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PERFECTO JABALDE, plaintiff-appellant,
vs.
PHILIPPINE NATIONAL BANK, defendant-appellee.
Facts:
Plaintiff-appellant deposited a sum of money with defendant-
appellee Philippine National Bank (PNB)
Plaintiff filed this complaint, seeking the recovery of said amount
(P10,000. First P5,000 – Phil currency; Second 5000 – Phil
currency and Japanese military notes)
Basis: a passbook
Defendant filed an answer which was not under oath and
admitting the making of the foregoing deposits, but denying the
dates indicated in the passbook,
PNB alleged that there were discrepancies in said passbook,
likely due to tampering on the part of plaintiff
Issue: W/N defendant PNB's failure to deny under oath the
entries in the passbook as 'copied' in the complaint constitutes
an admission of the genuineness and due execution of the
document
Held: NO
General rule: such failure is tantamount to such an admission
But this rule is inapplicable in the case at bar because the
plaintiff submitted evidence indicating what was allegedly the
dates of deposit, but did not raise an objection when witnesses
testified on different dates of deposit
By this omission, the plaintiff waived the defendant's failure to
deny under oath the genuineness and execution of the
passbook entries
Hence, PNB may interpose a defense assailing the
genuineness and due execution of the passbook entries
CENTRAL SURETY and INSURANCE
COMPANY, petitioner, vs.
C. N. HODGES and THE COURT OF
APPEALS, respondents.
FACTS:
lots Nos. 1226 and 1182 of the Cadastral Survey had been sold
by C. N. Hodges to Vicente M. Layson.In order that he could
use said lots as security for a loan he intended to apply from a
bank, Layson persuaded Hodges to execute in his (Layson's)
favor a deed of absolute sale over the properties, with the
understanding that he would put up a surety bond to guarantee
the payment of said balance. Layson executed, in favor of
Hodges, a promissory and indicated there in the principal and
interest and and the sum of P1,551.60, for attorney's fees and
costs in case of default in the payment of the principal or
interest of said note. To guarantee the same the Central Surety
and Insurance Company —(petitioner) — through the manager (
MRS.MESA)of its executed in favor of Hodges the surety bond .
Layson defaulted in the discharge of his obligation, Hodges
demanded payment from the petitioner but Layon failed to settle
it.

CFI-ILOIOLO
Hodges file recovery jointly and severally the sum against
Layson and petitioner
In his answer to the complaint, Layson admitted the formal
allegations and denied the other allegations. While petitioner
was declared in default.
CFI-ruled in favor of HODGE
Petitioner filled a MR and a motion for relief under Rule 38-CFI
set aside decision against the petitioner and admitted its
answer.
ANSWER OF PETITIONER :petitioner disclaimed liability under
the surety bond in question, upon the ground (a) that the same
is null and void, it having been issued by Mrs. Rosita Mesa after
her authority therefor had been withdrawn (b) that even under
her original authority Mrs. Mesa could not issue surety bonds in
excess of P8,000.00 without the approval of petitioner's main
office which was not given to the surety bond in favor of
Hodges; and (c) that the present action is barred by the
provision in the surety bond to the effect that all claims and
actions thereon should be filed within three (3) months from the
date of its expiration on January 23, 1955.
CFI-ruled for Pet. HODGES went to CA-ruled for HODGES
hence petitioner went to SC
PET contention: they assails the finding of the Court of Appeals
to the effect that the petitioner is liable for the full amount of
surety bond 17,826.08 — despite the fact that it exceeded the
sum of P8,000.00 and hence, required, for its validity and
binding effect as against petitioner herein, the express approval
and confirmation of its Manila office, which were not secured —
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in view of petitioner's failure to deny under oath the genuineness
and due execution of said bond, copy of which was attached to
the complaint
RULLING:
Section 8 of Rule 8 of the Rules of Court: 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 this provision does not apply when
the adverse party does not appear to be a party to the
instrument or when compliance with an order for an inspection
of the original instrument is refused.
IN THIS CASE: The parties acted in complete disregard of or
wholly overlooked the rule above-quoted. Hodges had neither
objected to the evidence introduced by petitioner herein in order
to prove that Mrs. Mesa had no authority to issue a surety bond,
much less one in excess of P8,000.00, and took no exception to
the admission of said evidence.
Hence, Hodges must be deemed to have waived the benefits of
said rule and petitioner was held liable only for the sum of
P8,000.00 and not the entire amount.
Capitol Motors, plaintiff-appellee vs. Yabut, defendant-appellant
(1970)
1966, Capitol Motors filed a complaint against Yabut
Yabut executed a promissory note for the sum of P30, 134. 25
Payable in 18 equal monthly installments with 12% interest per
annum

The note states that if Yabut fails to pay 2 successive
installments, the principal would become due and demandable
with additional 25% of the principal and interest due (for
attorney’s fees and costs of collection).
Several demands were made, but Yabut still refused to pay
On April 27, 1966, and within the reglementary period, Yabut,
through his counsel, filed an answer which reads:
DEFENDANT through counsel alleges:
1. Paragraph 1 of the complaint is admitted.
2. Paragraphs 2, 3, 4, 5, 6 and 7 of the complaint are
specifically denied for lack of knowledge sufficient to form a
belief as to the truth thereof.
WHEREFORE, it is respectfully prayed that the Complaint be
dismissed with costs against the plaintiff.
On June 16, 1966, the plaintiff filed a motion for judgment on the
pleadings, on the ground that the defendant, not having set forth
in his answer the substance of the matters relied upon by him to
support his denial, had failed to deny specifically the material
allegations of the complaint, hence, must be deemed to have
admitted them.
The defendant did not file an opposition to the motion.
On September 13, 1966, after hearing on the motion, the court
issued an order granting the said motion and considering the
case submitted for decision on the basis of the pleadings; and
on January 9, 1967, the court rendered judgment granting in
toto the plaintiff's prayer in its complaint.
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Yabut argues that the court erred in considering him as having
failed to deny specifically the material allegations of the
complaint
He argues that there are only 3 modes of specific denials
(1) by specifying each material allegation of fact in the complaint
the truth of which the defendant does not admit, and, whenever
practicable, setting forth the substance of the matters which he
will rely upon to support his denial or
(2) by specifying so much of an averment in the complaint as is
true and material and denying only the remainder or
(3) by stating that the defendant is without knowledge or
information sufficient to form a belief as to the truth of a material
averment in the complaint, which has the effect of a denial, and
he has adopted the third mode of specific denial, his answer
tendered an issue, and, consequently the court a quo could not
render a valid judgment on the pleadings.
ISSUE: Whether or not Yabuts answer constitutes a specific
denial under the Rules of Court?
HELD: NO, BUT it was denied because Yabut did not oppose
the motion for judgment on the pleadings filed by plaintiff
appellee;
We agree with defendant-appellant that one of the modes of
specific denial contemplated in Section 10, Rule 8, is a denial by
stating that the defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment
in the complaint.
The rule authorizing an answer to the effect that the defendant
has no knowledge or information sufficient to form a belief as to
the truth of an averment and giving such answer the effect of a

denial, does not apply where the fact as to which want of
knowledge is asserted, is so plainly and necessarily within the
defendant's knowledge that his averment of ignorance must be
palpably untrue.
In National Marketing Corporation vs. De Castro, 106 Phil. 803
(1959)
in his answer to the appellee's complaint, he merely alleged that
'he has no knowledge or information sufficient to form a belief as
to the truth of the matters contained in paragraphs 3, 4, 5 and 6
so much so that he denies specifically said allegations.' A denial
is not specific simply because it is so qualified.
Material averments in a complaint, other than those as to the
amount of damage, are deemed admitted when not specifically
denied.
The court may render judgment upon the pleadings if material
averments in the complaint are admitted.
It becomes evident from all the above doctrines that a mere
allegation of ignorance of the facts alleged in the complaint, is
insufficient to raise an issue; the defendant must aver positively
or state how it is that he is ignorant of the facts so alleged.
There are two other reasons why the present appeal must fail.
First. The present action is founded upon a written instrument
attached to the complaint, but defendant-appellant failed to deny
under oath the genuineness and due execution of the
instrument; hence, the same are deemed admitted. (Section 8,
Rule 8 of the Revised Rules of Court
Second. Defendant-appellant did not oppose the motion for
judgment on the pleadings filed by plaintiff appellee; neither has
he filed a motion for reconsideration of the order of September
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13, 1966, which deemed the case submitted for decision on the
pleadings, or of the decision rendered on January 9, 1967.
In Santiago vs. Basilan Lumber Company, G.R. No. L-15532,
October 31, 1963 (9 SCRA 349), this Court said:
It appears that when the plaintiff moved to have the case
decided on the pleadings, the defendant interposed no objection
and has practically assented thereto. The defendant, therefore,
is deemed to have admitted the allegations of the complaint, so
that there was no necessity for the plaintiff to submit evidence of
his claim.
FLUOR DANIEL, INC.-PHILIPPINES, Petitioner, vs. E.B.
VILLAROSA & PARTNERS CO., LTD., Respondent (2007)
Doctrine: The complaint may be dismissed for lack of cause of
action if it is obvious from the complaint and its annexes that the
plaintiff is not entitled to any relief.
Facts:
Petitioner Fluor Daniel, Inc.-Philippines [FDIP] entered into an
agreement with Fil-Estate Properties, Inc. [Fil-Estate] for the
construction of the Fairways & Bluewater, Newcoast Island
Resort in Boracay Island.
- FDIP engaged with E.B. Villarosa & Partners Co., Ltd.
[respondent] as one of the contractors to provide services for
the said project. They executed separate contracts for: (1) civil
structure and architecture; (2) plumbing and fire protection; and
(3) millworks. Each contract has a recurring provision which

states: Payment of the billings shall be subject to the timely
receipt of similar payments from the client by FDIP.
- However, Fil-Estate failed to satisfy petitioner monthly
progress billing. Hence, petitioner did not pay respondent.
- FDIP suspended the project and issued a notice of suspension
of work to Villarosa. Thus, the latter demanded payment for
suspension cost and works so far performed.
- Villarosa, believing that FDIP was in bad faith, filed a complaint
with RTC of Makati City for sum of money and damages. FDIP
however filed a motion to dismiss on the ground that the
complaint failed to state a cause of action.
- Trial Court denied the motion to dismiss as well as the motion
for reconsideration. The court declared that the filing of the last
pleading and the consequent joinder of issues has ripened the
case for pre-trial.
- Subsequently, trial court granted Villarosa’s motion to amend
complaint with leave of court. But it denied FDIP’s motion to
suspend proceedings.
- FDIP filed with the Court of Appeals a special civil action for
certiorari. CA affirmed orders of lower court denying the motion
to dismiss and the reconsideration thereof. Hence, this petition
for review on certiorari.
- Petitioner contended that: (1) the complaint failed to state the
operative facts which would give rise to a cause of action
against it; (2) the annexes attached to respondent’s complaint
show its admission that payment of its billings was subject to the
condition of timely receipt of similar payments and that those
annexes should be considered in determining respondent’s
cause of action.
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- Respondent argued that: (1) the three elements of a cause of
action are all present [namely: (i) legal right of respondent to
demand payment from petitioner; (ii) obligation of petitioner to
pay respondent; and (iii) failure of petitioner to pay respondent];
(2) the annexes attached to the complaint bear no relevance,
not having been admitted by stipulation.
Issue:
WON the complaint, taken with the annexed contracts attached
to it, has insufficient allegations of all the operative facts which
would give rise to a cause of action against FDIP. [Yes, there is
insufficient allegations-> no cause of action-> motion to dismiss
shall be granted.]
Held/Ratio:
The essential elements of a cause of action are as follows: 1) A
right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; 2) An obligation on the part
of the defendant not to violate such right; and 3) An act or
omission on the part of the defendant in violation of the right of
the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an
action for recovery of damages or other relief. The occurrence
of the last element that a cause of action arises gives the
plaintiff a right to file an action in court for recovery of damages
or other relief. The test of sufficiency of facts alleged in the
complaint as constituting a cause of action is whether or not
admitting the facts alleged, the court could render a valid verdict
in accordance with the prayer of the complaint. In determining
sufficiency of cause of action, the court takes into account only

the material allegations of the complaint and no other; but in
some cases, the court considers the documents attached to the
complaint to truly determine sufficiency of cause of action.
- We have ruled that a complaint should not be dismissed for
insufficiency of cause of action if it appears clearly from the
complaint and its attachments that the plaintiff is entitled to
relief. The converse is also true. The complaint may be
dismissed for lack of cause of action if it is obvious from the
complaint and its annexes that the plaintiff is not entitled to any
relief. In this case, we note that records show that recurring in
each of the three contracts is the provision that payment by
petitioner shall be subject to its timely receipt of similar
payments from Fil-Estate. On their face, the said attached
contracts clearly require a specific condition before petitioner
may be held liable for payment. The complaint, however, failed
to state that the said condition had been fulfilled. Without the
said condition having taken place, petitioner cannot be said to
have breached its obligation to pay.
CAVILI VS FLORENDO
Private respondents filed a civil case with the CFI of Negros
Oriental against petitioners for Partition, Accounting, and
Damages. The case was raffled to Branch I presided over by
Judge Augusto S. Villarin- summons was issued to the 3
petitioners, all at Bayawan Negros Oriental which was the
address indicated in the complaint.
After trying to effect service, the process server went back to the
court with the following return of service to Quirino and Primitivo
Cavili not contacted, according to Perfecta Cavili, subject
persons is staying in Kabangkalan, Negros Occidental
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Atty. Jose P. Alamino filed a motion for extension to answer in
behalf of the defendants, manifesting the representation of his
client Perfecta Cavili that she will inform her brothers Primitivo
and Quirino about the case.
Defendants, failed to file their answer within the request period
and upon motion of the plaintiffs, the defendants were declared
in default on October 5, 1979.
Records however show that a Manifestation was filed by Atty.
Jose P. Alamino informing the court that since he never met
Primitivo and Quirino Cavili, who are residents of another
province, he desisted from further appearing in the case in their
behalf.
December 1979 - Atty. Alamillo filed a motion for new trial in
behalf of the defendants on grounds of lack of jurisdiction and,
with a meritorious defense that the properties sought to be
partitioned have already been the subject of a written partition
agreement between the direct heirs of the late Bernardo Cavili
who are the predecessors of the parties in this case.
July 1981 – after a re-raffle of the case, Judge Cipriano
Vamenta whom the case had been assigned, directed the
execution of the October 5, 1979 (declaration of default)
decision without qualification ruling that the petitioners' remedy
should have been appeal rather than new trial. Their motion for
reconsideration having been denied. The defendants, now
petitioners, brought the case to this Court through a petition for
certiorari.
Oct. 1982 –Petition for certionari was granted
At the pre-trial & trial - defendants, (now petitioners), presented
Perfecta Cavili dela Cruz as their 1st witness.

The respondents moved for her disqualification as a witness on
the ground that having been declared in default, Perfecta Cavili
has lost her standing in court and she cannot be allowed to
participate in all premise the even as a witness. The court,
through the respondent judge, sustained the respondents'
contention and disqualified her from testifying.
1. WHETHER OR NOT PERFECTA CAVILI IS DISQUALIFIED
AS A WITNESS NO. Section 18 of Rule 130 . Witnesses; their
qualifications. — Except as provided in the next succeeding
section, all persons who, having organs of sense, can perceive,
and perceiving, can make known their perception to others, may
be witnesses. Neither parties nor other persons interested in the
outcome of a case shall be excluded; nor those who have been
convicted of crime; nor any person on account of his opinion on
matters of religious belief.
There is no provision of the Rules disqualifying parties declared
in default from taking the witness stand for non-disqualified
parties. The law does not provide default as an exception. The
specific enumeration of disqualified witnesses excludes the
operation of causes of disability other than those mentioned in
the Rules.
General Rule: where there are express exceptions, these
comprise the only limitations on the operation of a statute and
no other exception will be implied. The Rules should not be
interpreted to include an exception not embodied therein.
2. WHETHER OR NOT PETITIONERS (PRIMITIVO &
QUIRINO) ARE IN DEFAULT AND HAVE LOST STANDING IN
COURT.
NO. Section 2 of Rule 18 - Effect of order of default. — Except
as provided in section 9 of Rule 13, a party declared in default
shall not be entitled to notice of subsequent proceedings nor to
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take part in the trial.They advance the argument that to allow
Perfecta Cavili to stand as witness would be to permit a party in
default "to take part in the trial." An explanation of the Rule is in
order.
Loss of standing in court is the consequence of an order of
default. Thus, a party declared in default is considered out of
court and cannot appear therein, adduce evidence, and be
heard and for that reason he is not entitled to notice.
However, "loss of pending" must be understood to mean only
the forfeiture of one's rights as a party litigant, contestant or
legal adversary. A party in default loses his right to present his
defense, control the proceedings, and examine or cross-
examine witnesses. He has no right to expect that his pleadings
would be acted upon by the court nor may he object to or refute
evidence or motions filed against him. There is nothing in the
rule, however, which contemplates a disqualification to be a
witness or a opponent in a case. Default does not make him an
incompetent.
A party in default may thus be cited as a witness by his co-
defendants who have the standing and the right to present
evidence which the former may provide. The incidental benefit
giving the party in default the opportunity to present evidence
which may eventually redound to his advantage or bring about a
desired result, through his co-defendants, is of minor
consequence.
Of greater concern or importance in allowing the presence of
Perfecta Cavili as a witness in the case at bar, is the
preservation of the right of petitioners Quirino and Primitivo
Cavili to secure the attendance of witnesses and the production
of evidence in their behalf. To reject Perfecta Cavili's

presentation of testimonial evidence would be to treat Primitivo
and Quirino, as if they too were in default.
There is no reason why the latter should also be made to bear
the consequences of Perfecta's omission. Moreover, we cannot
deprive Quirino and Primitivo of the only instrument of proof
available to them, as Perfecta alone has been in possession
and administration of the claim.
Petition is hereby GRANTED.
PacetevsCarriaga
231 SCRA 321
FACTS:
Concepcion Alanis filed a complaint on October 1979, for the
Declaration of Nullity of Marriage between her erstwhile
husband Enrico Pacete and one Clarita de la Concepcion, as
well as for legal separation between her and Pacete, accounting
and separation of property. She averred in her complaint that
she was married to Pacete on April 1938 and they had a child
named Consuelo; that Pacete subsequently contracted a
second marriage with Clarita de la Concepcion and that she
learned of such marriage only on August 1979. Reconciliation
between her and Pacete was impossible since he evidently
preferred to continue living with Clarita.
The defendants were each served with summons. They filed an
extension within which to file an answer, which the court partly
granted. Due to unwanted misunderstanding, particularly in
communication, the defendants failed to file an answer on the
date set by the court. Thereafter, the plaintiff filed a motion to
declare the defendants in default, which the court forthwith
granted. The court received plaintiffs’ evidence during the
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hearings held on February 15, 20, 21, and 22, 1980. After trial,
the court rendered a decision in favor of the plaintiff on March
17,1980.
ISSUE: Whether or not the RTC gravely abused its discretion in
denying petitioner’s motion for extension of time to file their
answer, in declaring petitioners in default and in rendering its
decision on March 17, 1980 which decreed the legal separation
of Pacete and Alanis and held to be null and void the marriage
of Pacete to Clarita.
HELD: The Civil Code provides that “no decree of legal
separation shall be promulgated upon a stipulation of facts or by
confession of judgment. In case of non-appearance of the
defendant, the court shall order the prosecuting attorney to
inquire whether or not collusion between parties exists. If there
is no collusion, the prosecuting attorney shall intervene for the
State in order to take care that the evidence for the plaintiff is
not fabricated.”
The above stated provision calling for the intervention of the
state attorneys in case of uncontested proceedings for legal
separation (and of annulment of marriages, under Article 88) is
to emphasize that marriage is more than a mere contract.
Article 103 of the Civil Code, now Article 58 of the Family Code,
further mandates that an action for legal separation must “in no
case be tried before six months shall have elapsed since the
filing of the petition,” obviously in order to provide the parties a
“cooling-off” period. In this interim, the court should take steps
toward getting the parties to reconcile.
The significance of the above substantive provisions of the law
is further or underscored by the inclusion of a provision in Rule
18 of the Rules of Court which provides that no defaults in
actions for annulments of marriage or for legal separation.

Therefore, “if the defendant in an action for annulment of
marriage or for legal separation fails to answer, the court shall
order the prosecuting attorney to investigate whether or not a
collusion between the parties exists, and if there is no collusion,
to intervene for the State in order to see to it that the evidence
submitted is not fabricated.”
G.R. No. 101789. April 28, 1993. BHAGWAN RAMNANI,
petitioner, vs. COURT OF APPEALS, HON.
BUENAVENTURA J. GUERRERO, as Regional Trial Court
Judge of Makati, Metro Manila, Branch 133, SPOUSES
CENON G. DIZON and JULIETTE B. DIZON, respondents.
Bernardo D. Calderon for petitioner. Zosimo Cuasay for
private respondent. SYLLABUS 1. REMEDIAL LAW; CIVIL
PROCEDURE; PRE-TRIAL; FAILURE TO APPEAR AT PRE-
TRIAL CONFERENCE; REMEDIES AVAILABLE. — The basic
rule is found in Section 2, Rule 20, viz: "A party who fails to
appear at a pre-trial conference may be non-suited or
considered as in default." As held in Lina v. Court of Appeals,
the remedies available to a defendant in the regional trial court
who has been declared in default are: a) The defendant in
default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of
default on the ground that his failure to answer was due to
fraud, accident, mistake or excusable neglect, and that he has a
meritorious defense; (Sec. 3, Rule 18) b) If the judgment has
already been rendered when the defendant discovered the
default, but before the same has become final and executory,
he may file a motion for new trial under Section 1(a) of Rule 37;
c) If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief
under Section 2 of Rule 38; and d) He may also appeal from the
judgment rendered against him as contrary to the evidence or to
the law, even if no petition to set aside the order of default has
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been presented by him. 2. ID.; ID.; DEFAULTS; RELIEF FROM
ORDER OF DEFAULT; REQUIREMENTS; NOT SATISFIED IN
CASE AT BAR. — A satisfactory showing by the movant of the
existence of fraud, accident, mistake or excusable neglect is an
indispensable requirement for the setting aside of a judgment of
default or the order of default. After going over the pleadings of
the parties and the decision of the respondent court, we find that
the motion to lift the order of default was properly denied for
non-compliance with this requirement. The defendants were
less than conscientious in defending themselves and protecting
their rights before the trial court. They did not pay proper
attention and respect to its directive. The petitioner has not
shown that his and his wife's failure to attend the pre-trial
hearing as required was due to excusable neglect, much less to
fraud, accident or mistake. A meritorious defense is only one of
the two conditions. Even if it be assumed for the sake of
argument that the private respondents did owe Josephine
Ramnani P900,000, as alleged in the counterclaim, that
circumstance alone is not sufficient to justify the lifting of the
order of default and the default judgment. The obvious reason is
that a meritorious defense must concur with the satisfactory
reason for the non-appearance of the defaulted party. There is
no such reason in this case. 3. ID.; ID.; ORDINARY APPEAL;
APPROPRIATE REMEDY IN CASE AT BAR; CASE OF PISC
VS. HONTANOSAS, NOT APPLICABLE. — The appropriate
remedy is an ordinary appeal under Section 2 of Rule 41 of the
Rules of Court providing in part as follows: A party who has
been declared in default may likewise appeal from the judgment
rendered against him as contrary to the evidence or to the law,
even if no petition for relief to set aside the order of default has
been presented by him in accordance with Rule 38. In
questioning the dismissal of its petition by the respondent court,
the petitioner invokes the case of Pioneer Insurance and Surety
Corporation v. Hontanosas, (78 SCRA 447) where the Court

sustained the challenge to an order of default in a petition for
certiorari rather than in an ordinary appeal, which was held as
not an adequate remedy. That case is not applicable to the
present petition. Certiorari was allowed in that case because the
petitioner was illegally declared in default. The Court held that,
first, the petitioner could not be compelled to attend an
unnecessary second pre-trial after it had indicated at the earlier
pre-trial that there was no possibility of an amicable settlement;
second, the pre-trial was premature because the last pleading
had not yet been filed at the time; and third, there was
insufficient notice of the pre-trial to the petitioner. In the case at
bar, no such irregularities in the pre-trial have been alleged by
the petitioner. 4. ID.; SPECIAL CIVIL ACTION; CERTIORARI;
WHEN APPROPRIATE; RATIONALE. — As we held in Pure
Foods Corporation v. NLRC (171 SCRA 415): It must
emphatically be reiterated, since so often is it overlooked, that
the special civil action for certiorari is a remedy designed for the
correction of errors of jurisdiction and not errors of judgment.
The reason for the rule is simple. When a court exercises its
jurisdiction, an error committed while so engaged does not
deprive it of the jurisdiction being exercised when the error is
committed. If it did, every error committed by a court would
deprive it of its jurisdiction and every erroneous judgment would
be a void judgment. This cannot be allowed. The administration
of justice would not survive such a rule. Consequently, an error
of judgment that the court may commit in the exercise of its
jurisdiction is not correctible through the original civil action of
certiorari. 5. ID.; ID.; ID.; NOT PROPER ABSENT SHOWING
OF GRAVE ABUSE OF DISCRETION. — Even on the
supposition that certiorari was an appropriate remedy, the
petition would still fail because it has not been clearly shown
that the trial court committed grave abuse of discretion in
refusing to set aside the default order and the default judgment.
We have held in many cases, including Pahilanga v. Luna, (164
10
SCRA 725) that: It is within the sound discretion of the court to
set aside an order of default and to permit a defendant to file his
answer and to be heard on the merits even after the
reglementary period for the filing of the answer has expired, but
it is not error, or an abuse of discretion, on the part of the court
to refuse to set aside its order of default and to refuse to accept
the answer where it finds no justifiable reason for the delay in
the filing of the answer. In motions for reconsideration of an
order of default, the moving party has the burden of showing
such diligence as would justify his being excused from not filing
the answer within the reglementary period as provided by the
Rules of Court, otherwise, these guidelines for an orderly and
expeditious procedure would be rendered meaningless. Unless
it is shown clearly that a party has justifiable reason for the
delay the court will not ordinarily exercise its discretion in his
favor. The above doctrine is applicable to the inexcusable
neglect of the herein petitioner and his wife to appear at the pre-
trial hearing duly scheduled and of which they were properly
notified. DECISION CRUZ, J p: On March 13, 1990, the
spouses Juliette Dizon and Cenen Dizon filed a complaint in the
Regional Trial Court of Makati against the spouses Josephine
Anne Ramnani and Bhagwan Ramnani for the collection of a
sum of money representing the alleged unremitted value of
jewelry received by Josephine from Juliette on consignment
basis. Josephine Ramnani submitted an answer with
counterclaim 2 in which she alleged inter alia: (a) That although
she did receive pieces of jewelry worth P934,347.00 from Dizon,
the latter had likewise received from her jewelries worth
P1,671,842,00, including cash and unpaid checks in the amount
of P159,742.50; (b) That she paid Dizon P50,000; and (c) That
Dizon still owes her P787,495.00; The trial court set the case for
pre-trial on August 14, 1990, 3 but the Ramnanis did not
appear. Consequently, they were declared in default. 4 On
September 12, 1990, they filed a motion to lift the order of

default, but this was denied on November 20, 1990. On October
26, 1990, conformably to the default order, evidence of the
Dizon spouses was received ex parte. On January 28, 1991,
Judge Buenaventura J. Guerrero rendered judgment against the
Ramnanis, holding them liable to the plaintiffs in the amounts of
P884,347.00, representing the principal obligation plus legal
interest thereon from March 13, 1990, until fully paid;
P100,000.00 as moral damages; and P20,000.00 as exemplary
damages. They were also required to pay P50,000.00 as
attorney's fees, and the costs of the suit. The Ramnanis filed a
motion for reconsideration on the ground that a "personal
obligation contracted by the wife without the consent of the
husband (was) being made enforceable against the spouses'
conjugal partnership despite absence of any allegation and
proof that the same redounded to the benefit of the family as
required by Article 121 of the Family Code." 7 The motion was
denied on April 11, 1991. On April 29, 1991, Bhagwan Ramnani
filed a petition for certiorari before the respondent Court of
Appeals imputing error to the trial court: (1) in denying the
motion to lift order declaring petitioner as in default despite a
clear showing of a meritorious defense; (2) in not considering
petitioner's reason for failure to attend pre-trial as excusable
neglect. In a decision dated May 10, 1991, the Court of Appeals
dismissed the petition, holding that certiorari was not the proper
remedy. 9 The respondent court said: Petitioners alleged that
the respondent court erred and committed grave abuse of
discretion and/or acted in excess of jurisdiction in assigning its
Branch Clerk of Court as the hearing commissioner for the
purpose of the ex parte reception of plaintiffs' evidence (par. 19,
Petition); that the questioned Decision failed to specify whether
defendants are solidarily or only jointly liable (par. 20, Petition);
and that petitioner had a valid and meritorious defense (par. 21,
Petition). These are matters that could very well be ventilated in
an ordinary appeal. It should be stressed that the writ of
11
certiorari issues for the correction of errors of jurisdiction only or
grave abuse of discretion amounting to lack or excess of
jurisdiction. It cannot be legally used for any other purpose
(Silverio vs. Court of Appeals, 141 SCRA 527). Mere error of
judgment cannot be a proper subject of the special civil action
for certiorari (Zapata vs. NLRC, 175 SCRA 56). Further, it is a
settled rule that certiorari cannot be made a substitute for an
perform the function of an appeal (People vs. Cuaresma, 172
SCRA 415). The petitioner has come to this Court to challenge
that decision. He avers that the Court of Appeals erred in
upholding the refusal of the trial court to set aside the order of
default and the default judgment thereafter issued. The basic
rule is found in Section 2, Rule 20, viz: "A party who fails to
appear at a pre-trial conference may be non-suited or
considered as in default." As held in Lina v. Court of Appeals, 10
the remedies available to a defendant in the regional trial court
who has been declared in default are: a) The defendant in
default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of
default on the ground that his failure to answer was due to
fraud, accident, mistake or excusable neglect, and that he has a
meritorious defense; (Sec. 3, Rule 18) b) If the judgment has
already been rendered when the defendant discovered the
default, but before the same has become final and executory,
he may file a motion for new trial under Section 1(a) of Rule 37;
c) If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief
under Section 2 of Rule 38; and d) He may also appeal from the
judgment rendered against him as contrary to the evidence or to
the law, even if no petition to set aside the order of default has
been presented by him. (Sec. 2, Rule 41) The first remedy was
adopted by the petitioner but his motion to lift the order of
default was denied. According to the trial court: Defendants'
non-appearance is inexcusable. It is unbelievable their former

lawyer did not explain to them the mandatory character of their
appearance. Their invocation of the deteriorating health of
defendant Josephine necessitating her trip abroad for
appropriate medical treatment, is unavailing. There is no
medical certificate to attest such illness. Besides, at the time of
the hearing of the motion on October 19, 1990, counsel for the
defendants admitted that Josephine had not yet arrived from the
States, despite their averment in their motion she would "only be
back late September or early October of this year." This only
indicates her light regard of her duty to appear in court.
Moreover, the other defendant Bhagwan Ramnani did not
submit any other plausible explanation for his absence in the
pre-trial. A satisfactory showing by the movant of the existence
of fraud, accident, mistake or excusable neglect is an
indispensable requirement for the setting aside of a judgment of
default or the order of default. After going over the pleadings of
the parties and the decision of the respondent court, we find that
the motion to lift the order of default was properly denied for
non-compliance with this requirement. The defendants were
less than conscientious in defending themselves and protecting
their rights before the trial court. They did not pay proper
attention and respect to its directive. The petitioner has not
shown that his and his wife's failure to attend the pre-trial
hearing as required was due to excusable neglect, much less to
fraud, accident or mistake. The petitioner insists, however, that
they had a meritorious defense which the trial court should not
have disregarded. A meritorious defense is only one of the two
conditions. Even if it be assumed for the sake of argument that
the private respondents did owe Josephine Ramnani P900,000,
as alleged in the counterclaim, that circumstance alone is not
sufficient to justify the lifting of the order of default and the
default judgment. The obvious reason is that a meritorious
defense must concur with the satisfactory reason for the non-
appearance of the defaulted party. There is no such reason in
12
this case. The appropriate remedy is an ordinary appeal under
Section 2 of Rule 41 of the Rules of Court providing in part as
follows: A party who has been declared in default may likewise
appeal from the judgment rendered against him as contrary to
the evidence or to the law, even if no petition for relief to set
aside the order of default has been presented by him in
accordance with Rule 38. In questioning the dismissal of its
petition by the respondent court, the petitioner invokes the case
of Pioneer Insurance and Surety Corporation v. Hontanosas, 11
where the Court sustained the challenge to an order of default in
a petition for certiorari rather than in an ordinary appeal, which
was held as not an adequate remedy. That case is not
applicable to the present petition. Certiorari was allowed in that
case because the petitioner was illegally declared in default.
The Court held that, first, the petitioner could not be compelled
to attend an unnecessary second pre-trial after it had indicated
at the earlier pre-trial that there was no possibility of an
amicable settlement; second, the pre-trial was premature
because the last pleading had not yet been filed at the time; and
third, there was insufficient notice of the pre-trial to the
petitioner. In the case at bar, no such irregularities in the pre-
trial have been alleged by the petitioner. As we held in Pure
Foods Corporation v. NLRC: It must emphatically be reiterated,
since so often is it overlooked, that the special civil action for
certiorari is a remedy designed for the correction of errors of
jurisdiction and not errors of judgment. The reason for the rule is
simple. When a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of the
jurisdiction being exercised when the error is committed. If it did,
every error committed by a court would deprive it of its
jurisdiction and every erroneous judgment would be a void
judgment. This cannot be allowed. The administration of justice
would not survive such a rule. Consequently, an error of
judgment that the court may commit in the exercise of its

jurisdiction is not correctible through the original civil action of
certiorari. Even on the supposition that certiorari was an
appropriate remedy, the petition would still fail because it has
not been clearly shown that the trial court committed grave
abuse of discretion in refusing to set aside the default order and
the default judgment. We have held in many cases, including
Pahilanga v. Luna, 13 that: It is within the sound discretion of
the court to set aside an order of default and to permit a
defendant to file his answer and to be heard on the merits even
after the reglementary period for the filing of the answer has
expired, but it is not error, or an abuse of discretion, on the part
of the court to refuse to set aside its order of default and to
refuse to accept the answer where it finds no justifiable reason
for the delay in the filing of the answer. In motions for
reconsideration of an order of default, the moving party has the
burden of showing such diligence as would justify his being
excused from not filing the answer within the reglementary
period as provided by the Rules of Court, otherwise, these
guidelines for an orderly and expeditious procedure would be
rendered meaningless. Unless it is shown clearly that a party
has justifiable reason for the delay the court will not ordinarily
exercise its discretion in his favor.
The above doctrine is applicable to the inexcusable neglect of
the herein petitioner and his wife to appear at the pre-trial
hearing duly scheduled and of which they were properly notified.
We must, however, moderate the award of damages by the trial
court as we feel it is rather harsh upon the petitioner. In the
exercise of our discretion, we hereby reduce the moral damages
to P20,000.00 and the attorney's fees to P10,000.00, and
disallow the exemplary damages. The rest of the award is
approved. WHEREFORE, the challenged decision is
AFFIRMED as above modified, with costs against the petitioner.
It is so ordered.
13
149 SCRA 562 – Remedial Law – Civil Procedure – Payment of
Docket Fees – Claimed Damages must be Stated in the BODY
and PRAYER of pleadings
A complaint for specific performance was filed by Manchester
Development Corporation against City Land Development
Corporation to compel the latter to execute a deed of sale in
favor Manchester. Manchester also alleged that City Land
forfeited the former’s tender of payment for a certain transaction
thereby causing damages to Manchester amounting to
P78,750,000.00. This amount was alleged in the BODY of their
Complaint but it was not reiterated in the PRAYER of same
complaint. Manchester paid a docket fee of P410.00 only. Said
docket fee is premised on the allegation of Manchester that their
action is primarily for specific performance hence it is incapable
of pecuniary estimation. The court ruled that there is an under
assessment of docket fees hence it ordered Manchester to
amend its complaint. Manchester complied but what it did was
to lower the amount of claim for damages to P10M. Said
amount was however again not stated in the PRAYER.
ISSUE: Whether or not the amended complaint should be
admitted.
HELD: No. The docket fee, its computation, should be based on
the original complaint. A case is deemed filed only upon
payment of the appropriate docket fee regardless of the actual
date of filing in court. Here, since the proper docket fee was not
paid for the original complaint, it’s as if there is no complaint to
speak of. As a consequence, there is no original complaint duly
filed which can be amended. So, any subsequent proceeding
taken in consideration of the amended complaint is void.
Manchester’s defense that this case is primarily an action for
specific performance is not merited. The Supreme Court ruled

that based on the allegations and the prayer of the complaint,
this case is an action for damages and for specific performance.
Hence, it is capable of pecuniary estimation.
Further, the amount for damages in the original complaint was
already provided in the body of the complaint. Its omission in the
PRAYER clearly constitutes an attempt to evade the payment of
the proper filing fees. To stop the happenstance of similar
irregularities in the future, the Supreme Court ruled that from
this case on, all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed
for not only in the body of the pleading but also in the prayer,
and said damages shall be considered in the assessment of the
filing fees in any case. Any pleading that fails to comply with this
requirement shall not bib accepted nor admitted, or shall
otherwise be expunged from the record.
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and
D.J. WARBY
vs.
HON. MAXIMIANO C. ASUNCION (Judge, RTC Quezon City)
and MANUEL CHUA UY PO TIONG
G.R. Nos. 79937-38; February 13, 1989; GANCAYCO, J.
FACTS: On February 28, 1984, petitioner Sun Insurance filed a
complaint with the RTC Makati for the consignation of a
premium refund on a fire insurance policy with a prayer for the
judicial declaration of its nullity against private respondent
14
Manuel Uy Po Tiong. Private respondent as declared in default
for failure to file the required answer within the reglementary
period.
On the other hand, on March 28, 1984, private respondent filed
a complaint in the RTC QC for the refund of premiums and the
issuance of a writ of preliminary attachment, initially against
petitioner Sun Insurance, and thereafter including E.B. Philipps
and D.J. Warby as additional defendants. The complaint
docketed as Civil Case Q-41177 sought, among others, the
payment of damages. Although the prayer in the complaint did
not quantify the amount of damages sought said amount may
be inferred from the body of the complaint to be about P50
Million.
Only the amount of P210.00 was paid by private respondent as
docket fee which prompted petitioners' counsel to raise his
objection. Said objection was disregarded by respondent Judge
Jose P. Castro who was then presiding over said case. Upon
the order of this Court, the records of said case together with 22
other cases assigned to different branches of the RTC QC
which were under investigation for under-assessment of docket
fees were transmitted to the SC. The SC ordered that the cases
be re-raffled, the judges in said cases to reassess the docket
fees and that in case of deficiency, to order its payment. The
Resolution also requires all clerks of court to issue certificates of
re-assessment of docket fees. All litigants were likewise
required to specify in their pleadings the amount sought to be
recovered in their complaints.

Thus, Judge Solano, to whose sala Civil Case Q-41177 was
temporarily assigned, instructed the Clerk of Court to issue a
certificate of assessment of the docket fee paid by private
respondent and, in case of deficiency, to include the same in
said certificate. On January 7, 1984, to forestall a default, a
cautionary answer was filed by petitioners. On August 30,1984,
an amended complaint was filed by private respondent including
the two additional defendants aforestated.
Respondent Judge Asuncion, to whom Civil Case No. Q41177
was thereafter assigned, after his assumption into office on
January 16, 1986, issued a Supplemental Order requiring the
parties in the case to comment on the Clerk of Court's letter-
report signifying her difficulty in complying with the Resolution of
the SC since the pleadings filed by private respondent did not
indicate the exact amount sought to be recovered. Private
respondent filed a "Compliance" and a "Re-Amended
Complaint" stating therein a claim of "not less than P10 Million
as actual compensatory damages" in the prayer. In the body of
the said second amended complaint however, private
respondent alleges actual and compensatory damages and
attorney's fees in the total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order
admitting the second amended complaint and stating therein
that the same constituted proper compliance with the SC
Resolution and that a copy thereof should be furnished the
Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private
respondent's claim of "not less than P10 M as actual and
15
compensatory damages" amounted to P39,786.00 as docket
fee. This was subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the CA
questioning the said order of Judge Asuncion.
On April 24, 1986, private respondent filed a supplemental
complaint alleging an additional claim of P20 M as damages so
the total claim amounts to about P65 Million. Seven months
after filing the supplemental complaint, the private respondent
paid the additional docket fee of P80,396.00.
On August 13, 1987, the CA denied the petition insofar as it
seeks annulment of the order, and petitioner’s motion to dismiss
the amended complaint. Hence, the instant petition.
During the pendency of this petition and in conformity with the
said judgment of respondent court, private respondent paid the
additional docket fee of P62,432.90 on April 28, 1988.
ISSUE:
Did the RTC acquire jurisdiction over Civil Case No. Q-41177
even if there was nonpayment of the correct and proper docket
fee?
Petitioners’ contention: Considering that the total amount sought
to be recovered in the amended and supplemental complaint is

P64,601,623.70 the docket fee that should be paid by private
respondent is P257,810.49, more or less. Not having paid the
same, petitioners contend that the complaint should be
dismissed and all incidents arising therefrom should be
annulled. As basis, petitioners cite Manchester Development
Corporation vs. CA:
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on
the amounts sought in the amended pleading. The ruling in the
Magaspi Case in so far as it is inconsistent with this
pronouncement is overturned and reversed.
Respondent’s contention: Manchester cannot apply retroactively
for at the time said civil case was filed in court there was no
such ruling as yet. Magaspi v. Ramolete applies wherein it was
held that the trial court acquired jurisdiction over the case even
if the docket fee paid was insufficient.
HELD: YES, the court acquired jurisdiction over the case.
Nevertheless, the contention that Manchester cannot
retroactively apply is untenable. Statutes regulating the
procedure of the courts will be construed as applicable to
actions pending and undetermined at the time of their passage.
Procedural laws are retrospective in that sense and to that
extent.
16
In Lazaro vs. Endencia and Andres, this Court held that the
payment of the full amount of the docket fee is an indispensable
step for the perfection of an appeal. Plaintiff-appellant deposited
the deficiency in the docket fee outside the 15-day reglementary
period for appeal. Thus, the CFI (as appellate court) did not
acquire jurisdiction as the appeal was not perfected.
In Lee vs. Republic, the petitioner filed a verified declaration of
intention to become a Filipino citizen by sending it through
registered mail to the Office of the Solicitor General in 1953 but
the required filing fee was paid only in 1956. Citing Lazaro, this
Court concluded that the filing of petitioner's declaration of
intention on October 23, 1953 produced no legal effect until the
required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, the same principles enunciated in
Lazaro and Lee were applied. It was an original petition for quo
warranto contesting the right to office of proclaimed candidates
which was mailed, addressed to the clerk of the CFI, within the
one-week period after the proclamation as provided therefor by
law. However, the required docket fees were paid only after the
expiration of said period. Consequently, this Court held that the
date of such payment must be deemed to be the real date of
filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, this Court reiterated the rule that
the docket fee must be paid before a court will act on a petition
or complaint. However, we also held that said rule is not
applicable when petitioner seeks the probate of several wills of
the same decedent as he is not required to file a separate action

for each will but instead he may have other wills probated in the
same special proceeding then pending before the same court.
Then in Magaspi, this Court reiterated the ruling
in Malimit and Lee that a case is deemed filed only upon
payment of the correct docket fee regardless of the actual date
of its filing in court. In the said case, there was an honest
difference of opinion as to the correct amount to be paid as
docket fee because the action appears to be one for the
recovery of property the docket fee of P60.00 was correct; and
that as the action is also one, for damages, the SC upheld the
assessment of the additional docket fee based on the damages
alleged in the amended complaint as against the assessment of
the trial court which was based on the damages alleged in the
original complaint.
However, SC
overturned Magaspi in Manchester. Manchester involves an
action for torts and damages and specific performance with a
prayer for the issuance of a temporary restraining order, etc..
The amount of damages sought is not specified in the prayer
although the body of the complaint alleges the total amount of
over P78 Millon allegedly suffered by plaintiff. Applying the
principle in Magaspi that "the case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing
in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the
docket fee. Neither can the amendment of the complaint thereby
vest jurisdiction upon the Court. For all legal purposes there was
no such original complaint duly filed which could be amended.
Consequently, the order admitting the amended complaint and
17
all subsequent proceedings and actions taken by the trial court
were declared null and void.
The facts and circumstances of the present case are similar
toManchester. The principle in Manchester could very well be
applied in the present case. The pattern and the intent to
defraud the government of the docket fee due is obvious not
only in the filing of the original complaint but also in the filing of
the second amended complaint.
However, in Manchester, petitioner did not pay any additional
docket fee untill the case was decided by the SC on May 7,
1987. Thus, in Manchester, due to the fraud committed on the
government, this Court held that the court a quo did not acquire
jurisdiction over the case and that the amended complaint could
not have been admitted inasmuch as the original complaint was
null and void.
In the present case, a more liberal interpretation of the rules is
called for considering that, unlike Manchester, private
respondent demonstrated his willingness to abide by the rules
by paying the additional docket fees as required.
Nevertheless, petitioners contend that the docket fee that was
paid is still insufficient considering the total amount of the claim.
This is a matter which the clerk of court of the lower court and/or
his duly authorized docket clerk or clerk in-charge should
determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
 18

paid by private respondent considering the total amount of the

claim sought in the original complaint and the supplemental
Thus, the Court rules as follows: complaint as may be gleaned from the allegations and the
1. It is not simply the filing of the complaint or appropriate prayer thereof and to require private respondent to pay the
initiatory pleading, but the payment of the prescribed docket fee, deficiency, if any, without pronouncement as to costs.
that vests a trial court with jurisdiction over the subject matter or
nature of the action. Where the filing of the initiatory pleading is
not accompanied by payment of the docket fee, the court may
allow payment of the fee within a reasonable time but in no case
beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third

party claims and similar pleadings, which shall not be
considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee
within a reasonable time but also in no case beyond its
applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the

filing of the appropriate pleading and payment of the prescribed
filing fee but, subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left
for determination by the court, the additional filing fee therefor
shall constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly authorized deputy
to enforce said lien and assess and collect the additional fee.

WHEREFORE, the petition is DISMISSED for lack of merit. The

Clerk of Court of the court a quo is hereby instructed to
reassess and determine the additional filing fee that should be
19