RULE 5 ISSUE:
(1) Whether or not a complaint for sum of money is the proper remedy for the
1. CRISANTA ALCARAZ MIGUEL, petitioner, vs. JERRY D.
MONTANEZ, respondent.[G.R. No. 191336. January 25, 2012.]
FACTS:
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One
Hundred Forty-Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00),
payable in one (1) year, or until February 1, 2002, from the petitioner. The respondent
gave as collateral therefor his house and lot located at Block 39 Lot 39 Phase 3,
Palmera Spring, Bagumbong, Caloocan City.||| Due to the respondent's failure to pay
the loan, the petitioner filed a complaint against the respondent before the Lupong
Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into
a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in
installments in the amount of Two Thousand Pesos (P2,000.00) per month, and in the
event the house and lot given as collateral is sold, the respondent would settle the
balance of the loan in full. However, the respondent still failed to pay, and on
December 13, 2004, the Lupong Tagapamayapa issued a certification to file action in
court in favor of the petitioner.
On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of
Makati City, Branch 66, a complaint for Collection of Sum of Money. In his Answer
with Counterclaim, 3 the respondent raised the defense of improper venue considering
that the petitioner was a resident of Bagumbong, Caloocan City while he lived in San
Mateo, Rizal.After trial, on August 16, 2006, the MeTC rendered a Decision, 4 which
disposes as follows: WHEREFORE, premises considered[,] judgment is hereby
rendered ordering defendant Jerry D. Montanez to pay plaintiff. Anent the issue of
whether or not there is novation of the loan contract, the CA ruled in the
negative. ||The CA went on saying that since the parties entered into a Kasunduang
Pag-aayos before the Lupon ng Barangay, such settlement has the force and effect of
a court judgment, which may be enforced by execution within six (6) months from the
date of settlement by the Lupon ng Barangay, or by court action after the lapse of
such time. 10 Considering that more than six (6) months had elapsed from the date of
settlement, the CA ruled that the remedy of the petitioner was to file an action for the
execution of the Kasunduang Pag-aayos in court and not for collection of sum of
money. 11 Consequently, the CA deemed it unnecessary to resolve the issue on
venue.
petitioner, notwithstanding theKasunduang Pag-aayos; 13 and
(2) Whether or not the CA should have decided the case on the merits rather
than remand the case for the enforcement of the Kasunduang Pag-aayos.
HELD: Because the respondent failed to comply with the terms of
the Kasunduang Pag-aayos, said agreement is deemed rescinded pursuant to
Article 2041 of the New Civil Code and the petitioner can insist on his original
demand. Perforce, the complaint for collection of sum of money is the proper
remedy.The petitioner contends that the CA erred in ruling that she should have
followed the procedure for enforcement of the amicable settlement as provided in
the Revised Katarungang Pambarangay Law, instead of filing a collection case. The
petitioner points out that the cause of action did not arise from the Kasunduang Pag-
aayos but on the respondent's breach of the original loan agreement.
This Court agrees with the petitioner. It is true that an amicable settlement reached at
the barangay conciliation proceedings, like the Kasunduang Pag-aayos in this case, is
binding between the contracting parties and, upon its perfection, is immediately
executory insofar as it is not contrary to law, good morals, good customs, public order
and public policy. 16 This is in accord with the broad precept of Article 2037 of
the Civil Code, viz.: A compromise has upon the parties the effect and authority of res
judicata; but there shall be no execution except in compliance with a judicial
compromise.
Being a by-product of mutual concessions and good faith of the parties, an amicable
settlement has the force and effect of res judicata even if not judicially
approved. 17 It transcends being a mere contract binding only upon the parties
thereto, and is akin to a judgment that is subject to execution in accordance with the
Rules. 18 Thus, under Section 417 of the Local Government Code, 19 such amicable
settlement or arbitration award may be enforced by execution by the Barangay
Luponwithin six (6) months from the date of settlement, or by filing an action to
enforce such settlement in the appropriate city or municipal court, if beyond the six-
month period.
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
Under the first remedy, the proceedings are covered by the Local Government
Code and the Katarungang PambarangayImplementing Rules and Regulations.
The Punong Barangay is called upon during the hearing to determine solely the fact
of non-compliance of the terms of the settlement and to give the defaulting party
another chance at voluntarily complying with his obligation under the settlement.
Under the second remedy, the proceedings are governed by the Rules of Court, as
amended. The cause of action is the amicable settlement itself, which, by operation of
law, has the force and effect of a final judgment.
It must be emphasized, however, that enforcement by execution of the amicable
settlement, either under the first or the second remedy, is only applicable if the
contracting parties have not repudiated such settlement within ten (10) days from the
date thereof in accordance with Section 416 of the Local Government Code. If the
amicable settlement is repudiated by one party, either expressly or impliedly, the
other party has two options, namely, to enforce the compromise in accordance with
the Local Government Code or Rules of Court as the case may be, or to consider it
rescinded and insist upon his original demand.
This is in accord with Article 2041 of the Civil Code, which qualifies the broad
application of Article 2037, viz.:If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as
rescinded and insist upon his original demand.
In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-
tiered mode of enforcement of an amicable settlement, to wit: (a) by execution by
the Punong Barangay which is quasi-judicial and summary in nature on mere motion
of the party entitled thereto; and (b) an action in regular form, which remedy is
judicial. However, the mode of enforcement does not rule out the right of rescission
under Art. 2041 of the Civil Code. The availability of the right of rescission is
apparent from the wording of Sec. 417 itself which provides that the amicable
settlement "may" be enforced by execution by the lupon within six (6) months from
its date or by action in the appropriate city or municipal court, if beyond that period.
The use of the word "may" clearly makes the procedure provided in the Revised
Katarungang Pambarangay Law directory or merely optional in nature.
Thus, although the "Kasunduan" executed by petitioner and respondent before
the Office of the BarangayCaptain had the force and effect of a final judgment of
a court, petitioner's non-compliance paved the way for the application of Art.
2041 under which respondent may either enforce the compromise, following the
procedure laid out in the Revised Katarungang Pambarangay Law, or regard it as
rescinded and insist upon his original demand. Respondent chose the latter
option when he instituted Civil Case No. 5139-V-97 for recovery of unrealized
profits and reimbursement of advance rentals, moral and exemplary damages,
and attorney's fees. In the instant case, the respondent did not comply with the terms
and conditions of the Kasunduang Pag-aayos. Such non-compliance may be
construed as repudiation because it denotes that the respondent did not intend to be
bound by the terms thereof, thereby negating the very purpose for which it was
executed. Perforce, the petitioner has the option either to enforce the Kasunduang
Pag-aayos, or to regard it as rescinded and insist upon his original demand, in
accordance with the provision of Article 2041 of the Civil Code.Having instituted an
action for collection of sum of money, the petitioner obviously chose to rescind the
Kasunduang Pag-aayos. As such, it is error on the part of the CA to rule that
enforcement by execution of said agreement is the appropriate remedy under the
circumstances. Considering that the Kasunduang Pag-aayos is deemed rescinded
by the non-compliance of the respondent of the terms thereof, remanding the
case to the trial court for the enforcement of said agreement is clearly
unwarranted.
The petitioner avers that the CA erred in remanding the case to the trial court for the
enforcement of the Kasunduang Pag-aayos as it prolonged the process, "thereby
putting off the case in an indefinite pendency." 25 Thus, the petitioner insists that she
should be allowed to ventilate her rights before this Court and not to repeat the same
proceedings just to comply with the enforcement of the Kasunduang Pag-aayos, in
order to finally enforce her right to payment. The CA took off on the wrong premise
that enforcement of the Kasunduang Pag-aayos is the proper remedy, and therefore
erred in its conclusion that the case should be remanded to the trial court. The fact
that the petitioner opted to rescind theKasunduang Pag-aayos means that she is
insisting upon the undertaking of the respondent under the original loan contract.
Thus, the CA should have decided the case on the merits, as an appeal before it, and
not prolong the determination of the issues by remanding it to the trial court.
Pertinently, evidence abounds that the respondent has failed to comply with his loan
obligation. In fact, the Kasunduang Pag-aayos is the well nigh incontrovertible proof
of the respondent's indebtedness with the petitioner as it was executed precisely to
give the respondent a second chance to make good on his undertaking. And since the
respondent still reneged in paying his indebtedness, justice demands that he must be
held answerable therefor.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of
Appeals is SET ASIDE and the Decision of the Regional Trial Court, Branch 146,
Makati City, dated March 14, 2007 is REINSTATED. SO ORDERED.
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
2. [G.R. No. 192150. October 1, 2014.]
FEDERICO SABAY, petitioner, vs. PEOPLE OF THE
PHILIPPINES, respondent.
FACTS:
At around three o'clock to four o'clock in the afternoon of June 12, 2001, while the
petitioner and his daughter Erlinda Sabay(Erlinda) were busy laying wood and water
pipes in the yard of Godofredo Lopez (Godofredo), the latter confronted the petitioner
about his (the petitioner's) alleged intrusion into Godofredo's property. A verbal
altercation ensued between them. In the course of the verbal exchange, Erlinda hit
Godofredo on the head with a hard object. The petitioner joined in by throwing a
stone at Godofredo's face, breaking the latter's eyeglasses. Godofredo claimed that as
a result, he felt dizzy. 5 The petitioner and Erlinda then shouted at Godofredo and
threatened to kill him. Immediately thereafter, Jervie Lopez (Jervie) came and
pacified the three. But in the course his efforts, he was hit in the hand with a
bolo. 6 The neighbors intervened not long after and pacified the parties. The Medico
Legal Certificates 7 dated June 12, 2001 showed that Godofredo suffered a contusion
on the left parietal area of his head and an abrasion in his left cheek, while Jervie
sustained a wound in his right palm.
On June 13, 2001, Godofredo and Jervie filed a complaint against the petitioner
before the barangay. 8 The parties agreed to settle the complaint based on the
recommendation of the building inspector and reflected their agreement in their
Kasunduang Pag-aayos 9 (Kasunduan) dated June 20, 2001. The Kasunduan,
however, was not implemented because the building inspector failed to make the
promised recommendation to resolve the boundary dispute between the
parties. 10Thus, the Office of the Barangay Captain issued a Certificate to File an
Action. The petitioner was accordingly charged before the MTC with the crime of
Physical Injuries under two (2) Informations.
The petitioner, together with his daughter Erlinda, was also charged with Light
Threats 12 for allegedly uttering threatening words against the private complainant,
Godofredo. When arraigned, both accused pleaded not guilty to all the charges. Trial
on the merits thereafter ensued. At the trial, the prosecution presented the following
eyewitnesses: Rodolfo Lata, Sr. y Dolping (Rodolfo) and Dina Perez y
Alapaap (Dina) (who both testified on the details of the crime); Godofredo; Jervie;
and Dr. Melissa Palugod (Godofredo's attending physician). The defense, on the other
hand, presented the petitioner, Wilfredo Verdad and Caridad Sabay. The petitioner
denied the charge and claimed that he had simply acted in self-defense. He narrated
that on the date of the incident while he was putting a monument on his lot,
Godofredo suddenly hit him with an iron bar in his right hand, causing him injuries.
Jesus Lopez (Jessie), Godofredo's son, went out of their house and with a .38 caliber
gun, fired the gun at him. To defend himself, he got a stone and threw it at
Godofredo.
The MTC's and the RTC's Rulings
In its decision, MTC believed the prosecution's version of the incident and found the
petitioner guilty beyond reasonable doubt of two (2) counts of slight physical injuries.
The MTC, however, dismissed the light threats charged, as this offense is deemed
absorbed in the crime of slight physical injuries. Further, it absolved Erlinda for the
crime of light threats as there wasno allegation that she uttered threatening words
against Godofredo. The MTC rejected the petitioner's claim of self-defense for lack of
clear, convincing and satisfactory supporting evidence. The MTC held that the
petitioner failed to prove that there had been unlawful aggression by Godofredo; he
did not even present the medical certificate of his injury as evidence. The petitioner
sought recourse with the CA, arguing in this appeal that: (1) the MTC
has no jurisdiction over the case in view of the prosecution's failure to offer the
Certification to File an Action in evidence; and (2) the trial court erred in not
sustaining his claim of self-defense.
The CA's Ruling
The CA rejected the petitioner's arguments and affirmed the RTC's decision. The CA
held that even if there had been no formal offer of exhibit pursuant to Section 34,
Rule 132 of the Rules on Evidence, the Certification to File an Action could still be
admitted against the adverse party if, first, it has been duly identified by testimony
duly recorded and, second, it has been incorporated into the records of the case.
Noting that the Certification to File an Action was identified by the complainants and
is attached to the records of the case, the CA ruled that an exception to Section 34,
Rule 132 of the Rules on Evidence could be recognized.
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
The CA also dismissed the petitioner's plea of self-defense. The CA ruled that self-
defense is essentially a factual matter that is best addressed by the trial court; in the
absence of any showing that both the MTC and the RTC overlooked weighty and
substantial facts or circumstances that could alter their conclusion, the appellate court
saw no reason to disturb their factual ruling.
On March 22, 2010, the CA denied the petitioner's motion for reconsideration; hence,
the present petition.
ISSUE: WON MTC HAS JURISDICTION IN THE CASE?
HELD: YES. We find no reversible error committed by the CA and affirm the
petitioner's conviction for two counts of slight physical injuries.||| The CA correctly
observed and considered the situation: the settlement of the case was conditioned on
the recommendation of the building inspector; with no recommendation, no resolution
of the conflict likewise took place.
Furthermore, the Barangay Captain, as a public official, is presumed to act regularly
in the performance of official duty. 13 In the absence of contrary evidence, this
presumption prevails; his issuance of the disputed Certification to File an Action was
regular and pursuant to law. 14 Thus, the Barangay Captain properly issued the
Certification to File an Action.
Even granting that an irregularity had intervened in the Barangay Captain's issuance
of the Certification to File and Action, we note that this irregularity is not a
jurisdictional flaw that warrants the dismissal of the criminal cases before the MTC.
Thus, the MTC has jurisdiction to try and hear the petitioner's case; the claimed
irregularity in conciliation procedure, particularly in the issuance of the Certification
to File an Action, did not deprive the court of its jurisdiction. If at all, the irregularity
merely affected the parties' cause of action. The petitioner next contends that even if
there was a valid Certification to File an Action, the lower courts still erred in
admitting the Certificate into evidence as the prosecution did not formally offer it as
required by the Rules on Evidence. He emphasizes that in Fideldia v. Sps.
Mulato, 18 the Court held that a formal offer is necessary because judges are required
to base their findings solely upon evidence offered by the parties. In the absence of a
formal offer, the Certification is not admissible pursuant to Section 412 of Republic
Act No. 7160, and cannot be considered by the court. We do not find this argument
sufficiently persuasive.
In sum, we are fully satisfied that the petitioner is guilty beyond reasonable
doubt of two (2) counts of slight physical injuries, as the lower courts found. His
claim of self-defense fails for lack of supporting evidence; he failed to present
any evidence of unlawful aggression and cannot thus be said to have hit
Godofredo as a measure to defend himself.
WHEREFORE, premises considered, we DENY the appeal and AFFIRM the
decision dated October 23, 2009 and the resolution dated March 22, 2010 of the
Court of Appeals in CA-G.R. CR No. 31532.
SO ORDERED.
RULE 7
1. Traveo v. Bobongon Banana Growers Multi-purpose Cooperative, G.R. No.
164205, [September 3, 2009]
Facts:
Petitioner Oldarico Traveo and his 16 co-petitioners, in 1992, respondent Timog
Agricultural Corporation (TACOR) and respondent Diamond Farms, Inc. (DFI)
hired them to work at a banana plantation at Bobongon, Santo Tomas, Davao Del
Norte. Petitioners asseverated that while they worked under the direct control of
supervisors assigned by TACOR and DFI, these companies used different schemes
to make it appear that petitioners were hired through independent contractors,
including individuals, unregistered associations, and cooperatives; that the
successive changes in the names of their employers notwithstanding, they
continued to perform the same work under the direct control of TACOR and DFI
supervisors; and that under the last scheme adopted by these companies, the
nominal individual contractors were required to, as they did, join a cooperative and
thus became members of respondent Bobongon Banana Growers Multi-purpose
Cooperative (the Cooperative). Sometime in 2000, above-named respondents
began utilizing harassment tactics to ease them out of their jobs Soon thereafter,
they stopped paying their salaries, prompting them to stop working.
One after another, three separate complaints for illegal dismissal were filed by
petitioners, individually and collectively, with the National Labor Relations
Commission (NLRC) against said respondents including respondent Dole Asia
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
Philippines as it then supposedly owned TACOR, for unpaid salaries, overtime
pay, 13th month pay, service incentive leave pay, damages, and attorney's fees.
The Labor Arbiter, found respondent Cooperative guilty of illegal dismissal. On
partial appeal to the NLRC, petitioners questioned the Labor Arbiter's denial of
their money claims and the dropping of their complaints against TACOR, DFI, and
Dole Asia Philippines. NLRC sustained the Labor Arbiter's ruling that the
employer of petitioners is the Cooperative, there being no showing that the earlier
mentioned Orders of the DOLE Secretary had been set aside by a court of
competent jurisdiction. It partially granted petitioners' appeal, however, by
ordering the Cooperative to pay them their unpaid wages, wage differentials,
service incentive leave pay, and 13th month pay. It thus remanded the case to the
Labor Arbiter for computation of those awards. Their Motion for Reconsideration
having been denied by Resolution of September 30, 2003, petitioners appealed to
the Court of Appeals via certiorari.
By Resolution dated February 20, 2004, the appellate court dismissed
petitioners' petition for certiorari on the ground that the accompanying
verification and certification against forum shopping was defective, it having
been signed by only 19 of the 22 therein named petitioners. Their Motion for
Reconsideration having been denied by Resolution of May 13, 2004, petitioners
lodged the present Petition for Review on Certiorari.
Petitioners posit that the appellate court erred in dismissing their petition on a mere
technicality as it should have, at most, dismissed the petition only with respect to
the non-signing petitioners.
Issue: WON the appellate court erred in dismissing their petition due to the defect in
the verification and certification against forum shopping
Held:
No. The Court's guidelines for the bench and bar in Altres v. Empleo, 20 which were
culled "from jurisprudential pronouncements", are instructive: For the guidance of
the bench and bar, the Court restates in capsule form the jurisprudential
pronouncements already reflected above respecting non-compliance with the
requirements on, or submission of defective, verification and certification
against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or
submission of defective verification, and non-compliance with the requirement on or
submission of defective certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not
necessarily render the pleading fatally defective. The court may order its submission
or correction or act on the pleading if the attending circumstances are such that strict
compliance with the Rule may be dispensed with in order that the ends of justice
may be served thereby.
3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition
signs the verification, and when matters alleged in the petition have been made
in good faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not curable by its subsequent submission
or correction thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons". DcCITS
5) The certification against forum shopping must be signed by all the plaintiffs
or petitioners in a case; otherwise, those who did not sign will be dropped as
parties to the case. Under reasonable or justifiable circumstances, however, as when
all the plaintiffs or petitioners share a common interest and invoke a common cause
of action or defense, the signature of only one of them in the certification against
forum shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the
party-pleader, not by his counsel. If, however, for reasonable or justifiable
reasons, the party-pleader is unable to sign, he must execute a Special
Power of Attorney designating his counsel of record to sign on his behalf.
(Emphasis and underscoring supplied)
In this case, the foregoing restated pronouncements were lost in the challenged
Resolutions of the appellate court. Petitioners' contention that the appellate court
should have dismissed the petition only as to the non-signing petitioners or
merely dropped them as parties to the case is thus in order.
RULE 10
1. Philippine Ports Authority v. William Gothong & Aboitiz, Inc., G.R. No.
158401, [January 28, 2008]
Facts:
After the expiration of the lease contract of Veterans Shipping Corporation over the
Marine Slip Way in the North Harbor on December 31, 2000, petitioner WG&A
requested respondent PPA( Philippine Ports Authority) for it to be allowed to lease
and operate the said facility. Thereafter, then President Estrada issued a
memorandum dated December 18, 2000, stating to the effect that in its meeting held
on December 13, 2000, the Economic Coordinating Council (ECC) has approved the
request of petitioner WG&A to lease the Marine Slip Way from January 1 to June
30, 2001 or until such time that respondent PPA turns over its operations to the
winning bidder for the North Harbor Modernization Project. However, believing that
the said lease already expired on June 30, 2001, respondent PPA subsequently sent a
letter to petitioner WG&A dated November 12, 2001 directing the latter to vacate the
contested premises not later than November 30, 2001 and to turnover the
improvements made therein pursuant to the terms and conditions agreed upon in the
contract. In response, petitioner WG&A wrote PPA on November 27, 2001 urging
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
the latter to reconsider its decision to eject the former. Said request was denied by
the PPA via a letter dated November 29, 2001.
On November 28, 2001, petitioner WG&A commenced an Injunction suit before the
Regional Trial Court of Manila. Petitioner claims that the PPA unjustly, illegally and
prematurely terminated the lease contract. It likewise prayed for the issuance of a
temporary restraining order to arrest the evacuation. In its complaint, petitioner also
sought recovery of damages for breach of contract and attorney's fees. On December
11, 2001, petitioner WG&A amended its complaint for the first time. The
complaint was still denominated as one for Injunction with prayer for TRO. In the
said amended pleading, the petitioner incorporated statements to the effect
that PPA is already estopped from denying that the correct period of lease is "until
such time that the North Harbor Modernization Project has been bidded out to and
operations turned over to the winning bidder. It likewise included, as its third cause
of action, the additional relief in its prayer, that should the petitioner be forced to
vacate the said facility, it should be deemed as entitled to be refunded of the value of
the improvements it introduced in the leased property.
Following the first amendment in the petitioner's complaint,
respondent PPA submitted its answer on January 23, 2002. Meanwhile, the TRO
sought by the former was denied by the trial court by way of an order dated January
16, 2002.
Petitioner later moved for the reconsideration of the said Order on February 11,
2002. Shortly thereafter, petitioner filed a Motion to Admit Attached Second
Amended Complaint. This time, however, the complaint was already captioned as
one for Injunction with Prayer for Temporary Restraining Order and/or Writ of
Preliminary Injunction and damages and/or for Reformation of Contract. Also, it
included as its fourth cause of action and additional relief in its prayer, the
reformation of the contract as it failed to express or embody the true intent of the
contracting parties. The admission of the second amended complaint met strong
opposition from the respondent PPA. It postulated that the reformation sought
for by the petitioner constituted substantial amendment, which if granted, will
substantially alter the latter's cause of action and theory of the case.
RTC issued an Order denying the Admission of the Second Amended Complaint.
Petitioner filed a motion for reconsideration of the aforesaid order but the same was
again denied in an order dated April 26, 2002. Herein respondent WG&A then filed
a petition for certiorari with the CA seeking the nullification of the aforementioned
RTC orders. The CA granted respondent's petition, thereby setting aside the RTC
orders and directing the RTC to admit respondent's second amended complaint
pursuant to Section 3, Rule 10 of the 1997 Rules of Civil Procedure. Petitioner
moved for reconsideration but the same was denied per Resolution dated May 15,
2003.
Hence, the present petition.
Issue: Whether or not the CA erred in ruling that the RTC committed grave abuse of
discretion when it denied the admission of the second amended complaint
Held:
No. The CA did not err in finding that the RTC committed grave abuse of discretion
in issuing the Order dated March 22, 2002 denying the admission of respondent's
second amended complaint.
The RTC applied the old Section 3, Rule 10 of the Rules of Court:
Section 3. Amendments by leave of court. after the case is set
for hearing, substantial amendments may be made only upon
leave of court. But such leave may be refused if it appears to the
court that the motion was made with intent to delay the action or
that the cause of action or defense is substantially altered. Orders
of the court upon the matters provided in this section shall be
made upon motion filed in court, and after notice to the adverse
party, and an opportunity to be heard.
instead of the provisions of the 1997 Rules of Civil Procedure, amending Section
3, Rule 10, to wit:
SECTION 3. Amendments by leave of court. Except as
provided in the next preceding section, substantial amendments
may be made only upon leave of court. But such leave may be
refused if it appears to the court that the motion was made
with intent to delay. Orders of the court upon the matters
provided in this section shall be made upon motion filed in court,
and after notice to the adverse party, and an opportunity to be
heard.
The Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of
Civil Procedure in Valenzuela v. Court of Appeals, thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure
amended the former rule in such manner that the phrase "or that the cause of
action or defense is substantially altered" was stricken-off and not retained
in the new rules. The clear import of such amendment in Section 3, Rule
10 is that under the new rules, "the amendment may (now)
substantially alter the cause of action or defense." This should only be
true, however, when despite a substantial change or alteration in the cause
of action or defense, the amendments sought to be made shall serve the
higher interests of substantial justice, and prevent delay and equally
promote the laudable objective of the rules which is to secure a "just,
speedy and inexpensive disposition of every action and proceeding."
2. Swagman Hotels & Travel Inc. v. Court of Appeals, G.R. No. 161135, [April
8, 2005]
Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO
Facts:
David Hegerty, its president and vice-president, respectively, obtained from private
respondent Neal B. Christian loans evidenced by three promissory notes dated 7
August 1996, 14 March 1997, and 14 July 1997. Each of the promissory notes is in
the amount of US$50,000 payable after three years from its date with an
interest of 15% per annum payable every three months. In a letter dated 16
December 1998, Christian informed the petitioner corporation that he was
terminating the loans and demanded from the latter payment in the total
amount of US$150,000 plus unpaid interests in the total amount of US$13,500.
On 2 February 1999, private respondent Christian filed with the Regional
Trial Court of Baguio City, Branch 59, a complaint for a sum of money and damages
against the petitioner corporation, Hegerty, and Atty. Infante. For a while, they paid
an interest of 15% per annum every three months in accordance with the three
promissory notes. However, starting January 1998 until December 1998, they paid
him only an interest of 6% per annum, instead of 15% per annum, in violation of the
terms of the three promissory notes. Thus, Christian prayed that the trial court order
them to pay him jointly and solidarily the amount of US$150,000 representing the
total amount of the loans; US$13,500 representing unpaid interests from January
1998 until December 1998; P100,000 for moral damages; P50,000 for attorney's
fees; and the cost of the suit.
RTC rendered a decision on 5 May 2000 declaring the first two promissory notes
dated 7 August 1996 and 14 March 1997 as already due and demandable and that the
interest on the loans had been reduced by the parties from 15% to 6% per annum.
When the instant case was filed on February 2, 1999, none of the promissory notes
was due and demandable. As of this date however, the first and the second
promissory notes have already matured. Hence, payment is already due.
Under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a complaint which
states no cause of action may be cured by evidence presented without objection.
Thus, even if the plaintiff had no cause of action at the time he filed the instant
complaint, as defendants' obligation are not yet due and demandable then, he may
nevertheless recover on the first two promissory notes in view of the
introduction of evidence showing that the obligations covered by the two promissory
notes are now due and demandable. Court of Appeals denied petitioner's appeal and
affirmed in toto the decision of the trial court. MR was filed but was denied by the
Court of Appeals. Hence, this petition.
Issue: WON THE RESPONDENT COURT OF APPEALS VALIDLY AFFIRM A
DECISION OF THE LOWER COURT WHICH IS INVALID DUE TO
LACK OF CAUSE OF ACTION
other matters included in the case may be determined in a single proceeding, thereby
avoiding multiplicity of suits. Section 5 thereof applies to situations wherein
evidence not within the issues raised in the pleadings is presented by the parties
during the trial, and to conform to such evidence the pleadings are subsequently
amended on motion of a party. Thus, a complaint which fails to state a
cause of action may be cured by evidence presented during the trial.
However, the curing effect under Section 5 is applicable only if a cause of action in
fact exists at the time the complaint is filed, but the complaint is defective for failure
to allege the essential facts. It thus follows that a complaint whose cause of action
has not yet accrued cannot be cured or remedied by an amended or supplemental
pleading alleging the existence or accrual of a cause of action while the case is
pending. Such an action is prematurely brought and is, therefore, a groundless suit,
which should be dismissed by the court upon proper motion seasonably filed by the
defendant. The underlying reason for this rule is that a person should not be
summoned before the public tribunals to answer for complaints which are immature.
As this Court eloquently said in Surigao Mine Exploration Co., Inc. v. Harris: unless
the plaintiff has a valid and subsisting cause of action at the time his action is
commenced, the defect cannot be cured or remedied by the acquisition or
accrual of one while the action is pending, and a supplemental complaint or an
amendment setting up such after-accrued cause of action is not
permissible.||| Hence, contrary to the holding of the trial court and
the Court of Appeals, the defect of lack of cause of action at the
commencement of this suit cannot be cured by the accrual of a cause of action during
the pendency of this case arising from the alleged maturity of two of the promissory
notes on 7 August 1999 and 14 March 2000.|||

Held:
No. Amendments of pleadings are allowed under Rule 10 of the 1997 Rules of Civil
Procedure in order that the actual merits of a case may be determined in the most
expeditious and inexpensive manner without regard to technicalities, and that all

Case Digests in Civil Procedure Dean Jara AY 17-18 | DAVID, MATEO