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ATTY. JUDE FERNANDEZ

CASES SET #2 Respondents conceded that the tarpaulin was neither sponsored nor
paid for by any candidate. Petitioners also conceded that the tarpaulin contains
names ofcandidates for the 2013 elections, but not of politicians who helped in the
1. THE DIOCESE OF BACOLOD vs. COMELEC passage of the RH Law but were not candidates for that election.

G.R. No. 205728 January 21, 2015 ISSUES:

Whether or not the size limitation and its reasonableness of the tarpaulin is a
political question, hence not within the ambit of the Supreme Court’s power of
PONENTE: Leonen review.

Whether or not the petitioners violated the principle of exhaustion of administrative

remedies as the case was not brought first before the COMELEC En Banc or any if its
TOPIC: Right to expression, right to political speech, right to property divisions.

Whether or not COMELEC may regulate expressions made by private citizens.

FACTS:

Whether or not the assailed notice and letter for the removal of the tarpaulin
violated petitioners’ fundamental right to freedom of expression.
On February 21, 2013, petitioners posted two (2) tarpaulins within
a private compound housing the San Sebastian Cathedral of Bacolod. Each tarpaulin
was approximately six feet (6′) by ten feet (10′) in size. They were posted on the
front walls of the cathedral within public view. The first tarpaulin contains the Whether the order for removal of the tarpaulin is a content-based or content-neutral
message “IBASURA RH Law” referring to the Reproductive Health Law of 2012 or regulation.
Republic Act No. 10354. The second tarpaulin is the subject of the present case. This
tarpaulin contains the heading “Conscience Vote” and lists candidates as either
“(Anti-RH) Team Buhay” with a check mark, or “(Pro-RH) Team Patay” with an “X” Whether or not there was violation of petitioners’ right to property.
mark. The electoral candidates were classified according to their vote on the
adoption of Republic Act No. 10354, otherwise known as the RH Law. Those who
voted for the passing of the law were classified by petitioners as comprising “Team
Patay,” while those who voted against it form “Team Buhay.” Whether or not the tarpaulin and its message are considered religious speech.

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HELD:

SECOND ISSUE: No.

FIRST ISSUE: No.

The Court held that the argument on exhaustion of administrative

remedies is not proper in this case.
The Court ruled that the present case does not call for the exercise
of prudence or modesty. There is no political question. It can be acted upon by this
court through the expanded jurisdiction granted to this court through Article VIII,
Section 1 of the Constitution.. Despite the alleged non-exhaustion of administrative remedies, it is
clear that the controversy is already ripe for adjudication. Ripeness is the
“prerequisite that something had by then been accomplished or performed by either
branch or in this case, organ of government before a court may come into the
The concept of a political question never precludes judicial review picture.”
when the act of a constitutional organ infringes upon a fundamental individual or
collective right. Even assuming arguendo that the COMELEC did have the discretion
to choose the manner of regulation of the tarpaulin in question, it cannot do so by
abridging the fundamental right to expression. Petitioners’ exercise of their right to speech, given the message and
their medium, had understandable relevance especially during the elections.
COMELEC’s letter threatening the filing of the election offense against petitioners is
already an actionable infringement of this right. The impending threat of criminal
Also the Court said that in our jurisdiction, the determination of litigation is enough to curtail petitioners’ speech.
whether an issue involves a truly political and non-justiciable question lies in the
answer to the question of whether there are constitutionally imposed limits on
powers or functions conferred upon political bodies. If there are, then our courts are
duty-bound to examine whether the branch or instrumentality of the government In the context of this case, exhaustion of their administrative
properly acted within such limits. remedies as COMELEC suggested in their pleadings prolongs the violation of their
freedom of speech.

A political question will not be considered justiciable if there are no constitutionally

imposed limits on powers or functions conferred upon political bodies. Hence, the THIRD ISSUE: No.
existence of constitutionally imposed limits justifies subjecting the official actions of
the body to the scrutiny and review of this court.
Respondents cite the Constitution, laws, and jurisprudence to
support their position that they had the power to regulate the tarpaulin. However,
In this case, the Bill of Rights gives the utmost deference to the the Court held that all of these provisions pertain to candidates and political parties.
right to free speech. Any instance that this right may be abridged demands judicial Petitioners are not candidates. Neither do they belong to any political party.
scrutiny. It does not fall squarely into any doubt that a political question brings. COMELEC does not have the authority to regulate the enjoyment of the preferred
right to freedom of expression exercised by a non-candidate in this case.
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Content-based restraint or censorship refers to restrictions “based

on the subject matter of the utterance or speech.” In contrast, content-neutral
FOURTH ISSUE: Yes. regulation includes controls merely on the incidents of the speech such as time,
place, or manner of the speech.

The Court held that every citizen’s expression with political

consequences enjoys a high degree of protection. The Court held that the regulation involved at bar is content-based.
The tarpaulin content is not easily divorced from the size of its medium.

Moreover, the respondent’s argument that the tarpaulin is election

propaganda, being petitioners’ way of endorsing candidates who voted against the Content-based regulation bears a heavy presumption of invalidity,
RH Law and rejecting those who voted for it, holds no water. and this court has used the clear and present danger rule as measure.

The Court held that while the tarpaulin may influence the success or Under this rule, “the evil consequences sought to be prevented
failure of the named candidates and political parties, this does not necessarily mean must be substantive, ‘extremely serious and the degree of imminence extremely
it is election propaganda. The tarpaulin was not paid for or posted “in return for high.’” “Only when the challenged act has overcome the clear and present danger
consideration” by any candidate, political party, or party-list group. rule will it pass constitutional muster, with the government having the burden of
overcoming the presumed unconstitutionality.”

By interpreting the law, it is clear that personal opinions are not

included, while sponsored messages are covered. Even with the clear and present danger test, respondents failed to
justify the regulation. There is no compelling and substantial state interest
endangered by the posting of the tarpaulin as to justify curtailment of the right of
The content of the tarpaulin is a political speech freedom of expression. There is no reason for the state to minimize the right of
non-candidate petitioners to post the tarpaulin in their private property. The size of
the tarpaulin does not affect anyone else’s constitutional rights.
Political speech refers to speech “both intended and received as a contribution to
public deliberation about some issue,” “fostering informed and civic minded
deliberation.” On the other hand, commercial speech has been defined as speech SIXTH ISSUE: Yes.
that does “no more than propose a commercial transaction.” The expression
resulting from the content of the tarpaulin is, however, definitely political speech.
The Court held that even though the tarpaulin is readily seen by the
public, the tarpaulin remains the private property of petitioners. Their right to use
FIFTH ISSUE: Content-based regulation. their property is likewise protected by the Constitution.

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Any regulation, therefore, which operates as an effective As Justice Brennan explained, the “government may take religion
confiscation of private property or constitutes an arbitrary or unreasonable into account . . . to exempt, when possible, from generally applicable governmental
infringement of property rights is void, because it is repugnant to the constitutional regulation individuals whose religious beliefs and practices would otherwise thereby
guaranties of due process and equal protection of the laws. be infringed, or to create without state involvement an atmosphere in which
voluntary religious exercise may flourish.”

The Court in Adiong case held that a restriction that regulates where
decals and stickers should be posted is “so broad that it encompasses even the Lemon test
citizen’s private property.” Consequently, it violates Article III, Section 1 of the
Constitution which provides that no person shall be deprived of his property without
due process of law. A regulation is constitutional when:

Branch Contribution Administrative Sponsored

SEVENTH ISSUE: No.

It has a secular legislative purpose;

The Court held that the church doctrines relied upon by petitioners It neither advances nor inhibits religion; and
are not binding upon this court. The position of the Catholic religion in the
Philippines as regards the RH Law does not suffice to qualify the posting by one of its It does not foster an excessive entanglement with religion.
members of a tarpaulin as religious speech solely on such basis. The enumeration of
candidates on the face of the tarpaulin precludes any doubt as to its nature as
speech with political consequences and not religious speech.

Doctrine of benevolent neutrality

2. KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO.,
LTD., vs MINORU KITAMURA

With religion looked upon with benevolence and not hostility,

benevolent neutrality allows accommodation of religion under certain circumstances.
G.R. No. 149177 November 23, 2007
Accommodations are government policies that take religion specifically into account
not to promote the government’s favored form of religion, but to allow individuals
and groups to exercise their religion without hindrance. Their purpose or effect
therefore is to remove a burden on, or facilitate the exercise of, a person’s or FACTS:
institution’s religion.

Nippon Engineering Consultants (Nippon), a Japanese consultancy firm providing

technical and management support in the infrastructure projects national
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ATTY. JUDE FERNANDEZ

permanently residing in the Philippines. The agreement provides that Kitamaru was Whether or not the subject matter jurisdiction of Philippine courts in civil cases for
to extend professional services to Nippon for a year. Nippon assigned Kitamaru to specific performance & damages involving contracts executed outside the country
work as the project manager of the Southern Tagalog Access Road (STAR) project. by foreign nationals may be assailed on the principles of lex loci celebrationis, lex
When the STAR project was near completion, DPWH engaged the consultancy contractus, “the state of the most significant relationship rule,” or forum non
services of Nippon, this time for the detailed engineering & construction supervision conveniens.
of the Bongabon-Baler Road Improvement (BBRI) Project. Kitamaru was named as
the project manger in the contract.
HELD:

Hasegawa, Nippon’s general manager for its International Division, informed

Kitamaru that the company had no more intention of automatically renewing his ICA. NO. In the judicial resolution of conflicts problems, 3 consecutive phases are
His services would be engaged by the company only up to the substantial involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
completion of the STAR Project. Jurisdiction & choice of law are 2 distinct concepts. Jurisdiction considers whether it
is fair to cause a defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law w/c will determine the merits
Kitamaru demanded that he be assigned to the BBRI project. Nippon insisted that of the case is fair to both parties. The power to exercise jurisdiction does not
Kitamaru’s contract was for a fixed term that had expired. Kitamaru then filed for automatically give a state constitutional authority to apply forum law. While
specific performance & damages w/ the RTC of Lipa City. Nippon filed a MTD. jurisdiction and the choice of the lex fori will often coincide, the “minimum contacts”
for one do not always provide the necessary “significant contacts” for the other. The
question of whether the law of a state can be applied to a transaction is different
Nippon’s contention: The ICA had been perfected in Japan & executed by & between from the question of whether the courts of that state have jurisdiction to enter a
Japanese nationals. Thus, the RTC of Lipa City has no jurisdiction. The claim for judgment.
improper pre-termination of Kitamaru’s ICA could only be heard & ventilated in the
proper courts of Japan following the principles of lex loci celebrationis & lex
contractus. In this case, only the 1st phase is at issue—jurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy,
it must have jurisdiction over the plaintiff/petitioner, over the
The RTC denied the motion to dismiss. The CA ruled hat the principle of lex loci defendant/respondent, over the subject matter, over the issues of the case and, in
celebrationis was not applicable to the case, because nowhere in the pleadings was cases involving property, over the res or the thing w/c is the subject of the litigation.
the validity of the written agreement put in issue. It held that the RTC was correct in In assailing the trial court's jurisdiction herein, Nippon is actually referring to subject
applying the principle of lex loci solutionis. matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the

sovereign authority w/c establishes and organizes the court. It is given only by law
ISSUE: and in the manner prescribed by law. It is further determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to all or some of the

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ATTY. JUDE FERNANDEZ

claims asserted therein. To succeed in its motion for the dismissal of an action for Further, Nippon’s premature invocation of choice-of-law rules is exposed by the fact
lack of jurisdiction over the subject matter of the claim, the movant must show that that they have not yet pointed out any conflict between the laws of Japan and ours.
the court or tribunal cannot act on the matter submitted to it because no law grants Before determining which law should apply, 1st there should exist a conflict of laws
it the power to adjudicate the claims. situation requiring the application of the conflict of laws rules. Also, when the law of
a foreign country is invoked to provide the proper rules for the solution of a case, the
existence of such law must be pleaded and proved.
In the instant case, Nippon, in its MTD, does not claim that the RTC is not properly
vested by law w/ jurisdiction to hear the subject controversy for a civil case for
specific performance & damages is one not capable of pecuniary estimation & is It should be noted that when a conflicts case, one involving a foreign element, is
properly cognizable by the RTC of Lipa City. What they rather raise as grounds to brought before a court or administrative agency, there are 3 alternatives open to
question subject matter jurisdiction are the principles of lex loci celebrationis and the latter in disposing of it: (1) dismiss the case, either because of lack of
lex contractus, and the “state of the most significant relationship rule.” The Court jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction
finds the invocation of these grounds unsound. over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or States.
The court’s power to hear cases and controversies is derived from the Constitution
Lex loci celebrationis relates to the “law of the place of the ceremony” or the law of and the laws. While it may choose to recognize laws of foreign nations, the court is
the place where a contract is made. The doctrine of lex contractus or lex loci not limited by foreign sovereign law short of treaties or other formal agreements,
contractus means the “law of the place where a contract is executed or to be even in matters regarding rights provided by foreign sovereigns.
performed.” It controls the nature, construction, and validity of the contract and it
may pertain to the law voluntarily agreed upon by the parties or the law intended by
them either expressly or implicitly. Under the “state of the most significant Neither can the other ground raised, forum non conveniens, be used to deprive the
relationship rule,” to ascertain what state law to apply to a dispute, the court should RTC of its jurisdiction. 1st, it is not a proper basis for a motion to dismiss because
determine which state has the most substantial connection to the occurrence and Sec. 1, Rule 16 of the Rules of Court does not include it as a ground. 2nd, whether
the parties. In a case involving a contract, the court should consider where the a suit should be entertained or dismissed on the basis of the said doctrine depends
contract was made, was negotiated, was to be performed, and the domicile, place of largely upon the facts of the particular case and is addressed to the sound discretion
business, or place of incorporation of the parties. This rule takes into account of the RTC. In this case, the RTC decided to assume jurisdiction. 3rd, the propriety
several contacts and evaluates them according to their relative importance with of dismissing a case based on this principle requires a factual determination; hence,
respect to the particular issue to be resolved. this conflicts principle is more properly considered a matter of defense.

Since these 3 principles in conflict of laws make reference to the law applicable to a
dispute, they are rules proper for the 2nd phase, the choice of law. They determine
which state's law is to be applied in resolving the substantive issues of a conflicts 3. Barangay San Roque vs Heirs of Pastor
problem. Necessarily, as the only issue in this case is that of jurisdiction, GR 138896 20 June 2000
choice-of-law rules are not only inapplicable but also not yet called for.

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An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within Which court, MTC or RTC, has jurisdiction over cases for eminent domain or
the jurisdiction of the regional trial courts, regardless of the value of the subject expropriation where the assessed value of the subject property is below Twenty
property. Thousand (P20,000.00) Pesos?

Facts:

Held:

Petitioner Brgy. San Roque, Talisay, Cebu filed before the MTC of Talisay, Cebu a
complaint to expropriate a property of the respondents heirs of Francisco Pastor.
The MTC dismissed the complaint on the ground of lack of jurisdiction. It reasoned RTC.
that "eminent domain is an exercise of the power to take private property for public
use after payment of just compensation. In an action for eminent domain, therefore,
the principal cause of action is the exercise of such power or right. The fact that the Test to determine whether a suit is incapable of pecuniary estimation
action also involves real property is merely incidental. An action for eminent domain
is therefore within the exclusive original jurisdiction of the RTC and not with this
Court."
An expropriation suit is incapable of pecuniary estimation. A review of the
jurisprudence of this Court indicates that in determining whether an action is one
the subject matter of which is not capable of pecuniary estimation, this Court has
The RTC also dismissed the Complaint when filed before it, holding that the action adopted the criterion of first ascertaining the nature of the principal action or
for eminent domain or condemnation of real property is a real action affecting title remedy sought.
to or possession of real property, hence, it is the assessed value of the property
involved which determines the jurisdiction of the court. Section 3, paragraph (3), of
Republic Act No. 7691, provides that all civil actions involving title to, or possession
If it is primarily for the recovery of a sum of money, the claim is considered capable
of, real property with an assessed value of less than P20,000.00 are within the
of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the
exclusive original jurisdiction of the MTCs. The Tax Declaration shows that the
courts of first instance would depend on the amount of the claim.
assessed value of the land involved is only P1,740.00. Hence, it is the MTC which
has jurisdiction. However, where the basic issue is something other than the right to recover a sum
of money, or where the money claim is purely incidental to, or a consequence of, the
principal relief sought, like in suits to have the defendant perform his part of the
Petitioner thus appealed directly to the SC, raising a pure question of law. contract (specific performance) and in actions for support, or for annulment of a
judgment or to foreclose a mortgage, this Court has considered such actions as
cases where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance (now RTC).
Issue:

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An expropriation suit is incapable of pecuniary estimation

[G.R. No. 141375. April 30, 2003.]

An expropriation suit does not involve the recovery of a sum of money. Rather, it
deals with the exercise by the government of its authority and right to take private
property for public use. FACTS:

The primary consideration in an expropriation suit is whether the government or any When a boundary dispute arose between the Municipality of Kananga and the City of
of its instrumentalities has complied with the requisites for the taking of private Ormoc. By agreement, the parties submitted the issue to amicable settlement. No
property. Hence, the courts determine the authority of the government entity, the amicable settlement was reached.
necessity of the expropriation, and the observance of due process. In the main, the
subject of an expropriation suit is the government’s exercise of eminent domain, a
matter that is incapable of pecuniary estimation. The City of Ormoc filed before the RTC of Ormoc City a complaint to settle the
boundary dispute. Petitioner municipality filed a motion to dismiss, claiming that the
court has no jurisdiction over the subject matter, but the RTC denied the same.
True, the value of the property to be expropriated is estimated in monetary terms,
for the court is duty-bound to determine the just compensation for it. This, however,
is merely incidental to the expropriation suit. Indeed, that amount is determined RTC: it had jurisdiction over the action under Batas Pambansa Blg. 129. that Section
only after the court is satisfied with the propriety of the expropriation. 118 of the Local Government Code had been substantially complied with, because
both parties already had the occasion to meet and thresh out their differences. In
fact, both agreed to elevate the matter to the trial court via Resolution No. 97-01. It
To emphasize, the question in the present suit is whether the government may also held that Section 118 governed venue; hence, the parties could waive and
expropriate private property under the given set of circumstances. The government agree upon it under Section 4(b) of Rule 4 of the Rules of Court.
does not dispute respondents’ title to or possession of the same. Indeed, it is not a
question of who has a better title or right, for the government does not even claim
that it has a title to the property. It merely asserts its inherent sovereign power to ISSUES:
"appropriate and control individual property for the public benefit, as the public
necessity, convenience or welfare may demand." (Brgy. San Roque vs. Heirs of
Pastor, G.R. No. 138896. June 20, 2000)
WON Section 118 of the LGU on boundary dispute settlement applies.

WON respondent court may exercise original jurisdiction over the settlement of a
4. MUNICIPALITY OF KANANGA, Represented by its Mayor, Hon. GIOVANNI boundary dispute between a municipality and an independent component city.
M. NAPARI vs. Hon. FORTUNITO L. MADRONA

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HELD: No, Section 118 does not apply. Yes, RTC has jurisdiction. to that effect. Thereafter, the dispute shall be formally tried by the sanggunian
concerned which shall decide the issue within sixty (60) days from the date of the
certification referred to above.”
POLITICAL LAW; LOCAL GOVERNMENT CODE; SECTION 118 THEREOF;
PROCEDURE FOR SETTLEMENT OF BOUNDARY DISPUTES BETWEEN A COMPONENT
CITY OR MUNICIPALITY AND A HIGHLY URBANIZED CITY; ORMOC IS NOT A HIGHLY Under Section 118 of the Local Government Code, the settlement of a boundary
URBANIZED CITY IN CASE AT BAR. — dispute between a component city or a municipality on the one hand and a highly
urbanized city on the other — or between two or more highly urbanized cities — shall
be jointly referred for settlement to the respective sanggunians of the local
“Sec. [Link] Responsibility for Settlement of Boundary Disputes. — government units involved. There is no question that Kananga is a municipality
Boundary disputes between and among local government units shall, as much as constituted under Republic Act No. 542. By virtue of Section 442(d) of the LGC, it
possible, be settled amicably. To this end: continued to exist and operate as such. However, Ormoc is not a highly urbanized,
but an independent component, city created under Republic Act No. 179.

“(a)Boundary disputes involving two (2) or more barangays in the same city or
municipality shall be referred for settlement to the sangguniang panlungsod or Section 118 of the LGC applies to a situation in which a component city or a
sangguniang bayan concerned. municipality seeks to settle a boundary dispute with a highly urbanized city, not with
an independent component city. While Kananga is a municipality, Ormoc is an
independent component city. Clearly then, the procedure referred to in Section 118
does not apply to them.
“(b)Boundary disputes involving two (2) or more municipalities within the same
province shall be referred for settlement to the sangguniang panlalawigan
concerned.
SECTION 451 THEREOF; CITY; CLASSIFICATION; ORMOC IS DEEMED AN
INDEPENDENT COMPONENT CITY IN CASE AT BAR. —

“(c) Boundary disputes involving municipalities or component cities of different

provinces shall be jointly referred for settlement to the sanggunians of the provinces
concerned. Under Section 451 of the LGC, a city may be either component or highly urbanized.
Ormoc is deemed an independent component city, because its charter prohibits its
voters from voting for provincial elective officials. It is a city independent of the
province. In fact, it is considered a component, not a highly urbanized, city of Leyte
“(d) Boundary disputes involving a component city or municipality on the one hand in Region VIII by both Batas Pambansa Blg. 643, which calls for a plebiscite; and the
and a highly urbanized city on the other, or two (2) or more highly urbanized cities, Omnibus Election Code, which apportions representatives to the defunct Batasang
shall be jointly referred for settlement to the respective sanggunians of the parties. Pambansa.

“(e) In the event the sanggunian fails to effect an amicable settlement within sixty
(60) days from the date the dispute was referred thereto, it shall issue a certification

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There is neither a declaration by the President of the Philippines nor an allegation by Facts:
the parties that it is highly urbanized. On the contrary, petitioner asserted in its
Motion to Dismiss that Ormoc was an independent chartered city.
The petitioner Multi-Realty constructed condominium known as the Makati Tuscany
Condominium Building. In pursuant to RA 4726, respondent Makati Tuscany
REMEDIAL LAW; B.P. BLG. 129; GENERAL JURISDICTION OF RTCs TO ADJUDICATE Condominium Corporation (Matusco)was organized and established to manage the
ALL CONTROVERSIES EXCEPT THOSE EXPRESSLY WITHHELD FROM THEIR condominium units. In 1975, Multi-Realty executed a Master Deed and Declaration
PLENARY POWERS; CASE AT BAR. — of Restriction of the Makati Tuscany, which did not specify the ownership of the 98
parking slots.

As previously stated, “jurisdiction is vested by law and cannot be conferred or

waived by the parties.” It must exist as a matter of law and cannot be conferred by In 1989, Multi-Realty requested that two of its executives be allowed to park their
the consent of the parties or by estoppel. It should not be confused with venue. cars in two of Makati Tuscany’s remaining 72 unallocated parking slots but Matusco
Inasmuch as Section 118 of the LGC finds no application to the instant case, the denied the request. Then, Matusco sent a letter offering Multi-Realty for the use of
general rules governing jurisdiction should then be used. The applicable provision is the two unallocated parking slots which the latter rejected.
found in Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization
Act of 1980, as amended by Republic Act No. 7691.
On April 1990, petitioner filed a complaint against Matusco for Damages and or
Reformation of Instrument with prayer for temporary restraining order and or
Since there is no law providing for the exclusive jurisdiction of any court or agency preliminary injunction with theMakati RTC. Petitioner alleged that it had retained
over the settlement of boundary disputes between a municipality and an ownership of the 98 unassigned parking slots but it was not specified in the Master
independent component city of the same province, respondent court committed no Deed and that the mistake was discovered for the first time when Matusco Rejected
grave abuse of discretion in denying the Motion to Dismiss. RTCs have general its request.
jurisdiction to adjudicate all controversies except those expressly withheld from
their plenary powers. They have the power not only to take judicial cognizance of a
case instituted for judicial action for the first time, but also to do so to the exclusion In its answer with counterclaim, Matusco alleged that Multi-Realty had no cause
of all other courts at that stage. Indeed, the power is not only original, but also of action against it for reformation of their contract. The RTC dismissed the case
exclusive. and ruled that Multi-Realty failed to prove any ground for the reformation of its
agreement with Matusco.

5. DEVELOPMENT VS. TUSCANY Multi-Realty appealed the decision to the CA contending that Reformation is proper
because the deed failed to express the true agreement or intention of the parties. It
alleged that Matusco knew that petitioner owned the 98 parking slots and Matusco
never objected the sale of the slots to third parties. Matusco was also stopped from
G.R. NO. 146726, June 16, 2006 assailing the ownership over the parking [Link] also averred that Matusco’s
counterclaim had already prescribed because it was filed only in 1990 when the
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ATTY. JUDE FERNANDEZ

periodtherefor had elapsed in 1981. Whereas, Matusco contended that if there was 2) Prescription is rightly regarded as a statute of repose whose object is to suppress
a mistake in the drafting of the master Deed in 1975, it should have been corrected fraudulent and stale claims from springing up at great distances of time and
in 1977 upon the execution of the Deed of Transfer. Matusco alleged that it was not surprising the parties or their representatives when the facts have become obscure
stopped from claiming ownership over the slots because Multi-Realty acted from the lapse of time or the defective memory or death or removal of witnesses.
fraudulently and illegally. The essence of the statute of limitations is to prevent fraudulent claims arising from
unwarranted length of time and not to defeat actions asserted on the honest belief
that they were sufficiently submitted for judicial determination.
The CA rendered its decision dismissing Multi-Realty’s appeal on the ground that
its action had already prescribed. The CA denied the MR filed by [Link]
this petition. Article 1144 of the New Civil Code provides that an action upon a written contract
must be brought within ten (10) years from the time the right of action accrues. In
relation thereto, Article 1150of the New Civil Code provides that the time for
Issues: prescription of all actions, when there is no special provision which ordains
otherwise, shall be counted from the day they may be brought. It is the legal
possibility of bringing the action that determines the starting point for the
computation of the period of prescription.
Whether the CA erred in dismissing petitioner’s appeal on the ground of
prescription.

The term "right of action" is the right to commence and maintain an action. In the
law of pleadings, right of action is distinguished from a cause of action in that the
Whether petitioner’s action had already prescribed when it was filed in 1990 former is a remedial right belonging to some persons while the latter is a formal
statement of the operational facts that give rise to such remedial right. The former
is a matter of right and depends on the substantive law while the latter is a matter
Ruling: of statute and is governed by the law of procedure. The right of action springs from
the cause of action, but does not accrue until all the facts which constitute the cause
of action have occurred.
1) The CA erred in dismissing petitioner’s appeal. Settled is the rule that no
questions will be entertained on appeal unless they have been raised below. Points
of law, theories, issues and arguments not adequately brought to the attention of A cause of action must always consist of two elements: (1)the plaintiff’s primary
the lower court need not be considered by the reviewing court as they cannot be right and the defendant’s corresponding primary duty, whatever may be the subject
raised for the first time on appeal. In the case at bar,neither petitioner nor to which they relate –person, character, property or contract; and (2) the delict or
respondent raised the issue of prescription throughout the proceedings in the RTC, wrongful act or omission of the defendant, by which the primary right and duty have
hence the appellate court should have proceeded to resolve petitioner’s appeal on been [Link] determine when all the facts which constitute a cause of action for
its merits instead of dismissing the same on a ground not raised by the parties in the reformation of an instrument may be brought and when the right of the petitioner to
RTC and even in their pleadings in the CA. file such action accrues, the second paragraph of Section 1, Rule 63, must be
considered because an action for the reformation of an instrument may be brought
under said Rule:SECTION 1. Who may file petition. – Any person interested under a
deed, will, contract or other written instrument, whose rights are affected by a
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ATTY. JUDE FERNANDEZ

statute, executive order or regulation, ordinance, or any other governmental The statute of limitations does not begin to run against an equitable cause of action
regulation may, before breach or violation thereof, bring an action in the for the reformation of an instrument because of mistake until the mistake has been
appropriate Regional Trial Court to determine any question of construction or discovered or ought to have been discovered. The mere recording of a deed does not
validity arising, and for a declaration of his rights or duties, [Link] action for charge the grantor with constructive notice of a mistake therein, but is to be
the reformation of an instrument, to quiet title to real property or remove clouds considered with other facts and circumstances in determining whether the grantor
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be be charged with notice actual or constructive. In the case at bar, Petitioner only
brought under this Rule. discovered the error in1989, hence he is not prescribed or still has a right of action
against respondent in the reformation of the instrument. When he filed the
complaint in 1990, the prescriptive period had not yet elapsed
The concept and meaning of the term cause of action in proceedings for declaratory
relief, vis-à-vis an ordinary civil action,is broadened. It is not, as in ordinary civil
action, the wrong or delict by which the plaintiff’s rights are violated, but it is
6. RIVIERA GOLF CLUB, INC., Petitioner, v. CCA HOLDINGS,
extended to a mere denial, refusal or challenge raising at least an uncertainty or
B.V., Respondent. G.R. No. 173783, June 17, 2015
insecurity which is injurious to plaintiff’s [Link] a petition for declaratory relief to
prosper, the following conditions sine qua non must concur: (1) there must be a
justiciable controversy; (2) the controversy must be between persons whose BRION, J.:
interests are adverse; (3) the party seeking declaratory relief must have a legal
interest in the controversy; and(4) the issue involved must be ripe for judicial Before the Court is the petition for review on certiorari1 filed by Riviera Golf Club,
[Link] controvert is to dispute; to deny, to oppose or contest;to take Inc. (Riviera Golf) assailing the January 11, 2006 decision2 and the July 5, 2006
issue on. resolution3 of the Court of Appeals (CA) in [Link] No. 83824.

Background Facts
The controversy must be definite and concrete,touching on the legal relations of the
parties having adverse legal interests. It must be a real and substantial controversy Riviera Golf, a domestic corporation, is the owner of Riviera Golf Club (Club), a
admitting of specific relief through a decree of a conclusive character as 36-hole golf course and recreational facility in Silang, Cavite. On October 11, 1996,
distinguished from an opinion advising what the law would be upon a hypothetical Riviera Golf entered into a Management Agreement with CCA Holdings, B.V. (CCA
state of [Link] sum, one has a right of action to file a complaint/petition for Holdings), a foreign corporation, for the management and operation of the Club.
reformation of an instrument when his legal right is denied,challenged or refused by
another; or when there is an antagonistic assertion of his legal right and the denial The Management Agreement was for a period of five (5) years. Under this
thereof by another concerning a real question or issue; when there is a real, agreement, Riviera Golf would pay CCA Holdings a monthly Base Management Fee
definitive and substantive controversy between the parties touching on their legal of 5.5% of the Adjusted Gross Revenue equivalent to US$16,500.00 per month,
relations having adverse legal interests. This may occur shortly after the execution adjusted to 4.5% per month from the opening date, plus an incentive Management
of the instrument or much later.A party to an instrument is under no obligation to Fee of 10% of the Gross Operating Profit.
seek are formation of an instrument while he is unaware that any opposition will be
made to carry out the actual agreement. The parties also entered into a co-terminous Royalty Agreement that would allow
Riviera Golf and the Club's developer, Armed Forces of the Philippines' Retirement
and Separation Benefits System (AFP-RSBS), to use CCA Holdings' name and
facilities to market the Club's shares. In consideration of the license to use CCA
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Holdings' name, Riviera Golf and AFP-RSBS will pay CCA Holdings a gross licensing Holdings filed another complaint for sum of money and damages docketed as Civil
fee of 1% on all membership fees paid in the sale of shares, an additional gross Case No. 03-399 (second complaint) before Branch 57 of the RTC of Makati City.
licensing fee of 4% on all club shares, and 7% on non-golf memberships sold.
Noting that the first and second complaints involve the same parties, the same
Riviera Golf initially paid the agreed fees, but defaulted in its payment of the subject matter, and the same causes of action, Riviera Golf filed on August 6, 2003,
licensing fees and the reimbursement claims in September 1997. Riviera Golf a Motion to Dismiss on the grounds of res judicata and violation of the rule against
likewise failed to pay the monthly management and incentive fees in June 1999, splitting of causes of action. CCA Holdings opposed the motion contending that
prompting CCA Holdings to demand the amounts due under both agreements. there is no splitting of causes of action since the two cases are entirely independent
of each other. CCA Holdings also justified its belated filing of the second complaint,
On October 29, 1999, Riviera Golf sent CCA Holdings a letter informing the latter arguing that the needed financial records were in Riviera Golfs possession.
that it was pre-terminating the Management Agreement purportedly to alleviate the
financial crisis that the AFP-RSBS was experiencing. The Royalty Agreement was The RTC Ruling
also deemed pre-terminated.
The RTC, Branch 57, Makati City granted the motion to dismiss, holding that the first
CCA Holdings protested the termination of the agreement and demanded that and second complaints have identical causes of action and subject matter. Since the
Riviera Golf settle its unpaid management and royalty fees. Riviera Golf however claims in Civil Case No. 01-611 and Civil Case No. 03-399 arose from alleged
refused on the ground that CCA Holdings violated the terms of the agreement. violations of the terms and conditions of the Management and Royalty Agreements,
the rules on res judicata and splitting of causes of action apply.
In April 2001, CCA Holdings filed before the Regional Trial Court (RTC), Branch 146,
Makati City, a complaint for sum of money with damages docketed as Civil Case No. The RTC also noted that CCA Holdings had every opportunity to raise the issue of
01-611 (first complaint) against Riviera Golf. During the pendency of the case, the pre-termination when it filed Civil Case No. 01-611. That CCA Holdings did not do so
parties tried to extrajudicially settle their differences and executed a Compromise and opted instead to reserve it for future litigation only show that it was speculating
Agreement. on the results of the litigation.

On April 25, 2002, the RTC rendered a decision4 approving the parties' Compromise The RTC likewise pointed out that the reservation clause or the "non-waiver clause"
Agreement. Paragraph 4 of the agreement reads: that the parties inserted in the Compromise Agreement was qualified by the phrase
subject to whatever claims and defenses the defendant may have relative thereto.
4) It is understood that the execution of this compromise agreement or the payment The RTC held that the defenses that Riviera Golf could raise are not limited only to
of the aforementioned sum of money shall not be construed as a waiver of or with those relating to the legality of the pre-termination of the agreements, but could
prejudice to plaintiffs rights/cause of action, if any, arising from or relative to the also include all other claims and defenses such as res judicata and splitting of a
pre-termination of the parties' Management and Royalty Agreements by the single cause of action.
defendant subject to whatever claims and defenses may have relative thereto;
(Emphasis supplied.) CCA Holdings appealed the dismissal of its complaint to the CA.

Subsequently, or on November 22, 2002, CCA Holdings again sent a letter to Riviera The CA Ruling
Golf, this time, demanding the sum of US$390,768.00 representing the projected
net income or expected business profits it was supposed to derive for the unexpired
two-year term of the Management Agreement. As its demands went unheeded, CCA
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ATTY. JUDE FERNANDEZ

In its decision dated January 11, 2006, the CA set aside the order granting the Riviera Golf also argued that although there seems to be several rights violated,
motion to dismiss, and remanded the case to the RTC for adjudication on the merits. there is only one delict or wrong committed and consequently, only one cause of
The CA held that res judicata and splitting of a single cause of action were not action that should have been alleged in a single complaint. Since the alleged breach
committed based on the following reasons: of contract in this case was already total at the time of the filing of Civil Case No.
01-611, the filing of the second complaint for the recovery of damages for the
First, there is no identity of causes of action in the two civil cases. pre-termination of the Management and Royalty Agreements constitutes splitting a
single cause of action that is expressly prohibited by the Rules of Court.
The test to determine the identity of causes of action is to ascertain whether the
same evidence is necessary to sustain the two suits. In this case, the sets of Riviera Golf likewise disagrees with the CA's interpretation of the non-waiver clause.
evidence in the two complaints were different. It argues that the phrase if any and the condition that the causes of action are
subject to whatever claims and defenses the defendant may have relative thereto in
Second, there is no splitting of a single cause of action because Riviera Golf violated the non-waiver clause limited its recognition of CCA Holdings' rights and causes of
separate primary rights of CCA Holdings under the management contract. action. It also maintains that the filing of the motion to dismiss based on res judicata
and splitting of causes of action clearly falls within the non-waiver clause's
limitation.
Third, Riviera Golf recognized CCA Holdings' right to seek damages arising from or
relative to the premature termination of the Management Agreement. This view is
evident from the literal interpretation of Paragraph 4 (or the "non waiver clause") of The Case for the Respondent
the parties' compromise agreement.
CCA Holdings reiterates that there was absolutely no identity of subject matter and
Riviera Golf moved for the reconsideration of the decision, but the CA denied its causes of action because the first case sought the payment for the services it
motion in its resolution of July 5, 2006; hence, the present recourse to us pursuant already rendered, while the second case sought the recovery of damages
to Rule 45 of the Rules of Court. representing the projected net income that it failed to realize by reason of the
unilateral and premature termination of the Management and Royalty Agreements.
Thus, the principles of res judicata and splitting of a single cause of action do not
The Petition
apply.

Riviera Golf asks the Court to set aside the CA decision, contending that the
Even assuming that the prohibition against res judicata operates in this case, CCA
appellate court committed a grave error in not holding that the filing of the second
Holdings contends that Riviera Golf is already estopped from questioning the filing
complaint amounted to res judicata and splitting of a single cause of action. Riviera
of the second complaint in view of the non-waiver clause inserted in the compromise
Golf submits that based on the allegations in the two complaints, the facts that are
agreement.
necessary to support the second case (Civil Case No. 03-399) would have been
sufficient to authorize recovery in the first case (Civil Case No. 01-611).
The Issues

Moreover, the documentary evidence that CCA Holdings submitted to support both
complaints are also the same. Thus, both civil cases involve not only the same facts As defined by the parties, the issues before us are limited to:
and the same subject matter, but also the same cause of action, i.e., breach of the
Management and Royalty Agreements. 1. Whether the CCA Holdings violated the prohibitions against res judicata and
splitting a single cause of action when it filed the claim for damages for unrealized
profits; and
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ATTY. JUDE FERNANDEZ

2. Whether the CA's interpretation of paragraph 4 of the compromise agreement is (c) In any other litigation between the same parties or their successors in interest,
correct. If in the affirmative, whether the parties may stipulate on an agreement that only is deemed to have been adjudged in a former judgment or final order
violating the prohibitions against res judicata and splitting a single cause of action. which appears upon its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto.
Our Ruling
Res judicata requires the concurrence of the following requisites: (1) the former
We find the petition meritorious. judgment must be final; (2) it must have been rendered by a court having
jurisdiction of the subject matter and the parties; (3) it must be a judgment on the
The Second Complaint is Barred by Res Judicata merits; and (4) there must be, between the first and second actions (a) identity of
parties, (b) identity of subject matter, and (c) identity of causes of
action.6ChanRoblesVirtualawlibrary
Res judicata is defined as a matter adjudged; a thing judicially acted upon or
decided; or a thing or matter settled by judgment. Under this rule, a final judgment
or decree on the merits by a court of competent jurisdiction is conclusive as to the All the Elements of Res Judicata are Present
rights of the parties or their privies in all later suits, and on all points and matters
determined in the former suit. There is no dispute as to the presence of the first three elements in the present case.
The decision in Civil Case No. 01-611 is a final judgment on the merits rendered by
The concept of res judicata is embodied in Section 47(b) and (c) of Rule 39 of the a court which had jurisdiction over the subject matter and over the parties. Since a
Rules of Court, which reads: judicial compromise operates as an adjudication on the merits, it has the force of
law and the effect of res judicata.7ChanRoblesVirtualawlibrary

SEC. 47. Effect of judgments or final orders. — The effect of a judgment or final
order rendered by a court of the Philippines, having jurisdiction to pronounce the With respect to the fourth element, a careful examination of the allegations in the
judgment or final order, may be as follows: two complaints shows that the cases involve the same parties and the same subject
matter. While Civil Case No. 01-611 is for the collection of unpaid management and
royalty fees, and Civil Case No. 03-399 on the other hand, is for recovery of
(a) In case of a judgment or final order against a specific thing or in respect to the
damages for the premature termination of the parties' agreements, both cases were
probate of a will, or the administration of the estate of a deceased person, or in
nevertheless filed on the basis of the same Management and Royalty Agreements.
respect to the personal, political, or legal condition or status of a particular person or
Thus, we agree that these two cases refer to the same subject matter.
his relationship to another, the judgment or final order is conclusive upon the title to
the thing, the will or administration, or the condition, status or relationship of the
person; however, the probate of a will or granting of letters of administration shall The Court is also convinced that there is identity of causes of action between the first
only be prima facie evidence of the death of the testator or intestate; and the second complaints.

(b) In other cases, the judgment or final order is, with respect to the matter directly A cause of action may give rise to several reliefs, but only one action can be filed.8
adjudged or as to any other matter that could have been raised in relation thereto, A single cause of action or entire claim or demand cannot be split up or divided into
conclusive between the parties and their successors in interest by title subsequent two or more different actions. The rule on prohibiting the splitting of a single cause
to the commencement of the action or special proceeding, litigating for the same of action is clear. Section 4, Rule 2 of the Rules of Court expressly states:
thing and under the same title and in the same capacity; and,

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ATTY. JUDE FERNANDEZ

Section 4. Splitting a single cause of action; effect of. - If two or more suits are royalty fees, and the recovery of damages for the expected business profits aim at
instituted on the basis of the same cause of action, the filing of one or a judgment establishing the breach of the Management and Royalty Agreements.
upon the merits in any one is available as a ground for the dismissal of the others.
Furthermore, the evidence in the first complaint will have to be reexamined to
In both Civil Case No. 01-611 and Civil Case No. 03-399, CCA Holdings imputed the support the cause of action in the second complaint. We specifically note that at
same wrongful act - the alleged violations of the terms and conditions of the least four (4) documents were presented in both actions, namely:
Management and Royalty Agreements. In Civil Case No. 01-611, CCA Holdings'
cause of action rests on Riviera Golfs failure to pay the licensing fees, (1)the Management Agreement between Riviera Golf and CCA Holdings;
reimbursement claims, and monthly management and incentive fees. In Civil Case
No. 03-399 on the other hand, CCA Holdings' cause of action hinges on the damages (2)the Royalty Agreement between Riviera Golf and CCA Holdings;
it allegedly incurred as a result of Riviera Golfs premature termination of the
Management and Royalty Agreements (i.e., the expected business profits it was
(3)the Fees Receivable Report of CCA Holdings as of October 1999, amounting to
supposed to derive for the unexpired two-year term of the Management Agreement).
USD 97,122.00; and
Although differing in form, these two cases are ultimately anchored on Riviera Golfs
breach of the Management and Royalty Agreements. Thus, we conclude that they
have identical causes of action. (4)the letter dated October 29, 1999, stating the termination of the Management
Agreement.
Same Evidence Support and Establish Both the Present and the Former Cause of
Action Based on the allegations in the two complaints, the facts that are necessary to
support the second complaint would have been sufficient to allow CCA Holdings to
recover in the first complaint. The similarity in the pieces of evidence in these two
It is a settled rule that the application of the doctrine of res judicata to identical
cases therefore strongly suggests the identity of their causes of action.
causes of action does not depend on the similarity or differences in the forms of the
two actions. A party cannot, by varying the form of the action or by adopting a
different method of presenting his case, escape the operation of the doctrine of res We held in this regard in Stilianopulos v. The City of Legaspi: The underlying
judicata.9 The test of identity of causes of action rests on whether the same objectives or reliefs sought in both the quieting-of-title and the annulment-of-title
evidence would support and establish the former and the present causes of cases are essentially the same adjudication of the ownership of the disputed lot and
action.10ChanRoblesVirtualawlibrary nullification of one of the two certificates of title. Thus, it becomes readily apparent
that the same evidence or set of facts as those considered in the quieting-of-title
case would also be used in this Petition.
We held in Esperas v. The Court of Appeals11 that the ultimate test in determining
the presence of identity of cause of action is to consider whether the same evidence
would support the cause of action in both the first and the second cases. Under the The difference in form and nature of the two actions is immaterial and is not a
same evidence test, when the same evidence support and establish both the reason to exempt petitioner from the effects of res judicata. The philosophy behind
present and the former causes of action, there is likely an identity of causes of this rule prohibits the parties from litigating the same issue more than once. When
action.12ChanRoblesVirtualawlibrary a right or fact has been judicially tried and determined by a court of competent
jurisdiction or an opportunity for such trial has been given, the judgment of the
court, as long as it remains unreversed, should be conclusive upon the parties and
The pleadings and record of the present case show that there is a glaring similarity
those in privity with them. Verily, there should be an end to litigation by the same
in the documentary evidence submitted to prove the claims under the two
complaints. The pieces of evidence both in the collection of unpaid management and
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ATTY. JUDE FERNANDEZ

parties and their privies over a subject, once it is fully and fairly adjudicated. An unqualified and positive refusal to perform a contract, though the performance
(Citations omitted.) thereof is not yet due, may, if the renunciation goes to the whole contract, be
treated as a complete breach which will entitle the injured party to bring his action
At the Time the First Complaint was Filed at once.

The Breach of the Agreements was Already Total In the present case, CCA Holdings' claim for the unpaid management and royalty
fees as well as the damages for its expected business profits constituted an
We likewise note that the non-payment of fees and the premature termination of the indivisible demand. Verily, CCA Holdings should have included and alleged the
contract occurred as early as 1999. In other words, the violation of both the recovery of damages for its expected business profits as a second cause of action in
Management and Royalty Agreements preceded the filing of the first complaint. Civil Case No. 01-611. CCA Holdings cannot be permitted to split up a single cause
Consequently, when CCA Holdings filed its first complaint in 2001, the breach of the of action and make that single cause of action the basis of several suits.
agreements was already complete and total; and the ground for the recovery of
damages was available and in existence. Thus, allowing CCA Holdings now to file All told, the Court finds that the filing of the second complaint is barred by res
two separate and independent claims anchored on the same breach of contract (i.e., judicata.
breach of the Management and Royalty Agreements), constitutes a blatant
disregard of our prohibition against res judicata and splitting of a single cause of The "Non-Waiver Clause" Stipulated
action.
in the Compromise Agreement is Null and Void
In contracts providing several obligations, each obligation may give rise to a single
and independent cause of action. But if several obligations have matured, or if the CCA Holdings contends that Riviera Golf is already estopped from questioning the
entire contract is breached at the time of the filing of the complaint, all obligations filing of the second complaint because the non-waiver clause of the Compromise
are integrated into one cause of action. Hence, the claim arising from such cause of Agreement recognized CCA Holdings' prerogative to seek damages arising from the
action that is not included in the complaint is barred forever. The Court's premature termination of the Management Agreement.
explanation in Blossom and Company, Inc. v. Manila Gas Corporation,14 citing US
jurisprudence on the matter, is instructive, viz: We do not see any merit in this contention.

34 Corpus Juris, p. 839, it is said: A compromise is a contract whereby the parties, by making reciprocal concessions,
avoid a litigation or put an end to one already commenced.15 Like any other
As a general rule[,] a contract to do several things at several times in its nature, so contract, a compromise agreement must be consistent with the requisites and
as to authorize successive actions; and a judgment recovered for a single breach of principles of contracts. While it is true that the agreement is binding between the
a continuing contract or covenant is no bar to a suit for a subsequent breach thereof. parties and becomes the law between them, it is also a rule that to be valid, a
But where the covenant or contract is entire, and the breach total, there can be only compromise agreement must not be contrary to law, morals, good customs, and
one action, and [the] plaintiff must therein recover all his damages. public policy.16ChanRoblesVirtualawlibrary

In the case of Rhoelm v. Horst, 178 U. U., 1; 44 Law. ed., 953, that court said: In the present case, a reading of paragraph 4 of the Compromise Agreement shows
that it allows the filing of complaints based on the same cause of action (i.e., breach
of the Management and Royalty Agreements), to wit:

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ATTY. JUDE FERNANDEZ

4) It is understood that the execution of this compromise agreement or the payment REVERSED and SET ASIDE. Accordingly, the decision dated September 29, 2004, of
of the aforementioned sum of money shall not be construed as a waiver of or with the Regional Trial Court, Branch 57, Makati City, in Civil Case No. 03-399 is
prejudice to plaintiffs rights/cause of action, if any, arising from or relative to the REINSTATED.
pre-termination of the parties' Management and Royalty Agreements by the
defendant subject to whatever claims and defenses may have relative thereto; SO ORDERED.
(Emphasis supplied.)
7. Marilag vs. Martinez
Since paragraph 4 allows the splitting of causes of action and res judicata, this
provision of the Compromise Agreement should be invalidated for being repugnant [ G.R. No. 201892, July 22, 2015 ]
to our public policy.

FACTS:
The well-settled rule is that the principle or rule of res judicata is primarily one of
public policy. It is based on the policy against multiplicity of suits,17 whose primary
On July 30, 1992, Rafael Martinez (Rafael), respondent's father, obtained from
objective is to avoid unduly burdening the dockets of the courts.
petitioner a loan in the amount of P160,000.00, with a stipulated monthly interest of
five percent (5%), payable within a period of six (6) months. The loan was secured
Speaking through Justice J.B.L. Reyes, the Court in Aguila v. J.M. Tuason & Co., by a real estate mortgage over a parcel of land. However, Rafael failed to settle his
Inc.18 held that: obligation upon maturity and despite repeated demands, prompting petitioner to file
a Complaint for Judicial Foreclosure of Real Estate Mortgage.
Public policy is firmly set against unnecessary multiplicity of suits; the rule of res
judicata, like that against splitting causes of action, are all applications of the same RTC issued a Decision dated January 30, 1998, in the foreclosure case, declaring the
policy, that matters once settled by a Court's final judgment should not thereafter stipulated 5% monthly interest to be usurious and reducing the same to 12% per
be invoked against. Relitigation of issues already settled merely burdens the Courts annum. Accordingly, it ordered Rafael to pay petitioner the amount of P229,200.00,
and the taxpayers, creates uneasiness and confusion, and wastes valuable time and consisting of the principal of P160,000.00 and accrued interest of P59,200.00 from
energy that could be devoted to worthier cases. As the Roman maxim goes, Non bis July 30, 1992 to September 30, 1995. Records do not show that this Decision had
in idem. already attained finality. Meanwhile, respondent agreed to pay Rafael's obligation to
petitioner which was pegged at P689,000.00. After making a total payment of
Because it is contrary to our policy against multiplicity of suits, we cannot uphold P400,000.00, he executed a promissory note dated February 20, 1998 binding
paragraph 4 of the Compromise Agreement to be valid, for we would then render himself to pay on or before March 31, 1998 the amount of P289,000.00,
legitimate the splitting of causes of action and negate the prohibition against res "representing the balance of the agreed financial obligation of his father to
judicata. Under Article 1409 of the Civil Code, contracts which are contrary to public petitioner. After learning of the January 30, 1998 Decision, respondent refused to
policy and those expressly prohibited or declared void by law are considered pay the amount covered by the promissory note despite demands, prompting
inexistent and void from the beginning. petitioner to file a complaint for sum of money and damages.

In sum, we declare paragraph 4 of the Compromise Agreement null and void for TC ruled in favor of the respondents, upon motion of the petitioner the appellate
being contrary to public policy. court reversed its decision, prompting the respondent to elevate the matter to CA.

WHEREFORE, premises considered, we GRANT the petition. The decision dated

January 11, 2006, of the Court of Appeals in CA-G.R. CV No. 83824 is hereby
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ATTY. JUDE FERNANDEZ

It held that the doctrine of res judicata finds application in the instant case, estate mortgages consisting of five (5) parcels of land in the name of the petitioner.
considering that both the judicial foreclosure and collection cases were filed as a After several negotiations and despite the extension granted by Tan and Obiedo,
consequence of the non-payment of Rafael's loan, which was the principal obligation petitioner still wasn't able to pay. Tan and Obiedo, by virtue of real estate
secured by the real estate mortgage and the primary consideration for the execution mortgages, executed Deeds of Absolute Sale in their favor consisting the five
of the subject PN. parcels of land. It is provided for in the Memorandum Agreement that if petitioner
fails to pay the loaned amount, five Deeds of Absolute Sale would be executed in
ISSUE: favor of Tan and Obiedo.

whether or not the CA committed reversible error in upholding the dismissal of the On March 16, 2006, petitioner filed a Complaint before the Regional Trial Court for
collection case. declaration of nullity of the deeds of sale and damages believing that respondents'
action was one which was incapable of pecuniary estimation. Upon filing its
HELD: complaint, petitioner paid docket fees amounting to P13,644.25 as assessed by the
Office of the Clerk of Court. It was stated that it only wanted to annul the deeds of
absolute sale, so therefor, no issue of title or recovery of possession is present to
A case is barred by prior judgment or res judicata when the following elements
classify it as a real action.
concur: (a) the judgment sought to bar the new action must be final; (b) the
decision must have been rendered by a court having jurisdiction over the subject
matter and the parties; (c) the disposition of the case must be a judgment on the Pursuant to the Memorandum of Agreement, there was a provision which states that
merits; and (d) there must be as between the first and second action, identity of if Ruby Shelter brought suit against respondents, it would be amounting to
parties, subject matter, and causes of action P10,000,000.00 as liquidated damages inclusive of costs and attorney's fees. Tan
and Obiedo moved to dismiss the complaint contending that the Regional Trial Court
(RTC) did not acquire jurisdiction over the case since the case involved recovery of
the Court finds the principle of res judicata to be inapplicable to the present
real property making it a real action which requires payment of docket fees
case. This is because the records are bereft of any indication that the August 28,
equivalent to a percentage of the fair market value of the land amounting to
2003 Decision in the judicial foreclosure case had already attained finality,
P720,392.60.
evidenced, for instance, by a copy of the entry of judgment in the said
case. Accordingly, with the very first element of res judicata missing, said principle
cannot be made to obtain. RTC and Court of Appeals both ruled in favor of Tan and Obiedo ordering Ruby
Shelter to pay additional docket fees. Hence, this petition.

ISSUE:

8. Ruby Shelter Builders vs Formaran

Whether or not Ruby Shelter should pay additional docket fees to acquire
jurisdiction
G.R. No. 175914, 10 February 2009

FACTS:

HELD:
Ruby Shelter, herein petitioner, obtained a loan amounting to P95,700,620.00 from
respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo) secured by real
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ATTY. JUDE FERNANDEZ

Yes. copy of the TCT from Elenita and gave it to Maura. Maura then subdivided the
property into several lots under the name of Elenita and her husband Felicisimo.
Payment of Docket fees is not only mandatory but jurisdictional. In Manchester Devt.
Corp. vs. CA, 149 SCRA 562, the court explicitly pronounced that, the court acquires Through a falsified deed of sale bearing forged signature of Elenita and Felicisimo,
jurisdiction over any case only upon the payment of the prescribed docket fee. Maura was able to sell the lots to different buyers, one of whom was Lorna Ong
"Hence, the payment of docket fees is not only mandatoty, but also jurisdictional. (Lorna). Sometime in August 1990, Lorna sold the lot to Editha Padlan for P4,000.

A real action is an action affecting title to or recovery of possession of real property. After learning what happened, Elenita demanded Padlan to surrender possession of
No matter how fastidiously petitioner attempts to conceal them, the allegations and said land, but the latter refused. Respondents files a case before the RTC of Balanga,
reliefs it sought in its complaint in Civil Case no 2006-0030 appears to be ultimately Bataan and summons to petitioner was thereafter served.
a real action, involving as they do the recovery by petitioner of its title and
possession of the five parcels of land from respondents Tan and Obiedo. A real On December 13, 1999, respondents moved to declare petitioner in default and
action is one which the plaintiff seeks the recovery of real property, or, as indicated prayed that they be allowed to present evidence ex parte. Petitioner opposed the
in what is now section 1, Rule 4 of the Rules of court, a real action is an action same contending that the court did not have jurisdiction over the subject matter and
affecting title to or recovery of possession of real property. over her person.

The docket fees for a real action would still be determined in accordance with the ISSUE:
value of the real property involved therein; the only difference is in what constitutes
the acceptable value. In computing the docket fees for cases involving real Whether or not the court acquired jurisdiction over the subject matter and the
properties, the courts, instead on relying on the assessed or estimated value, would person of the petitioner.
now be using the fair market value of the real properties ( as stated in the Tax
Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is
HELD:
higher) or, in the absence thereof, the stated value of the same.

The court has no jurisdiction over the subject matter and consequently, over the
person of the petitioner.

9 -Padlan vs. Dinglasan

Respondents filed the complaint in 1999, at the time BP 129, the Judiciary
Reorganization Act of 1980, was already amended by RA No. 7691, An Act
G.R. No. 180321; March 20, 2013 Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts. Section 3 of RA 7691 expanded the exclusive
FACTS: original jurisdiction of the first level courts to include all civil actions which involve
title to, or possession, of real property, or any interest therein which does not
Elenita Dinglasan (Elenita) was the registered owner of a parcel of land covered by exceed P20,000 or, in civil actions in Metro Manila, where such assessed value does
TCT No. T-105602. While on board a jeepney, Elenita's mother, Lilia Baluyot (Lilia), not exceed P50, 000.
had a conversation with one Maura Passion (Maura) regarding the sale of said
property. Believing that Maura was a real estate agent, Lilia borrowed the owner's In order to determine which court has jurisdiction over the action, an examination of
the complaint is essential. Basic as hornbook principle is that jurisdiction over the

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ATTY. JUDE FERNANDEZ

subject matter of a case is conferred by law and determined by the allegations in the Our services as collaborating counsel will cover investigation, research and
complaint which comprise a concise statement of the ultimate facts constituting the representation with local banks, concerns regarding deposits (current and savings)
plaintiff's cause of action. and investment instruments evidenced by certificate of deposits. Our office may
also initiate appropriate civil and/or criminal actions as well as administrative
In the case at bar, the only basis of valuation of the subject property is the value remedies needed to adjudicate the Estate of Avelina Quesada-Navarez
alleged in the complaint that the lot was sold in the amount of P4, 000. No tax expeditiously, peacefully and lawfully.
declaration was even presented that would show the valuation of the subject
property. Since the amount alleged is only P4, 000, the MTC and not the RTC has Effective Date: June 2007
jurisdiction over the action.
Acceptance Fee: P100,000.00 in an installment basis

Success Fee: 2% of the total money value of your share as co-owner and heir of the
10 - EDMUNDO NAVAREZ, PETITIONER, VS. ATTY. MANUEL ABROGAR III, Estate (payable proportionately upon your receipt of any amount)
RESPONDENT.
Appearance Fee: P2,500.00 per Court hearing or administrative meetings and/or
[ G.R. No. 191641, September 02, 2015 ] other meetings.

DECISION Filing of Motions and/or pleadings at our initiative shall be for your account and you
will be billed accordingly.
BRION, J.:
OUT-OF-POCKET EXPENSES: Ordinary out-of-pocket expenses such as telex,
This is a petition for certiorari under Rule 65[1] of the Rules of Court, filed from the facsimile, word processing, machine reproduction, and transportation expenses, as
October 16, 2009 Decision and the March 12, 2010 Resolution of the Court of well as per diems and accommodations expenses incurred in undertaking work for
Appeals (CA) in CA-G.R. SP No. 108675.[2] The CA dismissed the petition for you outside Metro Manila area and other special out-of-pocket expenses as you may
certiorari that the present petitioner filed against the January 21, 2009 Order of the authorized [sic] us to incur (which shall always be cleared with you in advance) shall
Regional Trial Court (RTC). be for your account. xxxx

ANTECEDENTS On September 2, 2008, Navarez filed a Manifestation with the RTC that he was
terminating the services of Atty. Abrogar. On the same day, Navarez also caused
On July 30, 2007, petitioner Edmundo Navarez engaged the services of Abrogar the delivery to Atty. Abrogar of a check in the amount of P220,107.51 - allegedly
Valerio Maderazo and Associates Law Offices (the Firm) through the respondent, equivalent to one half of 7.5% of petitioner's P11,200,000.00 share in the estate of
Atty. Manuel Abrogar III. The Firm was to represent Navarez in Sp. Proc. No. his deceased wife less Atty. Abrogar's cash advances.
Q-05-59112 entitled "Apolonio Quesada, Jr. v. Edmundo Navarez" as collaborating
counsel of Atty. Perfecto Laguio. The case involved the settlement of the estate of On September 9, 2008, Atty. Abrogar manifested that with respect to the
Avelina Quesada-Navarez that was then pending before the Regional Trial Court petitioner's one-half (1/2) share in the conjugal partnership, the RTC had already
(RTC), Branch 83, Quezon City. The pertinent portions of the Retainer Agreement resolved the matter favorably because it had issued a release order for the
read: petitioner to withdraw the amount. Atty. Abrogar further declared that the Firm was

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ATTY. JUDE FERNANDEZ

withdrawing as counsel - effective upon the appointment of an Administrator of the On March 17, 2009, the RTC denied the motion for reconsideration and issued a Writ
estate - from the remaining proceedings for the settlement of the estate of Avelina of Execution of its Order dated January 21, 2009.
Quesada-Navarez.
The petitioner elevated the case to the CA via a petition for certiorari. He argued that
On September 22, 2008, the petitioner wrote to Atty. Abrogar offering to pay his the RTC committed grave abuse of discretion because: (1) the RTC granted Atty.
attorney's fees in accordance with their Retainer Agreement minus the latter's cash Abrogar's claim for attorney's fees despite non-payment of docket fees; (2) the RTC
advances - an offer that Atty. Abrogar had previously refused in August 2008. denied him the opportunity of a full-blown trial to contradict Atty. Abrogar's claims
and prove advance payments; and (3) the RTC issued a writ of execution even
On October 7, 2008, Atty. Abrogar filed a Motion to Enter into the Records his before the lapse of the reglementary period.
attorney's lien pursuant to Rule 138, Section 37 of the Rules of Court.
In its decision dated October 16, 2009, the CA dismissed the petition and held that
On November 21, 2008, the motion was submitted for resolution without oral the RTC did not commit grave abuse of discretion.
arguments.
The petitioner moved for reconsideration which the CA denied in a Resolution dated
On January 21, 2009, the RTC issued an order granting the motion and directed the March 12, 2010.
petitioner to pay Atty. Abrogar's attorney's fees. The Order reads:
On April 6, 2010, and April 26, 2010, the petitioner filed his first and second motions
WHEREFORE, premises considered, it is hereby ordered: for extension of time to file his petition for review. This Court granted both motions
for extension totaling thirty (30) days (or until May 5, 2010) in the Resolution dated
That the attorney's lien of Manuel Abrogar III conformably with the Retainer July 26, 2010.
Agreement dated July 30, 2007, be entered into the records of this case in
consonance with Section 37, Rule 138 of the Rules of Court; On May 5, 2010, the petitioner filed the present petition entitled "Petition for
Review." However, the contents of the petition show that it is a petition for certiorari
That oppositor Edmundo Navarez pay the amount of 7.5% of P11,196,675.05 to under Rule 65 of the Rules of Court.[3]
Manuel Abrogar III;
THE PETITION
That the oppositor pay the administrative costs/expenses of P103,000.00 to the
movant; and The petitioner argues that the CA gravely erred in dismissing his petition for
certiorari that challenged the RTC ruling ordering the payment of attorney's fees. He
That the prayers for P100,000.00 as exemplary damages, P200,000.00 as moral maintains his argument that the RTC committed grave abuse of discretion because:
damages and for writ of preliminary attachment be denied. (1) it granted Atty. Abrogar's claim for attorney's fees despite lack of jurisdiction
due to non-payment of docket fees; (2) it granted the claim for attorney's fees
without requiring a full-blown trial and without considering his advance payments;
SO ORDERED.
and (3) it issued the writ of execution before the lapse of the reglementary period.
The petitioner also points out that the CA nullified the RTC's release order in CA-G.R.
On February 18, 2009, the petitioner filed a Motion for Reconsideration. SP No. 108734.

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ATTY. JUDE FERNANDEZ

In his Comment dated September 8, 2010, Atty. Abrogar adopted the CA's position However, the filing of the statement of the claim does not, by itself, legally
in its October 16, 2009 Decision. determine the amount of the claim when the client disputes the amount or claims
that the amount has been paid.[10] In these cases, both the attorney and the client
OUR RULING have a right to be heard and to present evidence in support of their claims.[11] The
proper procedure for the court is to ascertain the proper amount of the lien in a full
We observe that the petitioner used the wrong remedy to challenge the CA's dress trial before it orders the registration of the charging lien.[12] The necessity of
decision and resolution. The petitioner filed a petition for certiorari under Rule 65, a hearing is obvious and beyond dispute.[13]
not a petition for review on certiorari under Rule 45. A special civil action for
certiorari is a remedy of last resort, available only to raise jurisdictional issues when In the present case, the RTC ordered the registration of Atty. Abrogar's lien without
there is no appeal or any other plain, speedy, and adequate remedy under the law. a hearing even though the client contested the amount of the lien. The petitioner
had the right to be heard and to present evidence on the true amount of the
Nonetheless, in the spirit of liberality that pervades the Rules of Court[4] and in the charging lien. The RTC acted with grave abuse of discretion because it denied the
interest of substantial justice,[5] this Court has, on appropriate occasions, treated a petitioner his right to be heard, i.e., the right to due process.
petition for certiorari as a petition for review on certiorari, particularly when: (1) the
petition for certiorari was filed within the reglementary period to file a petition for The registration of the lien should also be distinguished from the enforcement of the
review on certiorari;[6] (2) the petition avers errors of judgment;[7] and (3) when lien. Registration merely determines the birth of the lien.[14] The enforcement of
there is sufficient reason to justify the relaxation of the rules.[8] Considering that the lien, on the other hand, can only take place once a final money judgment has
the present petition was filed within the extension period granted by this Court and been secured in favor of the client. The enforcement of the lien is a claim for
avers errors of law and judgment, this Court deems it proper to treat the present attorney's fees that may be prosecuted in the very action where the attorney
petition for certiorari as a petition for review on certiorari in order to serve the rendered his services or in a separate action.
higher ends of justice.
However, a motion for the enforcement of the lien is in the nature of an action
With the procedural issue out of the way, the remaining issue is whether or not the commenced by a lawyer against his clients for attorney's fees.[15] As in every
CA erred when it held that the RTC acted within its jurisdiction and did not commit action for a sum of money, the attorney-movant must first pay the prescribed
grave abuse of discretion when it ordered the payment of attorney's fees. docket fees before the trial court can acquire jurisdiction to order the payment of
attorney's fees.
We find merit in the petition.
In this case, Atty. Abrogar only moved for the registration of his lien. He did not pay
An attorney has a right to be paid a fair and reasonable compensation for the any docket fees because he had not yet asked the RTC to enforce his lien. However,
services he has rendered to a client. As a security for his fees, Rule 138, Section 37 the RTC enforced the lien and ordered the petitioner to pay Atty. Abrogar's
of the Rules of Court grants an attorney an equitable right to a charging lien over attorney's fees and administrative expenses.
money judgments he has secured in litigation for his client. For the lien to be
enforceable, the attorney must have caused: (1) a statement of his claim to be Under this situation, the RTC had not yet acquired jurisdiction to enforce the
entered in the record of the case while the court has jurisdiction over the case and charging lien because the docket fees had not been paid. The payment of docket
before the full satisfaction of the judgment;[9] and (2) a written notice of his claim fees is mandatory in all actions, whether separate or an offshoot of a pending
to be delivered to his client and to the adverse party. proceeding. In Lacson v. Reyes,[16] this Court granted certiorari and annulled the
decision of the trial court granting a "motion for attorney's fees" because the
attorney did not pay the docket fees. Docket fees must be paid before a court can
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ATTY. JUDE FERNANDEZ

lawfully act on a case and grant relief. Therefore, the RTC acted without or in excess As our last word, this decision should not be construed as imposing unnecessary
of its jurisdiction when it ordered the payment of the attorney's fees. burden on the lawyer in collecting his just fees. But, as in the exercise of any other
right conferred by law, the lawyer - and the courts -must avail of the proper legal
Lastly, the enforcement of a charging lien can only take place after a final money remedies and observe the procedural rules to prevent the possibility, or even just
judgment has been rendered in favor of the client.[17] The lien only attaches to the the perception, of abuse or prejudice.[20]
money judgment due to the client and is contingent on the final determination of the
main case. Until the money judgment has become final and executory, enforcement WHEREFORE, premises considered, we hereby GRANT the petition. The decision of
of the lien is premature. the Court of Appeals in CA-G.R. SP No. 108675 dated October 16, 2009, is hereby
REVERSED, and the decision of the Regional Trial Court, Branch 83, Quezon City in
The RTC again abused its discretion in this respect because it prematurely enforced Sp. Proc. No. Q-05-59112 is hereby ANNULLED and SET ASIDE.
the lien and issued a writ of execution even before the main case became final; no
money judgment was as yet due to the client to which the lien could have attached SO ORDERED.
itself. Execution was improper because the enforceability of the lien is contingent on
a final and executory award of money to the client. This Court notes that in CA-G.R. 11 - Do All Metals ndustries Inc. Vs Security Bank Corp.
SP No. 108734, the CA nullified the "award" to which the RTC attached the
attorney's lien as there was nothing due to the petitioner. Thus, enforcement of the G. R. No. 176339 January 10, 2011
lien was premature.

ABAD, J.:
The RTC's issuance of a writ of execution before the lapse of the reglementary
period to appeal from its order is likewise premature. The Order of the RTC dated
This case is about the propriety of awarding damages based on claims embodied in
January 21, 2009, is an order that finally disposes of the issue on the amount of
the plaintiff’s supplemental complaint filed without prior payment of the
attorney's fees Atty. Abrogar is entitled to. The execution of a final order issues as
corresponding filing fees.
a matter of right upon the expiration of the reglementary period if no appeal has
been perfected.[18] Under Rule 39, Section 2 of the Rules of Court, discretionary
execution can only be made before the expiration of the reglementary period upon The Facts and the Case
a motion of the prevailing party with notice to the adverse party. Discretionary
execution may only issue upon good reasons to be stated in a special order after due From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses
hearing.[19] Domingo Lim and Lely Kung Lim (the Lims) took out loans from respondent Security
Bank Corporation (the Bank) that totaled ₱92,454,776.45. Unable to pay the loans
The RTC ordered execution without satisfying the requisites that would have on time, the Lims assigned some of their real properties to the Bank to secure the
justified discretionary execution. Atty. Abrogar had not moved for execution and same, including a building and the lot on which it stands (the property), located at
there were no good reasons to justify the immediate execution of the RTC's order. M. de Leon St., Santolan, Pasig City.1
Clearly, the RTC gravely abused its discretion when it ordered the execution of its
order dated January 21, 2009, before the lapse of the reglementary period. In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All
Metals Industries, Inc. (DMI) primarily for business although the Lims were to use
For these reasons, this Court finds that the CA erred when it held that the RTC did part of the property as their residence. DMI and the Bank executed a two-year lease
not commit grave abuse of discretion and acted without jurisdiction. contract from October 1, 1998 to September 30, 2000 but the Bank retained the

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ATTY. JUDE FERNANDEZ

right to pre-terminate the lease. The contract also provided that, should the Bank alleged that in October of 2000, when the parties could not come to an agreement
decide to sell the property, DMI shall have the right of first refusal. regarding the purchase of the property, DMI vacated the same and peacefully
turned over possession to the Bank.
On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it
was pre-terminating the lease on December 31, 1999. Wanting to exercise its right The Bank offered no objection to the issuance of a TRO since it claimed that it never
of first refusal, DMI tried to negotiate with the Bank the terms of its purchase. DMI prevented DMI or its employees from entering or leaving the building. For this
offered to pay the Bank ₱8 million for the property but the latter rejected the offer, reason, the RTC directed the Bank to allow DMI and the Lims to enter the building
suggesting ₱15 million instead. DMI made a second offer of ₱10 million but the Bank and get the things they left there. The latter claimed, however, that on entering the
declined the same. building, they were unable to find the movable properties they left there. In a
supplemental complaint, DMI and the Lims alleged that the Bank surreptitiously
While the negotiations were on going, the Lims claimed that they continued to use took such properties, resulting in additional actual damages to them of over ₱27
the property in their business. But the Bank posted at the place private security million.
guards from Philippine Industrial Security Agency (PISA). The Lims also claimed
that on several occasions in 2000, the guards, on instructions of the Bank The RTC set the pre-trial in the case for December 4, 2001. On that date, however,
representatives Titolaido Payongayong and Evylene Sison, padlocked the entrances counsel for the Bank moved to reset the proceeding. The court denied the motion
to the place and barred the Lims as well as DMI’s employees from entering the and allowed DMI and the Lims to present their evidence ex parte. The court
property. One of the guards even pointed his gun at one employee and shots were eventually reconsidered its order but only after the plaintiffs had already presented
fired. Because of this, DMI was unable to close several projects and contracts with their evidence and were about to rest their case. The RTC declined to recall the
prospective clients. Further, the Lims alleged that they were unable to retrieve plaintiffs’ witnesses for cross- examination but allowed the Bank to present its
assorted furniture, equipment, and personal items left at the property. evidence.3 This prompted the Bank to seek relief from the Court of Appeals (CA) and
eventually from this Court but to no avail.4
The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig
City for damages with prayer for the issuance of a temporary restraining order (TRO) During its turn at the trial, the Bank got to present only defendant Payongayong, a
or preliminary injunction against the Bank and its co-defendants Payongayong, bank officer. For repeatedly canceling the hearings and incurring delays, the RTC
Sison, PISA, and Gil Silos.2 Answering the complaint, the Bank pointed out that the declared the Bank to have forfeited its right to present additional evidence and
lease contract allowed it to sell the property at any time provided only that it gave deemed the case submitted for decision.
DMI the right of first refusal. DMI had seven days from notice to exercise its option.
On September 10, 1999 the Bank gave notice to DMI that it intended to sell the On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims.
property to a third party. DMI asked for an extension of its option to buy and the It ordered the Bank to pay the plaintiffs ₱27,974,564.00 as actual damages,
Bank granted it. But the parties could not agree on a purchase price. The Bank ₱500,000.00 as moral damages, ₱500,000 as exemplary damages, and
required DMI to vacate and turnover the property but it failed to do so. As a result, ₱100,000.00 as attorney’s fees. But the court absolved defendants Payongayong,
the Bank’s buyer backed-out of the sale. Despite what happened, the Bank and DMI Sison, Silos and PISA of any liability.
continued negotiations for the purchase of the leased premises but they came to no
agreement. The Bank moved for reconsideration of the decision, questioning among other
things the RTC’s authority to grant damages considering plaintiffs’ failure to pay the
The Bank denied, on the other hand, that its guards harassed DMI and the Lims. To filing fees on their supplemental complaint. The RTC denied the motion. On appeal
protect its property, the Bank began posting guards at the building even before it to the CA, the latter found for the Bank, reversed the RTC decision, and dismissed
leased the same to DMI. Indeed, this arrangement benefited both parties. The Bank
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ATTY. JUDE FERNANDEZ

the complaint as well as the counterclaims.5 DMI and the Lims filed a motion for The Bank belittles the testimonies of the petitioners’ witnesses for having been
reconsideration but the CA denied the same, hence this petition. presented ex parte before the clerk of court. But the ex parte hearing, having been
properly authorized, cannot be assailed as less credible. It was the Bank’s fault that
The issues presented in this case are: it was unable to attend the hearing. It cannot profit from its lack of diligence.

1. Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiff’s Domingo Lim and some employees of DMI testified regarding the Bank guards’
supplemental complaint against the Bank considering their failure to pay the filing unmitigated use of their superior strength and firepower. Their testimonies were
fees on the amounts of damages they claim in it; never refuted. Police Inspector Priscillo dela Paz testified that he responded to
several complaints regarding shooting incidents at the leased premises and on one
2. Whether or not the Bank is liable for the intimidation and harassment committed occasion, he found Domingo Lim was locked in the building. When he asked why Lim
against DMI and its representatives; and had been locked in, a Bank representative told him that they had instructions to
prevent anyone from taking any property out of the premises. It was only after Dela
Paz talked to the Bank representative that they let Lim out.7
3. Whether or not the Bank is liable to DMI and the Lims for the machineries,
equipment, and other properties they allegedly lost after they were barred from the
property.

The Court’s Rulings Payongayong, the Bank’s sole witness, denied charges of harassment against the
Bank’s representatives and the guards. But his denial came merely from reports
relayed to him. They were not based on personal knowledge.1avvphil
One. On the issue of jurisdiction, respondent Bank argues that plaintiffs’ failure to
pay the filing fees on their supplemental complaint is fatal to their action.
While the lease may have already lapsed, the Bank had no business harassing and
intimidating the Lims and their employees. The RTC was therefore correct in
But what the plaintiffs failed to pay was merely the filing fees for their Supplemental
adjudging moral damages, exemplary damages, and attorney’s fees against the
Complaint. The RTC acquired jurisdiction over plaintiffs’ action from the moment
Bank for the acts of their representatives and building guards.
they filed their original complaint accompanied by the payment of the filing fees due
on the same. The plaintiffs’ non-payment of the additional filing fees due on their
additional claims did not divest the RTC of the jurisdiction it already had over the Three. As to the damages that plaintiffs claim under their supplemental complaint,
case.6 their stand is that the RTC committed no error in admitting the complaint even if
they had not paid the filing fees due on it since such fees constituted a lien anyway
on the judgment award. But this after-judgment lien, which implies that payment
Two. As to the claim that Bank’s representatives and retained guards harassed and
depends on a successful execution of the judgment, applies to cases where the filing
intimidated DMI’s employees and the Lims, the RTC found ample proof of such
fees were incorrectly assessed or paid or where the court has discretion to fix the
wrongdoings and accordingly awarded damages to the plaintiffs. But the CA
amount of the award.8 None of these circumstances obtain in this case.
disagreed, discounting the testimony of the police officers regarding their
investigations of the incidents since such officers were not present when they
happened. The CA may be correct in a way but the plaintiffs presented eyewitnesses Here, the supplemental complaint specified from the beginning the actual damages
who testified out of personal knowledge. The police officers testified merely to point that the plaintiffs sought against the Bank. Still plaintiffs paid no filing fees on the
out that there had been trouble at the place and their investigations yielded their same. And, while petitioners claim that they were willing to pay the additional fees,
findings. they gave no reason for their omission nor offered to pay the same. They merely
said that they did not yet pay the fees because the RTC had not assessed them for
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ATTY. JUDE FERNANDEZ

it. But a supplemental complaint is like any complaint and the rule is that the filing 12 - Westmont Bank vs Funal Phil. Corp
fees due on a complaint need to be paid upon its filing.9 The rules do not require the
court to make special assessments in cases of supplemental complaints. R. No. 175733, July 8,2015

To aggravate plaintiffs’ omission, although the Bank brought up the question of their Respondents Funai Philippines Corporation (Funai) and Spouses Antonio and Sylvia
failure to pay additional filing fees in its motion for reconsideration, plaintiffs made Yutingco (Sps. Yutingco) obtained loans from Westmont Bank (Westmont), now
no effort to make at least a late payment before the case could be submitted for United Overseas Bank [Link] by several promissory notes (PNs) with
decision, assuming of course that the prescription of their action had not then set it different maturity dates. The PNs commonly provide that in case the same are
in. Clearly, plaintiffs have no excuse for their continuous failure to pay the fees they referred to an attorney-at-law or a collection agency, or a suit is instituted in court
owed the court. Consequently, the trial court should have treated their for collection, Sps. Yutingco will be liable to pay twenty percent (20%) of the total
Supplemental Complaint as not filed. amount due as attorney's fees, exclusive of costs of suit and other expenses.

Plaintiffs of course point out that the Bank itself raised the issue of non-payment of However, Funai and Sps. Yutingco (original defendants) defaulted in the payment of
additional filing fees only after the RTC had rendered its decision in the case. The the said loan obligations when they fell due, and ignored Westmont's demands for
implication is that the Bank should be deemed to have waived its objection to such payment. Hence, the Westmont filed a complaint for sum of money, with prayer for
omission. But it is not for a party to the case or even for the trial court to waive the the issuance of a writ of preliminary attachment before the RTC.
payment of the additional filing fees due on the supplemental complaint. Only the
Supreme Court can grant exemptions to the payment of the fees due the courts and After an ex-parte hearing, the RTC issued a Writ of Preliminary Attachment ordering
these exemptions are embodied in its rules. the attachment of the personal and real properties of the original defendants.
Furthermore, the RTC issued another Order, directing the attachment of properties
Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that appearing under the names of other persons, but which were under the control of
the movable properties in question had remained in the premises and that the bank the original defendants. In view of the foregoing directives, Sheriff Gerry C. Duncan
was responsible for their loss. The only evidence offered to prove the loss was (Sheriff Duncan) and Sheriff Cachero levied and seized the properties situated at: (a)
Domingo Lim’s testimony and some undated and unsigned inventories. These were No. 9 Northpark Avenue, Bellevue, Grace Village, Quezon City; and (b) 2nd Level,
self-serving and uncorroborated. Phase III, Sta. Lucia East Grand Mall, Cainta, Rizal (Sta. Lucia).

WHEREFORE, the Court PARTIALLY GRANTS the petition and REINSTATES with Pepito Ong Ngo (Ngo), as Acting President of Panamax Corporation (Panamax), filed
modification the decision of the Regional Trial Court of Pasig City in Civil Case 68184. an Affidavit of Third-Party Claim over the properties seized in Sta. Lucia, claiming
The Court DIRECTS respondent Security Bank Corporation to pay petitioners DMI that Panamax is the true and lawful owner thereof.
and spouses Domingo and Lely Kung Lim damages in the following amounts:
₱500,000.00 as moral damages, ₱500,000.00 as exemplary damages, and Westmont filed an Amended Complaint impeding additional defendants, Panamax,
₱100,000.00 for attorney’s fees. The Court DELETES the award of actual damages of Ngo, Aimee R. Alba, Richard N. Yu, Annabelle Baesa, and Nenita Resane (additional
₱27,974,564.00. defendants), and praying that they be declared as mere alter egos, conduits,
dummies, or nominees of Sps. Yutingco to defraud their creditors, including
SO ORDERED. Westmont.

The RTC ruled that the additional defendants had no participation or any
corresponding duty whatsoever relative to the subject PNs, which were executed
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only by the original defendants in favor of Westmont; hence, the latter cannot on the motion to discharge the attached items, no full-blown trial was conducted on
maintain an action against said additional defendants. The RTC further held that the case.
Westmont's imputation that the additional defendants acted as dummies, conduits,
and alter egos of the original defendants are but mere inferences of fact, and not a In the case at bar, both the RTC and the CA were one in dismissing Westmont's
narration of specific acts or set of facts or ultimate facts required in a complaint to Amended and Second Amended Complaints as to the additional defendants, but
entitle the plaintiff to a remedy in law. Thus, it concluded that the complaint failed to differed on the grounds therefor i.e., the RTC held that said complaints failed to
state a cause of action against the additional defendants. state a cause of action, while the CA ruled that there was no cause of action, as to
the additional defendants.
Due to Westmont's continued refusal to release the seized items, the RTC issued a
Break-Open Order to enforce the writ. However the CA issued a TRO enjoining "Failure to state a cause of action and lack of cause of action are distinct grounds to
Sheriffs Duncan and Cachero from enforcing the writ of execution. The CA process dismiss a particular action. The former refers to the insufficiency of the allegations
server, Alfredo Obrence, Jr. (Obrence), duly served a copy of the TRO to the RTC in the pleading, while the latter to the insufficiency of the factual basis for the action.
Clerk of Court and informed Sheriff Cachero over the phone. Notwithstanding, the Dismissal for failure to state a cause of action may be raised at the earliest stages of
latter proceeded with the implementation of the writ of execution. the proceedings through a motion to dismiss under Rule 16 of the Rules of Court,
while dismissal for lack of cause of action may be raised any time after the questions
Westmont's representative who was able to secure a facsimile copy of the TRO of fact have been resolved on the basis of stipulations, admissions or evidence
showed the same to Sheriff Cachero who merely ignored it. Meanwhile, various presented by the plaintiff."
audio, video, and electrical appliances were taken out from the warehouse and
loaded into a truck. Obrence arrived at the site and served on Sheriff Cachero a Considering that, in this case, no stipulations, admissions, or evidence have yet
duplicate original copy of the TRO. Nonetheless, the items on the truck were not been presented, it is perceptibly impossible to assess the insufficiency of the factual
unloaded and the truck was allowed to leave the premises. Consequently, a case for basis on which Sheriff Cachero asserts his cause of action. Hence, the ground of lack
indirect contempt was filed by Westmont against Sheriffs Cachero and Duncan, and of cause of action could not have been the basis for the dismissal of this action.
Ngo.
Nonetheless, the Amended and Second Amended Complaints are still dismissible on
Issues: the ground of failure to state a cause of action, as correctly held by the RTC.

In G.R. No. 175733: "A complaint states a cause of action if it sufficiently avers the existence of the three
(3) essential elements of a cause of action, namely: (a) a right in favor of the
Westmont argues that the CA gravely erred in: (a) not applying the alter ego plaintiff by whatever means and under whatever law it arises or is created; (b) an
doctrine; (b) not considering additional defendants as necessary parties to the case; obligation on the part of the named defendant to respect or not to violate such right;
(c) not awarding exemplary damages in its favor; and (d) disregarding the express and (c) an act or omission on the part of the named defendant violative of the right
stipulation of the PNs regarding attorney's fees. of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff
for which the latter may maintain an action for recovery of damages. If the
Held: allegations of the complaint do not state the concurrence of these elements, the
complaint becomes vulnerable to a motion to dismiss on the ground of failure to
At the outset, it must be stressed that Civil Case No. 98-86853 was submitted for state a cause of action."
judgment on the pleadings, on Westmont's motion. Hence, other than the hearing

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ATTY. JUDE FERNANDEZ

It bears to stress that "while the facts alleged in the complaint are hypothetically The Court deliberated on the letter-request of Atty. Pablito M. Rojas dated January
admitted by the defendant, who moves to dismiss the complaint on the ground of 5, 1988, the comments thereon of Quezon City Executive Judge B.D. Chingcuangco
failure to state a cause of action, it must, nevertheless, be remembered that the and of counsel for Sulpicio Lines et al, and the reply to said comments.
hypothetical admission extends only to the relevant and material facts well pleaded
in the complaint, as well as inferences fairly deductible therefrom." Verily, the filing It appears that on January 4, 1988 a complaint for damages amounting to more
of the motion to dismiss assailing the sufficiency of the complaint "does not admit than one and a half billion pesos was filed in the name and behalf of the relatives or
the truth of mere epithets of fraud; nor allegations of legal conclusions; nor an heirs of the victims of "the worst sea disaster in history:" the sinking of the vessel
erroneous statement of law; nor mere inferences or conclusions from facts not Doña Paz caused by its collision with another vessel. The complaint characterized
stated; nor mere conclusions of law; nor allegations of fact the falsity of which is the action thereby instituted as a "lass suit",prosecuted by the twenty-seven (27)
subject to judicial notice; nor matters of evidence; nor surplusage and irrelevant named plaintiffs in their behalf and in presentation of the approximately 4,000
matter; nor scandalous matter inserted merely to insult the opposing party; nor to persons . . . (who also) are all close relatives and legal heirs of the passengers of the
legally impossible facts; nor to facts which appear unfounded by a record Doña Paz" (par. 5). The action's character as a class suit results, it is claimed, from
incorporated in the pleading, or by a document referred to; nor to general "the subject matter . . . (thereof being) of general or common interest to 4,000
averments contradicted by more specific averments." persons, more or less, all of whom are residing variously in Samar, Leyte and Metro
Manila;" and its institution is proper because the Identified plaintiffs are sufficiently
Anent the award of attorney's fees, it is relevant to note that the stipulations on numerous and representative to fully protect the interests of all" (par. 3). The
attorney's fees contained in the PNs constitute what is known as a penal clause. The complaint prayed that —
award of attorney's fees by the CA, therefore, is not in the nature of an indemnity
but rather a penalty in the form of liquidated damages in accordance with the ... judgment be rendered in favor of the plaintiffs and all other persons embraced in
contract between Westmont and the original defendants. "Such a stipulation has this class suit, and against the defendants, ordering them to pay to the former,
been upheld by [the] Court as binding between the parties so long as it does not jointly and severally, as follows:
contravene the law, morals, public order or public policy." Nevertheless, the courts
possess the power to reduce the amount of attorney's fees whether intended as an a) From P200,000.00 to P400,000.00 per victim or passenger who perished in the
indemnity or a penalty, if the same is iniquitous or unconscionable. sinking of the vessel DOÑA PAZ, by way of actual or compensatory, moral and
exemplary damages, or the total amount of from P800,000,000.00 to
Westmont's claim for exemplary damages, the Court does not find any factual and Pl,200,000,000.00 (should be P1,600,000,000.00) for all of the 4,000 passengers
legal bases for the award. A perusal of the original, amended and second amended on board said vessel;
complaints failed to disclose specific averments that will show the wanton,
fraudulent, reckless, oppressive or malevolent acts committed by the original b) an amount which this Honorable Court may deem just and reasonable as and by
defendants with respect to the loan obligation sought to be enforced. way of attorney's fees and, under the circumstances of this case, P10,000,000.00
would be reasonable;

A.M. No. 88-1-646-0 March 3, 1988

xxx xxx xxx
13 - RE: REQUEST OF THE PLAINTIFFS, HEIRS OF THE PASSENGERS OF THE
DOÑA PAZ TO SET ASIDE THE ORDER DATED JANUARY 4, 1988 OF JUDGE Together with the complaint, the plaintiffs filed a "MOTION FOR LEAVE TO FILE CASE
B.D. CHINGCUANGCO. AS PAUPER LITIGANT." They alleged that "a big majority ... (of them) are poor and
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ATTY. JUDE FERNANDEZ

have no sufficient means to finance the filing of this case especially because, claims of the the legal basis for the claim and the amount of damages recoverable;"'
considering the gargantuan amount of damages involved, the amount of filing fee it is doubtful whether 27 plaintiffs are sufficiently numerous and representative to
alone will run to several thousands of pesos," that in view thereof and the fact that fully protect the interests of all the suit preempts the other claimants' cause of
the case was one of "national concern as shown by the public outcry and sustained action as to the amount of recovery and as to the venue of the suit; there are in
publicity that it has evoked,' the Court "may be justified in ... (allowing them) to file truth only seven plaintiffs qualified to sue as pauper litigants; and the claimants not
the instant suit as pauper litigants or, in the alternative, (ruling) that the legal fees authorized to sue as paupers may continue with the action.
incident to the filing of this case may constitute a lien on whatever judgment may be
recovered by the plaintiffs therein." On the same day, their counsel submitted a In the first place, it is not the rule governing class suits under Section 12, Rule 3 of
certification of the City Assessor of Quezon City of even date to the effect "that the Rules of Court that in truth is involved in the proceedings at bar, but that
according to the assessment records x x there is no property whether land or concerning permissive joinder of parties in Section 6 of the same Rule 3. 1 It is
improvements registered for taxation purposes in the . . names of' seven (7) of the perhaps not inappropriate for the Court to avail of the opportunity that the
named plaintiffs. proceeding at bar presents to point out the distinctions between the two rules, as
these appear to have been missed by the petitioners and even by the Court a quo.
By Order dated January 4, 1988, the motion was granted by Judge Chingcuangco in
his capacity as Executive Judge only in so far as said seven (7) plaintiffs were The first cited provision reads as follows:
concerned, but not as regards the case.

It is this order that the plaintiffs, in their counsel's aforementioned letter of January
5, 1988, request this Court to set aside. They ask that they all instead be allowed to SEC. 12. Class Suit. — When the subject matter of his controversy is one of
prosecute the case as pauper litigants and they be exempt from paying filing fees csurvivors and next of kin of the victims; each claimant is a class unto himself in
which they say have "been assessed in the amount of P6,060,252.50 based on the terms of ommon or general interest to many persons, and the parties are so
total maximum claim of P1,200,000,000.00 as per the complaint." numerous that it is impracticable to bring them all before the court, one or more
may sue or defend for the benefit of all. But in such case the court shall make sure
In the comment (dated January 22, 1988) submitted by him in response to this that the parties actually before it are sufficiently numerous and representative so
Court's direction, Judge Chingcuangco declared that he had opted to leave the that all interests concerned are fully protected. Any party in interest shall have a
matter of the propriety of the class suit "to the sound judgment of the branch to right to intervene in protection of his individual interest.
which this case may be raffled," although he personally "would have freely allowed
all plaintiffs to litigate as pauper litigants and close ... (his) eyes to the fact that one What is contemplated, as will be noted, is that (a) the subject matter in controversy
of them is the present Clerk of this Court and another regional trial court judge;"and is of common or general interest to many persons, and (b) those persons are so
that he had 'suggested to the plaintiffs' counsel to seek the assistance of the highest numerous as to make it impracticable to bring them all before the court. Illustrative
tribunal of the land with the fond hope that it may once again exercise its of the rule is a so-called derivative suit brought in behalf of numerous stockholders
highly-regarded judicial activism by allowing that which this Executive Judge cannot of a corporation to perpetually enjoin or nullify what is claimed to be a breach of
do, that is, allow, in the highest interest of public service, all plaintiffs to litigate as trust or an ultra vires act of the company's board of directors. 2 In such a suit, there
pauper litigants, and consider the case as a class suit." is one, single right of action pertaining to numerous stockholders, not multiple rights
belonging separately to several, distinct persons.
The defendants, Sulpicio Lines, Inc., et al., in their own comment, point out that
there were only 1,493 passengers on board the Doña Paz at the time of the tragedy, On the other hand, if there are many persons who have distinct, separate rights
not 4,000; they have not been remiss in attending to the immediate needs and against the same party or group of parties, but those rights arise from the same
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ATTY. JUDE FERNANDEZ

transaction or series of transactions and there are common questions of fact or law a suit wherein, but for the class action device, the joinder of all interested parties
resulting therefrom, the former may join as plaintiffs in one action against the same would be essential. 5
defendant. This is authorized by the above mentioned joinder-of- parties rule in
Section 6 of Rule 3. A "true class actions" — distinguished from the so-called hybrid and the spurious
class action in U.S. Federal Practice-involves principles of compulsory joinder,
SEC. 6. Permissive joinder of parties. — All persons in whom or against whom any since . . (were it not) for the numerosity of the class members all should ... (be)
right to relief in respect to or arising out of the same transaction or series of before the court. Included within the true class suit ... (are) the shareholders'
transaction is alleged to exist, whether jointly, severally, or in the alternative, may, derivative suit and a class action by or against an unincorporated association. ... A
except as otherwise provided in these rules, join as plaintiffs or be joined as judgment in a class suit, whether favorable or unfavorable to the class, is binding
defendants in one complaint, where any question of law or fact common to all such under res judicata principles upon all the members of the class, whether or not they
plaintiffs or to all such defendants may arise in the action; but the court may make were before the court. It is the non-divisible nature of the right sued on which
such orders as may be just to prevent any plaintiff or defendant from being determines both the membership of the class and the res judicata effect of the final
embarrassed or put texpense in connection with any proceedings in which he may determination of the right. 6
have no interests.
The object of the suit is to obtain relief for or against numerous persons as a group
For instance, it has been held that employees dismissed by their employer on the or as an integral entity, and not as separate, distinct individuals whose rights or
same occasion for substantially the same reasons, allegedly without cause or liabilities are separate from and independent of those affecting the others. 7
justification, may join as plaintiff in a single action to obtain relief from their
employer. 3 In such a case, the plaintiff each have a material interest only in the An action instituted by several hundred members of a voluntary association against
damages properly due to him, not in those that may be payable to the others, their officers to compel them to wind up the association's affairs and render an
although their rights thereto arise from the same transaction. In other words, there accounting of the money and property in their possession has been held to be a class
are as many rights of action as there are plaintiffs joined in the action. Similarly, the suit. 8 In that case there was in truth only one single right of action sought to be
owner of a tract of land whose property has been illegally occupied by many persons enforced by the numerous plaintiff, not separate, individual, distinct rights
claiming different portions thereof, may bring a single action against all illegal pertaining independently to them. 9
occupants thereof, in accordance with this rule of permissive joinder of parties. 4
The right of action is not unal but plural, there being as many rights asserted in the On the other hand — unlike an action by numerous stockholders (which is properly
action as there are defendants, each defendant having an interest only in the a class suit) to restrain an unauthorized act of a corporation's board of directors,
portion of the land occupied by him. e.g., to extend or shorten the corporate life or increase capital stock of incur bonded
indebtedness without the specified majority vote prescribed by the Corporation Law,
It is true that in both juridical situations, similar essential factors exist i.e., the same in which the right sought to be vindicated is single, common and general, not
transaction or series of transactions is involved; and common questions of fact or multiple and separate and distinct from each other's 10 — an action by shareholders
law are at issue. What makes the situation a proper case for a class suit is the of a banking corporation, for example, to enforce their right to subscribe to stock left
circumstance that there is only one right or cause of action pertaining or belonging unsubscribed by other stockholders who failed to exercise their own right to do so on
in common to many persons, not separately or severally to distinct individuals. or before a stipulated date, was held not to be a class suit since each one of them
'had determinable interest; each one had a right, if any, only to his respective
The "true" class action, which is the invention of equity, is one which involves the portion of the stocks (or a definite number of shares) ... and (no one) of them had
enforcement of a right which is joint, common, or secondary or derivative. ... (It) is any right to, or any interest in, the stock to which another was entitled."11So, too,
an action for libel flied in behalf of 8,500 sugarcane planters has been held not to be
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ATTY. JUDE FERNANDEZ

a class suit since 'each of the plaintiffs has a separate and distinct reputation in the wider interests of the people at large as to assume an aspect of "national
community ... (and) do not have a common or general interest in the subject matter importance," does not under any existing law or rule justify excusing such parties
of the controversy. 12 But in all these instances, and prescinding from pragmatic from paying the requisite judicial fees or costs.
considerations, a permissive joinder of parties would have been perfectly proper in
accordance with the aforecited Section 6 of Rule 3 .13 It should moreover be quite obvious that the denial of the privilege to prosecute as
paupers litigant to those who do not qualify as such cannot in any sense be deemed
The other factor that serves to distinguish the rule on class suits from that of a denial of free access to the courts by reason of poverty, 16 as counsel for the
permissive joinder of parties is, of course, the numerousness of parties involved in plaintiffs suggests.
the former. The rule is that for a class suit to be allowed, it is needful inter alia that
the parties be so numerous that it would be impracticable to bring them all before Everyone — and the members of the Court are no exception — deplores that tragedy
the court. that claimed so many unsuspecting victims in what has been described, to repeat,
as 'the worst single -disaster' in maritime history. Everyone condoles and
The case at bar not being a proper one for a class suit, it follows that the action may symphatizes with those whom the victims, both known and unknown, left behind,
not be maintained by a representative few in behalf of all the others. Be all this as it many of whom were denied even the small consolation of being able to bury their
may, as regards the computation of the amount involved in the action for purposes dead. Everyone undoubtedly hopes and wishes that these survivors may quickly
of determining the original jurisdiction over it, and the correlative matter of the obtain adequate recompense for the untimely loss of their loved ones. But sympathy
amount of filing fees to be paid, it is immaterial whether the rule applied be that on and commiseration however-well-deserved, are not considerations that would
class suits or permissive joinder of parties. For in either case, it is the totality of the justifiably argue for bending or dispensing with the observance of the rules which
amounts claimed by or against the parties that determines jurisdiction, exclusive prescribe now such vindication may be obtained in the courts of law.
only of interest and costs. 14
WHEREFORE, the order complained of being in accordance with law, the solicitation
The second question-whether or not the numerous claimants, should they join as to set aside the same, and to be exempted from observance of the rule on paupers
parties plaintiff, may be allowed to sue as pauper litigants, not because they are litigant, is DENIED. The authority to litigate in the form of a class action is likewise
shown to be without means to maintain their suits, but on the ground of the alleged DENIED.
"national importance" of the subject matter, or upon an unverified averment that
most of them are impecunious-yields another negative answer.

The rule on the matter is clear. A party may be allowed to litigate in forma pauper is
only. . upon a proper showing that he has no means to that effect by affidavits,
certificate of the corresponding provincial, city or municipal treasurer, or otherwise.
15

Thus, every would be litigant who seeks exemption from the payment of the fees
prescribed for maintaining an action must establish, not simply allege, his lack of
means Where there is a multiplicity of such parties, each must show such lack, in
propria persona as it were. And that the particular circumstances or possible
consequences of an actual or contemplated suit are such as to transcend the narrow
personal interests of the immediate parties thereto and to so impinge upon the
32