8/3/2019 Motion to Dismiss Notes
Motion to Dismiss
Nature*MTD should be filed w.n the period to file an ANSWER
HEIRS OF MARIANO LAGUTAN V ICAOG.R. No. 58057
MELO: June 30, 1993
On May 23, 1972 Heirs of Mariano Lagutan, filed a Complaint against Severina Icao,et al. for "Specific Performance and/or Payment of Improvements" in regard to twoparcels of land alleging that Felix Icao and spouses Mariano Lagutan and FranciscaIcao entered into a contract wherein it was agreed that spouses Mariano Lagutanand Francisca Icao would cultivate the first lot on condition that the spouses wouldcultivate and plant coconuts on the land, and the improvements would be dividedequally into two: one-half (1/2) would go to the spouses and the other one-half (1/2)would go to Felix Icao;
That the spouses have complied with their obligations under this agreement.Also as to the second lot plaintiff Amador Lagutan and the defendants and/or theirpredecessor-in-interest entered into contract to the effect that PARCEL II would becultivated and improved by said Amador Lagutan and to plant thereon coconuts oncondition that as consideration thereof, Amador Lagutan would be given anotherparcel of land commensurate to the labor or services rendered as mentioned above;Amador Lagutan cultivated and improved Parcel II and planted thereon 300 coconut
trees by himself and thru hired laborers, which coconuts are now fruit bearing.Respondents filed their Answer on May 20, 1977. Subsequently, they filed a Motionfor Leave to File an Amended Answer.
The trial court admitted respondents' Amended Answer . Three monthsthereafter, respondents filed a Motion to Dismiss which petitioners opposed,specifically questioning respondents' belated issues on laches and estoppel raised inthe Amended Answer.On February 10, 1978, the trial court issued a Resolution dismissing petitioners'Amended Complaint.
ISSUE:WON the MTD was filed out of time
HELD:YES. The motion to dismiss was filed long after respondents' Amended Answer hadbeen filed. Under Rule 16, the motion to dismiss must be filed within the time for
pleading, that is, within the period to answer (Tuason v. Rafor, 5 SCRA 478 ,at p. 483). Respondents filed their motion to dismiss almost three months after theyfiled their Amended Answer, which is a violation of the first requirement on motionsto dismiss.
When the complaint was dismissed not because of any evidence presented by theparties, as a result of the trial on the merits, but merely on a motion to dismiss filedby the defendants, the sufficiency of the motion should be tested on the strength ofthe allegations of facts contained in the complaint and no other. (De Jesus, et al. v.Belarmino, et al., 95 Phil. 366 .)and. . . the issue must be passed upon on the basis of the allegations assuming them tobe true and the court cannot inquire into the truth of the allegations and declarethem to be false; otherwise, it would be a procedural error and a denial of dueprocess to the plaintiff. (Ventura v. Bernabe, 38 SCRA 587 , at p. 598; Galeon
vs. Galeon, 49 SCRA 516 ; emphasis supplied.)
DISPOSITIVEWHEREFORE, the order dismissing the complaint is SET ASIDE and the case isREMANDED to the court a quo for further proceedings. No special pronouncement ismade as to costs.
GALEON V GALEON49 SCRA 516
ANTONIO; February 28, 1973
NATUREPetition for review on by certiorari of the order of the CFI Quezon
FACTS- Leonardo Galeon filed a complaint for partition (amended August 13, 1963)against private respondents Marcial Galeon, Zosima Galeon-Canda and MateoGaleon in the Quezon CFI. Leonardo prayed that he court order the partition of thesaid properties of the deceased Demetrio Galeon, that the private respondents beordered to render an accounting of the produce and that Leonardo be granted suchother relief as may be just and equitable in the premises.-Leonardo alleged that he is the illegitimate son of Demetrio Galeon. During hislifetime, Demetrio had acknowledged and recognized him as such.- The respondensts are Demetrios legitimate children with lawfully wedded wifeFelisa.
- Demetrio Galeon died intestate on September 9, 1958, and was survived by hiscompulsory heirs, namely, the three private respondents, his surviving spouse FelisaVenal and Leonardo.- During Demetrios lifetime, he owned six parcels of land which upon his death wereinherited in intestacy by his aforementioned heirs.- On March 1962, Felisa died intestate and her share in the estate of her husbandwas inherited by the private respondents as her only compulsory heirs. The privaterespondents took possession of all of the lands left by Demetrio and appropriated forthemselves the fruits of the land to the exclusion of Leonardo.- No partition of the land has been made and there is no assurance that the privaterespondents will agree to an extrajudicial partition of said properties.- Private respondents moved to dismiss the amended complaint on the groundsthat (1) petitioner has no legal capacity or personality to sue, (2) that the amendedcomplaint does not state a cause of action and (3) that the petitioner's cause ofaction, if any, is barred by the statute of limitations.
- In its order dated February 2, 1966, respondent court dismissed the amendedcomplaint on the ground that petitioner "has no legal personality to sue", becauseaccording to said court, "nowhere in his pleading is the allegation or proof thatpetitioner's filiation has been duly established as required by Article 887 of the CivilCode."- The amended complaint was dismissed by the respondent court on the lack ofpersonality of the petitioner to sue, because there is no allegation or proof thatplaintiff's filiation has been established.
ISSUEWON petitioner Leonardo has shown a present substantial interest in the realproperties left by the deceased Demetrio Galeon, as to entitle him to file the actionfor partition
8/3/2019 Motion to Dismiss Notes
YESRatio It is well settled that in a motion to dismiss a complaint based on lack ofcause of action, the question submitted to the court for determination is thesufficiency of the allegations of fact made in the complaint to constitute a cause ofaction, and not whether these allegations of fact are true, for said motion musthypothetically admit the truth of the facts alleged in the complaint. The test of thesufficiency of the facts, is whether or not, accepting the veracity of the facts alleged,the court could render a valid judgment upon the same in accordance with theprayer of the complaint.Reasoning
- The questioned portion of the amended complaint states as follows:2. That the plaintiff is an illegitimate (adulterous) son of one Demetrio Galeon, whoduring his lifetime, has acknowledged and recognized him as such illegitimate child,while the defendants are his only legitimate children with his lawfully wedded wife,Felisa Venal.- The dismissal of the amended complaint by the respondent court on the groundtherein stated was in effect a dismissal based on the insufficiency of the avermentsin said amended complaint to show that petitioner has a cause of action.- The uniform ruling of this Court is that the trial court may not inquire into the truthof the allegations, and find them to be false before a hearing is had on the merits ofthe cause. If the court finds the allegations to be sufficient but doubts their veracity,it is incumbent upon said court to deny the motion to dismiss and require thedefendant to answer. The veracity of the assertions could be ascertained at the trialon the merits.- The court invoked the case ofPaulino vs. Paulino:
The trial court, holding that the plaintiff's action to establish her filiation as theillegitimate (spurious) child of the deceased brought after the latter's death, whenshe had reached the age of 35 years, was already barred, dismissed her complaint.On appeal, the SC sustained the order of dismissal, explaining that while it is truethat by their motion to dismiss the appellees therein are "deemed to have admittedthat the appellant is the illegitimate spurious not natural child of the deceasedMarcos Paulino," such admission was not sufficient to entitle her to inherit from heralleged putative father.It is necessary to allege that her putative father had acknowledged and recognizedher as such. Such acknowledgment is essential and is the basis of her right toinherit. There being no allegation of such acknowledgment the action becomes oneto compel recognition which can not be brought after the death of the putativefather.- Since acknowledgment is essential and is the basis of the right of a spurious childto inherit in the estate of his deceased putative parent under Articles 287, 887 and
895 of the New Civil Code it is necessary as a basis for his claim in the estate toallege that his putative father had acknowledged and recognized him as such. It istherefore evident that the questioned averment in petitioner's amended complaintsubstantially complies with the aforestated requirement.- This case is not an action to compel recognition of petitioner as the illegitimate(spurious) child of the deceased Demetrio. Rather it is an action by one who allegesas a matter of fact that he is an acknowledged and recognized illegitimate child ofsaid deceased, for the partition of his estate.- As to whether or not petitioner was actually acknowledged and recognized byDemetrio Galeon as his illegitimate child, is a question of fact, which will dependupon the evidence to be presented at the trial. Inasmuch as such allegedacknowledgment and recognition by Demetrio Galeon, of petitioner as theillegitimate child, other than natural, of the latter was deemed hypotheticallyadmitted in private respondents' motion to dismiss based on lack of cause of action,the dismissal of the case would therefore be premature.
- It is true that the allegation in question is rather vague, as it does not state the
manner or form in which such voluntary recognition of petitioner was made, whetherin a record of birth, a will, statement before a court of record, or in any authenticwriting. But this Court, speaking thru Chief Justice Moran, in Co Tiamco v. Diaz,explained that under "the new Rules of Court, an action cannot be dismissed uponthe ground that the complaint is vague, ambiguous, or indefinite (see Rule 8, section1), because the defendant, in such case, may ask for more particulars (Rule 16) orhe may compel the plaintiff to disclose more relevant facts under the differentmethods of discovery provided by the Rules (Rules 18, 20, 21, 22 and 23).
Disposition Order dismissed and set aside.
TEEHANKEE [dissent]- I dissent from the main opinion, on the ground that the mere allegation in theamended Complaint that "plaintiff is an illegitimate (adulterous) son of one DemetrioGaleon, who during his lifetime has (sic) acknowledged and recognized him as suchillegitimate child" is not sufficient to constitute a cause of action for partition against"defendants (who) are (the deceased's) only legitimate children with his lawfullywedded wife, Felisa Venal.- Such action was premised on the bare conclusion of fact that petitioner had been"acknowledged and recognized ... as (an) illegitimate child." As conceded in themain opinion, 1 "the allegation in question is rather vague, as it does notstate themanner or form in which such voluntaryrecognition of petitioner was made, whetherin a record of birth, a will, statement before a court of record, or in any authentic
writing" which are the only modes recognized in Article 278 of the Civil Code formaking such voluntary recognition of an illegitimate child.- Without such official, judicial or written acknowledgment of the illegitimate child,which in such cases constitutes the ultimate fact, as against a mere conclusion,which must be duly alleged in the Complaint as required by Rule 8, section 1, theComplaint does not state a sufficient cause of action.- The lower court, therefore, properly dismissed the amended complaint for partitionsince there was no "allegation or proof that plaintiff's filiation has been established"i.e. that due recognition of petitioner as an illegitimate child was made in the official,
judicial or authentic writing required by Article 278 of the Civil Code.- As to the procedural question of whether the status of petitioner as anacknowledged illegitimate child was deemed hypothetically admitted upon privaterespondents' filing of their motion to dismiss petitioner's complaint on the ground oflack of cause of action, the case of Paulino thus disposed of the question, holdingthat "(I)t is true that by their motion to dismiss the appellees are deemed to have
admitted that the appellant is the illegitimate spurious, not natural, child of thedeceased Marcos Paulino. Such an admission, however, does not entitle her toinherit from her alleged putative father. It is necessary to allege that her putativefather had acknowledged and recognized her as such. Such acknowledgment isessential and is the basis of her light to inherit. There being no allegation of suchacknowledgment the action becomes one to compel recognition which can not bebrought after the death of the putative father."- The ultimate fact of due acknowledgment and recognition of the illegitimate childmay only be duly averred by alleging the mode whereby such acknowledgment wasmade, as circumscribed by Article 278 of the Civil Code, whether in "a record ofbirth, a will, a statement before a court of record or in any authentic writing."Concededly, no such averment of the mode of recognition was made by petitioner inhis amended complaint and hence, no admission can be inferred as to the essentialfact of due acknowledgment, which in turn is the very basis of any right to inherit.With out such essential basis, petitioner's complaint should stand dismissed for lack
of cause of action.2
8/3/2019 Motion to Dismiss Notes
MAKALINTAL [dissent]- The Civil Code (Art 278) does not merely speak of recognition (voluntary), but ofrecognition in specific ways: "in the record of birth, a will, a statement before a courtof record, or in any authentic writing." The particular circumstance relied upon,among these four, constitutes an essential element of the cause of action and musttherefore be alleged for the complaint to be considered sufficient.- I do not believe that a judgment declaring herein petitioner as having beenvoluntarily acknowledged by his supposed father during the latter's lifetime wouldbe justified on the basis of the questioned allegation in the complaint. The mere
statement that "Demetrio Galeon ... has acknowledged and recognized him(petitioner) as such illegitimate (adulterous) child," even if accepted as true, wouldstill leave the court uncertain, and therefore unable to declare, just how suchacknowledgment came about - whether in one of the modes enumerated in theCode, and if so, which one, or in some other manner not authorized for purposes ofvoluntary acknowledgment.
BARREDO [dissent]- Under the rules, the former is what a pleading should alleged; the latter is notallowed. More importantly, there must be a difference between a conclusion of law,on the one hand, and a conclusion of fact as well as an ultimate fact, on the other.- To my mind, to say that a child has been acknowledged by his father, whether aslegitimate or illegitimate, is not strictly speaking a statement of an ultimate fact, it isat the very least a conclusion of fact, if it is not a conclusion of law, both of whichhave no place in pleadings.
- I disagree, however, with the way the trial court disposed of the incident. Whatshould have been done, to avoid this appeal, was merely to require the plaintiff toamend his complaint. I believe that to simplify procedures and save time and effort,members of the bar or practitioners should be made to understand that it is to thebetter interest of a more speedy administration of justice, to which all lawyers arecommitted, for them to agree to more practical procedures suggested by the court,even if they have to suffer a little loss of face, rather than insist on technicalpositions that may turn out later on as not approvable by the Supreme Court.
FOSTER PARENTS PLAN INTERNATIONAL/BICOL, DIRECTOR RICHARDSON,ATTORNEY BADILLA and WONG, v.Presiding Judge DEMETRIOU, and SANAO
GR 74077NARVASA; July 7, 1986
FACTS- Private respondent Francia Zenaida Sanao was employed by petitioner FosterParents International Plan (FPPI). FPPI directed Sanao to answer disciplinary chargesfiled against her for (a) dishonesty; (b) gross and habitual neglect in theperformance of duty; (c) lack of respect for authority; (d) violation of the code ofbehavior; (e) violation on punctuality; (f) violation of the code of discipline regardingthe preservation of the good image of the Plan; (g) lack of credibility as supervisorand (h) lack of professionalism on the rights of subordinates.- Pending investigation of the charges before Atty. Romulo Badilla, FPPI-designatedHearing Officer, Sanao filed a complaint for injunction with preliminary injunctionand restraining order with the respondent Regional Trial Court of Camarines Sur,alleging that she was an employee of FPPI; that the charges presented against herwere designed only to provide a color of legality to an otherwise illegal dismissal,and that in any case, the prosecutor, investigator and judge in the aforesaid hearing
in the person of Atty. Badilla (FPPI Legal consultant) was one and the same person,in violation of her right to an impartial judge under the due process clause.- The respondent Court issued a restraining order, "valid for ... twenty (20) days"requiring FPPI, and certain of its officials impleaded as co-defendants, to maintainthe status quo and refrain from proceeding with the administrative investigation.- FPPI moved for the dismissal of the aforesaid civil case alleging among others lackof jurisdiction of the Court over the nature of the suit. Respondent Court held inabeyance resolution of the motion to dismiss until after trial on the merits statingthat the grounds relied thereon did not appear to be indubitable- FPPIs Motion for Reconsideration of this order having been denied, FPPI filed the
present petition for certiorari alleging that (a) the case before the lower Court is oneinvolving a labor dispute which is within the exclusive jurisdiction of the LaborArbiters and the National Labor Relations Commission (NLRC); and (b) corollarily, therespondent Court has no authority to issue a restraining order in the case.- Sanao contends (a) that this case does not fall under either Article 217 (Re:
Jurisdiction of Labor Arbiters and the Commission) or Article 255 (Re: InjunctionProhibited) of the Labor Code; and (b) that in any case, the decisive issue here is notwhether or not an employer has the right to discipline its employees, but whether itis just for an employer to set up sham and orchestrated charges against anemployee, and to establish a system of administrative investigation thereon wherethe judge, prosecutor, and the investigator are one and the same person indisregard of employee's right to due process
ISSUESWON regular courts of justice have jurisdiction over preliminary or antecedent acts
or proceedings which may end up in illegal dismissalsHELDNO.If private respondent is indeed ultimately dismissed from employment, as she fears,her recourse cannot but be to the Labor Arbiters and the National Labor RelationsCommission. For cases of illegal dismissal are within the exclusive original
jurisdiction of said arbiters and Commission, not the regular courts of justice. Ifregular courts of justice have no jurisdiction over cases of illegal dismissal, it followsthat they have no jurisdiction over the preliminary or antecedent acts orproceedings which by design or not, may end up in illegal dismissals. So, respondentCourts restraining order was issued without jurisdiction.- Courts or labor arbiters may not perpetually inhibit administrative investigation byan employer of charges against an employee which if duly established may justifydisciplinary sanctions, inclusive of dismissal from the service, upon the employee's
plea that the charges are concocted or the investigator is prejudiced. This wouldresult in a transfer from employers to courts or labor arbiters of the authority todetermine in the first instance the existence or non-existence of grounds foradministrative penalties against employees, since it may reasonably be anticipatedthat every employee will, justifiably or otherwise, deny the actuality of disciplinarygrounds against him, or impugn the authority of the employer's appointedinvestigator and/or the bona confides of the investigator's actuations, and willtherefore, not hesitate to file suit to enjoin the administrative investigation.- The right to dismiss or otherwise impose disciplinary sanctions upon an employeefor just and valid cause, pertains in the first place to the employer, as well as theauthority to determine the existence of said cause in accordance with the norms ofdue processDispositive Petition granted. Orders of respondent court declared void and setaside.Grounds, Rule 16, Sec. 1
8/3/2019 Motion to Dismiss Notes
Section 1. Grounds. Within the time for but before filing the answer to
the complaint or pleading asserting a claim, a motion to dismiss may be
made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the defending
(b) That the court has no jurisdiction over the subject matter of the
(c) That venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for
the same cause;
(f) That the cause of action is barred by a prior judgment or by thestatute of limitations;
(g) That the pleading asserting the claim states no cause of action;
(h) That the claim or demand set forth in the plaintiff's pleading has
been paid, waived, abandoned, or otherwise extinguished;
(i) That the claim on which the action is founded is unenforceable
under the provisions of the statute of frauds; and
(j) That a condition precedent for filing the claim has not been
JAVIER V CA214 SCRA 572
NOCON; October 14, 1992
Petition for review on certiorari to annul and set aside the decision of the CAdismissing Civil Case No. 88-976 for lack of jurisdiction.
FACTS- Normito Javier (NORMITO), the husband of petitioner Lolita Javier (LOLITA), wasemployed by private respondents Jebsens Maritime, Inc. (JEBSENS) as a boatswainfor its vessel M/V "General Campos".- September 23, 1987: the shipmaster, private respondents Fidel Dioso, orderedNORMITO to prepare the pilot ladder on the vessel's starboard side. While about histask, a sudden swell hit the vessel and, as a result, Javier, who did not have his life
jacket on, fell into the deep sea waters off Corona, Spain. A search and rescueoperation initiated by private respondents failed to yield Javier.- NORMITO was buried in La Corona, Spain on Oct. 3, 1987 without the knowledgeand consent of LOLITA and her children. It was only at a later date that Lolitalearned of NORMITOs death from a crewmate.
- LOLITA went to JEBSENS went and the latter promised to give the correspondingdeath benefits for the untimely death of her husband. JEBSENS however failed tocomply with its promise, prompting LOLITA to file a complaint with the Makati RTCfor a sum of money.- During trial, JEBSENS changed their counsel who, instead of continuing with thetrial of this case, filed on January 24, 1989, a Motion to Dismiss and/or Expungeon the ground of lack of jurisdiction by the trial court over the subjectmatter as said case falls within the original and exclusive jurisdiction ofthe POEA. Motion was dismissed by the RTC.- JEBSEN filed a Motion for Reconsideration, which was again denied by the RTC. Thisprompted JEBSENS to file with the CA a Petition for certiorari and prohibition with aprayer for preliminary injunction against LOLITA. This was granted by CA.- LOLITA filed a Motion for Reconsideration on July 2, 1990, which was denied.
1. WON the RTC has jurisdiction over the case even if it involved ER-EErelationship.
2. WON JEBSENS is estopped from invoking lack of jurisdiction due to theirparticipation in the early stages of the trial.
HELD1. NORatioThere is primary administrative jurisdiction lodged with the POEA.Reasoning POEA has exclusive and original jurisdiction to hear and decide allclaims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas employment including thedisciplinary cases [Sec. 3(d) of EO 247].- All claims, whether money claims and/or claims for contractual benefits of anynature, involving an employer-employee relationship would necessarily and properlyfall within the exclusive jurisdiction of the POEA. In the instant case, petitioner'shusband, who died while in the performance of his official duty, is admittedly anemployee of JEBSENS and jurisdiction should therefore be vested upon the POEAsince a case cannot have a civil aspect cognizable by the regular court and thesame time a labor aspect cognizable by the labor tribunal.- To rule otherwise would result in a multiplicity of suits which is frownedupon by the Court.- The question demands the exercise of sound administrative discretion requiringthe special knowledge, experience, and services of the administrative tribunal todetermine technical and intricate matters of fact, and a uniformity of ruling isessential to comply with the purposes of the regulatory statute administered
2. NORatio Lack of jurisdiction may be raised at any stage of the action.ReasoningThe doctrine of estoppel cannot be properly invoked by the petitionerdespite the participation of the private respondents at the initial stages of the trialproceedings.- When a party commits error in filing his suit or proceeding in a court that lacks
jurisdiction to take cognizance of the same, such act may not at once be deemedsufficient basis of estoppel. It could have been the result of an honest mistake, or ofdivergent interpretations of doubtful legal provisions. If any fault is to be imputed toa party taking such course of action, part of the blame should be placed on the courtwhich shall entertain the suit, thereby lulling the parties into believing that theypursued their remedies in the correct forum.- Under the rules, it is the duty of the court to dismiss an action "whenever itappears that the court has no jurisdiction over the subject matter."
- It is well settled that the decision of a tribunal not vested withappropriate jurisdiction is null and void.
DISPOSITIVEPetition is denied.
Laus v. C.A., 219 SCRA 688 (1993)*GR: MTD shld be filed w/in the pd to file a responsive pleading (ANSWER)X: NO Valid service of summons period for filing a responsive pleading didnt run
NATUREPetition for reviewFACTS
8/3/2019 Motion to Dismiss Notes
-Consuelo Torres filed against Loredo (sic) Alfaro-Laus and John Doe a complaintfor collection of a sum of money: Loreto Alfaro-Laus executed a PN in favor of
Torres underwhich Loreto undertook to pay Torres P66k after 3m from date ofexecution. Upon maturity, only P11k was paid and despite demands, no furtherpayments were made-prayed for: payment of the unpaid balance of P55,000.00 "plus interest at the rateof ten per cent (10%), compounded monthly beginning February 21, 1989, andtwenty-five per cent (25%) of the entire amount due for and as attorney's fees, suchbeing in accordance with the terms and conditions set forth in the promissory note."-IMPT facts for summons: Deputy Sheriff Romero S. Cruz proceeded to the
petitioners' address at 122 Molave Park Subdivision, Paraaque, Metro Manila toserve the summons and a copy of the complaint. Failing to serve the summonspersonally upon the petitioners after waiting for ten (10) minutes, he resortedto a substituted service through one Josephine Areola, who purportedlyrepresented herself to be the maid of the said petitioners. On the same date, DeputySheriff Cruz executed and filed a return 5 which reads:"Respectfully returned to the REGIONAL TRIAL COURT Branch 82, QUEZON CITY, theattached original copy of the summons issued in connection with Civil Case No. 89-3327 entitled CONSUELO P. TORRES versus LOREDO (sic) LAUS & JOHN DOE with theinformation that duplicate copy of the same together with the complaint and itsannexes was duly served upon defendant Loredo (sic) Laus of 122 Molave ParkSubd. Paraaque M. M. thru JOSEPHINE AREOLA, maid of Loredo Daus (sic) of sameaddress, received as evidenced by her signature appearing thereon."-NO ANSWER filed. Torres filed motion to declare defendants in default granted by court
-ex parte presentation of evidence January 16 but Order received by Laus only onJanuary 22-TC: judgment by default ordering Laus "[T]o pay the plaintiff (private respondent)the amount of FIFTY-FIVE Thousand Pesos (P55,000.00) at the rate of ten per cent(10%), compounded monthly beginning February 21, 1989 up to the present;and . . . [T]o pay attorney's fees equivalent to twenty-five percent (25%) of theentire amount due" to the private respondent.-by way ofspecial appearance, counsel of Laus filed MTD for lack ofjurisdiction over their persons: service of summons was ineffective because itwas not indicated in the return that the sheriff had first exerted efforts to serve thesame personally before resorting to substituted service.-TC Order: Denied MTD for lack of merit: it already rendered a judgment by default,also issued WOE-Deputy Sheriff Nilo Cabang, pursuant to a writ of execution issued by the trial court,levied upon petitioners' properties consisting of a 1983 Mitsubishi Galant Sedan and
a men's ring.-Laus filed MFR: reiterate that trial court did not acquire jurisdiction over theirpersons because of the defective service of summons + Josephine Areola was just aguest of their made and a child of about 10-11 years old who should not beexpected to know what to do with the documents handed to her.-MFR heard, parties presented their evidence on the issue of service of summons.MFR DENIED: proper service of summons as it was proven that Areola was not aguest of their maid-Laus filed with CA a petition for CP and injunction w/ application forrestraining order to set aside TC orders + dismiss civil case: GAD and graveerror in denying MFR despite lack of jurisdiction over their persons; on MTD, erred indenying it solely on the ground that a judgment by default had already beenrendered-CA: deny petition for lack of merit: (1) MTD on ground of lack of jurisdiction over thepersons of the defendants is proper only when made w/n the reglementary period
for filing a responsive pleading and before such responsive pleading is filed. Here
MTD filed 5m after the complaint was filed and only after default judgment alreadybeen rendered by TC;On 30 May 1991, the respondent Court of Appeals promulgated its decision 19denying the petition for lack of merit. It made the following disqualifications; (2)even if MTD filed on time, Order denying MTD is interlocutory and cannot be subjectof a petition for certiorari. Other remedies (Lina v. CA):(a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of default on the groundthat his failure to answer was due to fraud, accident, mistake, excusable negligence,and that he has a meritorious defense;
(b) If the judgment has already been rendered when the defendant discovered thedefault, but before the same has become final and executory, he may file a Motionfor New Trial under Section 1[a] of Rule 37;(c) If the defendant discovered the default after the judgment has become final andexecutory, he may file a petition for relief under Sec. 2 of Rule 38; and(d) He may also appeal from the judgment rendered against him as contrary to theevidence or to law, even if no petition to set aside the order of default has beenpresented by him (Sec. 2, Rule 41).(3) Laus were given their day in court to prove that service of summons was bothimproper and invalid but TC weighed the evidence and testimonies in favor of Torresso give weight to findings of TC: failed to rebut presumption of regularity ofperformance of official functions by the sheriff; could not substantiate that JosephineAreola was 10-11y.o. who would not know what to do with the court documents;failed to rebut assertion that Josephine Areola was already staying with them for atleast 3 months before summons were served
-Deputy Sheriff Cabang SOLD at public auction the levied mens ring and Galant car-MFR of CA decision DENIED
ISSUES1. WON the TC acquired jurisdiction over the persons of the petitioners by virtue ofsubstituted service of summons effected by Deputy Sheriff Cruz (for summons)2. WON MTD on the ground of lack of jurisdiction over the persons of the defendantcould still be filed3. WON MTDs dismissal could not be subject to a petition for certiorari, being aninterlocutory Order
HELD1. NO (for details, see actual case under SUMMONS). Since the substituted service ofsummons in this case was not validly effected, the trial court did not acquire
jurisdiction over the persons of the petitioners. The order of default, the judgment
by default, the writ of execution issued by it, as well as the auction sale of thepetitioners' properties levied on execution are, therefore, all null and void.Ratio.The general rule in this jurisdiction is that summons must be personallyserved; pursuant to Section 7, Rule 14 of the Revised Rules of Court, such personalservice is to be accomplished by "handing a copy thereof to the defendant inperson, or, if he refuses to receive it, by tendering it to him." However, if this modeof service cannot be effected within a reasonable time, substituted service may beresorted to under Section 8 of the same Rule.Changes to Substituted Service Rule: promptly in old rules changed towithin reasonable time-"Within a reasonable time" contemplates a period of time longer than thatdemarcated by the word "prompt," and presupposes that a prior attempt at personalservice, within a justifiable time frame as would be necessary to bring the defendantwithin the jurisdiction of the court, had failed. Since substituted service is inderogation of the common law and is extraordinary in character, it must be used
only as prescribed and in the circumstances authorized by statute. Statutes5
8/3/2019 Motion to Dismiss Notes
prescribing modes other than personal service of summons must be strictlycomplied with to give the court jurisdiction, and such compliance must appearaffirmatively in the return.Imposibility of prompt service: should be shown by stating the efforts made tofind the defendant personally and the fact that such efforts failed. This statementshould be made in the proof of service (I Moran, Comments on the Rules of Court,1970 Ed., p. 444). This is necessary because substituted service is in derogation ofthe usual method of service. It has been held that this method of service is `inderogation of the common law; it is a method extraordinary in character, and hencemay be used only as prescribed and in the circumstances authorized by statute.' . . .*Rules on Service of Summons Summarized in Administrative Circular No. 59Reasoning. A perusal of the sheriff's return in the case at bar readily reveals that itdoes not (a) indicate the impossibility of service of summons within a reasonabletime, (b) specify the efforts exerted to locate the petitioners and (c) state that it wasserved on a person of sufficient age and discretion residing therein. The fact of thematter is that as disclosed in his testimony taken in connection with the motion forreconsideration, and the affidavit he prepared in conjunction with such hearing.Deputy Sheriff Cruz resorted to a substituted service on his first - and only- attempt to effect a personal service. Upon being informed that the petitionerswere not around at that time, he immediately resorted to a substituted servicethrough Josephine Areola, a person whose age he did not even know or attempt todiscover. He did not even inquire about the whereabouts of the petitioners, the timethey were expected to return home, the hours of the day they could be contacted attheir house or the location of their offices, if any, in order that he could faithfullycomply with the requirement of personal service.
-It is all too obvious that no earnest efforts were exerted by Deputy SheriffCruz to effect the personal service of summons. His testimony thus attests toan undue, if not indecent, haste to serve the summons at the first attempt withoutmaking sure that personal service was, by then and even thereafter, an impossibilitybecause either the petitioners had left for a foreign country or an unknowndestination with not definite date of returning within a reasonable period or hadgone into hiding to avoid service of any process from the courts. If he had onlymade the inquiries suggested above, he could have returned in theevening of 10 October 1989 or on any of the succeeding days - includingthe following Saturday and Sunday. Service of summons may be made atnight as well as during the day, or even on a Sunday or holiday because ofits ministerial character.
2. YESGR: MTD was not filed seasonably because it was filed beyond the reglementary
period provided in the Revised Rules of Court (valid service of summons)X: defendant has not been properly summoned, the period to file a motion todismiss for lack of jurisdiction over his person does not commence to run until hevoluntarily submits to the jurisdiction of the court, since the court has no jurisdictionto adjudicate the controversy as to him until such time. In this case, petitioners didnot voluntarily submit to the jurisdiction of the trial court. Consequently, the periodto file a responsive pleading did not even commence to run.
3. NOGR: Petition for Certiorari should only be availed of in extraordinary cases and whenthere are no other speedy remediesX: when the trial court clearly acted outside of its jurisdiction or with grave abuse ofdiscretion in denying the motion to dismiss.-This is exactly what happened in the case while it was pending before the trialcourt; the denial of the motion to dismiss was based solely on the ground that a
judgment by default had already been entered. Certainly, this does not constitute a
valid ground for the denial because the motion raises a fundamental and prejudicialissue affecting the validity of the decision by default.
WHEREFORE, the Decision of the respondent Court of Appeals of 30 May 1991 andthe Resolution dated 30 July 1991 in CA-G.R. SP No. 22232 are hereby REVERSEDand SET ASIDE. The Order of Branch 82 of the Regional Trial Court of Quezon City of29 December 1989 (Civil Case No. Q-89-3327) declaring petitioners in default, itsDecision of 24 January 1990, Orders of 5 March 1990 and 9 July 1990 and the writ ofexecution issued therein, as well as all proceedings had pursuant to the writ ofexecution, are declared NULL and VOID. The case is hereby remanded to the courtof origin for further proceedings which shall include the valid service of summons.SO ORDERED.
DOLORES, NICOLAS and RICARDO DELOS SANTOS VS Judge MONTESA andJUANA DELOS SANTOS
G.R. No. 73531MELO; 1993
FACTS- Juana, who supposedly own the lot in question, a portion of which Dolores et.al.(petitioners) entered and occupied, lodged the complaint for Petitioners eviction.Summons was served through the mother of petitioners when the process serverwas unable to locate Dolores, Nicolas, and Ricardo delos Santos in Bulacan. Forfailure of petitioners to submit the corresponding answer, judgment was renderedpursuant to the rules on summary procedure.
- The court ordered the petitioners to vacate the lot in question and to pay P5k asrental from 1985 until possession is surrendered. Upon appeal, the RTC presidedby, respondent Judge Montesa granted Juanas motion for execution pending appealon account of petitioners failure to post supersedeas bond. To set aside theproceedings in the lower court, this petition at hand was instituted anchored on thesupposition that petitioners were deprived of their day in court. Upon learning if thesaid decision, petitioners sought to reconsider on the principal thesis that:they were never served notice of conciliation meeting at the barangay levelthey were never served with summonsrespondent was referring to a different piece of realtyDolores husband should have been impleaded
ISSUEWON these arguments are meritorious
HELDNo.All these arguments are to no avail. The writ of execution was ordered due topetitioners failure to post supersedeas bond.-although the proof of service of the summons upon petitioners does not indicateimpossibility of personal service, a condition precedent for resorting to substitutedservice, still, any defect in form and in the manner of effecting service thereof werenonetheless erased when petitioners' counsel moved to re-examine the impugneddecision and posed a subsequent bid on appeal to impede immediate execution.Indeed, such demeanor is tantamount to voluntary submission to the competenciaof the court within the purview of Section 23, Rule 14 of the Revised Rules of Courtsince any mode of appearance in court by a defendant or his lawyer is equivalent toservice of summons, absent any indication that the appearance of counsel forpetitioner was precisely to protest the jurisdiction of the court over the person ofdefendant. Neither can such appearance be considered as a special
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appearance founded on the sole challenge on invalid service of summonssince the application therefor raised another ground on failure to state acause of action when conciliation proceedings at the barangay level wereallegedly bypassed or disregarded.-The issue as the fact that petitioners are supposedly occupying a parcel of landother than the realty claimed by Juana deserves scant consideration since aclarification on a factual query of this nature is entertained only on the lower courts.-Petitioners argue that the execution pending appeal was ordered without any priornotice to them. This notion is also devoid of substance since it erroneously suggeststhat the court is duty-bound to notify petitioners of the immediate enforcement ofthe appeal under Section 2, Rule 39 of the Revised Rules of Court who is obliged toserve a copy of such motion on the adverse party's counsel, which, on the face ofthe subject motion, was effected by personal delivery.-In fine, petitioners may not press the idea that they were deprived of their day incourt amidst the implicit forms of waiver performed by their lawyer in submittingevery conceivable defense for petitioners via the two motions for reconsiderationbelow.
DISPOSITIVEWHEREFORE, the petition is hereby DISMISSED for lack of merit
*Voluntary appearanceBOTICANO V CHUG.R. No. L-58036
PARAS; March 16, 1987
NATUREPetition for review on certiorari seeking to reverse and set aside the decision of theCA which holds that defendant was not properly served with summons.
FACTS- Petitioner Eliseo Boticano (BOTICANO) is the registered owner of a Bedfordtruck which he was using in hauling logs for a certain fee. In the evening ofSeptember 3, 1971, it was properly parked at the shoulder of the national highwayin Barrio Labi, Bongabon, Nueva Ecija when it was hit and bumped at the rearportion by another Bedford truck. Bedford truck 2 was owned by privaterespondent Manuel Chu, Jr. (CHU) and driven by Jaime Sigua.- CHU acknowledged ownership thereof and agreed with BOTICANO to shoulder theexpenses of the repair of the damaged truck of the latter.- CHU failed to comply with aforesaid agreement as well as to pay damages
representing lost income despite BOTICANOs demands, prompting the latter to filea complaint on November 24, 1977 at the CFI of Nueva Ecija, against CHU andSIGUA.CFI:Summons was issued on December 12, 1977 but was returned unserved fordefendant Jaime Sigua because he was no longer connected with San Pedro SawMill, while another copy of the summons for Manuel Chu, Jr. was returnedduly served on him thru his wife Veronica Chu at his dwelling house.- BOTICANO moved to dismiss the case against SIGUA and to declare CHU in defaultfor failure to file responsive pleadings within the reglementary period. The motionwas granted by the lower court in allowing BOTICANO to adduce his evidence ex
parte.- The trial court found that CHU is responsible for the fault and negligence of hisdriver Sigua under Article 2180 of the Civil Code, whose negligence and lack of duecare was the immediate and proximate cause of the damage.
- CHU filed with the trial court a "Notice of Appeal" and an Urgent Motion forExtension of Time to file Record on Appeal which was granted by the trial court. CHUalso changed counsels.- BOTICANO filed with the trial court a Motion to Dismiss Appeal and for executionwhich was set for hearing on May 14, 1979 wherein CHUs counsel personallyappeared and opposed petitioner's motion while on the latter date petitioner filedhis reply to opposition, after which on May 16, 1979 the trial court issued an orderdenying aforesaid motion, while on May 22, 1979, the trial court issued anotherorder approving private respondent's Record on Appeal.CA:After parties filed their respective briefs, CA rendered a decision setting aside theappealed judgment for being null and void. CA ordered that the case be remandedto the court of origin; that appellant be properly served with summons.- CA is of the view that from all the actions and steps taken by CHU no presumptioncan arise that he voluntarily submitted himself to the jurisdiction of the Court. In factaccording to said Court, all of these actions taken by the appellant are geared andmustered towards contesting the court's jurisdiction over his person, or of attackingthe validity of the judgment on jurisdictional grounds.- BOTICANO filed with CA a Motion for Reconsideration and a Supplemental Motionfor Reconsideration. CA denied the Motion for Reconsideration.SC:In compliance with the resolution of this Court, CHU filed his comment. BOTICANOthen filed a reply thereto in compliance with the resolution of December 7, 1981,after which the petition was given due course in the resolution of February 8, 1982and the parties were required to file their respective memoranda. Petitioner filed his
memorandum on March 19, 1982, while private respondent filed his memorandumon April 15, 1982. Thereafter, in the resolution of April 30, 1982, the case wassubmitted for decision.
ISSUE(S)1. WON the question of jurisdiction over the person of the defendant can be raised
for the first time on appeal (as held by the CA, summons was improperly servedon CHU).
HELD1. NORatio Upon general principles, defects in jurisdiction arising from irregularities in thecommencement of the proceedings, defective process or even absence of processmay be waived by a failure to make seasonable objections.Reasoning
- Chu could have questioned the jurisdiction of the lower court but he did not.- It can of course be argued that the failure to question the lower court's jurisdictioncannot be accounted against Chu for his having been declared in default gave himno chance to participate in the court deliberations and therefore no chance to raisethe jurisdictional issue, but then, he could have done so, in the subsequentpleadings he filed. Even assuming that such failure cannot be taken against him, thefact is he had VOLUNTARILY submitted himself to the court's jurisdiction.- CHU voluntarily appeared thru counsel in the trial court. He filed a Notice ofAppeal, Appeal Bond, Motion for Extension of Time to File Record on Appeal, Recordon Appeal, Motion for Withdrawal of Appearance, Notice of Appearance andOpposition to Plaintiff's Motion to Dismiss Appeal and for Issuance of a Writ ofExecution. Not only did he submit pleadings and motions, but he likewise appearedin person, thru counsel in the hearing held on May 14, 1979 at 8:30 a.m. and orallyargued in open court on the pending incident.- Under Section 23, Rule 14 of the Rules of Court, the defendant's
voluntary appearance in the action shall be equivalent to service. Thus,7
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under this principle, it has been consistently held by the Supreme Courtthat the defect of summons is cured by the voluntary appearance of thedefendant.- If the defendant in the Regional Trial Court (RTC) has been declared in default, mayhe appeal the default judgment that may subsequently be rendered even if he hasnot asked the RTC to set aside the declaration of default? The answer is in theaffirmative. However a distinction must be made as to the effects of such appeal.(a) If an appeal is made withoutfirst asking the RTC to set aside the declaration ofdefault, and the CA sets aside on said declaration, all he can get is a review of theRTC's default judgment withoutthe opportunity of having the higher court considerdefense evidence (for the simple reason that no evidence was even adduced by himin the RTC).(b) If the defendant first asks the RTC to set aside the declaration of default (SeeRule 18, secs. 2 and 3, Rules of Court), and he is able to prevail, the declaration willbe set aside, and he will now have the opportunity to present his evidence in theRTC. Thus, even if he finally loses in the RTC's subsequent decision, his defense canbe considered, when appeal is made to the appellate tribunal. Of course, even if thedefault declaration is notset aside despite his motion for the setting aside, he willbe entitled to all notices in the court proceedings, and can file any pleading he maywish to file, including the notice of appeal. (See Rule 13, sec. 9, Rules of Court).- In the case at bar, there is no question that summons was timely issued andreceived by private respondent. In fact, he never denied actual receipt of suchsummons but confined himself to the argument that the Sheriff should prove thatpersonal service was first made before resorting to substituted service.- Indeed, such construction is but fair, and in accord with substantial justice. The
burden on a plaintiff is not to be enlarged with a restrictive construction desired bythe defendant. (Ibid., p. 1078).- In a last ditch effort, CHU insists that there was no valid service of summonsbecause private respondent is a partner and general manager in San Pedro Sawmill.Consequently the wife of private respondent to whom summons and complaint wereallegedly served not being partnership, cannot receive the same under Section 13 ofRule 14 of the Rules of Court.- It has however been settled that actions must be brought by the real parties ininterest and against the persons who are bound by the judgment obtained therein.- The title of the case both in the trial court, in the Court of Appeals and in this Courtshows that the partnership is not a party. On the contrary, as previously statedprivate respondent himself assumed the responsibility of the accident and is nowestopped to disclaim the liabilities pertaining thereto.
Decision of the CA is reversed and set aside, and the decision of the CFI isreinstated.
DBP v. JUSTICE PUNDOGAR
ROMERO, J p:
Behind the innocuous title of the case is the unraveling of a tale of the government'sdashed hopes of taking off for an industrial economy through the setting up of anintegrated steel plant that it supported in the sixties through gargantuaninvestments therein; of how the said enterprise floundered after repeatedlydefaulting in its obligations leading to the inevitable foreclosure of its assets; of howit laid low for fourteen years spanning the martial law regime only to resurface nowto claim what it vigorously insists is its own; and how the government, through thehighest reaches of officialdom, is now waging an equally relentless fight to
permanently keep what it considers to belong to it by just and legitimate title inorder that it may resume its interrupted economic dream.
In legalese, this is a special civil action for certiorari which seeks to annul and setaside the trial court's Order dated August 31, 1990 which denied petitioners' motionto dismiss and also the Order dated December 27, 1990 which likewise deniedpetitioners' motion for reconsideration.
The historical antecedents of the present petition hark back to 1955 when RepublicAct No. 1396 was enacted authorizing National Shipyards and Steel Corporation(NASSCO) to establish a pig-iron smelting plant. When NASSCO started negotiationswith the United States Export-Import Bank (EXIMBANK) for a $62.3 million loan, thelatter suggested that the management of the project be placed in the hands of theprivate sector. After a public bidding, the Jacinto Steel, Inc. (JSI) was entrusted withthe implementation of the project. Later, in October 1963, Iligan Integrated SteelMills, Inc. (IISMI) was incorporated with the Jacintos and the Government, throughthe GSIS, SSS and NASSCO as principal investors and about fifty other minoritystockholders. 1
On January 22, 1964, an agreement was entered into by the Government, IISMI andthe EXIMBANK whereby the latter would provide the funds required to launch theproject into commercial operation, including provisions for overruns and otherfinancial assistance. On the same date, IISMI and the Government entered into acollateral agreement whereby the Government committed to extend equity and non-equity funds to IISMI during the construction period, including an amount of no less
than P34 million. Pursuant to a Second Collateral Agreement dated July 26, 1966,the Development Bank of the Philippines granted IISMI additional loans which weresecured by real and chattel mortgages over all of IISMI's assets.
In order to forestall a threatened foreclosure due to defaults in loan payments, IISMIinstituted on June 1, 1971 an injunction suit against the Republic of the Philippines,Development Bank of the Philippines (DBP), Central Bank of the Philippines (CB),Board of Investments (BOI) and the Sheriff of Lanao del Norte and Iligan City. Thecomplaint 2 which was docketed as Civil Case No. 1701 alleged that the inability ofIISMI to meet its obligations was due to "(g)overnment violations of its commitmentsto the Integrated Steel Project" which "were all in pursuance of the concerted andsingle-minded plan of the defendants to foreclose the mortgaged properties of theplaintiff and/or take over the management and ownership of IISMI or its properties,plants, or mills."
The preliminary injunction issued by the court 3 on August 11, 1971 was questionedby the DBP in G.R. No. L-34188 and the CB in G.R. No. L-33986. When the motion todismiss filed by the Republic and the BOI on the grounds of improper venue andnon-suability of the State was denied, the parties likewise questioned the denialorder in G.R. No. L-33949. Subsequently, this Court ordered the consolidation ofthese petitions and set them all for a joint hearing. 4
While these cases were pending before the Court, then President Marcos issuedProclamation 1081 on September 21, 1972 declaring a state of martial law. Hethereafter issued four Letters of Instructions 5 directing the Secretary of NationalDefense to take over and control the operation of IISMI and other Jacinto-heldcompanies "for the duration of the present national emergency or until otherwiseordered" because the acts of management of IISMI "indicated that IISMI disposed ofproperty by fraudulent means and that the funds or money earned was (sic) notproperly accounted for, and neither were they applied for payment of obligations
due the Government and the government-owned corporations."8
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On October 23, 1973, the Court ordered the lower court "to resume proceedings inCivil Case No. 1701 by receiving further evidence which the parties may desire topresent relative to all the issues they have so far raised and, thereafter, to resolveall the incidents related to the writ of preliminary injunction said court has issuedand every other incident in the said case and/or render final judgment in the maincase on the merits." 6
On January 10, 1974, the lower court 7 issued an Order dissolving the writ ofpreliminary injunction. 8 It held that there was mismanagement of the financialaffairs of IISMI by its corporate officials through the diversion of its profits to other
Jacinto-controlled corporations especially to Ferro Products Inc. (FERRO), its knownmarketing instrumentality and biggest single buyer, which led to its failure to meetits different due and demandable obligations to DBP. More specifically,mismanagement was shown by the setting up of an unrealistic pricing schemewhere, while the floating exchange rate jacked up the cost of materials by 50%, theselling price of goods sold to FERRO was increased by only 25% and FERRO resoldthe goods at prices higher by 30%, thus realizing in the process additional grossprofits of 5%; by giving FERRO extraordinarily long credit terms of 90-180 days; byunduly postponing FERRO's payments of its matured payables through reinvoicing;by unjustifiably delaying the collecting trade and non-trade receivables from FERROand other Jacinto-controlled corporations; by heavily loading the selling expenses ofIISMI with other non-legitimate charges which created an economic imbalancebetween its income and expenses; by giving interest-free loans and direct advancesfrom IISMI funds to the Jacintos and their corporations; by passing on to IISMI traveland representation expenses of the Jacintos and their own corporations thus, usingIISMI funds to pay expenses of some Jacinto-controlled corporations; by making IISMIborrow at 12% interest per annum from Jacinto-controlled corporations instead ofIISMI collecting receivables from its debtors especially FERRO; by appropriatingIISMI's money to the Jacintos' private benefit; by debiting IISMI for goods andshipments actually received not by IISMI but by the Jacintos and their corporations;and by importing raw materials for Jacinto-controlled corporations through the use ofDBP guaranties intended for IISMI.
Likewise, the court found that there were attempts to hide these corporatemalpractices by "window dressing" of the financial statements and records of IISMIand of the Jacinto-controlled corporations. This consisted in understating profits tocreate the impression that losses were not due to improper operations but rather toother factors like the floating exchange rate; painting a favorable but unreal cashposition on the part of IISMI; creating an ostensibly favorable asset position by
including as IISMI's assets goods returned by FERRO to the Security Bank and TrustCo.; by overstating the inventories account; and by understating the accountreceivables from FERRO and other Jacinto-controlled corporations by interceptinglegitimate payables to IISMI.
Moreover, the lower court rejected the claim of IISMI that its failure to meet itsobligations was due to the floating exchange rate, holding that IISMI could only claima loss of P51.9 million owing to the floating rate as importations before February1970 were sold at pre-devaluation prices even after devaluation. However, no suchloss could be claimed after June 1970 since price adjustments could and should havebeen instituted by IISMI after that time. Furthermore, despite the disposition of theprocessed raw materials, IISMI failed to use the proceeds to liquidate its accountswhich, as of June 30, 1972 had ballooned to P407 million. Such failure compelledDBP to assume payments in its capacity as guarantor to assume payments due toIISMI's creditors.
Lastly, the court held that IISMI cannot pin the blame for the delay in payments of itsobligations on the alleged delay in the release of DBP, SSS and GSIS funds. The bulkof IISMI's obligations arose from subsequent raw material importations guaranteedby DBP. These accounts were only incurred by IISMI after DBP, SSS and GSIS hadreleased their respective funds to IISMI.
Thus, the lower court concluded:
"It is settled jurisprudence that an applicant for writ of preliminary injunction shouldbe able to establish a clear case, free from doubt and dispute. Since injunction is anequitable remedy, an applicant must also come to court with clean hands. Asdiscussed above, the evidence show that IISMI has failed to satisfy both basicrequirements to entitle it to a writ of preliminary injunction." 9
On February 25, 1974, the court deemed the pre-trial conference terminated anddismissed the complaint filed by IISMI with prejudice for its failure to appear duringthe pre-trial despite due notice. 10
After the finality of the January 10, 1974 Order, DBP filed an application for extra-judicial foreclosure of the IISMI mortgages. On February 26, 1974, the IISMI plantand assets were thus auctioned to DBP as the highest bidder. After one year, or onMarch 24, 1975, DBP consolidated its ownership over the said properties. 11
On December 29, 1989 or fourteen (14) years from said consolidation of ownership,IISMI, Fernando Jacinto and Jacinto Steel, Inc. (JSI) filed a complaint 12 docketed asCivil Case No. 111-1549 before Branch 3 of the Iligan Regional Trial Court againstpetitioners DBP, National Development Corporation (NDC) and National SteelCorporation (NSC) praying that judgment be rendered -
"1. Setting aside and declaring as null and void:
1.1 The extra-judicial foreclosure conducted by the provincial sheriff of Iligan City onFebruary 26, 1974 of the mortgage contract dated August 1, 1966, additionalmortgage dated January 13, 1967, addendum to chattel mortgage dated January 13,1967, additional mortgage dated May 20, 1968 and additional mortgage datedDecember 22, 1969, all executed by IISMI in favor of DBP.
1.2 The certificate of sale issued by the provincial sheriff of Iligan City inconsequence of the extra-judicial foreclosure of the mortgages referred to in 1.1 ofthis prayer;
2. Ordering all defendants, jointly and severally, to restore and/or return to IISMI allthe properties subject of the extra-judicial foreclosure of the mortgages referred toin 1.1 or 1.2 of this prayer portion;
3. Ordering the Register of Deeds, Iligan City, to cancel Transfer Certificate of TitleNo. P-25, 959 (a.f.) of the Registry of Deeds for Iligan City and to issue replacementtransfer certificates of title in the name of IISMI." 13
Petitioners filed their respective motions to dismiss 14 on the grounds of lack ofjurisdiction, failure to state cause of action, prescription and res judicata. On March31, 1990, private respondents filed an amended complaint. 15 Petitioners adoptedtheir earlier motions to dismiss as their motion to dismiss the amended complaint.16 On May 4, 1990, National Steel Corporation filed a motion to cancel notice of lispendens which was opposed by private respondents on June 22, 1990.
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On August 31, 1990, the lower court 17 issued an order denying the motions todismiss. 18 The motion for reconsideration was likewise denied on December 27,1990. 19 Hence, the present petition for certiorari which was filed on February 5,1991 seeking the nullification of the two aforementioned orders. On February 7,1991, this Court issued a Temporary Restraining Order requiring respondent JudgeAmir Pundogar to desist from taking any further proceeding in Civil Case No. 111-1549.
For a clear disposition of the issues raised, we shall consider them seriatim.
I. PROCEDURAL GROUND
Private respondents question the propriety of the instant petition for certioraribefore the Court on the ground that the Order denying a motion to dismiss, beinginterlocutory, cannot be the subject of a special civil action. They aver that theproper remedy is to file in the lower court an answer interposing as defenses theobjections raised in the motion to dismiss, proceed to trial and, in case of an adversedecision, elevate the same by appeal.
Petitioners, on the other hand, argue that the case at bar is an exception to thegeneral rule. Besides, there is no appeal nor any other plain, speedy and adequateremedy. They contend that the instant petition can be entertained by the Court forthe purpose of correcting the questioned Orders which were issued by respondent
judge with grave abuse of discretion.
Private respondents correctly cited the general rule in elevating cases to this Court.The rule, however, admits of exceptions, such as when the court, in denying themotion to dismiss acts without or in excess of jurisdiction or with grave abuse ofdiscretion. In such an instance, certiorari becomes available in order to relieve thedefendant of the trouble of undergoing the ordeal and expense of a useless trial. 20As will be seen in the subsequent discussion, petitioners are rightfully entitled to therecourse availed of as it is part of the supervisory authority of the Court to correctthe error committed. 21
Furthermore, the direct invocation of this Court's original jurisdiction to issue writs ofcertiorari should be allowed as there are special reasons therefor clearly andspecifically set out in the petition 22 as quoted hereunder:
"The Respondent Judge's unlawful refusal to immediately dismiss, and thecontinuing pendency of Civil Case No. 111-1549 has coated the Jacinto claim with a
misleading veneer of plausibility which is obstructing and causing inevitable delaysin (i) the government's and NDC's plans to privatize NSC at the earliest possible timeand under optional conditions generating the maximum returns for NDC, the countryand the Filipino people; (ii) NSC's Integrated Steel Mill Project and (iii) thedevelopment of the nation's steel industry as well as the country's industrializationboth of which have already suffered an incalculable fall due to IISMI's ruinmasterminded and engineered by Jacinto and his family." 23
II. SUBSTANTIVE GROUNDS
A. RES JUDICATA
Petitioners contend that the final Orders of January 10, 1974 and February 25, 1974in Civil Case No. 1701 bar IISMI from filing Civil Case No. 111-1549, which questionsthe same DBP foreclosure upon the very same claim that the foreclosure was
fraudulent, that is, IISMI defaulted on its loans due to GSIS-SSS-DBP-CB conspiracy.
The only difference is that in Civil Case No. 1701, they asked for a prospective relief(that the threatened DBP foreclosure be enjoined) while in Civil Case No. 111-1549,they asked for a retrospective relief (that the foreclosure be annulled).
Private respondents, on the other hand, argue that the present action cannot bebarred by res judicata because the proceedings in Civil Case No. 1701 is not a
judgment on the merits and there is no identity of causes of action between the firstand the second cases.
Res judicata is indeed present. Imbedded in Philippine jurisprudence are theelements constituting res judicata as a ground for the dismissal of a complaint: a)the former judgment must be final; b) the court which rendered it had jurisdictionover the subject matter and the parties; c) it must be a judgment on the merits andd) there must be, between the first and second actions, identity of parties, subjectmatter and causes of action. 24
The first three requisites are obviously present. The Orders of January 10, 1974 andFebruary 25, 1974 attained finality as no motion for reconsideration or appeal hadbeen filed. 25 The said Orders were issued by the CFI of Lanao del Norte, Branch 11which had jurisdiction over the injunction case as the property subject of thecomplaint is located within its territorial jurisdiction. These Orders are judgments onthe merits. In the Order of January 10, 1974 where the writ of preliminary injunctionwas lifted, then Judge Tutaan, after considering not only the evidence presentedduring the hearing of the motion for preliminary injunction but also the additionalevidence presented after this Court ordered the resumption of proceedings, foundthat a case of mismanagement existed. On the other hand, the Order of February25, 1974 whereby the complaint was dismissed with prejudice for failure to appearduring the pre-trial despite due notice, had the effect of an adjudication upon themerits. 26
For the fourth requisite to exist, the identity required is not only of the parties andsubject matter but also of the causes of action. In Civil Case No. 1701, the complaintwas filed by IISMI against the Republic, BOI, CB and DBP. In Civil Case No. 111-1549,the complaint was filed by IISMI, Fernando Jacinto and Jacinto Steel, Inc. againstDBP, NDC and NSC. For res judicata to apply, absolute identity of parties is notrequired because substantial identity is sufficient. 27 Inclusion of additional partieswill not affect the application of the principle of res judicata. 28 In both cases, thesubject matter involved is the Iligan Integrated Steel Mills, Inc.
As regards identity of causes of action, this requisite is similarly present although
the same may not be quite apparent. In Civil Case No. 170l, the caption clearlyindicates that the action is one for injunction while in Civil Case No. 111-1549, thecaption does not state the title of the action as required by Sec. 1, Rule 7 of theRules of Court. This omission notwithstanding, the test of identity of causes of actionlies, not in the form of the action, but on whether the same evidence would supportand establish the former and the present causes of action. 29
A comparison between the allegations of the complaints in Civil Case No. 1701 andthat of Civil Case No. 111-1549 reveals that there is indeed identity of causes ofaction. In both cases, private respondents claim that DBP has no right to foreclosebecause it violated its financial commitments to IISMI and that it conspired withother agencies of the government to cause the latter's financial ruin. It follows,therefore, that the evidence that private respondents used to support Civil Case No.1701 is the same evidence that they would utilize to establish Civil Case No. 111-1549.
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Private respondents claim that there is no identity of causes of action because theamended complaint added several allegations which were not present in thecomplaint for injunction (Civil Case No. 1701) as they could not have been alleged inthat case, and therefore, the evidence necessary to sustain Civil Case No. 111-1549could not have been the same as in the former case. On the contrary, petitionersinsist that there is identity of causes of action because respondent Judge cannotresolve the issue presented in Civil Case No. 111-1549 and grant the reliefs soughtwithout annulling the 1974 Orders. Hence, the additional allegations will not changethe cause of action in the two cases.
We agree with petitioners. It should be noted that said additional allegations may becategorized into three: first, those that have arisen after the filing of Civil Case No.1701; second, those that pertain to the foreclosure; and third, developments afterthe EDSA Revolution.
The first group of allegations supposedly affecting the validity of the foreclosureconsists of the declaration of Martial Law, 30 the issuance of LOI No. 27, 31 theseizure of IISMI's records and the detention of some of its officers, 32 thecancellation of passports of the members of the Jacinto family, 33 and thewithdrawal of IISMI's counsel. 34 It is significant to note that while these matterswere not alleged in Civil Case No. 1701 as they developed only after its filing, saidevents had in fact been brought to the attention of this Court which disposed ofthem in this wise:
". . . the Court finds no other alternative but to terminate the present proceedings inthis Court, so as to give way to further proceedings in the Court below, wherein allpertinent issues arising from the developments which have taken place since August17, 1972 may be appropriately and fully threshed out, considering that the factualmatters involved therein would require the formal and proper presentation of variedand voluminous evidence which the Court is not adequately equipped to receive."35 underscoring supplied).
Thus, the CFI of Lanao del Norte, when it resumed the hearing, was expected tosettle, not only the allegations in the complaint, but even those matters that haddeveloped during the pendency of the three petitions for certiorari before this Court.It follows perforce, that the subsequent dismissal of Civil Case No. 1701 for failure toprosecute is not limited solely to the allegations of the complaint therein. Hence,these additional allegations can no longer be raised for the second time as res
judicata now operates. This is supported by Sec. 49 of Rule 39 of the Rules of Courtwhich states:
"Sec. 49 Effect of Judgments.
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(b) In other cases the judgment or order is, with respect to the matter directlyadjudged or as to any other matter that could have been raised in relation thereto,conclusive between the parties and their successors in interest by title subsequentto the commencement of the action or special proceeding, litigating for the samething and under the same title and in the same capacity; underscoring supplied).
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The second group of allegations pertaining to the foreclosure are specifically, thatthe sheriff sold IISMI at public auction when it was not in the possession of the
mortgagee 36 and that the Jacintos offered to redeem the same. 37 We make short
shrift of these allegations by pointing out that the sheriff's act of selling the propertywhich was then under government control is woven into the very warp and woof ofthe issue of the legality of the take-over.
Considering that private respondents had waived their opportunity to question thetake-over, they cannot raise the same belatedly. Otherwise, the effect would be toallow private respondents to evade their liabilities simply because the foreclosurehappened at the time when martial law was in effect.
As to the claim that the Jacintos offered in a letter to redeem IISMI through a creditline facilitated by a foreign bank, suffice it to say that this is not the redemptioncontemplated by the law and its inclusion will not make res judicata inoperable. 38
Lastly, private respondents alleged "facts which transpired after EDSA", viz.: theEnrile Memorandum to President Aquino, the Enrile Memorandum to formerDepartment of Trade and Industry Secretary Jose Concepcion, the Order of Dismissalissued by the PCGG, the Legal Opinion of DBP's former Chief Legal Counsel datedDecember 5, 1986, the Opinion of the Deputy Government Corporate Counsel dated
January 14, 1984, and the Letter of the Undersecretary of Justice dated February 13,1987. 39 Private respondents have erroneously termed these "opinions" writtenafter the EDSA Revolution as "facts". Truth to tell, no factor event has supervenedwhich may justify the overturning of a finding of the court which had long becomefinal. These are but long debunked, tired reiterations of the same Jacinto refrain, of"fraudulent, illegal and systematic deprivation of IISMI of its assets (w)as part of ageneral preconceived plan . . . to oppress, impoverish and destroy Jacinto and hisfamily and their interests." 40
Petitioners assert that the lower court has no jurisdiction because the present caseseeks to annul the Orders of January 10, 1974 and February 25, 1974 of the then CFIof Lanao del Norte. As such, it is the Court of Appeals which has the exclusiveoriginal jurisdiction over actions for annulment of judgments of Regional Trial Courts.41 They observe that while private respondents concede that this case does notexpressly pray for the annulment of the said decision, their prayers, if granted, will,of necessity, invalidate the foreclosure. Furthermore, petitioners assert that sincethe allegations raised in both cases are the same, respondent Judge cannot resolvethe issues presented without annulling the questioned Orders in Civil Case No. 1701.
On the other hand, private respondents believe that the lower court has jurisdictionover the instant case as it involves reconveyance of real property 42 and that theOrders are limited to the circumstances prevailing at the time of the filing of thecomplaint.
For its part, the lower court did not consider the attack on jurisdiction well-takenbecause the annulment of the decision in Civil Case No. 1701 is not being sought byprivate respondents. 43
We agree with petitioners that the lower court committed grave abuse of discretionin taking jurisdiction over Civil Case No. 111-1549. The failure of respondents toexpressly pray for the annulment of the Orders dated January 10, 1974 and February25, 1974 does not mean lack of interest on their part in having them declared void.
To be sure, the prayers are explicitly limited to seeking the nullification of theextrajudicial foreclosure on February 26, 1974 and the certificate of sale issued bythe provincial sheriff of Iligan City, the restoration and/or return to IISMI of all the
foreclosed properties and the cancellation of TCT No. P-25.959 (a.f.), as well as the11
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issuance of a replacement transfer certificate of title in the name of IISMI. A closescrutiny of the allegations in the complaint, however, would reveal that if theprayers are to be granted, the resultant effect would be to annul the findings ofmismanagement made in the Order of January 10, 1974 and to re-litigate the sameclaims which had been earlier dismissed with prejudice in the Order of February 25,1974. Private respondents' submission that the action is one for reconveyance ofproperty is misleading, as reconveyance is but the inevitable consequence oncethese two Orders are annulled.
Petitioners contend that the action has prescribed since the case was filed almostsixteen (16) years after the 1974 Orders. They assert that, based on the allegationsin the complaint, if tort or quasi-delict were committed, the four-year prescriptiveperiod 44 has obviously lapsed. If constructive trust is established, the ten-yearprescriptive period 45 has likewise expired.
Private respondents counter that regardless of the prescriptive period (four or tenyears) applicable, the same was suspended during the martial law regime whichshould be treated as a force majeure and hence, the prescriptive period should startto run only on February 25, 1986. 46 Involving as it does an issue of fact, they averthat the presentation of evidence must be made before the trial court. Furthermore,they allege that since the action is one to recover immovable property, the sameprescribes in thirty (30) years. 47 In any case, they assert that the action isimprescriptible under Art. 1410 of the New Civil Code. 48
We can do no better than to cite the case of Tan v. Court of Appeals, 49 reiterated inNational Development Co. v. Court of Appeals 50 and quote the portion of thedecision which deals with the issue of whether or not martial law interrupted therunning of the prescriptive periods:
"We cannot accept the petitioners' contention that the period during whichauthoritarian rule was in force had interrupted prescription and that the same beganto run only on February 25, 1986, when the Aquino government took power. It istrue that under Article 1154:
'ART. 1154. The period during which the obligee was prevented by a fortuitous eventfrom enforcing his right is not reckoned against h im.'
fortuitous events have the effect of tolling the period of prescription. However, wecannot say, as a universal rule, that the period from September 21, 1972 throughFebruary 25, 1986 involves a force majeure. Plainly, we cannot box 1n the`dictatorial' period within the term without distinction, and without, by necessity,suspending all liabilities, however demandable, incurred during that period,including perhaps those ordered by this Court to be paid. While this Court iscognizant of acts of the last regime, especially political acts, that might have indeedprecluded the enforcement of liability against that regime and/or its minions, theCourt is not inclined to make quite a sweeping pronouncement, consideringespecially the unsettling effects such a pronouncement is likely to bring about. It isour opinion that claims should be taken on a case-to-case basis. This selective rule iscompelled, among others, by the fact that not all those imprisoned or detained bythe past dictatorship were true political oppositionists, or, for that matter, innocentof any crime or wrongdoing. Indeed, not a few of them were manipulators andscoundrels." 51 underscoring supplied)
In order to prove that they were prevented from commencing the suit during theMarcos regime, private respondents narrated that the passports of the Jacintofamily, who were then abroad, were cancelled; all their resources were taken overby the Government; their lawyers were constrained to withdraw their appearancesbecause of the change in the membership of the Board of Directors of IISMI, and theincarceration of the executives of IISMI who would have been witnesses in the case.
They would have the Court take judicial notice of these facts.
We cannot do so. If this Court does, then it would be relieving private respondents oftheir bounden duty to show that during martial law they were so circumstanced thatit was impossible for them to commence, continue or even resist an action. And yeta fullblown hearing is not even necessary as the so-called "special circumstances"do not convince this Court that, in this particular case, martial law should be treatedas force majeure that suspends the running of prescription. Likewise, petitionershave consistently pointed out that during the hearing of the motion to dismiss,private respondents failed to adduce any proof regarding their allegations on thetolling of the prescriptive period. Private respondents have not, in any of theirpleadings, rebutted this.
The allegation regarding the refugee status of the Jacintos finds utterly no support inthe records. Considering the voluminous pleadings they had filed before this Court,it comes as a surprise that they never offered documentary evidence to prove theirpossession of such status, let alone explain its legal implications. For the Court tonow give evidentiary value to this unsupported allegation is to be recreant to itssworn duty to uphold and apply the law.
The dissenting opinion of our respected Colleague poses as the threshold issue:"whether or not in the name of economic development, the Government can act in amanner basically unfair and arbitrary and deny to a party with a legitimategrievance, a remedy in law." To the extent that it anchors practically the wholeopinion on the assumption that the Government has indeed acted "in a mannerbasically unfair and arbitrary" as to "deny to a party with a legitimate grievance, aremedy in law" is to mislead him who seeks to address the imponderables of thecase objectively, impartially and fairly.
To cast the issue in such terminology is to ensnare the unwary who, in much thesame manner, is confronted with the question: "When did you stop beating yourwife?" on the false assumption that the addressee is in fact guilty of the obnoxiousact of wife-bashing.
The dissenting opinion stands for the proposition that the private respondents weredenied due process inasmuch as, being abroad when part of the trial was beingconducted, they were not given their day in court.
We are strongly convinced, however, upon careful scrutiny of the records thatprivate respondents have in fact been accorded the guaranties of due process.
There is no question that they were accorded the opportunity to be heard which isthe touchstone for determining whether a party litigant has been granted the rightto due process, but they can hardly blame anyone if they somehow failed to fullyutilize this. To over now that they have been deprived of the same is not to provesaid assertion. It is important to note that when martial law was declared, the
Jacintos were already abroad. Their physical absence did not, however, deter themfrom filing Civil Case No. 1701. They had present counsel as their counsel at thetime. For almost a year, these lawyers acted on their behalf and obtainedappropriate judicial relief. Their lawyer-client relationship was only terminated when
their counsel filed on July 30, 1973 a Manifestation and Omnibus Motion praying for12
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leave to withdraw from representation in the cases before us. On this point, wemade this observation in Republic v. CFI of Lanao del Norte:
"From the latest pleadings of petitioners, however, supported, as they are, by officialreports which are more specific and factual, the situation relative to the equities inthese cases appears to Us to have changed considerably. And in the face of thiscircumstance, counsel for IISMI have not been able to present sufficientlydocumented denials and rebuttals of the new allegations of petitioners, albeit theyexcuse themselves by alleging that they have lost contact with their clients, theprincipal private investors who used to be in control of respondent corporation. It isclaimed that said private investors have gone abroad to places unknown to saidcounsel, for which reason, precisely, the latter are even asking for leave to beallowed to withdraw their representation. Under the circumstances, and consideringthat to await the uncertain return of the private investors would jeopardize theefforts of the government to make the national Project herein involved, as conceivedin the triangular agreement among the Republic, the Exim Bank and IISMI itself,namely, the establishment of an integrated steel complex to meet the requirementsof the industry and economy of the whole country, totally operative without furtherloss of time, the Court is of the considered opinion that all the matters here indispute, should be referred to the respondent court for further proceedings andappropriate resolution. Indeed, having in view the nature and volume of theevidence which the parties would have to present in connection with the factualissues raised by petitioners regarding what they claim to have discovered orunearthed after the Secretary of National Defense took over the `management,control and operation' of IISMI, may be justly and comprehensively resolved onlyafter such evidence have been received by the trial court, rather than this Court,since it has the ready adequate machinery for the purpose. And with such additionalevidence, the trial court would naturally be in a better position than before to rule onthe injunctions which have given rise to these proceedings.
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Anent the prayer of all the counsel of IISMI to be given leave to withdraw theirrepresentation of said respondent, it is important to note that said request is notaccompanied by proof of their client's consent to such withdrawal. Ordinarily, underSection 26 of Rule 138, such consent is required. And even in the instances wherethe same section dispenses with the client's consent, it is generally the rule that theclient should be notified of the petition of counsel. But it is not inconceivable thatunder peculiar circumstances, the court may be justified in relieving a lawyer fromcontinuing his appearance in an action or proceeding, without hearing the client, as,for instance, when a situation develops, like in the cases at bar where the clientstops having any contact with the lawyer, who 1s thereby left without the usualmeans which are indispensable in the successful or, at least, proper defense of theclient's cause, such as, actual knowledge of relevant facts, the identity of usablewitnesses, pertinent documents and other evidence, not to speak of the moneyneeded for even the minimum of litigation expenses and the possible advances ofattorney's fees. Understandably, no responsible lawyer can be expected to do
justice to any cause under such conditions, and, it would be an unjust imposition tocompel him to continue his services in relation thereto. While perhaps the ab