
subject property which authority was allegedly upheld by the previous ruling of the court and on the other hand, defendant Angela M. Butte claims that being the owner of the 10-door apartment in
question, she has every right to collect the rents of the property.

Thereafter, Fernandez filed a Third-Party Complaint against the third-party defendants (petitioners herein) who are the lessees of the remaining doors of the 10-door apartment because of
their refusal to recognize the authority of respondent Fernandez to collect the rents on the doors leased by them. The third-party defendants who are now the petitioners herein filed with the respondent
court a "Motion To Strike Out And/Or To Dismiss The Third-Party Complaint" filed by Francisco E. Fernandez on the ground that the filing of said Third-Party Complaint against them is in violation of the
express provisions of Section 12, Rule 6 of the Revised Rules of Court and not in accord with established jurisprudence on the matter and on the further ground that said Third-Party Complaint does not
state any cause of action. However, the motion of the petitioners was dismissed by the trial court. The petitioners then appeal to the CA but was denied.

ISSUE: Whether or not there is connection between petitioners as third-party defendants and Hernandez as third-party plaintiff to allow a third-party complaint

HELD: Section 12 of Rule 6 of the Revised Rules of Court authorizes a defendant to bring into a lawsuit any person "not a party to the action ... for contribution, indemnity, subrogation or any other relief in
respect of his opponent's claim."The impleader of new parties under this rule is proper only when a right to relief exists under the applicable substantive law. This rule is merely a procedural mechanism,
and cannot be utilized unless there is some substantive basis under applicable law.The rule requires that the third-party defendant is "not a party to the action" for otherwise the proper procedure for
asserting a claim against one who is already a party to the suit is by means of counterclaim or cross-claim under sections 6 and 7 of Rule 6. In addition to the aforecited requirement, the claim against the
third-party defendant must be based upon plaintiff's claim against the original defendant (third-party claimant). The crucial characteristic of a third-party claim under section 12 of Rule 6, is that the original
"defendant is attempting to transfer to the third-party defendant the liability asserted against him by the original plaintiff. In Capayas v. Court of First Instance, the court ruled that the test to determine
whether the claim for indemnity in a third-party complaint, "in respect to plaintiff's claim is, whether it arises out of the same transaction on which the plaintiff's claim is based, or the third-party's claim,
although arising out of another or different contract or transaction, is connected with the plaintiff's claim.

Indeed, a third-party complaint is, under the Rules, available only if the defendant has a right to demand contribution, indemnity, subrogation or any other relief from the supposed third-party
defendants in respect to the plaintiff's claim." In case at bar, there is an absence on the connection between petitioners as third-party defendants and Francisco E. Fernandez, the third-party plaintiff,
showing the existence of a secondary or derivative liability of the former in favor of the latter "in respect of his opponent's claim. Hence, the third-party action would not be proper.

SPOUSES MICHAEL UY & BONITA UY vs. EDUARDO ARIZA, et al.

Gr no. 158370 August 17, 2006

FACTS: Petitioners bought from the respondents two parcels of land, both were part of a bigger parcel of land designated as Lot No. 3229-C-2-F. The lots were claimed to have been already sold and
titled to Delgados, who then filed a case for unlawful detainer against the petitioners. Petitioners entered into compromise agreement with the Delgados and surrendered the possession of the land.
Petitioners then filed a case for specific performance against the respondents claiming that the latter failed with their obligation to deliver. Respondents sought its dismissal, which the RTC denied,
contending that they have already complied with the delivery and it was the petitioners’ fault for losing the possession of the lots. The CA reversed the denial and ruled that petitioners had no cause of
action to file a case of specific performance and that the proper remedy is an action for enforcement of warranty against eviction.

ISSUE: Whether or not the petition failed to state a cause of action for specific performance.

HELD: The case involves a case of eviction, such that petitioners should have filed for the enforcement of warranty in case of eviction, which every vendor of a parcel of land is enjoined by law to
guarantee as provided under Article 1548 of the New Civil Code. Should the latter case be filed, however, it will also not prosper because the unlawful detainer case was decided by compromise
agreement without impleading respondents as third-party defendants. One of the requirements in order that a vendor’s liability for eviction may be enforced is that “the vendor has been summoned and
made co-defendant in the suit for eviction at the instance of the vendee”. If petitioners filed the third-party complaint against the respondents, they could have sought from the respondents "contribution,
indemnity, subrogation or any other relief" in respect of the claim of the Delgados. The phrase "any other relief" includes a claim of a vendee for warranty against the vendor.

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