RULE 5. UNIFORM PROCEDURE IN TRIAL COURTS.

25. A.L. Ang Network, Inc. v. Mondejar

GR No. 100804, January 22, 2014
J. Perlas-Bernabe

Doctrine: The remedy from decision in small-claims is certiorari.

Facts:
Petitioner claimed that it was duly authorized to supply water to and collect payment therefor
from the homeowners of Regent Pearl Subdivision in which the respondent owns and occupies
a lot.

Petitioner demanded to respondent payment, the amount of 23, 111.71 for the consumption of
water supply. Despite repeated demands, respondent failed to pay.

Petitioner filed a complaint for sum of money under the Rule of Procedure for Small Claims
before the MTCC, to collect from respondent the amount of 23, 111.71 pesos for her unpaid
water bills.

In defense, respondent contended that she religiously paid petitioner on an agreed flat rate of
75 Php. Parties agreed that this will not be increased unless a prior notice to the homeowners.
However, petitioner unilaterally adjust the said rate among 3 households only, thus, the amount
being claimed by petitioner is baseless.

MTCC: Ruled in favor of the respondent and dismissed the claim. The court found that
petitioner cannot unilaterally increase the said rate, hence the respondent have fully paid
petitioner.

Petitioner file a petition for certiorati under R65 before the RTC.

RTC: Dismissed the petition. According to the court, Sec 23 of the Rule of Procedure on Small
Claims Cases are non-appealable in nature.

MR was denied. Hence, this petition.

Petitioner contends that the RTC erred in dismissing its recourse under R65 assailing the
propriety of the MTCC Decision in the subject small claims case.

SC:
The Petition is Meritorious.

Under Sec. 23 of the Rules of Procedure for Small Claims, after the hearing, the court
shall render its decision on the same day, based on the facts established by the evidence (Form
13-SCC). The decision shall immediately be entered by the Clerk of Court in the court docket for
civil cases and a copy thereof forthwith served on the parties. This means that the decision shall
be final and unappealable.

Section 1, Rule 65 of the Rules of Court provides that the special civil action of certiorari
may only be invoked when "there is no appeal, nor any plain, speedy and adequate remedy in
the course of law,"
 Verily, a petition for certiorari, unlike an appeal, is an original action designed to correct
only errors of jurisdiction and not of judgment. Owing to its nature, it is therefore incumbent
upon petitioner to establish that jurisdictional errors tainted the MTCC Decision. The RTC, in
turn, could either grant or dismiss the petition based on an evaluation of whether or not the
MTCC gravely abused its discretion by capriciously, whimsically, or arbitrarily disregarding
evidence that is material to the controversy.

Hence, petitioner correctly availed of the remedy of certiorari to assail the propriety of
the MTCC Decision in the subject small claims case, contrary to the RTCs ruling.

Note: Petitioner filed the said petition before the proper forum (i.e., the RTC).1wphi1
The Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue a writ of certiorari. Such concurrence of jurisdiction, however, does
not give a party unbridled freedom to choose the venue of his action lest he ran afoul of
the doctrine of hierarchy of courts. Instead, a becoming regard for judicial hierarchy
dictates that petitions for the issuance of writs of certiorari against first level courts
should be filed with the Regional Trial Court, and those against the latter, with the Court
of Appeals, before resort may be had before the Court. This procedure is also in
consonance with Section 4, Rule 65 of the Rules of Court.

26. Fairland Knitcraft Corp. v. Po

FAIRLAND KNITCRAFT CORPORATION, petitioner, vs. ARTURO LOO PO, respondent.

G.R. No. 217694. January 27, 2016.
MENDOZA, J.:

Doctrine: Should the defendant fail to answer the complaint within the period above
provided, the court, motu proprio or on motion of the plaintiff, shall render judgment as
may be warranted by the facts alleged in the complaint and limited to what is prayed for
therein.

Facts:

Fairland (petitioner) alleged that it was the owner of Condominium Unit leased to Po
(respondent) by verbal agreement, with a rental fee of P20,000.00 a month, to be paid by Po at
the beginning of each month. From March 2011, respondent had continuously failed to pay rent.
For said reason, petitioner opted not to renew the lease agreement anymore.

Fairland was constrained to file the complaint for unlawful detainer before the MeTC. Po had
until January 7, 2013 to file his answer but he failed to do so. Hence, on February 6, 2013,
Fairland filed a motion to render judgment.

In its February 21, 2013 Order, the MeTC considered the case submitted for decision.
On March 1, 2013, Pos counsel filed his Entry of Appearance with Motion for Leave of Court to
file Comment/Opposition to Motion to Render Judgment. In the attached Comment/Opposition,
Po denied the allegations against him and commented that there was no supporting document
that would show that Fairland owned the property; that there was no lease contract between
them; that there were no documents attached to the complaint which would show that previous
demands had been made and received by him; that the alleged unpaid rental was P220,000.00,
but the amount of damages being prayed for was P440,000.00; that the issue in the case was
one of ownership; and that it was the RTC which had jurisdiction over the case.

MeTC Ruling: MeTC dismissed the complaint for lack of merit due to Fairlands failure to prove
its claim by preponderance of evidence.

RTC Ruling: RTC affirmed the MeTC ruling and agreed that Fairland failed to establish its case
by preponderance of evidence.

CA Ruling: CA dismissed the petition and ruled that an action for unlawful detainer would not
lie against Po. Notwithstanding the abbreviated proceeding it ordained and the limited pleadings
it allowed, the Rules on Summary Procedure did not relax the rules on evidence. In order for an
action for recovery of possession to prosper, it was indispensable that he who brought the
action should prove not only his ownership but also the identity of the property claimed.

Issue:

Whether a judgment may be rendered in favor of the petitioner on the basis of the complaint
itself and not on the failure to adduce proof of ownership over the subject property.

Held:

Yes, judgment may be rendered and no need for plaintiff to present evidence if defendant does
not answer. In relation thereto, Sections 5 and 6 of the Rules on Summary Procedure provide:

Sec. 5. Answer.Within ten (10) days from service of summons, the defendant shall file his
answer to the complaint and serve a copy thereof on the plaintiff. Affirmative and negative
defenses not pleaded therein shall be deemed waived, except for lack of jurisdiction over the
subject matter. Crossclaims and compulsory counterclaims not asserted in the answer shall be
considered barred. The answer to counterclaims or crossclaims shall be filed and served within
ten (10) days from service of the answer in which they are pleaded.

Sec. 6. Effect of failure to answer.Should the defendant fail to answer the complaint
within the period above provided, the court, motu proprio or on motion of the plaintiff,
shall render judgment as may be warranted by the facts alleged in the complaint and
limited to what is prayed for therein. The court may in its discretion reduce the amount of
damages and attorneys fees claimed for being excessive or otherwise unconscionable, without
prejudice to the applicability of Section 4, Rule 18 of the Rules of Court, if there are two or more
defendants.
The summons, together with the complaint and its annexes, was served upon Po on December
28, 2012. This presupposes that the MeTC found no ground to dismiss the action for unlawful
detainer. Nevertheless, Po failed to file his answer on time and the MeTC had the option to
render judgment motu proprio or on motion of the plaintiff.

Section 6 is clear that in case the defendant failed to file his answer, the court shall render
judgment, either motu proprio or upon plaintiffs motion, based solely on the facts alleged in
the complaint and limited to what is prayed for. The failure of the defendant to timely file his
answer and to controvert the claim against him constitutes his acquiescence to every allegation
stated in the complaint. Logically, there is nothing to be done in this situation except to render
judgment as may be warranted by the facts alleged in the complaint.

RULE 6. KINDS OF PLEADINGS.

27. Sps. Mendiola v CA

G.R. No. 159746; July 18, 2012
J. Bersamin

Doctrine: A counterclaim is compulsory if: (a) it arises out of or is necessarily connected with
the transaction or occurrence which is the subject matter of the opposing partys claim; (b) it
does not require for its adjudication the presence of third parties of whom the court cannot
acquire jurisdiction; and (c) the court has jurisdiction to entertain the claim both as to its amount
and nature, except that in an original action before the RTC, the counterclaim may be
considered compulsory regardless of the amount.

Elements of Res Judicata.Bar by res judicata avails if the following elements are present, to
wit: (a) the former judgment or order must be final; (b) the judgment or order must be on the
merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and
the parties; (d) there must be, between the first and the second action, identity of parties, of
subject matter and cause of action. (When asked only) Note: In this case all these elements
are present.

Facts:
Plaintiff: Spouses Mendiola
Respondent: Pilipinas Shell and Tabangao Realty
Pilipinas Shell Petroleum Corporation (Shell) entered into an agreement for the distribution
of Shell petroleum products by Pacific Management & Development belonging to petitioner
Ramon G. Mendiola (Ramon). Pacific secured the performance of its obligation by a real estate
mortgage in favor of Shell.
Pacific defaulted on its obligations, impelling Shell to commence extrajudicial foreclosure
proceedings. Petitioners proceeded to the announced venue for the auction on the scheduled
date and time but did not witness any auction being conducted (Paranaque). They later learned
that the auction had been held as scheduled in Makati, and that their mortgaged realty had been
sold to Tabangao Realty, Inc. (Tabangao).
The proceeds of the sale is not sufficient to the obligation of Pacific hence, Shell sued in
the RTC in Manila to recover the deficiency.
 In his answer with counterclaim Ramon asserted that the extrajudicial foreclosure of the
mortgage was made in bad faith. Petitioners commenced in the RTC Makati an action to
annul the extrajudicial foreclosure.
As defendants in the Makati case, Shell and Tabangao separately moved for dismissal on
the ground of res judicata and that that the Makati case was already barred by petitioners
failure to raise its cause of action as a compulsory counterclaim in the Manila case. RTC denied
both motions.
Shell filed its answer ad cautelam with the same assertions.
Pending the trial of the Makati case, the Manila RTC rendered its judgment in favor of Shell.
Ramon appealed in the Manila case but his appeal was denied. CA affirmed the Manila RTCs
decision. He filed later on petition for review which was also denied upholding the foreclosure of
the mortgage and became final and executory. (Manila case done!)
Meanwhile, Makati RTC resolved the Makati case finding that there had been no auction
actually conducted and petitioner was deprived of notice and hearing as to his liability. Shell
sought the reconsideration of the decision invoking the decision in the Manila case and
questioning the Makatis jurisdiction on account of res judicata. Tabangao adopted Shells MR.
Makati denied the MR. Shell and Tabangao filed a joint of appeal.
Instead of filing their appellees brief, the petitioner submitted a motion to dismiss
appeal based on Section 1, Rule 41 of the Rules of Court which prohibits an appeal of the
order denying an MR. CA denied petitioners motion to dismiss.

Issues: 1) Whether an appeal may be taken from the denial of MR of the decision in the Makati
case.
2) Whether Ramons cause of action for annulment of the extrajudicial foreclosure in
Makati case was a true compulsory counterclaim in the Manila case barring the Makati RTC to
hear the case.

Ruling: Issue 1) Yes. An appeal may be taken from the denial of MR of the decision in the
Makati case. Section 1, Rule 41 of the Rules of Court which prohibits an appeal of the order
denying an MR (the proper remedy being an appeal from the judgment or final order) was
clarified in the case of Quelnan v VHF Philippines. The Court has interpreted the proscription
against appealing the order denying an MR to refer only to an MR filed against an interlocutory
order and not an MR against a judgment or final order.

Here, the denial of the motion for reconsideration of an order of dismissal of a complaint in the
Makati case is not an interlocutory order, however, but a final order as it puts an end to the
particular matter resolved, or settles definitely the matter therein disposed of, and nothing is left
for the trial court to do other than to execute the order.

Issue 2) Yes. Ramons cause of action for annulment of the extrajudicial foreclosure in Makati
case was a true compulsory counterclaim in the Manila case barring the Makati RTC to hear the
case.

Rule 6 of the 1997 Rules of Civil Procedure provides that a counterclaim is compulsory if:
(a) it arises out of or is necessarily connected with the transaction or occurrence which is the
subject matter of the opposing partys claim; (b) it does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction; and (c) the court has
jurisdiction to entertain the claim both as to its amount and nature, except that in an original
action before the RTC, the counterclaim may be considered compulsory regardless of the
amount.

A compulsory counterclaim that a defending party has at the time he files his answer shall be
contained therein. Pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure, a
compulsory counterclaim not set up shall be barred.

The four tests to determine whether a counterclaim is compulsory or not are the
following, to wit: (a) Are the issues of fact or law raised by the claim and the counterclaim
largely the same? (b) Would res judicata bar a subsequent suit on defendants claims, absent
the compulsory counterclaim rule? (c) Will substantially the same evidence support or refute
plaintiffs claim as well as the defendants counterclaim? and (d) Is there any logical relation
between the claim and the counterclaim, such that the conduct of separate trials of the
respective claims of the parties would entail a substantial duplication of effort and time by the
parties and the court?

The four tests are affirmatively met as far as the Makati case was concerned. The Makati case
had the logical relation to the Manila case because both arose out of the extrajudicial
foreclosure of the real estate mortgage constituted to secure the payment of petitioners credit
purchases under the distributorship agreement with Shell.

Specifically, the right of Shell to demand the deficiency was predicated on the validity of the
extrajudicial foreclosure, such that there would not have been a deficiency to be claimed in the
Manila case had Shell not validly foreclosed the mortgage. As earlier shown, Ramons cause of
action for annulment of the extrajudicial foreclosure was a true compulsory counterclaim in the
Manila case. Thus, the Makati RTC could not have missed the logical relation between the two
actions.

28. Metrobank v. CPR Promotions

Case title: Metrobank vs. CPR Promotions
G.R. No / Date: G.R. No. 207970. June 22, 2015
Justice: Velasco, Jr.

Doctrine: Accordingly, a counterclaim is compulsory if: (a) it arises out of or is

necessarily connected with the transaction or occurrence which is the subject matter of
the opposing partys claim; (b) it does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction; and (c) the court has
jurisdiction to entertain the claim both as
to its amount and nature, except that in an original action before the RTC, the
counterclaim may be considered compulsory regardless of the amount.

Facts:

CPR Promotions and Marketing, Inc. CPR Promotions) obtained loans from
petitioner MBTC. These loans were covered by fifteen (15) promissory notes (PNs).
 To secure the loans, the spouses Reynoso executed two deeds of real estate
mortgage on separate dates.

Upon maturity of the loans, respondents defaulted, prompting MBTC to file a

petition for extra-judicial foreclosure of the real estate mortgages.

Notwithstanding the foreclosure of the mortgaged properties for the total amount
of PhP 13,614,000, petitioner MBTC alleged that there remained a deficiency balance of
PhP 2,628,520.73, plus interest and charges as stipulated and agreed upon in the PNs
and deeds of real estate mortgages. Despite petitioners repeated demands, however,
respondents failed to settle the alleged deficiency.

The RTC ruled in favor of Metrobank. On Appeal to the CA, petitioners raised the
defense of surplus in the proceeds of the foreclosure sale.

Issue:

Whether the defense of CPR as regards the surplus is a compulsory counterclaim,

hence, it should have been dismissed as it should have been barred because of its
failure to be raised in the initiatory pleading.

Ruling:

Yes, the defense should have been dismissed because it is a compulsory

counterclaim belatedly raised. it is evident that a claim for recovery of the excess in the
bid price vis--vis the amount due should be interposed as a compulsory counterclaim in
an action for recovery of a deficiency filed by the mortgagee against the debtor-
mortgagor.

First, in both cases, substantially the same evidence is needed in order to prove
their respective claim.

Second, adjudication in favor of one will necessarily bar the other since these two
actions are absolutely incompatible with each other; a debt cannot be fully paid and
partially unpaid at the same time.

Third, these two opposing claims arose from the same set of transactions. And
finally, if these two claims were to be the subject of separate trials, it would definitely
entail a substantial and needless duplication of effort and time by the parties and the
court, for said actions would involve the same parties, the same transaction, and the
same evidence. The only difference here would be in the findings of the courts based on
the evidence presented with regard to the issue of whether or not the bid prices
substantially cover the amounts due.

29. Del Monte Fresh Produce v Dow Chemical Co.,

Aug. 23 2012
Justice Velasco Jr.
Justice Leonardo De Castro
Note: This is a consolidated case of G.R. no. 179232 (Del Monte vs Dow Chemical) and G.R.
no. 179290 (Dow Chemical and Occidental Chemical vs Hon. Jesus Grageda)
Doctrine:
For a court to allow an omitted counterclaim or cross-claim by amendment, two requisites must
happen:
a) there was oversight, inadvertence, or excusable neglect, or when justice requires;
b) the amendment is made before judgment.
Parties in the Case
Petitioner
- DEL MONTE FRESH PRODUCE N.A. and DEL MONTE FRESH PRODUCE
COMPANY,
Respondents
- DOW CHEMICAL COMPANY, OCCIDENTAL CHEMICAL CORPORATION,
CECILIO G. ABENION, et al.,* DOLE FOOD COMPANY, INC., DOLE FRESH FRUIT
COMPANY, STANDARD FRUIT COMPANY, STANDARD FRUIT AND STEAMSHIP
COMPANY, CHIQUITA BRANDS, INC., and CHIQillTA BRANDS INTERNATIONAL, INC.,
Facts of The Case:
- On August 11, 1995, a joint complaint for damages based quasi delict was filed
before the RTC of Panabo City, Davao by 1,185 individuals against Del Monte, Dow
Chemical Corporations and other companies alleging that the companies were negligent in
the manufacture, distribution and sale, and for not informing the users of the hazardous
effects of the chemical they used. The workers said that they were exposed to the chemicals
since 1970s that they suffered serious permanent injuries to their health.
- Del Monte filed motion for dismiss saying that the complaint must be dismiss
because the claimants has already been paid, waived, abandoned and extinguish their
rights in effect of their compromise agreement with the claimants.
- The RTC rendered that all other motions filed by the parties in relations to or in
connection to the issue above resolved but which have been wittingly or unwittingly left
unresolved are hereby considered moot and academic; likewise, all previous orders contrary
to or not in accordance with the foregoing resolutions are hereby reconsidered, set aside
and vacated.
- The Dow Chemical Company and Occidental Chemical Corporation argues, that the
RTC gravely abused its discretion when it did not dismiss the cross claims filed by the Dole
Fresh Fruit Company, Del Monte and Chiquita despite the following:
(1) The cross claims were already filed beyond the reglementary period;
(2) The complaint against the defendants, including their respective counterclaims,
were already dismissed on the basis of the compromise agreements they each
had with the plaintiffs.
- The Court of Appeals, however, ruled that the RTC gravely abused its discretion
when it admitted the cross claims against the Dow and Occidental defendants without any
qualification. It held that only cross claims filed by the DOLE defendants, the Chiquita
defendants (with respect to the claims of James Bagas and Dante Bautista) and the Del
Monte defendants (with respect to the 16 non-compromising plaintiffs) against the
Dow/Occidental defendants can be rightly admitted by the RTC.
- Unsatisfied, the Dow/Occidental defendants, as petitioners in G.R. no. 179290, come
to this court arguing that the Court of Appeals committed reversible error in not finding that
the cross-claims of the DOLE, Del Monte and Chiquita defendants should all be dismissed
and the Request for Admission was timely filed and proper.
Issue:
Whether or not the dismissal of the civil case against the Dow/Occidental defendants carry with
it the dismissal of cross-claims against them is proper.
Held:
NO. The Supreme Court ruled citing Section 10, Rule 11 of the 1997 Rules of Civil Procedure,
provides,
SEC. 10. Omitted counterclaim or cross-claim. When a pleader fails to set up a counterclaim
or a cross-claim through oversight, inadvertence, or excusable neglect, or when justice requires,
he may, by leave of court, set up the counterclaim or cross-claim by amendment before
judgment.
The CA correctly held that there is basis for allowing the cross-claims of the Dole, Del Monte
and Chiquita defendants against the Dow/Occidental defendants as they complied with the
rules. It is undisputed that the Dole, Del Monte and Chiquita defendants sought to amend their
answers to include their cross-claims before judgment. More importantly, justice requires that
they be allowed to do so in consonance with the policy against multiplicity of suits.
And as correctly observed by the CA, the plaintiffs are seeking to hold all defendant companies
solidarily liable. Thus, even with the compromise agreements entered into by the
Dow/Occidental, Del Monte and Chiquita defendants with majority of the plaintiffs below, the
civil case was not dismissed nor the amount of damages sought by plaintiffs therein reduced.
Therefore, the remaining defendants can still be made liable by plaintiffs for the full amount. If
that happens, the remaining defendants can still proceed with their cross-claims against the
compromising defendants, including the Dow/Occidental defendants, for their respective shares.
We also uphold the appellate courts ruling that the RTC gravely abused its discretion when it
admitted the cross-claims against the Dow/Occidental defendants without any qualification. The
Del Monte and Chiquita defendants cross-claims against the Dow/Occidental defendants
cannot extend to the plaintiffs with whom they had settled, but only with respect to those
plaintiffs who refused to enter into a compromise agreement with them, that is, with respect only
to James Bagas and Dante Bautista for the Chiquita defendants and the 16 plaintiffs for the Del
Monte defendants. Simply put, as the compromising plaintiffs can no longer hold the Del Monte
and Chiquita defendants liable, there is no more reason for the latter to sue the Dow/Occidental
defendants as far as the compromising plaintiffs are concerned under the cross-claim.

RULE 7. PARTS OF A PLEADING.

30. People v. Arrojado

PEOPLE OF THE PHILIPPINES VS. JESUS ARROJADO

G.R. No. 207041, November 9, 2015
Peralta, J.:

Doctrine:

On failure to indicate MCLE informations in pleading: the prosecutor is required to indicate in the
information the number and date of issue of his MCLE Compliance Certificate because
information is a pleading. However, the court should not dismiss the information but simply
require the investigating prosecutor to indicate the required information.

Parties:

Petitioner People of the Philippines

Respondent Jesus A. Arrojado

Facts:

Jesus Arrojado, charged with Murder in an Information filed by the Office of the City
Prosecutor of Roxas City, filed a Motion to Dismiss the Information against him on the ground
that the investigating prosecutor who filed the Information did not indicate therein the number
and date of issue of her Mandatory Continuing Legal Education Certificate of Compliace, as
required by Bar Matter No. 1922 promulgated by the Court on June 3, 2008. The Office of the
City Prosecutor opposed the Motion to Dismiss, contending that 1) the Information sought to be
dismissed is sufficient in form and substance; (2) the lack of proof of MCLE compliance by the
prosecutor who prepared and signed the Information should not prejudice the interest of the
State in filing charges against persons who have violated the law; and (3) and administrative
edict cannot prevail over substantive or precedural law, by imposing additional requirements for
the sufficiency of a criminal information.

The RTC dismissed the Information without prejudice. The prosecutions motion for
reconsideration was also denied, hence the People of the Philippines filed a petition for
certiorari and/or mandamus before the Court of Appeals.

The CA, however, dismissed the petition. It held that the prosecution was not without any
recourse other than a petition for certiorari/mandamus as it may simply re-file the Information as
the dismissal thereof was without prejudice. Thus, the People of the Philippines represented by
the Office of the City Prosecutor of Roxas City filed the instant petition for review on certiorari to
assail the CA decision.

Issue:

Whether or not the Motion to Dismiss the Information was proper for failure of the
Investigating Prosecutor to vindicate her MCLE Certificate of Compliance as required under Bar
Matter No. 1922.

Ruling:

No. The rule has already been amended by the SC in its resolution. In any event, to
avoid inordinate delays in the disposition of cases brought about by a counsels failure to
indicate in his or her pleadings the number and date of issue of his or her MCLE Certificate of
Compliance, this Court issued an En Banc Resolution, dated January 14, 2014 which amended
B.M. No. 1922 by repealing the phrase Failure to disclose the required information would
cause the dismissal of the case and the expunction of the pleadings from the records
and replacing it with Failure to disclose the required information would subject the
counsel to appropriate penalty and disciplinary action.

Thus, under the amendatory Resolution, the failure of a lawyer to indicate in his or her pleadings
the number and date of issue of his or her MCLE Certificate of Compliance will no longer result
in the dismissal of the case and expunction of the pleadings from the records. Nonetheless,
such failure will subject the lawyer to the prescribed fine and/or disciplinary action.

In light of the above amendment, while the same was not yet in effect at the time that the
subject Information was filed, the more prudent and practical thing that the trial court should
have done in the first place, so as to avoid delay in the disposition of the case, was not to
dismiss the Information but to simply require the investigating prosecutor to indicate therein the
number and date of issue of her MCLE Certificate of Compliance.

Fallo:

WHEREFORE, the instant petition is DENIED. The Decision and Resolution of the Court of
Appeals, dated September 8, 2011 and April 18, 2013, respectively, in CA-G.R. SPNo. 04540
are AFFIRMED.

31. Cosco Phils Shipping v Kemper Insurance Co

COSCO PHILIPPINES SHIPPING, INC. v. KEMPER INSURANCE COMPANY

G.R. No. 179488; 23 April 2012
J. PERALTA

Doctrine:
For corporations, only individuals vested with authority by a valid board resolution may
sign the certificate of non-forum shopping on its behalf. There should also be presented
a proof of such authority. The petition is subject to dismissal if a certification was
submitted unaccompanied by proof of the signatorys authority.

Certifications against forum shopping signed by a person on behalf of a corporation

which are unaccompanied by proof that said signatory is authorized to file the complaint
on behalf of the corporation are generally not curable by mere amendment of the
complaint, but shall be a cause for the dismissal of the case without prejudice.

Facts:

Case: Petition for review on certiorari under Rule 45 to reverse and set aside the Decision and
Resolution of the CA

Kemper Insurance Company = a foreign insurance company based in Illinois, USA, with no
license to engage in business in the Philippines, as it is not doing business in the Philippines,
except in isolated transactions
Atty. Rodolfo Lat counsel of Kemper
Brent Healy underwriter who signed the SPA authorizing Atty Lat to appear on behalf of
Kemper in the pre-trial and all stages of the proceedings.
Cosco Philippines Shipping = domestic shipping company

Genosi, Inc. = importer-consignee

Avelino S. Mangahas, Jr = General Manager

1998. Kemper insured the shipment of imported frozen boneless beef (owned by Genosi, Inc.),
loaded Brisbane port, Australia, for shipment to Genosi, Inc. (importer-consignee) in the
Philippines. Upon arrival at the Manila port, a portion of the shipment was rejected by Genosi,
Inc. because of spoilage arising from the alleged temperature fluctuations of Coscos reefer
containers.

Genosi, Inc. filed a claim against both Cosco and Kemper. Kemper paid the claim of Genosi
($64,492.58). Then, Genosi, Inc., through its General Manager, Avelino S. Mangahas, Jr.,
executed a Loss and Subrogation Receipt stating the receipt of the amount of the claim and
discharging Kemper and thereby subrogating Kemper to the claims. Kemper made demands
upon Cosco, which claims Cosco failed and refused to pay.

Kemper filed a Complaint for Insurance Loss and Damages against Cosco.

Cosco (Answer): Kemper has no capacity to sue; claim is barred by laches; damage in shipment
beyond its control

During the period of pre-trial, Cosco filed a MOTION TO DISMISS, contending that the
complaint was filed by Atty. Rodolfo Lat who failed to show his authority to sue and sign the
corresponding certification against forum shopping, and such act of signing is a clear violation of
Section 5, Rule 7.

Trial Court: GRANTED MTD. MR by Kemper DENIED.

CA: REVERSED. the trial court decision; the physical act of signing may be performed in behalf
of the corporate entity by specifically authorized individuals; remanded the case to trial court.
MR by Cosco DENIED.

Hence, the present petition.

Issue:
Whether the case should be dismissed on the ground that Atty. Lat (Counsel of Kemper) was
not properly authorized by Kemper to sign the certification against forum shopping on its behalf.

Ruling:
YES, the case should be dismissed because there was no proof that Atty. Lat was
properly authorized by the corporation, through a board resolution, to sign the
verification and certification against forum shopping on its behalf.
Rule 7, Section 5 provides, and the Court has consistently held, that the certification against
forum shopping must be signed by the principal parties. If, for any reason, the principal party
cannot sign the petition, the one signing on his behalf must have been duly authorized. With
respect to a corporation, the certification against forum shopping may be signed for and on
its behalf, by a specifically authorized lawyer who has personal knowledge of the facts
required to be disclosed in such document. The power of a corporation to sue and be
sued in any court is lodged with the board of directors that exercises its corporate powers. In
turn, physical acts of the corporation, like the signing of documents, can be performed only by
natural persons duly authorized for the purpose by corporate by-laws or by a specific act
of the board of directors.

Only individuals vested with authority by a valid board resolution may sign the certificate
of non-forum shopping on behalf of a corporation. We also required proof of such authority
to be presented. The petition is subject to dismissal if a certification was submitted
unaccompanied by proof of the signatorys authority. (PAL vs. Flight Attendands and Stewards
Assoc of the Ph)

In this case, since Kemper is a corporation, the certification must be executed by an officer or
member of the board of directors or by one who is duly authorized by a resolution of the board
of directors; otherwise, the complaint will have to be dismissed.
There is no proof here that Kemper, a private corporation, authorized Atty. Lat, through a board
resolution, to sign the verification and certification against forum shopping on its behalf.

--
General Rule: The lack of certification against forum shopping is generally not curable by mere
amendment of the complaint, but shall be a cause for the dismissal of the case without
prejudice. The same rule applies to certifications against forum shopping signed by a person on
behalf of a corporation which are unaccompanied by proof that said signatory is authorized to
file the complaint on behalf of the corporation.

Exceptions: (jurisprudence)
On the basis of a special circumstance or compelling reason + subsequent compliance
by the submission of the proof of authority attesting to the fact that the person who signed
the certification was duly authorized
Where the board resolution which was subsequently attached recognized the
pre-existing status of the bank manager as an authorized signatory
Taking into consideration the merits of the case and to avoid relitigation of the issues
and further delay administration of justice where the case has already been decided by the
lower court on the merits + the authority to sign the certification was ratified by the Board.

In this case, there is no circumstance that necessitates the relaxation of the Rules.
There was no proof of authority submitted, even belatedly, to show subsequent compliance
with the requirement of the law.
 There is no copy of the board resolution or secretarys certificate subsequently submitted to
the trial court that would attest to the fact that Atty. Lat was indeed authorized to file said
complaint and sign the verification and certification against forum shopping.
Kemper did not satisfactorily explain why it failed to comply with the rules.

**Note also that the SPA allegedly authorizing Atty. Lat to appear on behalf of Kemper in the
pre-trial and all stages of the proceedings was fatally defective and had no evidentiary value. It
failed to establish Healys authority to act in behalf of Kemper, in view of the absence of a
resolution from respondents board of directors or secretarys certificate proving the
same.

Accordingly, the certification against forum shopping appended to the complaint is

fatally defective, and warrants the dismissal of the case.

32. William Go Que Construction v. Singson

WILLIAM GO QUE CONSTRUCTION VS. SINGSON

GR No. 191699, Apr 19, 2016
PERLAS-BERNABE, J.:

Doctrine:

On Jurat: a jurat refers to an act in which an individual on a single occasion appears before the
Notary Public or identified by the same through competent evidence of identity as defined by the
Rules. (effect of defective notarial certification - fatal if defective)

Parties:

Petitioner WILLIAM GO QUE CONSTRUCTION AND WILLIAM GO QUE

Complainant - DANNY SINGSON, RODOLFO PASAQUI, LENDO LOMINIQUI, AND JUN
ANDALES

Facts:

Private respondents filed complaints for illegal dismissal against petitioner William Go
Que Construction and/or William Go Que (petitioner) before the National Labor Relations
Commission (NLRC), National Capital Region-North Sector Arbitration Branch, claiming that
they were hired as steelmen on various dates, and were regular employees of petitioner until
their illegal dismissal on June 3, 2006. Moreover, they alleged that petitioner failed to pay their
monetary benefits, such as service incentive leave pay, holiday pay, and 13th month pay.

For his part, petitioner averred that private respondents were hired as project employees, and
were informed of the specific period or phase of construction wherein their services were
needed. Sometime in May 2006, petitioner learned that some workers were getting excess and
cutting unused steel bars, and selling them to junk shops, prompting him to announce that he
will bring the matter to the proper authorities. Thereafter, private respondents no longer reported
for work, and were identified by the other workers as the thieves.
Meanwhile, petitioner filed a complaint for theft against private respondents and a certain Jimmy
Dulman before the Office of the City Prosecutor, Quezon City. After preliminary investigation,
the investigating prosecutor found probable cause against them and filed the corresponding
Information before the Regional Trial Court of Quezon City, docketed as Criminal Case No. Q-
07-149245.

LA illegal dismissal, regular employees not contractual & no abandonment of jobs (should be
reinstated)

NLRC valid dismissal, just cause (commission of a crime or offense theft)

CA In a resolution dated Nov. 12, 2009, the CA held that the photocopies of the IDs submitted
by Singson, Pasaqui, and Lominiqui, as well as their joint-affidavit attesting to the identity of
Andales, who was unable to submit his ID, served as competent evidence of private
respondents identities and cured the defect in the affidavit of service, and
verification/certification of non-forum shopping.

Issue:
Whether or not the CA acted with grave abuse of discretion in refusing to dismiss the
petition for certiorari before it on the ground of non-compliance with the requirements of
verification and certification against forum shopping.

Held:

Yes. Under Section 6, Rule II of A.M. No. 02-8-13-SC dated July 6, 2004, entitled The
2004 Rules on Notarial Practice, a jurat refers to an act in which an individual on a single
occasion appears before the Notary Public or identified by the same through competent
evidence of identity as defined by the Rules. Hence the Verification and the Certification of Non-
Forum Shopping are fatally defective for failure to comply with the said Rules.

A jurat refers to an act in which an individual on a single occasion:

(a) appears in person before the notary public and presents an instrument or document;

(b) is personally known to the notary public or identified by the notary public through
competent evidence of identity as defined by these Rules;

(c) signs the instrument or document in the presence of the notary; and

(d) takes an oath or affirmation before the notary public as to such instrument or
document.

Under Section 12, Rule II of the 2004 Rules on Notarial Practice, competent evidence of
identity as used in the foregoing provision refers to the identification of an individual based on:

(a) at least one current identification document issued by an official agency bearing the
photograph and signature of the individual, such as but not limited to, passport, drivers
license, Professional Regulations Commission ID, National Bureau of Investigation clearance,
police clearance, postal ID, voters ID, barangay certification, Government Service and
Insurance System (GSIS) e-card, Social Security System (SSS) card, Philhealth card, senior
citizen card, Overseas Workers Welfare Administration (OWWA) ID, OFW ID, seamans book,
alien certificate of registration/immigrant certificate of registration, government office ID,
certification from the National Council for the Welfare of Disabled Persons (NCWDP),
Department of Social Welfare and Development (DSWD) certification; or

(b) the oath or affirmation of one credible witness not privy to the instrument, document
or transaction who is personally known to the notary public and who personally knows the
individual, or of two credible witnesses neither of whom is privy to the instrument, document or
transaction who each personally knows the individual and shows to the notary public
documentary identification.

Evidently, not being documents of identification issued by an official agency, the photocopies
of the IDs of private respondents Singson, Pasaqui, and Lominiqui from La Vista Association,
Inc., R.O. Barra Builders & Electrical Services, and St. Charbel Executive Village, respectively,
do not constitute competent evidence of their identities under Section 12 (a), Rule II of the
2004 Rules on Notarial Practice.

In the same vein, their joint-affidavit identifying Andales and assuring the CA that he was a
party-litigant is not competent evidence of Andaless identity under Section 12 (b), Rule II of
the same rules, considering that they themselves are privy to the instrument, in which Andaless
participation is sought to be proven. To note, it cannot be presumed that an affiant is personally
known to the notary public; the jurat must contain a statement to that effect. Tellingly, the
notarial certificate of the verification/certification of non-forum shopping attached to
private respondents petition before the CA did not state whether they presented
competent evidence of their identities, or that they were personally known to the notary
public, and, thus, runs afoul of the requirements of verification and certification against
forum shopping under Section 1, Rule 65, in relation to Section 3, Rule 46, of the Rules of
Court .

Fallo:

WHEREFORE, the petition is GRANTED. The Resolutions dated November 12, 2009 and
February 5, 2010 of the Court of Appeals in CA-G.R. SP No. 109427 are hereby REVERSED
and SET ASIDE. Accordingly, the petition for certiorari in CA-G.R. SP No. 109427 is
DISMISSED.

33. De Leon v. Chu

DE LEON v. CHU
G.R. No. 186522, September 02, 2015
BRION, J.:

DOCTRINE: The submission of a false certification of non-forum shopping does not

automatically warrant dismissal of the case, even if it might constitute contempt of court.
FACTS:

Petioners
Rowena C. De Leon as substituted by her children John Kevin C. De Leon and Eisenhower
Callumba
Respondents
Lolita Chu
Domingo Delos Santos
 De Leon filed a petition before RTC (LRC case No. 1322) in Gapan against respondent
Chu. De Leon demanded Chu's surrender of the TCT No. 2* covering a meter parcel of land
which she allegedly entrusted to Chu before she left for Saudi Arabia and which the latter
refused to return to her. She alleged that she bought the property from Domingo as evidence by
a Deed of Absolute Sale, however the said document also showed that of the entire parcel a
portion (550 sqm) was separately sold to Lolita.
On the other hand, the both Chu and Domingo filed a case against De Leon before the
RTC (Civil Case No. 2257)of Gapan for the annulment of the Deed of Sale and for the
cancellation of TCT No. 2*. Chu and Domingo alleged that Domingo sold to Lolita his 660 sqm
parcel of land through a DOAS, Chu entrusted the DOAS to De Leon before she left for Japan.
De Leon allegedly forged their signatures in to make it appear that Domingo transferred a 50-
square meter portion of the land to her and register the land in her name using such falsified
DOAS.
De Leon in her answer admitted that Domingo executed a DOAS in favour of Chu, but
claimed the three of them had an internal arrangement not to include her in the DOAS because
the Bureau of Lands had not yet approved the subdivision plan for Domingo's property.
She further claimed that she executed the allegedly forged documents upon the advice and
consent of Chu.
Both cases were consolidated.
RTC ruled in favor of Chu and Domingo, after finding that Rowena falsified their
signatures.
Rowena appealed before the CA, alleging that RTC erred in not dismissing Civil Case
No. 2257 despite the fact that Chu and Domingo are guilty of FORUM SHOPPING.
CA- denied the appeal. (Reason: The submission of a false certificate of non-forum
shopping only constitutes indirect contempt and will not cause the immediate dismissal of the
case unless a party deliberately committed forum shopping)

ISSUE: W/N the submission of FALSE CERTIFICATE OF NON-FORUM SHOPPING (FCNFS)

automatically warrant the dismissal of a case.

HELD: NO, the submission of FCNFS does not automatically warrant the dismissal of a case.
Under Rule 7, Section 5 of the ROC which prescribes the rule on certificates of non-forum
shopping, ***.The submission of a false certification or non-compliance with any of the
undertakings therein shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions***.

A violation of the abovementioned rule other than through willful and deliberate forum shopping
does not authorize the RTC to dismiss a case without motion and hearing. Even the
submission of a false certification of non-forum shopping does not automatically warrant
dismissal of the case, even if it might constitute contempt of court.

In the present case, the De Leon:

1. did not move for the dismissal of the petition in Civil Case No. 2257; or
2. to cite the respondents for indirect contempt; or
3. to show that the respondents committed wilful and deliberate forum shopping.

Hence, the CAs denial of De Leons appeal was proper.

RULE 8. MANNER OF MAKING ALLEGATIONS IN PLEADINGS.

34. Villalon v. Lirio

VILLALON vs. LIRIO

G.R. No. 183869, 3 August 2015
Justice Brion

Doctrine: All averments of fraud or mistake, the circumstances constituting fraud or mistake
must be stated with particularity, unlike in cases of malice, knowledge, or other conditions of the
mind which may be averred generally.

FACTS:

Parties:
Petitioner Leonardo E. Villalon
Respomdent Renato E. Lirio

Lirio and Semicon entered into a contract of lease covering Lirions properties in Pasig City.
Villalon, who was then Semicons President and Chairman of the Board, represented the lessee
corporation in the lease contract.

Prior to the expiration of the lease, Semicon terminated the contract and allegedly left
unpaid rentals, damages, and interest. Lirio demanded payment but Semicon and Villalon failed
to pay. As a result, Lirio filed a complaint for sum of money with prayer for preliminary
attachment against Semicon and Villalon. In his complaint, Lirio alleged that Semicon and
Villalon unjustly preterminated the lease and failed to pay the unpaid rentals despite demand.

In praying for the issuance of a preliminary attachment, Lirio claimed that Villalon
fraudulently and surreptitiously removed Semicons equipment, merchandise, and other effects
from the leased premises, preventing him to exercise his right, among others, to take
inventories of these effects, merchandise and equipment.

Villalon filed MTD on the ground that the complaint
against him. He argued that he is not a real partyininterest
officer of Semicon. He further contended that there was
complaint about any supposed wrongdoing on his part to
defendant.
failed to state a cause of action
in the action as he is merely an
no competent allegation in the
warrant his inclusion as a party

RTC: The RTC granted the MTD. The RTC concluded that the allegations clearly
showed that the collection of unpaid rentals and damages arose from the alleged breach
of the lease contract executed and entered into by Lirio and Semicon, and that the
conflict was between Lirio and Semicon only and did not include Villalon.

CA: The CA nullified the RTCs dismissal order and ruled that the RTC gravely abused
its discretion.

ISSUE: Whether Villalons liability arising from his purported fraudulent acts was established.

RULING: NO. The allegations in the complaint failed to particularly state how Villalon committed
fraud.
 Rule 8, Section 5 of the Rules of Court requires that in all averments of fraud or
mistake, the circumstances constituting fraud or mistake must be stated with particularity, unlike
in cases of malice, knowledge, or other conditions of the mind which may be averred generally.

In the present case, the only allegation of fraud in the complaint reads:

With intent to defraud the plaintiff and to prevent the plaintiff from
exercising his right [to be constituted or appointed as attorney-in-fact of the
defendant with power and authority to cause the premises to be opened, to take
inventories of all the defendants merchandise, effects, furniture, fixtures and/or
equipment therein and transfer the same to the plaintiffs bodega], the defendants
surreptitiously and fraudulently removed their merchandise, effects, and
equipment from the lease premises and transferred them to another location.

Lirios mere invocation of the words surreptitiously and fraudulently does not make the
allegation particular without specifying the circumstances of Villalons commission and
employment of fraud, and without delineating why it was fraudulent for him to remove Semicons
properties in the first place.

The allegation of fraud would have been averred with particularity had Lirio alleged, for
example, that Villalon removed the equipment under the false pretense that they needed repair
and refurbishing but the equipment were never returned; or that Villalon removed the
merchandise because Semicon needed to sell them in exchange for new supplies but no new
supplies were bought. No such allegation was ever made.

35. Ledda v BPI

GR No. 200868, November 21, 2012
J. Carpio

Doctrine: S7 R8 provides that whenever an action or defense is based upon a written

instrument or document, the substance of such instrument or document shall be set
forth in the pleading, and the original or a copy thereof shall be attached to the pleading
as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with
like effect be set forth in the pleading.

Facts:
Respondent BPI, through its credit card system, extends credit accommodations to its clientele
for the purchase of goods and availment of various services from accredited merchants, as well
as to secure cash advances from authorized bank branches or through automated teller
machines.

As one of Respondent BPIs valued clients, Petitioner (Ledda) was issued a pre-approved BPI
credit card. The BPI Credit Card Package, which included the Terms and Conditions governing
the use of the credit card, was delivered at petitioners residence on 1 July 2005. Thereafter,
Petitioner used the credit card for various purchases of goods and services and cash advances.
Petitioner defaulted in the payment of her credit card obligation, which Respondent BPI claimed
in their complaint amounted to P548,143. Respondent BPI sent letters to Petitioner demanding
the payment of such amount, representing the principal obligation with 3.25% finance charge
and 6% late payment charge per month.

Despite Respondent BPIs repeated demands, Petitioner failed to pay her credit card obligation
constraining Respondent BPI to file an action for collection of sum of money with the Regional
Trial Court, Makati City, Branch 61.

Trial Court declared Petitioner in default for failing to file Answer within the prescribed period,
despite receipt of the complaint and summons. Upon Petitioners motion for reconsideration, the
trial court lifted the default order and admitted Petitioners Answer Ad Cautelam.

While she filed a Pre-Trial Brief, Petitioner and her counsel failed to appear during the
continuation of the Pre-Trial. Hence, the trial court allowed Respondent BPI to present its
evidence ex-parte.

RTC: Ruled in favor of the Respondent BPI ordering Petitioner to pay Respondent BPI.

On appeal, Petitioner contends that the document containing the Terms and Conditions
governing the use of the BPI credit card is an actionable document contemplated in Section 7,
Rule 8 of the 1997 Rules of Civil Procedure which should be attached to the complaint.

CA: Debunked this argument. The Court of Appeals held that Respondent BPIs cause of action
is based on Petitioners availment of the banks credit facilities through the use of her
credit/plastic cards, coupled with her refusal to pay BPIs outstanding credit for the cost of the
goods, services and cash advances despite lawful demands.

Hence, this Petition, reiterating her contention with the CA that the Term and Conditions should
be attached in the complaint since it is an actionable document.

SC:
The contention lacks merit.

Under S7 R8, whenever an action or defense is based upon a written instrument or

document, the substance of such instrument or document shall be set forth in the pleading, and
the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may with like effect be set forth in the
pleading.

Here, the complaint is an action for collection of sum of money arising from Petitioners
default in her credit card obligation with Respondent BPI. Respondent BPIs cause of action is
primarily based on Petitioners (1) acceptance of the BPI credit card, (2) usage of the BPI credit
card to purchase goods, avail services and secure cash advances, and (3) non-payment of the
amount due for such credit card transactions, despite demands. In other words, BPIs cause of
action is not based only on the document containing the Terms and Conditions accompanying
the issuance of the BPI credit card in favor of Petitioner.

Therefore, the document containing the Terms and Conditions governing the use of the
BPI credit card is not an actionable document contemplated in Section 7, Rule 8 of the 1997
Rules of Civil Procedure. As such, it is not required by the Rules to be set forth in and attached
to the complaint.

36. Ogawa v Menigishi

ROSEA FONTELAR OGAWA, petitioner, vs. ELIZABETH GACHE MENIGISHI,

respondent G.R. No. 193089. July 9, 2012.
PERLASBERNABE, J.:

Doctrine: The requirement of an oath does not apply when the adverse party does not
appear to be party to the instrument (S8 R8)

Facts:

On January 26, 2004, Ogawa (petitioner) filed a complaint for sum of money, damages, breach
of good human relation and unjust enrichment before the RTC against Menigishi (respondent),
docketed as Civil Case No. 20047299, alleging that the latter borrowed from her the amounts of
P15,000.00, P100,000.00 and P8,000.00, in September 2000, August 2001, and March 2003,
respectively.

Unable to pay, respondent offered to sell her building and its improvements in Sorsogon City to
petitioner for a consideration of P1,500,000.00 with the agreement that her outstanding loans
with petitioner be deducted from the purchase price and the balance payable in installments. As
partial payment for the properties, petitioner remitted P150,000.00 and P250,772.90 to
respondent. Having paid huge amounts and in order to protect her proprietary rights, petitioner
then demanded for the execution of the corresponding deed of sale, but respondent backed out
from the deal and reneged on her obligations.

In her Answer with Counterclaim, respondent specifically denied her indebtedness to petitioner
and claimed that it was the latter who owed her 1,000,000.00 Yen, equivalent to about
P500,000.00, as evidenced by a receipt. Respondent also sought reimbursement of the
advances she allegedly made for the wedding expenses of petitioner and Yashoyuki in the
amount of 4,000,000.00 Yen.

RTC Ruling: respondent was indeed indebted to petitioner in the amounts of P150,000.00 and
P250,772.90 or the total amount of P400,772.90. It likewise disregarded the receipt presented
by respondent as proof of petitioners purported indebtedness of 1,000,000.00 Yen.

CA Ruling: the CA affirmed the RTCs awards of the sums of P150,000.00 and P250,772.90 in
favor of petitioner and sustained the denial of respondents counterclaim of 4,000,000.00 Yen
for lack of evidence. However, it gave probative value to the receipt for 1,000,000.00 Yen and
held it sufficient to establish petitioners indebtedness to respondent, considering the purported
admission of the formers counsel as well as petitioners own failure to specifically deny the
same under oath as provided for under Section 8, Rule 8 of the Rules of Court.

Issue:
Whether the disputed receipt not denied under oath sufficiently established petitioners
indebtedness to respondent?

Held:

No, there was no need to deny its genuineness and due execution under oath in accordance
with Section 8, Rule 8 of the Rules of Civil Procedure which provides:

Section 8. How to contest such documents.When an action or defense is founded upon a

written instrument, copied in, or attached to the corresponding pleading as provided in the
preceding Section, the genuineness and due execution of the instrument shall be deemed
admitted unless the adverse party, under oath, specifically denies them, and sets forth what he
claims to be the facts; but the requirement of an oath does not apply when the adverse
party does not appear to be party to the instrument or when compliance with an order for an
inspection of the original is refused.

A plain reading of the contents of Exhibit 1 negates any inference as to the nature of the
transaction for which the 1,000,000 Yen was received and who between the parties is the
obligor and the obligee. What is apparent is a mere written and signed acknowledgment that
money was received. There are no terms and conditions found therein from which a right or
obligation may be established. Hence, it cannot be considered an actionable document upon
which an action or defense may be founded.

The manifestation made in open court by Atty. Gerona, petitioners counsel, cannot be
construed as an admission of her liability. From their exchange, it cannot be clearly ascertained
who between the two signatories is the obligor and obligee. Atty. Geronas statement that the
one who usually prepares the receipt is the obligor or the creditor did not conclusively imply that
petitioner owed respondent 1,000,000.00 Yen, or vice versa. Hence, absent any other evidence
to prove the transaction for which the receipt was issued, the Court cannot consider Exhibit 1 as
evidence of a purported loan between petitioner and respondent which the former categorically
denied.

37. Sps. Dela Cruz v Concepcion

G.R. No. 172825; October 11, 2012
J. Peralta

Doctrine: General Rule: Section 1, Rule 9 of the Rules of Court states that defenses and
objections not pleaded either in a motion to dismiss or in the answer are deemed waived.

Exception: However, Section 5, Rule 10 of the Rules of Court allows the amendment to conform
to or authorize presentation of evidence. It envisions two scenarios, namely, when evidence is
introduced in an issue not alleged in the pleadings and no objection was interjected; and when
evidence is offered on an issue not alleged in the pleadings but this time an objection was
raised. When the issue is tried without the objection of the parties, it should be treated in all
respects as if it had been raised in the pleadings. On the other hand, when there is an objection,
the evidence may be admitted where its admission will not prejudice him.

Facts:
Plaintiff: Spouses Dela Cruz
Respondent: Ana Marie Conceapcion
Petitioners (as vendors) entered into a Contract to Sell with respondent (as vendee)
involving a house in Antipolo for a consideration of P2,000,000.00 plus interests. The
Respondent was able to settle the P2M. Respondent told petitioners that based on the
computation of her accountant as of July 6, 1997, her unpaid obligation which includes interests
and penalties was only P200,000.00. Petitioners agreed with respondent and said if
P200,000.00 is the correct balance, it is okay with us.
Meanwhile, the title to the property was transferred to respondent. Respondent claims that
the 200k remained unpaid despite repeated demands. Hence, the Complaint for Sum of Money
With Damages in RTC Antipolo.
In her Answer with Compulsory Counterclaim, respondent claimed that her unpaid
obligation to petitioners is only P200,000.00 as earlier confirmed by petitioners and not
P487,384.15 as later alleged in the complaint.
During the presentation of the parties evidence, in addition to documents showing the
statement of her paid obligations, respondent presented a receipt purportedly indicating
payment of the remaining balance. RTC granted Respondents counterclaim and later on
affirmed by CA.
Invoking the rule on judicial admission, petitioners insist that respondent admitted in her
Answer with Compulsory Counterclaim that she had paid only a total amount of P2 million and
that her unpaid obligation amounts to P200,000.00.They thus maintain that the RTC and the CA
erred in concluding that said amount had already been paid by respondent.

Issues: 1) Whether the Courts are correct in maintaining the judicial admissions of respondent
in her Answer with Compulsory Counterclaim as to the existence of the outstanding obligation of
200k.

Ruling: Yes. The Courts are correct.

Section 1, Rule 9 of the Rules of Court states that defenses and objections not pleaded either in
a motion to dismiss or in the answer are deemed waived. Hence, respondent should have been
barred from raising the defense of payment of the unpaid P200,000.00.

Section 5, Rule 10 of the Rules of Court allows the amendment to conform to or authorize
presentation of evidence. It envisions two scenarios, namely, when evidence is introduced in an
issue not alleged in the pleadings and no objection was interjected; and when evidence is
offered on an issue not alleged in the pleadings but this time an objection was raised. When the
issue is tried without the objection of the parties, it should be treated in all respects as if it had
been raised in the pleadings. On the other hand, when there is an objection, the evidence may
be admitted where its admission will not prejudice him.

Thus, while respondent judicially admitted in her Answer that she only paid P2 million and that
she still owed petitioners P200,000.00, respondent claimed later and, in fact, submitted an
evidence to show that she already paid the whole amount of her unpaid obligation. It is
noteworthy that when respondent presented the evidence of payment, petitioners did not object
thereto. When the receipt was formally offered as evidence, petitioners did not manifest their
objection to the admissibility of said document on the ground that payment was not an issue.
Hence, the Courts are correct in its decision to hold that the payment has already been
satisfied.

38. Fernando Medical Enterprises v. Wesleyan University

Case title: Fernando vs. Wesleyan

G.R. No / Date: G.R. No. 207970. January 20, 2016
Justice: BERSAMIN, J.

Doctrine: Any material averment in the complaint not so specifically denied are deemed
admitted except an averment of the unliquidated damages.

Facts:

From January 9, 2006 until February 2, 2007, the petitioner, a domestic corporation dealing with
medical equipment and supplies, delivered to and installed medical equipment and supplies at
the respondent's hospital. According to the petitioner, the respondent paid only P67,3 57,683.23
of its total obligation of P123,901,650.00, leaving unpaid the sum of P54,654,195.54.

However, on February 11, 2009, the petitioner and the respondent entered into an agreement
whereby the former agreed to reduce its claim to only P50,400,000.00, and allowed the latter to
pay the adjusted obligation on installment basis within 36 months.

In the letter dated May 27, 2009, the respondent notified the petitioner that its new
administration had reviewed their contracts and had found the contracts defective and
rescissible due to economic prejudice or lesion; and that it was consequently declining to
recognize the February 11, 2009 agreement because of the lack of approval by its Board of
Trustees and for having been signed by Maglaya whose term of office had expired.

On June 24, 2009, the petitioner sent a demand letter to the respondent. Due to the
respondent's failure to pay as demanded, the petitioner filed its complaint for sum of money in
the RTC.

The respondent moved to dismiss the complaint, as a special affirmative defenses, upon the
following grounds, namely: (a) lack of jurisdiction over the person of the defendant; (b) improper
venue; (c) litis pendentia; and (d) forum shopping. In support of the ground of litis pendentia, it
stated that it had earlier filed a complaint for the rescission of the four contracts and of the
February 11, 2009 agreement in the RTC in Cabanatuan City; and that the resolution of that
case would be determinative of the petitioner's action for collection. In its answer,
Issue:

Whether Wesleyans defendants manner of denial effective as specific denial?

Ruling:

No. Considering that paragraph no. of the complaint averred matters that the defendant ought
to know or could have easily known, the answer did not specifically deny such material
averments. It is settled that denials based on lack of knowledge or information of matters clearly
known to the pleader, or ought to be known to it, or could have easily been known by it are
insufficient, and constitute ineffective or sham denials.

That the defendant qualified its admissions and denials by subjecting them to its special and
affirmative defenses of lack of jurisdiction over its persons, improper venue, litis pendencia, and
forum shopping was of no consequence because these affirmative defenses by their nature,
involved matters extrinsic to the merits of the claim, and thus did not negate the material
averments of the complaint.