SECOND DIVISION

[G.R. No. L-30404. January 31, 1973.]

MIGUEL PEREZ RUBIO , petitioner, vs. HON. JUDGE HERMINIO

MARIANO, in his capacity as Presiding Judge of Branch X, of the
Court of First Instance of Rizal, ROBERT O. PHILLIPS & SONS, INC.,
ROBERT O. PHILLIPS, MAGDALENA YSMAEL PHILLIPS, VICTORIA
VALLEY DEVELOPMENT CORPORATION, MANUFACTURERS BANK &
TRUST COMPANY and HACIENDA BENITO, INC. , respondents.

Jose W . Diokno & Ramirez Oritigas for petitioner.

Alberto O. Villabraza for Victoria Valley Corp.
Ambrosio Padilla Law O ces and Calapatia, Gaviola & Associates for
respondent Bank.

SYLLABUS

1. REMEDIAL LAW; PLEADINGS AND PRACTICE; AMENDMENTS OF

PLEADINGS; AMENDED AND SUPPLEMENTAL ANSWER SHOULD BE ADMITTED IN
INSTANT CASE. — Where in the instant case, the petitioner's counterclaim is to obtain
payment of the Phillips' admitted indebtedness, the amended and supplemental answer
which contains the extensive recitals regarding certain events which transpired after
the original answer had been led, obviously intended to emphasize the resulting
di culty on the part of petitioner to collect from the Phillips said indebtedness, should
have been admitted. The narration of the steps allegedly taken by the debtors to make
it extremely hard for petitioner's counterclaim to be satis ed, does not necessarily
mean or imply that a new cause of action has been pleaded. What is being enforced
against the Phillips, both in the original answer and in the amended and supplemental
answer, is their obligation to the petitioner.
2. ID.; ID.; THIRD-PARTY COMPLAINT; ADMISSION THEREOF IS PROPER IN
INSTANT CASE. — Where what the third-party complaint seeks is to hold the third-party
defendants directly liable to the third-party plaintiff for damages for alleged fraudulent
acts which would render his counterclaim against the plaintiffs unrecoverable, the third-
party complaint should be admitted. It. would be an exercise in futility to allow
petitioner' s counterclaim against the plaintiffs to remain in the case for adjudication by
the Court and at the same time throw out his third-party complaint against third
persons for acts which would prevent such counterclaim from being realized because
by said acts the plaintiffs' assets are placed beyond the countercampaigns reach. The
admission of said third-party complaint is sanctioned by policy considerations against
multiplicity of suits. Besides, the bringing in of private respondents as third-party
respondents in the third-party complaint is in accordance with Sections 14 and 15, Rule
6 of the Rules of Court.
3. ID.; ID.; ID.; ID.; NO INTERFERENCE WITH THE JURISDICTION OF A CO-
EQUAL BRANCH OF COURT WHERE DECISION THEREIN WAS APPROVAL OF
MEMORANDUM AGREEMENT. — Where the third-party complaint in Civil Case No. 8632
seeks to hold the third-party defendants directly liable to the third-party plaintiff for
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 damages for alleged fraudulent acts which would render his counterclaim against the
plaintiffs unrecoverable and to secure the return by third-party defendant Bank and/or
the third-party defendant VVDC of the properties it and/or they had bought as a
consequence of the judgment foreclosure of mortgage case, Civil Case No. 8766, but in
said Civil Case 8766 what the Court did was simply to declare that the mortgage debt
has been satis ed by means of sale or cession of properties, without ruling on any
adversary claims of the parties, the admission of the said third-party claim in Civil Case
8632 would not amount to an invasion of the jurisdiction of a co-equal branch of the
court in said Civil Case 8766.

DECISION

MAKALINTAL , J : p

Petition for certiorari to review and set aside the order dated September 13,
1968 issued by the respondent Judge in Civil Case No. 8632 of the Court of First
Instance of Rizal (Branch X) entitled "Robert O. Phillips & Sons, Inc., et al. vs. Miguel
Perez Rubio," denying the motion of the defendant (now herein petitioner, Miguel Perez
Rubio) to admit his amended and supplemental answer and third-party complaint, and
to set aside as well the subsequent order denying his motion for reconsideration.
Pending determination of the issues raised here the petitioner prayed that respondent
Judge be restrained from proceeding with the hearing of the case below and the other
respondents from transferring or proceeding with the agreement to transfer any of the
assets of Hacienda Benito, Inc., to any third person except in the ordinary course of
selling subdivision lots. On April 16, 1969 this Court caused to be issued a temporary
restraining order as prayed for.
The present case is really a direct offshoot of an earlier case (Rubio vs. Reyes, et
al., L-24581, May 27, 1968, 23 SCRA 773) involving practically the same contending
parties. In that case this Court, resolving Miguel Perez Rubio's primary plea in his
petition for certiorari to annul a writ of preliminary injunction issued ex-parte in Civil
Case No. 8632, rendered judgment in part as follows:
"(1) In connection with the writ of preliminary injunction issued by the
respondent Judge in Civil Case No. 8632 . . ., the same is hereby declared null and
void and is, consequently, set aside . . .;"

We considered the ex-parte issuance of the voided writ of preliminary injunction

to be "unjust and improvident" because: "(W)ithout hearing the party concerned, and
without any legal justi cation, it restrained a creditor (Perez Rubio) from enforcing his
undenied right to collect from his debtor and the latter's guarantors the sum of
P4,250,000.00 representing the unpaid balance of the purchase price of his shares in
Hacienda. It is a fact that the debtor Corporation (Robert O. Phillips and Sons, Inc.) and
its guarantors, the Phillips spouses, do not deny the indebtedness and yet,
notwithstanding its extraordinary amount. they attempted to sell all the shares of stock
of Hacienda without making any reasonable provision for the payment thereof. For
them to prevent their creditor from enforcing that right in any lawful manner is, in any
language, rank injustice."
But, as noted in the same decision, in view of certain complicated matters 1 that
cropped up after the ling of the original petition in G. R. No, L-24581, which new
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 matters were brought to the attention of this Court by Miguel Perez Rubio by means of
several supplemental Petitions 2 , the scope of the petition in G. R. No. L-24581 as
originally led, i.e., mainly to annul the writ of preliminary injunction issued ex-parte in
Civil Case No. 8632, was actually enlarged to include a plea to annul the proceedings
had in a separate judicial foreclosure of mortgage case (Civil Case No. 8766, Court of
First Instance of Rizal, Branch VIII) instituted by the Manufacturers Bank and Trust
Company against the properties of the Hacienda Benito, Inc. Miguel Perez Rubio then
claimed that the foreclosure by the bank of the mortgage constituted on the properties
of the Hacienda Benito, Inc., was intended simply to remove the said properties and the
assets of the Hacienda's guarantors — the Phillips spouses — beyond his reach and
thus make it impossible for him to collect the sum of P4,250,000.00 still unpaid on the
purchase price of his shares in Hacienda sold by him to the Phillips corporation. On this
particular aspect of the case We made this observation:
". . . it is undeniable that the situation created by the acts admittedly done
by the respondents in connection rstly, with the proposed sale of the shares of
stock of Hacienda to Alfonso T. Yuchengco and his group, and secondly, with the
conveyance of the properties of Hacienda to the Bank and the contemplated
conveyance thereof to VVDC, placed petitioner's right and ability to collect the
sum of P4,250,000.00 still due to him from the Phillips corporation and its
guarantors, the Phillips spouses, in clear jeopardy, (and) it is our considered
opinion in this regard that petitioner is entitled, both in law and equity, to a
measure of protection — compatible with fairness towards the respondents —
while in the process of taking whatever steps maybe necessary for the
enforcement and protection of his rights."

We nevertheless denied the writ of certiorari prayed for ". . . insofar as it seeks to
annul the judicial proceedings had in Civil Case No. 8766 of the Court of First Instance
of Rizal, instituted by the Bank against Hacienda and other parties for the foreclosure of
the mortgage constituted in its favor upon the properties of Hacienda." Conformably,
however, with Our view that Miguel Perez Rubio should be entitled, both in law and
equity, to a measure of protection. We speci cally declared that Our denial of the writ
of certiorari was ". . . without prejudice . . . to the right of petitioner to seek such relief
and any other relief that he might be lawfully entitled to against the herein respondents,
singly or collectively, in the aforementioned Civil Case 8766 of the Court of First
Instance of Rizal or in a separate action. . . ." (emphasis supplied). It was against the
foregoing backdrop that the instant case arose.
Believing that the forum for the "separate action" referred to in the dispositive
portion of Our decision in No. G.R. No. L-24581 meant Civil Case No. 8632 which has
remained pending in the court a quo, Miguel Perez Rubio led in the said case on July 9,
1968 an "Urgent Motion To Admit Amended and Supplemental Answer and Third-Party
Complaint," the third-party complaint being directed against the Manufacturers Bank
and Trust Company, the Victoria Valley Development Corporation and the Hacienda
Benito, Inc. The amended and supplemental answer recited the same matters which
Miguel Perez Rubio had already alleged in his supplemental petition led in this Court in
G. R. No. L-24581, thereafter summarized in Our decision therein as follows:
"That after the respondent Judge had denied petitioner's (Miguel Perez
Rubio) motion to dissolve the writ of preliminary injunction issued in Civil Case
No. 8632, and sensing that the latter would take up the matter to Us for review, on
June 3, 1965 the Articles of Incorporation of the respondent VVDC were drawn up,
and led with the Securities and Exchange Commission the following day, . . .;
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 that on June 10, 1965 the Bank led a complaint dated May 31, 1965 against (1)
Hacienda, (2) Compound Investment Corporation, (3) Corregidor Development
Corporation, (4) Robert O. Phillips and Sons, (5) Crescent Corporation and (6)
Francisco D. Santana to foreclose the real estate mortgage constituted on the
properties of Hacienda to secure not only its own obligations but also those of
other corporations and business enterprises of Robert O. Phillips, . . . (Civil Case
No. 8766 of the Court of First Instance of Rizal); that instead of ling an answer
to the complaint the defendants in said case entered into a compromise
agreement dated June 17, 1967 whereby: (a) Hacienda agreed to convey and
assign its properties covered by the mortgage and to assign all receivables due to
it from the buyers of lots in its subdivisions, to the Bank in payment not only of its
own mortgage debt but also of the other defendants; (b) Hacienda was
subrogated to all the right and interest of the Bank under the deeds of mortgage
being foreclosed in respect of its co-defendants; (c) Hacienda waived its right to
redeem its properties thereby transferred or sold to the Bank; that on June 21,
1965, the Phillips — individuals and corporation — received notice of our
resolution of June 15, 1965 giving due course to the original petition led in this
case and requiring the petitioner therein to put up the bond required for the
issuance of the writ of preliminary injunction; that this notwithstanding, . . .
Hacienda, through Robert O. Phillips, executed a deed of absolute sale of its
properties in favor of the Bank in payment of the amounts due from all the
defendants; that . . . the deed of sale was registered in the Office of the Register of
Deeds of Rizal, the consideration appearing thereon being the total sum of
P7,485,492.98 representing the mortgage debts of all the defendants, plus costs
and attorney's fees; that since July, 1965 the newly-organized VVDC had in fact
been managing the Victoria Valley Subdivision which comprises the properties of
Hacienda, payment of receivables from the purchasers of lots being made directly
to it or to the Bank; that the aforesaid purchase price of the properties of
Hacienda was grossly inadequate . . .; that the deed of sale also deprived
Hacienda of its right to redeem the mortgaged properties; that the foreclosure
proceedings, the compromise agreement and the sale mentioned heretofore were
a scheme to circumvent and avoid the legal effects of the writ of preliminary
injunction issued by Us in the present case and would, in effect, render valueless
all the shares of Hacienda; that all the aforesaid foreclosure suit, compromise
agreement and sale were calculated to produce the same result which could have
been accomplished by Phillips and Sons, Inc. selling all the shares of Hacienda to
Yuchengco and his group; that these proceedings and transactions amounting to
a virtual disposal of all the assets of the Phillips spouses and of Robert O. Phillips
and Sons, Inc. were in fraud of petitioner, their creditor, who would then have
penniless debtors from whom he could not collect the unpaid balance of
P4,250.000.00 due to him; that considering the fact that a good number of the
members of the Board of the Bank were also members of the Board of VVDC,
these corporations must be deemed to have had knowledge of the scheme just
described and of the action taken by some of the members of their Board in
furtherance thereof."

Meanwhile the third-party complaint, substantially reiterating the above-

mentioned allegations, sought to secure the return by the Bank and/or the VVDC of the
properties it and/or they had bought as a consequence of the judicial foreclosure of
mortgage case (Civil Case No. 8766), with a further plea that "in the event that the
Phillips are unable to pay (Miguel Perez Rubio) the judgment on his counterclaim said
properties and funds returned by the defendant Bank be held to answer for such
judgment or any part thereof unpaid by the Phillips," together with damages. On the
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 same date, July 9, 1968, Miguel Perez Rubio urgently moved the court a quo for the
issuance of writs of preliminary injunction, both in the amended and supplemental
answer as well as in the third-party complaint, intended to prevent the Phillips spouses
and the impleaded third-party defendants from performing acts that would deplete the
assets of Hacienda Benito, Inc.
In due time respondent Phillips spouses led their twin opposition to the
admission of the amended and supplemental answer and the third-party complaint,
pleading the following grounds: (a) that the dispositive portion of the decision in G. R.
No. L-24581 granting Miguel Perez Rubio the right to seek relief in Civil Case No. 8766 ".
. . or in a separate action" meant that the choice of forum given Miguel Perez Rubio was
limited to Civil Case No. 8766 or an action other than Civil Case No. 8632; (b) that the
proper forum in fact was in Civil Case No. 8766, the foreclosure of mortgage case in
which the Phillips spouses voluntarily ceded to the Bank 78 hectares of Hacienda
Benito, Inc.'s property known as the Victoria Valley Subdivision to pay for all the
obligations of the Phillips and of their a liate corporations for which the ceded assets
of Hacienda Benito had been mortgaged; (c) that the additional allegations in the
amended and supplemental answer relating to supervening events which allegedly
operated to defraud Miguel Perez Rubio by depriving him of adequate security to
recover on his credit changed Miguel Perez Rubio's cause of action as alleged in the
counterclaim, i.e. the Phillips spouses' alleged indebtedness of P4,250,000.00.
Hacienda Benito, Inc., in the meantime, opposing Miguel Perez Rubio's
application for a writ of preliminary injunction, adopted as its own the arguments
adduced by Phillips, while the VVDC objected to the issuance of the writ of preliminary
injunction on the main ground that not having yet been formally served with summons
on the third-party complaint, it may not properly be subjected to the writ. The
Manufacturers Bank and Trust Company, on the other hand, entered a special
appearance solely to oppose both the urgent motion for the issuance of the writ of
preliminary injunction and the motion to admit the third-party complaint. The Bank
reiterated VVDC's argument that injunction was not proper as against it until the third-
party complaint had been admitted or allowed; and in opposition to the admission of
the third-party complaint it pointed out: (a) that the Bank may not be made a third-party
defendant since it could not stand liable for contribution, indemnity or subrogation or
any other relief which the original plaintiffs in Civil Case No. 8632 may obtain against
Miguel Perez Rubio; (b) that whatever it had done, i.e. foreclose the mortgage
constituted on the Hacienda Benito properties, was legally unassailable for it had
merely taken steps to protect its interest as mortgagor; and (c) that the respondent
Judge in Civil Case No. 8632 did not have jurisdiction to look into the validity of the
proceedings in Civil Case No. 8766 heard and decided by Branch VIII of the same Court
of First Instance of Rizal in Pasig.
In Miguel Perez Rubio's reply to the opposition of the Phillips spouses and
Hacienda Benito, Inc. to the admission of the amended and supplemental answer as
well as of the third-party complaint, he maintained (a) that in G.R. No. L-24581 he was
given the choice of forum where to seek relief, and that instead of seeking annulment of
the foreclosure in Civil Case No. 8766 he opted to ventilate his claim in the pending
case below; (b) that the amended and supplemental answer did not alter his cause of
action the counterclaim since the basis of all the allegations therein stemmed from his
right to collect the sum due him, and the reference to certain transactions entered into
by the Phillips and spouses with the third-party defendants was intended simply to
point out the consequent impossibility on the part of the Phillips spouses to make the
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 necessary payment; (c) that since the foreclosure of mortgage case (Civil Case No.
8766) did not proceed to trial but was settled before an answer could even be led,
there were no judicial proceedings that would have to be set aside; and (d) that the real
issue involving Miguel Perez Rubio and the Phillips spouses was the propriety and/or
validity of the agreement dated June 5, 1965 whereby the Phillips spouses and the
third-party defendants conspired to defraud the petitioner.
In justifying his ling of the third-party complaint, Miguel Perez Rubio argued, in
his reply to the opposition of the Bank and the VVDC, that a third-party complaint was
proper not only when the intended third-party defendant is liable for subrogation or
contribution on defendant's counterclaim but also" . . . where even if the action that may
be taken against a third-party defendant is unrelated to plaintiff's claim against the
third-party plaintiff or defendant, (it appears that) the third-party is a necessary party to
the case or one without whose intervention the real issue involved cannot be fully
determined . . . " citing the case of Baluyot vs. Court of Appeals, 106 Phil. 844. He
further reiterated that the Bank's arrangements with the Phillips spouses were of such
a fraudulent character that they prevented the latter from paying Miguel Perez Rubio or
from returning even the object of the Phillips' indebtedness, which was 50% of the
shares of stock of Hacienda Benito, Inc. formerly owned by Miguel Perez Rubio and
bought on installment by the Phillips.
On September 13, 1968 the respondent Judge issued an order denying the
admission of the amended and supplemental answer and the third-party complaint
mainly on the ground that to resolve the issues regarding the alleged fraudulent
transactions entered into by the plaintiffs and the third-party defendants in order to
prevent Miguel Perez Rubio from enforcing his admitted credit would necessarily
involve, in one way or another, the proceedings had in a coordinate and co-equal court
which had in fact been terminated in Civil Case No. 8766. In addition, the respondent
Judge viewed the additional matters alleged in the amended and supplemental answer
and in the third-party complaint as irrelevant to the principal issue raised by the Phillips
in the complaint, which was whether or not Miguel Perez Rubio unlawfully interfered
with the plaintiffs' transactions with Alfonso Yuchengco, and to the main issue raised
by Miguel Perez Rubio in his counterclaim, i.e. whether or not the Phillips spouses are
liable for the balance of P4.25 million in favor of Miguel Perez Rubio. A motion for
reconsideration having been denied on November 21, 1968, Miguel Perez Rubio
commenced the instant petition for certiorari, posing the central issue, as he saw it, in
this wise: "May your petitioner implead the respondents Victoria Valley Development
Corporation, Manufacturers Bank and Trust Company, and the Hacienda Benito, Inc. in
Civil Case No. 8632 where your petitioner has a compulsory counterclaim against
respondents Phillips on the shares of stock sold by your petitioner?"
In due time the herein respondents led their respective answers. The answer to
the petition led by the respondent Judge, by Robert O. Phillips — the corporation and
the individuals — and by Hacienda Benito, Inc., admits some of the material averments
in the petition and speci cally denies the others, particularly the propriety of the
petition for certiorari availed of by petitioner. To support said denials or by way of
special and a rmative defenses the answer further alleges: that the instant petition for
certiorari with preliminary injunction should not have been given due course since it was
led after petitioner had already lost his light to appeal the disputed order, it appearing
from the records that the said order, dated September 13, 1968, was received by the
petitioner on October 12, 1968 and the motion for its reconsideration was led on
November 18, 1968, the 37th day from receipt thereof, and not on November 11, 1968
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 as the petitioner alleged; that similarly, the petitioner let more than two (2) months
pass from receipt of the denial of his motion for reconsideration before he commenced
the instant petition on April 12, 1969; that the right to appeal having been lost through
inaction and/or negligence, certiorari may not be availed of as a substitute for appeal;
that in fact the court below had even lost jurisdiction to reconsider its original order
dated September 13, 1968 in view of the lapse of the reglementary period within which
the same might be reconsidered and/or appealed, it appearing that the motion for its
reconsideration was led on the 37th day from receipt of the assailed order; that since
an order denying admission of an amended pleading or a third-party complaint is
appealable, the petitioner's failure to appeal within the allowable period meant that the
assailed order may no longer be impugned; that the dominant issue raised in the instant
case, i.e. whether or not the respondent Judge committed a grave abuse of discretion
amounting to excess of jurisdiction in denying admission of the amended and
supplemental answer and the third-party complaint, had in fact already been resolved in
the earlier related case of Rubio vs. Reyes, supra, when the Supreme Court ruled that
any relief to which Miguel Perez Rubio might be lawfully entitled to may be sought in
"Civil Case No. 8766 of the Court of First Instance of Rizal or in a separate action,"
necessarily implying that the alleged fraudulent actions on the part of the respondents
— which matters were earlier alleged in the Second Supplemental Petition led in G.R.
No. L-24581 and repeated in the amended pleading and third-party complaint whose
admission in the court a quo is being sought — had already been determined to be
proper subject-matter either in Civil Case No. 8766 or in a separate action other than
Civil Case No. 8632; that the admission of the amended pleading and the third-party
complaint, if permitted, would involve an inquiry by the respondent Judge into the
legality and/or propriety of the proceedings had in Civil Case No. 8766, tried by a
coordinate and co-equal court, which could not be properly done in view of the rule that
the jurisdiction to annul a judgment of a branch of the Court of First Instance belongs
not to another co-equal and coordinate court; that assuming that the argument of non-
interference by one branch with the action of another branch of the same court could
be overcome, the respondent Judge nevertheless did not abuse his discretion in
denying admission of the amended and supplemental answer and third party complaint
because the former substantially altered Miguel Perez Rubio's cause of action since the
original counterclaim related only to the payment of the alleged indebtedness of
P4,250,000.00 while the amended pleading seeks a writ of preliminary injunction with
respect to a transaction which is not involved in the counterclaim for the payment of
the said indebtedness, and the third-party complaint seeks (a) the annulment of certain
processes in Civil Case No. 8766, particularly the memorandum agreement dated June
5, 1965, ceding the properties of Hacienda to the Bank which cession, as maintained by
the petitioner, was made in fraud of creditors and (b) the return of the same properties
to Hacienda — all these matters being completely irrelevant to petitioner's counterclaim
for his totally unsecured credit; that the third-party complaint under the foregoing set-
up may not be admitted without violating the applicable rule (section 12, Rule 6) which
requires that third-party complaint must be so related to the plaintiff's claim against the
defendant that the third-party defendant may actually stand liable for contribution,
indemnity, subrogation or any other relief, in respect of his (referring to the original
defendant and/or third-party plaintiff) opponent's claim . Lastly, by way of compulsory
counterclaim, the answering respondents alleged that as a result of the petitioner's bad
faith in instituting the present petition they suffered damages for which they should be
adequately compensated.
The VVDC, for its part, after making admissions and speci c denials in its
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 answer, particularly takes exception to the propriety of the instant petition for certiorari
with a plea for preliminary injunction, stressing that the assailed orders could have been
the subject only of review by appeal and that, in any event, the denial of the admission
of the amended and supplemental answer and the third-party complaint had already
become nal since the records showed that a motion for its reconsideration was led
beyond the reglementary period for ling the same; that although the instant petition
was labeled as one for certiorari, it was in effect one for a writ of mandamus to compel
the respondent Judge to admit the petitioner's amended and supplemental answer
below, as well as the third-party complaint and thereafter to proceed with the case,
which writ would not be available since the controverted orders were issued by the
respondent Judge in the exercise of his discretion. The prayer for preliminary injunction,
VVDC claims, has no basis in law insofar as it is concerned for the reason that since it
has been legally joined as a party in the principal case below (Civil Case No. 8632), no
action may be said to have been commenced against it for which it may be subject to a
writ of injunction. VVDC further avers: "(It is) being brought into these proceedings
merely as a prospective purchaser . . . (Likewise) if, as a matter of good law, injunction
could be available to the petitioner, then an order of restraint upon the prospective
seller would be more than su cient to protect the rights of the petitioner Miguel Perez
Rubio, without the need of harassing a would be purchaser and compelling it to litigate
together with the attendant inconveniences and expenses."
The Manufacturers Bank and Trust, Co., Inc., in its answer to the present petition,
also made admissions and speci c denials of the material averment of the petition. Its
extensive allegations may be summarized as follows: that the assailed orders denying
the admission of the petitioner's amended and supplemental answer and the third-party
complaint are not proper subjects for a petition for certiorari because: (a) appeal was
available to petitioner from the order dated September 13, I968 and it is well-settled
that certiorari cannot be availed of as a substitute for appeal; (b) by failing to appeal
within the reglementary period, petitioner had likewise lost his right to avail himself of
the special remedy of certiorari; and (c) the orders sought to be reviewed were validly
and legally issued on the basis of the attendant circumstances. It is further claimed that
insofar as the Bank is concerned, the pertinent inquiry is whether or not the petitioner
may implead — by means of a third-party complaint — the answering respondent Bank
in the original case where petitioner, as party defendant therein, has a compulsory
counterclaim against the plaintiff. Submitting a negative position, the Bank argues that
a third-party complaint may not be introduced if the same would effect a new and
separate controversy from that involved in the original action. If included as third party
defendant, the Bank, it is pointed out, will be unable to assert any defense which Miguel
Perez Rubio has or may have against the plaintiffs' claim. Furthermore, the third-party
complaint, if allowed admission, would virtually operate to reopen discussion of the
merits of an already terminated case (Civil Case No. 8766) tried by a co-equal branch of
the court a quo. Speci cally referring to the instant petition, the Bank maintains that not
being "otherwise a party to the original proceedings, it cannot be made a party in a
certiorari petition and in that petition be enjoined . . ."
From the welter of pleadings led by the contending parties, the fundamental
issue herein presented is the propriety or impropriety of the amended and
supplemental answer and of the third-party complaint.
According to the order in question, dated September 13, 1968, the respondent
Judge refused to admit both pleadings in order to avoid what he viewed as a possible
invasion of the jurisdiction and authority of another branch of the court, which is co-
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 equal and coordinate, and also in the belief that the new matters touched upon
particularly in the amended and supplemental answer would merely delay the
disposition of the main issue raised by the plaintiffs below, i.e., whether or not Miguel
Perez Rubio unlawfully interfered with the plaintiffs' transaction with one Alfonso
Yuchengco, as well as of the issue raised by Miguel Perez Rubio in his counterclaim, i.e.,
whether or not the plaintiffs are liable to him for the balance of P4.25 million.
We do not share the respondent Judge's conclusions. In his original answer
Miguel Perez Rubio prayed for the dismissal of the complaint and for judgment against
the Phillips in the sum of P4.25 million, which admittedly they owe him, plus damages.
On the other hand, the amended and supplemental answer which was sought to be
admitted prays additionally that:
"1. Pending the hearing of this case (that) a restraining order or a writ
of preliminary injunction be issued against the plaintiffs or any of their servants,
agents or persons acting for and in their behalf restraining them from:
a) proceeding with the sale of the shares of stock of Hacienda
Benito, Inc., or of any of its assets to Alfonso Yuchengco or to any person
save in the ordinary sale of subdivision lots; and
b) performing any act which will either diminish the value of
said shares or deplete the assets of said Hacienda;
2. In the alternative, should this injunction not be possible, a writ of
preliminary attachment be issued against the properties of plaintiffs in such value
as will properly guaranty the payment of P4.2 million plus 8% interest thereon
since April 30, 1964 continuing until the final termination of this case;
3. After hearing, judgment be rendered in favor of your defendant —
a) Making the above injunction, if granted, permanent;
xxx xxx xxx

The additional plea was the logical consequence of Miguel Perez Rubio's
allegations in the amended and supplemental answer of relevant facts which occurred
subsequently to the ling of the original answer. To be sure, these additional facts tend
to place in issue the propriety of the judicial foreclosure (Civil Case No. 8766) effected
by the Manufacturers Bank and Trust Co. against the properties of the Hacienda Benito,
Inc. But this fact alone hardly su ces to warrant a nding that the amended and
supplemental answer sought to be admitted alleges a cause of action different from
that originally pleaded.
The rule regarding amendments to the complaint — and mutatis mutandis to the
counterclaim — has been stated by this Court as follows: "(I)n determining whether a
different cause of action is introduced by amendments to the complaint, what is to be
ascertained is whether the defendant shall be required to answer for a liability or legal
obligation wholly different from that which was stated in the original complaint. An
amendment will not be considered as stating a new cause of action if the facts alleged
in the amended complaint (or counterclaim) show substantially the same wrong with
respect to the same transaction, or if what are alleged refer to the same matter but are
more fully and differently stated, or where averments which were implied are made in
expressed terms, and the subject of the controversy or the liability sought to be
enforced remains the same." (Shaffer vs. Palma, L-24115, March 1, 1968; 22 SCRA 934)
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 In the instant case, the extensive recitals regarding certain events which transpired
after the original answer had been led are obviously intended to emphasize the
resulting di culty on the part of Miguel Perez Rubio to collect from the Phillips their
admitted indebtedness. The narration of the steps allegedly taken by the debtors to
make it extremely hard, nay highly improbable, for Miguel Perez Rubio's counterclaim to
be satis ed, does not necessarily mean or imply that a new cause of action has been
pleaded. The counterclaim remains the same, namely: to obtain payment of the
indebtedness of the Phillips. In other words, what is being enforced against the Phillips,
both in the original answer and in the amended and supplemental answer, is the
obligation to pay the Perez Rubios. This amended and supplemental answer should
have been admitted.
Referring this time to the propriety of the third-party complaint, there appears at
rst blush to be some merit in the contention of the respondents (third-party
defendants), since there is no demand from them for contribution, indemnity,
subrogation or any other relief in respect of the plaintiffs' claim, (Rule 6, Sec. 12), which
is to stop Miguel Perez Rubio from interfering with a certain transaction between the
said plaintiffs and a third person. What the third-party complaint seeks is to hold the
third-party defendants directly liable to the third-party plaintiff for damages for alleged
fraudulent acts which would render his counterclaim against the plaintiffs
unrecoverable.
However, Miguel Perez Rubio has been accorded by this Court the right to seek
protection of his credit for the unpaid balance of the price of his shares in Hacienda
which he had sold to the Phillips — which credit has been jeopardized by the acts of the
plaintiffs and the third-party defendants. It would be an exercise in futility to allow
Miguel Perez Rubio's counterclaim against the plaintiffs to remain in the case (No.
8632) for adjudication by the Court and at the same time throw out his third-party
complaint against third persons for acts which would prevent such counterclaim from
being realized because by said acts the plaintiffs' assets are placed beyond the
counter-claimant's reach. It bears repeating that those acts took place after Miguel
Perez Rubio led his petition in this Court in L-24581, and in doing them the parties now
sought to be impleaded as third-party defendants in effect made common cause with
the plaintiffs — "conspired amongst themselves' — as stated by Us in Our decision in
that case. Having thus entered into transactions with respect to things then under
litigation, they have no cause to complain if they are brought in as parties.
We do not believe that it would serve the ends of justice or of a prompt dispatch
of the controversies and issues involved to a rm the orders herein challenged and
cause an entirely new action to be commenced. The main dispute below has been
delayed long enough for reasons that can be attributed to the plaintiffs and the third-
party defendants. The same policy considerations against multiplicity of suits which
prompted this Court in Balbastro, et al. vs. Court of Appeals, et al., L-33255, November
29, 1972, to a rm the admission of the third-party complaint therein involved despite a
nding of its procedural in rmity, likewise obtain in this case. Besides, the bringing in of
the herein private respondents as third-party respondents in the case below is in
accordance with sections 14 and 15, Rule 6 of the Rules of Court, which provide:
"SEC. 14. Bringing new parties. — When the presence of parties other
than those to the original action is required for the granting of complete relief in
the determination of a counterclaim or cross-claim, the court shall order them to
be brought in as defendants, if jurisdiction over them can be obtained.

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 SEC. 15. Liberal construction. — All pleadings shall be liberally
construed so as to do substantial justice."

With respect to the argument that to admit the third-party complaint would
amount to an invasion of the jurisdiction of a co-equal branch of the court in the
mortgage foreclosure case (Civil Case No. 8766) su ce it to point out that the so-
called decision therein was nothing but to approve a memorandum-agreement (dated
June 5, 1965) between the Phillips and the MBTC whereby the former transferred to the
latter certain properties as payment for the indebtedness of the Phillips and their
a liate companies. There was no contentious litigation; what the court did was simply
to declare that the mortgage debt had been satis ed by means of sale or cession of
properties, without ruling on any adversary claims of the parties. It cannot be
considered a judgment which is beyond question, even in another court. Otherwise, it
might be putting a premium on legal stratagem and subterfuge.
WHEREFORE, the orders complained of are set aside and respondent Judge or
whosoever is assigned to try the case below is instructed to admit the amended and
supplemental answer and third-party complaint led by Miguel Perez Rubio. Thereafter,
these cases shall proceed accordingly. The restraining order hereinbefore issued by
this Court is hereby lifted insofar as it restrains respondent Judge from proceeding
with the hearing of Civil Case No. 8632 of the Court of First Instance of Rizal, Branch X
(Pasig, Rizal), and maintained insofar as it restrains (the other respondents) "from
proceeding with the transfer of the shares and/or of the assets of Hacienda Benito, Inc.
to each other or to any other person, except in the ordinary course of selling subdivision
lots," without prejudice to the judgment that may be rendered by the court a quo in the
case. Costs against the respondents.
Zaldivar, Castro, Teehankee, Barredo, Makasiar, Antonio and Esguerra, JJ .,
concur.
Concepcion, C .J ., took no part.
Fernando, J ., did not take part.

Footnotes

1. These matters, as culled from the supplemental petitions filed by Miguel Perez Rubio,
were stated by this Court in this wise, to wit: "It is clear from the facts alleged in the
second amended supplemental petition that the burden of petitioner's case — aside from
the annulment of the writ of preliminary injunction issued by the respondent judge . . . —
is that all the material events that transpired after the filing of his original petition show
that the Bank, Robert O. Phillips and Sons, Inc., the Phillips spouses and VVDC,
conspired amongst themselves to put the properties of Hacienda and the assets of the
latter's guarantors — the Phillips spouses — beyond his reach and thus make it
impossible for him to collect the sum of P4,250,000.00 still unpaid on the purchase price
of his shares in Hacienda sold to the Phillips corporation; that they sought to accomplish
this by having the Bank foreclose the mortgage constituted on the properties of
Hacienda and acquire them at the foreclosure sale; that, in fact Hacienda, through Robert
O. Phillips, has already conveyed its properties to said Bank; that after acquiring them,
the Bank would transfer them all to the hurriedly organized VVDC, who would then
become their owner and from whom it would be at least difficult to enforce the vendor's
lien thereon claimed by petitioner."

2. The first supplemental petition simply included the Manufacturers Bank and Trust
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 Company and the Victoria Valley Development Corporation as additional respondents.
But even before the first supplemental petition could be formally acted upon, Miguel
Perez Rubio filed an amended supplemental petition — which was latter admitted by this
Court — intended to correct minor errors in his previous pleading. Still subsequently,
Miguel Perez Rubio filed a second amended supplemental petition to implead Hacienda
Benito, Inc. as additional party respondent with a specific plea that pending the issuance
of a writ of preliminary injunction prayed for, the Hacienda Benito, Inc. be restrained from
disposing of its properties or assets in any way save in the ordinary course of its
business of selling lots in subdivision.

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