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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-21450 April 15, 1968 SERAFIN TIJAM, ET AL., plaintiffs- appellees, vs. MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA BAGUIO, defendants, MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding company and defendant-appellant. F. S. Urot and G. A. Uriate for plaintiffs-appellees. Carlos J. Cuizon for defendants Gavino Sibonghanoy and Lucia Baguio. Villaluz Law Office, Velasco Law Office, Pages and Soberano for defendant-appellant Manila Surety and Fidelity Company, Inc. DIZON, J.: On July 19, 1948 — barely one month after the effectivity of Republic Act No. 296 known as the Judiciary Act of 1948 — the spouses Serafin Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with legal interest thereon from the date of the filing of the complaint until the whole obligation is paid, plus costs. As prayed for in the complaint, a writ of attachment was issued by the court against defendants' properties, but the same was soon dissolved upon the filing of a counter-bond by defendants and the Manila Surety and Fidelity Co., Inc. hereinafter referred to as the Surety, on the 31st of the same month. After being duly served with summons the defendants filed their answer in which, after making some admissions and denials of the material averments of the complaint, they interposed a counterclaim. This counterclaim was answered by the plaintiffs. After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs and, after the same had become final and executory, upon motion of the latter, the Court issued a writ of execution against the defendants. The writ having been returned unsatisfied, the plaintiffs moved for the issuance of a writ of execution against the Surety's bond (Rec. on Appeal, pp. 46-49), against which the Surety filed a written opposition (Id. pp. 49) upon two grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety for the payment of the amount due under the judgment. Upon these grounds the Surety prayed the Court not only to deny the motion for execution against its counter-bond but also the following affirmative relief : "to relieve the herein bonding company of its liability, if any, under the bond in question" (Id. p. 54) The Court denied this motion on the ground solely that no previous demand had been made on the Surety for the satisfaction of the judgment. Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the judgment, the plaintiffs filed a second motion for execution against the counterbond. On the date set for the hearing thereon, the Court, upon motion of the Surety's counsel, granted the latter a period of five days within which to answer the motion. Upon its failure to file such answer, the Court granted the motion for execution and the corresponding writ was issued. Subsequently, the Surety moved to quash the writ on the ground that the same was issued without the required summary hearing provided for in Section 17 of Rule 59 of the Rules of Court. As the Court denied the motion, the Surety appealed to the Court of Appeals from such order of denial and from the one denying its motion for reconsideration (Id. p. 97). Its record on appeal was then printed as required by the Rules, and in due time it filed its brief raising therein no other question but the ones covered by the following assignment of errors:
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Page 1: Civpro III

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-21450             April 15, 1968SERAFIN TIJAM, ET AL., plaintiffs-appellees, vs.MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA BAGUIO, defendants, MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding company and defendant-appellant.F. S. Urot and G. A. Uriate for plaintiffs-appellees.Carlos J. Cuizon for defendants Gavino Sibonghanoy and Lucia Baguio.Villaluz Law Office, Velasco Law Office, Pages and Soberano for defendant-appellant Manila Surety and Fidelity Company, Inc.DIZON, J.:On July 19, 1948 — barely one month after the effectivity of Republic Act No. 296 known as the Judiciary Act of 1948 — the spouses Serafin Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with legal interest thereon from the date of the filing of the complaint until the whole obligation is paid, plus costs. As prayed for in the complaint, a writ of attachment was issued by the court against defendants' properties, but the same was soon dissolved upon the filing of a counter-bond by defendants and the Manila Surety and Fidelity Co., Inc. hereinafter referred to as the Surety, on the 31st of the same month.After being duly served with summons the defendants filed their answer in which, after making some admissions and denials of the material averments of the complaint, they interposed a counterclaim. This counterclaim was answered by the plaintiffs.After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs and, after the same had become final and executory, upon motion of the latter, the Court issued a writ of execution against the defendants. The writ having been returned unsatisfied, the plaintiffs moved for the issuance of a writ of execution against the Surety's bond (Rec. on Appeal, pp. 46-49), against which the Surety filed a written opposition (Id. pp. 49) upon two grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety for the payment of the amount due under the judgment. Upon these grounds the Surety prayed the Court not only to deny the motion for execution against its counter-bond but also the following affirmative relief : "to relieve the herein bonding company of its liability, if any, under the bond in question" (Id. p. 54) The Court denied this motion on the ground solely that no previous demand had been made on the Surety for the satisfaction of the judgment. Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the judgment, the plaintiffs filed a second motion for execution against the counterbond.

On the date set for the hearing thereon, the Court, upon motion of the Surety's counsel, granted the latter a period of five days within which to answer the motion. Upon its failure to file such answer, the Court granted the motion for execution and the corresponding writ was issued.Subsequently, the Surety moved to quash the writ on the ground that the same was issued without the required summary hearing provided for in Section 17 of Rule 59 of the Rules of Court. As the Court denied the motion, the Surety appealed to the Court of Appeals from such order of denial and from the one denying its motion for reconsideration (Id. p. 97). Its record on appeal was then printed as required by the Rules, and in due time it filed its brief raising therein no other question but the ones covered by the following assignment of errors:

I. That the Honorable Court a quo erred in issuing its order dated November 2, 1957, by holding the incident as submitted for resolution, without a summary hearing and compliance with the other mandatory requirements provided for in Section 17, Rule 59 of the Rules of Court.II. That the Honorable Court a quo erred in ordering the issuance of execution against the herein bonding company-appellant.III. That the Honorable Court a quo erred in denying the motion to quash the writ of execution filed by the herein bonding company-appellant as well as its subsequent motion for reconsideration, and/or in not quashing or setting aside the writ of execution.

Not one of the assignment of errors — it is obvious — raises the question of lack of jurisdiction, neither directly nor indirectly.Although the appellees failed to file their brief, the Court of Appeals, on December 11, 1962, decided the case affirming the orders appealed from.On January 8, 1963 — five days after the Surety received notice of the decision, it filed a motion asking for extension of time within which to file a motion for reconsideration. The Court of Appeals granted the motion in its resolution of January 10 of the same year. Two days later the Surety filed a pleading entitled MOTION TO DISMISS, alleging substantially that appellees action was filed in the Court of First Instance of Cebu on July 19, 1948 for the recovery of the sum of P1,908.00 only; that a month before that date Republic Act No. 296, otherwise known as the Judiciary Act of 1948, had already become effective, Section 88 of which placed within the original exclusive jurisdiction of inferior courts all civil actions where the value of the subject-matter or the amount of the demand does not exceed P2,000.00, exclusive of interest and costs; that the Court of First Instance therefore had no jurisdiction to try and decide the case. Upon these premises the Surety's motion prayed the Court of Appeals to set aside its decision and to dismiss the case. By resolution of January 16, 1963 the Court of Appeals required the appellees to

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answer the motion to dismiss, but they failed to do so. Whereupon, on May 20 of the same year, the Court resolved to set aside its decision and to certify the case to Us. The pertinent portions of its resolution read as follows:

It would indeed appear from the record that the action at bar, which is a suit for collection of money in the sum of exactly P1,908.00 exclusive of interest, was originally instituted in the Court of First Instance of Cebu on July 19, 1948. But about a month prior to the filing of the complaint, more specifically on June 17, 1948, the Judiciary Act of 1948 took effect, depriving the Court of First Instance of original jurisdiction over cases in which the demand, exclusive of interest, is not more than P2,000.00. (Secs. 44[c] and 86[b], R.A. No. 296.)We believe, therefore, that the point raised in appellant's motion is an important one which merits serious consideration. As stated, the complaint was filed on July 19, 1948. This case therefore has been pending now for almost 15 years, and throughout the entire proceeding appellant never raised the question of jurisdiction until after receipt of this Court's adverse decision.There are three cases decided by the Honorable Supreme Court which may be worthy of consideration in connection with this case, namely: Tyson Tan, et al. vs. Filipinas Compañia de Seguros, et al., G.R. No. L-10096, March 23, 1956; Pindangan Agricultural Co., Inc. vs. Jose P. Dans, etc., et al., G.R. No. L-14591, September 26, 1962; and Alfredo Montelibano, et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. No. L-15092, September 29, 1962, wherein the Honorable Supreme Court frowned upon the 'undesirable practice' of appellants submitting their case for decision and then accepting the judgment, if favorable, but attacking it for lack of jurisdiction when adverse.Considering, however, that the Supreme Court has the "exclusive" appellate jurisdiction over "all cases in which the jurisdiction of any inferior court is in issue" (See. 1, Par. 3[3], Judiciary Act of 1948, as amended), we have no choice but to certify, as we hereby do certify, this case to the Supreme Court.1äwphï1.ñëtACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948 as amended, let the record of this case be forwarded to the Supreme Court.

It is an undisputed fact that the action commenced by appellees in the Court of First Instance of Cebu against the Sibonghanoy spouses was for the recovery of the sum of P1,908.00 only — an amount within the original exclusive jurisdiction of inferior courts in accordance with the provisions of the

Judiciary Act of 1948 which had taken effect about a month prior to the date when the action was commenced. True also is the rule that jurisdiction over the subject matter is conferred upon the courts exclusively by law, and as the lack of it affects the very authority of the court to take cognizance of the case, the objection may be raised at any stage of the proceedings. However, considering the facts and circumstances of the present case — which shall forthwith be set forth — We are of the opinion that the Surety is now barred by laches from invoking this plea at this late hour for the purpose of annuling everything done heretofore in the case with its active participation.As already stated, the action was commenced in the Court of First Instance of Cebu on July 19, 1948, that is, almost fifteen years before the Surety filed its motion to dismiss on January 12, 1963 raising the question of lack of jurisdiction for the first time.It must be remembered that although the action, originally, was exclusively against the Sibonghanoy spouses the Surety became a quasi-party therein since July 31, 1948 when it filed a counter-bond for the dissolution of the writ of attachment issued by the court of origin (Record on Appeal, pp. 15-19). Since then, it acquired certain rights and assumed specific obligations in connection with the pending case, in accordance with sections 12 and 17, Rule 57, Rules of Court (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65 Phil. 170).Upon the filing of the first motion for execution against the counter-bond the Surety not only filed a written opposition thereto praying for its denial but also asked for an additional affirmative relief — that it be relieved of its liability under the counter-bond upon the grounds relied upon in support of its opposition — lack of jurisdiction of the court a quo not being one of them.Then, at the hearing on the second motion for execution against the counter-bond, the Surety appeared, through counsel, to ask for time within which to file an answer or opposition thereto. This motion was granted, but instead of such answer or opposition, the Surety filed the motion to dismiss mentioned heretofore.A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.Laches, in a general sense is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a question of the

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inequity or unfairness of permitting a right or claim to be enforced or asserted.It has been held that a party can not invoke the jurisdiction of a court to sure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was further said that the question whether the court had jurisdiction either of the subject-matter of the action or of the parties was not important in such cases because the party is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated — obviously for reasons of public policy.Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of Appeals of May 20, 1963 (supra) — to the effect that we frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans, et al., G.R. L-14591, September 26, 1962; Montelibano, et al., vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court of Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277.The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the present action by reason of the sum of money involved which, according to the law then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.

Coming now to the merits of the appeal: after going over the entire record, We have become persuaded that We can do nothing better than to quote in toto, with approval, the decision rendered by the Court of Appeals on December 11, 1962 as follows:

In Civil Case No. R-660 of the Court of First Instance of Cebu, which was a suit for collection of a sum of money, a writ of attachment was issued against defendants' properties. The attachment, however, was subsequently discharged under Section 12 of Rule 59 upon the filing by defendants of a bond subscribed by Manila Surety & Fidelity Co., Inc.After trial, judgment was rendered in favor of plaintiffs.The writ of execution against defendants having been returned totally unsatisfied, plaintiffs moved, under Section 17 of Rule 59, for issuance of writ of execution against Manila Surety & Fidelity Co., Inc. to enforce the obligation of the bond. But the motion was, upon the surety's opposition, denied on the ground that there was "no showing that a demand had been made, by the plaintiffs to the bonding company for payment of the amount due under the judgment" (Record on Appeal, p. 60).Hence, plaintiffs made the necessary demand upon the surety for satisfaction of the judgment, and upon the latter's failure to pay the amount due, plaintiffs again filed a motion dated October 31, 1957, for issuance of writ of execution against the surety, with notice of hearing on November 2, 1957. On October 31, 1957, the surety received copy of said motion and notice of hearing.It appears that when the motion was called on November 2, 1957, the surety's counsel asked that he be given time within which to answer the motion, and so an order was issued in open court, as follows:1äwphï1.ñët

As prayed for, Atty. Jose P. Soberano, Jr., counsel for the Manila Surety & Fidelity Co., Inc., Cebu Branch, is given until Wednesday, November 6, 1957, to file his answer to the motion for the issuance of a writ of execution dated October 30, 1957 of the plaintiffs, after which this incident shall be deemed submitted for resolution.SO ORDERED.Given in open court, this 2nd day of November, 1957, at Cebu City, Philippines.

(Sgd.) JOSE M. MENDOZA Judge(Record on Appeal, pp. 64-65, emphasis ours)

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Since the surety's counsel failed to file any answer or objection within the period given him, the court, on December 7, 1957, issued an order granting plaintiffs' motion for execution against the surety; and on December 12, 1957, the corresponding writ of execution was issued.On December 24, 1957, the surety filed a motion to quash the writ of execution on the ground that the same was "issued without the requirements of Section 17, Rule 59 of the Rules of Court having been complied with," more specifically, that the same was issued without the required "summary hearing". This motion was denied by order of February 10, 1958.On February 25, 1958, the surety filed a motion for reconsideration of the above-stated order of denial; which motion was likewise denied by order of March 26, 1958.From the above-stated orders of February 10, 1958 and March 26, 1958 — denying the surety's motion to quash the writ of execution and motion for reconsideration, respectively — the surety has interposed the appeal on hand.The surety insists that the lower court should have granted its motion to quash the writ of execution because the same was issued without the summary hearing required by Section 17 of Rule 59, which reads;

"Sec. 17. When execution returned unsatisfied, recovery had upon bond. — If the execution be returned unsatisfied in whole or in part, the surety or sureties on any bond given pursuant to the provisions of this role to secure the payment of the judgment shall become finally charged on such bond, and bound to pay to the plaintiff upon demand the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action." (Emphasis ours)

Summary hearing is "not intended to be carried on in the formal manner in which ordinary actions are prosecuted" (83 C.J.S. 792). It is, rather, a procedure by which a question is resolved "with dispatch, with the least possible delay, and in preference to ordinary legal and regular judicial proceedings" (Ibid, p. 790). What is essential is that "the defendant is notified or summoned to appear and is given an opportunity to hear what is urged upon him, and to interpose a defense, after which follows an adjudication of the rights of the parties" (Ibid., pp. 793-794); and as to the extent and latitude of the hearing, the same

will naturally lie upon the discretion of the court, depending upon the attending circumstances and the nature of the incident up for consideration.In the case at bar, the surety had been notified of the plaintiffs' motion for execution and of the date when the same would be submitted for consideration. In fact, the surety's counsel was present in court when the motion was called, and it was upon his request that the court a quo gave him a period of four days within which to file an answer. Yet he allowed that period to lapse without filing an answer or objection. The surety cannot now, therefore, complain that it was deprived of its day in court.It is argued that the surety's counsel did not file an answer to the motion "for the simple reason that all its defenses can be set up during the hearing of the motion even if the same are not reduced to writing" (Appellant's brief, p. 4). There is obviously no merit in this pretense because, as stated above, the record will show that when the motion was called, what the surety's counsel did was to ask that he be allowed and given time to file an answer. Moreover, it was stated in the order given in open court upon request of the surety's counsel that after the four-day period within which to file an answer, "the incident shall be deemed submitted for resolution"; and counsel apparently agreed, as the order was issued upon his instance and he interposed no objection thereto.It is also urged that although according to Section 17 of Rule 59, supra, there is no need for a separate action, there must, however, be a separate judgment against the surety in order to hold it liable on the bond (Appellant's Brief, p. 15). Not so, in our opinion. A bond filed for discharge of attachment is, per Section 12 of Rule 59, "to secure the payment to the plaintiff of any judgment he may recover in the action," and stands "in place of the property so released". Hence, after the judgment for the plaintiff has become executory and the execution is "returned unsatisfied" (Sec. 17, Rule 59), as in this case, the liability of the bond automatically attaches and, in failure of the surety to satisfy the judgment against the defendant despite demand therefor, writ of execution may issue against the surety to enforce the obligation of the bond.

UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with costs against the appellant Manila Surety and Fidelity Company, Inc.

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Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISION

G.R. No. 181622 November 20, 2013

GENESIS INVESTMENT, INC., CEBU JAYA REALTY INC., and SPOUSES RHODORA and LAMBERT LIM, Petitioners, vs.HEIRS of CEFERINO EBARASABAL,* NAMELY: ROGELIO EBARASABAL, SPOUSES LIGAYA E. GULIMLIM AND JOSE GULIMLIM, SPOUSES VISITACION E. CONEJOS and ELIAS CONEJOS, BEN TEJERO, POCAS TEJERO, GERTRUDES TEJERO, BANING HAYO, LACIO EBARASABAL and JULIETA EBARASABAL; HEIRS OF FLORO EBARASABAL, namely: SOFIA ABELONG, PEPITO EBARASABAL AND ELPIDIO EBARASABAL; HEIRS OF LEONA EBARASABAL- APOLLO, namely: SILVESTRA A. MOJELLO and MARCELINO APOLLO; HEIRS OF PEDRO EBARASABAL, namely: BONIFACIO EBARASABAL, SERGIO EBARASABAL and JAIME EBARASABAL; HEIRS of ISIDRO EBARASABAL, NAMELY: SPOUSES CARLOSA E. NUEVO and FORTUNATO NUEVA;** HEIRS of BENITO EBARASABAL, namely: PAULO BAGAAN, SPOUSES CATALINA A. MARIBAO and RENE MARIBAO, VICENTE ABRINICA and PATRON EBARASABAL; HEIRS of JULIAN EBARASABAL, NAMELY: ALFREDO BAGAAN, JUAN BAGAAN, AVELINO BAGAAN, FERDINAND BAGAAN, MAURO BAGAAN, SPOUSES ROWENA B. LASACA and FRANCISCO LACASA,*** SPOUSES MARIA B. CABAG and EMILIO CABAG and ESTELITA BAGAAN, all being represented herein by VICTOR MOJELLO, FEDERICO BAGAAN and PAULINO EBARASABAL, as their Attorneys-in-Fact, Respondents.

D E C I S I O N

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 and Resolution,2 dated July 11, 2007 and January 10, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CEB-SP No. 01017.

The antecedents of the case are as follows:

On November 12, 2003, herein respondents filed against herein petitioners a Complaint3 for Declaration of Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees. The Complaint was filed with the Regional Trial Court (RTC) of Barili, Cebu.

On August 5, 2004, herein petitioners filed a Motion to Dismiss4 contending, among others, that the RTC has no jurisdiction to try the case on the ground that, as the case involves title to or possession of real property or any interest therein and since the assessed value of the subject property does not exceed P20,000.00 (the same being only P11,990.00), the action falls within the jurisdiction of the Municipal Trial Court (MTC).5

In its Order6 dated September 29, 2004, the RTC granted petitioners' Motion to Dismiss, holding as follows:

x x x x

And while the prayer of the plaintiffs for the annulment of documents qualified the case as one incapable of pecuniary estimation thus, rendering it cognizable supposedly by the second level courts but considering that Republic Act No. 7691 expressly provides to cover "all civil actions" which phrase understandably is to include those incapable of pecuniary estimation, like the case at bar, this Court is of the view that said law really finds application here more so that the same case also "involves title to, or possession of, real property, or any interest therein." For being so, the assessed value of the real property involved is determinative of which court has jurisdiction over the case. And the plaintiffs admitting that the assessed value of the litigated area is less than P20,000.00, the defendants are correct in arguing that the case is beyond this Court's jurisdiction.7

Respondents filed a Motion for Partial Reconsideration,8 arguing that their complaint consists of several causes of action, including one for annulment of documents, which is incapable of pecuniary estimation and, as such, falls within the jurisdiction of the RTC.9

On March 17, 2005, the RTC issued an Order granting respondents' Motion for Partial Reconsideration and reversing its earlier Order dated September 29, 2004. The RTC ruled, thus:

On the issue of want of jurisdiction, this court likewise finds to be with merit the contention of the movants as indeed the main case or the primary relief prayed for by the movants is for the declaration of nullity or annulment of documents which unquestionably is incapable of pecuniary estimation and thus within the exclusive original jurisdiction of this court to try although in the process of resolving the controversy, claims of title or possession of the property in question is involved which together with all the other remaining reliefs prayed for are but purely incidental to or as a consequence of the foregoing principal relief sought.10

Petitioners filed a Motion for Reconsideration,11 but the RTC denied it in its Order dated June 23, 2005.

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Aggrieved, petitioners filed a petition for certiorari with the CA. However, the CA dismissed the petition via its assailed Decision dated July 11, 2007, holding that the subject matter of respondents' complaint is incapable of pecuniary estimation and, therefore, within the jurisdiction of the RTC, considering that the main purpose in filing the action is to declare null and void the documents assailed therein.12

Petitioners' Motion for Reconsideration was, subsequently, denied in the CA Resolution dated January 10, 2008.

Hence, the instant petition for review on certiorari raising the sole issue, to wit:

Whether or not the Honorable Court of Appeals gravely erred in concluding that the Regional Trial Court, Branch 60 of Barili, Cebu has jurisdiction over the instant case when the ALLEGATIONS IN THE COMPLAINT clearly shows that the main cause of action of the respondents is for the Recovery of their Title, Interest, and Share over a Parcel of Land, which has an assessed value of P11,990.00 and thus, within the jurisdiction of the Municipal Trial Court.13

The petition lacks merit.

For a clearer understanding of the case, this Court, like the CA, finds it proper to quote pertinent portions of respondents' Complaint, to wit:

x x x x

1. Plaintiffs are all Filipino, of legal age, surviving descendants – either as grandchildren or great grandchildren – and heirs and successors-in-interest of deceased Roman Ebarsabal, who died on 07 September 1952 x x x

x x x x

8. During the lifetime of Roman Ebarsabal, he acquired a parcel of land situated in Basdaku, Saavedra, Moalboal, Cebu, x x x.

x x x x

with a total assessed value of P2,890.00 x x x. However, for the year 2002, the property was already having (sic) a total assessed value of P11,990.00 x x x.

9. Upon the death of said Roman Ebarsabal, his eight (8) children named in par. 7 above, became co-owners of his above-described property by hereditary succession; taking peaceful possession and enjoyment of the same in fee simple pro indiviso, paying the real estate taxes thereon and did not partition the said property among themselves until all of them likewise died, leaving, however, their

respective children and descendants and/or surviving heirs and successors-in-interest, and who are now the above-named plaintiffs herein;

10. The plaintiffs who are mostly residents in (sic) Mindanao and Manila, have just recently uncovered the fact that on 28th January 1997, the children and descendants of deceased Gil Ebarsabal, namely: Pelagio, Hipolito, Precela, Fructuosa, Roberta, Florentino, Erlinda, Sebastian, Cirilo, all surnamed Ebarsabal, have executed among themselves a Deed of Extrajudicial Settlement with Sale of Roman Ebarsabal's entire property described above, by virtue of which they allegedly extrajudicially settled the same and, for P2,600,000.00 – although only the sum of P950,000.00 was reflected in their Deed of Sale for reason only known to them, they sold the whole property to defendants Genesis Investment Inc. represented by co-defendant Rhodora B. Lim, the wife of Lambert Lim, without the knowledge, permission and consent of the plaintiffs who are the vendors' co-owners of the lot in question, x x x.

11. Surprisingly, however, the defendant Genesis managed to have the Tax Declaration of the property issued in the name of co-defendant Cebu Jaya Realty Incorporated, a firm which, as already intimated above, is also owned by Spouses Lambert and Rhodora B. Lim, instead of in the name of Genesis Investment, Incorporated, which is actually the vendee firm of the lot in question.

x x x x

Hence, the reason why Cebu Jaya Realty, Incorporated is joined and impleaded herein as a co-defendant.

12. Without the participation of the plaintiffs who are co-owners of the lot in question in the proceedings, the aforementioned extrajudicial settlement with sale cannot be binding upon the plaintiff-co-owners.

13. Further, where as in this case, the other heirs who are the plaintiffs herein, did not consent to the sale of their ideal shares in the inherited property, the sale was only to be limited to the pro indiviso share of the selling heirs.

x x x x

14. By representation, the plaintiffs, are therefore, by law, entitled to their rightful shares from the estate of the deceased Roman Ebarsabal consisting of seven (7) shares that would have been due as the shares of seven (7) other children of Roman Ebarsabal who are also now deceased, namely: Ceferino, Floro, Leona, Pedro, Isidoro, Julian and Benito, all surnamed Ebarsabal.

15. The defendants who had prior knowledge of the existence of the other heirs who are co-owners of the

Page 7: Civpro III

vendors of the property they purchased, had unlawfully acted in bad faith in insisting to buy the whole property in co-ownership, only from the heirs and successors-in-interest of deceased Gil Ebarsabal, who is only one (1) of the eight (8) children of deceased Roman Ebarsabal, and without notifying thereof in whatever manner the plaintiffs who are the heirs and successors-in-interest of the other co-owners of the property-in-question; thus, have compelled the plaintiffs herein to file this instant case in court to protect their interests, x x x.

x x x x

PRAYER

WHEREFORE, in view of all the foregoing, it is most respectfully prayed of this Honorable Court that, after due notice and hearing, judgment shall be rendered in favor of the plaintiffs, as follows, to wit:

1 – Declaring as null and void and not binding upon the plaintiffs, the following documents to wit:

(a) Deed of Extrajudicial Settlement with Sale executed by and between the heirs of deceased Gil Ebarsabal headed by Pedro Ebarsabal, and Genesis Investment, Inc., represented by Rhodora Lim, dated 28th of January, 1997, marked as Annex-A;

(b) Memorandum of Agreement executed between Pedro Ebarsabal and Genesis Investment, Inc., represented by Rhodora Lim dated 27 January, which document is notarized;

(c) Tax Declaration of Real Property issued to Cebu Jaya Realty, Inc., marked as Annex-D;

2 – Ordering the defendants to make partition of the property in litigation with the plaintiffs into eight (8) equal shares; to get one (1) share thereof, which is the only extent of what they allegedly acquired by purchase as mentioned above, and to transfer, restore or reconvey and deliver to the plaintiffs, seven (7) shares thereof, as pertaining to and due for the latter as the heirs and successors-in-interest of the seven (7) brothers and sister of deceased Gil Ebarsabal already named earlier in this complaint;

x x x x

Further reliefs and remedies just and equitable in the premises are also herein prayed for.

x x x x14

It is true that one of the causes of action of respondents pertains to the title, possession and interest of each of the contending parties over the contested property, the assessed value of which falls within the jurisdiction of the MTC. However, a complete reading of the complaint would readily show

that, based on the nature of the suit, the allegations therein, and the reliefs prayed for, the action is within the jurisdiction of the RTC.

As stated above, it is clear from the records that respondents' complaint was for "Declaration of Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees." In filing their Complaint with the RTC, respondents sought to recover ownership and possession of their shares in the disputed parcel of land by questioning the due execution and validity of the Deed of Extrajudicial Settlement with Sale as well as the Memorandum of Agreement entered into by and between some of their co-heirs and herein petitioners. Aside from praying that the RTC render judgment declaring as null and void the said Deed of Extrajudicial Settlement with Sale and Memorandum of Agreement, respondents likewise sought the following: (1) nullification of the Tax Declarations subsequently issued in the name of petitioner Cebu Jaya Realty, Inc.; (2) partition of the property in litigation; (3) reconveyance of their respective shares; and (3) payment of moral and exemplary damages, as well as attorney's fees, plus appearance fees.1âwphi1

Clearly, this is a case of joinder of causes of action which comprehends more than the issue of partition of or recovery of shares or interest over the real property in question but includes an action for declaration of nullity of contracts and documents which is incapable of pecuniary estimation.15

As cited by the CA, this Court, in the case of Singson v. Isabela Sawmill,16 held that:

In determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable by courts of first instance [now Regional Trial Courts].17

This rule was reiterated in Russell v. Vestil18 and Social Security System v. Atlantic Gulf and Pacific Company of Manila Inc.19

Contrary to petitioners contention, the principal relief sought by petitioners is the nullification of the subject Extrajudicial Settlement with Sale entered into by and between some of their co-heirs and respondents,

Page 8: Civpro III

insofar as their individual shares in the subject property are concerned. Thus, the recovery of their undivided shares or interest over the disputed lot, which were included in the sale, simply becomes a necessary consequence if the above deed is nullified. Hence, since the principal action sought in respondents Complaint is something other than the recovery of a sum of money, the action is incapable of pecuniary estimation and, thus, cognizable by the RTC.20 Well entrenched is the rule that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the party is entitled to all or some of the claims asserted.21

Moreover, it is provided under Section 5 (c), Rule 2 of the Rules of Court that where the causes of action are between the same parties but pertain to different venues or jurisdictions, the joinder may be allowed in the RTC provided one of the causes of action falls within the jurisdiction of said court and the venue lies therein. Thus, as shown above, respondents complaint clearly falls within the jurisdiction of the RTC.

WHEREFORE, the petition is DENIED. The Decision and Resolution dated July 11, 2007 and January 10, 2008, respectively, of the Court of Appeals in CA-G.R. CEB-SP No. 01017 are AFFIRMED.

SO ORDERED.

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Republic of the PhilippinesSupreme CourtManila SECOND DIVISION   PAGLAUM MANAGEMENT & DEVELOPMENT CORP. and HEALTH MARKETING TECHNOLOGIES, INC.,                                         Petitioners,                         - versus -  UNION BANK OF THE PHILIPPINES, NOTARY PUBLIC JOHN DOE, and REGISTER OF DEEDS of Cebu City and Cebu Province                    Respondents.  J. KING & SONS CO., INC.Intervenor. 

G.R. No.  179018 Present: CARPIO, J., Chairperson,BRION,PEREZ,SERENO, andREYES, JJ.          Promulgated:         June 18, 2012

 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x D E C I S I O N SERENO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision dated 31 May 2007[1] and Resolution dated 24 July 2007[2] issued by the Court of Appeals (CA).

Petitioner Paglaum Management and Development Corporation (PAGLAUM) is the registered owner of three parcels of land located in the Province of Cebu[3]and covered by Transfer Certificate of Title (TCT) Nos. 112488,[4] 112489,[5] and T-68516.[6] These lots are co-owned by Benjamin B. Dy, the president of petitioner Health Marketing Technologies, Inc. (HealthTech), and his mother and siblings.[7]

On 3 February 1994, respondent Union Bank of the Philippines (Union Bank) extended HealthTech a credit line in the amount of ₱10,000,000.[8] To secure this obligation, PAGLAUM executed three Real Estate Mortgages on behalf of HealthTech and in favor of Union Bank.[9] It must be noted that the Real Estate Mortgage, on the provision regarding the venue of all suits and actions arising out of or in connection therewith, originally stipulates:

Section 9. Venue. – The venue of all suits and actions arising out of or in connection with this Mortgage shall be in Makati, Metro

Manila or in the place where any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the parties hereto waiving any other venue.[10] (Emphasis supplied.)However, under the two Real Estate Mortgages

dated 11 February 1994, the following version appears:Section 9. Venue. – The

venue of all suits and actions arising out of or in connection with this Mortgage shall be in Cebu City Metro Manila or in the place where any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the xxxxxxxxxxxxx any other venue.[11] (Emphasis supplied.)Meanwhile, the same provision in the Real

Estate Mortgage dated 22 April 1998 contains the following:

Section 9. Venue. – The venue of all suits and actions arising out of or in connection with this Mortgage shall be in _________ or in the place where any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the parties hereto waiving any other venue.[12]

HealthTech and Union Bank agreed to subsequent renewals and increases in the credit line,[13] with the total amount of debt reaching ₱36,500,000.[14]Unfortunately, according to HealthTech, the 1997 Asian financial crisis adversely affected its business and caused it difficulty in meeting its obligations with Union Bank.[15] Thus, on 11 December 1998, both parties entered into a Restructuring Agreement,[16] which states that any action or proceeding arising out of or in connection therewith shall be commenced in Makati City, with both parties waiving any other venue.[17]

Despite the Restructuring Agreement, HealthTech failed to pay its obligation, prompting Union Bank to send a demand letter dated 9 October 2000, stating that the latter would be constrained to institute foreclosure proceedings, unless HealthTech settled its account in full.[18]

Since HealthTech defaulted on its payment, Union Bank extra-judicially foreclosed the mortgaged properties.[19] The bank, as the sole bidder in the auction sale, was then issued a Certificate of Sale dated 24 May 2001.[20] Thereafter, it filed a Petition for Consolidation of Title.[21]

Consequently, HealthTech filed a Complaint for Annulment of Sale and Titles with Damages and Application for Temporary Restraining Order and Writ of Injunction dated 23 October 2001, praying for: (a) the issuance of a temporary restraining order, and later a writ of preliminary injunction, directing Union Bank to refrain from exercising acts of ownership over the foreclosed properties; (b) the annulment of the extra-judicial foreclosure of real properties; (c) the cancellation of the registration of the Certificates of Sale and the resulting titles issued; (d) the reinstatement of PAGLAUM’s ownership over the subject properties; and (e) the payment of damages.[22] The case was docketed as Civil Case No.

Page 10: Civpro III

01-1567 and raffled to the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 134 (RTC Br. 134), which issued in favor of PAGLAUM and HealthTech a Writ of Preliminary Injunction restraining Union Bank from proceeding with the auction sale of the three mortgaged properties.[23]

On 23 November 2001, Union Bank filed a Motion to Dismiss on the following grounds: (a) lack of jurisdiction over the issuance of the injunctive relief; (b) improper venue; and (c) lack of authority of the person who signed the Complaint.[24] RTC Br. 134 granted this Motion in its Order dated 11 March 2003, resulting in the dismissal of the case, as well as the dissolution of the Writ of Preliminary Injunction.[25] It likewise denied the subsequent Motion for Reconsideration filed by PAGLAUM and HealthTech.[26]

PAGLAUM and HealthTech elevated the case to the CA, which affirmed the Order dated 11 March 2003[27] and denied the Motion for Reconsideration.[28]

In the instant Petition, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement governs the choice of venue between the parties, and (b) the agreement on the choice of venue must be interpreted with the convenience of the parties in mind and the view that any obscurity therein was caused by Union Bank.[29]

On the other hand, Union Bank contends that: (a) the Restructuring Agreement is applicable only to the contract of loan, and not to the Real Estate Mortgage, and (b) the mortgage contracts explicitly state that the choice of venue exclusively belongs to it.[30]

Meanwhile, intervenor J. King & Sons Company, Inc. adopts the position of Union Bank and reiterates the position that Cebu City is the proper venue.[31]

The sole issue to be resolved is whether Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage. This Court rules in the affirmative.

Civil Case No. 01-1567, being an action for Annulment of Sale and Titles resulting from the extrajudicial foreclosure by Union Bank of the mortgaged real properties, is classified as a real action. In Fortune Motors v. Court of Appeals,[32] this Court held that a case seeking to annul a foreclosure of a real estate mortgage is a real action, viz:

An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950).

While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner’s primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface

the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action.[33]

Being a real action, the filing and trial of the Civil Case No. 01-1567 should be governed by the following relevant provisions of the Rules of Court (the Rules):

Rule 4VENUE OF ACTIONS

Section 1. Venue of real actions. – Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated.

Sec. 3. When Rule not applicable. – This Rule shall not apply –

(a)                In those cases where a specific rule or law provides otherwise; or

(b)                Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof. (Emphasis supplied.)In Sps. Lantin v. Lantion,[34] this Court explained

that a venue stipulation must contain words that show exclusivity or restrictiveness, as follows:

At the outset, we must make clear that under Section 4 (b) of Rule 4 of the 1997 Rules of Civil Procedure, the general rules on venue of actions shall not apply where the parties, before the filing of the action, have validly agreed in writing on an exclusive venue. The mere stipulation on the venue of an action, however, is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place. x x x                            x x x                            x x x

 Clearly, the words

“exclusively” and “waiving for this purpose any other venue” are

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restrictive and used advisedly to meet the requirements.[35] (Emphasis supplied.)According to the Rules, real actions shall be

commenced and tried in the court that has jurisdiction over the area where the property is situated. In this case, all the mortgaged properties are located in the Province of Cebu. Thus, following the general rule, PAGLAUM and HealthTech should have filed their case in Cebu, and not in Makati.

However, the Rules provide an exception, in that real actions can be commenced and tried in a court other than where the property is situated in instances where the parties have previously and validly agreed in writing on the exclusive venue thereof. In the case at bar, the parties claim that such an agreement exists. The only dispute is whether the venue that should be followed is that contained in the Real Estate Mortgages, as contended by Union Bank, or that in the Restructuring Agreement, as posited by PAGLAUM and HealthTech. This Court rules that the venue stipulation in the Restructuring Agreement should be controlling.

The Real Estate Mortgages were executed by PAGLAUM in favor of Union Bank to secure the credit line extended by the latter to HealthTech. All three mortgage contracts contain a dragnet clause, which secures succeeding obligations, including renewals, extensions, amendments or novations thereof, incurred by HealthTech from Union Bank, to wit:

Section 1. Secured Obligations. – The obligations secured by this Mortgage (the “Secured Obligations”) are the following:

 a)                  All the

obligations of the Borrower and/or the Mortgagor under: (i) the Notes, the Agreement, and this Mortgage; (ii) any and all instruments or documents issued upon the renewal, extension, amendment or novation of the Notes, the Agreement and this Mortgage, irrespective of whether such obligations as renewed, extended, amended or novated are in the nature of new, separate or additional obligations; and (iii) any and all instruments or documents issued pursuant to the Notes, the Agreement and this Mortgage;

 b)                  All other

obligations of the Borrower and/or the Mortgagor in favor of the Mortgagee, whether presently owing or hereinafter incurred and whether or not arising from or connected with the Agreement, the Notes and/or this Mortgage; and

 c)                  Any and all

expenses which may be incurred in collecting any and all of the above and

in enforcing any and all rights, powers and remedies of the Mortgagee under this Mortgage.[36]

On the other hand, the Restructuring Agreement was entered into by HealthTech and Union Bank to modify the entire loan obligation. Section 7 thereof provides:

Security. – The principal, interests, penalties and other charges for which the BORROWER may be bound to the BANK under the terms of this Restructuring Agreement, including the renewal, extension, amendment or novation of this Restructuring Agreement, irrespective of whether the obligations arising out of or in connection with this Restructuring Agreement, as renewed, extended, amended or novated, are in the nature of new, separate or additional obligations, and all other instruments or documents covering the Indebtedness or otherwise made pursuant to this Restructuring Agreement (the “Secured Obligations”), shall continue to be secured by the following security arrangements (the “Collaterals”):

 a.                   Real Estate

Mortgage dated February 11, 1994 executed by Paglaum Management and Development Corporation over a 474 square meter property covered by TCT No. 112489;

 b.                  Real Estate

Mortgage dated February 11, 1994 executed by Paglaum Management and Development Corporation over a 2,796 square meter property covered by TCT No. T-68516;

 c.                   Real Estate

Mortgage dated April 22, 1998 executed by Paglaum Management and Development Corporation over a 3,711 square meter property covered by TCT No. 112488;

 d.                  Continuing

Surety Agreement of Benjamin B. Dy; Without need of any further

act and deed, the existing Collaterals, shall remain in full force and effect and continue to secure the payment and performance of the obligations of the BORROWER arising from the Notes and this Restructuring Agreement.[37] (Emphasis supplied.)

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Meanwhile, Section 20 of the Restructuring Agreement as regards the venue of actions state:

20. Venue – Venue of any action or proceeding arising out of or connected with this Restructuring Agreement, the Note, the Collateral and any and all related documents shall be in Makati City, [HealthTech] and [Union Bank] hereby waiving any other venue.[38] (Emphasis supplied.)These quoted provisions of the Real Estate

Mortgages and the later Restructuring Agreement clearly reveal the intention of the parties to implement a restrictive venue stipulation, which applies not only to the principal obligation, but also to the mortgages. The phrase “waiving any other venue” plainly shows that the choice of Makati City as the venue for actions arising out of or in connection with the Restructuring Agreement and the Collateral, with the Real Estate Mortgages being explicitly defined as such, is exclusive.

Even if this Court were to consider the venue stipulations under the Real Estate Mortgages, it must be underscored that those provisions did not contain words showing exclusivity or restrictiveness. In fact, in the Real Estate Mortgages dated 11 February 1994, the phrase “parties hereto waiving” – from the entire phrase “the parties hereto waiving any other venue” – was stricken from the final executed contract. Following the ruling in Sps. Lantin as earlier quoted, in the absence of qualifying or restrictive words, the venue stipulation should only be deemed as an agreement on an additional forum, and not as a restriction on a specified place.

Considering that Makati City was agreed upon by the parties to be the venue for all actions arising out of or in connection with the loan obligation incurred by HealthTech, as well as the Real Estate Mortgages executed by PAGLAUM, the CA committed reversible error in affirming the dismissal of Civil Case No. 01-1567 by RTC Br. 134 on the ground of improper venue.

WHEREFORE, the Petition for Review is GRANTED. The Decision dated 31 May 2007 and Resolution dated 24 July 2007 in CA-G.R. CV No. 82053 of the Court of Appeals, as well as the Orders dated 11 March 2003 and 19 September 2003 issued by the Regional Trial Court, Makati City, Branch 134, are REVERSEDand SET ASIDE. The Complaint in Civil Case No. 01-1567 is hereby REINSTATED.

SO ORDERED.

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THIRD DIVISION  LITTIE SARAH A. AGDEPPA,LYNN SARAH A. AGDEPPA,LOUELLA JEANNE A. AGDEPPA, and LALAINE LILIBETH A. AGDEPPA,

Petitioners,  

                - versus -  HEIRS OF IGNACIO BONETE, represented by DOROTEA BONETE, HIPOLITO BONETE, MILAGROS BONETE, MAURICIO BONETE, FERNANDO BONETE, and OPHELIA BONETE,

Respondents. 

G.R. No. 164436 Present:  CORONA, J.,   Chairperson,VELASCO, JR.,NACHURA,PERALTA, andMENDOZA, JJ.   Promulgated:    January 15, 2010 

 x------------------------------------------------------------------------------------x   DECISION  NACHURA, J.:                    Before this Court is a Petition for Review on Certiorari,[1] seeking the reversal of  the Court of Appeals (CA) Decision,[2] dated December 27, 2002,which reversed and set aside the Order,[3] dated May 21, 1990, issued by the Regional Trial Court (RTC), Branch 18, of Midsayap, Cotabato.                    The factual and procedural antecedents of the case are as follows:                   In 1979, respondent Dorotea Bonete (Dorotea), widow of the late Ignacio Bonete and mother of respondents Hipolito Bonete, Milagros Bonete, Mauricio Bonete, Fernando Bonete, and Ophelia Bonete (respondents), obtained a loan in the amount of P55,000.00 from Development Bank of the Philippines (DBP), Cotabato City Branch, in order to buy farm implements. A parcel of agricultural land, known as Lot No. (1144) H-207865 with an area of 18.00 hectares, covered by Transfer Certificate of Title (TCT) No. T-56923,[4] issued in the name of Dorotea and situated in Demapaco, Libungan, Cotabato (subject property), was used as collateral to secure the said loan.                   In 1982, respondents, through Dorotea, received a notice of collection from DBP.  Respondents alleged that

herein petitioner and counsel, Atty. Littie Sarah A. Agdeppa (Littie Sarah), expressed deep concern and sympathy for them. Consequently, Littie Sarah accompanied Dorotea to DBP and obligated herself to pay the loan.  Thereafter, Dorotea was allegedly made to sign a document as Littie Sarah’s security for the amount which the latter paid to DBP in connection with the said loan.  Further, respondents alleged that, since 1982, Littie Sarah and her representatives had been gradually easing them out of the subject property and that they were ordered to stop the cultivation of their respective ricefields. Eventually,  respondents  were  forcibly  ejected  from  the subject  property. Further, Littie Sarah planted corn and put up duck-raising projects on the subject property.                   On this account, respondents inquired from the Register of Deeds and found that the title to the subject property, which was in the name of respondents' predecessor-in-interest, the late Ignacio Bonete, had already been canceled and transferred to Littie Sarah under TCT No. T-75454 by virtue of a purported deed of sale.  According to Dorotea, Littie Sarah took advantage of her by letting her sign a contract, ostensibly as security for the loan from DBP, which later turned out to be a deed of sale. Thus, respondents filed a Complaint[5] for Recovery of Ownership and Possession and/or Annulment of Deed of Sale of the Subject Property with Damages, docketed as Civil Case No. 484 before the RTC.                   Littie Sarah filed a Motion to Dismiss[6]  the Complaint based on the following grounds:  1)  that respondents had no legal capacity to sue;  2)   that respondents were not the real parties in interest;  3)  that the Complaint stated no cause of action; and  4)  that the claim or demand set forth in the Complaint had already been waived and extinguished.                   Later, the Complaint was amended, impleading herein petitioners Lynn Sarah Agdeppa, Louella Jeanne Agdeppa, and Lalaine Lilibeth Agdeppa, together with Littie Sarah, as defendants (petitioners).[7]  Respondents also filed an Opposition to the Motion to Dismiss. [8]

                   On May 21, 1990, the RTC issued an Order dismissing the Amended Complaint with costs against respondents. It held that the Amended Complaint did not show the character and representation that respondents claimed to have. TCT No. T-56923, covering the subject property, was not in the name of the late Ignacio Bonete but in Dorotea's name. Thus, the RTC held that respondents were not real parties in interest. Respondents filed a Motion for Reconsideration[9] which the RTC denied in its Order[10] dated January 12, 1991. Therein, the RTC held that respondents lacked the personality to sue; thus, a valid basis to grant the motion to dismiss on the ground that the complaint did not state a cause of action.                    Aggrieved, respondents went to the CA.[11] On December 27, 2002, the CA reversed and set aside the RTC Order, and remanded the case to the RTC for further

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proceedings because Dorotea, being the former owner of the subject property, was a real party in interest.                 Petitioners filed their Motion for Reconsideration,[12] which the CA denied in its Resolution[13] dated April 28, 2004.                 Hence, this Petition assigning the following errors: 

         THE HONORABLE COURT OF APPEALS IN REVERSING THE ORDER OF DISMISSAL ISSUED BY THE REGIONAL TRIAL COURT, ACTED CONTRARY TO LAW AND JURISPRUDENCE; DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS; GRAVELY ERRED AND GRAVELY ABUSED ITS DISCRETION TANTAMOUNT TO LACK OF JURISDICTION; AND LAID DOWN A VERY BAD PRECEDENT, AS FOLLOWS: 

           A. BY VIOLATING SPECIFICALLY THE PROVISIONS OF THE RULES OF COURT, PARTICULARLY SECS. 2 AND 3 OF RULE 3 OF THE RULES OF COURT, ON PARTIES-PLAINTIFFS TO CIVIL ACTIONS AND REAL PARTIES IN INTEREST;                     B. BY UPHOLDING THE LEGAL CAPACITY OF THE PLAINTIFFS HEIRS OF IGNACIO BONETE TO SUE AND TO FILE THIS CASE WHEN THE HONORABLE COURT OF APPEALS ITSELF EVEN RIGHTFULLY FOUND THAT TCT NO. T-56923

WAS ALREADY REGISTERED IN THE NAME OF DOROTEA BONETE, WHEN IT WAS SOLD TO HEREIN DEFENDANTS, SUCH THAT IGNACIO BONETE OR THE HEIRS OF IGNACIO BONETE [HAD] NOTHING TO DO WITH THE SAID PROPERTY- THUS[,] NOT THE REAL PARTY IN INTEREST AND [HAD] NO LEGAL PERSONALITY TO SUE AND LIKEWISE [HAD] NO CAUSE OF ACTION AGAINST DEFENDANTS (PETITIONERS HEREIN);            C. THAT THE DECISION OF THIS HONORABLE COURT OF APPEALS WAS ISSUED CONTRARY TO LAW AND JURISPRUDENCE AND CONTRARY TO THE TRUE, ACTUAL AND EXISTING FACTS OF THIS CASE AND EVEN TO THE VERY FINDINGS OF THE  HONORABLE COURT OF APPEALS ITSELF, BECAUSE WHILE THE  HONORABLE COURT OF APPEALS RULED THAT DOROTEA BONETE AS

Page 15: Civpro III

REGISTERED OWNER IS A PARTY IN INTEREST, THIS CASE IS NOT PROSECUTED IN THE NAME OF DOROTEA BONETE, BUT IN THE NAME OF THE HEIRS OF IGNACIO BONETE, AND IF EVER THE NAME OF DOROTEA BONETE IS MENTIONED IT WAS MERELY [AND] ALLEGEDLY IN REPRESENTATION OF THE HEIRS OF IGNACIO BONETE AND NOT IN HER OWN PERSONAL CAPACITY; BUT WHICH REPRESENTATION IS NOT EVEN ALLEGED IN THE COMPLAINT, THUS STILL A VIOLATION OF THE RULES OF COURT;            D. THAT THE REMANDING OF THIS CASE TO THE REGIONAL TRIAL COURT FOR FURTHER PROCEEDINGS WITH THE PARTY PLAINTIFF “HEIRS OF IGNACIO BONETE” NOT BEING A REAL PARTY IN INTEREST VIOLATES THE WELL ESTABLISHED “GENERAL RULE [THAT] ONE HAVING NO

RIGHT OR INTEREST TO PROTECT CANNOT INVOKE THE JURISDICTION OF THE COURT AS A PARTY PLAINTIFF IN AN ACTION. (Ralla v. Ralla, 199 SCRA 495 [1991])” AND “THE GENERAL RULE OF x x x COMMON LAW x x x THAT EVERY ACTION MUST BE BROUGHT IN THE NAME OF THE PARTY WHOSE LEGAL RIGHT HAS BEEN INVADED OR INFRINGED”;            E. IT WILL CREATE A VERY BAD AND IMPROPER PRECEDENT NOT WARRANTED UNDER THE PROVISIONS OF THE RULES OF COURT; [AND]                                            F. WILL UNNECESSARILY CAUSE THE PARTIES UNDUE DELAY AND EXPENSES FOR AFTER ALL THE PARTIES-PLAINTIFFS THEREIN ARE NOT THE REAL PARTIES IN INTEREST[.][14]   

         The instant Petition is bereft of merit.           While it is true that respondents committed a procedural infraction before the RTC, such infraction does not justify the dismissal of the case. 

Page 16: Civpro III

         Misjoinder of parties does not warrant the dismissal of the action.[15] Rule 3, Section 11 of the Rules of Court clearly provides: 

            Sec. 11.           Misjoinder and non-joinder of parties. — Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately.

           It bears stressing that TCT No. T-56923, covering the subject property, was issued in the name of Dorotea. This is established by the record, and petitioners themselves admit this fact. However, because TCT No. T-75454, allegedly issued in favor of Littie Sarah, and the purported deed of sale, allegedly executed by Dorotea in favor of Littie Sarah, are not on record. Considering the allegations in the pleadings, it is best that a trial on the merits be conducted.          We fully agree with the apt and judicious ruling of the CA, when it said: 

             As the former owner of the subject property, the same having been titled in her name under TCT No. T-56923, Dorotea Cariaga Bonete, being the real party [in] interest, has the legal capacity to file the instant case for reconveyance and annulment of deed of sale.  The complaint was filed by the [respondents] precisely to question the issuance of TCT No. T-75454 in the name of Littie Sarah Agdeppa as the transaction allegedly contemplated was only to secure Dorotea’s loan.             Why the property became the subject of the deed of sale which is being disputed by Dorotea should be threshed out in a full-blown trial on the merits in order to afford the contending parties their respective days incourt.  As held in Del Bros.  Hotel Corporation vs. Court of Appeals, 210 SCRA 33, the complaint is not supposed to contain evidentiary matters as this will have to be done at the trial on the merits of the case.       

          A final note.          A liberal construction of the Rules is apt in situations involving excusable formal errors in a pleading, as long as

the same do not subvert the essence of the proceeding, and they connote at least a reasonable attempt at compliance with the Rules.[16] The Court is not precluded from rectifying errors of judgment, if blind and stubborn adherence to procedure would result in the sacrifice of substantial justice for technicality. To deprive respondents, particularly Dorotea, of their claims over the subject property on the strength of sheer technicality would be a travesty of justice and equity.              WHEREFORE, the instant Petition is DENIED and the assailed Court of Appeals Decision is AFFIRMED. The Regional Trial Court, Branch 18 of Midsayap, Cotabato, is hereby directed to resolve this case on the merits with deliberate dispatch.  Costs against petitioners.

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THIRD DIVISION ATTY. ROGELIO E. SARSABA,                                                Petitioner, 

                              - versus -

  FE VDA. DE TE, represented by her Attorney-in-Fact, FAUSTINO CASTAÑEDA,                                          Respondents.       G.R. No. 175910

 Present:

 YNARES-SANTIAGO, J.,         Chairperson,CHICO-NAZARIO,VELASCO, JR.,NACHURA, andPERALTA, JJ. Promulgated:

                 July 30, 2009x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N PERALTA, J.:           Before us is a petition for review on certiorari[1] with prayer   for   preliminary   injunction   assailing   the Order[2] dated March 22, 2006 of the Regional Trial Court (RTC),  Branch 19, Digos City,  Davao del  Sur,   in Civil  Case No. 3488.           The facts, as culled from the records, follow. 

On  February 14, 1995, a Decision was rendered in   NLRC   Case  No.   RAB-11-07-00608-93   entitled, Patricio Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to have been illegally dismissed and ordering Gasing to pay him   his   monetary   claims   in   the   amount of P43,606.47.   After the Writ of Execution was returned unsatisfied,   Labor   Arbiter   Newton   R.   Sancho   issued   an Alias   Writ   of   Execution[3] on June   10,   1996,   directing Fulgencio   R.   Lavarez,   Sheriff   II   of   the   National   Labor Relations   Commission   (NLRC),   to   satisfy   the   judgment award.   On July 23, 1996, Lavarez, accompanied by Sereno and his counsel, petitioner Atty. Rogelio E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which at that  time  was   in   the  possession  of  Gasing.   On July  30, 1996,   the truck  was sold  at  public  auction,  with Sereno appearing as the highest bidder.[4]

 

          Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-fact, Faustino Castañeda, filed with the RTC,  Branch  18,  Digos,  Davao del  Sur,  a  Complaint[5] for recovery  of  motor  vehicle,  damages with prayer  for   the delivery   of   the   truck pendente   lite against   petitioner, Sereno, Lavarez and the NLRC of Davao City, docketed as Civil Case No. 3488.             Respondent alleged that: (1) she is the wife of the late   Pedro   Te,   the   registered   owner   of   the   truck,   as evidenced   by   the   Official   Receipt[6] and   Certificate   of Registration;[7] (2)   Gasing  merely   rented   the   truck   from her; (3) Lavarez erroneously assumed that Gasing owned the truck because he was, at the time of the “taking,”[8] in possession of the same; and (4) since neither she nor her husband were parties to the labor case between Sereno and Gasing,  she should not  be made to  answer   for   the judgment award, much less be deprived of the truck as a consequence of the levy in execution.             Petitioner   filed   a   Motion   to   Dismiss[9] on   the following grounds: (1) respondent has no legal personality to sue, having no real interests over the property subject of   the   instant   complaint;   (2)   the   allegations   in   the complaint do not sufficiently state that the respondent has cause of action; (3) the allegations in the complaint do not contain sufficient cause of action as against him; and (4) the complaint is not accompanied by an Affidavit of Merit and   Bond   that   would   entitle   the   respondent   to   the delivery of the tuck pendente lite.           The  NLRC  also  filed  a  Motion   to  Dismiss[10] on   the grounds of lack of jurisdiction and lack of cause of action.            Meanwhile,   Lavarez   filed   an   Answer   with Compulsory   Counterclaim   and   Third-Party   Complaint.[11]   By way of special and affirmative defenses, he asserted that the RTC does not have jurisdiction over the subject matter and that the complaint does not state a cause of action.           On January   21,   2000,   the   RTC   issued   an Order[12] denying petitioner's Motion to Dismiss for lack of merit.            In   his   Answer,[13] petitioner   denied   the   material allegations   in   the   complaint.   Specifically,   he   cited   as affirmative   defenses   that:   respondent   had   no   legal personality to sue, as she had no interest over the motor vehicle;   that   there  was  no  showing   that   the  heirs  have filed an intestate estate proceedings of the estate of Pedro Te, or that respondent was duly authorized by her co-heirs to  file   the case;  and that   the  truck  was already sold  to Gasing   on  March   11,   1986   by   one   Jesus  Matias,   who bought the same from the Spouses Te.   Corollarily, Gasing was already the  lawful  owner  of   the  truck  when  it  was levied on execution and, later on, sold at public auction. 

Page 18: Civpro III

          Incidentally,   Lavarez   filed   a  Motion   for   Inhibition,[14]  which was opposed[15] by respondent. 

           On October   13,   2000,   RTC   Branch   18   issued   an Order[16] of   inhibition   and   directed   the   transfer   of   the records to Branch 19.   RTC Branch 19, however, returned the records back to Branch 18 in view of the appointment of   a   new   judge   in  place  of   Judge-designate  Rodolfo  A. Escovilla.   Yet,   Branch   19   issued   another Order[17] dated November   22,   2000 retaining   the   case   in said branch.                 Eventually, the RTC issued an Order[18] dated May 19, 2003 denying the separate motions to dismiss filed by the NLRC  and   Lavarez,   and   setting   the  Pre-Trial  Conference on July 25, 2003.          On October   17,   2005,   petitioner   filed   an   Omnibus Motion to Dismiss the Case on the following grounds:[19] (1) lack of  jurisdiction over one of the principal defendants; and (2) to discharge respondent's attorney-in-fact for lack of legal personality to sue.          It appeared that the respondent, Fe Vda. de Te, died on April 12, 2005.[20]

          Respondent,   through   her   lawyer,   Atty.  William   G. Carpentero,   filed   an   Opposition,[21] contending   that   the failure to serve summons upon Sereno is not a ground for dismissing   the  complaint,  because the  other  defendants have   already   submitted   their   respective   responsive pleadings.   He   also   contended   that   the   defendants, including herein petitioner,  had previously filed separate motions to dismiss the complaint, which the RTC denied for lack of merit.   Moreover, respondent's death did not render functus officio her right to sue since her attorney-in-fact,   Faustino   Castañeda,   had   long   testified   on   the complaint on March 13, 1998 for and on her behalf and, accordingly, submitted documentary exhibits in support of the complaint.          On March   22,   2006,   the   RTC   issued   the   assailed Order[22] denying petitioner's aforesaid motion.             Petitioner then filed a Motion for Reconsideration with Motion for Inhibition,[23] in which he claimed that the judge who issued the Order was biased and partial.   He went   on   to   state   that   the   judge's   husband   was   the defendant in a petition for judicial recognition of which he was   the   counsel,   docketed   as   Civil   Case  No.   C-XXI-100, before the RTC, Branch 21, Bansalan, Davao del Sur.   Thus, propriety   dictates   that   the   judge   should   inhibit   herself from the case.          Acting on the motion for inhibition, Judge Carmelita Sarno-Davin   granted   the   same[24] and   ordered   that   the case be re-raffled to Branch 18.   Eventually, the said RTC 

issued   an   Order[25] on October   16,   2006 denying petitioner's motion for reconsideration for lack of merit.                  Hence, petitioner directly sought recourse from the Court via the present petition involving pure questions of law, which he claimed were resolved by the RTC contrary to law, rules and existing jurisprudence.[26]             There   is   a   “question of law” when the   doubt   or difference arises as to what the law is on certain state of facts, and which does not call for an examination of the probative value of the evidence presented by the parties-litigants.   On the other hand, there is a “question of fact” when the doubt or controversy arises as to the truth or falsity of the alleged facts.   Simply put, when there is no dispute   as   to   fact,   the  question  of  whether  or  not   the conclusion  drawn  therefrom  is   correct,   is   a  question of law.[27]  

Verily, the issues raised by herein petitioner are “questions of  law,” as their resolution rest solely on what the   law   provides   given   the   set   of   circumstances availing.   The  first   issue   involves   the   jurisdiction  of   the court over the person of one of the defendants, who was not served with summons on account of  his  death.  The second   issue,   on   the  other   hand,   pertains   to   the   legal effect of death of the plaintiff during the pendency of the case.   

 At   first   brush,   it  may   appear   that   since   pure 

questions  of   law  were   raised,  petitioner's   resort   to   this Court   was   justified   and   the   resolution   of   the aforementioned issues will necessarily follow.   However, a perusal   of   the  petition   requires   that   certain  procedural issues must initially be resolved before We delve into the merits of the case.

 Notably, the petition was filed directly from the 

RTC which issued the Order in the exercise of its original jurisdiction.   The question before Us then is: whether or not   petitioner   correctly   availed   of   the  mode   of   appeal under Rule 45 of the Rules of Court.

 Significantly,   the   rule   on   appeals   is   outlined 

below, to wit:[28]

 (1)  In   all cases decided by the RTC in the

exercise of its original jurisdiction, appeal   may   be  made   to   the   Court   of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law;

 (2)  In   all cases decided by the RTC in the

exercise of its original jurisdiction where the appellant raises only questions of law,   the   appeal  must   be   taken   to   the 

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Supreme Court  on a petition for review on certiorari under Rule 45.

 (3)  All appeals from judgments rendered by the 

RTC   in   the   exercise   of   its   appellate jurisdiction,   regardless   of   whether   the appellant   raises   questions   of   fact, questions of   law, or  mixed questions of fact   and   law,   shall   be   brought   to   the Court  of  Appeals  by filing a petition for review under Rule 42.

 Accordingly,  an appeal  may be taken from the 

RTC  which   exercised   its   original   jurisdiction,   before   the Court  of  Appeals  or  directly  before  this  Court,  provided that   the   subject   of   the   same   is   a judgment or final order that   completely   disposes   of   the   case,   or   of   a particular matter therein when declared by the Rules to be appealable.[29]   The first mode of appeal, to be filed before the  Court  of  Appeals,   pertains   to  a writ   of   error  under Section 2(a), Rule 41 of the Rules of Court, if questions of fact   or   questions   of   fact   and   law   are   raised   or involved.   On the other hand, the second mode is by way of an appeal by certiorari before the Supreme Court under Section 2(c),  Rule 41,   in relation to Rule 45, where only questions of law are raised or involved.[30]                      An   order   or   judgment   of   the   RTC   is deemed final when it finally disposes of a pending action, so   that   nothing  more   can   be   done  with   it   in   the   trial court.   In  other  words,   the  order  or   judgment  ends  the litigation   in   the   lower   court.[31]   On   the  other  hand,   an order which does not dispose of the case completely and indicates that other things remain to be done by the court as   regards   the   merits, is interlocutory.   Interlocutory refers   to   something between   the   commencement   and   the   end   of   the   suit which  decides   some  point  or  matter,  but   is  not  a  final decision on the whole controversy.[32]

   The subject of the present petition is an Order 

of the RTC, which denied petitioner's Omnibus Motion to Dismiss, for lack of merit.           We have said time  and again that  an  order denying a motion to dismiss is interlocutory.[33]  Under Section 1(c), Rule 41 of the Rules of Court, an interlocutory order is not appealable.    As a remedy for the denial, a party has to file an   answer   and   interpose   as   a   defense   the   objections raised in the motion, and then to proceed to trial;  or,  a party may immediately avail of the remedy available to the aggrieved party by filing an appropriate special civil action for certiorari under   Rule   65   of   the   Revised   Rules   of Court.   Let   it   be   stressed   though   that   a   petition for certiorari is appropriate only when an order has been issued without or in excess of jurisdiction, or with grave abuse   of   discretion   amounting   to   lack   or   excess   of jurisdiction.  

           Based   on   the   foregoing,   the   Order   of   the   RTC denying   petitioner's  Omnibus  Motion   to   Dismiss   is   not appealable   even  on  pure  questions  of   law.   It   is  worth mentioning   that   the   proper   procedure   in   this   case,   as enunciated by this Court, is to cite such interlocutory order as an error in the appeal of the case -- in the event that the RTC rules in favor of respondent -- and not to appeal such interlocutory order.   On the other hand, if the petition is to be treated as a petition for  review under Rule 45,   it would likewise fail because the  proper  subject would only be  judgments or final  orders that completely  dispose of the case.[34]

           Not being a proper subject of an appeal,  the Order of the RTC is  considered interlocutory.   Petitioner should have  proceeded  with the trial of the case and, should the RTC eventually  render an unfavorable verdict,  petitioner should assail the said Order as part of an appeal that may be taken from the final  judgment to be rendered in this case.   Such rule  is   founded on considerations of  orderly procedure,  to  forestall  useless  appeals  and avoid   undue  inconvenience  to  the  appealing  party  by having  to  assail  orders  as   they  are  promulgated  by   the court, when all such orders may be contested in a single appeal.   

In one case,[35] the Court adverted to the hazards of interlocutory appeals:

 It is axiomatic that an interlocutory order cannot be challenged by an appeal.   Thus, it has been held that “the proper remedy in such cases is an ordinary appeal from an adverse judgment on the merits, incorporating in said appeal the grounds for assailing the interlocutory order.   Allowing appeals from interlocutory orders would result in the `sorry spectacle’ of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings.   x x x. 

 Another   recognized   reason   of   the   law   in 

permitting appeal only from a final order or judgment, and not   from an   interlocutory  or   incidental  one,   is   to  avoid multiplicity   of   appeals   in   a   single   action,   which   must necessarily suspend the hearing and decision on the merits of   the case during  the pendency of   the appeal.   If   such appeal were allowed, trial on the merits of the case would necessarily  be delayed for a considerable  length of time and   compel   the   adverse   party   to   incur   unnecessary expenses, for one of the parties may interpose as many appeals as incidental questions may be raised by him, and 

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interlocutory   orders   rendered   or   issued   by   the   lower court.[36]

 And, even if We treat the petition to have been 

filed   under   Rule   65,   the   same   is   still   dismissible   for violating the principle on hierarchy of courts.   Generally, a direct   resort   to   us   in   a   petition   for certiorari is   highly improper,   for   it   violates   the  established  policy  of   strict observance   of   the   judicial   hierarchy   of   courts.[37]   This principle,  as a  rule,  requires  that  recourse must  first  be made   to   the   lower-ranked   court   exercising   concurrent jurisdiction   with   a   higher court.   However,  the  judicial hierarchy of courts is not an iron-clad   rule.  A   strict   application   of   the   rule   is   not necessary   when   cases   brought before  the  appellate  courts  do  not  involve  factual   but legal questions.[38]

 In   the   present   case,   petitioner   submits   pure 

questions   of   law   involving   the   effect   of   non-service   of summons following the death of the person to whom it should   be   served,   and   the   effect   of   the   death   of   the complainant during the pendency of the case.   We deem it best to rule on these issues, not only for the benefit of the bench and bar, but in order to prevent further delay in the   trial  of   the  case.   Resultantly,  our   relaxation  of   the policy   of   strict   observance   of   the   judicial   hierarchy   of courts is warranted.

 Anent   the   first   issue,   petitioner   argues   that, 

since Sereno died before summons was served on him, the RTC should have dismissed the complaint against all  the defendants and that the same should be filed against his estate.

 The Sheriff's Return of Service[39] dated May 19, 

1997 states that Sereno could not be served with copy of the   summons,   together  with   a   copy   of   the   complaint, because he was already dead.

 In  view of  Sereno's  death,  petitioner  asks  that 

the   complaint   should   be   dismissed,   not only  against  Sereno,  but  as  to  all  the defendants,   considering   that   the   RTC   did   not   acquire jurisdiction over the person of Sereno.

          Jurisdiction over a party is acquired by service of summons by the sheriff, his deputy or other proper court officer, either personally by handing a  copy  thereof to  the  defendant  or  by  substituted  service.[40] On the otherhand, summons is a writ by which the defendant is notified of the action brought against him.   Service of such writ is the means by which the court may acquire jurisdiction over his person.[41]              Records show that petitioner had filed a Motion to Dismiss on the grounds of lack of legal personality of respondent; the allegations in the complaint did not

sufficiently state that respondent has a cause of action or a cause of action against the defendants; and, the complaint was not accompanied by an affidavit of merit and bond.   The RTC denied the motion and held therein that, on the basis of the allegations of fact in the complaint, it can render a valid judgment.   Petitioner, subsequently, filed his answer by denying all the material allegations of the complaint.   And by way of special and affirmative defenses, he reiterated that respondent had no legal personality to sue as she had no real interest over the property and that while the truck was still registered in Pedro Te's name, the same was already sold to Gasing.          Significantly, a motion to dismiss may be filed within the time for but before the filing of an answer to the complaint or pleading asserting a  claim.[42]   Among the grounds mentioned is the court's lack of jurisdiction over the person of the defending party.          As a rule, all defenses and objections not pleaded, either in a motion to dismiss or in an answer, are deemed waived.[43]   The exceptions to this rule are: (1) when the court has no jurisdiction over the subject matter, (2) when there is another action pending between the parties for the  same cause,  or (3) when the action is barred by prior judgment or by statute of limitations, in which cases, the court may dismiss the claim.          In the case before Us, petitioner raises the issue of lack of jurisdiction over the person of Sereno, not in his Motion to Dismiss or in his Answer but only in his Omnibus Motion to Dismiss.   Having failed to invoke this ground at the proper time, that is, in a motion to dismiss, petitioner cannot raise it now for the first time on appeal.          In fine, We cannot countenance petitioner's argument that the complaint against the other defendants should have been dismissed, considering that the RTC never acquired jurisdiction over the person of Sereno.   The court's failure to acquire jurisdiction over one's person is a defense which is personal to the person claiming it.  Obviously, it is now impossible for Sereno to invoke the same in view of his death.   Neither can petitioner invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed against all of the defendants.   Failure to serve summons on Sereno's person will not be a cause for the dismissal of the complaint against the other defendants, considering that they have been served with copies of the summons and complaints and have long submitted their respective responsive pleadings.   In fact, the other defendants in the complaint were given the chance to raise all possible defenses and objections personal to them in their respective motions to dismiss and their subsequent answers.             We agree with the RTC in its Order when it resolved the issue in this wise:

            As   correctly   pointed   by defendants,   the  Honorable  Court  has not   acquired   jurisdiction   over   the person of  Patricio Sereno since there was   indeed   no   valid   service   of 

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summons insofar as Patricio Sereno is concerned.    Patricio   Sereno   died before the summons, together with a copy of the complaint and its annexes, could be served upon him.             However,   the   failure   to   effect service   of   summons   unto   Patricio Sereno, one of the defendants herein does   not   render   the   action DISMISSIBLE,   considering   that   the three   (3)   other   defendants,   namely, Atty.   Rogelio   E.   Sarsaba,   Fulgencio Lavares   and   the   NLRC,   were   validly served   with   summons   and   the   case with   respect   to   the   answering defendants   may   still   proceed independently.   Be it recalled that the three   (3)   answering  defendants  have previously   filed   a  Motion   to  Dismiss the   Complaint  which  was   denied   by the Court.             Hence,   only   the   case against  Patricio   Sereno   will   be DISMISSED and the same may be filed as a claim against the estate of Patricio Sereno,  but   the case with   respect   to the   three   (3)   other   accused   will proceed.  

          Anent the second issue, petitioner moves that respondent's attorney-in-fact, Faustino Castañeda, be discharged as he has no more legal personality to sue on behalf of  Fe Vda. de Te, who passed away on April 12, 2005, during the pendency of the case before the RTC.          When a party to a pending action dies and the claim is not extinguished, the Rules of Court require a substitution of the deceased.[44] Section 1, Rule 87 of the Rules of Court enumerates the actions that survived and may be filed against the decedent's representatives as follows: (1) actions to recover real or personal property or an interest thereon, (2) actions to enforce liens thereon, and (3) actions to recover damages for an injury to a person or a property.   In such cases, a counsel is obliged to inform the court of the death of his client and give the name and address of the latter's legal representative.[45]

          The rule on substitution of parties is governed by Section 16,[46] Rule 3 of the 1997 Rules of Civil Procedure, as amended.          Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due process.   The rule on substitution was crafted to protect every party's right to due process.   It was designed to ensure that the deceased party would continue to be properly represented in the suit through his heirs or the duly appointed legal representative of his estate.   Moreover,

non-compliance with the Rules results in the denial of the right to due process for the heirs who, though not duly notified of the proceedings, would be substantially affected by the decision rendered therein.   Thus, it is only when there is a denial of due process, as when the deceased is not represented by any legal representative or heir, that the court nullifies the trial proceedings and the resulting judgment therein.[47]           In the case before Us, it appears that respondent's counsel did not make any manifestation before the RTC as to her death.   In fact, he had actively participated in the proceedings.   Neither had he shown any proof that he had been retained by respondent's legal representative or any one who succeeded her.           However, such failure of counsel would not lead Us to invalidate the proceedings that have long taken place before the RTC.   The Court has repeatedly declared that failure of the counsel to comply with his duty to inform the court of the death of his client, such that no substitution is effected, will not invalidate the proceedings and the judgment rendered thereon if the action survives the death of such party.   The trial court's jurisdiction over the case subsists despite the death of the party.[48]             The purpose behind this rule is the protection of the right to due process of every party to the litigation who may be affected by the intervening death.   The deceased litigants are themselves protected as they continue to be properly represented in the suit through the duly appointed legal representative of their estate.[49]

          Anent the claim of petitioner that the special power of attorney[50] dated March 4, 1997 executed by respondent in favor of Faustino has become functus officioand that the agency constituted between them has been extinguished upon the death of respondent, corollarily, he had no more personality to appear and prosecute the case on her behalf.          Agency is extinguished by the death of the principal.[51]   The only exception where the agency shall remain in full force and effect even after the death of the principal is when if it has been constituted in the common interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor.[52]

        A perusal of the special power of attorney leads us to conclude that it was constituted for the benefit solely of the principal or for respondent Fe Vda. de Te. Nowhere can we infer from the stipulations therein that it was created for the common interest of respondent and her attorney-in-fact.   Neither was there any mention that it was to benefit a third person who has accepted the stipulation in his favor.          On this ground, We agree with petitioner.   However, We do not believe that such ground would cause the dismissal of the complaint.   For as We have said, Civil Case No. 3488, which is an action for the recovery of a personal property, a motor vehicle, is an action that survives pursuant to Section 1, Rule 87 of the Rules of

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Court.   As such, it is not extinguished by the death of a party.         In Gonzalez v. Philippine Amusement and Gaming Corporation,[53] We have laid down the criteria for determining whether an action survives the death of a plaintiff or petitioner, to wit:

 x x x The question as to whether an action survives or not depends on the nature of the action and the damage sued for.   If the causes of action which survive the wrong complained [of] affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive the injury complained of is to the person the property and rights of property affected being incidental. x x x

          Thus, the RTC aptly resolved the second issue with the following ratiocination:                                 While it may be true as

alleged by defendants that with the death of Plaintiff, Fe Vda. de Te, the Special Power of Attorney she executed empowering the Attorney-in-fact, Faustino Castañeda to sue in her behalf has been rendered functus officio, however, this Court believes that the Attorney-in-fact had not lost his personality to prosecute this case.             It bears stressing that when this case   was   initiated/filed   by   the Attorney-in-fact,   the plaintiff was still very much alive.              Records   reveal   that   the Attorney-in-fact   has   testified   long before   in   behalf   of   the   said   plaintiff and more particularly during the state when   the   plaintiff   was   vehemently opposing   the   dismissal   of   the complainant.   Subsequently   thereto, he   even   offered   documentary evidence in support of the complaint, and   this   court   admitted   the same.   When   this   case  was   initiated, jurisdiction was vested upon this Court to   try   and   hear   the   same   to   the end.   Well-settled   is   the   rule   to   the point  of   being  elementary   that   once jurisdiction is acquired by this Court, it attaches until the case is decided.               Thus, the proper remedy here is the Substitution of Heirs  and not the dismissal   of   this   case   which   would work injustice to the plaintiff.

             SEC. 16, RULE 3 provides for the substitution  of   the  plaintiff  who  dies pending hearing of the case by his/her legal heirs.   As to whether or not the heirs will  still  continue to engage the services   of   the   Attorney-in-fact   is another matter, which lies within the sole discretion of the heirs.     

         In fine, We hold that the petition should be denied as the RTC Order is interlocutory; hence, not a proper subject of an appeal before the Court.   In the same breath, We also hold that, if the petition is to be treated as a petition for certiorari as   a   relaxation   of   the   judicial   hierarchy  of courts, the same is also dismissible for being substantially insufficient   to  warrant   the Court   the nullification of   the Order of the RTC.          Let this  be an occasion for Us to reiterate that the rules are there to aid litigants in prosecuting or defending their cases before the courts.   However, these very rules should  not  be   abused   so  as   to  advance  one's   personal purposes,   to   the  detriment  of  orderly  administration  of justice.   We   can   surmise   from   the   present   case   herein petitioner's manipulation in order to circumvent the rule on modes of appeal and the hierarchy of courts so that the issues   presented  herein   could  be   settled  without   going through   the   established   procedures.   In Vergara,   Sr.   v. Suelto,[54] We   stressed   that   this   should   be   the   constant policy   that  must  be  observed strictly  by   the  courts  and lawyers, thus: x x x. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition.  It  cannot  and should not  be burdened with the task of dealing with causes in the first instance.   Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor.  Hence,   that   jurisdiction   should generally be exercised relative to actions or proceedings before the Court  of  Appeals,  or  before constitutional  or other tribunals,  bodies or agencies whose acts for some reason  or  another  are  not   controllable  by   the  Court  of Appeals.  Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writ’s procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe.[55]

     WHEREFORE,   premises   considered,   the   Petition is DENIED.   The   Order   dated March   22,   2006 of   the Regional  Trial  Court,  Branch 19,  Digos,  Davao del  Sur  in Civil  Case  No.  3488,   is  hereby AFFIRMED.   Costs  against the petitioner.   


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