COMPILED RULE 2 CAUSE OF ACTION 2.doc

8/21/2019 COMPILED RULE 2 CAUSE OF ACTION 2.doc

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RULE 2 CAUSE OF ACTION

SECTION 1 ORDINARY CIVIL ACTIONS, BASIS OF

TURNER VS LORENZO SHIPPINGG.R. NO. 157479 (NOVEMBER 24, 21!

FACTS:

The petitioners held shares of stock of the respondent. The respondent decided to amend its articles of incorporation toremove the stockholders’ pre-emptive rights to newly issued shares of stock. Feeling that the corporate move would epre!udicial to their interest as stockholders" the petitioners voted against the amendment and demanded payment of theirshares. The respondent found the fair value of the shares demanded y the petitioners was unacceptale. Thedisagreement on the valuation of the shares led the parties to constitute an appraisal committee. The appraisal committeereported its valuation" suse#uently" the petitioners demanded payment ased on the valuation of the appraisalcommittee" plus $%&month penalty from the date of their original demand for payment" as well as the reimursement ofthe amounts advanced as professional fees to the appraisers.

The respondent refused the petitioners’ demand" e'plaining that pursuant to the Corporation Code" the dissentingstockholders e'ercising their appraisal rights could e paid only when the corporation had unrestricted retained earningsto cover the fair value of the shares" ut that it had no retained earnings at the time of the petitioners’ demand" as orneout y its Financial Statements for Fiscal (ear )***.

+pon the respondent’s refusal to pay" the petitioners sued the respondent for collection and damages in the ,TCin akati City upon motion for partial summary !udgment.

The respondent opposed the motion for partial summary judgment " stating that the determination of the unrestrictedretained earnings should e made at the end of the fiscal year of the respondent" and that the petitioners did not have acause of action against the respondent.

The ,TC concluded that the respondent’s oligation to pay had accrued y its having the unrestricted retained earningsafter the making of the demand y the petitioners. t ased its conclusion on the fact that the Corporation Code did notprovide that the unrestricted retained earnings must already e'ist at the time of the demand.

SS+/:

0hether or not petitioner has a cause of action.

S+1,// C2+,T ,+345:

4o" the 1etitioner’s cause of action was premature. A cause of action is the act or omission y which a party violates a right of another. The essential elements of a cause ofaction are:6a7 the e'istence of a legal right in favor of the plaintiff86b7 a correlative legal duty of the defendant to respect such right8 and6c 7 an act or omission y such defendant in violation of the right of the plaintiff with a resulting in!ury or damage to theplaintiff for which the latter may maintain an action for the recovery of relief from the defendant. Although the first two elements may e'ist" a cause of action arises only upon the occurrence of the last element" giving

the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief.Section )" ,ule $" of the Rules of Court re#uires that every ordinary civil action must e ased on a cause of action. Accordingly" Civil Case 4o. 9)-9; was dismissile from the eginning for eing without any cause of action. The ,TC’s construal of the Corporation Code was unsustainale" ecause it did not take into account the petitioners’ lackof a cause of action against the respondent. n order to give rise to any oligation to pay on the part of the respondent" thepetitioners should first make a valid demand that the respondent refused to pay despite having unrestricted retainedearnings. 2therwise" the respondent could not e said to e guilty of any actionale omission that could sustain theiraction to collect.

1


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SECTION 2 CAUSE OF ACTION, DEFINED

HEIRS OF YPON V. RICAFORTE, G.R. NO. 19"#", $ULY ", 21%

F&')*

2n amages 6su!ect complaint7 against respondent 5audioso 1onteras ,icaforte a.k.a. ?5audioso /

(pon@. n their complaint" they alleged that agdaleno (pon 6agdaleno7 died intestate and childless on


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a status, a right, or a particular fact . t is then decisively clear that the declaration of heirship can e made only in a special

proceeding inasmuch as the petitioners here are seeking the estalishment of a status or right.

0hile a court usually focuses on the complaint in determining whether the same fails to state a cause of action" a court

cannot disregard decisions material to the proper appreciation of the #uestions efore it. Since a determination of heirship

cannot e made in an ordinary action for recovery of ownership and&or possession" the dismissal of Civil Case 4o. T-$$=;

was altogether proper.

SECTION 2 CAUSE OF ACTION, DEFINED

S


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SS+/:

024 complaint that lacks a cause of action at the time it was filed e cured y the accrual of a cause of action during thependency of the caseI

,+345:

The sc e'pressed that:Cause of action" as defined in Section $" ,ule $ of the )** ,ules of Civil 1rocedure" is the act or omission y which aparty violates the right of another. ts essential elements are as follows:). A right in favor of the plaintiff y whatever means and under whatever law it arises or is created8$. An oligation on the part of the named defendant to respect or not to violate such right8 andB. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a reach of theoligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or otherappropriate relief.t is" thus" only upon the occurrence of the last element that a cause of action arises" giving the plaintiff the right tomaintain an action in court for recovery of damages or other appropriate relief.

At the time the complaint was filed with the trial court on $ Feruary )***" none of the three promissory notes was dueyet8 although" two of the promissory notes with the due dates of August )*** and )= arch $999 matured during thependency of the case with the trial court. oth courts also found that the petitioner had een religiously paying the privaterespondent +SGH9 per month from omingo Killawas on its way to KalenJuela" ulacan from 1angasinan. 1etitioner" with a cargo of livestock" oarded the cargotruck at >agupan City after paying the sum of 1 *.99 as one way fare to KalenJuela" ulacan. 0hile said cargotruck was negotiating the 4ational ighway proceeding towards anila" defendant >omingo Killa tried to overtakea tricycle likewise proceeding in the same direction. At aout the same time" a pick-up truck" supposedly ownedy respondents Antonio Sioson and


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• 1etitioner filed a complaint for damages against respondent 1ereJ" as owner of the cargo truck" ased on areach of contract of carriage and against respondents Sioson and Killanueva" as owner and driver" respectively"of the pick-up truck" ased on #uasi-delict.

• ,espondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up truck andneither would he ac#uire ownership thereof in the future.

• 2n Septemer )*B" petitioner filed his amended complaint impleading respondents


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only one delict or wrong" there is ut a single cause of action regardless of the numer of rights that may have eenviolated elonging to one person.

The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of one person.4evertheless" if only one in!ury resulted from several wrongful acts" only one cause of action arises. n the case at ar"there is no #uestion that the petitioner sustained a single in!ury on his person. That vested in him a single cause of action"aleit with the correlative rights of action against the different respondents through the appropriate remedies allowed ylaw.

The trial court was correct in holding that there was only one cause of action involved although the ases of recoveryinvoked y petitioner against the defendants therein were not necessarily dentical since the respondents were notidentically circumstanced. owever" a recovery y the petitioner under one remedy necessarily ars recovery under theother. This" in essence" is the rationale for the proscription in our law against doule recovery for the same act or omissionwhich" oviously" stems from the fundamental rule against un!ust enrichment.

There is no #uestion that the respondents herein are solidarily liale to petitioner . 0e cannot accept the vacuouscontention of petitioner that said allegations are intended to apply only in the event that e'ecution e issued in his favor.There is nothing in law or !urisprudence which would countenance such a procedure.

The respondents having een found to e solidarity liale to petitioner" the full payment made y some of the solidarydetors and their suse#uent release from any and all liaility to petitioner inevitaly resulted in the e'tinguishment and

release from liaility of the other solidary detors" including herein respondent 1atrocinio 1ereJ.

SECTION % ONE SUIT FOR A SINGLE CAUSE OF ACTION

PHILIPPINE BAN> OF, COMMUNICATIONS, P6/),;).

ELENA LIM, RAMON CALDERON, &/3 TRI?ORO INTERNATIONAL TRADING @ MANUFACTURING CORPORATION,R)6/3/).

G.R. N6. 15"1%". A- 12, 25

FACTS*

2n Septemer B" )***" the 1hilippine ank of Communications filed a complaint against /lena 3im" ,amon Calderon andTri-2ro nternational Trading N anufacturing Corporation 6OTri-2ro’ for revity7P with the ,egional Trial Court of anila forthe collection of a deficiency amounting to 1="9)="$*.$B e'clusive of interest.

1etitioner alleged therein that respondents otained a loan from it and e'ecuted a continuing surety agreement dated4ovemer );" )**H in favor of petitioner.

1etitioner granted a renewal of said loan upon respondent’s re#uest" the most recent eing on


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CA ruled that respondents’ alleged det was ased on the 1romissory 4ote" which had provided an e'clusionarystipulation on venue Mto the e'clusion of all other courts.@ The parties’ Surety Agreement" though silent as to venue" wasan accessory contract that should have een interpreted in consonance with the 1romissory 4ote.;

ISSUE*

0hether or not petitioner did not violate section B of rule $ 62ne suit for a cause of action7

RULING*1etitioner correctly argues that there are two causes of action contained in its Complaint. A cause of action is a party’s actor omission that violates the rights of the other. 2nly one suit may e commenced for a single cause of action. f two ormore suits are instituted on the asis of the same cause of action" only one case should remain and the others must edismissed.

As against Tri-2ro nternational Trading N anufacturing Corporation" petitioner’s cause of action is the alleged failure topay the det in violation of the 148 as against /lena 3im and ,amon Calderon" in violation of the SA.

ecause of the variance etween the causes of action" petitioner could have filed separate actions against respondents torecover the det" on condition that it could not recover twice from the same cause. t could have proceeded against onlyone or all of them"B9 as full payment y any one of them would have e'tinguished the oligation.B) y the same token"respondents could have een !oined as defendants in one suit" ecause petitioner’s alleged right of relief arose from thesame transaction or series of transactions that had common #uestions of fact.B$ To avoid a multiplicity of suits" !oinder of

parties is encouraged y the law.The cause of action" however" does not affect the venue of the action. The vital issue in the present case is whether theaction against the sureties is covered y the restriction on venue stipulated in the 14. As earlier stated" the answer is inthe affirmative. Since the cases pertaining to oth causes of action are restricted to akati City as the proper venue"petitioner cannot rely on Section H of ,ule $ of the ,ules of Court.

SECTION 4 SPLITTING A SINGLE CAUSE OF ACTION, EFFECT OF

CHUA VS. METROBAN>

G.R. N6. 1#11%5, A- ", 25

FACTS*

• P6/ Chua is president of co-petitioner Filiden" a domestic corporation" engaged in the realty usiness

Q=P R)6/3/ etropolitan ank and Trust Co. 6respondent etroank7 is a domestic corporation and a duly

licensed anking institution.

• Sometime in )*" petitioners otained from respondent etroank a loan of 1="999"999.99" which was secured

y a real estate mortgage 6,/7 on parcels of land registered in petitioner Chua’s name.• aving failed to fully pay their oligations" petitioners entered into a >et Settlement AgreementQP with responden

etroank where AmortiJation payments were to e made. 0hen petitioners still failed to pay their loans"

respondent etroank sought to e'tra-!udicially foreclose the ,/ constituted on the su!ect properties

,espondent Atty. ,omualdo Celestra 6Atty. Celestra7 issued a 4otice of Sale.

• 1etitioner Chua" in his personal capacity and acting on ehalf of petitioner Filiden" filed efore ranch $H of the

,egional Trial Court of 1araRa#ue 6,TC-ranch $H7" & C6-&/ 6 I/=+/'6/ 8 P&: 6 I))+&/' 6

7

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T6&: R)&//0 O3 (TRO!, P-/&: I/=+/'6/ &/3 D&&0)"Q)$Pagainst respondents Atty

Celestra" docketed as C;- C&) N6. CV?1?27. TRO 8&) 0&/3 : RTC?B&/' 257.

• owever" no in!unction was issued y ,TC-ranch $H. ence" Atty. Celestra reset the auction sale on 4ovemer

" $99) and a Certificate of Sale was accordingly issued to respondent etroank as the highest idder of the

foreclosed properties.

•

1etitioners filed with ,TC-ranch $H a M66/ 6 A3 A/33 C6-&/15

/ C;- C&) N6. CV?1?27impleading as additional defendant the incument ,egister of >eeds of 1araRa#ue City on the ground that the

1.! Certificate of Sale was a falsified document8 2.! 1etitioners additionally prayed in their Amended Complaint for

the award of damages given the ause of power of respondent etroank in the preparation" e'ecution" and

implementation of the >et Settlement Agreement with petitioners8 %.! 1etitioners also sought the issuance of a

T,2 or a writ of preliminary in!unction to en!oin respondent Atty. Celestra and all other persons from proceeding

with the foreclosure sale" on the premise that no auction sale was actually held on 4ovemer $99).

• owever acting AFF/CT T/ ?S/C24>@ CAS/.

$. 024 the filing of Civil Case 4o. CK-9)-9$9 and Civil Case 4o. CK-9H-9=9$ amounts to forum shopping.

8

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RULING*

FORUM SHOPPING

The Court answers in the affirmative.

The proscription against forum shopping is found in Section H" ,ule of the )** ,ules of Court" which provides

that:

SEC. 5. Certification against forum shopping.The plaintiff or principal party shall certify under

oath in the complaint or other initiatory pleading asserting a claim for relief" or in a sworn certificationanne'ed thereto and simultaneously filed therewith: 6&! & &) /6 66 '6/'3 &/:&'6/ 6 -3 &/: '-& /;6-;/0 )& ))+) / &/: '6+, +/&- 6 +&)?=+3'&- &0/':&/3, 6 ) 6 ) /68-30, /6 )+' 6 &'6/ 6 '-& ) /3/0 / (! ))+' 6 /3/0 &'6/ 6 '-&, & '6- )&/ 6 )/ )&+) 6 &/3 ('! )6+-3 & -&/ & )& 6 )-& &'6/ 6 '-& &) / -3 6 ) /3/0, )&--6 & &' 8/ ; (5! 3&:) 6 6 '6+ 8/ ) &6)&3 '6-&/ 6

/&6: -&3/0 &) / -3.

Failure to comply with the foregoing re#uirements shall not e curale y mere amendment of thecomplaint or other initiatory pleading ut shall e cause for the dismissal of the case without pre!udice"unless otherwise provided" upon motion and after hearing

Forum shopping e'ists when a party repeatedly avails himself of several !udicial remedies in different courts"

simultaneously or successively" all sustantially founded on the same transactions and the same essential facts and

circumstances" and all raising sustantially the same issues either pending in or already resolved adversely y some

other court.QB$P

F6+ )6/0 '&/ '63 / 8&:) : 6)7 filing multiple cases ased on the same cause of action

and with the same prayer" the previous case not having een resolved yet 6where the ground for dismissal is litis

pendentia78 6$7 filing multiple cases ased on the same cause of action and the same prayer" the previous case having

een finally resolved 6where the ground for dismissal is res judicata78 and 6B7 filing multiple cases ased on the same

cause of action" ut with different prayers 6splitting of causes of action" where the ground for dismissal is also either litis

pendentia or res judicata7.QB=P

I/ )/ '&)" there is no dispute that petitioners failed to state in the Certificate of 4on-Forum Shopping"

attached to their Kerified Complaint in Civil Case 4o. CK-9H-9=9$ efore ,TC-ranch )*H" the e'istence of Civil Case 4o

CK-9)-9$9 pending efore ,TC-ranch $H. 4evertheless" petitioners insist that they are not guilty of forum shopping

since 6)7 the two cases do not have the same.

P6/) '63 6+ )6/0 : -/0 +-- '&)) &)3 6/ )& '&+) 6 &'6/,

&-6+0 8 3/ &:).

9



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S'6/) % &/3 4, R+- 2 6 R+-) 6 C6+ 6)' )-/0 6 & )/0- '&+) 6 &'6/*

S'6/ %. A &: &: /6 /)+ 6 &/ 6/ )+ 6 & )/0- '&+) 6 &'6/. S'6/ 4. S-/0 & )/0- '&+) 6 &'6/ ' 6.I 86 6 6 )+) & /)+3 6/

&)) 6 )& '&+) 6 &'6/, -/0 6 6/ 6 & =+30/ +6/ ) / &/: 6/ )

&;&-&- &) & 06+/3 6 3)))&- 6 6).

Forum shopping occurs although the actions seem to e different" when it can e seen that there is a splitting of a

cause of action.


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& nemo debet bis vexari, pro una et eadem causa (/6 &/ )&-- 8' ;3 6 6/ &/3 )& '&+)!

41

f the forum shopping is not considered willful and delierate" the suse#uent case shall e dismissed 86+

=+3', on the ground of either litis pendentiaor res judicata. owever" if the forum shopping is willful and delierate

oth 6or all" if there are more than two7 actions shall e dismissed 8 =+3'..Q=BP

I/ ) '&), 6/) 33 /63-&-: - C;- C&) N6. CV?5?42 6 +6) 6 )/0 & &;6&- 3')6/ / &/6

6+. O8), : 86+-3 /6 &; 6;3 6 '6/)6-3&6/ 6 6 '&)). T+), 6/-: C;- C&) N6. CV

5?42 ) 3)))3 &/3 &/0 6 C;- C&) N6. CV?1?27 6 RTC?B&/' 25" 8-- '6//+3.

IN VIE< OF THE FOREGOING" the instant 1etition is DENIED.

SECTION 4 SPLITTING A SINGLE CAUSE OF ACTION, EFFECT OF

CATALINA B. CHU, THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEevelopment Corporation 6Cool Town ,ealty7" and the 2ffice of the ,egistry of>eeds of 1ampanga as defendants in addition to the Cunanans.

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• Considering that the Carloses had meanwhile sold the two lots to enelda /state >evelopment Corporation6enelda /state7 in )**H" the Chus further amended the complaint in Civil Case 4o. 5-)*B; to implead enelda/state as additional defendant.

• 2n >ecemer $" )***" the Chus" the Cunanans" and Cool Town ,ealty entered into a compromiseagreement,wherey the Cunanans transferred to the Chus their H9% share in ?all the parcels of land situated inSaguin" San Fernando" 1ampanga@ registered in the name of Cool Town ,ealty ?for and in consideration of thefull settlement of their case.@ The ,TC approved the compromise agreement in a partial decision dated A> 4.C+4A4A4 and F/,4A4>2 C.C+4A4A4 6 &/3 / '6/)3&6/ 6 +-- )-/ 6 '&) / &6;?/-3 '&) " hereyT,A4SF/," >/3K/," and C24K/( unto the plaintiffs all their rights" interest" enefits" participation"possession and ownership which consists of FFT( 6H9%7 percent share on all the parcels of landsituated in Saguin" San Fernando 1ampanga now registered in the name of defendant" C223 T204,/A3T( N >/K/321/4T C2,12,AT24" as particularly evidenced y the corresponding Transfer Certificates of Titles '''

'''';. That the plaintiffs and the defendant herein are waiving" aandoning" surrendering" #uitclaiming"

releasing" relin#uishing &/: &/3 &-- )'; '-&) &0&/) &' 6 &) &--03 / -&3/0) : )';-: -3 / '6//'6/ 8 ) '&).Q$=P 6old emphasis supplied7

The intent of the parties to settle all their claims against each other is e'pressed in the phrase any and all their

respective claims against each other as alleged in the pleadings they respectively filed in connection with this case " which

was road enough to cover whatever claims the petitioners might assert ased on the deed of sale with assumption of

mortgage.

There is no #uestion that the deed of sale with assumption of mortgage covered all the five lots" to wit:

12

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0/,/AS" the K/4>2,S are willing to sell the aove-descried properties and the K/4>// iswilling to uy the same at FFT( FK/ 61HH.997 1/S2S" 1hilippine Currency" per s#uare meter" or a totalconsideration of FK/ 3324 24/ +4>,/> ST( 24/ T2+SA4> and 44/T( 61H");)"9*9.9971/S2S" 1hilippine Currency.Q$HP

To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed o!ective

of Civil Case 4o. 5-)*B; to enforce or to rescind the entiredeed of sale with assumption of mortgage. Such interpretation

is akin to saying that the Cunanans separately sold the five lots" which is not the truth. For one" Civil Case 4o. 5-)*B; did

not demand separate amounts for each of the purchased lots. Also" the compromise agreement did not state that the

value eing therey transferred to the petitioners y the Cunanans corresponded only to that of the three lots.

Apparently" the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale

with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or indivisile cause of action

into several parts or claims and instituting two or more actions upon them. Q$;P A single cause of action or entire claim o

demand cannot e split up or divided in order to e made the su!ect of two or more different actions. Q$P Thus" Section =

,ule $ of the Rules of Court e'pressly prohiits splitting of a single cause of action.

The petitioners were not at lierty to split their demand to enforce or rescind the deed of sale with assumption of

mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was sought

under the deed of sale with assumption of mortgage, and then to leave the rest to e presented in another suit8 otherwise

there would e no end to litigation.P Their splitting violated the policy against multiplicity of suits" whose primary o!ective

was to avoid unduly urdening the dockets of the courts. Their contravention of the policy merited the dismissal of Civil

Case 4o. )$$H) on the ground of ar y res judicata.

+nder the doctrine of res judicata" a final !udgment or decree on the merits rendered y a court of competent !urisdiction is conclusive of the rights of the parties or their privies in all later suits and on all points and matters

determined in the previous suit.QB)P The foundation principle upon which the doctrine rests is that the parties ought notto e permitted to litigate the same issue more than once8 that when a right or fact has een !udicially tried anddetermined y a court of competent !urisdiction" so long as it remains unreversed" should e conclusive upon theparties and those in privity with them in law or estate.

(et" in order that res judicata may ar the institution of a suse#uent action" the following re#uisites must concur:E 6a7the former !udgment must e f inal8 6b7 it must have een rendered y a court having !urisdiction of the su!ect matterand the parties8 6c 7 it must e a !udgment on the merits8 and 6d 7 there must e etween the first and second actions 6i 7identity of parties" 6ii 7 identity of the su!ect matter" and 6 iii 7 identity of cause of action.

PANTRANCO VS. STANDARD INSURANCE

Facts:

This is a petition for review on certiorari assailing the >ecision dated


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vehicles were negotiating a curve along the highway" the passenger us overtook the !eepney. n so doing" the passenger

us hit the left rear side of the !eepney and sped away.

Crispin reported the incident to the Talavera 1olice Station and respondent Standard nsurance Co." nc." insurer of the

!eepney. The total cost of the repair was 1$)"=)H.99 ut Standard paid only 1"999.99. artina 5icale shouldered the

alance of 1)B"=)H.99.

Standard and artina demanded reimursement from 1antranco and its driver Ale'ander uncan" ut they refused. This

prompted respondents to file with the ,TC" ranch *=" anila" a complaint for sum of money.

1etitioners" in their answer denied the allegations and averred that it is the etropolitan Trial Court which has !urisdiction

over the case.

2n


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' ' '

6d7 0here the claims in all the causes of action are principally for recovery of money the aggregate amountclaimed shall e the test of !urisdiction.@

The aove provision presupposes that the different causes of action which are !oined accrue in favor of the sameplaintiff&s and against the same defendant&s and that no mis!oinder of parties is involved.QP The issue of whetherrespondents’ claims shall e lumped together is determined y paragraph 6d7 of the aove provision. This

paragraph emodies the ?totality rule@ as e'emplified y Section BB 6)7 of .1. lg. )$*Q*P which states" amongothers" that ?where there are several claims or causes of action etween the same or different parties" emodiedin the same complaint" the amount of the demand shall e the totality of the claims in all the causes of action"irrespective of whether the causes of action arose out of the same or different transactions.@

As previously stated" respondents’ cause of action against petitioners arose out of the same transaction. Thus"the amount of the demand shall e the totality of the claims.,espondent Standard’s claim is 1"999.99" while that of respondent artina 5icale is 1)B"=)H.99" or a total of1$)"=)H.99. Section )* of .1. lg. )$* provides that the ,TC has ?e'clusive original !urisdiction over all othercases" in which the demand" e'clusive of interest and cost or the value of the property in controversy" amounts tomore than twenty thousand pesos 61$9"999.997.@ Clearly" it is the ,TC that has !urisdiction over the instant case.t ears emphasis that when the complaint was filed" ,.A. ;*) e'panding the !urisdiction of the etropolitan"unicipal and unicipal Circuit Trial Courts had not yet taken effect. t ecame effective on April )H" )**=.

UMALE VS. CANOGA PAR>

Facts:

The petitioner agreed to lease" for a period of two 6$7 years starting from


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2n >ecemer =" $99$" the TC-ranch ) rendered a decision in favor of the respondent.

2n appeal" the ,TC-ranch ; reversed and set aside the decision of the TC-ranch )" and dismissed Civil Case 4o

*$)9 on the ground of litis pendentia. The petitioner" however" was still ordered to pay rent in the amount of seventy-one

thousand five hundred pesos 61)"H99.997 per month eginning


17/46

fundamental is the test of determiningwhether the cause of action in the second case e'isted at the time of the filing of the

first complaint

2f the three tests cited" the third one is especially applicale to the present case" i.e." whether the cause of action in the

second case e'isted at the time of the filing of the first complaint E and to which we answer in the negative. The facts

clearly show that the filing of the first e!ectment case was grounded on the petitioner’s violation of stipulations in the lease

contract" while the filing of the second case was ased on the e'piration of the lease contract. At the time the respondent

filed the first e!ectment complaint on 2ctoer )9" $999" the lease contract etween the parties was still in effect. The lease

was fi'ed for a period of two 6$7 years" from amages" Attorney’s Fees with 1rayer for the ssuance of the 0rit of 1reliminary n!unction and&or Temporary ,estraining 2rderagainst the respondents and the City 5overnment of utuan. They prayed that the respondents e en!oined fromunlawfully and illegally threatening to take possession of the su!ect property. They averred that they ac#uired the landfrom a certain Kirginia TuaJon in )**. TuaJon was the sole idder and winner in a ta' delin#uency sale conducted ythe City of utuan on >ecemer $" )**;.

n their answer" the respondents pointed out that they were never delin#uent in paying the land ta'es and were in fact notaware that their property had een offered for pulic auction. oreover" TuaJon" eing a government employee" wasdis#ualified to id in the pulic auction" as stated in Section * of the 3ocal 5overnment Code of )**). As TuaJon’sparticipation in the sale was void" she could have not transferred ownership to the petitioners. /#ually important" thepetitioners merely falsified the property ta' declaration y inserting the name of the petitioners’ father" making him appearas a co-owner of the auctioned land. Armed with the falsified ta' declaration" the petitioners" as heirs of their father"

fraudulently redeemed the land from TuaJon. 4onetheless" there was nothing to redeem as the land was not sold. Forthese irregularities" the petitioners had no right to the 0rit of 1reliminary n!unction and&or Temporary ,estraining 2rderprayed for against them.

The ,egional Trial Court 6,TC7 of utuan City" ranch H" denied the prayer for a 0rit of 1reliminary n!unction" andordered that the possession and occupation of the land e returned to the respondents.

The petitioners challenged the ,TC’s order efore the CA through a petition for review on certiorari under ,ule ;H"

17


18/46

0hile the petition for review on certiorari was pending efore the CA" 6/) -3 &/ &'6/ 6 )''6&/' &0&/) C: G6;// 6 B++&/. A''63/0 6 6/), : &'+3 6))))6/ &/368/) 6; &+'6/3 6: 8/ : 33 6 T+&6/. T C: G6;// 6 B++&/+) 6 ))+ & ''& 6 )&-.

The CA affirmed the ,TC’s ruling" found the petitioners guilty of forum shopping" dismissed the case" and referred thecase to the Court and to the ntegrated ar of the 1hilippines for investigation and institution of the appropriateadministrative action.

2n April ;" $99;" the CA re!ected the petitioners’ motion for reconsideration.

T/ 1A,T/S’ A,5+/4TS

The petitioners filed the present petition for review on certiorari with this Court to challenge the CA rulings. The petitionersmaintain that they did not falsify the ta' declaration in ac#uiring the auctioned property. oreover" assuming that TuaJonthe sole idder" was indeed dis#ualified from participating in the pulic auction" Section ))of the 3ocal 5overnment Codeof )**) finds application. Applying the law" it is as if there was no idder" for which the City 5overnment of utuan was toe considered the purchaser of the land in auction. Therefore" when the petitioners ought the land" they ought it directlyfrom the purchaser - City 5overnment of utuan - and not from TuaJon" as redeemers.

Also" the respondents may not #uestion the validity of the pulic auction for failing to deposit with the court the amount

re#uired y Section $;) of the 3ocal 5overnment Code of )**).

Finally" the petitioners argue that they did not commit forum shopping" as the reliefs prayed for in the present case and inthe specific performance case are not the same. n the present case" they merely impleaded the City 5overnment ofutuan as a nominal party to pay for the value of the land only if possession of the land was awarded to the respondents.2n the other hand" the complaint for specific performance prayed that the City 5overnment of utuan e'ecute thenecessary certificate of sale and other relevant documents pertaining to the auction.

The respondents" for their part" reiterate the lower courts’ findings that there could have een no legal redemption in favorof the petitioners as the highest idder was dis#ualified from idding. oreover" the CA correctly applied the law in findingthe petitioners guilty of forum shopping. ost importantly" the grant of preliminary in!unction lies in the sound discretion ofthe court and the petitioners failed to show proof that they are entitled to it.

SS+/:

0hether or not petitioners are guilty of forum shopping y splitting a single cause of actionI

/3> : The petitioners are guilty of forum shopping

0e agree with the CA that the petitioners committed forum shopping when they filed the specific performance casedespite the pendency of the present case efore the CA. n the recent case of eirs of arcelo Sotto" etc." et al. v. atildeS. 1alicte"the Court laid down the three ways forum shopping may e committed: )7 through litis pendentia filingmultiple cases ased on the same cause of action and with the same prayer" the previous case not having een resolved

yet8 $7 through res !udicata filing multiple cases ased on the same cause of action and the same prayer" the previouscase having een finally resolved8 and B7 splitting of causes of action filing multiple cases ased on the same cause ofaction ut with different prayers the ground to dismiss eing either litis pendentia or res !udicata. MThe re#uisites of litispendentia are: 6a7 the identity of parties" or at least such as representing the same interests in oth actions8 67 the identityof rights asserted and relief prayed for" the relief eing founded on the same facts8 and 6c7 the identity of the two casessuch that !udgment in one" regardless of which party is successful" would amount to res !udicata in the other.M

4oticeale among these three types of forum shopping is the identity of the cause of action in the different cases filed.Cause of action is Mthe act or omission y which a party violates the right of another.M

18


19/46

The cause of action in the present case 6and the main case7 is the petitioners’ claim of ownership of the land when theyought it" either from the City 5overnment of utuan or from TuaJon. This ownership is the petitioners’ asis in en!oiningthe respondents from dispossessing them of the property. 2n the other hand" the specific performance case prayed thatthe City 5overnment of utuan e ordered to issue the petitioners the certificate of sale grounded on the petitioners’ownership of the land when they had ought it" either from the City 5overnment of utuan or from TuaJon. 0hile it mayappear that the main relief prayed for in the present in!unction case is different from what was prayed for in the specificperformance case" the cause of action which serves as the asis for the reliefs remains the same the petitioners’alleged ownership of the property after its purchase in a pulic auction.

Thus" the petitionersL suse#uent filing of the specific performance action is forum shopping of the third kind-splittingcauses of action or filing multiple cases ased on the same cause of action" ut with different prayers. As the Court hasheld in the past" Mthere is still forum shopping even if the reliefs prayed for in the two cases are different" so long as othcases raise sustantially the same issues.M

Similarly" the CA correctly found that the petitioners and their counsel were guilty of forum shopping ased on litispendentia. 4ot only were the parties in oth cases the same insofar as the City 5overnment of utuan is concerned" therewas also identity of rights asserted and identity of facts alleged. The cause of action in the specific performance case hadalready een ruled upon in the present case" although it was still pending appeal efore the CA. 3ikewise" the prayersought in the specific performance case-for the City 5overnment ofutuan to e'ecute a deed of sale in favor of thepetitioners - had een indirectly ruled upon in the present case when the , TC declared that no certificate of sale could eissued ecause there had een no valid sale.

BAYANG VS. CAG.R. NO. 5%5#4

FEBRUARY 27, 19"7

F&')*

1etitioner


20/46

A long line of decisions has consistently held that for res judicata to apply: a7 the former !udgment must e final8 7 it must

have een rendered y a court having !urisdiction over the su!ect matter and the parties8 c7 it must e a !udgment on the

merits8 and d7 there must e etween the first case and the second case identity of parties" identity of su!ect matter and

dentity of cause of action.

The decision in Civil Case 4o. )*$ ecame final and e'ecutory on Feruary $" )*. There is no dispute that the trial

court which rendered that decision had !urisdiction over the su!ectmatter and the parties to the proceeding. The case was

tried on the merits. The parties to Civil Case 4o. )*$ and the suse#uent Civil Case 4o. $H* are the same petitioner

and private respondent now efore us.

T 6/ 86+-3 3&8 & 3)/'6/ 8/ -&/3 / 3)+ / C;- C&) N6. 1"92 &/3 /'6 6& -&/3 /0 '-&3 / C;- C&) N6. 25"9. B+ & ) / 6+ ;8 )-/0 &) 6 )- & '&+) 6 &'6/. T)+='& ) ))/&--: )& / 6 '&)) &) /'6 ) 6/-: & '6/)+/' 6 &''))6: 6 3)+3 6:.


21/46

The present action was rought on April )B" )*$H" ut the last amended complaint" setting forth three causes of action"

was not filed until


22/46

the complaint and that failure to do so will constitute a ar to a suse#uent action for the payment of that rent. The

aforesaid action" 5. ,. 4o. $)9;" was rought on August $B" )*$$" the plaintiff demanding payment of the then due rent

in addition to the rescission of the lease.

The lease did not provide for payment of rent in advance or at any definite time" and it appears plainly from the record that

the rent for an agricultural year was not considered due until the end of the corresponding year. t follows that the rent for

the agricultural year )*$$-)*$= had not ecome due at the time of the trial of the case and that conse#uently the trial

court could not render !udgment therefor. The action referred to is" therefore" no ar to the first cause of action in the

present litigation.

The action for terminating the lease was rought under article ))$= of the Civil Code" and it may" perhaps" e said that

property speaking" the su!ect matter of the action was a resolution of the contract and not a rescission. That may e true"

ut it is a distinction without a difference8 in either case a !udicial declaration would e necessary for the cancellation of

the contract in the asence of a special agreement.

Kery little need e said in regard to the third cause of action. t relates to a period suse#uent to the complete termination

of the lease y final !udicial order. The defendant had then no right whatever to the possession of the land or to the fruits

thereof" and in removing the fruits" he acted in ad faith. This eing the case" he must pay for the fruits received y him"

less the necessary e'penses of production. 6Arts. =HH and =HB of the Civil Code.7 As his ad faith commenced long efore

the fruits in #uestion were produced" he is not entitled to any part of the net proceeds of the crop. The evidence showsthat the net ratoon crop for the year )*$=-)*$H was )";)B.$H piculs of sugar" and according to the defendant’s own

statement" the market value of the sugar was in the neighorhood of 1)) per picul and the cost of production aout 1=.H9

The net result is that under the third cause of action" the defendant must pay to the plaintiff the sum of 1)9"=;.)B with

interest.


23/46

I))+*

0hether or not rendition of the former !udgment is a ar to the right of the plaintiff to recover damages from and after

Septemer" )*$B" arising from" and growing out of" reaches of the original contract of Septemer )9" )*)" as modified

on


24/46

4AT+,/ 2F T/ CAS/: The CA affirmed the decision of the ,TC that the CCC’s 6herein respondent7 complaint for

damages against >anfoss. So" the case was elevated to the Supreme Court on appeal of the said ruling of the CA and the

CA’s denial for >anfoss’ motion for reconsideration.

FACTS*

echatronics nstruments and Controls" nc. 64C7 is an agent of >anfoss" nc.’s products here in the 1hilippines. 2n

Septemer )**" CCC ordered two unit )B$ U0 >anfoss rand Fre#uency Converter&nverter from 4C to e used in

the Finish ill of its Cement 1lant in ulacan. n the terms of conditions of the original purchase order" the two unit

Fre#uency Converter shall e delivered y >anfoss within to )9 weeks from the opening of the letter of credit. The letter

of credit opened y CCC in favour of >anfoss on Septemer *" )**.

2n Septemer )" )**" 4C informed CCC that its order are already ready for shipment and 4C re#uested to

amend the letter of credit changing the port of origin&loading from Singapore to >enmark 6Singapore is the Asian ,egiona

2ffice of >anfoss" the ead 2ffice of the company is >enmark7. CCC complied and the port of origin in the letter of credit

was changed.

2n 4ovemer ;" )**" 4C relayed to CCC that >anfoss nc. was still checking the status of their order. CCC replied

that every delay in the delivery of the order will cause loss to their company" so CCC re#uested for early work out and

immediate shipment to avoid further loss.

ut" on 4ovemer *" )**" >anfoss nc. informed 4C through fa'" that the reason for the delivery prolems was that

some of the supplied components for the new K3T H999 series 6this may e a part of the converter which is the su!ect

thing in this case or a machine to create the converter7 did not meet the agreed #uality standard. So" >anfoss was

canvassing for another supplier for the said K3T H999 series. n the fa'" there was no clear message as to when norma

production will resume.

+pon receiving the relayed information" CCC surmised that >anfoss would not e ale to deliver their order. There was

also no definite commitment of the delivery from >anfoss and 4C" so CCC informed 4C that they intend to cancel

its order. The order was cancelled on 4ovemer )B" )**.

ence the complaint for damages filed y CCC with the ,TC of DueJon City against >anfoss and 4C on 4ovemer H"

)**. n reply" >anfoss filed a motion to dismiss the complaint.

CCC* >ue to the ?impending@ delay in the delivery of its order" it suffered more than 1 million and was compelled to lookfor another supplier.

D&/6))* The case should e dismissed on the ground that it did not state a cause of action.

)7 The letter of credit was opened on Septemer *" )**" so" since the agreed delivery period is to )9 weeks

from the opening of the letter of credit" the due date is until 4ovemer )*" )**.

$7 Although >anfoss was having a prolem with its supplier prior to CCC’s cancellation of its order" CCC only

surmised that >anfoss could not deliver within the due date agreed upon.

B7 4either >anfoss nor CCC agreed to change the date of delivery. 2nly the port of origin was changed in the

letter of credit. >anfoss has until 4ovemer )*" )** to deliver the order" CCC cancelled the order on 4ovemer )B

)**.

=7 CCC never made an e'tra!udicial demand for the delivery of its order on its due date as it cancelled the orde

efore the due date.

24


25/46

H7 >amages sought for y CCC could not have accrued yet since the order was cancelled efore the delivery was

actually delayed.

,TC:


26/46

FACTS:

As orne y the records" A4TSA and A3 on several occasions granted three ma!or multi-million +nited States 6+S7>ollar loans to the following corporate orrowers: 6)7 3ierian Transport 4avigation" S.A.8 6$7 /l Challenger S.A. and 6B7/shley Compania 4aviera S.A. 6hereinafter collectively referred to as MorrowersM7" all of which are e'isting under and yvirtue of the laws of the ,epulic of 1anama and are foreign affiliates of private respondent.

>ue to the default in the payment of the loan amortiJations" A4TSA and the corporate orrowers signed and entered intorestructuring agreements. As additional security for the restructured loans" private respondent A,C as third partymortgagor e'ecuted two real estate mortgages

/ventually" the corporate orrowers defaulted in the payment of the restructured loans prompting petitioner A4TSA to file

civil actions efore foreign courts for the collection of the principal loan

n the civil suits instituted efore the foreign courts" private respondent A,C" eing a third party mortgagor" was private notimpleaded as party-defendant.

2n ); >ecemer )**$" petitioner A4TSA filed efore the 2ffice of the 1rovincial Sheriff of ulacan" 1hilippines anapplication for e'tra!udicial foreclosure of real estate mortgage and the lots were suse#uently sold at an auction.

2n )$ Feruary )**B" private respondent filed efore the 1asig ,egional Trial Court" ranch )H*" an action fordamages " against the petitioner" for the latterLs act of foreclosing e'tra!udicially the real estate mortgages despite thependency of civil suits efore foreign courts for the collection of the principal loan.

2n )= >ecemer )**B" private respondent filed a motion for suspension which the trial court granted.

After trial" the lower court rendered a decision in favor of private respondent A,C .

2n appeal" the Court of Appeals affirmed the assailed decision of the lower court prompting petitioner to file a motion forreconsideration which the appellate court denied.

ence" the instant petition for review on certiorari

SS+/:

0hether or not the re#uisites of filing the action for collection and rendition of final !udgment therein should concur.

,+345:

n the instant case" petitionerLs contention that the re#uisites of filing the action for collection and rendition of final !udgment therein should concur" is untenale.

Thus" in Cerna vs. Court of Appeals" 22 we agreed with the petitioner in said case" that the filing of a collection suit arredthe foreclosure of the mortgage:

A mortgagee who files a suit for collection aandons the remedy of foreclosure of the chattel mortgageconstituted over the personal property as security for the det or value of the promissory note when heseeks to recover in the said collection suit.

. . . 0hen the mortgagee elects to file a suit for collection" not foreclosure" therey aandoning the chattelmortgage as asis for relief" he clearly manifests his lack of desire and interest to go after the mortgagedproperty as security for the promissory note . . . .

Contrary to petitionerLs arguments" we therefore reiterate the rule" for clarity and emphasis" that the mere act of filing of anordinary action for collection operates as a waiver of the mortgage-creditorLs remedy to foreclose the mortgage. y themere filing of the ordinary action for collection against the principal detors" the petitioner in the present case is deemed tohave elected a remedy" as a result of which a waiver of the other necessarily must arise. Corollarily" no final !udgment inthe collection suit is re#uired for the rule on waiver to apply.

ence" in Calte !hilippines, "nc. vs. "ntermediate#Appellate Court " 2% a case relied upon y petitioner" supposedly touttress its contention" this Court had occasion to rule that the mere act of filing a collection suit for the recovery of a det

26


27/46

secured y a mortgage constitutes waiver of the other remedy of foreclosure.

n the case at ar" petitioner A4TSA only has one cause of action which is non-payment of the det. 4evertheless"alternative remedies are availale for its en!oyment and e'ercise. 1etitioner then may opt to e'ercise only one of tworemedies so as not to violate the rule against splitting a cause of action.

ALANDALE SPORTSLINE V. GOOD DEVELOPMENT CORP

FACTS:

Allandale Sportsline" nc. 6AS7 otained a loan of 1$9="999.99 from The 5ood >evelopment Corp. 65>C7 under a 1romissory 4ote

signed y defendants 6AS7 with other co-makers. The 1romissory 4ote provides that the loan is payale in daily e#ual installments

of1$"999.99 with interest at the rate of $;.99$% per annum. n case of default in the payment of any installment" the entire alance o

the oligation shall ecome immediately due and payale" and su!ect to li#uidated penalty of 2 6 /'&-. They provideadditional security of mortgage in favor of 5>C in which they acceded that should the 2,T5A52,S fail to comply with any of the

terms of the promissory note and this mortgage contract" the 2,T5A5// shall automatically have the asolute right without need of

prior notice or demand to forthwith !udicially or e'tra!udicially foreclose this mortgage. 2n C demanded the unpaid

account or surrender the mortgaged chattels within five days from notice to the defendants. 0hen no payment was made" 5>C filed with

the ,TC a Complaint for ,eplevin with >amages and alternative reliefs against defendants ut 5>C did not alleged for deficiency

amount. The ,TC issued a 0rit of ,eplevin. eanwhile" defendants filed their Answer with Counterclaim. They claimed that thei

unpaid oligation was only 1))"999.99. 5>C presented to the ,TC a Statement of Account dated August $=" )**$" which indicated

that the total outstanding alance of the loan oligation of defendants was reduced to 1)*)"))).$ after the proceeds of the auction sale

conducted on C against defendants ordering them to pay the plaintiff !ointly and severally the amount of 1$;*";)).$ plus legal interest thereon

effective to date until the full amount is fully paid" and $H% of the total amount due as li#uidated damages. >efendants appealed to the

CA. CA affimred the decision of ,TC and motion for reconsideration of defendants is denied y the CA and they filed a petition for review

in the SC.

SS+/:

). 0hether respondent instituted the proper action for the deficiency amount at the pre-trial.

$. 0hether or not petitioners are entitled to the return of their properties pursuant to Section *" ,ule ;9 of the ,ules of Court.

,+345:

27


28/46

2ne effect of respondent’s -'6/ 6 3: 6 &?=+3'&- 6'-6)+ ) ) 8&; 6 3: 6 '6--'6/ 6

+/&3 -6&/. Therefore" there was no more legal asis for the ,TC to grant respondent the relief of collecting from petitioners ?the

amount of1hp$;*";)).$ plus legal interest thereon effective to date until the full amount is fully paid"@ nor for the CA to affirm it.

Another effect of its -'6/ 6 3: 6 &?=+3'&- 6'-6)+ ) & 8&; 3'/': &/) & &-:/0

6'3) 6 &+'6/ )&- 6 6&- -6&/ 6-0&6/ &: )-- '6;3 : )6/3/. B+ 6 '6; &/: 3'/':

& 6'-6)+, +- ) & & 60&0 '36 +) /)+ &/ /3/3/ ';- &'6/. 5%

1C 3easing N Finance" nc. v. >ai the Court held that the claim should at least e included in the pre-trial rief. n said case" the

mortgage-creditor had foreclosed on the mortgaged properties and sold the same at pulic auction during the trial on the action for

damages with replevin. After !udgment on the replevin case was rendered" the mortgage-creditor filed another case" this time for the

deficiency amount. The Court dismissed the second case on the ground of res !udicata.

n the case at ar" the Court notes that evidence on the deficiency amount was duly presented y respondent and e'amined y

petitioners. Therefore" in the higher /) 6 =+)' &/3 +:" the Court takes it upon itself to grant the claim of respondent to the

deficiency amount of 1)*)"))).$" as stated in its August $=" )**$ Statement of Account.

2n the other hand" S'6/ 9, R+- # 6 R+-) 6 C6+ ) /6 &-'&- in this case. Section *. iJon and Aurea Soriano de >iJon sold to Socorro A. ,amos" y a notarial

deed eleven 6))7 parcels of land. The vendee paid 1H"999.99 down" 1$"H99.99 in cash" and 1$"H99.99 y a check drawn

against the 1hilippine 4ational ank" and agreed to satisfy the alance of 1*;"999.99 within ninety 6*97 days. To secure

the said alance" the vendee Socorro A. ,amos" in the same deed of sale" mortgaged the eleven parcels in favor of the

vendors. y way of additional security" Socorro A. ,amos" e'ecuted another mortgage on 3ot 4o. =9* of the alinta

/state.

28

http://sc.judiciary.gov.ph/jurisprudence/2008/december2008/164521.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2008/december2008/164521.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2008/december2008/164521.htm#_ftn54


29/46

ecause of the vendee-mortgagorLs failure to comply with some conditions of the mortgage" this action for foreclosure of

the mortgage was filed. >efendant Socorro ,amos moved to dismiss" alleging that the plaintiffs previously had filed action

against her for the recovery of 1$"H99.99 paid y check as part of the down payment on the price of the mortgaged lands

that at the time this first suit was filed" the mortgage det was already accrued and demandale8 that plaintiffs were"

therefore" guilty of splitting a single cause of action" and under section = of ,ule $ of the ,ules of Court" the filing of the

first action for 1$"H99.99 was a defense that could e pleaded in aatement of the second suit.

The Court of First nstance of DueJon City rendered !udgment against defendant ,amos.

,amos appealed directly to the Supreme Court" and insists that the action should e dismissed on account of the alleged

splitting of appelleeLs cause of action.

ssue:

024 there was a splitting of appellee’s cause of action.

,uling:

An e'amination of the first complaint filed against appellant in the Court of First nstance of anila shows that it was

ased on appellantsL having unlawfully stopped payment of the check for 1$"H99.99 she had issued in favor of appellees8

while the complaint in the present action was for non-payment of the alance of 1*;"999.99 guaranteed y the mortgage.

The claim for 1$"H99.99 was" therefore" a distinct det not covered y the security8 and since the mortgage was

constituted on lands situated in DueJon City" the appellees could not ask for its foreclosure in the anila courts. The two

causes of action eing different" section = of ,ule $ does not apply.

RAMON A. TARNATE, petitioner-appellant" vs.

LUCILO U. GARCIA &/3 T H6/. VICTORIANO H. ENDAYA &) )3/0 $+30 6 M+/'&- C6+ 6 B&&/0&), respondents-appellees.

G.R. N6. L?2#2## D' 29, 1972

SECTION 5 $OINDER OF CAUSES OF ACTION

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BAYLON, REMO BAYLON, $OSE BAYLON, ERIC BAYLON,FLORENTINO BAYLON, AND MA. RUBY BAYLON, PETITIONERS,

?;)+)

FLORANTE BAYLON, R)6/3/.

29


30/46

F&'):

This case involves the estate of the late spouses Florentino aylon and a'imina /lnas aylon.

At the time of their death" Spouses aylon were survived y their legitimate children" namely" ,ita aylon 6,ita7" Kictoria

aylon 6Kictoria7" >olores aylon 6>olores7" 1anfila 5omeJ 61anfila7" ,amon aylon 6,amon7 and herein petitioner 3ilia

. Ada 63ilia7.

2n


31/46

y a !oinder of causes of action is meant the uniting of two or more demands or rights of action in one action" the

statement of more than one cause of action in a declaration. t is the union of two or more civil causes of action" each of

which could e made the asis of a separate suit" in the same complaint" declaration or petition.

$wisdom behind rule on joinder% The o!ectives of the rule or provision are to avoid a multiplicity of suits where the same

parties and su!ect matter are to e dealt with y effecting in one action a complete determination of all matters in

controversy and litigation etween the parties involving one su!ect matter" and to e'pedite the disposition of litigation at

minimum cost. The provision should e construed so as to avoid such multiplicity" where possile" without pre!udice to the

rights of the litigants.

$here, the court opined a limitation of a joinder & i.e. not include special action% 4evertheless" while parties to an action

may assert in one pleading" in the alternative or otherwise" as many causes of action as they may have against an

opposing party" such !oinder of causes of action is su!ect to the condition" inter alia" that the !oinder shall not include

special civil actions governed y special rules.

$here, the court applied the above limitation% ere" there was a mis!oinder of causes of action. The action for partition filed

y the petitioners could not e !oined with the action for the rescission of the said donation inter vivos in favor of Florante

3est it e overlooked" an action for partition is a special civil action governed y ,ule ;* of the ,ules of Court while an

action for rescission is an ordinary civil action governed y the ordinary rules of civil procedure. The variance in the

procedure in the special civil action of partition and in the ordinary civil action of rescission precludes their !oinder in one

complaint or their eing tried in a single proceeding to avoid confusion in determining what rules shall govern the conductof the proceedings as well as in the determination of the presence of re#uisite elements of each particular cause of action.

$what is the effect of a misjoined cause of action, if not severed upon motion of a party or by the court moto proprio, as in

this case% isip'(

A )=6/3 '&+) 6 &'6/, /6 );3 +6/ 66/ 6 & &: 6 : '6+ )+& )6/, &: &3=+3'&3 : '6+ 60 8 6 '&+)) 6 &'6/.

4evertheless" mis!oinder of causes of action is not a ground for dismissal. ndeed" the courts have the power" acting upon

the motion of a party to the case or sua sponte" to order the severance of the mis!oined cause of action to e proceededwith separately. owever" if there is no o!ection to the improper !oinder or the court did not motu proprio direct a

severance" then there e'ists no ar in the simultaneous ad!udication of all the erroneously !oined causes of action.

ere" Florante posed no o!ection" and neither did the ,TC direct the severance of the petitioners’ action for rescission

from their action for partition. 0hile this may e a patent omission on the part of the ,TC" this does not constitute a

ground to assail the validity and correctness of its decision. The ,TC validly ad!udicated the issues raised in the actions

for partition and rescission filed y the petitioners.

Supporting cases* $application of the res judicata principle%never mind(

R+-' 6 P-/) ;. H6

is!oinder of causes of action and parties do not involve a #uestion of !urisdiction of the court to hear and proceed with

the case. They are not even accepted grounds for dismissal thereof. nstead" under the ,ules of Court" the mis!oinder of

causes of action and parties involve an implied admission of the court’s !urisdiction. t acknowledges the power of the

court" acting upon the motion of a party to the case or on its own initiative" to order the severance of the mis!oined cause

of action" to e proceeded with separately.

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PANTRANCO NORTH EPRESS, INC. &/3 ALEANDER BUNCAN ;). STANDARD INSURANCE COMPANY, INC.&/3 MARTINA GICALE

FACTS:n the afternoon of 2ctoer $" )*=" Crispin 5icale 6Crispin7 was driving the passenger !eepney owned y his

mother artina 5icale 6artina7. t was then raining. 0hile driving north ound along the 4ational ighway in Talavera"4ueva /ci!a" a passenger us" owned y 1antranco 4orth /'press" nc." driven y Ale'ander uncan 6uncan7" wastrailing ehind. 0hen the two vehicles were negotiating a curve along the highway" the passenger us overtook the

!eepney. The passenger us hit the left rear side of the !eepney and sped away.Crispin reported the incident to the Talavera 1olice Station and Standard nsurance Co." nc. 6Standard7" insurer of

the !eepney. Standard did not pay the total cost and so artina paid the rest.Standard and artina" demanded reimursement from petitioners 1antranco and its driver uncan" ut they

refused. This prompted respondents to file with the ,TC anila" a complaint for sum of money. oth petitionersspecifically denied the allegations in the complaint and averred that it is the TC" not the ,TC" which has !urisdiction overthe case. The trial court rendered a >ecision in favor of respondents Standard and artina.

2n appeal" the CA affirmed the trial court’s ruling. 1etitioners filed a motion for reconsideration ut was denied.ence" this petition for review on certiorari .

SS+/:). 0hether or not respondents’ respective cause of action against petitioners arose out of the same transaction or

are there #uestions of law and facts common to oth petitioners and respondents.

,+345:(/S. Section ;" ,ule B of the ,evised ,ules of Court" provides:

MSec. ;. !ermissive joinder of parties. E All persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged to e'ist" whether !ointly" severally" or in thealternative" may" e'cept as otherwise provided in these ,ules" !oin as plaintiffs or e !oined as defendants in onecomplaint" where any #uestion of law or fact common to all such plaintiffs or to all such defendants may arise inthe action8 ut the court may make such orders as may e !ust to prevent any plaintiff or defendant from eingemarrassed or put to e'pense in connection with any proceedings in which he may have no interest.M

1ermissive !oinder of parties re#uires that: 6a7 the right to relief arises out of the same transaction or series oftransactions8 67 there is a #uestion of law or fact common to all the plaintiffs or defendants8 and 6c7 such !oinder is nototherwise proscried y the provisions of the ,ules on !urisdiction and venue.

n this case" there is a single transaction common to all" that is" 1antranco’s us hitting the rear side of the !eepney. There is also a common #uestion of fact" that is" whether petitioners are negligent. There eing a singletransaction common to oth respondents" conse#uently" they have the same cause of action against petitioners.

To determine identity of cause of action" it must e ascertained whether the same evidence which is necessary tosustain the second cause of action would have een sufficient to authoriJe a recovery in the first. ere" had respondentsfiled separate suits against petitioners" the same evidence would have een presented to sustain the same cause ofaction. Thus" the filing y oth respondents of the complaint with the court elow is in order. Such !oinder of parties avoidsmultiplicity of suit and ensures the convenient" speedy and orderly administration of !ustice.

Corollarily" Section H6d7" ,ule $ of the same ,ules provides:

MSec. H. Joinder of causes of action. E A party may in one pleading assert" in the alternative or otherwise" asmany causes of action as he may have against an opposing party" su!ect to the following conditions:' ' '

6d7 0here the claims in all the causes of action are principally for recovery of money the aggregate amountclaimed shall e the test of !urisdiction.M

The aove provision presupposes that the different causes of action which are !oined accrue in favor of the sameplaintiff&s and against the same defendant&s and that no mis!oinder of parties is involved. The issue of whetherespondents’ claims shall e lumped together is determined y paragraph 6d7 of the aove provision. This paragraphemodies the Mtotality ruleM as e'emplified y Section BB 6)7 of .1. lg. )$* which states" among others" that Mwhere thereare several claims or causes of action etween the same or different parties" emodied in the same complaint" the amountof the demand shall e the totality of the claims in all the causes of action" irrespective of whether the causes of actionarose out of the same or different transactions.M

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As previously stated" respondents’ cause of action against petitioners arose out of the same transaction. Thus" theamount of the demand shall e the totality of the claims.

UNION GLASS @ CONTAINER CORPORATION &/3 CARLOS PALANCA, $R., / ) '&&': &) P)3/ 6 U/6/G-&)) @ C6/&/ C66&6/, 6/),

;).THE SECURITIES AND ECHANGE COMMISSION &/3 CAROLINA HOFILEA, )6/3/).

G.R. N6. L?#41% N6; 2", 19"%

TITLE* FLORES VS. $UDGE MALLARE PHILLIPS

CITATION* L?###2, S 24, 19"#

PENNED BY* FERIA, $.

FACTS:

). 2n the petitioner’s complaint states two 6$7 causes of action" one against inongcal for refusing to pay 1))";=Brepresenting cost of truck tires which the latter purchased from the petitioner on credit8 and the second cause ofaction was against respondent Callon for allegedly refusing to pay the amount of 1)9"$)$ representing the cost oftruck tires he purchased on credit.

$. The counsel for inongcal and Callon filed for a motion to dismiss on the ground of lack of !urisdiction since theamount of the demand against said respondent was 1))";=B and 1)9"$)$ for inongcal and Callon" respectivelyThat under Sec )*67 of 1 )$*" the regional trial court shall have !urisdiction if the demand is more than 1$9"999

B. t was further averred in the said motion that Callon is indeted for 1)9"$)$ and that such is a separate anddistinct to that of inongcal.

=. The court dismissed the petitioner for lack of !urisdiction.H. 1etitioner however posits that lower court has !urisdiction over the case y applying ?novel@ totality rule introduced

in Section BB67 of 1 )$*

The pertinent portion of Section BB6l7 of 1)$* reads as follows:

... 1rovided" That where there are several claims or causes of action 8/ )& 6 3/

&)" 633 / )& '6-&/" &6+/ 6 3&/3 )&-- 6&-: 6 '-&) / &-- '&+)) 6 &'6/ " )'; 6 8 '&+)) 6 &'6/ &6) 6+ 6 )& 6 3/ &/)&'6/). ...

Section )) of the nterim ,ules provides thus:

Application of the totality rule.-n actions where the !urisdiction of the court is dependent on the amouninvolved" the test of !urisdiction shall e the aggregate sum of all the money demands , '-+); 6/-: 6/) &/3 '6)), )'; 6 8 6 /6 )&& '-&) & 68/3 : 6 3+ 6

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3/ &). f any demand is for damages in a civil action" the amount thereof must e specificallyalleged.

;. 1etitioner compares the aove-#uoted provisions with the pertinent portion of the former rule under Section ofthe


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although the total e'ceeded" its !urisdiction and it was a case of permissive !oinder of parties plaintiff under Section ; of,ule B.

+nder the present law" the two cases aove cited 6assuming they do not fall under the 3aor Code7 would e under the !urisdiction of the regional trial court. Similarly" in the aovecited cases of )rillo vs. )uklatan and *acula vs+artine 6supra7" if the separate claims against the several defendants arose out of the same transaction or series oftransactions and there is a common #uestion of law or fact" they would now e under the !urisdiction of the regional trialcourt.

I/ 6 863), / '&)) 6 )); =6/3 6 &), 8 &) -&/) 6 &) 3/3&/), +/3 S'6/ #6 R+- %, 6&- 6 &-- '-&) )&-- /68 +/) =+)3'6/&- ). N3-)) 6 )& &-)6, /)&3 6

=6//0 6 /0 =6/3 / 6/ '6-&/ )&& &'6/) & -3 : 6 &0&/) &), &6+/3&/33 / &' '6-&/ )&-- +/) =+)3'6/&- ).

n the case at ar" the lower court correctly held that the !urisdictional test is su!ect to the rules on !oinder ofparties pursuant to Section H of ,ule $ and Section ; of ,ule B of the ,ules of Court and that" after a careful scrutiny ofthe complaint, &&) & ) & )=6/3 6 &) 6 &)6/ & '-&) &0&/) )6/3/)B/6/0'&- &/3 C&-6/ & )&& &/3 3)/' &/3 / 6 8' &--) 8/ ) =+)3'6/.

GENESIS INVESTMENT, INC., ET AL., VS. HEIRS OF CEFERINO EBARASABAL, ET AL.,

G.R. NO. 1"1#22, 2 NOVEMBER 21%

FACTS: ,espondents filed efore the ,TC 2F A,3 C/+ A a complaint against herein petitioners for >eclaration of4ullity of >ocuments" ,ecovery of Shares" 1artition" >amages and AttorneyLs Fees.

1etitioner filed a otion to >ismiss contending" that ,TC has no !urisdiction to try the case on the ground that" as the caseinvolves title to or possession of real property or any interest therein and since the assessed value of the su!ect propertydoes not e'ceed 1$9"999.99 6the same eing only 1))"**9.997" the action falls within the !urisdiction of the unicipal TrialCourt 6TC7. The ,TC granted petitionersL otion to >ismiss. ,espondents filed a otion for 1artial ,econsideration"arguing that their complaint consists of several causes of action" including one for annulment of documents" which isincapale of pecuniary estimation and" as such" falls within the !urisdiction of the ,TC. 1etitioners filed a otion for,econsideration" ut the ,TC denied.

,TC issued an 2rder granting respondentsL otion for 1artial ,econsideration and reversing its earlier 2rder.petitioners filed a petition for certiorari with the CA.owever" the CA dismissed the petition holding that the su!ect matter of respondentsL complaint is incapale of pecuniaryestimation and" therefore" within the !urisdiction of the ,TC" considering that the main purpose in filing the action is todeclare null and void the documents assailed therein.

ssue: >oes the ,TC have !urisdiction over the caseI

eld:

(es. 2n the issue of want of !urisdiction" this court likewise finds to e with merit the contention of the movants as indeedthe main case or the primary relief prayed for y the movants is for the declaration of nullity or annulment of documentswhich un#uestionaly is incapale of pecuniary estimation and thus within the e'clusive original !urisdiction of this court totry although in the process of resolving the controversy" claims of title or possession of the property in #uestion is involvedwhich together with all the other remaining reliefs prayed for are ut purely incidental to or as a conse#uence of theforegoing principal relief sought. t is true that one of the causes of action of respondents pertains to the title" possessionand interest of each of the contending parties over the contested property" the assessed value of which falls within the

!urisdiction of the TC. owever" a complete reading of the complaint would readily show that" ased on the nature of thesuit" the allegations therein" and the reliefs prayed for" the action is within the !urisdiction of the ,TC.

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Clearly" this is a case of !oinder of causes of action which comprehends more than the issue of partition of or recovery ofshares or interest over the real property in #uestion ut includes an action for declaration of nullity of contracts anddocuments which is incapale of pecuniary estimation.

Section H 6c7" ,ule $ of the ,ules of Court that where the causes of action are etween the same parties ut pertain todifferent venues or !urisdictions" the !oinder may e allowed in the ,TC provided one of the causes of action falls withinthe !urisdiction of said court and the venue lies therein. Thus" as shown aove" respondents complaint clearly falls withinthe !urisdiction of the ,TC.

UNI


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• CruJ filed a motion to dismiss on the ground of improper venue y invoking Article $.H of the agreement whichreads:

$.H Kenue Stipulation E The F&/') '6/)/) 6 '-+); =+)3'6/ 6 '6+) 6Q+6/ C:" the Franchisee waiving any other venue.

• ranch $H of the 1araRa#ue ,TC" y 2rder of >ecemer )$" $99H" granted CruJ’s motion to dismiss.

ISSUE*

0/T/, A CAS/ AS/> 24 S/K/,A3 CA+S/S 2F ACT24 S >SSS3/ 24 T/ 5,2+4> 2F1,21/, K/4+/ 0/,/ 243( 24/ 2F T/ CA+S/S 2F ACT24 A,S/S F,2 A C24T,ACT 0T/C3+SK/ K/4+/ ST1+3AT24.

SC RULING*

The petition is impressed with merit.

The general rule on venue of personal actions" as in petitioner’s complaint for collection of sum of money" is emodied inSection $" ,ule = of the ,ules of Court and is #ualified y Section = of the same rule which allows parties" efore the filing

of the action" to validly agree in writing on an e'clusive venue.

The forging of a written agreement on an e'clusive venue of an action does not" however" preclude parties from ringing acase to other venues.

Where there is a joinder of causes of action between the same parties one of which does not arise out of thecontract where the exclusive venue was stipulated upon, the complaint, as in the one at bar, may be broughtbefore other venues provided that such other cause of action falls within the jurisdiction of the court and thevenue lies therein.

ased on the allegations in petitioner’s complaint" the second and third causes of action are ased on the deeds ofassignment e'ecuted in its favor y F1C and +S0C. The deeds ear no e'clusive venue stipulation with respect to thecauses of action thereunder. Hence, the general rule on venue applies – that the complaint may be filed in the placewhere the plaintiff or defendant resides.

t ears emphasis that the causes of action on the assigned accounts are not ased on a reach of the agreementetween + and CruJ. They are ased on separate" distinct and independent contracts-deeds of assignment in which+ is the assignee of CruJ’s oligations to the assignors F1C and +S0C. Thus" any action arising from the deeds ofassignment cannot e su!ected to the e'clusive venue stipulation emodied in the agreement. So -an +iguelCorporation v. +onasterio enlightens:

/'clusive venue stipulation emodied in a contract restricts or confines parties thereto when the suit relates toreach of said contract. B+ 8 '-+);: '-&+) 36) /6 & /'))&-: /'6&))/0, )+'& ;/ 6) /6 -&3 6 /6'/ 6 '6/&' )6+-3 )+=' 6 '-+); ;/+, )+-&6/ 3)0/&/0 '-+); ;/+) )6+-3 )'-: '6//3 6 )'' +/3&/0 6&0/. 2therwise" the asic principles of freedom to contract might work to the great disadvantage of a weakparty-suitor who ought to e allowed free access to courts of !ustice.

n fine" since the other causes of action in petitioner’s complaint do not relate to a reach of the agreement it forged withCruJ emodying the e'clusive venue stipulation" they should not e su!ected thereto. As San iguel further enlightens:

,estrictive stipulations are in derogation of the general policy of making it more convenient for the parties toinstitute actions arising from or in relation to their agreements. Thus" the restriction should e strictly construed asrelating solely to the agreement for which the e'clusive venue stipulation is emodied. /'panding the scope of

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such limitation on a contracting party will create unwarranted restrictions which the parties might f ind unintendedor worse" aritrary and oppressive. 6+nderscoring supplied7

UNICAPITAL VS. CONSING $R.

FACTS*n )**" Consing" ela CruJ. 1rior tothese" 1lus uilders nc. 617" a real estate company" entered into a !oint venture agreement with +nicapital. The loanand mortgage over the su!ect property was later on modified into an 2ption to uy ,eal 1roperty and" after furthernegotiations" >ela CruJ decided to sell the same to +nicapital and 1. +nicapital purchased one-half of the propertyfor 1$)"$$)"H99.99 against which the outstanding loan oligations were first offset " while 1 ought the remaining halffor the price of 1$)"9="999.99. owever" even efore +, and 1 were ale to have the titles transferred to theirnames" ela CruJ’s title was a mere forgery. After conducting further investigations" 1 and +nicapital sent separate demand

letters to >ela CruJ and Consing"


39/46

A cause of action is defined as the act or omission by which a party violates a right of another. "t is well#settledthat the eistence of a cause of action is determined by the allegations in the complaint. "n this relation, a complaint issaid to sufficiently assert a cause of action if, admitting what appears solely on its face to be correct, the plaintiff would beentitled to the relief prayed for. hus, if the allegations furnish ade/uate basis by which the complaint can be maintained,then the same should not be dismissed, regardless of the defenses that may be averred by the defendants.

he elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. -tated otherwise, may the court render a valid judgment upon the facts alleged therein0 hein/uiry is into the sufficiency, not the veracity of the material allegations. "f the allegations in the complaint furnishsufficient basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presentedby the defendants. $!ioneer Concrete !hilippines, "nc. v. odaro, citing 1ongkong and -hanghai )anking Corporation,2imited. v. Catalan%. -tated otherwise, the resolution on this matter should stem from an analysis on whether or not thecomplaint is able to convey a cause of action3 and not that the complainant has no cause of action. 2est it bemisunderstood, failure to state a cause of action is properly a ground for a motion to dismiss under -ection 4$g%, Rule45 of the Rules of Court$Rules%, while the latter is not a ground for dismissal under the same rule.

n this case" the Court finds that Consing"


40/46

he is an investment anker.M n similar regard" the hypothetical admission of these allegations may result into the recoveryof damages pursuant to Article $;" and even Article$$)*6)97" of the Civil Code.

$7 N6.The rule is that a party’s failure to oserve the following conditions under Section H" ,ule $ of the ,ules results in

a mis!oinder of causes of action:

S/C. H.


41/46

ISSUE*• 0hether actions for damages ased on #uasi delict are actions that are capale of pecuniary estimation and

therefore fall under the !urisdiction of the municipal courts if the claim does not e'ceed the !urisdictional amountof 1=99"999.99

• 0hether moral and e'emplary damages claimed y private respondent should e '-+33 from the computationof the aove-mentioned !urisdictional amount ecause they arose from a cause of action other than the negligent

act of the defendant.

RULING*

1. Y). A'6/) 6 3&&0) &)3 6/ +&)?3-') & &-: &/3 ';-: &'6/) 6 '6;: 6 &)+ 6 6/: 6 3&&0) )+3 '&+) 6 3/3&/) &--03 66+) &'), &/3 &6 '&&- 6 '+/&: )&6/.

The respondent


42/46

/ven assuming" for the sake of argument" that the claims for moral and e'emplary damages arose from a cause of actionother than the #uasi-delict" their inclusion in the computation of damages for !urisdictional purposes is still proper. Allclaims for damages should e considered in determining the !urisdiction of the court regardless of whether they arosefrom a single cause of action or several causes of action. R+- 2, S'6/ 5, 6 R+-) 6 C6+ allows a party toassert as many causes of action as he may have against the opposing party. Susection 6d7 of said section provides thatwhere the claims in all such !oined causes of action are principally for recovery of money" the aggregate amount claimedshall e the test of !urisdiction

ence" whether or not the different claims for damages are ased on a single cause of action or different causes of actionit is the total amount thereof which shall govern.


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2n appeal" the CA rendered a decision reversing and setting aside the decision of the ,TC.

The CA held that

6)7 efore the petitioners may file an action for rescission" they must first otain a favorale !udicial ruling that 3ot 4o

=9* and half of 3ot 4o. =9; actually elonged to the estate of Spouses aylon and not to ,ita. +ntil then" the

CA asserted" an action for rescission is premature.(2) that the petitioners’ action for rescission cannot e !oined with their action for partition" accounting and damages

through a mere supplemental pleading. ence" this petition. $in effect, the CA dismissed a case on the ground of

misjoinder of causes of action%

I))+: 024 petitioners’ action for rescission cannot e !oined with their action for partition" accounting and damagesthrough a mere supplemental pleading.

6Corollary: 024 the court can dismiss action for rescission for eing a mis!oinder on action for partition" accounting and

damages7.

,uling:

$here, the court observe the filling of two distinct action in one complaint & a joinder, nay, a misjoinder%The complaint filed

y the petitioners with the ,TC involves two separate" distinct and independent actions E partition and rescission. First"

the petitioners raised the refusal of their co-heirs" Florante" ,ita and 1anfila" to partition the properties which they inherited

from Spouses aylon. Second" in their supplemental pleading" the petitioners assailed the donation inter vivos of 3ot 4o.

=9* and half of 3ot 4o. =9; made y ,ita in favor of Florante pendente lite. The actions of partition and rescission

cannot e !oined in a single action.

y a !oinder of causes of action is meant the uniting of two or more demands or rights of action in one action" the

statement of more than one cause of action in a declaration. t is the union of two or more civil causes of action" each of

which could e made the asis of a separate suit" in the same complaint" declaration or petition.

$wisdom behind rule on joinder% The o!ectives of the rule or provision are to avoid a multiplicity of suits where the same

parties and su!ect matter are to e dealt with y effecting in one action a complete determination of all matters in

controversy and litigation etween the parties involving one su!

Documents

COMPILED RULE 2 CAUSE OF ACTION 2.doc