Enriquez Vda De Santiago vs. Vilar CASE DIGEST - Civil Procedure - Indispensable Party - Transfer of Interest

Enriquez Vda De Santiago vs. Vilar

Facts: Spouses Zulueta, registered owners of several parcels of land, obtained loans amounting to 3.1m to the GSIS. This was secured by the titles. The lot was divided into 199 lots. 78 of these lots were excluded from the mortgage. Spouses failed to pay. GSIS became the owner. GSIS, however, consolidated its title on all of the three mother titles, including the 78 lots which were expressly excluded from the mortgage contract. Later, it began to dispose the foreclosed lots, including those not covered by the foreclosure sale.

Spouses were succeeded by Antonio, who transferred all his rights and interests in the lots to Santiago. Antonio, as represented by Eduardo, filed an Action for Reconveyance of the excluded lots against the GSIS. Eduardo died and was substituted by his widow, herein petitioner Rosario.
RTC ordered GSIS to reconvey to Rosario the excluded lots or to pay the market value of said lots in case reconveyance is not possible. CA affirmed RTC. Vilar filed Motion for Substitution before the RTC. He alleged that after Antonio transferred his rights and interests to Eduardo, the latter assigned to Vilar 90% of his interest in the judgment proceeds of the reconveyance case.
RTC in merely noted Vilar's motion. CA impleaded Vilar as party-plaintiff in substitution of Rosario
Rosario is an indispensable party in the petition before the CA as she is the widow of the original party-plaintiff Eduardo. The RTC in merely noting and not granting his motion would necessarily affect her interest in the subject matter of litigation as the party-plaintiff. Rosario's failure to participate in the proceedings before the CA constitutes a denial of her constitutional right to due process. Hence, failure to implead Rosario as an indispensable party rendered all the proceedings before the CA null and void for want of authority to act.
An indispensable party is a party-in-interest without whom no final determination can be had of an action, and who shall be joined either as plaintiffs or defendants. It is a party whose interest will be affected by the court's action in the litigation. The joinder of indispensable parties is mandatory. The presence of indispensable parties is necessary to vest the court with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case. Thus, without the presence of indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality.

Issue: WON the CA erred in impleading Vilar as party-plaintiff in substitution of Rosario.

Held: Yes. The assignment of rights to Vilar was set aside by the court for being belatedly filed.

Divinagracia vs Parilla CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

Divinagracia vs. Parilla

Facts: Conrado, Sr. owned a parcel of land.  He had 2 children with his 1st wife and 7 children with his 2nd wife.  He also begot 3 illegitimate children. Both Mateo, Sr. (7 children) and Cebeleo, Sr. (2) pre-deceased Conrado, Sr. Santiago, who bought the shares of majority of the heirs of a property left by Conrado, Sr. He filed a complaint for partition but did not implead Mateo, Sr.’s children.

RTC found that through the subject document, Santiago became a co-owner of the subject land and, as such, has the right to demand the partition of the same. However, Santiago did not validly acquire Mateo, Sr.’s share over the subject land, considering that Felcon (son of Mateo Sr.) admitted the lack of authority to bind his siblings with regard to Mateo, Sr.’s share.

CA dismissed Santiago’s complaint for partition. It held the Mateo, Sr.’s children are indispensable parties to the judicial partition and thus, their non-inclusion as defendants would necessarily result in its dismissal.

Issue:  WON the action for partition proper without impleading Mateo, Sr.’s children

Held:  No because the co-heirs are indispensable parties. They have rights over the subject land and, as such, should be impleaded as indispensable parties in an action for partition.

An indispensable party is one whose interest will be affected by the court’s action in the litigation, and without whom no final determination of the case can be had. The party’s interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties’ that his legal presence as a party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable. Thus, the absence of an indispensable party renders all subsequent actions of the court null and void, for want of authority to act, not only as to the absent parties but even as to those present. (Domingo v. Scheer). The non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be indispensable.

Land Bank of the Philippines vs Eduardo Cacayuran CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

LAND BANK OF THE PHILIPPINES VS EDUARDO M. CACAYURAN

TOPIC: Indispensable party

Facts: Municipality of Agoo entered into 2 loans with LBP in order to finance a Redevelopment Plan of the Agoo Public Plaza. The Sangguniang Bayan of the Municipality authorized the Mayor  Eriguel to enter into a P4M loan with LBP for the Public Plaza and again for the amount of P28M to construct a commercial center. The Municipality used as collateral a 2,323.75 sqm lot at the south-eastern portion of the Plaza. Cacayuran and other residents opposed the redevelopment of the Plaza as well as the means of the funding. They claim that these are highly irregular, violative of the law, and detrimental to public interest resulting in the desecration of the public plaza. Cacayuran’s request for the documents relating to the plaza’s redevelopment was not granted. Cacayuran invokes his taxpayer right and files a complaint against LBP and officers of the municipality but does not include the municipality itself as party-defendant. He questioned the validity of the loan agreements and prays that the redevelopment is enjoined.

LBP asserted that Cacayuran did not have any cause of action because he was not privy to the loan agreements.

RTC held the Subject loans are null and void. Resolutions approving the loanwere passed irregularly and are thus ultra vires. Plaza lot is property for public use and not valid as collateral.

CA affirmed RTC with modification. Cacayuran has locus standi as resident and the issue is of transcendental importance to public interest.

Issue: WON the Municipality of Agoo should be deemed an indispensable party to the case

Held: YES, it is an indispensable party under Sec 7, Rule 3 which mandates that all indispensable parties are to be joined in a suit as it is the party whose interest will be affected by the court’s action and without whom no final determination of the case can be had. His legal presence is an absolute necessity. Absence of the indispensable party renders all subsequent actions of the court null and void for want of authority to act.

Failure to implead any indispensable party is not a ground for the dismissal of the complaint. The proper remedy is to implead them. In this case, Cacayuran failed to implead the Municipality, a real party in interest and an indispensable party that stands to be directly affected by any judicial resolution. It is the contracting party and the owner of the public plaza. It stands to be benefited or injured by the judgment of the case.

The decision of the RTC, CA, and SC is not binding upon the Municipality as it was not impleaded as defendant in the case. Case is REMANDED to the RTC and Cacayuran is DIRECTED to implead all indispensable parties.

Navarro vs Escobido CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

NAVARRO VS ESCOBIDO

TOPIC: Real Parties in Interest, Indispensable Parties

Facts: Respondent Go filed 2 complaints before the RTC for replevin and/or sum of money with damages against Navarro. Go prayed that the RTC issue writs of replevin for the seizure of 2 motor vehicles in Navarro’s possession. Navarro alleged as a special affirmative defense that the 2 complaints stated no cause of action, since Go was not a party to the lease agreements— the actionable documents on which the complaints were based.

RTC dismissed the case but set aside the dismissal on the presumption that Go’s husband leasing business is a conjugal property and thus ordered Go to file a motion for the inclusion of her husband as co-plaintiff as per Rule 4, Sec 3. CA denied.

ISSUE: WON Karen Go is a real party in interest.

Held: YES. Go, as the registered owner of Kargo Enterprises, is the party who will directly benefit from or be injured by a judgment in this case. Thus, contrary to Navarro’s contention, Go is the real party-in-interest, and it is legally incorrect to say that her Complaint does not state a cause of action because her name did not appear in the Lease Agreement that her husband signed in behalf of Kargo Enterprises.

Gos are effectively co-owners of Kargo Enterprises and the properties registered under this name; hence, both have an equal right to seek possession of these properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners. Glenn Go is not strictly an indispensable party in the action to recover possession of the leased vehicles, he only needs to be impleaded as a pro-forma party to the suit, based on Sec 4, Rule 4. -Spouses as parties. Husband and wife shall sue or be sued jointly, except as provided by law.

Juana Complex et. al vs Fil-Estate et. al CASE DIGEST - Civil Procedure - Class Suit

Juana Complex vs Fil-Estate

Facts: Juana Complex I and other neighboring subdivisions, instituted a complaint for damages, in its own behalf and as a class suit representing the regular commuters and motorists who were deprived of the use of La Paz Road, against Fil-Estate Land, La Paz Housing & Dev Co and Warbird Security Agency.

JC constantly traveled towards the direction of Manila and Calamba; that they used the entry and exit toll gates of SLEX by passing through right-of-way public road La Paz Road; that they had been using La Paz Road for more than 10 years; that in 1998, Fil-estate ruined La Paz Road that led to SLEX so JC would not be able to pass through the said road; that La Paz Road was restored by the residents to make it passable but Fil-estate excavated the road again; that JC reported the matter to the Municipal Government but the latter failed to repair the road to make it passable; that the act of Fil- caused damage and loss of precious hours to them because traffic was re-routed to narrow streets; and that its permanent closure would not only prejudice their right to free and unhampered use of the property but would also cause great damage and irreparable injury.

Fil-Estate argued that the TRO was improperly filed as a class suit. RTC ordered Fil-Estate from stopping and intimidating JC in their use of the road. CA partly granted. It annulled the TRO for failure of JC to prove their clear and present right over the La Paz road.

Issue: WON the complaint has been properly filed as a class suit

Held: YES.

The necessary elements for the maintenance of a class suit are:

1) the subject matter of controversy is one of common or general interest to many persons;

2) the parties affected are so numerous that it is impracticable to bring them all to court; and

3) the parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.

In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road. Moreover, the individuals sought to be represented by private respondents in the suit are so numerous that it is impracticable to join them all as parties and be named individually as plaintiffs in the complaint.

Carabeo vs Dingco CASE DIGEST - Civil Procedure - Death of party - Effects

CARABEO VS. DINGCO

TOPIC: DEATH OF PARTY - EFFECTS

Facts: 1990, petitioner entered into a contract denominated as "Kasunduan sa Bilihan ng Karapatan sa Lupa" with Spouses Dingco whereby petitioner agreed to sell his rights over a 648 sqm parcel of unregistered land for P38k.

1994, respondents learned that the land had been registered under Carabeo’s name. They offered to pay the balance but petitioner declined, drawing them to file a complaint before the Katarungan Pambarangay. No settlement was reached. Hence, respondent filed a complaint for specific performance before the RTC.

In 2001, petitioner passed away. RTC ruled in favor of Dinco. The records do not show that petitioner’s counsel informed RTC of his death and that proper substitution was effected in accordance with Sec 16, Rule 3. Petitioner’s counsel filed a Notice of Appeal with the CA but the latter affirmed the RTC. Petitioner’s motion for reconsideration having been denied, the present petition for review was filed by petitioner’s son.

Issue: WON petitioner’s death rendered respondents’ complaint against him dismissible.

Held: NO. The question as to whether an action survives or not depends on the nature of the action and the damage sued for. In the causes of action which survive, the wrong complained affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive, the injury complained of is to the person, the property and rights of property affected being incidental.

In the present case, respondents are pursuing a property right arising from the kasunduan, whereas petitioner is invoking nullity of the kasunduan to protect his proprietary interest. Assuming arguendo, however, that the kasunduan is deemed void, there is a corollary obligation of petitioner to return the money paid by respondents, and since the action involves property rights, it survives.

Lotte Phil. Co. Inc vs Dela Cruz et. al CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

LOTTE PHIL. CO., INC V DELA CRUZ ET.AL

TOPIC: INDISPENSIBLE PARTY; NON-JOINDER – EFFECTS

Facts: 1995 until 2000, 7J Maintenance and Janitorial Services (7J) entered into a contract with Lotte to provide manpower. In compliance with the contract, and to accommodate the needs of Lotte for workers, Dela Cruz were hired and assigned to Lotte as repackers or sealers. However, Lotte dispensed with their services allegedly due to the expiration/termination of the service contract by Lotte with 7J. Respondents were never called back again.

LA declared 7J as employer of respondents and finding 7J guilty of illegal dismissal. NLRC denied the MR.

CA reversed LA and NLRC and declared Lotte as the real employer of respondents and that 7J who engaged in labor-only contracting was merely the agent of Lotte.

Issue: WON 7J is an indispensable party and should have been impleaded in respondent’s petition in the CA

Held: YES. An indispensable party is a party in interest without whom no final determination can be had of an action, and who shall be joined either as plaintiffs or defendants. The joinder of indispensable parties is mandatory. The presence of indispensable parties is necessary to vest the court with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case. Thus, without the presence of indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality. The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present.

Here, 7J is an indispensable party. It is a party in interest because it will be affected by the outcome of the case.  Hence, the CA did not acquire jurisdiction over 7J. No final ruling on this matter can be had without impleading 7J, whose inclusion is necessary for the effective and complete resolution of the case and in order to accord all parties with due process and fair play.

In Domingo v. Scheer, we held that the non-joinder of indispensable parties is not a ground for the dismissal of an action and the remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court on motion of the party or on its own initiative at any stage of the action and/or such times as are just. If the petitioner refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the petitioner/plaintiff’s failure to comply therefor.

China Banking Corporation vs Mercedes Oliver CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

CHINA BANKING CORPORATION VS. MERCEDES OLIVER

Topic: RULES 1-5, Specifically in this case Rule 3, Sec . 7

Facts: 1995, Lim and Oliver opened a joint account in Chinabank. They applied for a P17m loan, offering as collateral a 7,782 sqm lot in the name of Oliver. The bank approved the application. They executed in favor of Chinabank a promissory note for P16.6k, as well as a Real Estate Mortgage on the property. The mortgage was duly registered and annotated on the original title under the custody of the Registry of Deeds and on the owners duplicate copy in the bank’s possession. The mortgage document showed Oliver’s address. For brevity, she is hereafter referred to as OLIVER ONE.

1996, respondent claiming that she is Oliver, filed an action for annulment of mortgage and cancellation of title with damages against Chinabank, Register of Deeds, and Deputy Register of Deeds. Respondent, whom we shall call as OLIVER TWO, claimed that she was the registered and lawful owner of the land subject of the real estate mortgage; that the owners duplicate copy of the title had always been in her possession; and that she did not apply for a loan or surrender her title to Chinabank.

1997, Chinabank moved to dismiss the case for lack of cause of action and non-joinder of an indispensable party, the mortgagor. RTC dismissed.

Issue: WON the mortgagor Oliver, referred to as OLIVER ONE, is an indispensable party to the case without whom no final determination could be had of an action.

Held: No. An indispensable party is a party in interest, without whom no final determination can be had of an action. However, mortgagor Oliver One’s absence from the case does not hamper the trial court in resolving the dispute between respondent Oliver Two and petitioner. A perusal of Oliver Twos allegations in the complaint below shows that it was for annulment of mortgage due to petitioners’ negligence in not determining the actual ownership of the property, resulting in the mortgages. To support said allegations, respondent Oliver Two had to prove (1) that she is the real Mercedes M. Oliver referred to in the TCT, and (2) that she is not the same person using that name who entered into a deed of mortgage with the petitioner. This, respondent Oliver Two can do in her complaint without necessarily impleading the mortgagor Oliver One.

Thus, it was the bank who should have filed a third-party complaint or other action versus the mortgagor Oliver One.

Orquiola vs CA CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

ORQUIOLA VS. CA

TOPIC: RULE 3 - Section 9. Non-joinder of necessary parties to be pleaded

Facts: Ledesma was the registered owner of Lot 689. This parcel of land was adjacent to certain portions of Lot 707 of the Piedad Estates, registered in the name of Pedro. Pedro sold Lot 707-A and 707-B to Lising who then registered both lots and Lot 707-C in the name of M.B. Lising Realty and subdivided them into smaller lots. Certain portions of the subdivided lots were sold to third persons including Orquiola (1964).

Sometime in 1969, Ledesma filed a complaint in RTC against Pedro and Lising for allegedly encroaching upon Lot 689. During the pendency of the action, Tandang Sora Development Corporation replaced Ledesma as plaintiff by virtue of an assignment of Lot 689 made by Ledesma in favor of said corporation.

In 1991, RTC finally adjudged defendants Pedro and Lising jointly and severally liable for encroaching on plaintiff’s land.

Issue: WON the decision in the Civil Case can be enforced against petitioners even though they were not impleaded thereto

Held: NO, petitioners are not privies (interested in the outcome of the action) and cannot be bound by the judgment against Lising and his predecessors-in-interests.

The Medina doctrine relied upon by the CA is markedly different from the one before the court. In the present case, petitioners acquired the lot before the commencement of Civil Case and petitioners acquired the registered title in their own names.

In other words, the sale to petitioners was made before Ledesma claimed the lot. Petitioners could reasonably rely on Lising’s Certificate of Title which at the time of purchase was still free from any third-party claim.

De Castro vs CA CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

De Castro vs. Ca

TOPIC: REAL PARTY IN INTEREST;

FACTS: Petitioners De Castro were co-owners of 4 lots. In a letter, Antigo was authorized by the De Castros to act as real estate broker in the sale of these properties for the amount of P23m, 5% of which will be given to him as commission. Antigo found Times Transit Corporation, its president Mr. Rondaris, as a prospective buyer which desired to buy 2 lots only, specifically lots 14 and 15. Eventually, the sale of lots 14 and 15 was consummated.

Antigo however received only P48k as commission. He asserted that his total commission should be P352k which is 5% of the agreed price of P7m for the 2 lots. Artigo then sued Constante and Corazon De Castro to collect the unpaid balance of his broker’s commission from the De Castros. One of the defenses advanced by the De Castro is that complaint failed to implead their other siblings who were co-owners as well.

CA affirmed RTC that that Artigo’s complaint is not dismissible for failure to implead as indispensable parties the other co-owners of the two lots. It is not necessary to implead the other co-owners since the action is exclusively based on a contract of agency between Artigo and Constante.

Issue: WON the complaint should be dismissed for failure to implead indispensable parties.

Held: No. An indispensable party is one whose interest will be affected by the court’s action in the litigation, and without whom no final determination of the case can be had. The joinder of indispensable parties is mandatory and courts cannot proceed without their presence. Whenever it appears to the court in the course of a proceeding that an indispensable party has not been joined, it is the duty of the court to stop the trial and order the inclusion of such party.

However, the rule on mandatory joinder of indispensable parties is not applicable to the instant case. Under the note/letter sent by the De Castro to Antigo, a contract of agency was clearly constituted between Constante and Artigo. Whether Constante appointed Artigo as agent, in Constante’s individual or representative capacity, or both, the De Castros cannot seek the dismissal of the case for failure to implead the other co-owners as indispensable parties.

Relucio vs Lopez CASE DIGEST - Civil Procedure - Real Party in Interest - Necessary Party

Relucio vs. Lopez

TOPIC: REAL PARTY IN INTEREST; NECESSARY PARTY

FACTS: Angelina Lopez filed a petition for Appointment as Sole Administratix of Conjugal Partnership of Properties, Forfeiture, etc. against her husband Alberto and Imelda Relucio, for Alberto abandoned Angelina and her four children and maintained an illicit relationship with Relucio.

A motion to dismiss was filed by Relucio on the ground that Angelina Lopez has no cause of action against her. RTC denied her Motion to Dismiss on the ground that some of the properties are registered in her name. A motion for reconsideration was filed by Relucio but the same was denied by the RTC. CA denied.

ISSUE: WON Relucio is an indispensable party or only a necessary party.

HELD: Neither. “A real party in interest is one who stands "to be benefited or injured by the judgment of the suit." In this case, petitioner would not be affected by any judgment in Special Proceedings.

If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is one without whom there can be no final determination of an action. Petitioner's participation in Special Proceeding is not indispensable. Certainly, the trial court can issue a judgment ordering Alberto to make an accounting of his conjugal partnership with respondent, and give support to respondent and their children, and dissolve Alberto’s conjugal partnership with respondent, and forfeit Alberto’s share in property co-owned by him and petitioner. Such judgment would be perfectly valid and enforceable against Alberto. Nor can petitioner be a necessary party in Special Proceedings.

A necessary party as one who is not indispensable but who ought to be joined as party if complete relief is to be accorded those already parties, or for a complete determination or settlement of the claim subject of the action. In the context of her petition in the lower court, respondent would be accorded complete relief if Alberto were ordered to account for his alleged conjugal partnership property with respondent, give support to respondent and her children, turn over his share in the co-ownership with petitioner and dissolve his conjugal partnership or absolute community property with respondent.

Dynamic Builders vs Presbitero CASE DIGEST - Civil Procedure - Splitting single cause of action

Dynamic Builders vs Presbitero

Facts: 2005, the Municipality of Valladolid, Negros Occidental, through its Bids and Awards Committee, published an invitation to bid for the construction of a 1,050-lineal-meter rubble concrete seawall along the municipality's shoreline.  The Committee conducted a pre-bid conference attended by 6 prospective contractors including Dynamic Builders. The Committee affirmed the award of contract to HLJ Construction for the Construction Shoreline Protection Project. The Committee informed Dynamic Builders of the post-evaluation examination results showing Dynamic Builders' failure in its Financial Contracting Capability. Dynamic Builders lodged a formal protest with the head of the procuring entity, Mayor Presbitero to set aside the Committee decision. Mayor Presbitero dismissed.

Pursuant to Art XVII, Sec 58 of RA No. 9184, the Government Procurement Reform Act, Dynamic Builders filed the Petition for Certiorari before the RTC assailing Mayor Presbitero's Decision. Presbitero counter that petitioner "grossly violated the rules against splitting a single cause of action, multiplicity of suits, and forum shopping.

Issue: WON DB violated the rules against the splitting of a cause of action, multiplicity of suits, and forum shopping;

Held:  Rule 2, Sec 3 provides that "a party may not institute more than one suit for a single cause of action." Moreover, Section 4 discusses the splitting of a single cause of action in that "if two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others." The splitting of a cause of action "violates the policy against multiplicity of suits, whose primary objective is to avoid unduly burdening the dockets of the courts."

This Petition seeks to enjoin the execution of Presbitero’s Decision and Resolution on the protest- the same Decision and Resolution sought to be set aside in the Petition before the RTC. In essence, petitioner seeks the same relief through two separate Petitions filed before separate courts. This violates the rule against forum shopping.

Rule 7, Section 5 of the Rules of Court requires the plaintiff or principal party to certify under oath that he or she has not commenced any action involving the same issues in any court.

Forum shopping is the practice of litigants resorting to two different fora for the purpose of obtaining the same relief, to increase their chances of obtaining a favorable judgment. Forum shopping is present when, in two or more cases pending, there is identity of (1) parties (2) rights or causes of action and reliefs prayed for and (3) the identity of the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful, amount to res judicata in the action under consideration.

Camaso vs. TMS Shipping CASE DIGEST - Civil Procedure - Commencement of action

Camaso vs. TMS Shipping

Camaso signed a contract of employment in 2014 with TSM Shipping for a period of 6 months. Prior to said contract, he claimed to have been working for respondents for almost 5 years and boarded 8 of their vessels

In 2014, Camaso was diagnosed with tonsillar cancer. He underwent chemotherapy sessions and radiation which were all paid for by TMS. He likewise received sickwage allowances.Thereafter, TMS refused to shoulder Camaso's medical expenses, thus, forcing the latter to pay for his treatment. Believing that his sickness was work-related and that respondents remained silent on their obligation, Camaso filed the instant complaint for disability benefits, sickwage allowance, reimbursement of medical and hospital expenses, and other consequential damages before the NLRC.

LA ruled in Camaso's favor. NLRC dismissed Camaso's complaint. CA dismissed "for non-payment of the required docketing fees.

Issue: WON the CA correctly dismissed Camaso's petition for certiorari before it for non­payment of docket fees

Held: Yes. Rules of Court provides that in original actions filed before the CA, payment of the corresponding docket fees is required, and that the failure to comply with the same shall be sufficient ground for the dismissal of such action, 

The failure to pay the required docket fees per se should not necessarily lead to the dismissal of a case. It has long been settled that while the court acquires jurisdiction over any case only upon the payment of the prescribed docket fees, its non-payment at the time of filing of the initiatory pleading does not automatically cause its dismissal provided that: (a) the fees are paid within a reasonable period; and (b) there was no intention on the part of the claimant to defraud the government.cralawred

Here, it appears that when Camaso filed his petition, a check was attached thereto to serve as payment of docket fees. Although this was not an authorized mode of payment, the attachment of such personal check shows that Camaso exerted earnest efforts to pay the required docket fees. Clearly, this exhibits good faith and evinces his intention not to defraud the government.

Sy-Vargas vs. Estate of Ogsos CASE DIGEST - Civil Procedure - Commencement of action

Sy-Vargas vs. Estate of Ogsos

Facts: Ogsos, Sr. and the Heirs of Fermina Pepico in 1994 entered into a Contract of Lease covering 5 parcels of agricultural land owned by the latter. Ogsos, Sr. agreed to pay the Heirs 290.95 liquid-kilogram of centrifugal sugar every crop year, starting from as lease rental. In, 1996 the lease contract was extended for 3 more years. On that same year, the said contract was amended, and the lease rental modified from lkg. centrifugal sugar every crop year to P 150k cash.

Sy-Vargas one of the heirs, filed a Complaint for Specific Performance and Damages against Ogsos, before RTC claiming that the lease rentals were not paid.  RTC declared Ogsos’ counterclaim as compulsory; thus holding that the payment of the required docket fees was no longer necessary and ordered Sy to pay Ogsos. CA affirmed RTC.

Issue: WON the CA correctly ruled that respondents’ counterclaim for damages is compulsory and not permissive in nature, and thus, no payment of docket fees is required.

Held: Permissive. The nature of a counterclaim is determinative of whether or not the counterclaimant is required to pay docket fees. A counterclaim is permissive if it does not arise out of or is not necessarily connected with the subject matter of the opposing party’s claim. It is essentially an independent claim that may be filed separately in another case.

By reason of the respondents’ counterclaim being permissive, and not compulsory, Ogsos are required to pay docket fees. However, it must be clarified that respondents’ failure to pay the required docket fees, per se, should not necessarily lead to the dismissal of the counterclaim. While the court acquires jurisdiction over any case only upon the payment of the prescribed docket fee, its non-payment at the time of the filing of the initiatory pleading does not automatically cause its dismissal provided that: (a) the fees are paid within a reasonable period; and (b) there was no intention on the part of the claimant to defraud the government.

Ogsos cannot be faulted for non-payment of docket fees in connection with their counterclaim, primarily because as early 2006, the RTC had already found such counterclaim to be compulsory in nature. As such, the lower courts did not require respondents to pay docket fees and even proceeded to rule on their entitlement thereto.

Reyes vs. People CASE DIGEST - Civil Procedure - Commencement of action

Reyes vs. People

2001, Reyes threatened the life of Gegato thru telephone, which acts cast fear and danger upon the life of the Gegato. Reyes was charged with Grave Threats before the MCTC. MCTC found Reyes guilty. RTC denied Reyes's appeal but found him guilty beyond of Light Threats under Article 285, par. 2 of the Revised Penal Code, instead of Grave Threats as originally adjudged by the MCTC. CA dismissed for failure to pay the full amount of the docket fees.

Issue: WON the CA erred in favoring procedural technicalities over his constitutional right to due process.

Held:  The rule is that payment in full of the docket fees within the prescribed period is mandatory. In Manchester, it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. In Sun Insurance v. Asuncion, wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required. Thus, in United Overseas Bank v. Ros, the Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict regulations set in Manchester, will apply.

The CA, in its discretion, may grant of any extensions for the filing of the petition is discretionary and subject to the condition that the full amount of the docket and lawful fees are paid before the expiration of the reglementary period to file the petition. CA clearly explained its denial of Reyes’ motion for extension. CA is affirmed.

Gipa vs. Southern Luzon Institute CASE DIGEST - Civil Procedure - Commencement of action

Gipa vs. Southern Luzon Institute

Facts: 1996 SLI filed a complaint for recovery of ownership and possession with damages against Gipa et al. SLI alleged that it is the absolute owner of a parcel of land. Gipa et al who had been informally occupying portion of the said property refused to vacate premises despite demand. Gipa et al asserted that they did not heed SLI’s demand to vacate as they believe that they have the right to stay on the said property relying on the fact that they and their predecessors in interest occupied the property since the 1950s.

RTC ruled in favor of SLI having proven its ownershi. CA dismissed since the it was not shown that appellate court docket fees and other lawful fees were paid. Gipa attached a certification from the RTC that they paid the appeal fee in the amount of P3000. Then, CA further required Gipa to pay P30 for legal research fund which was apparently was not included in the P3000 appeal fee. 9 months after they still failed to comply. Hence, CA dismissed the appeal for nonpayment of the docket and other lawful fees.

Issue: WON CA gravely erred in dismissing the appeal for the failure of petitioners to remit the P30 for legal research fund after having advanced a substantial portion of docket fees.

Held: No. Gipa et al concede to the fact that payment of the full amount of docket fees within the prescribed period is not a mere technicality of law or procedure but a jurisdictional requirement they nevertheless are praying for the relaxation of the application of the rule on the payment of the appeal fee in the name of substantial justice and equity. The Court held that "concomitant to the liberal interpretation of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules.” Those who seek exemption from the application of the rule have the burden of proving the existence of exceptionally meritorious reason warranting such departure. Gipa’s failure to advance any explanation as to why they failed to pay the correct docket fees or to complete payment of the same within the period allowed by the CA is thus fatal to their cause. Hence, a departure from the rule on the payment of the appeal fee is unwarranted.

St. Louis University Inc. vs Cobarrubias CASE DIGEST - Civil Procedure - Commencement of action

St. Louis University Inc. vs Cobarrubias

Facts: Cobarrubias is an associate professor of SLU and an active member of the union of faculty and employees. The CBAS contained that for teaching employees in college who fail the yearly evaluation, who are retained for 3 cumulative years in 5 years, shall be on forced leave for 1 regular semester during which period all benefits due them shall be suspended. SLU placed Cob on forced leave for failing to achieve the required rating points. To reverse the imposed forced leave, Cob sought recourse from the CBA’s grievance machinery but the parties failed to settle their dispute. Cob filed a case for illegal forced leave or illegal suspension with DOLE but circulation and mediation again failed. Cob argued that the CA already resolved the forced leave issue in a prior case between the parties ruling that the forced leave should be coterminous with the CBA in force during the same 5-year period. On the other hand, SLU argued that said CA decision is not yet final for there is still a pending appeal.

Voluntary Arbitration dismissed the complaint, then Cob filed with the CA a petition for review under Rule 43 of the Rules of Court, but failed to pay the required filing fees and to attach to the petition copies of the material portions of the record. CA responded by dismissing the petition for procedural lapses.

Issue: WON the CA is correct in reinstating the petition despite the failure of Cob to pay the appeal docket fees on time.

Held: Appeal is not a natural right but a mere statutory privilege, thus it must be made strictly in accordance with the provision set by law that appeals from the judgment of the VA shall be taken to the CA, by filing a petition for review within 15 days from the receipt of the notice of judgment. Upon the filing of the petition, the petitioner shall pay to the CA clerk of court the docketing and other lawful fees; non-compliance with the procedural requirements shall be a sufficient ground for dismissal. Thus, payment in full of docket fees within the prescribed period is not only mandatory, but also jurisdictional. It is an essential requirement, without which, the decision appealed from would become final and executory as if no appeal has been filed.

There are exceptions. Thus, there should be an effort, on the part of the party invoking liberality, to advance a reasonable or meritorious explanation for his/her failure to comply with the rules, in this case, no explanation has been given.

Ruby Shelters Builders vs. Hon. Pablo C. Formaran III CASE DIGEST - Civil Procedure - Commencement of action

Ruby Shelters Builders vs. Hon. Pablo C. Formaran III

FACTS: RSB filed a complaint with the RTC against Tan. It paid the sum of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered the case as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.

Tan filed a motion contending that the case involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended. Thus, since RSB did not pay the appropriate docket fees, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct and accurate docket fees.

Issue: WOR the RTC acquired jurisdiction over the case.

Held: No. In Manchester Dev. Co v. CA, the court acquires jurisdiction over any case only upon the payment of the prescribed docket fee." Hence, the payment of docket fees is not only mandatory, but also jurisdictional.

In Sun Insurance v. Asuncion, the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment.

RSB did not pay the correct amount of docket fees. It should pay docket fees in accordance with Sec 7(a), Rule 141, as amended. Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioner’s Complaint, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141.

The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation.

RTC is affirmed and RBS was required to pay additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court, as amended.

Proton Pilipinas vs. Banque Nationale De Paris CASE DIGEST -Civil Procedure - Commencement of action

Proton Pilipinas vs. Banque Nationale De Paris

Facts: Proton availed of the credit facilities of BNP and executed a corporate guarantee of the extent of US$2 million to guarantee its obligation. Under their trust agreement, Proton would receive imported motor vehicles and hold them in trust for BNP, to be applied to its obligations to it in case the vehicles are not sold, Proton would return them to BNP with the documents of title.

Proton failed to deliver the proceeds and to return the unsold motor vehicles. Proton’s guarantors refused to pay its obligation so BNP filed a complaint ordering them to pay the initial amount of US$2 million with accrued interest and other related charges. RTC Makati Clerk of Court assessed the docket fees at P352,000. The petitioners filed a motion to dismiss the complaint by BNP for failure to pay the correct docket fees thus preventing the RTC from acquiring jurisdiction over the case. In addition, the petitioners allege the prematurity of the complaint since BNP did not priorly send a demand letter.

The RTC denied the motion to dismiss and the subsequent MR. The CA denied the appeal by way of certiorari stating that Section 7(a), Rule 141 of the Rules of Court excludes interest accruing from the principal amount being claimed in the pleading in the computation of the prescribed filing fees. CA denied their MR.

The petitioners argue that pursuant to Administrative Circular 11-94, interests claimed should be included in the computation of the docket fees. Thus since BNP underpaid, RTC never acquired jurisdiction over the case.

Issue: WON the RTC fail to acquire jurisdiction over the case for insufficient docket fees.

Held: No. When the complaint was filed in 1998, Rule 141 had been amended by Administrative Circular 11-94.

The payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply (court acquires jurisdiction over any case only upon payment of the prescribed docket fees)

BNP merely relied on the assessment made by the Clerk of Court which turned out to be incorrect. As priorly discussed, this is required under Rule 141, as amended by Administrative Circular 11-94, which was the rule applicable at the time. Thus, as the complaint currently stands, BNP cannot claim the interest unless respondent is allowed by motion to amend its complaint within a reasonable time and specify the precise amount of interest Proton owe and pay the corresponding docket fee.

Mercado VS. CA CASE DIGEST - Civil Procedure - Commencement of action

Mercado VS. CA

Facts: Mercado had been distributing respondent San Miguel Corporation’s (SMC’s) beer products in Manila. SMC extended to him a P7.5 million credit line allowing him to withdraw goods on credit. Mercado failed to pay for the items. Citing the continuing hold-out agreement (which allows SMC to encash China Banking Corporation (CBC) certificates of deposit assigned by Mercado), it asked CBC to release the proceeds of the assigned certificates of deposit. Mercado filed an action to annul the continuing hold-out agreement and deed of assignment in the RTC. SMC filed its answer with counterclaim against Mercado. SMC sought payment of the lees products he withdrew (or purchased on credit) worth P7.5 million

During trial, Mercado acknowledged the accuracy of SMC’s computation of his outstanding liability. Thus, the RTC dismissed the complaint and ordered Mercado and Eastern Assurance and Surety Corporation (EASCO) (to the extent of P2.6 million or the value of its bonds) to jointly and severally pay SMC the amount of P7.5m. CA affirmed the RTC.

Mercado passed away and was substituted by his heirs who filed the petition asserting that the CA erred in affirming the RTC. The said decision (insofar as it ordered Mercado to pay SMC P7,468,153.75) was void. SMC’s counterclaim was permissive in nature. Inasmuch as SMC did not pay docket fees, the RTC never acquired jurisdiction over the counterclaim.

Issue: WON SMC’s counterclaim was permissive in nature, whereby payment of docket fees is necessary for the RTC to acquire jurisdiction.

Held: No. A counterclaim (or a claim which a defending party may have against any party) may be compulsory or permissive. A counterclaim that (1) arises out of (or is necessarily connected with) the transaction or occurrence that is the subject matter of the opposing party’s claim; (2) falls within the jurisdiction of the court and (3) does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, is compulsory. Otherwise, a counterclaim is merely permissive.

Aside from invoking the validity of the said agreements, SMC therefore sought to collect the payment for the value of goods Mercado purchased on credit. Thus, Mercado’s complaint and SMC’s counterclaim both touched the issues of whether the continuing hold-out agreement and deed of assignment were valid and whether Mercado had outstanding liabilities to SMC. The same evidence would essentially support or refute Mercado’s claim and SMC’s counterclaim.

Based on the foregoing, had these issues been tried separately, the efforts of the RTC and the parties would have had to be duplicated. Clearly, SMC’s counterclaim, being logically related to Mercado’s claim, was compulsory in nature. Consequently, the payment of docket fees was not necessary for the RTC to acquire jurisdiction over the subject matter.

Korea Technologies CASE DIGEST vs. Lerma - Civil Procedure - Commencement of action

Korea Technologies vs. Lerma (2008)

Facts: In 1997, KT and Pacific General Steel PGSMC executed a Contract whereby KT would set up an LPG Cylinder Manufacturing Plant for PG. PG unilaterally cancelled the contract on the ground that KT had altered the quantity and lowered the quality of the machineries and equipment it delivered.

KT opposed that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations. KT then filed a Complaint for Specific Performance before the RTC. PG filed its Answer with Compulsory Counterclaim asserting that it had the full right to dismantle and transfer the machineries and equipment because it had paid for them in full as stipulated in the contract. KT filed a motion to dismiss respondent’s counterclaims arguing that when PG filed the counterclaims, it should have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.

RTC dismissed the KT’s motion to dismiss PG’s counterclaims as these counterclaims fell within the requisites of compulsory counterclaims.

Isue: WON payment of docket fees and certificate of non-forum shopping were required in the respondent’s Answer with counterclaim

Held: NO. The counterclaims of PG were incorporated in its Answer with Compulsory Counterclaim in accordance with Rules of Civil Procedure. Sec. 8 on existing counterclaim or cross-claim states, “A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein.” As to the failure to submit a certificate of forum shopping, PG’s Answer is not an initiatory pleading which requires a certification against forum shopping under the Rules. It is a responsive pleading, hence, RTC did not commit reversible error in denying KT’s motion to dismiss PGSMC’s compulsory counterclaims. At the time PG filed its Answer incorporating its counterclaims against KT, it was not liable to pay filing fees for said counterclaims being compulsory in nature. However, effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross-claims.

Alday vs. FGU Insurance CASE DIGEST - Civil Procedure - Commencement of action

Alday VS. FGU Insurance

FGU filed a complaint for sum of money against Alday amounting to P114k. Alday filed her Answer by way of counterclaim and asserted that it is FGU who owes them P104k and for premium reserves of P500k. She also prayed for attorney’s fees, litigation expenses, moral damages and exemplary damages for the allegedly unfounded actions filed by FGU. FGU then moved to strike out Alday’s answer and to declare her in default for filing the answer out of time. The motion was denied. FGU again moved to dismiss Alday’s counterclaim by contending that the trial court never acquired jurisdiction over the same because of non-payment of docket fees. Alday also in response, asked the RTC to declare her counterclaim as exempt from payment of docket fees since it is compulsory and that FGU be declared in default for failing to answer such counterclaim.

RTC dismissed Alday’s counterclaim it being merely permissive and that failure to pay the docket fees prevented the court from acquiring jurisdiction over the same. CA sustained the RTC.

Issue: WON counterclaim of petitioner exempt from the payment of docket fees and therefore the court acquired jurisdiction over the same

Held: NO. The counterclaim being permissive, in order for the trial court to acquire jurisdiction over the same, petitioner is bound to pay the prescribed docket fees. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

Meanwhile, the compulsory counterclaim of petitioner for damages based on the filing by respondent of an allegedly unfounded and malicious suit need not be answered since it is inseparable from the claims of respondent. If respondent were to answer the compulsory counterclaim of petitioner, it would merely result in the former pleading the same facts raised in its complaint.