Civpro Syllabus & Cases

8/20/2019 Civpro Syllabus & Cases

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Civil Procedure - Judge Elma Wagan

ASSIGNMENT CIVIL PROCE!RE SECTIONS "#$ $ %

General Princi&le' -

() Juri'dic*ion+) Juri'dic*ion o, Cour*' - #)P) (+$ a' amended ./ R)A) 01( - SC Admini'*ra*iveMa**er No) 2-3 - SC Circular No) +(- - SC Circular No) 0-44

I. CASES on Jurisdiction (First Set)

() Navale' v) A.a/a 33( SCRA ""+) Cero,err Real*/ Cor&) v') CA G)R) ("5" +-5-2+") Lee v') Pre'iding Judge G)R) 1404 ((-(2-413) Ignacio v') C%I L-+040 (2-+-0(

5) Marciana Serdoncillo v) #enolirao G)R) ((4"+4 (2-4-41) Tini*igan v) Tini*igan (22 SCRA 1(0) Amigo v) C)A) +5" SCRA "4+4) Ti6am v) Si.ong7ana/ L-+(352 3-(5-14) Calimlim v) Ramire8 +23 P7il +5 (4+(2) %rancel Real*/ Cor&) v) S/ci& G)R) (53143 -4-25(() Venancio %iguerroa v) Peo&le G)R) (30321 0-(0-24(+) Manc7e'*er v) C)A) G)R) L-05( 5-0-40(") Sun In'urance v) A'uncion G)R) 0"0-"4 +-("-4(3) Taca/ v) RTC G)R) 44205-00 (+-+2-4(5) A/ala Cor&) v) Mada/ag G)R) 443+( (-"2-2(1) P7il %ir'* In'urance Co) v P/ramid Logi'*ic' G)R) (15(30 0--24(0) La&i*an v) Scandia +3 SCRA 30(4) e Leon v) C)A) G)R) No) (2301 "-1-4

II. CAUSE OF ACTION

() Pioneer v) Guiande8 G)R) (51434 (2-((-20

Re&u.lic o, *7e P7ili&&ine'

SUPREME COURTManila

SECOND DIVISION

G.R. No. !"#$# Octo%er & '

PIONEER INTERNATIONA*& *TD.& &e*i*ioner$v')+ON. TEOFI*O GUADI,& JR.& in -is c/cit0 s Presidin1 Jud1e o2

Re1ion3 Tri3 Court& 4rnc- $& M5ti Cit0& nd ANTONIO D.TODARO& re'&onden*')


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D E C I S I O N

CARPIO& J.6

T-e Cse

T7i' i' a &e*i*ion ,or revie9 on cer*iorari( o, *7e eci'ion+ da*ed +0Se&*em.er +22( and o, *7e Re'olu*ion"da*ed (3 Januar/ +22" o, *7e Cour*o, A&&eal' :a&&ella*e cour*; in CA-G)R) SP No) 5321+) T7e eci'iona,,irmed *7e Order'3 da*ed 3 Januar/ (5 and " June (1 o, #ranc7 (30o, *7e Regional Trial Cour* o, Male&8ig :>le&8ig;)PIL and i*' co-de,endan*' 9ere 'erved co&ie' o, *7e 'ummon' and o, *7ecom&lain* a* PP=I and PCPI?' o,,ice in Ala.ang$ Mun*inlu&a$ *7roug7Cecille L) e Leon :e Leon;$ 97o 9a' >le&8ig?' E@ecu*ive A''i'*an*)

Todaro alleged *7a* PIL i' a cor&ora*ion dul/ organi8ed under Au'*ralianla9'$ 97ile PCPI and PP=I are cor&ora*ion' dul/ organi8ed underP7ili&&ine la9') PIL i' engaged in *7e read/-mi@ and concre*e aggrega*e'

.u'ine'' and 7a' e'*a.li'7ed a &re'ence 9orld9ide) PIL e'*a.li'7ed PP=I a'*7e 7olding com&an/ o, *7e '*oc


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Todaro a**ac7ed nine le**er'$ marong; Limi*ed) Todaro 9ro*e *7a* Bm/ aim i' *o run again

a read/-mi@ concre*e com&an/ in *7e P7ili&&ine' and no* *o .e a &ar*-*imecon'ul*an*) O*7er9i'e$ I could 7ave c7arged /our com&an/ 9i*7 a muc77ig7er ,ee)

Anne@ # '7o9' *7a* on 3 Se&*em.er (1$ Lind'a/$ under *7e le**er7eado, Pioneer Concre*e :=ong >ong; Limi*ed$ re'&onded ./ ,a@ *o Todaro?',a@ed le**er *o Mconald and &ro&o'ed *7a* Todaro 6oin Pioneer on are*ainer .a'i' ,or + *o " mon*7' on *7e under'*anding *7a* BTodaro 9ould

.ecome a &ermanen* em&lo/ee i, a' 9e e@&ec*$ our en*r/ &roceed') T7e,a@ed le**er *o Mconald re,erred *o ./ Lind'a/ i' no* ,ound in *7e rolloand

9a' no* a**ac7ed *o Todaro?' com&lain*)

Anne@ C(2 '7o9' *7a* on *7e 'ame da*e a' *7a* o, Anne@ #$ Todaro$under *7e le**er7ead o, I*al Tec7 i'*ri.u*or'$ Inc)$ ,a@ed ano*7er le**er *oLind'a/ o, Pioneer Concre*e :=ong >ong; Limi*ed) Todaro a'


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%ur*7er *o our recen* mee*ing in =ong >ong$ I am no9 a.le *ocon,irm m/ o,,er *o engage /ou a' a con'ul*an* *o PioneerIn*erna*ional L*d) S7ould Pioneer &roceed 9i*7 an inve'*men* in *7eP7ili&&ine'$ *7en Pioneer 9ould o,,er /ou a &o'i*ion *o manage *7e

&remi@ed concre*e o&era*ion')

Pioneer 9ill &ro.a.l/ .e in a &o'i*ion *o ma


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advi'e /ou *7a* *7e agreemen* 9ill cea'e ,rom Augu'* "('* a' &er our &reviou' di'cu''ion')

Anne@ I(1 '7o9' *7e le**er da*ed +2 Oc*o.er (0 o, >)M) %ol9ell:%ol9ell;$ PIL?' E@ecu*ive General Manager o, Au'*ralia and A'ia$ *oTodaro) %ol9ell con,irmed *7e con*en*' o, >le&8ig?' (4 Se&*em.er (0le**er) %ol9ell?' me''age read'

T7an< /ou ,or /our le**er *o r) Sc7u.er* da*ed +*7 Se&*em.er (0regarding *7e alleged .reac7 o, con*rac* 9i*7 /ou) r) Sc7u.er* 7a'a'ong are 9elldocumen*ed and 7ave .een a&&ro&ria*el/ re9arded) =o9ever$ inregard *o /our reDue'* and e@&ec*a*ion *o .e 1i7en /er8nente8/3o08ent 9it- Pioneer P-i3i//ines +o3din1s& Inc) I amin,ormed *7a* nego*ia*ion' *o reac7 agreemen* on a&&ro&ria*e *erm'and condi*ion' 7ave no* .een 'ucce'',ul)

T7e em&lo/men* condi*ion' /ou '&eci,ied in /our le**er *o Jo7n

Mconald da*ed ((*7

Se&*em.er are 9ell .e/ond our e@&ec*a*ion')

Mr) Todaro$ I regre* *7a* 9e do no* 9i'7 *o &ur'ue our a''ocia*ion9i*7 /ou an/ ,ur*7er) Mr) >le&8ig 9a' au*7ori8ed *o *ermina*e *7i'a''ocia*ion and *7e le**er 7e 'en* *o /ou da*ed (4*7 Se&*em.er 7a' m/'u&&or*)

T7an< /ou ,or /our involvemen* 9i*7 Pioneer) I 9i'7 /ou all *7e .e'*,or *7e ,u*ure) :Em&7a'i' added;

PIL ,iled$ ./ '&ecial a&&earance$ a mo*ion *o di'mi'' Todaro?' com&lain*)PIL?' co-de,endan*'$ PCPI$ PP=I$ and >le&8ig$ ,iled a 'e&ara*e mo*ion *odi'mi'')(0 PIL a''er*ed *7a* *7e *rial cour* 7a' no 6uri'dic*ion over PIL

.ecau'e PIL i' a ,oreign cor&ora*ion no* doing .u'ine'' in *7e P7ili&&ine')PIL al'o Due'*ioned *7e 'ervice o, 'ummon' on i*) A''uming arguendo *7a*>le&8ig i' PIL?' agen* in *7e P7ili&&ine'$ i* 9a' no* >le&8ig .u* e Leon97o received *7e 'ummon' ,or PIL) PIL ,ur*7er '*a*ed *7a* *7e Na*ionalLa.or Rela*ion' Commi''ion :NLRC;$ and no* *7e *rial cour*$ 7a'

6uri'dic*ion over *7e 'u.6ec* ma**er o, *7e ac*ion) I* claimed *7a* a''uming*7a* *7e *rial cour* 7a' 6uri'dic*ion over *7e 'u.6ec* ma**er o, *7e ac*ion$ *7ecom&lain* '7ould .e di'mi''ed on *7e ground o, forum non-

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conveniens. %inall/$ PIL main*ained *7a* *7e com&lain* doe' no* '*a*e a cau'eo, ac*ion .ecau'e *7ere 9a' no &er,ec*ed con*rac*$ and no &er'onal 6udgmen*could .e rendered ./ *7e *rial cour* again'* PIL .ecau'e PIL i' a ,oreigncor&ora*ion no* doing .u'ine'' in *7e P7ili&&ine' and *7ere 9a' im&ro&er

'ervice o, 'ummon' on PIL)

Todaro ,iled a Con'olida*ed O&&o'i*ion da*ed +1 Augu'* (4 *o re,u*e PIL?'a''er*ion') PIL ,iled$ '*ill ./ '&ecial a&&earance$ a Re&l/ on + Oc*o.er (4)

T-e Ru3in1 o2 t-e Tri3 Court

On 3 Januar/ ($ *7e *rial cour* i''ued an order (4 97ic7 ruled in ,avor o,Todaro) T7e *rial cour* denied *7e mo*ion' *o di'mi'' ,iled ./ PIL$ PCPI$PP=I$ and >le&8ig)

T7e *rial cour* '*a*ed *7a* *7e meri*' o, a mo*ion *o di'mi'' a com&lain* ,orlac< o, cau'e o, ac*ion are *e'*ed on *7e '*reng*7 o, *7e allega*ion o, ,ac*' in*7e com&lain*) T7e *rial cour* ,ound *7a* *7e allega*ion' in *7e com&lain*'u,,icien*l/ e'*a.li'7 a cau'e o, ac*ion) T7e *rial cour* declared *7a* Todaro?'cau'e o, ac*ion i' .a'ed on an alleged .reac7 o, a con*rac*ual o.liga*ion andan alleged viola*ion o, Ar*icle' ( and +( o, *7e Civil Code) T7ere,ore$ *7ecau'e o, ac*ion doe' no* lie 9i*7in *7e 6uri'dic*ion o, *7e NLRC .u* 9i*7 *7e*rial cour*)

T7e *rial cour* al'o a''er*ed i*' 6uri'dic*ion over PIL$ 7olding *7a* PIL did .u'ine'' in *7e P7ili&&ine' 97en i* en*ered in*o a con*rac* 9i*7 Todaro)Al*7oug7 PIL Due'*ion' *7e 'ervice o, 'ummon' on >le&8ig$ 97om PILclaim' i' no* i*' agen*$ *7e *rial cour* ruled *7a* PIL ,ailed *o adduce evidence*o &rove i*' con*en*ion) %inall/$ on *7e i''ue o, forum non-conveniens$ *7e*rial cour* ,ound *7a* i* i' more convenien* *o 7ear and decide *7e ca'e in *7eP7ili&&ine' .ecau'e Todaro re'ide' in *7e P7ili&&ine' and *7e con*rac*allegedl/ .reac7ed involve' em&lo/men* in *7e P7ili&&ine')

PIL ,iled an urgen* omni.u' mo*ion ,or *7e recon'idera*ion o, *7e *rial

cour*?' 3 Januar/ ( order and ,or *7e de,ermen* o, ,iling i*' an'9er)PCPI$ PP=I$ and >le&8ig lile&8ig ,ileda 6oin* re&l/) T7e *rial cour* i''ued an order ( on " June ( den/ing *7emo*ion' o, PIL$ PCPI$ PP=I$ and >le&8ig) T7e *rial cour* gave PIL$ PCPI$PP=I$ and >le&8ig (5 da/' 9i*7in 97ic7 *o ,ile *7eir re'&ec*ive an'9er')

PIL did no* ,ile an an'9er .e,ore *7e *rial cour* and in'*ead ,iled a &e*i*ion,or cer*iorari .e,ore *7e a&&ella*e cour*)

T-e Ru3in1 o2 t-e A//e33te Court

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T7e a&&ella*e cour* denied PIL?' &e*i*ion and a,,irmed *7e *rial cour*?'ruling in toto) T7e di'&o'i*ive &or*ion o, *7e a&&ella*e cour*?' deci'ion read'

W=ERE%ORE$ &remi'e' con'idered$ *7e &re'en* &e*i*ion ,orcer*iorari i' 7ere./ ENIE !E CO!RSE and accordingl/ISMISSE) T7e a''ailed Order' da*ed Januar/ 3$ ( and June "$( o, *7e Regional Trial Cour* o, Ma


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) Pur'uan* *o *7e &rinci&le o, forum non-conveniens$ B*7e *rial cour*commi**ed grave a.u'e o, di'cre*ion 97en i* *oo< cogni8ance o, *7eca'e)++

T-e Ru3in1 o2 t-e Court

T7e &e*i*ion 7a' &ar*ial meri*) We a,,irm 9i*7 modi,ica*ion *7e ruling' o, *7e*rial and a&&ella*e cour*') A&ar* ,rom *7e i''ue on 'ervice o, 'ummon'$ *7eruling' o, *7e *rial and a&&ella*e cour*' on *7e i''ue' rai'ed ./ PIL arecorrec*)

Cause of Action

Sec*ion +$ Rule + o, *7e (0 Rule' o, Civil Procedure '*a*e' *7a* a cau'e o,

ac*ion i' *7e ac* or omi''ion ./ 97ic7 a &ar*/ viola*e' a rig7* o, ano*7er)

T7e general rule i' *7a* *7e allega*ion' in a com&lain* are 'u,,icien* *ocon'*i*u*e a cau'e o, ac*ion again'* *7e de,endan*' i,$ admi**ing *7e,ac*' alleged$ *7e cour* can render a valid 6udgmen* u&on *7e 'ame inaccordance 9i*7 *7e &ra/er *7erein) A cau'e o, ac*ion e@i'*' i, *7e,ollo9ing elemen*' are &re'en*$ namel/ :(; a rig7* in ,avor o, *7e

&lain*i,, ./ 97a*ever mean' and under 97a*ever la9 i* ari'e' or i'crea*ed :+; an o.liga*ion on *7e &ar* o, *7e named de,endan* *ore'&ec* or no* *o viola*e 'uc7 rig7* and :"; an ac* or omi''ion on *7e

&ar* o, 'uc7 de,endan* viola*ive o, *7e rig7* o, *7e &lain*i,, orcon'*i*u*ing a .reac7 o, *7e o.liga*ion o, *7e de,endan* *o *7e &lain*i,, ,or 97ic7 *7e la**er ma/ main*ain an ac*ion ,or recover/ o, damage')+"

In *7e &re'en* ca'e$ *7e 'ummar/ o, Todaro?' allega*ion' '*a*e' *7a* PIL$PCPI$ PP=I$ Mconald$ and >le&8ig did no* ,ul,ill *7eir con*rac*ualo.liga*ion *o em&lo/ Todaro on a &ermanen* .a'i' in PIL?' P7ili&&ine o,,ice)Todaro?' allega*ion' are *7u' 'u,,icien* *o e'*a.li'7 a cau'e o, ac*ion) WeDuo*e 9i*7 a&&roval *7e *rial cour*?' ruling on *7i' ma**er

On *7e i''ue o, lac< o, cau'e o, ac*ion H I* i' 9ell-'e**led *7a* *7emeri*' o, a mo*ion *o di'mi'' a com&lain* ,or lac< o, cau'e o, ac*ioni' *e'*ed on *7e '*reng*7 o, *7e allega*ion' o, ,ac* con*ained in *7ecom&lain* and no o*7er :e Je'u'$ e* al) v') #elarmino$ e* al)$ 5 P7il)"11 B(53;) T7i' Cour* ,ind' *7a* *7e allega*ion' o, *7e com&lain*$'&eci,icall/ &aragra&7' ("-"" *7ereo,$ &aragra&7' "2-"" alleging a',ollo9'

"2) All o, *7e ac*' 'e* ,or*7 in *7e ,oregoing 7ave .een done9i*7 *7e


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ground ,or ,iling a mo*ion *o di'mi'') T7e &ro&rie*/ o, di'mi''ing a ca'e .a'ed on forum non-conveniensreDuire' a ,ac*ual de*ermina*ion 7ence$ i* i'more &ro&erl/ con'idered a ma**er o, de,en'e) W7ile i* i' 9i*7in *7edi'cre*ion o, *7e *rial cour* *o a.'*ain ,rom a''uming 6uri'dic*ion on *7i'

ground$ *7e *rial cour* '7ould do 'o onl/ a,*er vi*al ,ac*' are e'*a.li'7ed *ode*ermine 97e*7er '&ecial circum'*ance' reDuire *7e cour*?' de'i'*ance)+5

Jurisdiction over PIL

PIL Due'*ion' *7e *rial cour*?' e@erci'e o, 6uri'dic*ion over i* on *9o level')%ir'*$ *7a* PIL i' a ,oreign cor&ora*ion no* doing .u'ine'' in *7e P7ili&&ine'and .ecau'e o, *7i'$ *7e 'ervice o, 'ummon' on PIL did no* ,ollo9 *7emanda*ed &rocedure) Second$ *7a* Todaro?' claim' are .a'ed on an alleged

.reac7 o, an em&lo/men* con*rac* 'o Todaro '7ould 7ave ,iled 7i' com&lain*

.e,ore *7e NLRC and no* .e,ore *7e *rial cour*)

Transacting Business in the Philippines and

Service of Summons

T7e ,ir'* level 7a' *9o 'u.-i''ue' PIL?' *ran'ac*ion o, .u'ine'' in *7eP7ili&&ine' and *7e 'ervice o, 'ummon' on PIL) Sec*ion (+$ Rule (3 o, *7e(0 Rule' o, Civil Procedure &rovide' *7e manner ./ 97ic7 'ummon' ma/

.e 'erved u&on a ,oreign 6uridical en*i*/ 97ic7 7a' *ran'ac*ed .u'ine'' in *7eP7ili&&ine') T7u'

Service upon foreign private juridical entity. — W7en *7e de,endan* i'a ,oreign 6uridical en*i*/ 97ic7 7a' *ran'ac*ed .u'ine'' in *7eP7ili&&ine'$ 'ervice ma/ .e made on i*' re'iden* agen* de'igna*ed inaccordance 9i*7 la9 ,or *7a* &ur&o'e$ or$ i, *7ere .e no 'uc7 agen*$ on*7e governmen* o,,icial de'igna*ed ./ la9 *o *7a* e,,ec*$ or an/ o, i*'o,,icer' or agen*' 9i*7in *7e P7ili&&ine')

A' *o *7e ,ir'* 'u.-i''ue$ PIL in'i'*' *7a* i*' 'ole ac* o, *ran'ac*ing ordoing .u'ine'' in *7e P7ili&&ine' con'i'*ed o, i*' inve'*men* in PP=I)

!nder P7ili&&ine la9$ PIL?' mere inve'*men* in PP=I doe' no* con'*i*u*edoing .u'ine'') =o9ever$ 9e a,,irm *7e lo9er cour*'? ruling and declare*7a*$ .a'ed on *7e allega*ion' in Todaro?' com&lain*$ PIL 9a' doing .u'ine''in *7e P7ili&&ine' 97en i* nego*ia*ed Todaro?' em&lo/men* 9i*7 PP=I)Sec*ion ":d; o, Re&u.lic Ac* No) 023+$ %oreign Inve'*men*' Ac* o, (($'*a*e'

T-e /-rse :doing business" s-33 inc3ude

so3icitin1 order'& ser7ice contrcts$ o&ening o,,ice'$ 97e*7er called

liaison" o,,ice' or .ranc7e' a&&oin*ing re&re'en*a*ive' ordi'*ri.u*or' domiciled in *7e P7ili&&ine' or 97o in an/ calendar /ear

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variou' Pioneer cor&ora*ion' '7oo*' do9n *7eir de,en'e *7a* *7e cor&ora*ion'7ave 'e&ara*e and di'*inc* &er'onali*ie'$ managemen*'$ and o&era*ion') T7evariou' Pioneer cor&ora*ion' 9ere all 9or


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W7en 'ummon' i' 'erved on a ,oreign 6uridical en*i*/$ *7ere are *7ree &re'cri.ed 9a/' :(; 'ervice on i*' re'iden* agen* de'igna*ed in accordance9i*7 la9 ,or *7a* &ur&o'e$ :+; 'ervice on *7e governmen* o,,icial de'igna*ed

./ la9 *o receive 'ummon' i, *7e cor&ora*ion doe' no* 7ave a re'iden* agen*$

and :"; 'ervice on an/ o, *7e cor&ora*ion?' o,,icer' or agen*' 9i*7in *7eP7ili&&ine')"2

In *7e &re'en* ca'e$ 'ervice o, 'ummon' on PIL ,ailed *o ,ollo9 an/ o, *7e &re'cri.ed &roce''e') PIL 7ad no re'iden* agen* in *7e P7ili&&ine') Summon'9a' no* 'erved on *7e Securi*ie' and E@c7ange Commi''ion :SEC;$ *7ede'igna*ed governmen* agenc/$"( 'ince PIL i' no* regi'*ered 9i*7 *7e SEC)Summon' ,or PIL 9a' 'erved on e Leon$ >le&8ig?' E@ecu*ive A''i'*an*)>le&8ig i' PIL?' agen* 9i*7in *7e P7ili&&ine' .ecau'e PIL au*7ori8ed>le&8ig *o no*i,/ Todaro o, *7e ce''a*ion o, 7i' con'ul*anc/ :Anne@e' =

and I;)"+

T7e au*7ori*/ given ./ PIL *o >le&8ig *o no*i,/ Todaro im&lie'*7a* >le&8ig 9a' lile&8ig a' agen* o, PIL)In'*ead$ 'ummon' 9a' 'erved on e Leon$ >le&8ig?' E@ecu*ive A''i'*an*) In*7i' in'*ance$ e Leon 9a' no* PIL?' agen* .u* a mere em&lo/ee o, >le&8ig)In e,,ec*$ *7e '7eri,, "" re'or*ed *o 'u.'*i*u*ed 'ervice) %or '/mme*r/$ 9ea&&l/ *7e rule on 'u.'*i*u*ed 'ervice o, 'ummon' on a na*ural &er'on and 9e

,ind *7a* no rea'on 9a' given *o 6u'*i,/ *7e 'ervice o, PIL?' 'ummon' on eLeon)

T7u'$ 9e rule *7a* PIL *ran'ac*ed .u'ine'' in *7e P7ili&&ine' and >le&8ig9a' i*' agen* 9i*7in *7e P7ili&&ine') =o9ever$ *7ere 9a' im&ro&er 'ervice o, 'ummon' on PIL 'ince 'ummon' 9a' no* 'erved &er'onall/ on >le&8ig)

!#$ %urisdiction

A' *o *7e 'econd level$ Todaro &ra/' ,or &a/men* o, damage' due 7im .ecau'e o, PIL?' non-im&lemen*a*ion o, Todaro?' alleged em&lo/men*agreemen* 9i*7 PP=I) T7e a&&ella*e cour* '*a*ed i*' ruling on *7i' ma**er$*7u'

I* could no* .e denied *7a* *7ere 9a' no e@i'*ing con*rac* /e* *o '&ea<o, .e*9een PIONEER INTL) and BTodaro) Since *7ere 9a' ana.'ence o, an em&lo/men* con*rac* .e*9een *7e *9o &ar*ie'$ *7i'Cour* i' o, *7e o&inion and 'o 7old' *7a* no em&lo/er-em&lo/eerela*ion'7i& ac*uall/ e@i'*') Record reveal' *7a* all *7a* 9a' agreed

u&on ./ BTodaro and *7e Pioneer Concre*e$ ac*ing in .e7al, o,PIONEER INTL)$ 9a' *7e con,irma*ion o, *7e o,,er *o engage *7e

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'ervice' o, *7e ,ormer a' con'ul*an* o, PIONEER INTL) :Rollo$ &)("+;) T7e ,ailure on *7e &ar* o, PIONEER INTL) *o a.ide ./ *7e 'aidagreemen*$ 97ic7 9a' dul/ con,irmed ./ PIONEER INTL)$ .roug7*a.ou* a .reac7 o, an o.liga*ion on a valid and &er,ec*ed agreemen*)

T7ere .eing no em&lo/er-em&lo/ee rela*ion'7i& e'*a.li'7ed .e*9eenBPIL and BTodaro$ i* could .e 'aid *7a* *7e in'*an* ca'e ,all' 9i*7in*7e 6uri'dic*ion o, *7e regular cour*' o, 6u'*ice a' *7e mone/ claim o,BTodaro did no* ari'e ou* o, or in connec*ion 9i*7 Ban em&lo/er-em&lo/ee rela*ion'7i&)"3

Todaro?' em&lo/men* in *7e P7ili&&ine' 9ould no* .e 9i*7 PIL .u* 9i*7PP=I a' '*a*ed in *7e +2 Oc*o.er (0 le**er o, %ol9ell) A''uming *7ee@i'*ence o, *7e em&lo/men* agreemen*$ *7e em&lo/er-em&lo/eerela*ion'7i& 9ould .e .e*9een PP=I and Todaro$ no* .e*9een PIL and

Todaro) PIL?' lia.ili*/ ,or *7e non-im&lemen*a*ion o, *7e allegedem&lo/men* agreemen* i' a civil di'&u*e &ro&erl/ .elonging *o *7e regularcour*') Todaro?' cau'e' o, ac*ion a' '*a*ed in 7i' com&lain* are$ in addi*ion *o

.reac7 o, con*rac*$ .a'ed on viola*ion o, Ar*icle' ( and +( o, *7e Ne9Civil Code ,or *7e clear and eviden* .ad ,ai*7 and malice"5 on *7e &ar* o,de,endan*') T7e NLRC?' 6uri'dic*ion i' limi*ed *o *7o'e enumera*ed underAr*icle +(0 o, *7e La.or Code)"1

>+EREFORE$ *7e &e*i*ion i' PARTIA**? GRANTED) T7e eci'ionda*ed +0 Se&*em.er +22( and *7e Re'olu*ion da*ed (3 Januar/ +22" o, *7e

a&&ella*e cour* are AFFIRMED 9i*7 *7e MODIFICATION *7a* *7ere 9a'im&ro&er 'ervice o, 'ummon' on Pioneer In*erna*ional$ L*d) T7e ca'e i'remanded *o *7e *rial cour* ,or &ro&er 'ervice o, 'ummon' and *rial) Noco'*')

SO ORDERED

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(-A) Galicia v) ManlinDue8 G)R) (55045 3-("-24

G.R. No. !!#! A/ri3 @& '

SIMP*ICIO GA*ICIA& 2or -i8se32& nd s Attorne0inFct o2ROSA*IA G. TORRE& PABUITO GA*ICIA& NE**IE GA*ICIA&

*ETICIA G. MAESTRO nd C*ARO GA*ICIA& Pe*i*ioner'$v')*OURDES MAN*IBUE, 7d. de MINDO nd *I*IA RICO

MINANO& Re'&onden*')

E C I S I O N

AUSTRIAMARTINE,& J.:

#e,ore *7e Cour* i' a Pe*i*ion ,or Revie9 on $ertiorari 'ee


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land 97ic7 9a' acDuired ./ Ine'$ Milagro'?' &redece''or-in-in*ere'* in (30,rom a cer*ain Juan Galic7a 97o i' a di,,eren* &er'on ,rom Juan Galicia)

uring *7e 'c7eduled &re-*rial con,erence on Ma/ +($ (0$ none o, *7ede,endan*' a&&eared) T7e/ ,iled a mo*ion ,or &o'*&onemen* o, *7e &re-*rialcon,erence .u* i* 9a' .ela*edl/ received ./ *7e *rial cour*) A' acon'eDuence$ de,endan*' 9ere declared in de,aul*) =erein &e*i*ioner'$ a'

&lain*i,,'$ 9ere *7en allo9ed *o &re'en* evidence e& parte)

On ecem.er +$ (0$ *7e RTC rendered 6udgmen* 9i*7 *7e ,ollo9ingdi'&o'i*ive &or*ion

W=ERE%ORE$ &remi'e' con'idered$ and ./ &re&onderance o, evidence$ 6udgmen* i' 7ere./ rendered in ,avor o, *7e &lain*i,,' and again'* *7e

de,endan*'

() eclaring &lain*i,,' a' *7e *rue and a.'olu*e o9ner o, *7e &ro&er*/'u.6ec* o, *7e ca'e and &ar*icularl/ de'cri.ed in &aragra&7 II o, *7ecom&lain*

+) A,,irming and con,irming *7e validi*/ and legali*/ o, &lain*i,,'?o9ner'7i& over *7e &ro&er*/

") Ordering de,endan*' *o vaca*e *7e land adver*ed *o in &aragra&7 II

o, *7e com&lain*

3) %or *7e de,endan*' *o re'&ec* &lain*i,,' &eace,ul &o''e''ion ando9ner'7i& o, *7e land a,ore'aid and

5) To &a/ *7e co'*')

SO ORERE)"

On ecem.er (5$ (0$ *7e RTC received a Mo*ion ,or Leave o, Cour* *o

In*ervene 9i*7 an a**ac7ed An'9er-in-In*erven*ion ,iled ./ *7e com&ul'or/7eir' o, Ine'$ among 97om are 7erein re'&onden*'$ 97o are al'o co-7eir' o,de,endan* Milagro') T7e in*ervenor' con*ended *7a* *7e 'u.6ec* &arcel o,land ,orm' &ar* o, *7e e'*a*e o, Ine' 97ic7 i' /e* *o .e &ar*i*ioned among*7em an in*e'*a*e &roceeding i' &re'en*l/ &ending in *7e RTC o, Odiongan$Rom.lon$ #ranc7 4( *7e ou*come o, Civil Ca'e No) O-"21$ one 9a/ or*7e o*7er$ 9ould adver'el/ a,,ec* *7eir in*ere'* *7eir rig7*' 9ould .e .e**er

&ro*ec*ed in *7e 'aid civil ca'e and *7eir in*erven*ion 9ould no* undul/dela/$ or in an/ 9a/ &re6udice *7e rig7*' o, *7e original &ar*ie')

In i*' Order o, ecem.er +"$ (0$ *7e RTC denied *7e 'aid mo*ion *oin*ervene on *7e ground *7a* i* 7a' alread/ rendered 6udgmen* and under

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Sec*ion +$ Rule ( o, *7e Rule' o, Cour*$ *7e mo*ion *o in*ervene '7ould7ave .een ,iled .e,ore rendi*ion o, 6udgmen* ./ *7e *rial cour*)

Mean97ile$ *7e de,endan*' in Civil Ca'e No) O-"21 ,iled an a&&eal 9i*7*7e CA) T7eir No*ice o, A&&eal 9a' ,iled on %e.ruar/ +0$ (4) On June +"$($ *7e CA i''ued a Re'olu*ion di'mi''ing *7e a&&eal ,or ,ailure o, *7ede,endan*'-a&&ellan*' *o ,ile *7eir .rie, 9i*7in *7e e@*ended &eriod gran*ed

./ *7e a&&ella*e cour*) On Augu'* ("$ ($ *7e a.ovemen*ioned CARe'olu*ion .ecame ,inal and e@ecu*or/)

Su.'eDuen*l/$ *7e *rial cour* i''ued a 9ri* o, e@ecu*ion da*ed Marc7 "$ +222)

On Ma/ +"$ +222$ 7erein re'&onden*' ,iled a &e*i*ion ,or annulmen* o, 6udgmen* 9i*7 *7e CA anc7ored on ground' o, lac< o, 6uri'dic*ion over *7eir

&er'on' and &ro&er*/ and on e@*rin'ic ,raud)

On Januar/ (3$ +22+$ *7e CA &romulga*ed *7e &re'en*l/ a''ailed eci'ion9i*7 *7e ,ollo9ing di'&o'i*ive &or*ion

W=ERE%ORE$ *7e &re'en* &e*i*ion i' 7ere./ GRANTE) T7e eci'ionda*ed ecem.er +$ (0 and Wri* o, E@ecu*ion da*ed Marc7 "$ +222 o,#ranc7 4+ o, *7e Regional Trial Cour* o, Odiongan$ Rom.lon are 7ere./ANN!LLE and SET ASIE)

SO ORERE)3

=erein &e*i*ioner' ,iled a Mo*ion ,or Recon'idera*ion .u* i* 9a' denied ./*7e CA in i*' Re'olu*ion5 da*ed Oc*o.er +($ +22+)

=ence$ *7e in'*an* &e*i*ion ,or revie9 .a'ed on *7e ,ollo9ing a''ignmen* o,error'

() T=AT T=E CO!RT O% APPEALS COMMITTE SERIO!SERROR O% LAW IN ANN!LLING AN SETTING ASIE T=E

ECISION ATE + ECEM#ER (0 AN WRIT O%EEC!TION ATE " MARC= +222 O% #RANC= 4+ O% T=EREGIONAL TRIAL CO!RT O% OIONGAN$ ROM#LON %ORLAC> O% J!RISICTION OVER T=E PERSONS O%PETITIONERS :NOW RESPONENTS IN T=E A#OVE-ENTITLE CASE;$ A ECISION NOT IN ACCOR WIT= LAWOR WIT= T=E APPLICA#LE ECISIONS O% T=E S!PREMECO!RT)

+) T=AT T=E CO!RT O% APPEALS COMMITTE SERIO!S

ERROR O% LAW IN NOT ISMISSING T=E PETITION %OR

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ANN!LMENT O% J!GMENT ON T=E GRO!N O%ESTOPPEL ON T=E PART O% T=E PETITIONERS IN CA-G)R)SP) NO) 544"3)1

A' *o *7eir ,ir'* a''igned error$ &e*i*ioner' invo


19/124

6uri'&rudence i' re&le*e 9i*7 ca'e' 97erein *7e Cour* ruled *7a* a mo*ion *oin*ervene ma/ .e en*er*ained or allo9ed even i, ,iled a,*er 6udgmen* 9a'rendered ./ *7e *rial cour*$ e'&eciall/ in ca'e' 97ere *7e in*ervenor' areindi'&en'a.le &ar*ie')4 In Pinlac v. $ourt of 'ppeals, *7i' Cour* 7eld

T7e rule on in*erven*ion$ li


20/124

com&lain* ,iled ./ &e*i*ioner) I* mu'* .e em&7a'i8ed *7a* re'&onden*' 9ereno* a.le *o &ar*ici&a*e during *7e &re-*rial muc7 le'' &re'en* evidence in'u&&or* o, *7eir claim') In o*7er 9ord'$ *7e cour* acDuired 6uri'dic*ion over*7e &er'on' o, 7erein re'&onden*' onl/ 97en *7e/ ,iled *7eir Mo*ion ,or

Leave *o In*ervene 9i*7 *7e RTC) Prior *o *7a*$ *7e/ 9ere '*ranger' *o CivilCa'e No) O-"21)

I* i' .a'ic *7a* no man '7all .e a,,ec*ed ./ an/ &roceeding *o 97ic7 7e i' a'*ranger$ and '*ranger' *o a ca'e are no* .ound ./ 6udgmen* rendered ./ *7ecour*)(1 In *7e &re'en* ca'e$ re'&onden*' and *7eir co-7eir' are adver'el/a,,ec*ed ./ *7e 6udgmen* rendered ./ *7e *rial cour* con'idering *7eiro'*en'i.le o9ner'7i& o, *7e &ro&er*/) I* 9ill .e *7e 7eig7* o, ineDui*/ *odeclare 7erein &e*i*ioner' a' o9ner' o, *7e di'&u*ed lo* 9i*7ou* givingre'&onden*' *7e o&&or*uni*/ *o &re'en* an/ evidence in 'u&&or* o, *7eir claim

*7a* *7e 'u.6ec* &ro&er*/ '*ill ,orm' &ar* o, *7e e'*a*e o, *7eir decea'ed &redece''or and i' *7e 'u.6ec* o, a &ending ac*ion ,or &ar*i*ion among *7ecom&ul'or/ 7eir') Muc7 more$ i* i' *an*amoun* *o a viola*ion o, *7econ'*i*u*ional guaran*ee *7a* no &er'on '7all .e de&rived o, &ro&er*/ 9i*7ou*due &roce'' o, la9)(0(*vvphi(.n+t

T7i' Cour* 7eld in etropolitan Ban and Trust $ompany v. 'lejo *7a*

A void 6udgmen* ,or 9an* o, 6uri'dic*ion i' no 6udgmen* a* all) I* canno* .e*7e 'ource o, an/ rig7* nor *7e crea*or o, an/ o.liga*ion) All ac*' &er,ormed

&ur'uan* *o i* and all claim' emana*ing ,rom i* 7ave no legal e,,ec*) =ence$ i*can never .ecome ,inal and an/ 9ri* o, e@ecu*ion .a'ed on i* i' void @ @ @ i*ma/ .e 'aid *o .e a la9le'' *7ing 97ic7 can .e *rea*ed a' an ou*la9 and'lain a* 'ig7*$ or ignored 97erever and 97enever i* [email protected]*' i*' 7ead)(4

In *7e a.'ence o, 7erein re'&onden*' and *7eir co-7eir' 97o areindi'&en'a.le &ar*ie'$ *7e *rial cour* 7ad in *7e ,ir'* &lace no au*7ori*/ *o ac*on *7e ca'e) T7u'$ *7e 6udgmen* o, *7e *rial cour* 9a' null and void due *olac< o, 6uri'dic*ion over indi'&en'a.le &ar*ie')( T7e CA correc*l/ annulled*7e RTC eci'ion and 9ri* o, e@ecu*ion)

A' *o *7e *imeline'' o, *7e &e*i*ion ,or annulmen* o, 6udgmen* ,iled 9i*7 *7eCA$ Sec*ion "$ Rule 30 o, *7e Rule' o, Cour* &rovide' *7a* a &e*i*ion ,orannulmen* o, 6udgmen* .a'ed on e@*rin'ic ,raud mu'* .e ,iled 9i*7in ,our/ear' ,rom i*' di'cover/ and i, .a'ed on lac< o, 6uri'dic*ion$ .e,ore i* i'

.arred ./ lac7e' or e'*o&&el)

T7e &rinci&le o, lac7e' or '*ale demand' ordain' *7a* *7e ,ailure or neglec*$,or an unrea'ona.le and une@&lained leng*7 o, *ime$ *o do *7a* 97ic7 ./

e@erci'ing due diligence could or '7ould 7ave .een done earlier$ or *7enegligence or omi''ion *o a''er* a rig7* 9i*7in a rea'ona.le *ime$ 9arran*' a

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&re'um&*ion *7a* *7e &ar*/ en*i*led *o a''er* i* ei*7er 7a' a.andoned i* ordeclined *o a''er* i*)+2

T7ere i' no a.'olu*e rule a' *o 97a* con'*i*u*e' lac7e' or '*alene'' o,demand eac7 ca'e i' *o .e de*ermined according *o i*' &ar*icularcircum'*ance')+( T7e Due'*ion o, lac7e' i' addre''ed *o *7e 'ound di'cre*iono, *7e cour* and$ .eing an eDui*a.le doc*rine$ i*' a&&lica*ion i' con*rolled ./eDui*a.le con'idera*ion')++ I* canno* .e u'ed *o de,ea* 6u'*ice or &er&e*ra*e,raud and in6u'*ice)+" I* i' *7e .e**er rule *7a* cour*'$ under *7e &rinci&le o,eDui*/$ 9ill no* .e guided or .ound '*ric*l/ ./ *7e '*a*u*e o, limi*a*ion' or*7e doc*rine o, lac7e' 97en *o do 'o$ mani,e'* 9rong or in6u'*ice 9ouldre'ul*)+3

In *7e &re'en* ca'e$ *7e CA ,ound no evidence *o '7o9 97en re'&onden*'

acDuired


22/124

I* i' an acce&*ed rule o, &rocedure ,or *7i' Cour* *o '*rive *o 'e**le *7e en*irecon*rover'/ in a 'ingle &roceeding$ leaving no roo* or .ranc7 *o .ear *7e'eed' o, ,u*ure li*iga*ion)+0

In concurrence *7ere9i*7$ *7e Cour* ma


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III. PARTIES TO CIVI* ACTION

+2) S&ou'e' e La Cru8 v) JuaDuin G)R) (1+044 0-+4-2

G.R. No. "'##. Ju30 '#& '!

S/ouses JU*ITA DE *A CRU, nd FE*IPE DE *A CRU,& petitioners, vs.PEDRO JOABUIN& respondent .

D E C I S I O N

PANGANI4AN& J.:

T7e Rule' reDuire *7e legal re&re'en*a*ive' o, a dead li*igan* *o .e 'u.'*i*u*ed a' &ar*ie' *o a li*iga*ion) T7i' reDuiremen* i' nece''i*a*ed ./ due &roce'') T7u'$ 97en*7e rig7*' o, *7e legal re&re'en*a*ive' o, a deceden* are ac*uall/ recogni8ed and

&ro*ec*ed$ noncom&liance or .ela*ed ,ormal com&liance 9i*7 *7e Rule' canno* a,,ec**7e validi*/ o, *7e &romulga*ed deci'ion) A,*er all$ due &roce'' 7ad *7ere./ .een'a*i',ied)T-e Cse

#e,ore u' i' a Pe*i*ion ,or Revie9 B( under Rule 35 o, *7e Rule' o, Cour*$ a''ailing *7eAugu'* +1$ +22" eci'ionB+ and *7e Marc7 $ +223 Re'olu*ionB" o, *7e Cour* o,A&&eal' :CA; in CA-GR CV No) "302+) T7e c7allenged eci'ion di'&o'ed a',ollo9'W=ERE%ORE$ *7e ,oregoing con'idered$ *7e a&&eal i' ISMISSE and *7e a''aileddeci'ion accordingl/ A%%IRME in *o*o) No co'*')B3

On *7e o*7er 7and$ *7e *rial cour*?' a,,irmed eci'ion di'&o'ed a' ,ollo9'W=ERE%ORE$ 6udgmen* i' 7ere./ rendereda/ declaring the 0eed of 'solute Sale 12&h. 304/ and 35asunduan4 12&hiit B/, to

e a sale with right of repurchase6

/ ordering the plaintiff to pay the defendants the sum of P7,888.88 y way of

repurchasing the land in 9uestion6

c/ ordering the defendants to e&ecute a deed of reconveyance of said land in favor

of the plaintiff after the latter has paid them the amount of P7,888.88 to repurchase

the land in 9uestion6

d/ ordering the defendants to yield possession of the suject land to the plaintiff

after the latter has paid them the amount of P7,888.88 to repurchase the property

from them6 and

e/ ordering the defendants to pay the plaintiff the amount of P(8,888.88 as actual

and compensatory damages6 the amount of P:,888;.88< as e&emplary damages6 the

amount of P:,888.88 as e&penses of litigation and the amount of P:,888.88 y way of

attorney4s fees.= !

T-e Fcts

T7e ca'e origina*ed ,rom a Com&lain* ,or *7e recover/ o, &o''e''ion and o9ner'7i&$*7e cancella*ion o, *i*le$ and damage'$ ,iled ./ Pedro JoaDuin again'* &e*i*ioner' in *7eRegional Trial Cour* o, #aloc$ S*o) omingo$ Nueva Eci6a)B1 Re'&onden* alleged *7a*7e 7ad o.*ained a loan ,rom *7em in *7e amoun* o, P$222 on June +$ (03$ &a/a.lea,*er ,ive :5; /ear' *7a* i'$ on June +$ (0) To 'ecure *7e &a/men* o, *7e o.liga*ion$7e 'u&&o'edl/ e@ecu*ed a eed o, Sale in ,avor o, &e*i*ioner') T7e eed 9a' ,or a

&arcel o, land in Pinag&anaan$ Talavera$ Nueva Eci6a$ covered ./ TCT No) T-(((42+)T7e &ar*ie' al'o e@ecu*ed ano*7er documen* en*i*led 5asunduan) B0

Re'&onden* claimed *7a* *7e 5asunduan '7o9ed *7e eed o, Sale *o .e ac*uall/ an

eDui*a.le mor*gage)B4

S&ou'e' e la Cru8 con*ended *7a* *7i' documen* 9a' merel/

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I, no legal re&re'en*a*ive i' named ./ *7e coun'el ,or *7e decea'ed &ar*/$ or i, *7eone 'o named '7all ,ail *o a&&ear 9i*7in *7e '&eci,ied &eriod$ *7e cour* ma/ order *7eo&&o'ing &ar*/$ 9i*7in a '&eci,ied *ime$ *o &rocure *7e a&&oin*men* o, an e@ecu*or oradmini'*ra*or ,or *7e e'*a*e o, *7e decea'ed$ and *7e la**er '7all immedia*el/ a&&ear ,or and on .e7al, o, *7e decea'ed) T7e cour* c7arge' in &rocuring 'uc7 a&&oin*men*$ i,

de,ra/ed ./ *7e o&&o'ing &ar*/$ ma/ .e recovered a' co'*')T7e rule on *7e 'u.'*i*u*ion o, &ar*ie' 9a' cra,*ed *o &ro*ec* ever/ &ar*/?' rig7* *o due

&roce'')B++ T7e e'*a*e o, *7e decea'ed &ar*/ 9ill con*inue *o .e &ro&erl/ re&re'en*ed in*7e 'ui* *7roug7 *7e dul/ a&&oin*ed legal re&re'en*a*ive)B+" Moreover$ no ad6udica*ioncan .e made again'* *7e 'ucce''or o, *7e decea'ed i, *7e ,undamen*al rig7* *o a da/ incour* i' denied)B+3

T7e Cour* 7a' nulli,ied no* onl/ *rial &roceeding' conduc*ed 9i*7ou* *7e a&&earanceo, *7e legal re&re'en*a*ive' o, *7e decea'ed$ .u* al'o *7e re'ul*ing 6udgmen*') B+5 In*7o'e in'*ance'$ *7e cour*' acDuired no 6uri'dic*ion over *7e &er'on' o, *7e legalre&re'en*a*ive' or *7e 7eir' u&on 97om no 6udgmen* 9a' .inding)B+1

T7i' general rule no*9i*7'*anding$ a formal 'u.'*i*u*ion ./ 7eir' i' no* nece''ar/

97en *7e/ *7em'elve' volun*aril/ a&&ear$ &ar*ici&a*e in *7e ca'e$ and &re'en* evidencein de,en'e o, *7e decea'ed)B+0 T7e'e ac*ion' nega*e an/ claim *7a* *7e rig7* *o due

&roce'' 9a' viola*ed)T7e Cour* i' no* una9are o, $hittic v. $ourt of 'ppeals$B+4 in 97ic7 *7e ,ailure o, *7e7eir' *o 'u.'*i*u*e ,or *7e original &lain*i,, u&on 7er dea*7 led *o *7e nulli,ica*ion o,*7e *rial cour*?' eci'ion) T7e la**er 7ad 'oug7* *o recover 'u&&or* in arrear' and 7er'7are in *7e con6ugal &ar*ner'7i&) T7e c7ildren 97o allegedl/ 'u.'*i*u*ed ,or 7erre,u'ed *o con*inue *7e ca'e again'* *7eir ,a*7er and ve7emen*l/ o.6ec*ed *o *7eirinclu'ion a' &ar*ie')B+ Moreover$ .ecau'e 7e died during *7e &endenc/ o, *7e ca'e$*7e/ 9ere .ound *o 'u.'*i*u*e ,or *7e de,endan* al'o) T7e 'u.'*i*u*ion e,,ec*ivel/merged *7e &er'on' o, *7e &lain*i,, and *7e de,endan* and *7u' e@*ingui'7ed *7eo.liga*ion .eing 'ued u&on)B"2

Clearl/$ *7e &re'en* ca'e i' no* 'imilar$ muc7 le'' iden*ical$ *o *7e ,ac*ual milieuo, $hittic )S*ric*l/ '&ea


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In all &roceeding'$ *7e legal re&re'en*a*ive' mu'* a&&ear *o &ro*ec* *7e in*ere'*' o, *7edecea'ed)B"3 A,*er *7e rendi*ion o, 6udgmen*$ ,ur*7er &roceeding' ma/ .e 7eld$ 'uc7 a'a mo*ion ,or recon'idera*ion or a ne9 *rial$ an a&&eal$ or an e@ecu*ion)B"5

Con'idering *7e ,oregoing circum'*ance'$ *7e Mo*ion ,or Su.'*i*u*ion ma/ .e deemed*o 7ave .een gran*ed and *7e 7eir'$ *o 7ave 'u.'*i*u*ed ,or *7e decea'ed$ Pedro

JoaDuin) T7ere .eing no viola*ion o, due &roce''$ *7e i''ue o, 'u.'*i*u*ion canno* .eu&7eld a' a ground *o nulli,/ *7e *rial cour*?' eci'ion)Second Issue6

Forum %&opping

Pe*i*ioner' al'o claim *7a* re'&onden*' 9ere guil*/ o, ,orum '7o&&ing$ a ,ac* *7a*'7ould 7ave com&elled *7e *rial cour* *o di'mi'' *7e Com&lain*) B"1 T7e/ claim *7a*

&rior *o *7e commencemen* o, *7e &re'en* 'ui* on Jul/ 0$ (4($ re'&onden* 7ad ,iled acivil ca'e again'* &e*i*ioner' on June +5$ (0) oc


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In'*ead$ *7e/ 7ave made onl/ .are a''er*ion' involving i*' e@i'*ence 9i*7ou* re,erence*o i*' ,ac*') In o*7er 9ord'$ *7e/ 7ave alleged conclu'ion' o, la9 9i*7ou* '*a*ing an/,ac*ual or legal .a'i') Mere men*ion o, o*7er civil ca'e' 9i*7ou* '7o9ing *7e iden*i*/o, rig7*' a''er*ed and relie,' 'oug7* i' no* enoug7 .a'i' *o claim *7a* re'&onden* i'guil*/ o, ,orum '7o&&ing$ or *7a* res judicata e@i'*')B30

>+EREFORE$ *7e Pe*i*ion i' 02!?20 and *7e a''ailed eci'ion and Re'olu*ionare '@@?#20) Co'*' again'* &e*i*ioner')SO ORDERED.

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+2-A) Colum.ia Pic*ure' Inc) v) CA G)R) ((2"(4 4-+4-1

G.R. No. 110318 August 28, 1996

COLUMBIA PICTURES, INC., ORION PICTURES CORPORATION, PARAMOUNT

PICTURES CORPORATION, TWENTIET CENTUR! "O# "ILM CORPORATION,UNITE$ ARTISTS CORPORATION, UNI%ERSAL CIT! STU$IOS, INC., TE WALT$ISNE! COMPAN!, &'( WARNER BROTERS, INC., petitioners,vs.COURT O" APPEALS, SUNSINE OME %I$EO, INC. &'( $ANILO A.PELIN$ARIO, respondents.

REGALA$O, J.: p

Before us is a petition for review on certiorari of the decision of the Court of

Appeals 1

promulgated on July 22, 1992 and its resolution 2

of May 1, 199! denyingpetitioners" motion for reconsideration, #oth of which sustained the order 3 of the$egional %rial Court, Branch 1!!, Ma&ati, Metro Manila, dated 'ovem#er 22, 19(( for the )uashal of *earch +arrant 'o. (-! earlier issued per its own order ) on*eptem#er , 19(( for violation of *ection / of 0residential ecree 'o. 9, asamended, otherwise &nown as the 3ecree on the 0rotection of 4ntellectual 0roperty.3

%he material facts found #y respondent appellate court are as follows5

Complainants thru counsel lodged a formal complaint with the 'ationalBureau of 4nvestigation for violation of 0 'o. 9, as amended, andsought its assistance in their anti-film piracy drive. Agents of the 'B4 and

private researchers made discreet surveillance on various videoesta#lishments in Metro Manila including *unshine 6ome 7ideo 4nc.8*unshine for #revity, owned and operated #y anilo A. 0elindario withaddress at 'o. / Mayfair Center, Magallanes, Ma&ati, Metro Manila.

:n 'ovem#er 1, 19(, 'B4 *enior Agent ;auro C. $eyes applied for asearch warrant with the court a quo against *unshine see&ing theseior laser disc recordings e)uipmentand other machines and paraphernalia used or intended to #e used in theunlawful e?hi#ition, showing, reproduction, sale, lease or disposition ofvideograms tapes in the premises a#ove descri#ed. 4n the hearing of theapplication, 'B4 *enior Agent ;auro C. $eyes, upon )uestions #y thecourt a quo, reiterated in su#stance his averments in his affidavit. 6istestimony was corro#orated #y another witness, Mr. $ene C. Balta


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e)uipment, television sets, paraphernalia, materials, accessories all ofwhich were included in the receipt for properties accomplished #y theraiding team. Copy of the receipt was furnished and>or tendered to Mr.anilo A. 0elindario, registered owner-proprietor of *unshine 6ome7ideo.

:n ecem#er 1/, 19(, a 3$eturn of *earch +arrant3 was filed with theCourt.

A 3Motion %o ;ift the :rder of *earch +arrant3 was filed #ut was laterdenied for lac& of merit 8p. 2(, $ecords.

A Motion for reconsideration of the :rder of denial was filed. %he court aquo granted the said motion for reconsideration and @ustified it in thismanner5

4t is undisputed that the master tapes of the copyrighted

films from which the pirated films were allegedly copies8sic , were never presented in the proceedings for theissuance of the search warrants in )uestion. %he orders of the Court granting the search warrants and denying theurgent motion to lift order of search warrants were,therefore, issued in error. Conse)uently, they must #e setaside. 8p. 1!, Appellant"s Brief *

0etitioners thereafter appealed the order of the trial court granting privaterespondents" motion for reconsideration, thus lifting the search warrant which ithad theretofore issued, to the Court of Appeals. As stated at the outset, saidappeal was dismissed and the motion for reconsideration thereof was denied.6ence, this petition was #rought to this Court particularly challenging the validityof respondent court"s retroactive application of the ruling in 20th Century Fox FilmCorporation vs. Court of Appeals, et al ., 6 in dismissing petitioners" appeal andupholding the )uashal of the search warrant #y the trial court.

4

4nceptively, we shall settle the procedural considerations on the matter of and thechallenge to petitioners" legal standing in our courts, they #eing foreigncorporations not licensed to do #usiness in the 0hilippines.

0rivate respondents aver that #eing foreign corporations, petitioners should have

such license to #e a#le to maintain an action in 0hilippine courts. 4n sochallenging petitioners" personality to sue, private respondents point to the factthat petitioners are the copyright owners or owners of e?clusive rights ofdistri#ution in the 0hilippines of copyrighted motion pictures or films, and also tothe appointment of Atty. $ico 7. omingo as their attorney-in-fact, as #eingconstitutive of 3doing #usiness in the 0hilippines3 under *ection 1 8f81 and 82,$ule 1 of the $ules of the Board of 4nvestments. As foreign corporations doing#usiness in the 0hilippines, *ection 1!! of Batas 0am#ansa Blg. /(, or theCorporation Code of the 0hilippines, denies them the right to maintain a suit in0hilippine courts in the a#sence of a license to do #usiness. Conse)uently, theyhave no right to as& for the issuance of a search warrant. +

4n refutation, petitioners flatly deny that they are doing #usiness in the0hilippines, 8 and contend that private respondents have not adduced evidence toprove that petitioners are doing such #usiness here, as would re)uire them to #e


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licensed #y the *ecurities and ?change Commission, other than averments in the)uoted portions of petitioners" 3:pposition to rgent Motion to ;ift :rder of *earch+arrant3 dated April 2(, 19(( and Atty. $ico 7. omingo"s affidavit of ecem#er 1,19(. Moreover, an e?clusive right to distri#ute a product or the ownership of suche?clusive right does not conclusively prove the act of doing #usiness nor esta#lish thepresumption of doing #usiness. 9

%he Corporation Code provides5

*ec. 1!!. Doing business without a license. 'o foreign corporationtransacting #usiness in the 0hilippines without a license, or its successorsor assigns, shall #e permitted to maintain or intervene in any action, suitor proceeding in any court or administrative agency of the 0hilippines= #utsuch corporation may #e sued or proceeded against #efore 0hilippinecourts or administrative tri#unals on any valid cause of action recogni


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distinguished from merely casual, sporadic, or occasional transactions andisolated acts. 1*

%he Corporation Code does not itself define or categori


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Dinally, $epu#lic Act 'o. 2 19 em#odies such concept in this wise5

*ec. !. Definitions. As used in this Act5

??? ??? ???

8d the phrase 3doing #usiness shall include soliciting orders, servicecontracts, opening offices, whether called 3liaison3 offices or #ranches=appointing representatives or distri#utors domiciled in the 0hilippines orwho in any calendar year stay in the country for a period or periodstotalling one hundred eight8y 81( days or more= participating in themanagement, supervision or control of any domestic #usiness, firm, entityor corporation in the 0hilippines= and any other act or acts that imply acontinuity of commercial dealings or arrangements, and contemplate tothat e?tent the performance of acts or wor&s, or the e?ercise of some ofthe functions normally incident to, and in progressive prosecution of,commercial gain or of the purpose and o#@ect of the #usinessorganior thee?ercise of rights as such investor= nor having a nominee director orofficer to represent its interests in such corporation= nor appointing arepresentative or distri#utor domiciled in the 0hilippines which transacts#usiness in its own name and for its own account.

Based on Article 1!! of the Corporation Code and gauged #y such statutorystandards, petitioners are not #arred from maintaining the present action. %hereis no showing that, under our statutory or case law, petitioners are doing,transacting, engaging in or carrying on #usiness in the 0hilippines as wouldre)uire o#tention of a license #efore they can see& redress from our courts. 'o

evidence has #een offered to show that petitioners have performed any of theenumerated acts or any other specific act indicative of an intention to conduct ortransact #usiness in the 0hilippines.

Accordingly, the certification issued #y the *ecurities and ?changeCommission 20 stating that its records do not show the registration of petitioner filmcompanies either as corporations or partnerships or that they have #een licensed totransact #usiness in the 0hilippines, while undenia#ly true, is of no conse)uence topetitioners" right to #ring action in the 0hilippines. 7erily, no record of such registration#y petitioners can #e e?pected to #e found for, as aforestated, said foreign filmcorporations do not transact or do #usiness in the 0hilippines and, therefore, do notneed to #e licensed in order to ta&e recourse to our courts.

Although *ection 18g of the 4mplementing $ules and $egulations of the :mni#us4nvestments Code lists, among others

81 *oliciting orders, purchases 8sales or service contracts. Concrete andspecific solicitations #y a foreign firm, or #y an agent of such foreign firm,not acting independently of the foreign firm amounting to negotiations orfi?ing of the terms and conditions of sales or service contracts, regardlessof where the contracts are actually reduced to writing, shall constitutedoing #usiness even if the enterprise has no office or fi?ed place of#usiness in the 0hilippines. %he arrangements agreed upon as tomanner, time and terms of delivery of the goods or the transfer of title

thereto is immaterial. A foreign firm which does #usiness through themiddlemen acting in their own names, such as indentors, commercial


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#ro&ers or commission merchants, shall not #e deemed doing #usiness inthe 0hilippines. But such indentors, commercial #ro&ers or commissionmerchants shall #e the ones deemed to #e doing #usiness in the0hilippines.

82 Appointing a representative or distri#utor who is domiciled in the0hilippines, unless said representative or distri#utor has an independentstatus, i .e., it transacts #usiness in its name and for its own account, andnot in the name or for the account of a principal. %hus, where a foreignfirm is represented in the 0hilippines #y a person or local company whichdoes not act in its name #ut in the name of the foreign firm, the latter isdoing #usiness in the 0hilippines.

as acts constitutive of 3doing #usiness,3 the fact that petitioners are admittedlycopyright owners or owners of e?clusive distri#ution rights in the 0hilippines ofmotion pictures or films does not convert such ownership into an indicium ofdoing #usiness which would re)uire them to o#tain a license #efore they can sueupon a cause of action in local courts.

'either is the appointment of Atty. $ico 7. omingo as attorney-in-fact ofpetitioners, with e?press authority pursuant to a special power of attorney, interalia

%o lay criminal complaints with the appropriate authorities and to provideevidence in support of #oth civil and criminal proceedings against anyperson or persons involved in the criminal infringement of copyright orconcerning the unauthori


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*tate, for distri#ution #y them, is not doing #usiness in the *tate so as to render itsu#@ect to service of process therein, where the contract with these purchasers is thatthey shall #uy e?clusively from the foreign corporation such goods as it manufacturesand shall sell them at trade prices esta#lished #y it. 2*

4t has moreover #een held that the act of a foreign corporation in engaging an

attorney to represent it in a Dederal court sitting in a particular *tate is not doing#usiness within the scope of the minimum contact test.26 +ith much more reasonshould this doctrine apply to the mere retainer of Atty. omingo for legal protectionagainst contingent acts of intellectual piracy.

4n accordance with the rule that 3doing #usiness3 imports only acts in furtheranceof the purposes for which a foreign corporation was organi


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supposed lac& of capacity to sue. %he doctrine of lac& of capacity to sue #asedon failure to first ac)uire a local license is #ased on considerations of pu#licpolicy. 4t was never intended to favor nor insulate from suit unscrupulousesta#lishments or nationals in case of #reach of valid o#ligations or violation oflegal rights of unsuspecting foreign firms or entities simply #ecause they are notlicensed to do #usiness in the country. 3*

44

+e now proceed to the main issue of the retroactive application to the presentcontroversy of the ruling in20th Century Fox Film Corporation vs. Court of Appeals, et al ., promulgated on August 19, 19((, 36 that for the determination ofpro#a#le cause to support the issuance of a search warrant in copyright infringementcases involving videograms, the production of the master tape for comparison withthe allegedly pirate copies is necessary.

0etitioners assert that the issuance of a search warrant is addressed to thediscretion of the court su#@ect to the determination of pro#a#le cause in

accordance with the procedure prescri#ed therefore under *ections ! and of$ule 12/. As of the time of the application for the search warrant in )uestion, thecontrolling criterion for the finding of pro#a#le cause was that enunciatedin !urgos vs. Chief of "taff 3+ stating that5

0ro#a#le cause for a search warrant is defined as such facts andcircumstances which would lead a reasona#ly discreet and prudent manto #elieve that an offense has #een committed and that the o#@ectssought in connection with the offense are in the place sought to #esearched.

According to petitioners, after complying with what the law then re)uired, the

lower court determined that there was pro#a#le cause for the issuance of asearch warrant, and which determination in fact led to the issuance and serviceon ecem#er 1, 19( of *earch +arrant 'o. (-!. 4t is further argued thatany search warrant so issued in accordance with all applica#le legalre)uirements is valid, for the lower court could not possi#ly have #een e?pectedto apply, as the #asis for a finding of pro#a#le cause for the issuance of a searchwarrant in copyright infringement cases involving videograms, a pronouncementwhich was not e?istent at the time of such determination, on ecem#er 1, 19(,that is, the doctrine in the 20th Century Fox case that was promulgated only on August 19, 19((, or over eight months later.

0rivate respondents predicta#ly argue in support of the ruling of the Court of

Appeals sustaining the )uashal of the search warrant #y the lower court on thestrength of that 20th Century Fox ruling which, they claim, goes into the veryessence of pro#a#le cause. At the time of the issuance of the search warrantinvolved here, although the 20th Century Fox case had not yet #een decided,*ection 2, Article 444 of the Constitution and *ection !, $ule 12/ of the 19( $uleson Criminal 0rocedure em#odied the prevailing and governing law on the matter.%he ruling in 20th Century Fox was merely an application of the law on pro#a#lecause. 6ence, they posit that there was no law that was retrospectively applied,since the law had #een there all along. %o refrain from applying the 20th CenturyFox ruling, which had supervened as a doctrine promulgated at the time of theresolution of private respondents" motion for reconsideration see&ing the )uashalof the search warrant for failure of the trial court to re)uire presentation of the

master tapes prior to the issuance of the search warrant, would have constitutedgrave a#use of discretion. 38


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$espondent court upheld the retroactive application of the 20th CenturyFox ruling #y the trial court in resolving petitioners" motion for reconsideration infavor of the )uashal of the search warrant, on this renovated thesis5

And whether this doctrine should apply retroactively, it must #e noted thatin the 2th Century Do? case, the lower court )uashed the earlier searchwarrant it issued. :n certiorari , the *upreme Court affirmed the )uashalon the ground among others that the master tapes or copyrighted filmswere not presented for comparison with the purchased evidence of thevideo tapes to determine whether the latter is an unauthori


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ecisions of this Court, although in themselves not laws, are neverthelessevidence of what the laws mean, and this is the reason why under Article( of the 'ew Civil Code, 3Judicial decisions applying or interpreting thelaws or the Constitution shall form part of the legal system.3 %heinterpretation upon a law #y this Court constitutes, in a way, a part of thelaw as of the date that the law was originally passed, since this Court"s

construction merely esta#lishes the contemporaneous legislative intentthat the law thus construed intends to effectuate. %he settled rulesupported #y numerous authorities is a restatement of the legal ma?im3legis interpretatio legis vim obtinet 3 the interpretation placed upon thewritten law #y a competent court has the force of law. . . . , #ut when adoctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to partieswho had relied on the old doctrine and acted on the faith thereof . . . .8mphasis supplied.

%his was forcefully reiterated in "pouses !en&onan vs. Court of Appeals, etal ., )* where the Court e?pounded5

. . . . But while our decisions form part of the law of the land, they are alsosu#@ect to Article of the Civil Code which provides that 3laws shall haveno retroactive effect unless the contrary is provided.3 %his is e?pressed inthe familiar legal ma?im lex prospicit , non respicit , the law loo&s forwardnot #ac&ward. %he rationale against retroactivity is easy to perceive. %heretroactive application of a law usually divests rights that have already#ecome vested or impairs the o#ligations of contract and hence, isunconstitutional 8Drancisco v. Certe


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??? ??? ???

4n short, the lower court was convinced at that time after conductingsearching e?amination )uestions of the applicant and his witnesses that3an offense had #een committed and that the o#@ects sought inconnection with the offense 8were in the place sought to #e searched38Burgos v. Chief of *taff, et al., 1!! *C$A (. 4t is indisputa#le,therefore, that at the time of the application, or on ecem#er 1, 19(,the lower court did not commit any error nor did it fail to comply with anylegal re)uirement for the valid issuance of search warrant.

. . . 8+e #elieve that the lower court should #e considered as havingfollowed the re)uirements of the law in issuing *earch +arrant 'o. (-!. %he search warrant is therefore valid and #inding. 4t must #e notedthat nowhere is it found in the allegations of the $espondents that thelower court failed to apply the law as then interpreted in ()*+ . 6ence, wefind it a#surd that it is 8sic should #e seen otherwise, #ecause it is simplyimpossi#le to have re)uired the lower court to apply a formulation which

will only #e defined si? months later.

Durthermore, it is un@ust and unfair to re)uire compliance with legal and>or doctrinal re)uirements which are ine?istent at the time they weresupposed to have #een complied with.

??? ??? ???

. . . 4f the lower court"s reversal will #e sustained, what encouragementcan #e given to courts and litigants to respect the law and rules if theycan e?pect with reasona#le certainty that upon the passage of a new rule,their conduct can still #e open to )uestionG %his certainly #reedsinsta#ility in our system of dispensing @ustice. Dor 0etitioners who too&special effort to redress their grievances and to protect their propertyrights #y resorting to the remedies provided #y the law, it is most unfairthat fealty to the rules and procedures then o#taining would #ear #ut fruitsof in@ustice. )9

+ithal, even the proposition that the prospectivity of @udicial decisions importsapplication thereof not only to future cases #ut also to cases still ongoing or notyet final when the decision was promulgated, should not #e countenanced in the @ural sphere on account of its inevita#ly unsettling repercussions. More to thepoint, it is felt that the reasona#leness of the added re)uirement in 20th Century

Fox calling for the production of the master tapes of the copyrighted films fordetermination of pro#a#le cause in copyright infringement cases needs revisitingand clarification.

4t will #e recalled that the 20th Century Fox case arose from search warrantproceedings in anticipation of the filing of a case for the unauthori


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%he presentation of master tapes of the copyrighted films from which thepirated films were allegedly copied, was necessary for the validity ofsearch warrants against those who have in their possession the piratedfilms. %he petitioner"s argument to the effect that the presentation of themaster tapes at the time of application may not #e necessary as thesewould #e merely evidentiary in nature and not determinative of whether or

not a pro#a#le cause e?ists to @ustify the issuance of the search warrantsis not meritorious. %he court cannot presume that duplicate or copiedtapes were necessarily reproduced from master tapes that it owns.

%he application for search warrants was directed against video tapeoutlets which allegedly were engaged in the unauthori


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master tapes of the allegedly pirated tapes were shown tohim and he made comparisons of the tapes with thosepurchased #y their man Bacani. +hy the master tapes orat least the film reels of the allegedly pirated tapes werenot shown to the Court during the application gives somemisgivings as to the truth of that #are statement of the 'B4

agent on the witness stand.

Again as the application and search proceedings is aprelude to the filing of criminal cases under 0 9, thecopyright infringement law, and although what is re)uiredfor the issuance thereof is merely the presence ofpro#a#le cause, that pro#a#le cause must #e satisfactoryto the Court, for it is a time-honored precept thatproceedings to put a man to tas& as an offender under our laws should #e interpreted in strictissimi $uris against thegovernment and li#erally in favor of the alleged offender.

??? ??? ???

%his doctrine has never #een overturned, and as a matterof fact it had #een enshrined in the Bill of $ights in our19! Constitution.

*o that lac&ing in persuasive effect, the allegation thatmaster tapes were viewed #y the 'B4 and were comparedto the purchased and sei


41/124

testimony in view of the fact that the master tapes of the allegedly piratedtapes were not shown to the court during the application 8mphasis ours.

%he italici


42/124

the present case reveal that 81 there is no allegation of misrepresentation, much lessa finding thereof #y the lower court, on the part of petitioners" witnesses= 82 there isno denial on the part of private respondents that the tapes sei


43/124

warrant, which must #e su#stantially in the form prescri#ed #y these$ules.

%he constitutional and statutory provisions of various @urisdictions re)uiring ashowing of pro#a#le cause #efore a search warrant can #e issued are mandatoryand must #e complied with, and such a showing has #een held to #e anun)ualified condition precedent to the issuance of a warrant. A search warrant not#ased on pro#a#le cause is a nullity, or is void, and the issuance thereof is, inlegal contemplation, ar#itrary. 61 4t #ehooves us, then, to review the concept ofpro#a#le cause, firstly, from representative holdings in the American @urisdiction fromwhich we patterned our doctrines on the matter.

Although the term 3pro#a#le cause3 has #een said to have a well-definedmeaning in the law, the term is e?ceedingly difficult to define, in this case, withany degree of precision= indeed, no definition of it which would @ustify theissuance of a search warrant can #e formulated which would cover every state offacts which might arise, and no formula or standard, or hard and fast rule, may #elaid down which may #e applied to the facts of every situation. 62 As to what acts

constitute pro#a#le cause seem incapa#le of definition. 63 %here is, of necessity, noe?act test. 6)

At #est, the term 3pro#a#le cause3 has #een understood to mean a reasona#leground of suspicion, supported #y circumstances sufficiently strong in themselvesto warrant a cautious man in the #elief that the person accused is guilty of theoffense with which he is charged= 6* or the e?istence of such facts andcircumstances as would e?cite an honest #elief in a reasona#le mind acting on all thefacts and circumstances within the &nowledge of the magistrate that the charge made#y the applicant for the warrant is true. 66

0ro#a#le cause does not mean actual and positive cause, nor does it import

a#solute certainty. %he determination of the e?istence of pro#a#le cause is notconcerned with the )uestion of whether the offense charged has #een or is #eingcommitted in fact, or whether the accused is guilty or innocent, #ut only whetherthe affiant has reasona#le grounds for his #elief. 6+ %he re)uirement is less thancertainty or proof , #ut more than suspicion or possibility . 68

4n 0hilippine @urisprudence, pro#a#le cause has #een uniformly defined as suchfacts and circumstances which would lead a reasona#le, discreet and prudentman to #elieve that an offense has #een committed, and that the o#@ects soughtin connection with the offense are in the place sought to #e searched. 69 4t #eingthe duty of the issuing officer to issue, or refuse to issue, the warrant as soon aspractica#le after the application therefor is filed, +0 the facts warranting the conclusion

of pro#a#le cause must #e assessed at the time of such @udicial determination #ynecessarily using legal standards then set forth in law and $urisprudence, and notthose that have yet to be crafted thereafter .

As already stated, the definition of pro#a#le cause enunciatedin !urgos, "r . vs. Chief of "taff, et al ., supra,vis6a6vis the provisions of *ections !and of $ule 12/, were the prevailing and controlling legal standards, as theycontinue to #e, #y which a finding of pro#a#le cause is tested. *ince the proprietyof the issuance of a search warrant is to #e determined at the time of theapplication therefor, which in turn must not #e too remote in time from theoccurrence of the offense alleged to have #een committed, the issuing @udge, indetermining the e?istence of pro#a#le cause, can and should logically loo& to thetouchstones in the laws theretofore enacted and the decisions alreadypromulgated at the time, and not to those which had not yet even #een conceivedor formulated.


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4t is worth noting that neither the Constitution nor the $ules of Court attempt todefine pro#a#le cause, o#viously for the purpose of leaving such matter to thecourt"s discretion within the particular facts of each case. Although theConstitution prohi#its the issuance of a search warrant in the a#sence ofpro#a#le cause, such constitutional inhi#ition does not command the legislatureto esta#lish a definition or formula for determining what shall constitute pro#a#le

cause. +1 %hus, Congress, despite its #road authority to fashion standards ofreasona#leness for searches and sei


45/124

;auro C. $eyes led a team to conduct discreet surveillance operations onsaid video esta#lishments. 0er information earlier gathered #y Atty.omingo, defendants were engaged in the illegal sale, rental, distri#ution,circulation or pu#lic e?hi#ition of copyrighted films of M0AA without itswritten authority or its mem#ers. Inowing that defendant *unshine 6ome7ideo and its proprietor, Mr. anilo 0elindario, were not authori


46/124

their #ul&, will definitely draw attention, unli&e diminutive o#@ects li&e video tapeswhich can #e easily concealed. +6 +ith hundreds of titles #eing pirated, this onerousand tedious imposition would #e multiplied a hundredfold #y @udicial fiat, discouragingand preventing legal recourses in foreign @urisdictions.

iven the present international awareness and furor over violations in large scale

of intellectual property rights, calling for transnational sanctions, it #ears calling tomind the Court"s admonition also in 7a Chemise 7acoste, supra, that

. . . . Judges all over the country are well advised to remem#er that courtprocesses should not #e used as instruments to, unwittingly or otherwise,aid counterfeiters and intellectual pirates, tie the hands of the law as itsee&s to protect the Dilipino consuming pu#lic and frustrate e?ecutive andadministrative implementation of solemn commitments pursuant tointernational conventions and treaties.

444

%he amendment to *ection / of 0residential ecree 'o. 9 #y 0residentialecree 'o. 19(, ++ which should here #e pu#lici


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A copy of a piracy is an infringement of the original, and it is no defense that thepirate, in such cases, did not &now what wor&s he was indirectly copying, or didnot &now whether or not he was infringing any copyright= he at least &new thatwhat he was copying was not his, and he copied at his peril. 4n determining the)uestion of infringement, the amount of matter copied from the copyrighted wor&is an important consideration. %o constitute infringement, it is not necessary that

the whole or even a large portion of the wor& shall have #een copied. 4f so muchis ta&en that the value of the original is sensi#ly diminished, or the la#ors of theoriginal author are su#stantially and to an in@urious e?tent appropriated #yanother, that is sufficient in point of law to constitute apiracy. +9 %he )uestion of whether there has #een an actiona#le infringement of aliterary, musical, or artistic wor& in motion pictures, radio or television #eing one offact, 80 it should properly #e determined during the trial. %hat is the stage calling forconclusive or preponderating evidence, and not the summary proceeding for theissuance of a search warrant wherein #oth lower courts erroneously re)uire themaster tapes.

4n disregarding private respondent"s argument that *earch +arrant 'o. (-! is

a general warrant, the lower court o#served that 3it was worded in a manner thatthe enumerated sei


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tapes is not to #e confused with the num#er of offenses charged. %he searchwarrant herein issued does not violate the one-specific-offense rule.

4t is pointless for private respondents to insist on compliance with the registrationand deposit re)uirements under 0residential ecree 'o. 9 as prere)uisites forinvo&ing the court"s protective mantle in copyright infringement cases. Ase?plained #y the court #elow5

efendants-movants contend that 0 9 as amended covers onlyproducers who have complied with the re)uirements of deposit and notice8in other words registration under *ections 9 and thereof. A#sentsuch registration, as in this case, there was no right created, hence, noinfringement under 0 9 as amended. %his is not well-ta&en.

As correctly pointed out #y private complainants-oppositors, theepartment of Justice has resolved this legal )uestion as far #ac& asecem#er 12, 19( in its :pinion 'o. 191 of the then *ecretary of Justice7icente A#ad *antos which stated that *ections 2/ and do not applyto cinematographic wor&s and 0 'o. 9 3had done away with theregistration and deposit of cinematographic wor&s3 and that 3even withoutprior registration and deposit of a wor& which may #e entitled to protectionunder the ecree, the creator can file action for infringement of its rights3.6e cannot demand, however, payment of damages arising frominfringement. %he same opinion stressed that 3the re)uirements ofregistration and deposit are thus retained under the ecree, not asconditions for the ac)uisition of copyright and other rights, #ut asprere)uisites to a suit for damages3. %he statutory interpretation of the?ecutive Branch #eing correct, is entitled 8to weight and respect.

??? ??? ???

efendants-movants maintain that complainant and his witnesses led theCourt to #elieve that a crime e?isted when in fact there was none. %his iswrong. As earlier discussed, 0 9 as amended, does not re)uireregistration and deposit for a creator to #e a#le to file an action forinfringement of his rights. %hese conditions are merely pre-re)uisites toan action for damages. *o, as long as the proscri#ed acts are shown toe?ist, an action for infringement may #e initiated. 8)

Accordingly, the certifications 8* from the Copyright *ection of the 'ational ;i#rary,presented as evidence #y private respondents to show non-registration of some ofthe films of petitioners, assume no evidentiary weight or significance whatsoever.

Durthermore, a closer review of 0residential ecree 'o. 9 reveals that even withrespect to wor&s which are re)uired under *ection 2/ thereof to #e registeredand with copies to deposited with the 'ational ;i#rary, such as #oo&s, includingcomposite and cyclopedic wor&s, manuscripts, directories and ga


49/124

respect to any of the following classes of wor&s.3 %his means that under thepresent state of the law, the copyright for a wor& is ac)uired #y an intellectualcreator from the moment of creation even in the a#sence of registration anddeposit. As has #een authoritatively clarified5

%he registration and deposit of two complete copies or reproductions ofthe wor& with the 'ational ;i#rary within three wee&s after the first pu#licdissemination or performance of the wor&, as provided for in *ection 2/80.. 'o. 9, as amended, is not for the purpose of securing a copyrightof the wor&, #ut rather to avoid the penalty for non-compliance of thedeposit of said two copies and in order to recover damages in aninfringement suit. 86

:ne distressing o#servation. %his case has #een fought on the #asis of, and itsresolution long delayed #y resort to, technicalities to a virtually a#usive e?tent #yprivate respondents, without so much as an attempt to adduce any credi#leevidence showing that they conduct their #usiness legitimately and fairly. %he factthat private respondents could not show proof of their authority or that there was

consent from the copyright owners for them to sell, lease, distri#ute or circulatepetitioners" copyrighted films immeasura#ly #olsters the lower court"s initialfinding of pro#a#le cause. %hat private respondents are licensed #y the7ideogram $egulatory Board does not insulate them from criminal and civillia#ility for their unlawful #usiness practices. +hat is more deplora#le is that thereprehensi#le acts of some unscrupulous characters have stigmati


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IV. VENUE

+() We'*mon* v) Samaniego 34+ SCRA 1(( :+221;

G.R. Nos. $""!@!$ Fe%rur0 '& '"

>ESTMONT P+ARMACEUTICA*S& INC.& UNITED

*A4ORATORIES& INC.& ndor JOSE ?AO CAMPOS& CAR*OS

EJERCITO& ERNESTO SA*A,AR& E*IE,ER SA*A,AR& JOSE

SO*IDUM& JR.&Pe*i*ioner'$v')RICARDO C. SAMANIEGO& Re'&onden*)

@ - - - - - - - - - - - - - - - @

G.R. Nos. $$# Fe%rur0 '& '"

RICARDO C. SAMANIEGO& Pe*i*ioner$v')>ESTMONT P+ARMACEUTICA*S& INC. nd UNITED

*A4ORATORIES& INC.& Re'&onden*')

E C I S I O N

SANDOVA*GUTIERRE,& J.:

#e,ore u' are con'olida*ed &e*i*ion' ,or revie9 on certiorari under Rule 35o, *7e (0 Rule' o, Civil Procedure$ a' amended$ ,iled ./ .o*7 con*ending

&ar*ie' a''ailing *7e eci'ion( da*ed Januar/ 4$ +22( and *7eRe'olu*ion+ da*ed Marc7 $ +22( rendered ./ *7e Cour* o, A&&eal' in CA-G)R) SP No) 12322)

T7e ,ac*ual an*eceden*' a' .orne ./ *7e record' are

On Ma/ 5$ (4$ Ricardo C) Samaniego ,iled 9i*7 *7e O,,ice o, *7e La.orAr.i*er$ Regional Ar.i*ra*ion #ranc7 :RA#; No) II$ Tuguegarao Ci*/$Caga/an$ a com&lain* ,or illegal di'mi''al and damage' again'* We'*mon*P7armaceu*ical'$ Inc) :We'*mon*; and !ni*ed La.ora*orie'$ Inc) :!nila.;$7erein Re'&onden*') Al'o im&leaded a' re'&onden*' are !nila.?' o,,icer'$Jo'e Qao Cam&o'$ Carlo' E6erci*o$ Erne'*o Sala8ar$ Elie8er Sala8ar$ and Jo'eSolidum$ Jr)

T7e com&lain* allege' *7a* !nila. ini*iall/ 7ired Samaniego a' Pro,e''ional

Service Re&re'en*a*ive o, i*' mar


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in I'a.ela a' Ac*ing i'*ric* Manager o, We'*mon* and C7airman o, !nila.S&ecial Pro6ec*') In Augu'* (5$ 7e 9a' *ran',erred *o Me*ro Manila

&ending inve'*iga*ion o, 7i' 'u.ordina*e and &7/'ician' o, Region IIinvolved in a 'ale' di'coun* and R@ *rade-o,, con*rover'/) =e 9a' *7en

&laced under ,loa*ing '*a*u' and a''igned *o &er,orm du*ie' no* connec*ed9i*7 7i' &o'i*ion$ li


52/124

*7eir &e*i*ion ,or c7ange o, venue 7a' remained unre'olved) T7e/ did no* ,ile*7eir &o'i*ion &a&er' nor did *7e/ a**end *7e 7earing) T7u'$ *7e La.or Ar.i*er con'idered *7e ca'e 'u.mi**ed ,or eci'ion .a'ed on *7e record' and *7eevidence 'u.mi**ed ./ Samaniego)

On ecem.er (1$ (4$ *7e La.or Ar.i*er rendered a eci'ion ,inding *7a*Samaniego 9a' illegall/ and un6u'*l/ di'mi''ed con'*ruc*ivel/ andordering 7i' rein'*a*emen* *o 7i' ,ormer &o'i*ion 9i*7ou* lo'' o, 'eniori*/rig7*' and &rivilege' and &a/men* o, 7i' ,ull .ac


53/124

immedia*e conduc* o, ,ur*7er &roceeding) T7e re'&onden*'-a&&ellan*' areIRECTE *o &a/ com&lainan*-a&&ellee *7e amoun* o, T9o =undredT7ir*/ T7ou'and Seven =undred T9en*/ Pe'o' and T7ir*/ Cen*avo':P+"2$0+2)"2; re&re'en*ing 7i' 'alar/ ,rom Januar/ ($ ( *o Augu'* "($

($ *7e da*e o, i''uance o, *7i' Re'olu*ion le'' an/ 'alar/ collec*ed ./ 7im ./ 9a/ o, e@ecu*ion &ending a&&eal)

SO ORERE)

T7e &ar*ie' 'e&ara*el/ ,iled *7eir mo*ion' ,or recon'idera*ion .u* 9ere .o*7denied ./ *7e NLRC in i*' Re'olu*ion da*ed June +0$ +222)

On Januar/ 4$ +22($ *7e Cour* o, A&&eal'$ ac*ing on *7e &ar*ie'? &e*i*ion',or certiorari$ rendered i*' eci'ion 'e**ing a'ide *7e NLRC Re'olu*ion' and

a,,irming 9i*7 modi,ica*ion *7e La.or Ar.i*er?' eci'ion in *7e 'en'e *7a**7e a9ard o, moral damage' 9a' reduced ,rom P5$222$222)22*o P522$222)22 and *7e e@em&lar/ damage' ,rom P($222$222)22*o P"22$222)22$ *7u'

@ @ @

W7ile *7i' Cour* concur' 9i*7 *7e ruling o, *7e E@ecu*ive La.or Ar.i*er *7a**7ere 9a' con'*ruc*ive di'mi''al commi**ed again'* Ricardo Samaniego$ *7i'Cour* ,ind' *7e a9ard on moral and e@em&lar/ damage' uncon'ciona.le)

@ @ @

W=ERE%ORE$ *7e NLRC?' re'olu*ion' da*ed Augu'* "($ ( and June +0$+222 are 7ere./ SET ASIE) T7e deci'ion o, *7e E@ecu*ive La.or Ar.i*erda*ed ecem.er (1$ (4 i' REINSTATE and A%%IRME in all re'&ec*e@ce&* 9i*7 *7e ,ollo9ing modi,ica*ion *7e moral and e@em&lar/ damage'are reduced *o P522$222)22 and P"22$222)22$ re'&ec*ivel/)

SO ORERE)

=ence$ *7e'e con'olida*ed &e*i*ion' ,or revie9 on certiorari ,iled ./ *7eo&&o'ing &ar*ie')

In *7eir &e*i*ion$ We'*mon* and !nila. allege *7a* *7e Cour* o, A&&eal' erredin den/ing *7eir mo*ion *o di'mi'' ./ rea'on o, im&ro&er venue and in'u'*aining *7e La.or Ar.i*er?' eci'ion declaring *7a* Samaniego 9a'con'*ruc*ivel/ di'mi''ed and *7a* *7e/ 9ere denied due &roce'')

%or 7i' &ar*$ Samaniego main*ain' *7a* *7e Cour* o, A&&eal' did no* err in i*'

ruling) =o9ever$ 7e claim' *7a* *7e A&&ella*e Cour* '7ould no* 7ave reduced*7e La.or Ar.i*er?' a9ard ,or moral and e@em&lar/ damage')


54/124


55/124

*o a''ure convenience ,or *7e &lain*i,, and 7i' 9i*ne''e' and *o &romo*e *7eend' o, 6u'*ice) T7i' a@iom all *7e more ,ind' a&&lica.ili*/ in ca'e'involving la.or and managemen* .ecau'e o, *7e &rinci&le$ &aramoun* in our

6uri'dic*ion$ *7a* *7e S*a*e '7all a,,ord ,ull &ro*ec*ion *o la.or)

@ @ @

T7i' &rovi'ion i' o.viou'l/ &ermi''ive$ ,or *7e 'aid 'ec*ion u'e' *7e 9ordma/$ allo9ing a di,,eren* venue 97en *7e in*ere'*' o, 'u.'*an*ial 6u'*icedemand a di,,eren* one) In an/ ca'e$ a' '*a*ed earlier$ *7e Con'*i*u*ional

&ro*ec*ion accorded *o la.or i' a &aramoun* and com&elling ,ac*or$ &rovided*7e venue c7o'en i' no* al*oge*7er o&&re''ive *o *7e em&lo/er)

=ere$ i* i' undi'&u*ed *7a* Samaniego?' regular &lace o, a''ignmen* 9a' in

I'a.ela 97en 7e 9a' *ran',erred *o Me*ro Manila or 97en *7e cau'e o,ac*ion aro'e) Clearl/$ *7e A&&ella*e Cour* 9a' correc* in a,,irming *7e La.orAr.i*er?' ,inding *7a* *7e &ro&er venue i' in *7e RA# No) II a* TuguegaraoCi*/$ Caga/an)

On *7e con*en*ion o, We'*mon* and !nila. *7a* *7e/ 9ere denied due &roce''$ 9ell 'e**led i' *7e rule *7a* *7eessence o2 due /rocess is si8/30 no//ortunit0 to %e -erd or$ a' a&&lied *o admini'*ra*ive &roceeding'$ ano&&or*uni*/ *o e@&lain one?' 'ide or an o&&or*uni*/ *o 'ee< a recon'idera*iono, *7e ac*ion or ruling com&lained o,) T7e reDuiremen* o, due &roce'' in

la.or ca'e' .e,ore a La.or Ar.i*er i' 'a*i',ied 97en *7e &ar*ie' are given*7e o//ortunit0 to su%8it t-eir /osition //ers *o 97ic7 *7e/ are'u&&o'ed *o a**ac7 all *7e 'u&&or*ing documen*' or documen*ar/ evidence*7a* 9ould &rove *7eir re'&ec*ive claim'$ in *7e even* *7e La.or Ar.i*erde*ermine' *7a* no ,ormal 7earing 9ould .e conduc*ed or *7a* 'uc7 7earing9a' no* nece''ar/)5

A' '7o9n ./ *7e record'$ *7e La.or Ar.i*er gave We'*mon* and !nila.$ no*onl/ once$ .u* *7rice$ *7e o&&or*uni*/ *o 'u.mi* *7eir &o'i*ion &a&er' and'u&&or*ing a,,idavi*' and documen*') #u* *7e/ 9ere o.'*ina*e) Clearl/$ *7e/9ere no* denied *7eir rig7* *o due &roce'')

T7e ul*ima*e i''ue ,or our re'olu*ion i' 97e*7er *7e Cour* o, A&&eal' erredin 7olding *7a* Samaniego 9a' con'*ruc*ivel/ di'mi''ed ./ We'*mon* and!nila.)

To reca&i*ula*e$ Samaniego claim' *7a* u&on 7i' rea''ignmen* andKor*ran',er *o Me*ro Manila$ 7e 9a' &laced on ,loa*ing '*a*u' and direc*ed *o

&er,orm ,unc*ion' no* rela*ed *o 7i' &o'i*ion) %or *7eir &ar*$ We'*mon* and

!nila. e@&lain *7a* 7i' *ran',er i' .a'ed on a 'ound .u'ine'' 6udgmen*$ amanagemen* &reroga*ive)

http://www.lawphil.net/judjuris/juri2006/feb2006/gr_146653_2006.html#fnt5http://www.lawphil.net/judjuris/juri2006/feb2006/gr_146653_2006.html#fnt5


56/124

In con'*ruc*ive di'mi''al$ *7e em&lo/er 7a' *7e .urden o, &roving *7a* *7e*ran',er o, an em&lo/ee i' ,or 6u'* and valid ground'$ 'uc7 a' genuine

.u'ine'' nece''i*/) T7e em&lo/er mu'* .e a.le *o '7o9 *7a* *7e *ran',er i'no* unrea'ona.le$ inconvenien*$ or &re6udicial *o *7e em&lo/ee) I* mu'* no*

involve a demo*ion in ran< or a diminu*ion o, 'alar/ and o*7er .ene,i*') I,*7e em&lo/er canno* overcome *7i' .urden o, &roo,$ *7e em&lo/ee?' *ran',er'7all .e *an*amoun* *o unla9,ul con'*ruc*ive di'mi''al)1

We'*mon* and !nila. ,ailed *o di'c7arge *7i' .urden) Samaniego 9a'unceremoniou'l/ *ran',erred ,rom I'a.ela *o Me*ro Manila) We 7old *7a*'uc7 *ran',er i' economicall/ and emo*ionall/ .urden'ome on 7i' &ar*) =e9a' con'*rained *o main*ain *9o re'idence' H one ,or 7im'el, in Me*roManila$ and *7e o*7er ,or 7i' ,amil/ in Tuguegarao Ci*/$ Caga/an) Wor'e$immedia*el/ a,*er 7i' *ran',er *o Me*ro Manila$ 7e 9a' &laced on ,loa*ing

'*a*u' and 9a' demo*ed in ran


57/124

'u&&o'ed ac*ual rein'*a*emen*) T7e a9ard ,or moral and e@em&lar/ damage'i' dele*ed)

Co'*' again'* We'*mon* and !nila.)

SO ORERE


58/124

++) !nima'*er' v) CA G)R) ((150 +-0-20

G.R. No. 1196*+. "-/u&/ +, 199+

UNIMASTERS CONGLOMERATION, INC., petitioner, vs.COURT O" APPEALS &'( UBOTA AGRIMACINER!PILIPPINES, INC.,respondents.

$ E C I S I O N

NAR%ASA, C.J .4

%he appellate proceeding at #ar turns upon the interpretation of astipulation in a contract governing venue of actions thereunder arising.

:n :cto#er 2(, 19(( Iu#ota Agri-Machinery 0hilippines, 4nc.8hereafter, simply IB:%A and nimasters Conglomeration, 4nc.8hereafter, simply '4MA*%$* entered into a 3ealership

Agreement for *ales and *ervices3 of the former"s products in *amar and ;eyte 0rovinces.E1F %he contract contained, among others5

(; a '*i&ula*ion reading CC 'll suits arising out of this 'greement shalle filed with D in the proper $ourts of EueFon $ity," and

+; a &rovi'ion .inding !NIMASTERS *o o.*ain :a' i* did in ,ac* o.*ain;a credi* line 9i*7 Me*ro&oli*an #an< and Tru'* Co)-Taclo.an #ranc7 in *7eamoun* o, P+$222$222)22 *o an'9er ,or i*' o.liga*ion' *o >!#OTA)

*ome five years later, or more precisely on ecem#er 2, 199!,'4MA*%$* filed an action in the $egional %rial Court of %aclo#anCity against IB:%A, a certain $eynaldo o, and Metropolitan Ban&

and %rust Company-%aclo#an Branch 8hereafter, simplyM%$:BA'I for damages for #reach of contract, and in@unctionwith prayer for temporary restraining order. %he action was doc&etedas Civil Case 'o. 9!-12-21 and assigned to Branch /.

:n the same day the %rial Court issued a restraining order en@oining M%$:BA'I from 3authori


59/124

amount paid and released to defendant KK 8IB:%A #y the 6ead:ffice of M%$:BA'I in Ma&ati, Metro-Manila KK.3 %he Court alsoset the application for prelimi

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