Cruz Agana v. Lagman

Facts

·          18 March 1996 – Cruz-Agana filed a Complaint for annulment of title with prayer for preliminary mandatory injunction against Serrano Enterprises.

§   Cruz-Agana claims that as the sole heir of one Teodorico Cruz, she is the sole owner of the disputed lot.

§   the lot was fraudulently sold to Eugenio Lopez, Jr. who later on transferred the lot to Serrano Enterprises.

·          Serrano filed its Answer with compulsory counterclaim.

·          Cruz moved to dismiss respondent’s counterclaim for lack of a CNFS.

·          11 March 1999 – RTC denied Cruz’s MTD respondent’s counterclaim. 

§   respondent’s counterclaim is compulsory and excluded from Rule 7.5

·          Petitioner filed an MR invoking the mandatory nature of a CNFS under SC AC 04-94.

·          25 May 1999 – RTC reversed its order and dismissed respondent’s counterclaim for lack of a CNFS.

·          Serrano filed a MR: AC No. 04-94 does not apply to compulsory counterclaims (Santo Tomas)

·           4 June 1999 – RTC again reversed itself and recalled its Order dismissing respondent’s counterclaim.

·          Petitioner comes before this Court through Rule 65.

Issue

Can a compulsory counterclaim pleaded in an Answer be dismissed on the ground of a failure to accompany it with a CNFS?

Ruling

·          Santo Tomas University Hospital v. Surla clarified the scope of AC No. 04-94 with respect to counterclaims. 

o    circular is intended primarily to cover “an initiatory pleading or an incipient application of a party asserting a claim for relief.” 

·          The distinction between a compulsory and a permissive counterclaim is vital in the application of the circular:

o    Counterclaims by its very nature as being auxiliary to the proceedings in the suit and as deriving its substantive and jurisdictional support can only be pleaded in the answer and not remain outstanding for independent resolution except by the court where the main case pends.

o    Rule 8.5 does not include a claim which cannot be independently set up.

·          Ponciano v. Judge Parentela,  Peaches Jr

o    AC No. 04-94 does not apply to compulsory counterclaims.  The circular applies to initiatory and similar pleadings. 

o    A compulsory counterclaim set up in the answer is not an “initiatory” or similar pleading.  The initiatory pleading is the plaintiff’s complaint.  A respondent has no choice but to raise a compulsory counterclaim the moment the plaintiff files the complaint.  Otherwise, respondent waives the compulsory counterclaim.

o    compulsory counterclaim is a reaction or response, mandatory upon pain of waiver, to an initiatory pleading which is the complaint.

sc’s right to promulgate and amend rules

·          Petitioner is mistaken that Santo Tomas and Ponciano are “contrary to the mandate of AC No. 04-94” and other procedural laws.

·          The Constitution expressly bestows on this Court the power to promulgate rules concerning the pleading, practice and procedure in all courts. Procedural matters are within the sole jurisdiction of this Court to prescribe.  AC No. 04-94 is an issuance of this Court. It covers a matter of procedure. AC No. 04-94 is not an enactment of the Legislature.  This Court has the exclusive jurisdiction to interpret, amend or revise the rules it promulgates, as long as the rules do not diminish, increase, or modify substantive rights.   

distinction between a permissive and a compulsory claim

·          If it is a permissive counterclaim, the lack of a CNFS is fatal.  If it is a compulsory counterclaim, the lack of a CNFS is immaterial.

·          A compulsory counterclaim is any claim for money or other relief, which a defending party may have against an opposing party, which at the time of suit arises out of, or is necessarily connected with, the same transaction or occurrence that is the subject matter of plaintiff’s complaint. It is compulsory in the sense that it is within the jurisdiction of the court, does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the same case.  Any other counterclaim is permissive.

·          Respondent’s counterclaim as set up in its answer states: “unwarranted [litigation] of the plaintiff”

·          The counterclaim is so intertwined with the main case that it is incapable of proceeding independently.  The counterclaim will require a re-litigation of the same evidence if the counterclaim is allowed to proceed in a separate action.  Even petitioner recognizes that respondent’s counterclaim is compulsory. A compulsory counterclaim does not require a CNFS because a compulsory counterclaim is not an initiatory pleading.

Petition is DENIED for lack of merit.  

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Spouses Wee v. Galvez

NATURE

For review is the decision of the CA which denied special civil action for certiorari, prohibition, and mandamus filed by petitioners Manuel and Rosemarie Wee.  

Wees sought to:

(1)      annul and set aside the Order of the RTC denying their MTD and MR

(2)      order the trial court to desist from further proceedings in Civil Case No. Q-99-37372; and

(3)      order the trial court to dismiss the said action.

(4)      CA resolution denying their MR. 

facts

·          Rosemarie Wee and Rosario D. Galvez are sisters.

·          Rosemarie lives with her husband, Manuel Wee, in Balanga, Bataan, while Rosario resides in New York, U.S.A. The present controversy stemmed from an investment agreement between the two sisters, which had gone sour along the way.

·          Rosario, represented by Grace Galvez (daughter) as her attorney-in-fact, filed a complaint before the RTC to collect a sum of money from Manuel and Rosemarie Wee.  The amount for collection was US$20,000 at the exchange rate of P38.30 per dollar.  

·          The complaint alleged that Rosario and Rosemarie entered into an agreement whereby Rosario would send Rosemarie US$20,000, half of said amount to be deposited in a savings account while the balance could be invested in the money market.  The interest to be earned therefrom would be given to Rosario’s son, Manolito Galvez, as his allowance.

·          Rosario sent five (5) Chemical Bank checks ($20,050.00)

·          All of the checks were deposited and encashed by Rosemarie, except for the first check, Chemical Bank Check No. 97, which was issued to one Zenedes Mariano, who gave the cash equivalent of US$2,000 to Rosemarie.

·          Rosemarie gave Manolito his monthly allowance ranging from P2,000 to P4,000 a month from 1993 to Jan 1999.

·          In 1995, Rosario asked for the return of the US$20,000 and for an accounting.  

·          Rosario sent Rosemarie a written demand for her US$20,000 and an accounting.  

MTD

·          Wees moved to dismiss on the following grounds:  

o    lack of allegation in the complaint that earnest efforts toward a compromise (FC 151

o    failure to state a valid cause of action, the action being premature in the absence of previous earnest efforts toward a compromise

o    certification against forum shopping was defective, having been executed by an attorney-in-fact and not the plaintiff, (Rule 7.5)

Rosario amended her complaint with the addition of the following par:

9-A. Earnest efforts towards (sic) have been made but the same have failed.  Plaintiff thru her daughter as Attorney-In-Fact caused the sending of a Demand Letter dated Jan 4, 1999and the last par of which reads as follows:

Trusting this will merit your utmost peaches preferential attention and consideration in as much as you and our client are sisters and in order that [earnest] efforts toward a compromise could be obtained.

·          Wees opposed Rosario’s motion to have the Amended Complaint admitted. They contended that said motion was a mere scrap of paper for being in violation of the 3-day notice requirement of Rule 15, Section 4 of the 1997 Rules of Civil Procedure and for having the notice of hearing addressed to the Clerk of Court and not to the adverse party as required by Section 5 of the same Rule.

·          Trial court denied the MTD of the Wees for being “moot and academic”  

·          Wees MR denied by the lower court.

court ofappeals

·          Wees brought it to CA via a special civil action for certiorari, prohibition, and mandamus. (TC acted with GAD amounting to lack or excess of jurisdiction for issuing the interlocutory orders instead of granting the MTD.

·          CA Galvez’ amended complaint sufficiently stated a cause of action.

·          The questioned certification against forum shopping appended thereto was not so defective as to warrant the dismissal of the complaint.

·          MR at CA denied

WON THE CERTIFICATION OF NON-FORUM SHOPPING EXECUTED BY THE PLAINTIFF’S ATTORNEY-IN-FACT IS DEFECTIVE

wee:

·          Certification against forum shopping was invalid since it was NOT Rosario who executed and signed the same, but her attorney-in-fact, Grace Galvez.

·          there was nothing in the SPA which expressly conferred upon the latter the authority to execute and sign, on behalf of the former, the CNFS.

·          BA Savings Bank v. Sia: where the parties in an action are natural persons, the party himself is required to sign the certification, and where a representative is allowed in case of artificial persons, he must be specifically authorized to execute and sign the certification.  

·          Galvez failed to show any justifiable reason why her attorney-in-fact should be the one to sign the certification against forum shopping, instead of herself as the party, as required by Santos v. CA.

galvez:

·          In the SPA, Grace Galvez is given the authority to institute both civil and criminal actions against any person, natural or juridical, who may be obliged or answerable to the respondent.

·          Corollary with this power is the authority to sign all papers, documents, and pleadings necessary for the accomplishment of the said purpose.  

·          Since Grace Galvez is the one authorized to file any action in the PHs on behalf of her principal, she is in the best position to know whether there are other cases involving the same parties and the same subject matter instituted with or pending before any other court or tribunal in this jurisdiction.

·          As an attorney-in-fact, Grace Galvez is deemed to be a party, pursuant to Rule 3.3 

supreme court

·          Galvez is already a resident of the US.

·          It was proper for her to appoint her daughter, Grace Galvez, to act as her attorney-in-fact in the PHs.

·          SPA grants the ff:

1.        To ask, demand and claim any sum of money that is duly [due] from any person natural, juridical and/or CORP in the PHs;

2.        To file criminal and/or civil complaints before the courts of justice in the PHs to enforce my rights and interest[s];

3.        To attend hearings and/or Preliminary Conference[s], to make stipulations, adjust claims, to settle and/or enter into Compromise Agreement[s], to litigate and to terminate such proceedings; [and]

4.        To sign all papers, documents and pleadings necessary for the accomplishment of the above purposes.

·          Grace Galvez was duly authorized and empowered not just to initiate complaints but is specifically authorized to sign all “papers, documents, and pleadings” necessarily connected with the filing of a complaint.

discussion about forum shopping

·          Forum shopping “occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict.”

·          It has taken the form of filing multiple petitions or complaints involving the same issues before two or more tribunals or agencies in the hope that one or the other court would make a favorable disposition.

·          There is also forum shopping when, because of an adverse decision in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another.

·          Rule 7, Section 5 of the Rules of Court, requires that the certification should be signed by the “petitioner or principal party” himself. The rationale behind this is “because only the petitioner himself has actual knowledge of WON he has initiated similar actions or proceedings in different courts or agencies.”

·          The rationale does not apply where, as in this case, it is the attorney-in-fact who instituted the action.  

·          Grace Galvez has actual and personal knowledge whether she initiated similar actions or proceedings before various courts on the same issue on respondent’s behalf.

·          There has been proper compliance with the rule proscribing forum shopping

·          The fact that the Circular requires that it be strictly complied with merely underscores its mandatory nature in that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances.

·          AC No. 04-94 is now incorporated in the 1997 Rules of Civil Procedure, as Rule 7, Section 5. The Rules “shall be liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every action and proceeding.”

·          The rule requiring a certification of forum shopping to accompany every initiatory pleading, “should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all rules of procedure – which is to achieve substantial justice as expeditiously as possible.”

WON THE AMENDED COMPLAINT BEFORE THE RTC SUFFICIENTLY STATES A CAUSE OF ACTION AGAINST THE DEFENDANTS.

Wee

·          amended complaint violates Rule 8.1 as there is no plain and direct statement of the ultimate facts on which the plaintiff relies for her claim.

·          the allegation in par 9-A  of the amended complaint that “Earnest efforts towards have been made but the same have failed” is clearly insufficient.  

·          The sentence is incomplete, thus requires the reader of the pleading to engage in deductions or inferences in order to get a complete sense of the cause of action, according to petitioners.

galvez

·          amended complaint as well as the annexes attached to the pleadings should be taken in their entirety in determining whether a cause of action was validly stated in the complaint.  

supreme court

·          FC 151: a suit between members of the same family shall not be entertained, unless it is alleged in the complaint or petition that the disputants have made earnest efforts to resolve their differences through compromise, but these efforts have not succeeded.  

·          Rule 8.3  provides that conditions precedent may be generally averred in the pleadings.

·          Par 9-A of the Amended Complaint shows that respondent has complied with this requirement of a general averment.  

·          It is true that the lead sentence of par 9-A, which reads “Earnest efforts towards have been made but the same have failed” may be incomplete or even grammatically incorrect as there might be a missing word or phrase, but to our mind, a lacking word like “compromise” could be supplied by the rest of the par.

·          There is no need for guesswork or complicated deductions in order to derive the point that earnest efforts to compromise the differences between the disputants were made but to no avail.

·          The Amended Complaint in its entirety as well as the documents attached thereto, following the rule that documents attached to a pleading are considered both as evidence and as part of the pleading.

WON THE INSTANT PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45 IS THE PROPER REMEDY FOR PETITIONERS UPON THE DENIAL OF THEIR PETITION FOR CERTIORARI, PROHIBITION AND MANDAMUS BY THE CA

wee

·          a petition for review under Rule 45.1 could be brought before us, regardless of whether the assailed decision of the CA involves an appeal on the merits from the trial court’s judgment or the dismissal of a special civil action questioning an interlocutory order of the trial court.  

·          What is important is that the assailed decision of the CA is final and that the petition before this Court should raise only questions of law.

galvez

·          dismissal by the CA of special civil action for certiorari, prohibition, and mandamus is not the final judgment or order, which could be the subject of an appeal by certiorari under Rule 45.

·          certiorari as a mode of appeal involves the review of a judgment, final order, or award on the merits.  

·          CA’s ruling did not dispose of the case on the merits, as the orders of the trial court were all interlocutory.

SC

·          Present petition is proper remedy to challenge the CA’s judgment.

·          CA’s decision on said petition is final for it disposes of the original action for certiorari, prohibition, and mandamus directed against the interlocutory orders of the RTC.

·          there is nothing more left to be done as far as the CA is concerned.

·          In special civil actions for certiorari the only issue before the CA is whether the lower court acted without or in excess of jurisdiction, or with GAD amounting to lack or excess of jurisdiction.  

·          in a certiorari petition the CA is not tasked to adjudicate the merits of the respondent’s claims before the trial court.  

·          CA properly ruled that the trial court committed no GAD amounting to lack or excess of jurisdiction so as to warrant the issuance of writs of certiorari, prohibition, and mandamus that petitioners sought.

Petition denied. CA AFFIRMED.

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Heirs of Medrano v. De Vera

doctrine

In cases where the property is transferred by the defendant during the pendency of the litigation, the interest of the transferee pendente lite cannot be considered independent of the interest of his transferors. If the transferee files an answer while the transferor is declared in default, the case should be tried on the basis of the transferee’s answer and with the participation of the transferee.

facts

·          Flaviana De Gracia owns a 463-sq m of land.  When Flaviana died intestate in 1980, leaving her half-sisters Hilaria Martin-Paguyo and Elena Martin-Alvarado as her compulsory heirs.

·          Hilaria and Elena, by virtue of a private document[1] waived all their hereditary rights to Flaviana’s land in favor of Francisca Medrano in consideration of the expenses that she incurred for Flaviana’s medication, hospitalization and burial.  

·          Due to the refusal of the other children to sign a similar renunciation, Medrano filed a Complaint for quieting of title and/or partition with damages against Pelagia, Faustina, Jesus, Veneranda, Emilio a.k.a. Antonio Alvarado, Francisca and Estrellita before the RTC.

·          De Vera filed an Answer with Counterclaim, presented himself as the real party-in-interest.

o    the private document executed by the defendants’ predecessors in favor of Medrano was null and void for want of consideration.  

o    some children renounced their hereditary rights in favor of De Vera. 

·          Medrano filed a Motion to Expunge Answer with Counterclaim of De Vera and to Declare Defendants in Default. She argued that De Vera had no personality to answer the complaint since he was not authorized by the named defendants to answer in their behalf.

·          The trial court did not allow De Vera to present his evidence. TC ruled that he should have complied with the court’s order to file a pleading-in-intervention.

·          CA agreed with De Vera.  

o    trial court should ordered the substitution of the original defendants instead of requiring De Vera to file a pleading-in-intervention.  (Rule 3, Section 19)

o    A transferee pendente lite is a proper party to the case, the court can order his outright substitution for the original defendants. 

the lost trial court

·          TC disagreed with Medrano’s argument and admitted De Vera’s Answer with Counterclaim. The TC opined that De Vera did not need a special power of attorney from the defendants because he did not answer the complaint in their behalf.

·          De Vera made a voluntary appearance in the case as the transferee of the defendants’ rights to the subject property. The TC further explained that when the presence of other parties is required for granting complete relief, the court shall order them to be brought in as defendants.

·          While it was unsure whether De Vera was an indispensable party to the case, the TC opined that at the very least he was a necessary party for granting complete relief.

·          The admission of De Vera’s Answer with Counterclaim is proper in order to avoid multiplicity of suits.

·          The court declared the named defendants in default for not answering the complaint despite valid service of summons. Thus, it appears that the court a quo treated the named defendants and De Vera as distinct and separate parties.

medrano

·          With regard to the order declaring the named defendants in default, Medrano filed on Feb 13, 2003 a Motion to Set Reception of Evidence Before the Branch Clerk of Court.

·          She argued that she could present evidence ex parte against the defaulting defendants on the ground that she presented alternative causes of action against them in her complaint.

·          Her cause of action on the basis of acquisitive prescription can be raised solely against the defaulting original defendants.

·          She prayed to be allowed to present evidence ex parte with respect to her claim of acquisitive prescription against the defaulting defendants.

·          As for the order admitting De Vera’s Answer with Counterclaim, Medrano filed on a MR and asked the court to order De Vera to file a pleading-in-intervention so that he could be properly named as a defendant in the case.

·          TC resolved to grant Medrano’s Motion to Set Reception of Evidence. It ordered the conduct of ex parte presentation of evidence. Medrano presented her evidence ex parte on the set dates. The case was submitted for resolution.

·          De Vera filed a Motion to Set the Case for Preliminary Conference on March 27, 2003.

·          TC resolved pets’ and De Vera’s respective pending motions. TC granted Medrano’s set aside its Order which admitted De Vera’s Answer with Counterclaim. Citing Rule 19 of the Rules of Court, the court ordered De Vera to file a pleading-in-intervention so that he could be recognized as a party-defendant. As a necessary consequence to this ruling, the TC denied De Vera’s motion to set the case for preliminary conference for prematurity.

Ruling of the RTC

·          ownership over the titled property has vested in Heirs of Medrano by virtue of good faith possession for more than 10 years;

·          it was no longer necessary to compel the defendants - heirs of Hilaria and Elena - to execute an instrument to confirm Medrano’s rightful ownership over the land.

·          "Tapno Maamoan Ti Sangalobongan" sufficiently conveyed to Medrano the property. The conveyance was done in consideration of the various expenses that Medrano incurred for Flaviana’s benefit.

mr at the rtc

He was an indispensable party who was not given an opportunity to present his evidence in the case.

Medrano was not the owner of the property, but a mere administratrix of the land.

decision for the mr

·          De Vera had no legal personality to file a MR because he did not file a pleading-in-intervention.

·          It would have allowed De Vera to present his evidence in the case had he complied with the court’s order to file a pleading-in-intervention.

Pet: De Vera, as a transferee pendente lite, was bound by the final judgment or decree rendered against his transferors. Even assuming that De Vera had a right to appeal, the period therefor had already lapsed on August 12, 2003.

RTC: De Vera was not a party to the suit, hence his appeal would not stay the finality and execution of judgment. The writ of execution was issued on Dec 12, 2003.

de vera arguments

·          De Vera insisted that he stepped into the shoes of the defendants with regard to the property by virtue of the quitclaim that the defendants executed in his favor. TC should have considered the defendants as properly substituted by De Vera when he filed his Answer.

·          De Vera argued that it was improper for the TC to have allowed Medrano to present her evidence ex parte because it had yet to rule on whether De Vera had personality to participate in the proceedings.

Ruling of the CA

·          CA agreed with De Vera.

·          The ex parte presentation of evidence took place on March 6 and 10, 2003; while the Motion to Expunge Answer and Require Filing of Pleading-in-Intervention was granted much later on March 31, 2003.

·          TC gravely abused its discretion by allowing Medrano to present her evidence ex parte while De Vera’s personality to participate in the case still remained unresolved. The premature ex parte presentation of evidence rendered a pleading-in-intervention moot and academic.

·          TC should have exercised its authority to order the substitution of the original defendants instead of requiring De Vera to file a pleading-in-intervention. 

·          De Vera’s failure to file the pleading-in-intervention was a technical defect that could have been easily cured. 

·          CA remanded the case to the TC to afford De Vera an opportunity to present his evidence.

Issues

Whether De Vera is bound by the judgment against his transferors

Whether it was proper for the CA to take cognizance of resp’s Petition for Certiorari and Mandamus

Our Ruling

Whether De Vera could participate without filing a motion to intervene

·          TC gravely abused its discretion in refusing to allow De Vera to participate in the case and requiring him to file a motion to intervene.

·          TC held that De Vera’s right to participate in the case was independent of the named defendants. Because of its ruling that De Vera had an "independent interest," the TC considered his interest as separate from Medrano’s claims against the named defendants, and allowed the latter to be tried separately.

·          De Vera’s interest is not independent of or severable from the interest of the named defendants. De Vera is a transferee pendente lite of the named defendants. His rights were derived from the named defendants and he would be bound by any judgment against his transferors under the rules of res judicata.  

·          What the TC should have done is to treat De Vera (as transferee pendente lite) as having been joined as a party-defendant, and to try the case on the basis of the answer De Vera had filed and with De Vera’s participation.

·          Rule 3.19 gives the TC discretion to allow or disallow the substitution or joinder by the transferee. Discretion is permitted because, in general, the transferee’s interest is deemed by law as adequately represented and protected by the participation of his transferors in the case. In legal contemplation, he is not really denied protection as his interest is one and the same as his transferors, who are already parties to the case.

·          The TC should have tried the case based on De Vera’s answer, which answer is deemed to have been adopted by the non-answering defendants.

·          Rule 3, Section 19, the substitution or joinder of the transferee is "upon motion", and De Vera did not file any motion for substitution or joinder. However, this technical flaw may be disregarded for the fact remains that the court had already admitted his answer and such answer was on record when the ex parte presentation of evidence was allowed by the court.

·          The purpose of intervention is to enable a stranger to an action to become a party in order for him to protect his interest and for the court to settle all conflicting claims. Intervention is allowed to avoid multiplicity of suits more than on due process considerations. The intervenor can choose not to participate in the case and he will not be bound by the judgment.

·          De Vera is not a stranger to the action but a transferee pendente lite. As mentioned, a transferee pendente lite is deemed joined in the pending action from the moment when the transfer of interest is perfected.   

·          De Vera’s failure to file a pleading-in-intervention will not change the long foregone violation of his right to due process. The ex parte presentation of evidence had already been terminated when the TC required De Vera to file his pleading-in-intervention. 

·          The TC’s judgment by default cannot bind De Vera. A void judgment cannot attain finality and its execution has no basis in law. Case should be remanded to the TC for trial based on De Vera’s answer and with his participation.

Certiorari petition before the CA proper

Ordinary appeal was not an adequate remedy under the circumstances of the case. An appeal seeks to correct errors of judgment committed by a court, which has jurisdiction over the person and the subject matter of the dispute. TC maintained that it had no jurisdiction over De Vera because it did not consider him a party to the case. An appeal would have been an illusory remedy in this situation because his notice of appeal would have certainly been denied on the ground that he is not a party to the case.

Certiorari is an extraordinary remedy for the correction of errors of jurisdiction. Given the circumstance that the final decision prejudices De Vera’s rights despite the fact that he was not recognized as a party thereto and was not allowed to assail any portion thereof, De Vera’s remedy was to annul the TC proceedings on the ground that it was conducted with GAD amounting to lack of jurisdiction. With such annulment, the TC should hear the case anew with De Vera fully participating therein.

CA affirmed.

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[1] "Tapno Maamoan ti Sangalobongan"

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