ANTONIO LIM TANHU

7/25/2019 ANTONIO LIM TANHU

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ANTONIO LIM TANHU, DY OCHAY, ALFONSO LEONARDO NG SUA and CO

OYO, petitioners, vs.HON. JOSE R. RAMOLETE as Presiding Judge, ran!" III,

CFI, Ce#u and TAN PUT, respondents.

ARREDO, J. | G.R. N$. L%&''() * Augus+ (, -(/

This case all started when a complaint was filed by respondent Tan Put only againstthe spouses-petitioners Antonio Lim Tanhu and Dy Ochay.

ubse!uently, in an amended complaint, their son Lim Tec" #huan and the other

spouses-petitioners Alfonso Leonardo $g ua and #o Oyo and their son %ng #hong

Leonardo were included as defendants.

&n said amended complaint, respondent Tan alleged that'

(. he )is the widow of Tee *oon Lim Po #huan, who was a partner in thecommercial partnership, +lory #ommercial #ompany ... with Antonio Lim Tanhu

and Alfonso $g ua that )defendant Antonio Lim Tanhu, Alfonso Leonardo $g

ua, Lim Tec" #huan, and %ng #hong Leonardo,

. Lim Tanhu and others through fraud and machination, too" actual and active

management of the partnership and although Tee *oon Lim Po #huan was the

manager of +lory #ommercial #ompany, defendants managed to use the funds

of the partnership to purchase lands and buildings in the cities of #ebu,

Lapulapu, andaue, and the municipalities of Talisay and inglanilla, some ofwhich were hidden. (Some were discovered, see list of description in full text)

he prayed for' /(0 Accounting of real and personal properties, /0 Delivery after

accounting of (12 of the total value of all the properties which is appro3 4 million and /20

Payment of Attorneys fees and damagees

The amended complaint was opposed on the ground that it was a modification of a

cause of action but the court allowed the same as it merely amplifies materia

averments constituting the cause of action in the original complaint. It likewise include

necessary and indispensable defendants without whom no final determination can be

had in the action and in order that complete relief is to be accorded as between those

already parties.

&n a single answer with counterclaim, defendants claimed'


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(. Tan is not the widow of Tee *oon because, according to them, his legitimate wife

was Ang io" Tin still living and with whom he had four /50 legitimate children, a

twin born in (65, and two others born in (656 and (674, all presently residing in

*ong"ong

. Proper li!uidation had been regularly made of the business of the partnership

and Tee *oon used to receive his 8ust share until his death, as a result of whichthe partnership was dissolved and what corresponded to him were all given to his

wife and children.

2. %ven before the death of Tee *oon Lim Po #huan, the plaintiff was no longer his

common law wife and even though she was not entitled to anything left by Tee

*oon Lim Po #huan, yet, out of the "indness and generosity on the part of the

defendants, particularly Antonio Lain Tanhu, who, was inspiring to be mon" and

in fact he is now a mon", plaintiff was given a substantial amount evidenced by

the !uitclaim.

5. Defendants have ac!uired properties out of their own personal fund and certainly

not from the funds belonging to the partnership, 8ust as Tee *oon Lim Po #huan

had ac!uired properties out of his personal fund and which are now in the

possession of the widow and neither the defendants nor the partnership have

anything to do about said properties

On the date set for the pre-trial, both of the two defendants-spouses the Lim Tanhusand $g uas, did not appear, for which reason they were all )declared in D%9A:LT.

They sought to hive this order lifted thru a motion for reconsideration, but the effort

failed when the court denied it.

Thereafter, the trial started, but at the stage thereof where the first witness of the

plaintiff by the name of Antonio $u;e< who testified that he is her adopted son, was up

for re-cross-e3amination, said plaintiff une3pectedly filed the following simple and

unreasoned )OT&O$ TO D=OP D%9%$DA$T L& T%#> #*:A$ A$D %$+

#*O$+ L%O$A=DO) which the court granted without verifying the notices.

imultaneously, the following order was also issued #onsidering that defendants

Antonio Lim Tanhu and his spouse Dy Ochay as well as defendants Alfonso $g ua

and his spouse #o Oyo have been declared in default for failure to appear during the

pre-trial and as to the other defendants the complaint had already been ordered

dismissed as against them. Let the hearing of the plaintiffs evidence ex-parte be set

which did not ta"e place upon verbal motion of the plaintiff.


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:pon learning of these orders, defendant Lim Tec" #heng filed a motion for

reconsideration thereof, and %ng #hong Leonardo, filed also his own motion for

reconsideration and clarification of the same orders. These motions were denied

eanwhile, respondent court rendered the impugned decision. &t does not appear

when the parties were served copies of this decision.

ubse!uently, all the defendants, thru counsel, filed a motion to !uash the order.?ithout waiting however for the resolution thereof, Lim Tec" #huan and %ng #hong

Leonardo went to the #ourt of Appeals with a petition for certiorari see"ing the

annulment of the above-mentioned orders. #ourt of Appeals dismissed said petition,

holding that its filing was premature, considering that the motion to !uash the order

was still unresolved by the trial court.

The other defendants, petitioners herein, filed their notice of appeal, appeal bond and

motion for e3tension to file their record on appeal, which was granted.

@ut before the perfection of their appeal, petitioners filed the present petition with this

#ourt.

And with the evident intent to ma"e their procedural position clear, counsel for

defendants, filed with respondent court a manifestation stating that )when the non-

defaulted defendants %ng #hong Leonardo and Lim Tec" #huan filed their petition in

the #ourt of Appeals, they in effect abandoned their motion to !uash the order and that

similarly )when Antonio Lim Tanhu, Dy Ochay, Alfonso Leonardo $g ua and #o Oyo,filed their petition for certiorari and prohibition ... in the upreme #ourt, they li"ewise

abandoned their motion to !uash. This manifestation was acted upon by respondent

court together with plaintiffs motion for e3ecution pending appeal in its order of the

same date 9ebruary (5, (64 this wise' The motion to quash is ordered

ABANDONED. The resolution of the motion for execution pending appeal shall

be resoled after the petition for certiorari and prohibition shall hae been

resoled b! the "upreme #ourt.

CONTENTION OF PETITIONERS0 :pon these premises, i+ is +"e 1$si+i$n $21e+i+i$ners +"a+ res1$nden+ !$ur+ a!+ed i33ega334, in 5i$3a+i$n $2 +"e ru3es $r 6i+"

gra5e a#use $2 dis!re+i$n0

(. without previously ascertaining whether or not due notice thereof had been

served on the adverse parties, as, in fact, no such notice was timely served on

the non-defaulted defendants Lim Tec" #huan and %ng #hong Leonardo and no

notice at all was ever sent to the other defendants, herein petitioners, and more


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so, in actuall! ordering the dismissal of the caseand at the same time setting

the case for further hearing as against the defaulted defendants, herein

petitioners, actually hearing the same ex-parte and thereafter rendering the

decision granting respondent Tan even reliefs not prayed for in the complaint.

. there $as compulsor! counterclaim in the common ans$er of the

defendants the nature of $hich is such that it cannot be decided in anindependent actionand as to which the attention of respondent court was duly

called in the motions for reconsideration.

2. respondent court had no authorit! to diide the case before it b!

dismissing the same as against the non%defaulted defendants and

thereafter proceeding to hear it ex%parteand subse!uently rendering 8udgment

against the defaulted defendants, considering that in their view, under the said

provision of the rules, when a common cause of action is alleged against several

defendants, the default of any of them is a mere formality by which those

defaulted are not allowed to ta"e part in the proceedings, but otherwise, all the

defendants, defaulted and not defaulted, are supposed to have but a common

fate, win or lose.

&n other $ords' petitioners posit that in such a situation' there can onl! be one

common (udgment for or against all the defendant' the non%defaulted and the

defaulted. Thus, petitioners contend that the order of dismissal should be considered

also as the final 8udgment insofar as they are concerned, or, in the alternative, it shouldbe set aside together with all the proceedings and decision held and rendered

subse!uent thereto, and that the trial be resumed as of said date, with the defendants

Lim Tec" #huan and %ng #hong Leonardo being allowed to defend the case for all the

defendants.

PRI7ATE RESPONDENT8S CONTENTIONS0 )etitioners had been properl!

declared in default' the! hae no personalit! nor interest to question the

dismissal of the case as against their non%defaulted co%defendants and should

suffer the consequences of their o$n default.

ince petitioners have already made or at least started to ma"e their appeal, as they

are in fact entitled to appeal, this special civil action has no reason for being

Additionally, she invo"es thepoint of prematurit!upheld by the #ourt of Appeals in

regard to the above-mentioned petition therein of the non-defaulted defendants Lim

Tec" #huan and %ng #hong Leonardo. 9inally, she argues that in any event, the errors


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attributed to respondent court are errors of (udgment and ma! be reie$ed onl! in

an appeal.

ISSUE0

HELD0 Pe+i+i$ners s"$u3d #e gran+ed re3ie2, i2 $n34 +$ s+ress e91"a+i!a334 $n!e

9$re +"a+ +"e ru3es $2 1r$!edure 9a4 n$+ #e 9isused and a#used as ins+ru9en+s2$r +"e denia3 $2 su#s+an+ia3 :us+i!e.

A review of the record of this case immediately discloses that here is another

demonstrative instance of how some members of the bar, availing of their proficiency in

invo"ing the letter of the rules without regard to their real spirit and intent, succeed in

inducing courts to act contrary to the dictates of 8ustice and e!uity, and, in some

instances, to wittingly or unwittingly abet unfair advantage by ironically camouflaging

their actuations as earnest efforts to satisfy the public clamor for speedy disposition of

litigations.

?e cannot simply pass over the impression that the procedural maneuvers and tactics

revealed in the records of the case at bar were deliberately planned with the calculated

end in view of depriving petitioners and their co-defendants below of every opportunity

to properly defend themselves against a claim of more than substantial character,

considering the millions of pesos worth of properties involved as found by respondent

udge himself in the impugned decision, a claim that appears, in the light of the

allegations of the answer and the documents already brought to the attention of thecourt at the pre-trial, to be rather dubious . ?hat is most regrettable is that apparently

all of these alarming circumstances have escaped respondent 8udge.

&ndeed, a seeming disposition on the part of respondent court to lean more on the

contentions of private respondent may be discerned from the manner it resolved the

attempts of defendants Dy Ochay and Antonio Lim Tanhu to have the earlier order of

default against them lifted. $otwithstanding that Dy Ochays motion was over the 8urat

of the notary public before whom she too" her oath. &t is not even a verification. ?hat

the rule re!uires as interpreted by the upreme #ourt is that the motion must have tobe accompanied by an affidavit of merits that the defendant has a meritorious defense,

thereby ignoring the very simple legal point that the ruling of the upreme #ourt in !ng

"eng vs. #ustodio, ( #=A B(, relied upon by *is *onor, under which a separate

affidavit of merit is re!uired refers obviously to instances where the motion is not over

oath of the party concerned, considering that what the cited provision literally re!uires

is no more than a )motion under oath.) S+a+ed $+"er6ise, 6"en a 9$+i$n +$ 3i2+ an

$rder $2 de2au3+ !$n+ains +"e reas$ns 2$r +"e 2ai3ure +$ ans6er as 6e33 as +"e 2a!+s


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!$ns+i+u+ing +"e 1r$s1e!+i5e de2ense $2 +"e de2endan+ and i+ is s6$rn +$ #4 said

de2endan+, nei+"er a 2$r9a3 5eri2i!a+i$n n$r a se1ara+e a22ida5i+ $2 9eri+ is

ne!essar4.

;"a+ is 6$rse, +"e sa9e $rder 2ur+"er "e3d +"a+ +"e 9$+i$n +$ 3i2+ +"e $rder $2

de2au3+


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de2au3+ed de2endan+s Li9 Te!> C"uan and Eng C"$ng Le$nard$ 6as dis1$sed

$2, 6"i!" de2ini+e34 $ug"+ n$+ +$ "a5e #een +"e !ase. The trial was proceeding with

the testimony of the first witness of plaintiff and he was still under re-cross-

e3amination. :ndoubtedly, the motion to dismiss at that stage and in the light of the

declaration of default against the rest of the defendants was a well calculated surprise

move, obviously designed to secure utmost advantage of the situation, regardless of its

apparent unfairness.

@ut the situation here was aggravated by the indisputable fact that the adverse parties

who were entitled to be notified of such unanticipated dismissal motion did not get due

notice thereof. #ertainly, the non-defaulted defendants had the right to the three-day

prior notice re!uired by ection 5 of =ule (4. *ow could they have had such

indispensable notice when the motion was set for hearing on onday, October (,

(65, whereas the counsel for Lim Tec" #huan, Atty. itoy was personally served with

the notice only on aturday, October (6, (65 and the counsel for %ng #hongLeonardo, Atty. Alcudia, was notified by registered mail which was posted only that

same aturday, October (6, (65 According to #hief Eustice oran, )three days at

least must intervene between the date of service of notice and the date set for the

hearing, otherwise the court may not validly act on the motion.)

?orse, the 8udge was aware of said conse!uences, for simultaneously with his order of

dismissal, he immediately set the case for the e3-parte hearing of the evidence against

the defaulted defendants which was done motu proprio.

@efore proceeding to the discussion of the default aspects of this case, however, it

should not be amiss to advert first to the patent incorrectness, apparent on the face of

the record, of the aforementioned order of dismissal of the case below as regards non-

defaulted defendants Lim and Leonardo. ?hile it is true that said defendants are not

petitioners herein, the #ourt deems it necessary for a full view of the outrageous

procedural strategy conceived by respondents counsel and sanctioned by respondent

court to also ma"e reference to the very evident fact that in ordering said dismissal

respondent court disregarded completely the e3istence of defendants counterclaimwhich it had itself earlier held if indirectly, to be compulsory in nature when it refused to

dismiss the same on the ground alleged by respondent Tan that he doc"eting fees for

the filing thereof had not been paid by defendants.

Indeed, +"a+ said !$un+er!3ai9 is !$91u3s$r4 needs n$ e?+ended e3a#$ra+i$n. As

may be noted in the allegations hereof afore!uoted, it arose out of or is necessarily

connected with the occurrence that is the sub8ect matter of the plaintiffs claim, namely,

plaintiffs allegedly being the widow of the deceased Tee *oon entitled, as such, to


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demand accounting of and to receive the share of her alleged late husband as partner

of defendants Antonio Lim Tanhu and Alfonso Leonardo $g ua in +lory #ommercia

#ompany, the truth of which allegations all the defendants have denied. Defendants

maintain in their counterclaim that plaintiff "new of the falsity of said allegations even

before she filed her complaint, for she had in fact admitted her common-law

relationship with said deceased in a document she had 8ointly e3ecuted with him by

way of agreement to terminate their illegitimate relationship, for which she receivedP5F,FFF from the deceased, and with respect to her pretended share in the capital and

profits in the partnership, it is also defendants posture that she had already

!uitclaimed, with the assistance of able counsel, whatever rights if any she had thereto

in $ovember, (67, for the sum of P4,FFF duly receipted by her, which !uitclaim was,

however, e3ecuted, according to respondent herself in her amended complaint,

through fraud. And having filed her complaint "nowing, according to defendants, as she

ought to have "nown, that the material allegations thereof are false and baseless, she

has caused them to suffer damages. :ndoubtedly, with such allegations, defendantscounterclaim is compulsory, not only because the same evidence to sustain it will also

refute the cause or causes of action alleged in plaintiffs complaint, but also because

from its very nature, it is obvious that the same cannot )remain pending for

independent ad8udication by the court.)

The provision of the rules 8ust cited specifically en8oins that )/i0f a counterclaim has

been pleaded by a defendant prior to the service upon him of the plaintiffs motion to

dismiss, the action shall not be dismissed against the defendants ob8ection unless the

counterclaim can remain pending for independent ad8udication by the court.)

Defendants Lim and Leonardo had no opportunity to ob8ect to the motion to dismiss

before the order granting the same was issued, for the simple reason that they were

not opportunity notified of the motion therefor, but the record shows clearly that at least

defendant Lim immediately brought the matter of their compulsory counterclaim to the

attention of the trial court in his motion for reconsideration of even as the counsel for

the other defendant, Leonardo, predicated his motion on other grounds. &n its order of

respondent court not only upheld the plaintiffs supposed absolute right to choose her

adversaries but also held that the counterclaim is not compulsory, thereby virtuallyma"ing une3plained and ine3plicable (BF-degree turnabout in that respect.

There is another e!ually fundamental consideration why the motion to dismiss should

not have been granted. As +"e 13ain+i228s !$913ain+ "as #een 2ra9ed, a33 +"e si?

de2endan+s are !"arged 6i+" "a5ing a!+ua334 +a>en 1ar+ in a !$ns1ira!4 +$

9isa11r$1ria+e, !$n!ea3 and !$n5er+ +$ +"eir $6n #ene2i+ +"e 1r$2i+s, 1r$1er+ies

and a33 $+"er asse+s $2 +"e 1ar+ners"i1 G3$r4 C$99er!ia3 C$91an4, +$ +"e e?+en+


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+"a+ +"e4 "a5e a33eged34 $rgani=ed a !$r1$ra+i$n, G3$r4 C$99er!ia3 C$91an4,

In!. 6i+" 6"a+ +"e4 "ad i33ega334 g$++en 2r$9 +"e 1ar+ners"i1. :pon such

allegations, no 8udgment finding the e3istence of the alleged conspiracy or holding the

capital of the corporation to be the money of the partnership is legally possible without

the presence of all the defendants. The non-defaulted defendants are alleged to be

stoc"holders of the corporation and any decision depriving the same of all its assets

cannot but pre8udice the interests of said defendants. Accordingly, upon thesepremises, and even prescinding from the other reasons to be discussed anon it is clear

that all the si3 defendants below, defaulted and non-defaulted, are indispensable

parties. =espondents could do no less than grant that they are so on page 2 of their

answer. uch being the case, the !uestioned order of dismissal is e3actly the opposite

of what ought to have been done.

?henever it appears to the court in the course of a proceeding that an indispensable

party has not been 8oined, it is the duty of the court to stop the trial and to order theinclusion of such party. uch an order is unavoidable, for the )general rule with

reference to the ma"ing of parties in a civil action re!uires the 8oinder of all necessary

parties wherever possible, and the 8oinder of all indispensable parties under any and all

conditions, the presence of those latter being a sine $ua non of the e3ercise of 8udicia

power.) /@orlasa vs. Polistico, 5 Phil. 254, at p. 25.0 &t is precisely ) when an

indispensable party is not before the court /that0 the action should be dismissed.) The

absence of an indispensable party renders all subse!uent actuations of the court null

and void, for want of authority to act, not only as to the absent parties but even as to

those present. &n short, what respondent court did here was e3actly the reverse of what

the law ordains G it eliminated those who by law should precisely be 8oined.

As may he noted from the order of respondent court !uoted earlier, which resolved the

motions for reconsideration of the dismissal order filed by the non-defaulted

defendants, *is *onor rationali


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defendant may avoid or mitigate their liability. (a*o vs. +lo, "hil. -

/.)

%his being the rule this court cannot compel the plaintiff to continue

prosecuting her cause of action against the defendants-movants if in the

course of the trial she believes she can enforce it against the remaining

defendants subect only to the limitation provided in Section 0, 1ule 23 ofthe 1ules of #ourt. ... ("ages /0/4, 1ecord.)

$oticeably, *is *onor has employed the same e!uivocal terminology as in plaintiffs

motion of October (B, (65 by referring to the action he had ta"en as being )dismissal

of the complaint against them or their being dropped therefrom), without perceiving that

the reason for the evidently intentional ambiguity is transparent. The apparent idea is to

rely on the theory that under ection (( of =ule 2, parties may be dropped by the court

upon motion of any party at any stage of the action, hence )it is the absolute right

prerogative of the plaintiff to chooseGthe parties he desires to sue, without dictation or

imposition by the court or the adverse party.) &n other words, the ambivalent pose is

suggested that plaintiffs motion of was not predicated on ection of =ule ( but

more on ection (( of =ule 2. @ut the truth is that nothing can be more incorrect. To

start with, the latter rule does not comprehend whimsical and irrational dropping or

adding of parties in a complaint. ?hat it really contemplates is erroneous or mista"en

non-8oinder and mis8oinder of parties. N$ $ne is 2ree +$ :$in an4#$d4 in a !$913ain+

in !$ur+ $n34 +$ dr$1 "i9 un!ere9$ni$us34 3a+er a+ +"e 13easure $2 +"e 13ain+i22.

The rule presupposes that the original inclusion had been made in the honest

conviction that it was proper and the subse!uent dropping is re!uested because it has

turned out that such inclusion was a mista"e. And this is the reason why the rule

ordains that the dropping be )on such terms as are 8ust) G 8ust to all the other parties.

&n the case at bar, there is nothing in the record to legally 8ustify the dropping of the

non-defaulted defendants, Lim and Leonardo. The motion of October (B, (65 cites

none. :sually, the court in granting such a motion in!uires for the reasons and in the

appropriate instances directs the granting of some form of compensation for the troubleundergone by the defendant in answering the complaint, preparing for or proceeding

partially to trial, hiring counsel and ma"ing corresponding e3penses in the premises.

$othing of these, appears in the order in !uestion. ost importantly, *is *onor ought

to have considered that the outright dropping of the non-defaulted defendants Lim and

Leonardo, over their ob8ection at that, would certainly be un8ust not only to the

petitioners, their own parents, who would in conse!uence be entirely defenseless, but

also to Lim and Leonardo themselves who would naturally correspondingly suffer from


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the eventual 8udgment against their parents. =espondent court paid no heed at all to

the mandate that such dropping must be on such terms as are 8ust) G meaning to all

concerned with its legal and factual effects.

T"us, i+ is @ui+e 13ain +"a+ res1$nden+ !$ur+ erred in issuing i+s $rder $2

dis9issa3 as 6e33 as i+s $rder den4ing re!$nsidera+i$n $2 su!" dis9issa3. As ;e

9a>e +"is ru3ing, ;e are n$+ $#3i5i$us $2 +"e !ir!u9s+an!e +"a+ de2endan+s Li9and Le$nard$ are n$+ 1ar+ies "erein. u+ su!" !$nsidera+i$n is in!$nse@uen+ia3.

T"e 2a+e $2 +"e !ase $2 1e+i+i$ners is inse1ara#34 +ied u1 6i+" said $rder $2

dis9issa3, i2 $n34 #e!ause +"e $rder $2 ex%parte "earing 6"i!" dire!+34 a22e!+s

and 1re:udi!es said 1e+i+i$ners is 1redi!a+ed +"ere$n. Ne!essari34, +"ere2$re, ;e

"a5e +$ 1ass $n +"e 3ega3i+4 $2 said $rder, i2 ;e are +$ de!ide +"e !ase $2 "erein

1e+i+i$ners 1r$1er34 and 2air34.

The attitude of the non-defaulted defendants of no longer pursuing further their

!uestioning of the dismissal is from another point of view understandable. On the one

hand, why should they insist on being defendants when plaintiff herself has already

release from her claims On the other hand, as far as their respective parents-co-

defendants are concerned, they must have reali


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much less in the upreme #ourt, and if ?e are adopting a passive attitude in the

premises, it is due only to the fact that this is counsels first offense. @ut similar conduct

on his part in the future will definitely be dealt with more severely. Parties and counsel

would be well advised to avoid such attempts to befuddle the issues as invariably then

will be e3posed for what they are, certainly unethical and degrading to the dignity of the

law profession. oreover, almost always they only betray the inherent wea"ness of the

cause of the party resorting to them.

C C

C$9ing n$6 +$ +"e 9a++er i+se32 $2 de2au3+.

The =ules of #ourt contain a separate rule on the sub8ect of default, =ule (B. @ut said

rule is concerned solely with default resulting from failure of the defendant or

defendants to answer within the reglementary period. =eferring to the simplest form of

default, that is, where there is only one defendant in the action and he fails to answeron time, ection ( of the rule provides that upon )proof of such failure, /the court shall0

declare the defendant in default. Thereupon the court shall proceed to receive the

plaintiffs evidence and render 8udgment granting him such relief as the complaint and

the facts proven may warrant.) This last clause is clarified by ection 4 which says that

)a 8udgment entered against a party in default shall not e3ceed the amount or be

different in "ind from that prayed for.)

:ne!uivocal, in the literal sense, as these provisions are, they do not readily conveythe full import of what they contemplate. To begin with, contrary to the immediate

notion that can be drawn from their language, these provisions are not to be

understood as meaning that default or the failure of the defendant to answer should be

)interpreted as an admission by the said defendant that the plaintiffs cause of action

find support in the law or that plaintiff is entitled to the relief prayed for.)

eing de!3ared in de2au3+ d$es n$+ !$ns+i+u+e a 6ai5er $2 rig"+s e?!e1+ +"a+ $2

#eing "eard and $2 1resen+ing e5iden!e in +"e +ria3 !$ur+.And pursuant to ection

of =ule 5(, )a party who has been declared in default may li"ewise appeal from the8udgment 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 =ule 2B.).

&n other words, a defaulted defendant is not actually thrown out of court. ?hile in a

sense it may be said that by defaulting he leaves himself at the mercy of the court, the

rules see to it that any 8udgment against him must be in accordance with law. The


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evidence to support the plaintiffs cause is, of course, presented in his absence, but the

court is not supposed to admit that which is basically incompetent. Although the

defendant would not be in a position to ob8ect, elementary 8ustice re!uires that, only

legal evidence should be considered against him. &f the evidence presented should not

be sufficient to 8ustify a 8udgment for the plaintiff, the complaint must be dismissed. And

if an unfavorable 8udgment should be 8ustifiable, it cannot e3ceed in amount or be

different in "ind from what is prayed for in the complaint.

&ncidentally, these considerations argue against the present widespread practice of trial

8udges, as was done by *is *onor in this case, of delegating to their cler"s of court the

reception of the plaintiffs evidence when the defendant is in default. uch a Practice is

wrong in principle and orientation. ?hen a defendant allows himself to be declared in

default, he relies on the faith that the court would ta"e care that his rights are not

unduly pre8udiced.

The e3pression, therefore, in ection ( of =ule (B afore!uoted which says that

)thereupon the court shall proceed to receive the plaintiffs evidence etc.) is not to be

ta"en literally. The gain in time and dispatch should the court immediately try the case

on the very day of or shortly after the declaration of default is far outweighed by the

inconvenience and complications involved in having to undo everything already done in

the event the defendant should 8ustify his omission to answer on time.

The foregoing observations, as may be noted, refer to instances where the only

defendant or all the defendants, there being several, are declared in default. There areadditional rules embodying more considerations of 8ustice and e!uity in cases where

there are several defendants against whom a common cause of action is averred and

not all of them answer opportunely or are in default, particularly in reference to the

power of the court to render 8udgment in such situations. Thus, in addition to the

limitation of ection 4 that the 8udgment by default should not be more in amount nor

different in "ind from the reliefs specifically sought by plaintiff in his complaint, ection

5 restricts the authority of the court in rendering 8udgment in the situations 8ust

mentioned as follows'

ec. 5. 5udgment when some defendants answer, and other make difficult.

6 7hen a complaint states a common cause of action against several

defendant some of whom answer, and the others fail to do so, the court

shall try the case against all upon the answer thus filed and render

udgment upon the evidence presented. %he same proceeding applies

when a common cause of action is pleaded in a counterclaim, cross-claim

and third-party claim.


14/34

Iery aptly does #hief Eustice oran elucidate on this provision and the controlling

8urisprudence e3planatory thereof this wise'

?here a complaint states a common cause of action against severa

defendants and some appear to defend the case on the merits while others

ma"e default, the defense interposed by those who appear to litigate the

case inures to the benefit of those who fail to appear, and if the court findsthat a good defense has been made, all of the defendants must be

absolved. &n other words, the answer filed by one or some of the

defendants inures to the benefit of all the others, even those who have not

seasonably filed their answer. /@ueno v. Orti


15/34

tates adopted as ground for its own decision the following ruling of the

$ew Kor" #ourt of %rrors in #lason vs. ;orris, (F Eons., 45'

&t would be unreasonable to hold that because one defendant had made

default, the plaintiff should have a decree even against him, where the

court is satisfied from the proofs offered by the other, that in fact the plaintiff

is not entitled to a decree. /( Law, ed., 7(.0

The reason is simple' 8ustice has to be consistent. The complaint stating a

common cause of action against several defendants, the complainants

rights G or lac" of them G in the controversy have to be the same, and not

different, as against all the defendants although one or some ma"e default

and the other or others appear, 8oin issue, and enter into trial. 9or instance,

in the case of #lason vs. ;orris above cited, the $ew Kor" #ourt of %rrors

in effect held that in such a case if the plaintiff is not entitled to a decree, he

will not be entitled to it, not only as against the defendant appearing and

resisting his action but also as against the one who made default. &n the

case at bar, the cause of action in the plaintiffs complaint was common

against the ayor of anila, %milia atanguihan, and the other defendants

in #ivil #ase $o. (2(B of the lower court. The #ourt of 9irst &nstance in its

8udgment found and held upon the evidence adduced by the plaintiff and

the defendant mayor that as between said plaintiff and defendant

atanguihan the latter was the one legally entitled to occupy the stallsJ and

it decreed, among other things, that said plaintiff immediately vacate them.Paraphrasing the $ew Kor" #ourt of %rrors, it would be unreasonable to

hold now that because atanguihan had made default, the said plaintiff

should be declared, as against her, legally entitled to the occupancy of the

stalls, or to remain therein, although the #ourt of 9irst &nstance was so

firmly satisfied, from the proofs offered by the other defendant, that the

same plaintiff was not entitled to such occupancy that it peremptorily

ordered her to vacate the stalls. &f in the cases of #lason vs. ;orris,

supra, 8row vs. 9e la ega, supra, and ele: vs. 1amas, supra thedecrees entered inured to the benefit of the defaulting defendants, there is

no reason why that entered in said case $o. (2(B should not be held also

to have inured to the benefit of the defaulting defendant atanguihan and

the doctrine in said three cases plainly implies that there is nothing in the

law governing default which would prohibit the court from rendering

8udgment favorable to the defaulting defendant in such cases. &f it inured to

her benefit, it stands to reason that she had a right to claim that benefit, for


16/34

it would not be a benefit if the supposed beneficiary were barred from

claiming itJ and if the benefit necessitated the e3ecution of the decree, she

must be possessed of the right to as" for the e3ecution thereof as she did

when she, by counsel, participated in the petition for e3ecution Anne3 (.

ection of =ule 24 would seem to afford a solid support to the above

considerations. &t provides that when a complaint states a common causeof action against several defendants, some of whom answer, and the

others ma"e default, the court shall try the case against all upon the

answer thus filed and render 8udgment upon the evidence presented by the

parties in court. &t is obvious that under this provision the case is tried

8ointly not only against the defendants answering but also against those

defaulting, and the trial is held upon the answer filed by the formerJ and the

8udgment, if adverse, will pre8udice the defaulting defendants no less than

those who answer. &n other words, the defaulting defendants are heldbound by the answer filed by their co-defendants and by the 8udgment

which the court may render against all of them. @y the same to"en, and by

all rules of e!uity and fair play, if the 8udgment should happen to be

favorable, totally or partially, to the answering defendants, it must

correspondingly benefit the defaulting ones, for it would not be 8ust to let

the 8udgment produce effects as to the defaulting defendants only when

adverse to them and not when favorable.

&n


17/34

defendants some of whom answer and the others fail to do so, the court

shall try the case against all upon the answer thus filed /by some0 and

render 8udgment upon the evidence presented. &n other words, the answer

filed by one or some of the defendants inures to the benefit of all the

others, even those who have not seasonably filed their answer.

&ndeed, since the petition in #ase $o. (6F sets forth a common cause ofaction against all of the respondents therein, a decision in favor of one of

them would necessarily favor the others. &n fact, the main issue, in said

case, is whether Patanao has a timber license to underta"e logging

operations in the disputed area. &t is not possible to decide such issue in

the negative, insofar as the Director of 9orestry, and to settle it otherwise,

as regards the P#, which is merely acting as agent of the Director of

9orestry, and is, therefore, his alter ego, with respect to the disputed forest

area.

S+a+ed di22eren+34, in a33 ins+an!es 6"ere a !$99$n !ause $2 a!+i$n is a33eged

agains+ se5era3 de2endan+s, s$9e $2 6"$9 ans6er and +"e $+"ers d$ n$+, +"e

3a++er $r +"$se in de2au3+ a!@uire a 5es+ed rig"+ n$+ $n34 +$ $6n +"e de2ense

in+er1$sed in +"e ans6er $2 +"eir !$% de2endan+ $r !$%de2endan+s n$+ in de2au3+

#u+ a3s$ +$ e?1e!+ a resu3+ $2 +"e 3i+iga+i$n +$+a334 !$99$n 6i+" +"e9 in >ind and

in a9$un+ 6"e+"er 2a5$ra#3e $r un2a5$ra#3e. The substantive unity of the plaintiffs

cause against all the defendants is carried through to its ad8ective phase as ineluctably

demanded by the homogeneity and indivisibility of 8ustice itself.

&ndeed, since the singleness of the cause of action also inevitably implies that all the

defendants are indispensable parties, the courts power to act is integral and cannot be

split such that it cannot relieve any of them and at the same time render 8udgment

against the rest. #onsidering the tenor of the section in !uestion, it is to be assumed

that when any defendant allows himself to be declared in default "nowing that his

defendant has already answered, he does so trusting in the assurance implicit in the

rule that his default is in essence a mere formality that deprives him of no more thanthe right to ta"e part in the trial and that the court would deem anything done by or for

the answering defendant as done by or for him. The presumption is that otherwise he

would not -have seen to that he would not be in default. Of course, he has to suffer the

conse!uences of whatever the answering defendant may do or fail to do, regardless of

possible adverse conse!uences, but if the complaint has to be dismissed in so far as

the answering defendant is concerned it becomes his inalienable right that the same

be dismissed also as to him. &t does not matter that the dismissal is upon the evidence


18/34

presented by the plaintiff or upon the latters mere desistance, for in both

contingencies, the lac" of sufficient legal basis must be the cause.

The integrity of the common cause of action against all the defendants and the

indispensability of all of them in the proceedings do not permit any possibility of waiver

of the plaintiffs right only as to one or some of them, without including all of them, and

so, as a rule, withdrawal must be deemed to be a confession of wea"ness as to all.This is not only elementary 8usticeJ it also precludes the concomitant ha


19/34

;ON "erein 1e+i+i$ners 6ere en+i+3ed +$ n$+i!e $2 13ain+i228s 9$+i$n +$ dr$1 +"eir

!$%de2endan+s Li9 and Le$nard$, !$nsidering +"a+ 1e+i+i$ners "ad #een

1re5i$us34 de!3ared in de2au3+.

&n this connection, the decisive consideration is that according to the applicable rule,

ection 6, =ule (2, already !uoted above, /(0 even after a defendant has been

declared in default, provided he )files a motion to set aside the order of default, G heshall be entitled to notice of all further proceedings regardless of whether the order of

default is set aside or not) and /0 a party in default who has not filed such a motion to

set aside must still be served with all )substantially amended or supplemented

pleadings.)

&n the instant case, it cannot be denied that petitioners had all filed their motion for

reconsideration of the order declaring them in default. =espondents own answer to the

petition therein ma"es reference to the order which denied said motion for

reconsideration. On page 2 of petitioners memorandum herein this motion is referred

to as )a motion to set aside the order of default.) @ut as ?e have not been favored by

the parties with a copy of the said motion, ?e do not even "now the e3cuse given for

petitioners failure to appear at the pre-trial, and ?e cannot, therefore, determine

whether or not the motion complied with the re!uirements of ection 2 of =ule (B

which ?e have held to be controlling in cases of default for failure to answer on time.

;e d$ n$+, "$6e5er, "a5e "ere, as ear3ier n$+ed, a !ase $2 de2au3+ 2$r 2ai3ure +$

ans6er #u+ $ne 2$r 2ai3ure +$ a11ear a+ +"e 1re%+ria3. ;e rei+era+e, in +"e si+ua+i$nn$6 #e2$re Us, issues "a5e a3read4 #een :$ined. &n fact, evidence had been

partially offered already at the pre-trial and more of it at the actual trial which had

already begun with the first witness of the plaintiff undergoing re-cross-e3amination.

?ith these facts in mind and considering that issues had already been 8oined even as

regards the defaulted defendants, it would be re!uiring the obvious to pretend that

there was still need for an oath or a verification as to the merits of the defense of the

defaulted defendants in their motion to reconsider their default. &nasmuch as none of

the parties had as"ed for a summary 8udgment there can be no !uestion that the

issues 8oined were genuine, and conse!uently, the reason for re!uiring such oath or

verification no longer holds. @esides, it may also be reiterated that being the parents of

the non-defaulted defendants, petitioners must have assumed that their presence was

superfluous, particularly because the cause of action against them as well as their own

defenses are common.


20/34

?e can thus hold as ?e do hold for the purposes of the revival of their right to notice

under ection 6 of =ule (2, that petitioners motion for reconsideration was in

substance legally ade!uate regardless of whether or not it was under oath.

&n any event, the dropping of the defendants Lim and Leonardo from plaintiffs

amended complaint was virtually a second amendment of plaintiffs complaint. And

there can be no doubt that such amendment was substantial, for with the eliminationthereby of two defendants allegedly solidarily liable with their co-defendants, herein

petitioners, it had the effect of increasing proportionally what each of the remaining

defendants, the said petitioners, would have to answer for 8ointly and severally.

Accordingly, notice to petitioners of the plaintiffs motion was legally indispensable

under the rule above-!uoted. #onse!uently, respondent court had no authority to act

on the motion, to dismiss, pursuant to ection 7 of =ule (4, for according to enator

9rancisco, )/t0 he =ules of #ourt clearly provide that no motion shall be acted upon by

the #ourt without the proof of service of notice thereof, together with a copy of the

motion and other papers accompanying it, to all parties concerned at least three days

before the hearing thereof, stating the time and place for the hearing of the motion.

/=ule 7, section 5, 4 and 7, =ules of #ourt /now ec. (4, new =ules0. ?hen the

motion does not comply with this re!uirement, it is not a motion. &t presents no

!uestion which the court could decide. And the #ourt ac!uires no 8urisdiction to

consider it.

C 5 C

The foregoing considerations notwithstanding, i+ is res1$nden+s8 1$si+i$n +"a+

!er+i$rari is n$+ +"e 1r$1er re9ed4 $2 1e+i+i$ners. &t is contended that inasmuch as

said petitioners have in fact made their appeal already by filing the re!uired notice of

appeal and appeal bond and a motion for e3tension to file their record on appeal,

which motion was granted by respondent court, their only recourse is to prosecute that

appeal. Additionally, it is also maintained that since petitioners have e3pressly

withdrawn their motion to !uash of impugning the order they have lost their right to

assail by certiorari the actuations of respondent court now being !uestioned,

respondent court not having been given the opportunity to correct any possible error it

might have committed.

?e do not agree. The essential purpose of certiorari is to "eep the proceedings in

lower 8udicial courts and tribunals within legal bounds, so that due process and the rule

of law may prevail at all times and arbitrariness, whimsicality and unfairness which

8ustice abhors may immediately be stamped out before graver in8ury, 8uridical and


21/34

otherwise, ensues. ?hile generally these ob8ectives may well be attained in an

ordinary appeal, it is undoubtedly the better rule to allow the special remedy of

certiorari at the option of the party adversely affected, when the irregularity committed

by the trial court is so grave and so far reaching in its conse!uences that the long and

cumbersome procedure of appeal will only further aggravate the situation of the

aggrieved party because other untoward actuations are li"ely to materiali $2 !$ur+, +"e su#se@uen+ using $2 +"e sa9e

as #asis 2$r i+s :udg9en+ and +"e rendi+i$n $2 su!" :udg9en+.

9or at least three reasons which ?e have already fully discussed above, the order of

dismissal of October (, (65 is unworthy of Our sanction' /(0 there was no timely

notice of the motion therefor to the non-defaulted defendants, aside from there being

no notice at all to herein petitionersJ /0 the common answer of the defendants,

including the non-defaulted, contained a compulsory counterclaim incapable of being

determined in an independent actionJ and /20 the immediate effect of such dismissalwas the removal of the two non-defaulted defendants as parties, and inasmuch as they

are both indispensable parties in the case, the court conse!uently lost the) sine !ua

non of the e3ercise of 8udicial power), per


22/34

be reviewing the case as against the two non-defaulted defendants who are not before

:s not being parties hereto. :pon the other hand, for :s to hold that the order of

dismissal should be allowed to stand, as contended by respondents themselves who

insist that the same is already final, not only because the period for its finality has long

passed but also because allegedly, albeit not very accurately, said non-defaulted

defendants unsuccessfully tried to have it set aside by the #ourt of Appeals whose

decision on their petition is also already final, ?e would have to disregard whateverevidence had been presented by the plaintiff against them and, of course, the findings

of respondent court based thereon which, as the assailed decision shows, are adverse

to them.

&n other words, whichever of the two apparent remedies the #ourt chooses, it would

necessarily entail some "ind of possible 8uridical imperfection. pea"ing of their

respective practical or pragmatic effects, to annul the dismissal would inevitably

pre8udice the rights of the non-defaulted defendants whom ?e have not heard and whoeven respondents would not wish to have anything anymore to do with the case. On

the other hand, to include petitioners in the dismissal would naturally set at naught

every effort private respondent has made to establish or prove her case thru means

sanctioned by respondent court. &n short, ?e are confronted with a legal para-dilemma.

All things considered, after careful and mature deliberation, the #ourt has arrived at the

conclusion that as between the two possible alternatives 8ust stated, it would only be

fair, e!uitable and proper to uphold the position of petitioners. &n other words, ?e rule

that the order of dismissal is in law a dismissal of the whole case of the plaintiff,including as to petitioners herein. #onse!uently, all proceedings held by respondent

court subse!uent thereto including and principally its decision of are illegal and should

be set aside.

This conclusion is fully 8ustified by the following considerations of e!uity'

(. &t is very clear to :s that the procedural maneuver resorted to by private respondent

in securing the decision in her favor was ill-conceived. &t was characteri


23/34

why such tactics had to be availed of. ?e cannot directly or indirectly give Our assent

to the commission of unfairness and ine!uity in the application of the rules of

procedure, particularly when the propriety of reliance thereon is not beyond

controversy.

. The theories of remedial law pursued by private respondents, although approved by

*is *onor, run counter to such basic principles in the rules on default and suchelementary rules on dismissal of actions and notice of motions that no trial court should

be unaware of or should be mista"en in applying. ?e are at a loss as to why *is *onor

failed to see through counsels ine!uitous strategy, when the provisions /(0 on the

three-day rule on notice of motions, ection 5 of =ule (4, /0 against dismissal of

actions on motion of plaintiff when there is a compulsory counterclaim, ection , =ule

(, /20 against permitting the absence of indispensable parties, ection , =ule 2, /50

on service of papers upon defendants in default when there are substantia

amendments to pleadings, ection 6, =ule (2, and /40 on the unity and integrity of thefate of defendants in default with those not in default where the cause of action against

them and their own defenses are common, ection 5, =ule (B, are so plain and the

8urisprudence declaratory of their intent and proper construction are so readily

comprehensible that any error as to their application would be unusual in any

competent trial court.

2. After all, all the malactuations of respondent court are traceable to the initiative of

private respondent and1or her counsel. he cannot, therefore, complain that she is

being made to un8ustifiably suffer the conse!uences of what ?e have found to beerroneous orders of respondent court. &t is only fair that she should not be allowed to

benefit from her own frustrated ob8ective of securing a one-sided decision.

5. ore importantly, ?e do not hesitate to hold that on the basis of its own recitals, the

decision in !uestion cannot stand close scrutiny. ?hat is more, the very considerations

contained therein reveal convincingly the inherent wea"ness of the cause of the

plaintiff. To be sure, ?e have been giving serious thought to the idea of merely

returning this case for a resumption of trial by setting aside the order of dismissal ofOctober (, (65, with all its attendant difficulties on account of its adverse effects on

parties who have not been heard, but upon closer study of the pleadings and the

decision and other circumstances e3tant in the record before :s, ?e are now

persuaded that such a course of action would only lead to more legal complications

incident to attempts on the part of the parties concerned to desperately s!uee


24/34

%ven a mere superficial reading of the decision would immediately reveal that it is

littered on its face with deficiencies and imperfections which would have had no reason

for being were there less haste and more circumspection in rendering the same.

=ec"lessness in 8umping to unwarranted conclusions, both factual and legal, is at once

evident in its findings relative precisely to the main bases themselves of the reliefs

granted. &t is apparent therein that no effort has been made to avoid glaring

inconsistencies. ?here references are made to codal provisions and 8urisprudence,inaccuracy and inapplicability are at once manifest. &t hardly commends itself as a

deliberate and consciencious ad8udication of a litigation which, considering the

substantial value of the sub8ect matter it involves and the unprecedented procedure

that was followed by respondents counsel, calls for greater attention and s"ill than the

general run of cases would.

Inter alia, the following features of the decision ma"e it highly improbable that if ?e

too" another course of action, private respondent would still be able to ma"e out anycase against petitioners, not to spea" of their co-defendants who have already been

e3onerated by respondent herself thru her motion to dismiss'

(. According to *is *onors own statement of plaintiffs case, )she is the widow of the

late Tee *oon Po #huan /Po #huan, for short0 who was then one of the partners in the

commercial partnership, +lory #ommercial #o. with defendants Antonio Lim Tanhu

/Lim Tanhu, for short0 and Alfonso Leonardo $g ua /$g ua, for short0 as co-partnersJ

that after the death of her husband on arch ((, (677 she is entitled to share not only

in the capital and profits of the partnership but also in the other assets, both real andpersonal, ac!uired by the partnership with funds of the latter during its lifetime.)

=elatedly, in the latter part of the decision, the findings are to the following effect' .

That the herein plaintiff Tan Put and her late husband Po #huan married at

the Philippine &ndependent #hurch of #ebu #ity on December, F, (656J

that Po #huan died on arch ((, (677J that the plaintiff and the late Po

#huan were childless but the former has a foster son Antonio $u;e< whom

she has reared since his birth with whom she lives up to the presentJ that

prior to the marriage of the plaintiff to Po #huan the latter was already

managing the partnership +lory #ommercial #o. then engaged in a little

business in hardware at analili t., #ebu #ityJ that prior to and 8ust after

the marriage of the plaintiff to Po #huan she was engaged in the drugstore

businessJ that not long after her marriage, upon the suggestion of Po

#huan the plaintiff sold her drugstore for P(4,FFF.FF which amount she

gave to her husband in the presence of defendant Lim Tanhu and was


25/34

invested in the partnership +lory #ommercial #o. sometime in (64FJ that

after the investment of the above-stated amount in the partnership its

business flourished and it embar"ed in the import business and also

engaged in the wholesale and retail trade of cement and +& sheets and

under huge profitsJ

333 333 333

That the late Po #huan was the one who actively managed the business of

the partnership +lory #ommercial #o. he was the one who made the final

decisions and approved the appointments of new personnel who were

ta"en in by the partnershipJ that the late Po #huan and defendants Lim

Tanhu and $g ua are brothers, the latter two /0 being the elder brothers

of the formerJ that defendants Lim Tanhu and $g ua are both naturali


26/34

at the pre- trial serves to put the 8udge on notice of their respective basic positions, in

order that in appropriate cases he may, if necessary in the interest of 8ustice and a

more accurate determination of the facts, ma"e in!uiries about or re!uire clarifications

of matters ta"en up at the pre-trial, before finally resolving any issue of fact or of law. &n

brief, the pre-trial constitutes part and parcel of the proceedings, and hence, matters

dealt with therein may not be disregarded in the process of decision ma"ing.

Otherwise, the real essence of compulsory pre-trial would be insignificant andworthless.

$ow, applying these postulates to the findings of respondent court 8ust !uoted, i+ 6i3

#e $#ser5ed +"a+ +"e !$ur+8s !$n!3usi$n a#$u+ +"e su11$sed 9arriage $2 13ain+i22

+$ +"e de!eased Tee H$$n Li9 P$ C"uan is !$n+rar4 +$ +"e 6eig"+ $2 +"e

e5iden!e #r$ug"+ #e2$re i+ during +"e +ria3 and +"e 1re%+ria3.

The primary evidence of a marriage must be an authentic copy of the marriage

contract. ?hile a marriage may also be proved by other competent evidence, the

absence of the contract must first be satisfactorily e3plained. &n the case at bar, the

purported certification issued by a ons. Eose . =ecoleto, @ishop, Philippine

&ndependent #hurch, #ebu #ity, is not, therefore, competent evidence, there being

absolutely no showing as to unavailability of the marriage contract and, indeed, as to

the authenticity of the signature of said certifier, the 8urat allegedly signed by a second

assistant provincial fiscal not being authoriim @eng. @ut she testified she was childless. o which is which &n any event, if on


27/34

the strength of this document, $u;e< is actually the legitimate son of Tan Put and not

her adopted son, he would have been but (2 years old in (656, the year of her alleged

marriage to Po #huan, and even then, considering such age, his testimony in regard

thereto would still be suspect.

$ow, as against such flimsy evidence of plaintiff, the court had before it, two

documents of great weight belying the pretended marriage. ?e refer to /(0 %3hibit LL,the income ta3 return of the deceased Tee *oon Lim Po #huan indicating that the

name of his wife was Ang ic" Tin and /0 the !uitclaim, Anne3 A of the answer,

wherein plaintiff Tan Put stated that she had been living with the deceased without

benefit of marriage and that she was his )common-law wife). urely, these two

documents are far more reliable than all the evidence of the plaintiff put together.

Of course, %3hibit LL is what might be termed as pre-trial evidence. @ut it is evidence

offered to the 8udge himself, not to the cler" of court, and should have at least moved

him to as" plaintiff to e3plain if not rebut it before 8umping to the conclusion regarding

her alleged marriage to the deceased, Po #huan. And in regard to the !uitclaim

containing the admission of a common-law relationship only, it is to be observed that

*is *onor found that )defendants Lim Tanhu and $g ua had the plaintiff e3ecute a

!uitclaim on $ovember 6, (67 /Anne3 )A), Answer0 where they gave plaintiff the

amount of P4,FFF as her share in the capital and profits of the business of +lory

#ommercial #o. which was engaged in the hardware business), without ma"ing

mention of any evidence of fraud and misrepresentation in its e3ecution, thereby

indicating either that no evidence to prove that allegation of the plaintiff had beenpresented by her or that whatever evidence was actually offered did not produce

persuasion upon the court. tated differently, since the e3istence of the !uitclaim has

been duly established without any circumstance to detract from its legal import, the

court should have held that plaintiff was bound by her admission therein that she was

the common-law wife only of Po #huan and what is more, that she had already

renounced for valuable consideration whatever claim she might have relative to the

partnership +lory #ommercial #o.

And when it is borne in mind that in addition to all these considerations, there are

mentioned and discussed in the memorandum of petitioners /(0 the certification of the

Local #ivil =egistrar of #ebu #ity and /0 a similar certification of the Apostolic Prefect

of the Philippine &ndependent #hurch, Parish of to. $i;o, #ebu #ity, that their

respective official records corresponding to December (656 to December (64F do not

show any marriage between Tee *oon Lim Po #huan and Tan Put, neither of which

certifications have been impugned by respondent until now, it stands to reason that


28/34

plaintiffs claim of marriage is really unfounded. ?ithal, there is still another document,

also mentioned and discussed in the same memorandum and unimpugned by

respondents, a written agreement e3ecuted in #hinese, but purportedly translated into

%nglish by the #hinese #onsul of #ebu, between Tan Put and Tee *oon Lim Po #huan

to the following effect'

#O$:LAT% O9 T*% =%P:@L O9 #*&$A #ebu #ity, Philippines

T = A $ L A T & O $

This is to certify that (, iss Tan >i %ng Alias Tan Put, have lived with r.

Lim Po #huan alias Tee*oon since (656 but it recently occurs that we are

incompatible with each other and are not in the position to "eep living

together permanently. ?ith the mutual concurrence, we decided to

terminate the e3isting relationship of common law-marriage and promised

not to interfere each others affairs from now on. The 9orty ThousandPesos /P5F,FFF.FF0 has been given to me by r. Lim Po #huan for my

subsistence.

?itnesses'

r. Lim @eng +uan r. *uang ing e

igned on the (F day of the th month of the 45th year of the =epublic of

#hina /corresponding to the year (6740.

/+D0 TA$ >& %$+

Ierified from the records. EO=+% TA@A= /Pp. B2-B5, =ecord.0

&ndeed, not only does this document prove that plaintiffs relation to the deceased was

that of a common-law wife but that they had settled their property interests with the

payment to her of P5F,FFF.

In +"e 3ig"+ $2 a33 +"ese !ir!u9s+an!es, ;e 2ind n$ a3+erna+i5e #u+ +$ "$3d +"a+

13ain+i22 Tan Pu+8s a33ega+i$n +"a+ s"e is +"e 6id$6 $2 Tee H$$n Li9 P$ C"uan "as

n$+ #een sa+is2a!+$ri34 es+a#3is"ed and +"a+, $n +"e !$n+rar4, +"e e5iden!e $n

re!$rd !$n5in!ing34 s"$6s +"a+ "er re3a+i$n 6i+" said de!eased 6as +"a+ $2 a

!$99$n%3a6 6i2e and 2ur+"er9$re, +"a+ a33 "er !3ai9s agains+ +"e !$91an4 and

i+s sur5i5ing 1ar+ners as 6e33 as +"$se agains+ +"e es+a+e $2 +"e de!eased "a5e

a3read4 #een se++3ed and 1aid.?e ta"e 8udicial notice of the fact that the respective


29/34

counsel who assisted the parties in the !uitclaim, Attys. *. *ermosisima and $atalio

#astillo, are members in good standing of the Philippine @ar, with the particularity that

the latter has been a member of the #abinet and of the *ouse of =epresentatives of

the Philippines, hence, absent any credible proof that they had allowed themselves to

be parties to a fraudulent document *is *onor did right in recogni


30/34

inas9u!" as 6"a+ 6as #eing rendered 6as a :udg9en+ #4 de2au3+, su!" +"e$r4

s"$u3d n$+ "a5e #een a33$6ed +$ #e +"e su#:e!+ $2 an4 e5iden!e. @ut inasmuch as

it was the cler" of court who received the evidence, it is understandable that he failed

to observe the rule. Then, on the other hand, if it was her capital that made the

partnership flourish, why would she claim to be entitled to only to 1 2of its assets and

profits :nder her theory found proven by respondent court, she was actually the

owner of everything, particularly because *is *onor also found )that defendants LimTanhu and $g ua were partners in the name but they were employees of Po #huan

that defendants Lim Tanhu and $g ua had no means of livelihood at the time of their

employment with the +lory #ommercial #o. under the management of the late Po

#huan e3cept their salaries therefromJ ...) /p. , id.0 ?hy then does she claim only

12share &s this an indication of her generosity towards defendants or of a concocted

cause of action e3isting only in her confused imagination engendered by the death of

her common-law husband with whom she had settled her common-law claim for

recompense of her services as common law wife for less than what she must have"nown would go to his legitimate wife and children

A!+ua334, as 9a4 #e n$+ed 2r$9 +"e de!isi$n i+se32, +"e +ria3 !$ur+ 6as !$n2used

as +$ +"e 1ar+i!i1a+i$n $2 de2endan+s Li9 Tan"u and Ng Sua in G3$r4 C$99er!ia3

C$. A+ $ne 1$in+, +"e4 6ere dee9ed 1ar+ners, a+ an$+"er 1$in+ 9ere e913$4ees

and +"en e3se6"ere as 1ar+ners%e913$4ees, a ne634 2$und !$n!e1+, +$ #e sure, in

+"e 3a6 $n 1ar+ners"i1. And the confusion is worse comfounded in the 8udgment

which allows these )partners in name) and )partners-employees) or employees who

had no means of livelihood and who must not have contributed any capital in the

business, )as Po #huan was practically the owner of the partnership having the

controlling interest), 12each of the huge assets and profits of the partnership

&ncidentally, it may be observed at this 8uncture that the decision has made Po #huan

play the inconsistent role of being )practically the owner) but at the same time getting

his capital from the P(4,FFF given to him by plaintiff and from which capital the

business allegedly )flourished.)

Anent the allegation of plaintiff that the properties shown by her e3hibits to be in thenames of defendants Lim Tanhu and $g ua were bought by them with partnership

funds, *is *onor confirmed the same by finding and holding that )it is li"ewise clear

that real properties together with the improvements in the names of defendants Lim

Tanhu and $g ua were ac!uired with partnership funds as these defendants were

only partners-employees of deceased Po #huan in the +lory #ommercial #o. until the

time of his death on arch ((, (677.) /p. 2F,id.0 &t &s Our considered view, however

that this conclusion of *is *onor is based on nothing but pure unwarranted con8ecture.


31/34

$owhere is it shown in the decision how said defendants could have e3tracted money

from the partnership in the fraudulent and illegal manner pretended by plaintiff. $either

in the testimony of $u;e< nor in that of plaintiff, as these are summari


32/34

the allegation in the amended complaint to the effect that )defendants Antonio Lim

Tanhu, Alfonso Leonardo $g ua, Lim Tec" #huan and %ng #hong Leonardo, through

fraud and machination, too" actual and active management of the partnership and

although Tee *oon Lim Po #huan was the manager of +lory #ommercial #o.

defendants managed to use the funds of the partnership to purchase lands and

buildings etc. /Par. 5, p. of amended complaint, Anne3 @ of petition0 and should not

have been permitted to be proven by the hearing officer, who naturally did not "nowany better.

oreover, it is very significant that a!!$rding +$ +"e 5er4 +a? de!3ara+i$ns and 3and

+i+3es 3is+ed in +"e de!isi$n, 9$s+ i2 n$+ a33 $2 +"e 1r$1er+ies su11$sed +$ "a5e

#een a!@uired #4 +"e de2endan+s Li9 Tan"u and Ng Sua 6i+" 2unds $2 +"e

1ar+ners"i1 a11ear +$ "a5e #een +rans2erred +$ +"eir na9es $n34 in -(( $r 3a+er,

+"a+ is, 3$ng a2+er +"e 1ar+ners"i1 "ad #een au+$9a+i!a334 diss$35ed as a resu3+ $2

+"e dea+" $2 P$ C"uan.Accordingly, defendants have no obligation to account toanyone for such ac!uisitions in the absence of clear proof that they had violated the

trust of Po #huan during the e3istence of the partnership.

T"ere are $+"er 1ar+i!u3ars 6"i!" s"$u3d "a5e !aused His H$n$r +$ readi34

dis#e3ie5e 13ain+i22s8 1re+ensi$ns. Nue= +es+i2ied +"a+ 2r$9 -(/ $r -(

6$u3d +a>e Us +$ -(& $r -(&). Sin!e a!!$rding +$ E?"i#i+ LL, +"e #a1+is9a3

!er+i2i!a+e 1r$du!ed #4 +"e sa9e 6i+ness as "is #ir+" !er+i2i!a+e, s"$6s "e 6as#$rn in Mar!", -(&, "$6 !$u3d "e "a5e s+ar+ed 9anaging G3$r4 C$99er!ia3 C$.

in -(&( 6"en "e 9us+ "a5e #een #are34 si? $r se5en 4ears $3d &t should not have

escaped *is *onors attention that the photographs showing the premises of Philippine

etal &ndustries after its organi


33/34

although he did not go there always being a mere employee of +lory #ommercial #o.)

/p. , Anne3 the decision.0

T"e de!isi$n is ra+"er e91"a+i! in +"a+ Li9 Tan"u and Ng Sua "ad n$ >n$6n

in!$9e e?!e1+ +"eir sa3aries.Actually, it is not stated, however, from what evidence

such conclusion was derived in so far as $g ua is concerned. On the other hand, with

respect to Lim Tanhu, the decision itself states that according to %3hibit $$-Pre trial, inthe supposed income ta3 return of Lim Tanhu for (675, he had an income of P5,BFF as

salary from Philippine etal &ndustries alone and had a total assess sable net income

of P2,6F. that year for which he paid a ta3 of P5,747.FF. /p. (5. Anne3 L, id.0 And

per %3hibit ++-Pretrial in the year, he had a net income of P2,FFF for which be paid a

ta3 of P2,4(.5F. /id.0 As early as (67, )his fishing business in adride8os #ebu was

ma"ing money, and he reported )a net gain from operation /in0 the amount of PB74.75)

/id., per %3hibit II-Pre-trial.0 9rom what then did his *onor gather the conclusion that

all the properties registered in his name have come from funds malversed from thepartnership

I+ is ra+"er unusua3 +"a+ His H$n$r de35ed in+$ 2inan!ia3 s+a+e9en+s and #$$>s $2

G3$r4 C$99er!ia3 C$. 6i+"$u+ +"e aid $2 an4 a!!$un+an+ $r 6i+"$u+ +"e sa9e

#eing e?13ained #4 an4 6i+ness 6"$ "ad 1re1ared +"e9 $r 6"$ "as >n$63edge

$2 +"e en+ries +"erein. T"is 9us+ #e +"e reas$n 6"4 +"ere are a11aren+

in!$nsis+en!ies and ina!!ura!ies in +"e !$n!3usi$ns His H$n$r 9ade $u+ $2

+"e9. &n %3hibit -Pre-trial, the reported total assets of the company amounted to

P,2B,57F. as of December, (674, and yet, %3hibit TT-Pre-trial, according to *is*onor, showed that the total value of goods available as of the same date was

P((,(77,2.7. On the other hand, per %3hibit HH-Pre-trial, the supposed balance

sheet of the company for (677, )the value of inventoried merchandise, both local and

imported), as found by *is *onor, was P4B5,F25.2B. Again, as of December 2(, (677,

the value of the companys goods available for sale was P4,45,F4F.B, per %3hibit KK

and KK-Pre-trial. Then, per %3hibit &&-2-Pre-trial, the supposed @oo" of Account,

whatever that is, of the company showed its )cash analysis) was P(,2,(B.44. ?e

do not hesitate to ma"e the observation that *is *onor, unless he is a certified publicaccountant, was hardly !ualified to read such e3hibits and draw any definite

conclusions therefrom, without ris" of erring and committing an in8ustice. &n any event,

there is no comprehensible e3planation in the decision of the conclusion of *is *onor

that there were P(,2,(B.44 cash money defendants have to account for,

particularly when it can be very clearly seen in %3hibits ((-5, ((-5- A, ((-4 and ((-7-

Pre-trial, +lory #ommercial #o. had accounts payable as of December 2(, (674 in the

amount of P5,BF(,2(.(. /p. (4, id.0 :nder the circumstances, ?e are not prepared to


34/34

permit anyone to predicate any claim or right from respondent courts unaided e3ercise

of accounting "nowledge.

Additionally, ?e note that the decision has not made any finding regarding the

allegation in the amended complaint that a corporation denominated +lory #ommercial

#o., &nc. was organi

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ANTONIO LIM TANHU

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