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PLEADINGS  
(SUBSTANTIAL  REQUIREMENTS)  
 
PLEADINGS,  IN  GENERAL  
 
Defined  
 
  Pleadings  are  the  written  statements  of  the  respective  claims  and  defenses  of  the  parties  
submitted  to  the  court  for  appropriate  judgments.  (Section  1,  Rule  6)  Thus,  pleadings  cannot  be  
oral  because  they  are  clearly  described  as  “written”  statements.  (Riano,  p.51).  
 
  Pleadings  have  the  following  purposes:    
(a) To  apprise  the  Court  of  the  rival  claims  in  a  judicial  controversy  submitted  for  trial  and  
decision;  
(b) To  indicate  fairly  the  nature  of  the  claims  and  defense  of  both  parties;  and  
(c) To  present,  define  and  narrow  the  issues,  to  limit  the  proof  to  be  submitted  in  the  trial  
and  form  the  foundation  of  proof  to  be  submitted  during  trial  as  well  as  advice  a  party  to  what  
his  adversary  would  rely  on  as  a  cause  of  actions  or  as  defense.  (Lianga  Lumber  v.  Lianga  Timber,  
G.R.  No.  386685,  31  March  1977).  
 
Distinguished  from  motion  (Rule  15,  Sec.  1)  
 
  A  pleading  is  different  from  a  motion.  Section  1,  Rule  15,  of  the  Rules  of  Court  expressly  
states  that  a  motion  is  an  application  for  relief  other  than  by  a  pleading.  
 
Pleading   Motion  
Purpose:   To   submit   a   claim   or   defense   for   Purpose:  To  apply  for  an  order  not  included  in  
appropriate  judgment.   the  judgment.  
It  may  be  initiatory   It  cannot  be  initiatory  as  they  are  always  made  
in  a  case  already  filed  in  court.  
It  is  always  filed  before  judgment.   It  may  be  filed  even  after  judgment.  
There   are   only   nine   (9)   kinds   of   pleadings   Any  application  for  relief  not  by  a  pleading  is  
allowed  by  the  Rules  of  Court.   a  motion.  
It  must  be  written.   It  may  be  oral  when  made  in  open  court  or  in  
the  course  of  a  hearing  or  trial.  
 
 
Pleadings  allowed  under  the  Rules  of  Court  
 
(a) Complaint  
 
The  complaint  is  the  pleading  alleging  the  plaintiff'ʹs  cause  or  causes  of  action.  The  names  and  
residences  of  the  plaintiff  and  defendant  must  be  stated  in  the  complaint.  
 
(b) Counterclaim  
 
A  counterclaim  is  any  claim  which  a  defending  party  may  have  against  an  opposing  party.  
 
A   compulsory   counterclaim   is   one   which,   being   cognizable   by   the   regular   courts   of   justice,  
arises  out  of  or  is  connected  with  the  transaction  or  occurrence  constituting  the  subject  matter  of  
the  opposing  party'ʹs  claim  and  does  not  require  for  its  adjudication  the  presence  of  third  parties  
of   whom   the   court   cannot   acquire   jurisdiction.   Such   a   counterclaim   must   be   within   the  
jurisdiction  of  the  court  both  as  to  the  amount  and  the  nature  thereof,  except  that  in  an  original  
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action   before   the   Regional   Trial   Court,   the   counter-­‐‑claim   may   be   considered   compulsory  
regardless  of  the  amount.  
 
(c) Cross-­‐‑claim  
 
A   cross-­‐‑claim   is   any   claim   by   one   party   against   a   co-­‐‑party   arising   out   of   the   transaction   or  
occurrence   that   is   the   subject   matter   either   of   the   original   action   or   of   a   counterclaim   therein.  
Such   cross-­‐‑claim   may   include   a   claim   that   the   party   against   whom   it   is   asserted   is   or   may   be  
liable   to   the   cross-­‐‑claimant   for   all   or   part   of   a   claim   asserted   in   the   action   against   the   cross-­‐‑
claimant.  
 
(d) Third  (fourth,  etc.)-­‐‑party  complaint  
 
A   third   (fourth,   etc.)   —   party   complaint   is   a   claim   that   a   defending   party   may,   with   leave   of  
court,   file   against   a   person   not   a   party   to   the   action,   called   the   third   (fourth,   etc.)   —   party  
defendant   for   contribution,   indemnity,   subrogation   or   any   other   relief,   in   respect   of   his  
opponent'ʹs  claim.  
 
(e) Complaint-­‐‑in-­‐‑intervention  
 
One  filed  by  an  intervenor  asserting  a  claim  against  either  or  all  of  the  original  parties.  (Section  
3,  Rule  19).  
 
(f) Answer  
 
An  answer  is  a  pleading  in  which  a  defending  party  sets  forth  his  defenses.  
 
Parts  of  a  pleading:  
 
Ordinarily,  a  pleading  has  the  following  parts:  
 
1. Caption.    It  sets  forth  the  name  of  the  court,  the  title  of  the  action,  and  the  docket  number  
if  assigned.  The  title  of  the  action  indicates  the  names  of  the  parties.  They  shall  all  be  named  in  
the  original  complaint  or  petition;  but  in  subsequent  pleadings,  it  shall  be  sufficient  if  the  name  
of   the   first   party   on   each   side   be   stated   with   an   appropriate   indication   when   there   are   other  
parties.  Their  respective  participation  in  the  case  shall  be  indicated.  
 
2. The   body.   The   body   of   the   pleading   sets   forth   its   designation,   the   allegations   of   the  
party'ʹs  claims  or  defenses,  the  relief  prayed  for,  and  the  date  of  the  pleading.  
 
(a) Paragraphs.  —  The  allegations  in  the  body  of  a  pleading  shall  be  divided  into  paragraphs  
so  numbered  to  be  readily  identified,  each  of  which  shall  contain  a  statement  of  a  single  set  of  
circumstances  so  far  as  that  can  be  done  with  convenience.  A  paragraph  may  be  referred  to  by  
its  number  in  all  succeeding  pleadings.    
 
(b) Headings.  —  When  two  or  more  causes  of  action  are  joined  the  statement  of  the  first  shall  
be  prefaced  by  the  words  "ʺfirst  cause  of  action,'ʹ'ʹ  of  the  second  by  "ʺsecond  cause  of  action"ʺ,  and  
so  on  for  the  others.  
 
When  one  or  more  paragraphs  in  the  answer  are  addressed  to  one  of  several  causes  of  action  in  
the   complaint,   they   shall   be   prefaced   by   the   words   "ʺanswer   to   the   first   cause   of   action"ʺ   or  
"ʺanswer   to   the   second   cause   of   action"ʺ   and   so   on;   and   when   one   or   more   paragraphs   of   the  
answer  are  addressed  to  several  causes  of  action,  they  shall  be  prefaced  by  words  to  that  effect.    
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(c) Relief.  —  The  pleading  shall  specify  the  relief  sought,  but  it  may  add  a  general  prayer  for  
such  further  or  other  relief  as  may  be  deemed  just  or  equitable.    
 
(d) Date.  —  Every  pleading  shall  be  dated.  
 
3. Signature   and   address.   Every   pleading   must   be   signed   by   the   party   or   counsel  
representing  him,  stating  in  either  case  his  address  which  should  not  be  a  post  office  box.  
 
The   signature   of   counsel   constitutes   a   certificate   by   him   that   he   has   read   the   pleading;   that   to  
the  best  of  his  knowledge,  information,  and  belief  there  is  good  ground  to  support  it;  and  that  it  
is  not  interposed  for  delay.  
 
An  unsigned  pleading  produces  no  legal  effect.  However,  the  court  may,  in  its  discretion,  allow  
such   deficiency   to   be   remedied   if   it   shall   appear   that   the   same   was   due   to   mere   inadvertence  
and  not  intended  for  delay.    
 
Counsel   who   deliberately   files   an   unsigned   pleading,   or   signs   a   pleading   in   violation   of   this  
Rule,   or   alleges   scandalous   or   indecent   matter   therein,   or   fails   promptly   report   to   the   court   a  
change  of  his  address,  shall  be  subject  to  appropriate  disciplinary  action.    
 
4. Verification.  Except  when  otherwise  specifically  required  by  law  or  rule,  pleadings  need  
not  be  under  oath,  verified  or  accompanied  by  affidavit.    
 
How  a  pleading  is  verified  
 
A   pleading   is   verified   by   an   affidavit   that   the   affiant   has   read   the   pleading   and   that   the  
allegations  therein  are  true  and  correct  of  his  knowledge  and  belief.  
 
A   pleading   required   to   be   verified   which   contains   a   verification   based   on   "ʺinformation   and  
belief"ʺ,   or   upon   "ʺknowledge,   information   and   belief"ʺ,   or   lacks   a   proper   verification,   shall   be  
treated  as  an  unsigned  pleading.    
 
Purpose  of  verification:  
 
The   purpose   of   requiring   verification   is   to   secure   an   assurance   that   the   allegations   in   the  
petition   are   true   and   correct,   not   merely   speculative.   This   requirement   is   simply   a   condition  
affecting   the   form   of   pleadings,   and   noncompliance   therewith   does   not  necessarily   render   the  
pleading  fatally  defective.  (Torres-­‐‑Gomez  v.  Codilla,  G.R.  No.  195191.  20  March  2012.)  
 
5. Certification  against  forum  shopping.  
 
The   plaintiff   or   principal   party   shall   certify   under   oath   in   the   complaint   or   other   initiatory  
pleading   asserting   a   claim   for   relief,   or   in   a   sworn   certification   annexed   thereto   and  
simultaneously   filed   therewith:   (a)   that   he   has   not   theretofore   commenced   any   action   or   filed  
any  claim  involving  the  same  issues  in  any  court,  tribunal  or  quasi-­‐‑judicial  agency  and,  to  the  
best  of  his  knowledge,  no  such  other  action  or  claim  is  pending  therein;  (b)  if  there  is  such  other  
pending  action  or  claim,  a  complete  statement  of  the  present  status  thereof;  and  (c)  if  he  should  
thereafter   learn   that   the   same   or   similar   action   or   claim   has   been   filed   or   is   pending,   he   shall  
report   that   fact   within   five   (5)   days   therefrom   to   the   court   wherein   his   aforesaid   complaint   or  
initiatory  pleading  has  been  filed.  
 
 
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Effect  of  failure  to  comply:  
 
Failure  to  comply  with  the  foregoing  requirements  shall  not  be  curable  by  mere  amendment  of  
the   complaint   or   other   initiatory   pleading   but   shall   be   cause   for   the   dismissal   of   the   case  
without  prejudice,  unless  otherwise  provided,  upon  motion  and  after  hearing.    
The  submission  of  a  false  certification  or  non-­‐‑compliance  with  any  of  the  undertakings  therein  
shall   constitute   indirect   contempt   of   court,   without   prejudice   to   the   corresponding  
administrative   and   criminal   actions.   If   the   acts   of   the   party   or   his   counsel   clearly   constitute  
willful   and   deliberate   forum   shopping,   the   same   shall   be   ground   for   summary   dismissal   with  
prejudice  and  shall  constitute  direct  contempt,  as  well  as  a  cause  for  administrative  sanctions.  
 
What  is  forum  shopping?  
There   is   forum   shopping   "ʺwhen   a   party   repetitively   avails   of   several   judicial   remedies   in  
different   courts,   simultaneously   or   successively,   all   substantially   founded   on   the   same  
transactions   and   the   same   essential   facts   and   circumstances,   and   all   raising   substantially   the  
same   issues   either   pending   in   or   already   resolved   adversely   by   some   other   court."ʺ  Forum  
shopping   is   an   act   of   malpractice   that   is   prohibited   and   condemned   because   it   trifles   with   the  
courts   and   abuses   their   processes.   It   degrades   the   administration   of   justice   and   adds   to   the  
already   congested   court   dockets.   (Heirs   of   Marcelo   Sotto   v.   Palicte,   G.R.   No.   159691,   17   February  
2014.)  
An   important   factor   in   determining   its   existence   is   the   vexation   caused   to   the   courts   and   the  
parties-­‐‑litigants  by  the  filing  of  similar  cases  to  claim  substantially  the  same  reliefs.  (Id.)  
The  test  to  determine  the  existence  of  forum  shopping  is  whether  the  elements  of  litis  pendentia  
are  present,  or  whether  a  final  judgment  in  one  case  amounts  to  res  judicata  in  the  other.  Thus,  
there   is   forum   shopping   when   the   following   elements   are   present,   namely:   (a)   identity   of  
parties,   or   at   least   such   parties   as   represent   the   same   interests   in   both   actions;   (b)   identity   of  
rights   asserted   and   reliefs   prayed   for,   the   relief   being   founded   on   the   same   facts;   and   (c)   the  
identity  of  the  two  preceding  particulars,  such  that  any  judgment  rendered  in  the  other  action  
will,   regardless   of   which   party   is   successful,   amounts   to   res   judicata   in   the   action   under  
consideration.  (Id.)  
 
 
How  allegations  made  
 
In  general  (Rule  8,  Sec.  1)  
 
Every   pleading   shall   contain   in   a   methodical   and   logical   form,   a   plain,   concise   and   direct  
statement   of   the   ultimate   facts   on   which   the   party   pleading   relies   for   his   claim   or   defense,   as  
the  case  may  be,  omitting  the  statement  of  mere  evidentiary  facts.    
 
If  a  defense  relied  on  is  based  on  law,  the  pertinent  provisions  thereof  and  their  applicability  to  
him  shall  be  clearly  and  concisely  stated.  
 
"ʺUltimate  facts"ʺ  means  the  essential  facts  constituting  the  plaintiff'ʹs  cause  of  action,  or  such  facts  
as  are  so  essential  that  they  cannot  be  stricken  out  without  leaving  the  statement  of  the  cause  of  
action  inadequate.  (Cañete,  et  al.  v.  Genuino  Ice  Company,  Inc.,  G.R.  No.  154080,  22  January  2008).  
 
Evidentiary  facts  –  refer  to  those  which  are  necessary  to  prove  the  ultimate  fact  or  which  furnish  
evidence  of  the  existence  of  some  other  facts.  
 
 
 
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Capacity  (Rule  8,  Sec.  4)  
 
Facts  showing  the  capacity  of  a  party  to  sue  or  be  sued  or  the  authority  of  a  party  to  sue  or  be  
sued   in   a   representative   capacity   or   the   legal   existence   of   an   organized   association   of   person  
that  is  made  a  party,  must  be  averred.    
 
A   party   desiring   to   raise   an   issue   as   to   the   legal   existence   of   any   party   or   the   capacity   of   any  
party  to  sue  or  be  sued  in  a  representative  capacity,  shall  do  so  by  specific  denial,  which  shall  
include  such  supporting  particulars  as  are  peculiarly  within  the  pleader'ʹs  knowledge.  
 
Alternative  claims  and  defenses  (Rule  8,  Sec.  2)  
 
A   party   may   set   forth   two   or   more   statements   of   a   claim   or   defense   alternatively   or  
hypothetically,   either   in   one   cause   of   action   or   defense   or   in   separate   causes   of   action   or  
defenses.    
 
When   two   or   more   statements   are   made   in   the   alternative   and   one   of   them   if   made  
independently  would  be  sufficient,  the  pleading  is  not  made  insufficient  by  the  insufficiency  of  
one  or  more  of  the  alternative  statements.  
 
Conditions  precedent  (Rule  8,  Sec.  3)  
 
In  any  pleading  a  general  averment  of  the  performance  or  occurrence  of  all  conditions  precedent  
shall  be  sufficient.  
 
Fraud  and  mistake,  condition  of  mind  (Rule  8,  Sec.  5)  
 
In   all   averments   of   fraud   or   mistake   the   circumstances   constituting   fraud   or   mistake   must   be  
stated  with  particularity.  Malice,  intent,  knowledge,  or  other  condition  of  the  mind  of  a  person  
may  be  averred  generally.  
 
Judgments  (Rule  8,  Sec.  6)  
 
In   pleading   a   judgment   or   decision   of   a   domestic   or   foreign   court,   judicial   or   quasi-­‐‑judicial  
tribunal,  or  of  a  board  or  officer,  it  is  sufficient  to  aver  the  judgment  or  decision  without  setting  
forth  matter  showing  jurisdiction  to  render  it.  
 
Official  documents  (Rule  8,  Sec.  9)  
 
In   pleading   an   official   document   or   official   act,   it   is   sufficient   to   aver   that   the   document   was  
issued  or  the  act  done  in  compliance  with  law.  
 
Need  to  bring  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.  
 
 
COMPLAINT  
 
Complaint   is   the   pleading   alleging   the   plaintiff’s   cause   or   causes   of   action,   stating   therein   the  
names  and  residences  of  the  plaintiff  and  defendant  (Sec.  3,  Rule  6).  
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Allegations  
Every   pleading   shall   contain   in   a   mathematical   and   logical   form,   a   plain,   concise   and   direct  
statement  of  the  ultimate  facts  on  which  the  party  relies  for  his  claim  and  defense,  as  the  case  
may  be,  containing  the  statement  of  mere  evidenciary  facts  (Sec.  1,  Rule  8)  
 
 
Manner  of  making  allegations  in  a  Complaint  
 
1. Conditions   precedent   are   matters   which   must   be   complied   with   before   a   cause   of   action  
arises.  When  a  claim  is  subject  to  a  condition  precedent,  the  compliance  of  the  same  must  be  
alleged  in  the  pleading.  
2. Failure   to   comply   with   a   condition   precedent   is   an   independent   ground   for   a   motion   to  
dismiss:  that  a  condition  precedent  for  filing  the  claim  has  not  been  complied  (Sec.  1[j],  Rule  
16).  
 
3. When  making  averments  of  fraud  or  mistake,  the  circumstances  constituting  such  fraud  or  
mistake  must  be  stated  with  particularity  (Sec.  5,  Rule  8).  It  is  not  enough  therefore,  for  the  
complaint   to   allege   that   he   was   defrauded   by   the   defendant.   Under   this   provision,   the  
complaint   must   state   with   particularity   the   fraudulent   acts   of   the   adverse   party.   These  
particulars   would   necessarily   include   the   time,   place   and   specific   acts   of   fraud   committed  
against  him.  
 
4. Malice,   intent,   knowledge   or   other   conditions   of   the   mind   of   a   person   may   be   averred  
generally(Sec.   5,   Rule   8).   Unlike   in   fraud   or   mistake,   they   need   not   be   stated   with  
particularity.  The  rule  is  borne  out  of  human  experience.  It  is  difficult  to  state  the  particulars  
constituting  these  matters.  Hence,  a  general  averment  is  sufficient.  
 
5. Facts  showing  the  capacity  of  a  party  to  sue  or  be  sued  or  the  authority  of  a  party  to  sue  or  
be   sued   in   a   representative   capacity   or   the   legal   existence   of   an   organized   association   of  
person   that   is   made   a   party,   must   be   averred.   A   party   desiring   to   raise   an   issue   as   to   the  
legal  existence  of  any  party  or  the  capacity  of  any  party  to  sue  or  be  sued  in  a  representative  
capacity,   shall   do   so   by   specific   denial,   which   shall   include   such   supporting   particulars   as  
are  peculiarly  within  the  pleader'ʹs  knowledge.  (Sec.  4,  Rule  8)  
 
Reyes  v.  Makati  RTC  
G.R.  No.  165744,  11  August  2008  
 
Facts:  
Petitioner  Oscar  and  private  respondent  Rodrigo  C.  Reyes  (Rodrigo)  are  two  of  the  four  
children  of  the  spouses  Pedro  and  Anastacia  Reyes.  Pedro,  Anastacia,  Oscar,  and  Rodrigo  each  
owned   shares   of   stock   of   Zenith   Insurance   Corporation   (Zenith),   a   domestic   corporation  
established   by   their   family.   Pedro   died   in   1964,   while   Anastacia   died   in   1993.   The   former   had  
his   estate   judicially   partitioned   among   his   heirs,   but   the   latter   had   not   made   the   same   in   her  
shareholding  in  Zenith.  Zenith  and  Rodrigo  filed  a  complaint  with  the  Securities  and  Exchange  
Commission   (SEC)   against   Oscar   to   obtain   accounting   of   funds   and   assets   of   Zenith,   and   to  
determine   the   shares   of   stock   of   deceased   Pedro   and   Anastacia   that   were   arbitrarily   and  
fraudulently   appropriated.   In   his   answer   with   counterclaim,   Oscar   denied   the   illegality   of   the  
acquisition   of   shares   of   Anastacia   and   questioned   the   jurisdiction   of   SEC   to   entertain   the  
complaint  because  it  pertains  to  settlement  of  Anastacia’s  estate.  The  case  was  then  transferred  
to  Makati  Regional  Trial  Court.  Oscar  then  filed  a  “Motion  to  Declare  Complaint  as  Nuisance  or  
Harassment   Suit”   and   prayed   that   the   same   must   be   dismissed.   The   RTC   denied   the   motion.  
 7  
 
The  motion  was  elevated  to  the  Court  of  Appeals  by  way  of  petition  for  certiorari,  prohibition  
and  mandamus,  but  was  again  denied.  
Issue:  
Whether  or  not  the  complaint  is  a  mere  nuisance  or  harassment  suit.  
 
Held:  
The   rule   is   that   a   complaint   must   contain   a   plain,   concise,   and   direct   statement   of   the  
ultimate   facts   constituting   the   plaintiff’s   cause   of   action   and   must   specify   the   relief   sought.    
Section   5,   Rule   8   of   the   Revised   Rules   of   Court   provides   that   in   all   averments   of   fraud   or  
mistake,   the   circumstances   constituting   fraud   or   mistake   must   be   stated   with   particularity.    
These  rules  find  specific  application  to  Section  5(a)  of  P.D.  No.  902-­‐‑A  which  speaks  of  corporate  
devices  or  schemes  that  amount  to  fraud  or  misrepresentation  detrimental  to  the  public  and/or  
to  the  stockholders.  
 
Allegations   of   deceit,   machination,   false   pretenses,   misrepresentation,   and   threats   are  
largely   conclusions   of   law   that,   without   supporting   statements   of   the   facts   to   which   the  
allegations   of   fraud   refer,   do   not   sufficiently   state   an   effective   cause   of   action.   Fraud   and  
mistake   are   required   to   be   averred   with   particularity   in   order   to   enable   the   opposing   party   to  
controvert  the  particular  facts  allegedly  constituting  such  fraud  or  mistake.  Tested  against  these  
standards,  charges  of  fraud  against  Oscar  were  not  properly  supported  by  the  required  factual  
allegations.    While  the  complaint  contained  allegations  of  fraud  purportedly  committed  by  him,  
these   allegations   are   not   particular   enough   to   bring   the   controversy   within   the   special  
commercial   court’s   jurisdiction;   they   are   not   statements   of   ultimate   facts,   but   are   mere  
conclusions   of   law:   how   and   why   the   alleged   appropriation   of   shares   can   be   characterized   as  
“illegal  and  fraudulent”  were  not  explained  nor  elaborated  on.  The  case  must  be  dismissed.  
 
 
Actions  based  upon  a  document  
 
An  actionable  document  is  a  document  relied  upon  by  either  the  plaintiff  or  the  defendant.  
 
Whenever   an   actionable   document   is   the   basis   of   a   pleading,   the   rule   specifically   direct   the  
pleader  to  set  forth  in  the  pleading  the  substance  of  the  instrument  or  the  document  and:  (a)  to  
attach  the  original  or  the  copy  of  the  document  to  the  pleading  as  an  exhibit  and  to  be  part  of  
the  pleading;  or  (b)  with  like  effect,  to  set  forth  in  the  pleading  said  copy  of  the  instrument  or  
document  (Sec.  7,  Rule  8).  This  manner  of  pleading  a  document  applies  only  to  one  which  is  the  
basis  of  action  or  a  defense.  Hence,  if  the  document  does  not  have  the  character  of  an  actionable  
document,   as   when   it   is   merely   evidentiary,   it   need   not   be   pleaded   strictly   in   the   manner  
prescribed  by  Sec.  7,  Rule  8.  
 
 
ANSWER  
 
Defined;  in  general  
 
An  answer  is  a  responsive  pleading  in  which  a  defending  party  sets  forth  his  defenses.  (Rule  6,  
Sec.4)  
 
Types  of  Defenses  
 
1. Negative  
 8  
 
a. A  negative  defense  is  the  specific  denial  of  the  material  fact  or  facts  alleged  in  
the  pleading  of  the  claimant  essential  to  his  cause  or  causes  of  action.  [Rule  6,  Section  
5(a)]  
 
b. How  alleged,  generally  (Section  10,  Rule  8)  
 
A  negative  defense  is  stated  in  the  form  of  a  specific  denial,  which  may  be  a/an:  
 
(1) Absolute  denial  
There  is  absolute  denial  when  the  defendant  specifies  each  material  allegation  of  fact  the  
truth  of  which  he  does  not  admit  and  whenever  practicable,  shall  set  forth  the  substance  
of  the  matters  upon  which  he  relies  to  support  his  denial.  
 
(2) Partial  denial  
There  is  partial  denial  when  the  defendant  denies  only  a  part  of  the  averment,  as  when  
he  specifies  so  much  of  it  as  is  true  and  material  and  denies  the  remainder.  
 
(3) Denial  by  disavowal  of  knowledge  
There  is  denial  by  disavowal  of  knowledge  when  the  defendant  alleges  having  no  
knowledge  or  information  sufficient  to  form  a  belief  as  to  the  truth  of  the  material  
averment  made  in  the  complaint.  Such  denial  must  be  made  in  good  faith.  
 
• Note:  When  the  defendant  alleges  having  no  knowledge  or  information  sufficient  
to  form  a  belief  as  to  the  truth  of  the  allegations  of  the  other  party  but  such  matters  are  
plainly  and  necessarily  within  the  defendant’s  knowledge,  a  claim  of  “ignorance  or  lack  
of  information”  will  not  be  considered  as  a  specific  denial.  (Aquintey  v.  Tibong,  G.R.  No.  
166704,  20  December  2006)  
 
c. Capacity  of  parties  (Sec.4,  Rule  8)  
A  party  desiring  to  raise  an  issue  as  to  the  legal  existence  of  any  party  or  the  capacity  of  
any  party  to  sue  or  be  sued  in  a  representative  capacity,  shall  do  so  by  specific  denial,  
which  shall  include  such  supporting  particulars  as  are  peculiarly  within  the  pleader’s  
knowledge.  
 
d. Genuineness  of  documents  (Sec.  8,  Rule  8)  
Rule:   When   an   action   or   defense   is   founded   upon   a   written   instrument,   copied   in   or  
attached   to   the   corresponding   pleading   as   provided   in   the   preceding   Section,   the  
genuineness  and  due  execution  of  the  instrument  shall  be  deemed  admitted  unless  the  
adverse   party,   under   oath,   specifically   denies   them,   and   sets   forth   what   he   claims   to   be  
the  facts.  
 
Exceptions:  The  requirement  of  an  oath  does  not  apply  when:  
(a) the  adverse  party  does  not  appear  to  be  a  party  to  the  instrument;  or  
(b) when   compliance   with   an   order   for   an   inspection   of   the   original   instrument   is  
refused.  
 
Memita  v.  Masongsong  
G.R.  No.  150912,  28  May  2007  
 
Facts:  
Masongsong,  under  the  business  name  of  RM  Integrated  Services,  was  the  distributor  of  
San   Miguel   Foods,   Inc.’s   Magnolia   chicken   products.  Masongsong   supplied   Magnolia   chicken  
products   on   a   25-­‐‑day   payment   credit   to   Memitas   Vicor   Store   (“Memitas”)   in   Burgos   Public  
 9  
 
Market,  Bacolod  City.   Masongsong   filed   a   complaint   for   collection   of   sum   of   money   against  
Memitas  for  its  alleged  non-­‐‑payment  of  purchased  goods  from  the  former.  In  his  answer,  while  
Memitas   did   not   deny   that   he   purchased   goods   on   credit   from   Masongsong,   he   claimed,  
however,   that   there   were   questionable   deliveries,   short   deliveries   and   discrepancies,   and  
possible   manipulation   of   delivery   receipts,   hence   his   refusal   to   pay.   The   trial   court   ruled   in  
favor  of  Masongsong,  and  was  upheld  by  the  Court  of  Appeals.  Memitas  assail,  among  others,  
the  admissibility  of  the  sales  invoices  presented  by  Masongsong.  
 
Held:  
Ruling:   Memita,   in   alleging   questionable   and   short   deliveries,   in   effect   alleges   that  
Masongsong   committed   fraud.  As   the   party   invoking   fraud,   Memita   has   the   burden   of  
proof.  Whoever  alleges  fraud  or  mistake  affecting  a  transaction  must  substantiate  his  allegation,  
since  it  is  presumed  that  a  person  takes  ordinary  care  of  his  concerns  and  private  concerns  have  
been  fair  and  regular.  
   
The   best   evidence   of   the   transaction   between   Memita   and   Masongsong   are   the   sales  
invoices.  The   sales   invoices   show   that   Memita   or   his   representative   acknowledged   receipt   of  
Masongsongs  deliveries  without  protest.  Memita  aired  his  doubts  about  the  amounts  only  after  
Masongsong  asked  him  to  pay  his  credit.  Moreover,  although  Memita  confronted  Masongsong  
with  a  check  dated  1  July  1996  in  the  amount  of  P127,238.40  payable  to  RM  Integrated  Services,  
Masongsong  stated  that  the  said  amount  did  not  include  any  transaction  in  the  present  case.  
   
Memitas’   evidence   reveal   that   Memita   failed   to   prove   fraud   on   Masongsong’s  
part.  Therefore,  the  trial  court  is  correct  in  stating  that  Memitas  is  liable  to  Masongsong  in  the  
amount   of  P603,520.50   plus   interest   of   12%   per   annum   as   agreed   upon   by   the   parties   and   as  
stated  in  the  sales  invoices.    
 
e. Negative  pregnant  
A   negative   pregnant   is   a   denial   pregnant   with   an   admission   of   the   substantial   facts   in   the  
pleading  responded  to.  It  is  not  a  specific  denial  and  is  actually  an  admission.  This  arises  when  
the   pleader   merely   repeats   the   allegations   in   a   negative   form.   (Regalado,   Remedial   Law  
Compendium  (2000),  p.177)  
 
 
Philippine  American  General  Insurance  Co.  v.  Sweet  Lines  
G.R.  No.  87434,  5  August  1992  
 
Facts:  
A   total   of   7,000   bags   of   low   density   polyethylene   (600   bags   of   polyethylene   641   and  
6,400   bags   of   polyethylene   647)   were   shipped   from   Baton   Rouge,   LA   to   Manila   on   board   SS  
Vishva   Yash,   a   vessel   belonging   to   the   Shipping   Corporation   of   India   (SCI).   From   Manila,   the  
cargoes  were  shipped  to  Davao  on  board  MV  Sweet  Love,  a  vessel  owned  by  Sweet  Lines.  The  
consignee   was   Far   East   Bank   with   arrival   notice   to   Tagum   Plastics,   Inc.   (“Tagum   Plastics”),  
Tagum,  Davao  City.  The  cargoes  were  insured  by  Far  East  Bank  with  the  Philippine  American  
General   Insurance   Co   (“Philamgen”).   After   the   shipments   were   discharged,   it   was   discovered  
that   there   were   damages,   losses   and   shortages   on   the   cargo   covered   by   the   bills   of   lading.  
Philamgen  and  Tagum  Plastics  commenced  a  suit  against  Sweet  Lines  Inc.(SLI),  Davao  Arrastre,  
SCI   Line   and   FE   Zuellig   to   recover   the   cost   of   damaged   shipment.   Philamgen   argued,   among  
others,  that  SLI  failed  to  adduce  any  evidence  in  support  of  its  defense  of  prescription  and  that  
the   bills   of   lading   said   to   contain   the   shortened   periods   for   filing   and   for   instituting   an   action  
against  the  carrier  were  never  offered  in  evidence.  
 
 10  
 
Held:  As  petitioners  are  suing  upon  SLI'ʹs  contractual  obligation  under  the  contract  of  carriage  
as   contained   in   the   bills   of   lading,   such   bills   of   lading   can   be   categorized   as   actionable  
documents   which   under   the   Rules   must   be   properly   pleaded   either   as   causes   of   action   or  
defenses,  and   the   genuineness   and   due   execution   of   which   are   deemed   admitted   unless  
specifically   denied   under   oath   by   the   adverse   party.  The   rules   on   actionable   documents   cover  
and  apply  to  both  a  cause  of  action  or  defense  based  on  said  documents.  Petitioners'ʹ  failure  to  
specifically   deny   the   existence,   much   less   the   genuineness   and   due   execution,   of   the  
instruments  in  question  amounts  to  an  admission.  Judicial  admissions,  verbal  or  written,  made  
by  the  parties  in  the  pleadings  or  in  the  course  of  the  trial  or  other  proceedings  in  the  same  case  
are   conclusive,   no   evidence   being   required   to   prove   the   same,   and   cannot   be   contradicted  
unless   shown   to   have   been   made   through   palpable   mistake   or   that   no   such   admission   was  
made.  Moreover,   when   the   due   execution   and   genuineness   of   an   instrument   are   deemed  
admitted   because   of   the   adverse   party'ʹs   failure   to   make   a   specific   verified   denial   thereof,   the  
instrument   need   not   be   presented   formally   in   evidence   for   it   may   be   considered   an   admitted  
fact.    
 
Even  granting  that  petitioners'ʹ  averment  in  their  reply  amounts  to  a  denial,  it  has  the  
procedural   earmarks   of   what   in   the   law   on   pleadings   is   called   a   negative   pregnant,   that   is,   a  
denial  pregnant  with  the  admission  of  the  substantial  facts  in  the  pleading  responded  to  which  
are  not  squarely  denied.  It  is  in  effect  an  admission  of  the  averment  it  is  directed  to.  Thus,  while  
petitioners   objected   to   the   validity   of   such   agreement   for   being   contrary   to   public   policy,   the  
existence   of   the   bills   of   lading   and   said   stipulations   were   nevertheless   impliedly   admitted   by  
them.  
 
2. Affirmative  
An   affirmative   defense   is   an   allegation   of   a   new   matter   which,   while   hypothetically  
admitting   the   material   allegations   in   the   pleading   of   the   claimant,   would   nevertheless  
prevent  or  bar  recovery  by  him.  
 
Affirmative   defenses   include   (1)   fraud,   (2)   prescription,   (3)   release,   (4)   payment,   (5)  
illegality,   (6)   statute   of   frauds,   (7)   estoppel,   (8)   former   recovery,   (9)   discharge   in  
bankruptcy,  and  (10)  any  other  matter  by  way  of  confession  and  avoidance.  
 
 
Implied  Admissions  
 
• Material  averment  in  the  complaint,  other  than  those  as  to  the  amount  of  unliquidated  
damages,  shall  be  deemed  admitted  when  not  specifically  denied.  (Sec.11,  Rule  8)  
Ø Admissions  may  be  withdrawn  by  amendments.  The  original  pleadings  are  superseded  
by  the  amended  pleading  (Insular  Veneer,  Inc.  v.  Plan,  G.R.  No.  L-­‐‑40155,  10  September  1976)  
 
• Failure  to  specifically  deny  under  oath  an  actionable  document  results  in  the  admission  of  
the  genuineness  and  due  execution  of  said  document.    
Ø Note:  While  failure  to  specifically  deny  under  oath  the  genuineness  and  due  execution  
of  an  actionable  document  generally  implies  an  admission  of  the  same  by  the  other  party,  such  
implied   admission   is   deemed   waived   if   the   party   asserting   the   same   has   allowed   the   adverse  
party  to  present  evidence  contrary  to  the  contents  of  such  document  without  objection.  (Central  
Surety   v.   Hodges,   G.R.    
No.  12730,  22  August  1960).    
 11  
 
Periods  to  Plead  
 
Pleading   Time  to  File    
 
    General  Rule   within  fifteen  (15)  
    days  after  service  of  
    summons  
      (a) within   fifteen  
      (15)  days  after  service  
      of   summons   to  
      resident   agent   or   to  
      agent  or  officer  in  the  
    Defendant  is  foreign   Philippines;    
    private  juridical  entity    
    (b) within   30  
    days   after   receipt   of  
    summons   by   the  
    home   office   of   the  
    foreign  private  entity,  
  To  Complaint   when   there   is   neither  
  resident   agent   nor  
  officer.  
  When  service  of   Within   the   time  
  summons  is  by   specified   in   the   order  
  publication   granting   leave   to  
  serve   summons   by  
  publication,   which  
  shall   not   be   less   than  
  sixty  (60)  days  
  Non-­‐‑resident  defendant   At  least  sixty  (60)  
  on  whom  extraterritorial   days  to  answer  
  service  of  summons  is  
  made  
Answer     When  filing  is  a  matter  of   Within   fifteen   (15)  
  right   days   from   service   of  
To  Amended   amended  complaint.  
Complaint   When  filing  is  NOT  a   Within   ten   (10)   days  
matter  of  right   from   notice   of   the  
court  order  admitting  
the   amended  
complaint.  
     
To   Within  ten  (10)  days  from  service  of  pleading.  
Counterclaim/  
Crossclaim  
 
   
To  Third(Fourth,   Same  period  as  with  the  original  defendant.  
Etc.)-­‐‑  Party  
Complaint  
 
  To  Supplemental   Within  ten  (10)  days  from  the  notice  of  the  order  
Complaint   admitting  the  same,  unless  a  different  period  is  
fixed  by  the  court.  
Reply   Within  ten  (10)  days  from  service  of  the  pleading  responded  to.  
 12  
 
Waiver  of  Defenses  
General  Rule:  Defenses  and  objections  not  pleaded  either  in  a  motion  to  dismiss  or  in  the  answer  
are  deemed  waived.  (Sec.1,  Rule  9)  
 
Exceptions:  
1. Lack  of  jurisdiction  over  the  subject  matter;  
2. Litis  pendentia  
3. Res  judicata;  and  
4. Prescription  of  action                  
 
 
COUNTERCLAIMS  
 
Defined  and  in  general  (Rule  6  Section  6)  
 
Section   6.   Counterclaim.   —   A   counterclaim   is   any   claim   which   a   defending   party   may   have  
against  an  opposing  party.  (6a)  
 
How  raised  
 
Included  in  answer  (Rule  6,  Sec.  9;  Rule  11  Sec.  8)  
 
Section  9.  Counter-­‐‑counterclaims  and  counter-­‐‑crossclaims.  —  A  counter-­‐‑claim  may  
be  asserted  against  an  original  counter-­‐‑claimant.  
A  cross-­‐‑claim  may  also  be  filed  against  an  original  cross-­‐‑claimant.  (n)  
 
Section  8.  Existing  counterclaim  or  cross-­‐‑claim.  —  A  compulsory  counterclaim  or  a  
cross-­‐‑claim   that   a   defending   party   has   at   the   time   he   files   his   answer   shall   be  
contained  therein.  (8a,  R6)  
 
After  Answer  (Rule  6,Sec.9;  Rule  11  Sec.  9)  
 
Section   9.   Counterclaim   or   cross-­‐‑claim   arising   after   answer.   —   A   counterclaim   or   a  
cross-­‐‑claim   which   either   matured   or   was   acquired   by   a   party   after   serving   his  
pleading  may,  with  the  permission  of  the  court,  be  presented  as  a  counterclaim  
or  a  cross-­‐‑claim  by  supplemental  pleading  before  judgment.  (9,  R6)  
 
Permissive  Counterclaim  
 
Korean  Exchange  v.  Gonzales  
G.R.  Nos.  142286-­‐‑87.  April  15,  2005  
 
Facts:   The   de   Mesa   siblings   are   the   original   incorporators   of   the   board   of   directors  
(“BOD”)  of  Phi-­‐‑Han  Development,  Inc.  (PHDI).  The  President  is  Jae  II  Aum  (“Aum”),  a  Korean  
national,   was   the   president   and   Lourdes   de   Mesa   Mendoza   (“Mendoza”)   was   the   corporate  
secretary.  PHDI  and  the  de  Mera  siblings  (‘plaintiffs”)  filed  a  complaint  against  Aum  and  Korea  
Exchange   Bank   (KEB)   (“Civil   Case   NO.   G-­‐‑3012”).   Plaintiffs   alleged   that   through   the  
machinations  of  Aum,  KEB  granted  a  loan  to  the  PHDI  for  500kUSD,  with  the  condition  that  it  
be  deposited  to  KEB  in  the  name  of  PHDI.  Plaintiffs  executed  a  real  estate  mortgage  over  their  
properties.   The   only   authorized   by   the   BOD   of   PHDI   are   Aum   and   Mendoza.   Aum   withdrew  
160kUSD   from   the   account   by   forging   the   signature   of   Mendoza.   He   was   again   allowed   to  
withdraw,   leaving   163kUSD   as   the   balance.   Aum   could   not   have   withdrawn   without   the  
connivance  of  KEB.  KEB  filed  a  Motion  to  Dismiss  on  the  ground  that  the  the  case  was  within  
 13  
 
SEC’s   jurisdiction.   When   the   Motion   was   denied,   KEB   filed   a   petition   for  certiorari   in   with   the  
CA  but  which  was  also  dismissed  by  said  court.  They  appealed  said  dismissal  to  the  SC.    
 
Pending  resolution,  KEB  filed  a  complaint  against  the  BOD  and  PHDI  for  sum  of  money  
and   reformation   of   the   mortgage   (“Civil   Case   No.   G-­‐‑3119”).   KEB   alleged   that   the   true  
agreement  was  to  bind  only  PHDI  as  the  debtor.  KEB  prayed  that  PHDI  pay  the  50kUSD  plus  
interest.   PHDI   filed   a   motion   to   dismiss   on   the   ground   of   forum   shopping,   saying   that   KEB  
should   have   filed   its   counterclaim   for   the   reformation   of   the   mortgage   and   collection   of  
500kUSD   in   Civil   Case   No.   G-­‐‑3012.   The   RTC   denied   the   Motion   to   Dismiss.   PHDI   filed   an  
answer  with  counterclaims  and  alleged  that  its  loan  should  be  extinguished  by  set-­‐‑off.    
 
In  Civil  Case  No.  G-­‐‑3012,  KEB  filed  a  motion  to  dismiss  for  forum  shopping.    
 
The   lower   court   denied   the   Motion   to   dismiss   in   Civil   Case   No.   G-­‐‑3012   on   the   ground  
that   the   causes   of   action   of   PHDI   in   the   latter   were   different   from   their   counterclaim   in   Civil  
Case  No.  G-­‐‑3119.  The  lower  court  also  denied  the  Motion  to  dismiss  the  counterclaims  of  PHDI  
in   Civil   Case   No.   G-­‐‑3119   in   finding   that   the   reliefs   prayed   for   by   PHDI   did   not   include   the  
collection  of  the  160kUSD  from  KEB.  
 
Held:  A  counterclaim,  as  now  used  and  understood,  includes  both  set-­‐‑off  and  recoupment  and  
is   broader   than   both;   it   includes   equitable   demands   and   secures   to   the   defendant   full   relief  
which  is  a  separate  action  at  law  and  would  have  secured  him  on  the  same  state  of  facts  being  
substantially  a  cross-­‐‑action  by  the  defendant  against  the  plaintiff.  
 
A  set-­‐‑off  (compensacion)  is  a  money  demand  by  the  defendant  against  the  plaintiff  arising  
upon   contract   and   constituting   a   debt   independent   of   and   unconnected   with   the   cause   of  
actions  set  forth  in  the  complaint,  and  may  be  used  to  offset  a  plaintiffs  claim  but  not  to  recover  
affirmatively.  As  in  the  case  with  recoupment,  set-­‐‑off  may  be  used  to  offset  a  plaintiffs  claim  but  
not  to  recover  affirmatively.  This  is  similar  to  the  English  rule  which  was  first  authorized  by  an  
English  statute  in  1729.  
 
A   recoupment   (reconvencion)   differs   from   a   counterclaim   (contrarreclamacion)   in   that,  
under   a   counterclaim,   the   defendant   may   have   an   affirmative   judgment   where   he   is   able   to  
prove   a   demand   in   excess   of   the   plaintiffs   demand,   whereas   in   the   case   of   recoupment,  
whatever   the   damages   proved   by   the   defendant,   they   can   go   only   to   reduce   or   extinguish   the  
claim   against   him.   Recoupment   must   arise   out   of   the   contract   or   transaction   upon   which   the  
plaintiffs  claim  is  founded.  Recoupment  is  of  French  origin  and  means  the  cutting  back  of  the  
plaintiffs  claim  by  the  defendant.  It  thus  implies  an  admission  of  the  plaintiffs  claim.  
 
In  Lopez  v.  Gloria  and  Sheriff  of  Leyte,  the  Court  ruled  that  for  set-­‐‑off  or  recoupment  to  be  
considered  as  a  counterclaim,  the  following  must  concur:  (1)  the  same  be  essentially  a  genuine  
action  of  the  defendant  against  the  plaintiff;  (2)  the  same  should  have  as  its  object  to  neutralize,  
wholly  or  partially,  that  which  the  plaintiff  is  trying  to  obtain;  (3)  the  same  does  not  have  for  its  
object   to   destroy   directly   the   action   of   the   plaintiff;   and   (4)   the   same   ought   not   to   pray   for   a  
positive  remedy  distinct  from  the  payment  of  money.  
 
The   Court   explained   that   under   the   first   requisite,   independent   of   any   other  
consideration,   a   genuine   action   is   constituted   by   the   defendant   which   could   be   employed  
separately  against  the  plaintiff.  On  the  second  requisite,  the  Court  declared  that  the  defendant  
admits  the  facts  upon  which  the  action  of  the  plaintiff  is  based.  The  second  requisite  is  absent  if  
the  defendant  bases  his  claim  on  facts  which  directly  destroy  the  action  or  cause  of  action  of  the  
plaintiff.  In  such  a  case,  the  claim  of  the  defendant  would  only  be  a  special  defense.[36]  On  the  
 14  
 
third  requisite,  set-­‐‑off  or  recoupment  may  be  merely  a  defense  and  not  a  counterclaim  if  it  only  
tends  to  oppose  or  to  destroy  the  action  of  the  plaintiff.  
 
After  consideration  of  the  material  allegations  of  the  answer  of  the  respondents  in  Civil  
Case   No.   G-­‐‑3119,   we   believe   that   the   respondents   claim   of   set-­‐‑off   or   compensation   of   the  
US$160,000.00  against  the  claim  of  US$500,000.00  of  the  petitioner  against  the  respondents  is  a  
counterclaim.   The   respondents   admit   in   their   complaint   in   Civil   Case   No.   G-­‐‑3012   and   in   their  
answer  in  Civil  Case  No.  G-­‐‑3119  that  they  secured  a  loan  from  the  petitioner  in  the  amount  of  
US$500,000.00,  but  maintain  that  they  are  not  liable  for  the  payment  of  the  said  loan  because  the  
petitioner,  in  connivance  with  Jae  Il  Aum,  had  withdrawn  not  only  US$160,000.00  but  the  entire  
deposit   of   US$500,000.00   from   the   peso   and   dollar   accounts   of   respondent   PHDI   without   the  
consent  of  the  respondents.  The  latter  did  not  seek  to  recover  affirmatively  from  the  petitioner.  
 
However,   we   do   not   agree   with   the   contention   of   the   respondents   that   their  
counterclaims  are  compulsory  in  nature.  Section  7,  Rule  5  of  the  Rules  of  Court  reads:  
 
Sec.   7.   Compulsory   counterclaim.   A   compulsory   counterclaim   is   one   which,   being  
cognizable   by   the   regular   courts   of   justice,   arises   out   of   or   is   connected   with   the  
transaction   or   occurrence   constituting   the   subject   matter   of   the   opposing   partys   claim  
and  does  not  require  for  its  adjudication  the  presence  of  third  parties  of  whom  the  court  
cannot   acquire   jurisdiction.   Such   a   counterclaim   must   be   within   the   jurisdiction   of   the  
court   both   as   to   the   amount   and   the   nature   thereof,   except   that   in   an   original   action  
before   the   Regional   Trial   Court,   the   counterclaim   may   be   considered   compulsory  
regardless  of  the  amount.  
 
As   correctly   held   by   the   CA,   the   counterclaim   of   the   respondents   for   moral   and  
exemplary  damages  against  the  petitioner  is  permissive.  So  is  the  respondents  claim  of  a  set-­‐‑off  
or  compensation  of  the  US$160,000.00  which  they  sought  in  Civil  Case  No.  G-­‐‑3012  against  the  
US$500,000.00  claimed  by  the  petitioner  against  the  respondents  in  Civil  Case  No.  G-­‐‑3119.  
 
As  the  Court  held  in  Yulienco  v.  Court  of  Appeals:  A  counterclaim  is  defined  as  any  claim  
for   money   or   other   relief   which   a   defending   party   may   have   against   an   opposing   party.   A  
counterclaim   is   compulsory   if   (a)   it   arises   out   of,   or   is   necessarily   connected   with,   the  
transaction   or   occurrence   which   is   the   subject   matter   of   the   opposing   partys   claim;   (b)   it   does  
not  require  for  its  adjudication  the  presence  of  third  parties  of  whom  the  court  cannot  acquire  
jurisdiction;   and   (c)   the   court   has   jurisdiction   to   entertain   the   claim.   In   other   words,   a  
compulsory  counterclaim  cannot  be  made  the  subject  of  a  separate  action  but  should  be  asserted  
in  the  same  suit  involving  the  same  transaction  or  occurrence  giving  rise  to  it.  
 
The   criteria   or   tests   by   which   the   compulsory   or   permissive   nature   of   specific  
counterclaims  can  be  determined  are  as  follows:  
(1)  Are  the  issues  of  fact  and  law  raised  by  the  claim  and  counterclaim  largely  the  same?  
(2)  Would  res  judicata  bar  a  subsequent  suit  on  defendants  claim  absent  the  compulsory  
counterclaim  rule?  
(3)   Will   substantially   the   same   evidence   support   or   refute   plaintiffs   claim   as   well   as  
defendants  counterclaim?  
(4)  Is  there  any  logical  relation  between  the  claim  and  the  counterclaim?  
 
In  the  present  case,  the  issues  of  fact  and  law  raised  by  the  petitioner  in  its  complaint  in  
Civil  Case  No.  G-­‐‑3119,  and  in  the  counterclaims  of  the  respondents  for  the  set-­‐‑off  of  not  only  the  
US$160,000.00  but  the  entirety  of  the  deposits  of  the  respondent  PHDI  of  US$500,000.00,  and  for  
moral  and  exemplary  damages,  are  not  identical  or  even  largely  the  same.  In  the  complaint  of  
the   petitioner   in   Civil   Case   No.   G-­‐‑3119,   the   issue   is   whether   the   loan   of   US$500,000.00   was  
secured  by  respondent  PHDI  from  the  petitioner,  and  whether  the  respondents  failed  to  pay  the  
 15  
 
same   and   its   increment   despite   the   petitioners   demands.   On   the   other   hand,   the   issues   in   the  
respondents   counterclaims   for   set-­‐‑off   of   the   amount   of   US$160,000.00   are   the   following:  
whether   the   signature   of   respondent   Lourdes   Mendoza   appearing   on   the   said   withdrawal  
application   was   forged;   whether   the   petitioner   connived   with   Jae   Il   Aum   when   the   latter  
withdrew  the  said  amount  from  the  accounts  of  respondent  PHDI;  whether  the  petitioner  and  
Jae   Il   Aum   are   obliged   to   pay   the   said   amount   to   the   respondent   PHDI;   and   whether   the  
obligations   of   the   respondent   to   pay   their   loan   of   US$500,000.00   is   extrajudicial   pro   tanto.   Any  
judgment  of  the  court  on  the  complaint  of  the  petitioner  in  Civil  Case  No.  G-­‐‑3119  would  not  bar  
any   suit   on   the   respondents   counterclaim.   The   evidence   of   the   petitioner   on   its   claim   in   its  
complaint,   and   that   of   the   respondents   on   their   counterclaims   are   thus   different.   There   is,  
likewise,   no   logical   relation   between   the   claim   of   the   petitioner   and   the   counterclaim   of   the  
respondents.   Hence,   the   counterclaim   of   the   respondents   is   an   initiatory   pleading,   which  
requires  the  respondents  to  append  thereto  a  certificate  of  non-­‐‑forum  shopping.  Their  failure  to  
do  so  results  to  the  dismissal  of  their  counterclaim  without  prejudice.  
 
Compulsory  Counterclaims  
 
It  is  one  which,  being  cognizable  by  the  regular  courts,  arises  out  of  or  is  connected  with  
the  transaction  or  occurrence  constituting  the  subject  matter  of  the  opposing  party’s  claim  and  
does   not   require   for   its   adjudication   the   presence   of   third   parties   of   whom   the   court   cannot  
acquire  jurisdiction.  (Rule  6,  Sec.  7)  
 
A  compulsory  counterclaim,  or  cross-­‐‑claim,  not  set  up  shall  be  barred.  (Rule  9,  Sec.  2)  
 
Spouses  Mendiola  v.  Court  of  Appeals  
G.R.  No.  159746,  18  July  2012  
 
The  four  tests  to  determine  whether  a  counterclaim  is  compulsory  or  not  are  the  following:  
 
a. Are  the  issues  of  fact  or  law  raised  by  the  claim  and  the  counterclaim  largely  the  same?  
b. Would  res  judicata  bar  a  subsequent  suit  on  defendant’s  claims,  absent  the  compulsory  
counterclaim  rule?  
c. Will   substantially   the   same   evidence   support   or   refute   plaintiff’s   claim   as   well   as   the  
defendant’s  counterclaim?  and  
d. Is   there   any   logical   relation   between   the   claim   and   the   counterclaim,   such   that   the  
conduct   of   separate   trials   of   the   respective   claims   of   the   parties   would   entail   a  
substantial  duplication  of  effort  and  time  by  the  parties  and  the  court?    
 
Of  the  four,  the  one  compelling  test  of  compulsoriness  is  the  logical  relation  between  the  
claim   alleged   in   the   complaint   and   that   in   the   counterclaim.   Such   relationship   exists   when  
conducting   separate   trials   of   the   respective   claims   of   the   parties   would   entail   substantial  
duplication  of  time  and  effort  by  the  parties  and  the  court;  when  the  multiple  claims  involve  the  
same   factual   and   legal   issues;   or   when   the   claims   are   offshoots   of   the   same   basic   controversy  
between  the  parties.  If  these  tests  result  in  affirmative  answers,  the  counterclaim  is  compulsory.  
 
 
Nature  of  compulsory  counterclaims  
 
a. It   is   auxiliary   to   the   original   suit   such   that   as   a   general   rule,   the   court   must   have  
jurisdiction   over   the   original   action   in   order   to   hear   the   compulsory   counterclaim.   The  
exception  is  discussed  in  Padilla  v.  Globe  Asiatique  below.    
 
 
 16  
 
 
 
Financial  Building  Corp.  vs.  Forbes  Park  Association  
G.R.  No.  133119,  17  August  2000  
 
Facts:  
 
The  then  Union  of  Soviet  Socialist  Republic  (“USSR”)  owned  a  residential  lot  in  Forbes  
Park,   Makati.   Due   to   the   USSR’s   representation   and   repeated   reassurance   that   it   would   be  
building   a   residence   for   its   Trade   Representative,   Forbes   Park   authorized   its   construction   and  
work  began  shortly  thereafter.  Despite  this,  and  upon  ocular  inspection,  Forbes  Park  discovered  
that   USSR   was   constructing   a   multi-­‐‑level   apartment   building,   in   violation   of   Forbes   Park’s  
deeds   of   restrictions.   Thus,   Forbes   Park   suspended   all   permits   of   entry   for   the   personnel   and  
materials  to  USSR’s  construction  site.  
 
Financial   Building,   the   contractor   or   USSR’s   building,   filed   a   complaint   for   injunction  
and   damages   against   Forbes   Park   with   the   Regional   Trial   Court   of   Makati.   The   latter,   in   turn,  
filed  a  Motion  to  Dismiss  on  the  ground  that  Financial  Building  had  no  cause  of  action  because  
it  was  not  the  real  party-­‐‑in-­‐‑interest.  Financial  Building’s  case  was  dismissed  and  terminated.  
 
After   the   termination   of   Financial   Building’s   case,   Forbes   Park   filed   a   complaint   for  
damages  against  Financial  Building  arising  from  violation  of  its  rules  and  regulations.        
 
Issue:  
 
  Whether   Forbes   Park’s   complaint   for   damages   arising   from   violation   of   its   rules   and  
regulations  is  proper  for  adjudication  in  a  separate  and  subsequent  action  
 
Held:  
 
  No.   Financial   Building’s   case  and   the   instant   case   arose   from   the   same   occurrence   the  
construction   work   done   by   Financial   Building   on   the   USSRs   lot   in   Forbes   Park   Village.  The  
issues   of   fact   and   law   in   both   cases   are   identical.  The   factual   issue   is   whether   the   structures  
erected  by  Financial  Building  violate  Forbes  Parks  rules  and  regulations,  whereas  the  legal  issue  
is   whether   Financial   Building,   as   an   independent   contractor   working   for   the   USSR,   could   be  
enjoined  from  continuing  with  the  construction  and  be  held  liable  for  damages  if  it  is  found  to  
have  violated  Forbes  Parks  rules.  
 
As  a  result  of  the  controversy,  Financial  Building  seized  the  initiative  by  filing  the  prior  
injunction   case,   which   was   anchored   on   the   contention   that   Forbes   Park’s   prohibition   on   the  
construction  work  in  the  subject  premises  was  improper.  The  instant  case  on  the  other  hand  was  
initiated   by   Forbes   Park   to   compel   Financial   Building   to   remove   the   same   structures   it   has  
erected  in  the  same  premises  involved  in  the  prior  case  and  to  claim  damages  for  undertaking  
the  said  construction.  Thus,  the  logical  relation  between  the  two  cases  is  patent  and  it  is  obvious  
that  substantially  the  same  evidence  is  involved  in  the  said  cases.  
 
Moreover,  the  two  cases  involve  the  same  parties.  The  aggregate  amount  of  the  claims  in  
the   instant   case   is   within   the   jurisdiction   of   the   regional   trial   court,   had   it   been   set   up   as   a  
counterclaim  in  Civil  Case  No.  16540.  Therefore,  Forbes  Park’s  claims  in  the  instant  case  should  
have  been  filed  as  a  counterclaim  in  Civil  Case  No.  16540.  
 
A   compulsory   counterclaim   is   auxiliary   to   the   proceeding   in   the   original   suit   and  
derives   its   jurisdictional   support   therefrom.   A   counterclaim   presupposes   the   existence   of   a  
 17  
 
claim   against   the   party   filing   the   counterclaim.  Hence,   where   there   is   no   claim   against   the  
counterclaimant,   the   counterclaim   is   improper   and   it   must   dismissed,   more   so   where   the  
complaint  is  dismissed  at  the  instance  of  the  counterclaimant.  In  other  words,  if  the  dismissal  
of  the  main  action  results  in  the  dismissal  of  the  counterclaim  already  filed,  it  stands  to  reason  
that   the   filing   of   a   motion   to   dismiss   the   complaint   is   an   implied   waiver   of   the   compulsory  
counterclaim   because   the   grant   of   the   motion   ultimately   results   in   the   dismissal   of   the  
counterclaim.  
 
Thus,  the  filing  of  a  motion  to  dismiss  and  the  setting  up  of  a  compulsory  counterclaim  
are  incompatible  remedies.  In  the  event  that  a  defending  party  has  a  ground  for  dismissal  and  a  
compulsory   counterclaim   at   the   same   time,   he   must   choose   only   one   remedy.  If   he   decides   to  
file   a   motion   to   dismiss,   he   will   lose   his   compulsory   counterclaim.  But   if   he   opts   to   set   up   his  
compulsory  counterclaim,  he  may  still  plead  his  ground  for  dismissal  as  an  affirmative  defense  
in  his  answer.  The  latter  option  is  obviously  more  favorable  to  the  defendant  although  such  fact  
was  lost  on  Forbes  Park.  
 
The  ground  for  dismissal  invoked  by  Forbes  Park  in  Financial  Building’s  case  was  lack  
of   cause   of   action.  There   was   no   need   to   plead   such   ground   in   a   motion   to   dismiss   or   in   the  
answer  since  the  same  was  not  deemed  waived  if  it  was  not  pleaded.  Nonetheless,  Forbes  Park  
still  filed  a  motion  to  dismiss  and  thus  exercised  bad  judgment  in  its  choice  of  remedies.  Thus,  it  
has   no   one   to   blame   but   itself   for   the   consequent   loss   of   its   counterclaim   as   a   result   of   such  
choice.  
 
 
b. Effect  of  dismissal.  -­‐‑   If  the  dismissal  of  the  complaint  somehow  eliminates  the  cause  of  
the   counterclaim,   then   the   counterclaim   cannot   survive.   Conversely,   if   the   counterclaim  
itself  states  sufficient  cause  of  action  then  it  should  stand  independently  of  and  survive  
the   dismissal   of   the   complaint.   However,   if   the   dismissal   is   pursuant   to   circumstances  
covered  by  Section  6,  Rule  16  and  Sections  2  and  3  of  Rule  17,  then  the  dismissal  of  the  
complaint   does   not   result   in   the   dismissal   of   the   counterclaim,   whether   compulsory   or  
permissive.  
 
Pinga  vs.  Santiago  
G.R.  No.  170354,  30  June  2006  
 
Facts:  
 
  Pinga   was   a   defendant   in   a   complaint   for   injunction   filed   by   Santiago   in   1998.   On  
October   2004,   the   Regional   Trial   Court   (RTC)   already   ordered   the   dismissal   of   the   complaint  
after  Santiago’s  counsel  had  sought  the  postponement  of  the  hearing  scheduled  then.  However,  
the   order   of   dismissal   was   subsequently   reconsidered   by   the   RTC   in   an   Order   dated   9   June  
2005,  which  took  into  account  the  assurance  of  Santiago’s  counsel  that  he  would  give  priority  to  
that   case.   On   the   scheduled   hearing,   Santiago’s   counsel   still   failed   to   appear,   thus,   the   RTC  
dismissed  the  complaint  and  allowed  Pinga  to  present  his  evidence  ex  parte.    
 
  Santiago  filed  a  Motion  for  Reconsideration  of  the  RTC’s  Order,  opting  however  not  to  
seek  that  their  complaint  be  reinstated,  but  praying  instead  that  the  entire  action  be  dismissed  
and  petitioner  be  disallowed  from  presenting  evidence  ex-­‐‑parte.  The  RTC  granted  the  Motion  for  
Reconsideration  and  dismissed  the  counterclaim,  citing  as  the  only  ground  therefor  that  "ʺthere  
is  no  opposition  to  the  Motion  for  Reconsideration  of  [Pinga]."ʺ  
 
Issue:   Whether   the   dismissal   of   a   complaint   for   failure   to   prosecute   must   necessarily   result   in  
the  dismissal  of  the  counterclaim  therein.  
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Held:  No.  The  dismissal  of  a  complaint  due  to  fault  of  the  plaintiff  is  without  prejudice  to  the  
right  of  the  defendant  to  prosecute  any  pending  counterclaims  of  whatever  nature  in  the  same  
or   separate   action.     Accordingly,   the   RTC   clearly   erred   when   it   ordered   the   dismissal   of   the  
counterclaim,  since  Section  3,  Rule  17  mandates  that  the  dismissal  of  the  complaint  is  without  
prejudice   to   the   right   of   the   defendant   to   prosecute   the   counterclaim   in   the   same   or   separate  
action.   If   the   RTC   were   to   dismiss   the   counterclaim,   it   should   be   on   the   merits   of   such  
counterclaim.  Reversal  of  the  RTC  is  in  order,  and  a  remand  is  necessary  for  trial  on  the  merits  
of  the  counterclaim.  
 
Ratio:   Whatever   the   nature   of   the   counterclaim,   it   bears   the   same   integral   characteristics   as   a  
complaint;  namely  a  cause  (or  causes)  of  action  constituting  an  act  or  omission  by  which  a  party  
violates   the   right   of   another.   The   main   difference   lies   in   that   the   cause   of   action   in   the  
counterclaim  is  maintained  by  the  defendant  against  the  plaintiff,  while  the  converse  holds  true  
with   the   complaint.   Yet,   as   with   a   complaint,   a   counterclaim   without   a   cause   of   action   cannot  
survive.  
 
It   would   then   seemingly   follow   that   if   the   dismissal   of   the   complaint   somehow  
eliminates   the   cause(s)   of   the   counterclaim,   then   the   counterclaim   cannot   survive.   Yet   that  
hardly   is   the   case,   especially   as   a   general   rule.  More   often   than   not,   the   allegations   that   form  
the  counterclaim  are  rooted  in  an  act  or  omission  of  the  plaintiff  other  than  the  plaintiff’s  very  
act  of  filing  the  complaint.  Moreover,  such  acts  or  omissions  imputed  to  the  plaintiff  are  often  
claimed  to  have  occurred  prior  to  the  filing  of  the  complaint  itself.  The  only  apparent  exception  
to   this   circumstance   is   if   it   is   alleged   in   the   counterclaim   that   the   very   act   of   the   plaintiff   in  
filing  the  complaint  precisely  causes  the  violation  of  the  defendant’s  rights.  Yet  even  in  such  an  
instance,   it   remains   debatable   whether   the   dismissal   or   withdrawal   of   the   complaint   is  
sufficient   to   obviate   the   pending   cause   of   action   maintained   by   the   defendant   against   the  
plaintiff.  
   
These   considerations   persist   whether   the   counterclaim   in   question   is   permissive   or  
compulsory.   A   compulsory   counterclaim   arises   out   of   or   is   connected   with   the   transaction   or  
occurrence  constituting  the  subject  matter  of  the  opposing  party’s  claim,  does  not  require  for  its  
adjudication  the  presence  of  third  parties,  and  stands  within  the  jurisdiction  of  the  court  both  as  
to  the  amount  involved  and  the  nature  of  the  claim.  The  fact  that  the  culpable  acts  on  which  the  
counterclaim  is  based  are  founded  within  the  same  transaction  or  occurrence  as  the  complaint,  
is  insufficient  causation  to  negate  the  counterclaim  together  with  the  complaint.  The  dismissal  
or   withdrawal   of   the   complaint   does   not   traverse   the   boundaries   of   time   to   undo   the   act   or  
omission   of   the   plaintiff   against   the   defendant,   or   vice   versa.   While  such  dismissal   or  
withdrawal   precludes   the   pursuit   of   litigation   by   the   plaintiff,   either   through   his/her   own  
initiative  or  fault,  it  would  be  iniquitous  to  similarly  encumber  the  defendant  who  maintained  
no  such  initiative  or  fault.  If  the  defendant  similarly  moves  for  the  dismissal  of  the  counterclaim  
or   neglects   to   timely   pursue   such   action,   let   the   dismissal   of   the   counterclaim   be   premised   on  
those  grounds  imputable  to  the  defendant,  and  not  on  the  actuations  of  the  plaintiff.  
   
The   other   considerations   supplied   in  Metals  are   anchored   on   the   premise   that   the  
jurisdictional   foundation   of   the   counterclaim   is   the   complaint   itself.   The   theory   is   correct,   but  
there  are  other  facets  to  this  subject  that  should  be  taken  into  account  as  well.  On  the  established  
premise   that   a   counterclaim   involves   separate   causes   of   action   than   the   complaint   even   if  
derived   from   the   same   transaction   or   series   of   transactions,   the   counterclaim   could   have   very  
well   been   lodged   as   a   complaint   had   the   defendant   filed   the   action   ahead   of   the  
complainant.  The   terms   ancillary   or   auxiliary   may   mislead   in   signifying   that   a   complaint  
innately  possesses  more  credence  than  a  counterclaim,  yet  there  are  many  instances  wherein  the  
complaint  is  trivial  but  the  counterclaim  is  meritorious.  In  truth,  the  notion  that  a  counterclaim  
 19  
 
is,  or  better  still,  appears  to  be  merely  ancillary  or  auxiliary  is  chiefly  the  offshoot  of  an  accident  
of  chronology,  more  than  anything  else.  
   
The   formalistic   distinction   between   a   complaint   and   a   counterclaim   does   not   detract  
from  the  fact  that  both  of  them  embody  causes  of  action  that  have  in  their  end  the  vindication  of  
rights.  While  the  distinction  is  necessary  as  a  means  to  facilitate  order  and  clarity  in  the  rules  of  
procedure,   it   should   be   remembered   that   the   primordial   purpose   of   procedural   rules   is   to  
provide   the   means   for   the   vindication   of   rights.   A   party   with   a   valid   cause   of   action   against  
another   party   cannot   be   denied   the   right   to   relief   simply   because   the   opposing   side   had   the  
good   fortune   of   filing   the   case   first.   Yet   this   in   effect   was   what   had   happened   under   the  
previous   procedural   rule   and   correspondent   doctrine,   which   under   their   final   permutation,  
prescribed   the   automatic   dismissal   of   the   compulsory   counterclaim   upon   the   dismissal   of   the  
complaint,  whether  upon  the  initiative  of  the  plaintiff  or  of  the  defendant.  
   
Thus,  the  present  rule  embodied  in  Sections  2  and  3  of  Rule  17  ordains  a  more  equitable  
disposition  of  the  counterclaims  by  ensuring  that  any  judgment  thereon  is  based  on  the  merit  of  
the   counterclaim   itself   and   not   on   the   survival   of   the   main   complaint.   Certainly,   if   the  
counterclaim  is  palpably  without  merit  or  suffers  jurisdictional  flaws  which  stand  independent  
of   the   complaint,   the   trial   court   is   not   precluded   from   dismissing   it   under   the   amended   rules,  
provided  that  the  judgment  or  order  dismissing  the  counterclaim  is  premised  on  those  defects.  
At  the  same  time,  if  the  counterclaim  is  justified,  the  amended  rules  now  unequivocally  protect  
such  counterclaim  from  peremptory  dismissal  by  reason  of  the  dismissal  of  the  complaint.  
 
 
Padilla  v.  Globe  Asiatique  Realty  Holdings  Corporation  
G.R.  No.  207376,  6  August  2014  
 
If  the  dismissal  of  the  complaint  somehow  eliminates  the  cause  of  the  counterclaim,  then  
the  counterclaim  cannot  survive.  Conversely,  if  the  counterclaim  itself  states  sufficient  cause  of  
action  then  it  should  stand  independently  of  and  survive  the  dismissal  of  the  complaint.  
 
It   bears   to   emphasize   that   petitioner’s   counterclaim   against   respondent   is   for   damages  
and   attorney’s   fees   arising   from   the   unfounded   suit.   While   respondent’s   Complaint   against  
petitioner  is  already  dismissed  on  the  ground  of  litis  pendentia,  petitioner  may  have  very  well  
already  incurred  damages  and  litigation  expenses  such  as  attorney’s  fees  since  it  was  forced  to  
engage   legal   representation   in   the   Philippines   to   protect   its   rights   and   to   assert   lack   of  
jurisdiction  of  the  courts  over  its  person  by  virtue  of  the  improper  service  of  summons  upon  it.  
Hence,  the  cause  of  action  of  petitioner’s  counterclaim  is  not  eliminated  by  the  mere  dismissal  
of  respondent’s  complaint.  
 
It   may   also   do   well   to   remember   that   it   is   this   Court   which   mandated   that   claims   for  
damages   and   attorney’s   fees   based   on   unfounded   suit   constitute   compulsory   counterclaim  
which   must   be   pleaded   in   the   same   action   or,   otherwise,   it   shall   be   barred.   It   will   then   be  
iniquitous  and  the  height  of  injustice  to  require  the  petitioner  to  make  the  counterclaim  in  the  
present  action,  under  threat  of  losing  his  right  to  claim  the  same  ever  again  in  any  other  court,  
yet  make  his  right  totally  dependent  on  the  fate  of  the  respondent’s  complaint.  
 
If   indeed   the   Court   dismisses   petitioner’s   counterclaim   solely   on   the   basis   of   the  
dismissal  of  respondent’s  Complaint,  then  what  remedy  is  left  for  the  petitioner?  It  can  be  said  
that   he   can   still   file   a   separate   action   to   recover   the   damages   and   attorney’s   fees   based   on   the  
unfounded   suit   for   he   cannot   be   barred   from   doing   so   since   he   did   file   the   compulsory  
counterclaim   in   the   present   action,   only   that   it   was   dismissed   when   respondent’s   Complaint  
was   dismissed.   However,   this   reasoning   is   highly   flawed   and   irrational   considering   that  
 20  
 
petitioner,   already   burdened   by   the   damages   and   attorney’s   fees   it   may   have   incurred   in   the  
present  case,  must  again  incur  more  damages  and  attorney’s  fees  in  pursuing  a  separate  action,  
when,  in  the  first  place,  it  should  not  have  been  involved  in  any  case  at  all.  
 
c. The   court   must   have   jurisdiction   both   as   to   amount   and   nature   of   the   counterclaim,  
except   when   the   original   action   was   filed   before   the   Regional   Trial   Court.   In   the   latter  
case,  the  counterclaim  may  be  considered  compulsory  regardless  of  the  amount.    
 
 
Maceda  vs.  Court  of  Appeals  
G.R.  No.  83545,  11  August  1989  
 
Facts:  
   
  Private   respondent   Cement   Center,   Inc.   (“Cement   Center”)   filed   a   case   for   ejectment  
against  Maceda.  In  his  answer  to  the  complaint,  Maceda  set  up  a  counterclaim  for  P240,000,  the  
alleged   value   of   the   improvements   which   he   introduced   to   the   subject   property.   Maceda  
claimed  that  the  original  owners  of  the  property  promised  to  reimburse  him  of  his  expenses  for  
said  property’s  improvement.    
 
In   its   decision,   the   Metropolitan   Trial   Court   (MTC)   ordered   Maceda   to   vacate   the  
premises  and  pay  the  plaintiff  P2,000  per  month  as  reasonable  compensation  for  his  use  of  the  
premises   until   he   actually   vacates,   and   P5,000   as   attorney'ʹs   fees.   It   ordered   Cement   Center   to  
pay  Maceda  P158,000  as  the  value  of  his  improvements  and  repairs,  less  his  accrued  rentals  of  
P64,000   as   of   December   1985   and   the   sum   of   P12,000   which   he   had   earlier   received   as   partial  
reimbursement.   The   MTC’s   mandate   for   Cement   Center   to   pay   Maceda   was   upheld   by   the  
Regional  Trial  Court  (RTC).    
 
On   appeal,   the   Court   of   Appeals   modified   the   RTC’s   decision   and   set   aside   Cement  
Center’s   obligation   to   pay   Maceda   P182,200.00   corresponding   to   the   value   of   the   supposed  
necessary  and  useful  improvements.  
 
Held:  
  MTC   had   NO   jurisdiction   over   Maceda’s   counterclaim   of   P240,000.   The   Court   of  
Appeals  correctly  ruled  that  the  MTC  did  not  have  original  jurisdiction  over  his  counterclaim  as  
it  exceeds  P20,000.  Correspondingly,  the  RTC  did  not  have  appellate  jurisdiction  over  the  claim.  
The   decision   of   the   Municipal   Trial   Court   of   San   Juan   awarding   him   P158,000   on   his  
counterclaim,  and  that  of  the  Regional  Trial  Court  raising  the  award  to  P182,200,  were  invalid  
for  lack  of  jurisdiction.  The  jurisdiction  of  the  Metropolitan  Trial  Court  in  a  civil  action  for  sum  
of   money   (Maceda'ʹs   counterclaim   for   the   value   of   his   improvements   is   one   such   action)   is  
limited  to  a  demand  that  "ʺdoes  not  exceed  twenty  thousand  pesos  exclusive  of  interest  and  costs  
but  inclusive  of  damages  of  whatever  kind."ʺ  (Sec.  33,  subpar.  1,  B.P.  Blg.  129.)  A  counterclaim  in  
the   municipal   or   city   court   beyond   that   jurisdictional   limit   may   be   pleaded   only   by   way   of  
defense  to  weaken  the  plaintiffs  claim,  but  not  to  obtain  affirmative  relief.    
 
 
d. When  original  action  filed  with  RTC,  the  counterclaim  is  deemed  compulsory  regardless  
of  amount.  
 
Rule   6,   Section   7.   Compulsory   counterclaim.   xxx   xxx   xxx   Such   a   counterclaim   must   be  
within  the  jurisdiction  of  the  court  both  as  to  the  amount  and  nature  thereof,  except  that  in  
an   original   action   before   the   Regional   Trial   Court,   the   counterclaim   may   be   considered  
compulsory  regardless  of  the  amount.    
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e. Filing  fees  and  certificate  of  non-­‐‑forum  shopping  are  not  required  in  compulsory  
counterclaims.    
 
Carpio  vs.  Rural  Bank  of  Sto.  Tomas  (Batangas),  Inc.  
G.R.  No.  153171,  4  May  1996  
 
Facts:  
Carpio   filed   a   Complaint   for   annulment   of   foreclosure   sale   and   damages)   against   the  
Rural  Bank  of  Sto.  Tomas,  Batangas,  Inc.  Respondent  bank  filed  its  Answer  with  Counterclaim,  
denying  specifically  the  material  allegations  of  the  complaint,  and  praying  for  damages.  Carpio  
filed   a   motion   to   dismiss   the   counterclaim   on   the   ground   that   respondent   banks   counterclaim  
was  not  accompanied  by  a  certification  against  forum  shopping.  
 
Held:   A   certificate   of   non-­‐‑forum   shopping   is   NOT   required   for   the   filing   of   compulsory  
counterclaims.  It  bears  stressing  that  the  Section  5,  Rule  7  distinctly  provides  that  the  required  
certification   against   forum   shopping   is   intended   to   cover   an  initiatory  pleading,   meaning  
an  incipient  application   of   a   party   asserting   a   claim   for   relief.  Certainly,   respondent   bank’s  
Answer   with   Counterclaim   is   a  responsive  pleading,   filed   merely   to   counter   petitioners  
complaint  that  initiates  the  civil  action.  In  other  words,  the  rule  requiring  such  certification  does  
not   contemplate   a   defendants/respondents   claim   for   relief   that   is   derived   only   from,   or   is  
necessarily  connected  with,  the  main  action  or  complaint.  In  fact,  upon  failure  by  the  plaintiff  to  
comply   with   such   requirement,   Section   5,   quoted   above,   directs   the  dismissal  of  
the  case  without  prejudice,  not  the  dismissal  of  respondents  counterclaim.  
 
 
f. A  compulsory  counterclaim  is  barred  if  not  raised  (Rule  11,  Sec.  8  and  Rule  9,  Sec.  2)  
i. A  compulsory  counterclaim  or  a  cross-­‐‑claim  that  a  defending  party  has  at  the  time  
he  files  his  answer  shall  be  contained  therein.  (Rule  11,  Sec.  8)  
ii. A  compulsory  counterclaim,  or  cross-­‐‑claim,  not  set  up  shall  be  barred.  (Rule  9,  Sec.  2)  
iii. When   a   pleader   fails   to   set   up   a   counterclaim   or   a   cross-­‐‑claim   through   oversight,  
inadvertence,   or   excusable   neglect,   or   when   justice   requires,   he   may,   by   leave   of  
court,  set  up  the  counterclaim  or  cross-­‐‑claim  by  amendment  before  judgment.  (Rule  
11,  Sec.  10)  
 
 
g. A  compulsory  counterclaim  need  not  be  answered.  
 
Sarmiento  v.  San  Juan  
G.R.  No.  L-­‐‑56605,  28  January  1983  
 
Facts:  
Private   respondent   Belfast   Surety   &   Insurance   Co.   Inc.   (“Belfast”)   filed   a   civil   action  
against   Sarmiento   for   indemnification   under   an   Indemnity   Agreement   executed   by   them   in  
connection   with   a   bail   bond.   Sarmiento   filed   an   answer   with   compulsory   counterclaim.  
Thereafter,  upon  motion  from  Belfast,  the  judge  scheduled  the  pre-­‐‑trial.  At  the  scheduled  pre-­‐‑
trial,   only   Belfast’s   counsel   appeared.   Sarmiento   was   declared   as   “non-­‐‑suited”   and   the   court  
allowed   Belfast   to   present   its   evidence   ex   parte.   Upon   the   denial   of   Sarmiento’s   motion   for  
reconsideration,  he  filed  a  case  for  certiorari  against  the  judge,  alleging  in  part  that  the  pre-­‐‑trial  
was   premature   inasmuch   as   Belfast   did   not   file   an   answer   to   Sarmiento’s   counterclaim.   Thus,  
the  "ʺlast  pleading"ʺ  has  not  yet  been  filed  so  as  to  authorize  the  judge  to  schedule  a  pre-­‐‑trial  in  
accordance  with  the  Rules  of  Court.    
 
 22  
 
Held:  
  No.   An   answer   to   a   compulsory   counterclaim   is   NOT   required   before   pre-­‐‑trial   may   be  
scheduled.   While   it   may   be   true   that   the   private   respondent   had   not   filed   any   answer   to   the  
counterclaim  contained  in  the  petitioner'ʹs  answer,  such  circumstance  does  not  prevent  the  trial  
court  from  conducting  the  pre-­‐‑trial.    
 
The   requirement   that   the   pre-­‐‑trial   shall   be   scheduled   "ʺafter   the   last   pleading   has   been  
filed"ʺ  is  intended  to  fully  apprise  the  court  and  the  parties  of  all  the  issues  in  the  case  before  the  
pre-­‐‑trial  is  conducted.  It  must  be  remembered  that  the  issues  may  only  be  ascertained  from  the  
allegations  contained  in  the  pleadings  filed  by  the  parties.  The  last  permissible  pleading  that  a  
party  may  file  would  be  the  reply  to  the  answer  to  the  last  pleading  of  claim  that  had  been  filed  
in   the   case,   which   may   either   be   the   complaint,   a   cross-­‐‑claim,   a   counterclaim   or   a   third   party  
complaint,  etc.  Any  pleading  asserting  a  claim  must  be  answered,  and  the  failure  to  do  so  by  the  
party  against  whom  the  claim  is  asserted  renders  him  liable  to  be  declared  in  default  in  respect  
of   such   claim.   There   are,   however,   recognized   exceptions   to   the   rule,   making   the   failure   to  
answer  a  pleading  of  claim  as  a  ground  for  a  default  declaration,  such  as  the  failure  to  answer  
a   complaint   in   intervention,   or   a   compulsory   counterclaim   so   intimately   related   to   the  
complaint   such   that   to   answer   to   same   would   merely   require   a   repetition   of   the   allegations  
contained  in  the  complaint.    
 
In   the   case   presently   considered,   the   nature   of   the   counterclaim   in   the   petitioner'ʹs  
answer   has   not   been   made   clear,   except   to   categorize   it   as   a   compulsory   counterclaim.   Such  
being  the  case,  it  is  likely  to  be  one  where  the  answering  thereof  is  not  necessary,  and  the  failure  
to  do  so  would  not  be  a  ground  to  be  declared  in  default.  In  any  event,  the  private  respondent'ʹs  
failure  to  answer  the  petitioner'ʹs  counterclaim  after  the  period  to  file  the  answer  had  lapsed  is  
no  obstacle  to  holding  a  pre-­‐‑trial.  The  requirement  that  the  last  pleading  must  have  been  filed  
before  a  pre-­‐‑trial  may  be  scheduled  should  more  appropriately  be  construed  to  mean  not  only  if  
the  last  pleading  had  been  actually  filed,  but  also  if  the  period  for  filing  the  same  had  expired.  
 
 
h. A  compulsory  counterclaim  is  allowed  under  the  Rule  on  Summary  Procedure  (Rules  of  
Summary  Procedure  (RSP),  A.  M.  No.  00-­‐‑11-­‐‑01-­‐‑SC,  Sec.  3)  
 
The   only   pleadings   allowed   to   be   filed   are   the   complaints,   compulsory   counterclaims  
and  cross-­‐‑claims'ʹ  pleaded  in  the  answer,  and  the  answers  thereto.  (RSP,  Sec.  3)  
 
 
Remedy  for  omitted  counterclaim  due  to  oversight,  excusable  neglect  (Rule  11,  Sec.  10)  
 
Section  10.  Omitted  counterclaim  or  cross-­‐‑claim.  —  When  a  pleader  fails  to  set  up  a  counterclaim  
or  a  cross-­‐‑claim  through  oversight,  inadvertence,  or  excusable  neglect,  or  when  justice  requires,  
he   may,   by   leave   of   court,   set   up   the   counterclaim   or   cross-­‐‑claim   by   amendment   before  
judgment.  (3,  R9)  
 
 
ANSWER  TO  COUNTERCLAIM  
   
In  General  
 
Answer.  —  An  answer  is  a  pleading  in  which  a  defending  party  sets  forth  his  defenses  (Rule  6,  
Section  4).    
 
 
 23  
 
 
Period  to  plead    
 
Answer  to  counterclaim  or  cross-­‐‑claim.  —  A  counterclaim  or  cross-­‐‑claim  must  be  answered  within  
ten  (10)  days  from  service  (Rule  11,  Section  4).    
 
 
REPLY  
 
Defined  and  in  general  
 
A   reply   is   a   pleading,   the   office   or   function   of   which   is   to   deny,   or   allege   facts   in   denial   or  
avoidance   of   new   matters   alleged   by   way   of   defense   in   the   answer   and   thereby   join   or   make  
issue  as  to  such  new  matters.  If  a  party  does  not  file  such  reply,  all  the  new  matters  alleged  in  
the  answer  are  deemed  controverted  (Rule  6,  Section  10).  
 
If   the   plaintiff   wishes   to   interpose   any   claims   arising   out   of   the   new   matters   so   alleged,   such  
claims  shall  be  set  forth  in  an  amended  or  supplemental  complaint.    
 
§ A  reply  is  the  responsive  pleading  to  an  answer,  not  to  counterclaim  or  cross-­‐‑claim.  
§ Not   mandatory—If   a   party   does   not   file   such   reply,   all   the   new   matters   alleged   in   the  
answer  are  deemed  controverted.  
 
When  required    
 
a. Challenge  due  to  authenticity  of  documents    
 
How  to  contest  such  documents.  —  When  an  action  or  defense  is  founded  upon  a  written  
instrument,   copied   in   or   attached   to   the   corresponding   pleading   as   provided   in   the  
preceding  section,  the  genuineness  and  due  execution  of  the  instrument  shall  be  deemed  
admitted   unless   the   adverse   party,   under   oath   specifically   denies   them,   and   sets   forth  
what  he  claims  to  be  the  facts,  but  the  requirement  of  an  oath  does  not  apply  when  the  
adverse  party  does  not  appear  to  be  a  party  to  the  instrument  or  when  compliance  with  
an  order  for  an  inspection  of  the  original  instrument  is  refused  (Rule  8,  Section  8).  
 
§ “Actionable   document”   –   the   document   relied   upon   by   either   the   plaintiff   and   the  
defendant.        
E.g.  Promissory  note  in  an  action  for  collection  of  sum  of  money;  Deed  of  mortgage  in  an  action  
for  foreclosure  of  mortgage  
 
§ Denial  under  oath  means  that  the  denial  must  be  verified.    The  absence  of  an  oath  will  
result  in  the  implied  admission  of  the  due  execution  and  genuineness  of  the  document  
 
§ When   a   party   is   deemed   to   have   admitted   the   genuineness   and   due   execution   of   an  
actionable   document,   defenses   that   are   implied   from   said   admission   are   necessarily   waived,  
such  as  the  following:  
a. defenses  of  forgery  of  the  document;  
b. the  lack  of  authority  to  execute  the  document;  
c. that  the  party  charged  signed  the  document  in  some  other  capacity  than  that  alleged  in  
the  pleading;  or  
d. that  the  document  was  never  delivered  (Hibberd  v.  Rhode  McMillian,  32  Phil  476)  
 
 24  
 
§ Also   cut-­‐‑off   by   the   admission   is   the   defense   that   the   document   was   not   in   words   and  
figures  as  set  out  in  the  pleadings  (Imperial  Textile  Mills  v.  CA,  183  SCRA  584).  
 
§ However,  the  following  defenses  may  still  be  interposed  despite  the  implied  admission  
of  the  genuineness  and  due  execution  of  the  document,  since  these  are  not  inconsistent  with  the  
admission  of  the  genuineness  and  due  execution  of  the  instrument:  
a. payment;  
b. want  of  consideration;  
c. illegality  of  consideration;  
d. usury;  
e. fraud.  
 
§ Prescription,  release,  waiver,  statute  of  frauds,  estoppel,  former  recovery  or  discharge  in  
bankruptcy   are   likewise   not   barred,   since   these   defenses   have   no   direct   relationship   to   the  
concepts  of  “genuineness  and  due  execution”  (Riano).  
 
Casent    Realty  Development  Corp.  vs.  Philbanking  Corporation  
G.R.    No.  150731,  14  September    2007  
 
Facts:  
 
In   1984,   petitioner   Casent   Realty   Development   Corporation   executed   two   promissory  
notes  in  favor  of  Rare  Realty  Corporation  (Rare  Realty)  involving  the  amounts  of  P  300,000.00  
and   P681,500.00.     On   8   August   1986,   these   promissory   notes   were   assigned   to   respondent  
Philbanking  through  a  Deed  of  Assignment.  
 
Petitioner  failed  to  pay  the  promissory  notes  despite  demands.    Thus,  respondent  filed  a  
complaint  for  the  collection  of  sum  of  money.    Respondent  raised  the  defense  of  extinguishment  
of   obligation,   stating   that   on   27   August   1986,   the   parties   executed   a   Dacion   en   Pago   which  
conveyed   petitioner’s   property   to   respondent   with   the   intention   of   extinguishing   petitioner’s  
outstanding   accounts   with   the   respondent.     Petitioner   presented   a   Confirmation   Statement  
stating  that  petitioner  no  longer  had  loans  with  the  respondent.  
 
After   respondent   presented   its   evidence,   petitioner   filed   a   Motion   for   Judgment   on  
Demurrer   to   Evidence,   pointing   out   that   respondent’s   failure   to   file   a   Reply   to   the   Answer  
which   raised   the   dacion   and   Confirmation   Statement   constituted   an   admission   of   the  
genuineness   and   due   execution   of   said   documents,   and   that   since   these   obligation   was  
extinguished,  respondent  no  longer  had  the  right  to  collect  from  petitioner.    Respondent,  on  the  
other  hand,  filed  an  Opposition  stating  that  since  it  did  not  file  a  Reply,  all  new  matters  alleged  
in  the  Answer  are  deemed  controverted,  pursuant  to  Rule  6,  Section  10  of  the  Rules  of  Court.  
 
Accordingly,   the   trial   court   dismissed   the   complaint   on   the   ground   of   extinction   of  
obligation.    The  Court  of  Appeals  reversed,  ruling  that  in  resolving  petitioner’s  Demurrer,  the  
trial  court  erred  in  considering  the  affirmative  defenses  raised  in  the  Answer.  
 
Issue:  
 
Whether   or   not   respondent’s   failure   to   file   a   Reply   and   deny   the   Dacion   and  
Confirmation  Statement  under  oath  constitute  a  judicial  admission  of  the  genuineness  and  due  
execution  of  these  documents?    YES.      
 
Held:   What   should   be   resolved   in   a   motion   to   dismiss   based   on   a   demurrer   to   evidence   is  
whether   the   plaintiff   is   entitled   to   the   relief  based   on   the   facts  and   the   law.   The   evidence  
 25  
 
contemplated  by  the  rule  on  demurrer  is  that  which  pertains  to  the  merits  of  the  case,  excluding  
technical   aspects   such   as   capacity   to   sue.  However,   the   plaintiff’s   evidence   should   not   be   the  
only   basis   in   resolving   a   demurrer   to   evidence.   The   "ʺfacts"ʺ   referred   to   should   include   all   the  
means   sanctioned   by   the   Rules   of   Court   in   ascertaining   matters   in   judicial   proceedings.   These  
include   judicial   admissions,   matters   of   judicial   notice,   stipulations   made   during   the   pre-­‐‑trial  
and  trial,  admissions,  and  presumptions,  the  only  exclusion  being  the  defendant’s  evidence.  
 
The   defense   of   Dacion   and   Confirmation   Statement,   which   were   submitted   in   the  
Answer,   should   have   been   specifically   denied   under   oath   by   respondent   in   accordance   with  
Rule   8,   Section   8   of   the   Rules   of   Court.     These   defenses   are   not   deemed   controverted   by  
respondent’s  failure  to  file  a  Reply.    Rule  8,  Section  8  specifically  applies  to  actions  or  defenses  
founded   upon   a   written   instrument   and   provides   the   manner   of   denying   it.   It   is   more  
controlling   than   Rule   6,   Section   10   which   merely   provides   the   effect   of   failure   to   file   a   Reply.  
Thus,  where  the  defense  in  the  Answer  is  based  on  an  actionable  document,  a  Reply  specifically  
denying   it   under   oath   must   be   made;   otherwise,   the   genuineness   and   due   execution   of   the  
document  will  be  deemed  admitted.  Since  respondent  failed  to  deny  the  genuineness  and  due  
execution   of   the  Dacion  and   Confirmation   Statement   under   oath,   then   these   are   deemed  
admitted.     This     judicial   admission   should   have   been   considered   by   the   court   in   resolving   the  
demurrer  to  evidence.  
 
Nevertheless,   petitioner   remains   liable   to   respondent.     In   this   case,   the   Dacion   and  
Confirmation  Statement  do  not  sufficiently  prove  that  petitioner’s  liability  was  extinguished.    In  
executing  the  Dacion¸  the  intention  of  the  parties  was  to  settle  only  the  loans  of  petitioner  with  
respondent,   not   the   obligation   of   petitioner   arising   from   the   promissory   notes   that   were  
assigned  by  Rare  Realty  to  respondent.    When  petitioner  and  respondent  executed  the  Dacion  on  
27  August  1986,  what  was  then  covered  was  petitioner’s  subsequent  loan  from  the  respondent  
in  the  amount  of  P3,921,750.00.      
 
It  must  be  noted  that  the  promissory  notes  subject  of  the  case  were  given  as  security  for  
the  loan  granted  by  respondent  to  Rare  Realty.    Through  the  Deed  of  Assignment,  respondent  
stepped  into  the  shoes  of  Rare  Realty  as  petitioner’s  creditor.    Thus,  in  1989,  when  Rare  Realty  
defaulted  in  its  payment  to  respondent,  respondent  proceeded  against  the  security  assigned  to  
it,   that   is,   the   promissory   notes   issued   by   the   petitioner.     Under   these   promissory   notes,  
petitioner  is  still  liable  for  the  amount  of  P300,000.00  with  interest  thereon.        
 
 
 THIRD  /  FOURTH  PARTY  COMPLAINT  
 
Defined  
 
Third,  (fourth,  etc.)—party  complaint.  —  A  third  (fourth,  etc.)  —  party  complaint  is  a  claim  
that  a  defending  party  may,  with  leave  of  court,  file  against  a  person  not  a  party  to  the  
action,   called   the   third   (fourth,   etc.)   —   party   defendant   for   contribution,   indemnity,  
subrogation  or  any  other  relief,  in  respect  of  his  opponent'ʹs  claim  (Rule  6,  Section  11).  
 
Remedies  when  denied  
 
When   a   complaint   is   dismissed,   the   third-­‐‑party   complaint   is   also   dismissed.   But   if   the  
plaintiff   appeals   the   dismissal,   the   defendant-­‐‑third-­‐‑party   plaintiff   must   also   appeal   to  
obtain  affirmative  relief.  
 
 
 
 26  
 
 
 
 ANSWER  TO  THIRD/FOURTH  PARTY  COMPLAINT  
 
In  general  
 
Answer  to  third  (fourth,  etc.)—party  complaint.  —  A  third  (fourth,  etc.)  —  party  defendant  
may   allege   in   his   answer   his   defenses,   counterclaims   or   cross-­‐‑claims,   including   such  
defenses   that   the   third   (fourth,   etc.)   —   party   plaintiff   may   have   against   the   original  
plaintiff'ʹs  claim.  In  proper  cases,  he  may  also  assert  a  counterclaim  against  the  original  
plaintiff   in   respect   of   the   latter'ʹs   claim   against   the   third-­‐‑party   plaintiff   (Rule   6,   Section  
13).      
 
Time  to  plead    
 
The   time   to   answer   a   third   (fourth,   etc.)—party   complaint   shall   be   governed   by   the  
same  rule  as  the  answer  to  the  complaint  (Rule  11,  Section  5).    
 
Extension  of  time  to  plead  
 
Upon   motion   and   on   such   terms   as   may   be   just,   the   court   may   extend   the   time   to   plead  
provided  in  the  Rules  of  Court  (Rule  11,  Section  11).  
 
The  court  may  also,  upon  like  terms,  allow  an  answer  or  other  pleading  to  be  filed  after  the  time  
fixed  by  these  Rules.  
 
 
(FORMAL  REQUIREMENTS)  
FILING  AND  SERVICE  OF  PLEADINGS,  MOTIONS  AND  ORDERS  
 
 
Verification  (Rule  7,  Sec.  4)  
 
Section  4.  Verification.  —  Except  when  otherwise  specifically  required  by  law  or  rule,  pleadings  
need  not  be  under  oath,  verified  or  accompanied  by  affidavit.  
 
A   pleading   is   verified   by   an   affidavit   that   the   affiant   has   read   the   pleading   and   that   the  
allegations  therein  are  true  and  correct  of  his  knowledge  and  belief.  
 
A   pleading   required   to   be   verified   which   contains   a   verification   based   on   "ʺinformation   and  
belief"ʺ,   or   upon   "ʺknowledge,   information   and   belief"ʺ,   or   lacks   a   proper   verification,   shall   be  
treated  as  an  unsigned  pleading.  
 
• The  verification  requirement  is  “deemed  substantially  complied  with  when  one  who  has  
an  ample  knowledge  to  swear  to  the  truth  of  the  allegations  in  the  complaint  or  petition  
signs  the  verification,  and  when  matters  alleged  in  the  petition  have  been  made  in  good  
faith  or  are  true  and  correct  (Vda.  De  Formoso  v.  Philippine  National  Bank,  650  SCRA  35).  
 
• The  verification  requirement  is  significant,  as  it  intends  to  secure  an  assurance  that  the  
allegations  in  a  pleading  are  true  and  correct  and  not  the  product  of  the  imagination  or  a  
matter   of   speculation   and   that   the   pleading   is   filed   in   good   faith   (Sarmiento   v.   Zaratan,  
514  SCRA  246)  
 27  
 
• A  pleading  required  to  be  verified  but  lacks  the  proper  verification  shall  be  treated  as  an  
unsigned  pleading.  Hence,  it  produces  no  legal  effect.  The  lack  of  proper  verification  is  
cause  to  treat  the  pleading  as  unsigned  and  dismissible.  (Chua  v.  Torres,  468  SCRA  358)  
 
• It  was,  however,  been  held  that  the  absence  of  a  verification  or  the  non-­‐‑compliance  with  
the  verification  requirement  does  not  necessarily  render  the  pleading  defective.  It  is  only  
a   formal   and   not   a   jurisdictional   requirement.   The   requirement   is   a   condition   affecting  
only  the  form  of  the  pleading  and  non-­‐‑compliance  therewith  does  not  necessarily  render  
it  fatally  defective.  (Benguet  Corporation  v.  Cordillera  Caraballo  Mission,  Inc.)  
 
 
Certification  against  forum  shopping  (Rule  7,  Sec.  5)  
 
The   plaintiff   or   principal   party   shall   certify   under   oath   in   the   complaint   or   other   initiatory  
pleading   asserting   a   claim   for   relief,   or   in   a   sworn   certification   annexed   thereto   and  
simultaneously  filed  therewith:    
(a)   that   he   has   not   theretofore   commenced   any   action   or   filed   any   claim   involving   the  
same   issues   in   any   court,   tribunal   or   quasi-­‐‑judicial   agency   and,   to   the   best   of   his  
knowledge,  no  such  other  action  or  claim  is  pending  therein;    
 
(b)   if   there   is   such   other   pending   action   or   claim,   a   complete   statement   of   the   present  
status  thereof;  and    
 
(c)  if  he  should  thereafter  learn  that  the  same  or  similar  action  or  claim  has  been  filed  or  
is  pending,  he  shall  report  that  fact  within  five  (5)  days  therefrom  to  the  court  wherein  
his  aforesaid  complaint  or  initiatory  pleading  has  been  filed.  
 
Failure  to  comply  with  the  foregoing  requirements  shall  not  be  curable  by  mere  amendment  of  
the   complaint   or   other   initiatory   pleading   but   shall   be   cause   for   the   dismissal   of   the   case  
without  prejudice,  unless  otherwise  provided,  upon  motion  and  after  hearing.  The  submission  
of  a  false  certification  or  non-­‐‑compliance  with  any  of  the  undertakings  therein  shall  constitute  
indirect  contempt  of  court,  without  prejudice  to  the  corresponding  administrative  and  criminal  
actions.   If   the   acts   of   the   party   or   his   counsel   clearly   constitute   willful   and   deliberate   forum  
shopping,  the  same  shall  be  ground  for  summary  dismissal  with  prejudice  and  shall  constitute  
direct  contempt,  as  well  as  a  cause  for  administrative  sanctions.    
 
• The  certification  is  mandatory  under  Sec.  5  of  Rule  7  but  not  jurisdictional  since  jurisdiction  
over  the  subject  of  the  action  is  conferred  by  law.  (Robert  Development  Corporation  v.  Quitain,  
315  SCRA  150).  
 
• There   is   forum   shopping   when   a   party   repetitively   avails   of   several   judicial   remedies   in  
different   courts,   simultaneously   or   successively,   all   substantially   founded   on   the   same  
transactions  and  the  same  essential  facts  and  circumstances,  and  all  raising  substantially  the  
same   issues   either   pending   in   or   already   resolved   adversely   by   some   other   court   (Asia  
United  Bank  v.  Goodland  Company,  Inc.,  G.R.  No.  191388).  
 
• Three  ways  of  committing  forum  shopping:  
o Filing   multiple   cases   based   on   the   same   cause   of   action   and   with   the   same  
prayer,  the  previous  case  not  having  been  resolved  yet;  
o Filing  multiple  cases  based  on  the  same  cause  of  action  and  the  same  prayer,  the  
previous  case  having  been  finally  resolved;  and    
o Filing   multiple   cases   based   on   the   same   cause   of   action,   but   with   different  
prayers  (Chua  v.  Metrobank,  596  SCRA  535).  
 28  
 
• The   rationale   against   forum   shopping   is   that   a   party   should   not   be   allowed   to   pursue  
simultaneous   remedies   in   two   different   fora.   Filing   multiple   petitions   or   complaints  
constitutes   abuse   of   court   processes,   which   tends   to   degrade   the   administration   of   justice,  
wreaks   havocs   upon   orderly   judicial   procedure,   and   adds   to   the   congestion   of   the   heavily  
burdened  dockets  of  the  courts.    
 
• The   certification   against   forum   shopping   must   be   executed   by   the   party,   not   the   attorney  
(Damasco  v.  NLRC,  346  SCRA  714)  
 
• While  it  is  true  that  the  certification  against  forum  shopping  must  be  executed  by  the  party-­‐‑
pleader   and   not   by   his   counsel,   the   rule   is   subject   to   exceptions.   If   for   reasonable   or  
justifiable   reasons,   the   party-­‐‑pleader   is   unable   to   sign,   he   must   execute   a   Special   Power   of  
Attorney   designating   his   counsel   of   record   to   sign   on   his   behalf.   (Vda.   de   Formoso   v.  
Philippine  National  Bank).  
 
• Under   reasonable   or   justifiable   circumstances,   as   when   the   plaintiffs   or   petitioners   share   a  
common  interest  and  invoke  a  common  cause  of  action  or  defense,  the  signature  of  only  one  
of  them  substantially  conforms  with  the  Rule.  (Vda.  de  Formoso  v.  Philippine  Naitonal  Bank)  
 
• The   failure   to   comply   with   the   required   certification   is   not   curable   by   a   mere   amendment  
and  shall  be  a  cause  for  dismissal  of  the  action.  The  dismissal  for  failure  to  comply  with  the  
certification  requirement  is  not  to  be  done  by  the  court  motu  proprio.  The  rule  requires  that  
the  dismissal  be  upon  the  motion  and  after  hearing.    
 
• Strict   compliance   with   the   provision   regarding   the   certificate   of   non-­‐‑forum   shopping  
underscores   its   mandatory   nature   in   that   the   certification   cannot   be   altogether   dispensed  
with  or  its  requirements  completely  disregarded.  It  does  not,  however,  prohibit  substantial  
compliance   therewith   under   justifiable   circumstances,   considering   especially   that   although  
it  is  obligatory,  it  is  not  jurisdictional.  The  substantial  compliance  rule,  however,  will  not  be  
applied  if  dishonesty  attended  the  signing  of  the  certification.    
 
• It   has   also   been   held   that   the   rules   on   forum   shopping,   which   were   precisely   designed   to  
promote   or   facilitate   the   orderly   administration   of   justice,   should   not   be   interpreted   with  
such  absolute  literalness  as  to  subvert  its  own  ultimate  and  legitimate  objective  which  is  the  
goal   of   all   rules   of   procedure—that   is,   to   achieve   substantial   justice   as   expeditiously   as  
possible   (Great   Southern   Maritime   Services   v.   Acuña,   452   SCRA   422).   However,   any   liberal  
application  has  to  be  justified  by  ample  and  sufficient  reasons  that  maintain  the  integrity  of,  
and  not  detract  from,  the  mandatory  character  of  the  rule  (BPI  v.  CA,  G.R.  No.  168313).    
 
• If   the   acts   of   the   party   or   his   counsel   clearly   constitute   willful   and   deliberate   forum  
shopping,   the   same   shall   be   a   ground   for   summary   dismissal.   Here,   no   motion   to   dismiss  
and   hearing   are   required.   The   dismissal   in   this   case   is   with   prejudice   and   shall   constitute  
direct  contempt,  as  well  as  cause  for  administrative  sanctions.    
 
• A   false   certification   shall   constitute   indirect   contempt   of   court   without   prejudice   to   the  
corresponding  administrative  and  criminal  sanctions.    
 
• Failure  to  comply  with  the  undertakings  in  the  certification  against  forum  shopping  has  the  
same  effect  as  the  submission  of  a  false  certification  (Oliveros  v.  Sison,  548  SCRA  265).  
 
 
 
 
 29  
 
Ao-­‐‑As  v.  CA  
G.R.  No.  128464,  20  June  2006.  
 
Facts:  
The  Lutheran  Church  in  the  Philippines  is  a  religious  organization  duly  registered  with  
the   SEC.   At   the   time   of   its   incorporation,   the   church   was   divided   into   three   districts,   namely:  
North  Luzon  District  (NLD);  the  South  Luzon  District  (SLD);  and  the  Mindanao  District  (MDD).  
Subsequently,  new  districts  were  added.  Since  the  addition  of  the  new  districts  an  11  member  
board   of   directors   representing   5   districts   managed   the   church   without   challenged   from   the  
membership  until  several  years  later  when  certain  controversies  arose  involving  the  resolutions  
of  the  Board  terminating  the  service  of  the  LCP  business  manager  and  corporate  treasurer  since  
1979,  Mr.  Hipe.  The  controversies  divided  the  board  into  two  groups  the  Ao-­‐‑as  group  and  the  
Batong  group.    
 
The  termination  of  Mr.  Hipe  sparked  a  series  of  cases  filed  in  different  tribunals  between  
the  Ao-­‐‑As  group  and  the  Batong  group.  One  of  which  is  the  SEC  case  No.  3857  for  accounting  
and   damages   with   prayer   for   preliminary   injunction   and   appointment   of   a   management  
committee,  filed  by  the  Ao-­‐‑As  group  against  the  Batong  group.  This  SEC  case  reached  the  Court  
of  Appeals,  the  CA  held  that  the  issues  raised  by  the  Ao-­‐‑As  group  in  the  said  case  were  already  
raised  and  passed  upon  in  other  cases  pending  at  the  time  the  Ao-­‐‑As  group  filed  their  SEC  case.    
 
Held:  
Ao-­‐‑As  group  did  NOT  commit  deliberate  and  intentional  forum  shopping.  The  elements  
of   forum   shopping   are:   (a)   identity   of   parties,   or   at   least   such   parties   as   represent   the   same  
interests  in  both  actions;  (b)  identity  of  rights  asserted  and  the  relief  prayed  for,  the  relief  being  
founded  on  the  same  facts;  and  (c)  the  identity  of  the  two  preceding  particulars,  such  that  any  
judgment  rendered  in  the  other  action  will,  regardless  of  which  party  is  successful,  amount  to  
res  judicata  in  the  action  under  consideration.  
 
Otherwise  stated,  there  is  forum  shopping  where  a  litigant  sues  the  same  party  against  
whom  another  action  or  actions  for  the  alleged  violation  of  the  same  right  and  the  enforcement  
of  the  same  relief  is/are   still  pending.  The  defense  of  litis  pendentia  in  one  case  is  a  bar  to  the  
other/others;   and,   a   final   judgment   is   one   that   would   constitute   res   judicata   and   thus   would  
cause  the  dismissal  of  the  rest.  Absolute  identity  of  the  parties  is  not  required.  It  is  enough  that  
there  is  substantial  identity  of  the  parties.  It  is  enough  that  the  party  against  whom  the  estoppel  
is  set  up  is  actually  a  party  to  the  former  case.  There  is  identity  of  causes  of  action  if  the  same  
evidence  will  sustain  the  second  action.  The  principle  applies  even  if  the  relief  sought  in  the  two  
cases   may   be   different.   Forum   shopping   consists   of   filing   multiple   suits   involving   the   same  
parties   for   the   same   cause   of   action,   either   simultaneously   or   successively,   for   the   purpose   of  
obtaining  a  favorable  judgment.  
 
As   the   present   jurisprudence   now   stands,   forum   shopping   can   be   committed   in   three  
ways:  (1)  filing  multiple  cases  based  on  the  same  cause  of  action  and  with  the  same  prayer,  the  
previous  case  not  having  been  resolved  yet  (litis  pendentia);  (2)  filing  multiple  cases  based  on  
the   same   cause   of   action   and   the   same   prayer,   the   previous   case   having   been   finally   resolved  
(res  judicata);  and  (3)  filing  multiple  cases  based  on  the  same  cause  of  action  but  with  different  
prayers   (splitting   of   causes   of   action,   where   the   ground   for   dismissal   is   also   either   litis  
pendentia  or  res  judicata11  ).  If  the  forum  shopping  is  not  considered  willful  and  deliberate,  the  
subsequent   cases   shall   be   dismissed   without   prejudice   on   one   of   the   two   grounds   mentioned  
above.  However,  if  the  forum  shopping  is  willful  and  deliberate,  both  (or  all,  if  there  are  more  
than  two)  actions  shall  be  dismissed  with  prejudice.  
 
The  six  grounds  originally  relied  upon  by  the  Ao-­‐‑As  group  in  SEC-­‐‑SICD  Case  No.  3857  
 30  
 
are  entirely  different  from  the  causes  of  action  in  the  other  cases  NLRC  Cases  No.  03-­‐‑01935-­‐‑90  
and  04-­‐‑01979-­‐‑90,  Civil  Cases  No.  133394-­‐‑CV  and  131879-­‐‑CV,  and  SEC-­‐‑SICD  Cases  No.  3556  and  
3524.    
 
It  is  true  that  the  causes  of  action  in  the  latter  cases  were  included  as  additional  grounds  
in   SEC-­‐‑SICD   Case   No.   3857   for   the   appointment   of   the   management   committee   and   for  
accounting   "ʺof   all   funds,   properties   and   assets   of   LCP   which   may   have   come   into   their  
possession  during  their  incumbency  as  officers  and/or  directors  of  LCP."ʺ   However,  the  creation  
of  a  management  committee  and  the  prayer  for  accounting  could  not  have  been  asked  for  in  the  
labor   (NLRC   Cases   No.   03-­‐‑01935-­‐‑90   and   04-­‐‑01979-­‐‑90)   and   forcible   entry   (Civil   Cases   No.  
133394-­‐‑CV  and  131879-­‐‑CV)  cases.  
 
As  regards  the  other  SEC  Cases,  though,  the  Ao-­‐‑As  group  could  have  indeed  prayed  for  
the  creation  of  the  management  committee  and  the  accounting  of  the  funds  of  the  LCP.  In  fact,  
as  stated  by  the  Court  of  Appeals,  the  petitioner  in  SEC-­‐‑SICD  Case  No.  3556  had  prayed  for  the  
appointment   of   a   management   committee   in   a   motion   dated   18   June   1991.   This   motion,  
however,  was  subsequent  to  the  filing  of  SEC-­‐‑SICD  Case  No.  3857  on  17  August  1990,  for  which  
reason  the  SEC-­‐‑SICD  ruled  that  such  motion  cannot  be  given  due  course  considering  that  it  was  
one   of   the   incidents   of   SEC-­‐‑SIDC   Case   No.   3857.   In   effect,   the   SEC-­‐‑SIDC   had   denied   the  
subsequent   motion   on   the   ground   of   litis   pendentia.   But   should   SEC-­‐‑SICD   Case   No.   3857,  
which   contains   the   earlier   prayer   to   create   a   management   committee,   be   likewise   dismissed?  
Following   the   rules   set   forth   in   the   preceding   paragraphs,   it   would   depend   on   whether   the  
different   SEC   cases   constitute   willful   and   deliberate   forum   shopping   on   the   part   of   Ao-­‐‑As  
group.  
 
We  hold  that  this  is  not  a  case  of  willful  and  deliberate  forum  shopping  and,  hence,  the  
SEC-­‐‑SICD  Case  No.  3857,  which  contains  the  earlier  prayer  to  create  a  management  committee,  
should   not   be   dismissed.   The   reason   for   this   is   the   strict   evidentiary   requirement   needed   to  
grant   a   prayer   to   create   a   management   committee.   The   power   of   the   SEC   to   create   a  
management  committee  is  found  in  Section  6(d)  of  Presidential  Decree  No.  902-­‐‑A,  as  amended,  
which  provides:  
 
Sec.  6.  In  order  to  effectively  exercise  such  jurisdiction,  the  Commission  shall  possess  the  
following  powers:  
 
d)   To   create   and   appoint   a   management   committee,   board   or   body   upon   petition   or  
motu  propio  to  undertake  the  management  of  corporations,  partnerships  or  other  associations  
not   supervised   or   regulated   by   other   government   agencies   in   appropriate   cases   when   there   is  
imminent   danger   of   dissipation,   loss,   wastage   or   destruction   of   assets   or   other   properties   or  
paralization  of  business  operations  of  such  corporations  or  entities  which  may  be  prejudicial  to  
the  interest  of  the  minority  stockholders,  parties-­‐‑litigants  or  the  general  public.  
 
Evidently,   it   should   be   difficult   to   deduce   the   "ʺimminent   danger   of   dissipation,   loss,  
wastage   or   destruction   of   assets   or   other   properties"ʺ   from   an   allegation   of   a   single   act   of  
previous  misappropriation  or  dissipation  on  the  part  of  the  Batong  group.  It  is  often  only  when  
the  previous  misappropriations  and  dissipations  have  become  extensive  and  out  of  control  that  
it  can  be  candidly  said  that  there  is  an  imminent  danger  of  further  dissipation.  The  Ao-­‐‑As  group  
cannot  be  faulted  therefore  for  not  praying  for  the  creation  of  a  management  committee  in  the  
first  couple  of  cases  it  filed  with  the  SEC,  and  neither  can  they  be  faulted  for  using  the  causes  of  
action  in  previously  filed  cases  to  prove  their  allegation  of  imminent  dissipation.  We  cannot  rule  
out   the   possibility   that   the   danger   of   imminent   dissipation   of   the   corporate   assets   became  
apparent  only  in  the  acts  of  the  respondents  subsequent  to  the  filing  of  the  first  two  SEC  cases.  
 
 31  
 
Forum  Shopping  certificate  for  a  corporation  
 
• A  juridical  entity,  unlike  a  natural  person,  can  only  perform  physical  acts  through  properly  
delegated   individuals.   The   certification   against   forum   shopping   where   the   plaintiff   or   a  
principal   party   is   a   juridical   entity   like   a   corporation,   may   be   executed   by   properly  
authorized  persons.  This  person  may  be  the  lawyer  of  the  corporation.  As  long  as  he  is  duly  
authorized   by   the   corporation   and   has   personal   knowledge   of   the   facts   required   to   be  
disclosed  in  the  certification  against  forum  shopping,  the  certification  may  be  signed  by  the  
authorized  lawyer  (National  Steel  Corporation  v.  CA,  388  SCRA  85).    
 
 
PAL  v.  Flight  Attendants  and  Stewards  Assn  of  the  Philippines  (FASAP)  
G.R.  No.  143088,  24  January  2006.  
 
Facts:  
FASAP   filed   a   complaint   for   unfair   labor   practice,   illegal   suspension,   and   illegal  
dismissal   against   PAL   before   the   Labor   Arbiter   of   the   NLRC.   The   NLRC   ruled   in   favor   of  
FASAP.   The   NLRC   modified   the   arbiter’s   decision   by   setting   aside   the   finding   that   PAL   was  
guilty  of  unfair  labor  practice,  but  affirming  the  rest  of  the  decision.    
 
Subsequently,  PAL  filed  a  petition  for  certiorari  with  the  CA,  it  was  accompanied  by  a  
Certification   of   Non-­‐‑forum   shopping   executed   by   Cesar   R.   Lamberte   and   Susan   Del   Carmen,  
Vice-­‐‑President   Human   Resources   and   Assistant   Vice-­‐‑President   Cabin   Services   of   PAL,  
respectively,  who  are  not  parties  to  the  case.  The  certification,  however,  was  without  proof  that  
the  two  affiants  had  authority  to  sign  in  behalf  of  petitioners.  As  a  result,  the  Court  of  Appeals  
dismissed  the  case  for  failure  to  show  the  authority  of  affiants  to  sign  for  PAL  and  for  failure  of  
the   other   petitioners   to   join   in   the   execution   of   the   certification.   A   motion   for   reconsideration  
was  filed  with  a  Secretary’s  Certificate  attached  evidencing  that  affiants  Cesar  R.  Lamberte  and  
Susan   Del   Carmen   have   been   authorized   by   Board   Resolution   No.   00-­‐‑02-­‐‑03   to   initiate   and/or  
cause   to   be   filed   on   behalf   of   PAL   petitions   and   pleadings   in   all   labor-­‐‑related   cases.   As   to   the  
other   petitioners,   it   was   argued   that   they   are   mere   nominal   parties   so   that   their   failure   to  
execute   the   certification   does   not   justify   dismissal   of   the   petition.   Despite   this   submission,   the  
Court   of   Appeals   denied   the   motion   for   reconsideration.   Hence,   the   case   is   now   before   this  
Court.  
 
Held:  
The  petitioner  violated  the  rules  on  certificate  of  non-­‐‑forum  shopping.  The  necessity  for  
a  certification  of  non-­‐‑forum  shopping  in  filing  petitions  for  certiorari  is  found  in  Rule  65,  Section  
1,   in   relation   to   Rule   46,   Section   3   of   the   Rules   of   Court.   These   provisions   require   it   to   be  
executed  by  the  corresponding  petitioner  or  petitioners.  As  no  distinction  is  made  as  to  which  
party   must   execute   the   certificate,   this   requirement   is   made   to   apply   to   both   natural   and  
juridical  entities.   When  the  petitioner  is  a  corporation,  the  certification  should  be  executed  by  a  
natural  person.  Furthermore,  not  just  any  person  can  be  called  upon  to  execute  the  certification,  
although  such  a  person  may  have  personal  knowledge  of  the  facts  to  be  attested  to.  
 
This   Court   has   explained   that   a   corporation   has   no   power   except   those   conferred   on   it  
by  the  Corporation  Code  and  those  that  are  implied  or  incidental  to  its  existence.  The  exercise  of  
these  powers  is  done  through  the  board  of  directors  and/or  duly  authorized  officers  and  agents.  
Given   these   corporate   features,   the   power   of   a   corporation   to   sue   in   any   court   is   generally  
lodged  with  the  board  of  directors.  The  board,  in  turn,  can  delegate  the  physical  acts  needed  to  
sue,   which   may   be   performed   only   by   natural   persons,   to   its   attorneys-­‐‑in-­‐‑fact   by   a   board  
resolution,  if  not  already  authorized  under  the  corporate  by-­‐‑laws.  
 
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Thus,   only   individuals   vested   with   authority   by   a   valid   board   resolution   may   sign   the  
certificate  of  non-­‐‑forum  shopping  in  behalf  of  a  corporation.  In  addition,  the  Court  has  required  
that   proof   of   said   authority   must   be   attached.   Failure   to   provide   a   certificate   of   non-­‐‑forum  
shopping   is   sufficient   ground   to   dismiss   the   petition.   Likewise,   the   petition   is   subject   to  
dismissal  if  a  certification  was  submitted  unaccompanied  by  proof  of  the  signatory’s  authority.  
 
The  petition  filed  with  the  Court  of  Appeals  had  a  certification  of  non-­‐‑forum  shopping  
executed  by  Cesar  R.  Lamberte  and  Susan  Del  Carmen.  The  certification,  however,  was  without  
proof  of  authority  to  sign.  When  a  motion  for  reconsideration  was  filed,  a  Secretary’s  Certificate  
was  submitted  as  proof  that  the  board  of  directors  of  PAL  had  authorized  the  two  to  execute  the  
certificate.   Nonetheless,   the   Court   finds   that   this   belated   submission   is   an   insufficient  
compliance  with  the  certification  requirement.  
 
This  Court  has  allowed  the  reinstatement  of  petitions  that  were  dismissed  due  to  lack  of  
proof   of   authority   to   sign   the   certification   upon   its   subsequent   submission,   saying   that   this  
amounted  to  
substantial  compliance.  The  rationale  was  that  the  signatories,  at  the  time  of  execution  of  
the  certification,  were  in  fact  authorized  to  sign,  although  proof  of  their  authority  was  lacking.  
 
This  is  not  what  happened  in  this  case.  A  perusal  of  the  Secretary’s  Certificate  submitted  
reveals   that   the   authority   to   cause   the   filing   of   the   petition   was   granted   on   February   15,   2000.  
The  petition,  on  the  other  hand,  was  filed  on  January  24,  2000  and  was  dismissed  by  the  Court  
of  Appeals  on  January  31,  2000.  This  means  that  at  the  time  the  certification  was  signed,  Cesar  
R.  Lamberte  and  Susan  Del  Carmen  were  not  duly  authorized  by  the  Board  of  Directors  of  PAL  
and,   consequently,   their   signing   and   attestations   were   not   in   representation   of   PAL.   This  
effectively  translates  to  a  petition  that  was  filed  without  a  certification  at  all  as  none  was  issued  
by  PAL,  the  principal  party  to  the  case.  
 
The   required   certification   of   non-­‐‑forum   shopping   must   be   valid   at   the   time   of   filing   of  
the   petition.   An   invalid   certificate   cannot   be   remedied   by   the   subsequent   submission   of   a  
Secretary’s  Certificate  that  vests  authority  only  after  the  petition  had  been  filed.  
 
 
Filing  and  service  defined  (Rule  13,  Sec.  2)  
 
• Filing  is  the  act  of  presenting  the  pleading  or  other  paper  to  the  clerk  of  court.  
 
• Service  is  the  act  of  providing  a  party  with  a  copy  of  the  pleading  or  paper  concerned.  If  any  
party  has  appeared  by  counsel,  service  upon  him  shall  be  made  upon  his  counsel  or  one  of  
them,   unless   service   upon   the   party   himself   is   ordered   by   the   court.   Where   one   counsel  
appears  for  several  parties,  he  shall  only  be  entitled  to  one  copy  of  any  paper  served  upon  
him  by  the  opposite  side.    
 
o If  a  party  has  not  appeared  by  counsel,  then  service  must  be  made  upon  him.  
 
o If  a  party  has  appeared  by  counsel,  then  service  upon  said  party  shall  be  made  upon  his  
counsel  or  one  of  them,  unless  service  upon  the  party  himself  is  ordered  by  the  court.    
o The  rule  is  that  when  a  party  is  represented  by  counsel  in  an  action  in  court,  notices  of  
all  kinds,  including  motions,  pleadings,  and  orders  must  be  served  on  said  counsel  and  
notice  to  him  is  notice  to  the  client.  (People  v.  Gabriel,  501  SCRA  197).  
 
o It  has  been  held  that  notice  or  service  made  upon  a  party  who  is  represented  by  counsel  
is  a  nullity.  As  a  rule,  notice  to  the  client  and  not  to  his  counsel  of  record  is  not  notice  in  
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law  unless  for  instance  when  the  court  or  tribunal  orders  service  upon  the  party  or  when  
the  technical  defect  in  the  manner  of  notice  is  waived.  (Heirs  of  Benjamin  Mendoza  v.  CA,  
565  SCRA  506).  
 
o Where  one  counsel  appears  for  several  parties,  service  shall  be  made  upon  said  counsel  
but  he  shall  be  entitled  only  to  one  copy  of  any  paper  served  upon  him  by  the  opposite  
side.    
 
Coverage  (Rule  13,  Secs.  1,  4)  
 
Section   1.   Coverage.   —   This   Rule   shall   govern   the   filing   of   all   pleadings   and   other   papers,   as  
well  as  the  service  thereof,  except  those  for  which  a  different  mode  of  service  is  prescribed.    
 
Section   4.   Papers   required   to   be   filed   and   served.   —   Every   judgment,   resolution,   order,   pleading  
subsequent  to  the  complaint,  written  motion,  notice,  appearance,  demand,  offer  of  judgment  or  
similar  papers  shall  be  filed  with  the  court,  and  served  upon  the  parties  affected.    
 
 
Modes  of  Service    
 
a. In  general,  filing  (Rule  13,  Section  3)  
 
Section   3.   Manner   of   filing.   —   The   filing   of   pleadings,   appearances,   motions,   notices,   orders,  
judgments  and  all  other  papers  shall  be  made  by  presenting  the  original  copies  thereof,  plainly  
indicated  as  such,  personally  to  the  clerk  of  court  or  by  sending  them  by  registered  mail.  In  the  
first   case,   the   clerk   of   court   shall   endorse   on   the   pleading   the   date   and   hour   of   filing.   In   the  
second  case,  the  date  of  the  mailing  of  motions,  pleadings,  or  any  other  papers  or  payments  or  
deposits,   as   shown   by   the   post   office   stamp   on   the   envelope   or   the   registry   receipt,   shall   be  
considered   as   the   date   of   their   filing,   payment,   or   deposit   in   court.   The   envelope   shall   be  
attached  to  the  record  of  the  case.  (1a)  
 
• There  are  two  modes  of  filing,  to  wit:  
o by  presenting  the  original  copy  of  the  pleading  notice,  appearance,  motion,  order  
or  judgment  personally  with  the  clerk  of  courtl  or    
o by  registered  mail.  
 
• In   the   first   mode,   the   clerk   of   court   shall   indicate   or   endorse   on   the   pleading   or   paper  
filed,  the  date  and  hour  of  filing.    
 
• In   the   second   mode,   the   date   of   mailing   as   shown   by   the   post   office   stamp   on   the  
envelope  or  registry  receipt  shall  be  considered  as  the  date  of  filing,  payment  or  deposit  
in  court.  
 
b. In  general,  service  (Rule  13,  Section  5,  9)  
 
Section  5.  Modes  of  service.  —  Service  of  pleadings  motions,  notices,  orders,  judgments  and  other  
papers  shall  be  made  either  personally  or  by  mail.  (3a)  
 
Section   9.   Service   of   judgments,   final   orders,   or   resolutions.   —   Judgments,   final   orders   or  
resolutions  shall  be  served  either  personally  or  by  registered  mail.  When  a  party  summoned  by  
publication  has  failed  to  appear  in  the  action,  judgments,  final  orders  or  resolutions  against  him  
shall  be  served  upon  him  also  by  publication  at  the  expense  of  the  prevailing  party.  (7a)  
 
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• Under  the  Rules,  there  are  two  modes  of  service  of  pleadings,  motions,  notices,  orders,  
judgments,  and  other  papers:  (a)  personally  or  by  (b)  mail.  However,  if  personal  service  
and  service  by  mail  cannot  be  made,  service  shall  be  done  by  substituted  service.    
 
i. Personal  (Rule  13,  Section  6)  
 
Section  6.  Personal  service.  —  Service  of  the  papers  may  be  made  by  delivering  personally  a  copy  
to  the  party  or  his  counsel,  or  by  leaving  it  in  his  office  with  his  clerk  or  with  a  person  having  
charge  thereof.  If  no  person  is  found  in  his  office,  or  his  office  is  not  known,  or  he  has  no  office,  
then  by  leaving  the  copy,  between  the  hours  of  eight  in  the  morning  and  six  in  the  evening,  at  
the  party'ʹs  or  counsel'ʹs  residence,  if  known,  with  a  person  of  sufficient  age  and  discretion  then  
residing  therein.  (4a)  
 
• Personal  service  is  made  by:  (a)  delivering  a  copy  of  the  papers  personally  to  the  party    
or   his   counsel,   or   (b)   or   by   leaving   the   papers   in   his   office   with   his   clerk   or   a   person  
having  charge  thereof.  If  no  person  is  found  in  the  office,  or  his  office  is  not  known  or  he  
has  no  office,  then  by  leaving  a  copy  of  the  papers  at  the  party’s  or  counsel’s  residence,  if  
known,  with  a  person  of  sufficient  age  and  discretion  residing  therein  between  eight  in  
the  morning  and  six  in  the  evening.    
 
ii. Mail  (Rule  13,  Section  7)  
 
Section  7.  Service  by  mail.  —  Service  by  registered  mail  shall  be  made  by  depositing  the  copy  in  
the  post  office  in  a  sealed  envelope,  plainly  addressed  to  the  party  or  his  counsel  at  his  office,  if  
known,  otherwise  at  his  residence,  if  known,  with  postage  fully  prepaid,  and  with  instructions  
to   the   postmaster   to   return   the   mail   to   the   sender   after   ten   (10)   days   if   undelivered.   If   no  
registry  service  is  available  in  the  locality  of  either  the  senders  or  the  addressee,  service  may  be  
done  by  ordinary  mail.  (5a;  Bar  Matter  No.  803,  17  February  1998)  
 
• The  preferred  service  by  mail  is  registered  mail.  Service  by  ordinary  mail  may  be  done  
only  if  no  registry  service  is  available  in  the  locality  of  either  the  sender  or  the  addressee.    
• Service  by  registered  mail  is  complete  upon  actual  receipt  by  the  addressee,  or  after  five  
(5)  days  from  the  date  he  received  the  first  notice  of  the  postmaster,  whichever  is  earlier.    
 
c. Substituted  service  (Rule  13,  Section  8)  
 
Section  8.  Substituted  service.  —  If  service  of  pleadings,  motions,  notices,  resolutions,  orders  and  
other  papers  cannot  be  made  under  the  two  preceding  sections,  the  office  and  place  of  residence  
of  the  party  or  his  counsel  being  unknown,  service  may  be  made  by  delivering  the  copy  to  the  
clerk  of  court,  with  proof  of  failure  of  both  personal  service  and  service  by  mail.  The  service  is  
complete  at  the  time  of  such  delivery.  (6a)  
 
• This  mode  is  availed  of  only  when  there  is  failure  to  effect  service  personally  or  by  mail.  
This  failure  occurs  when  the  office  and  residence  of  the  party  or  counsel  are  unknown.  
   
• Subsituted  service  is  effected  by  delivering  the  copy  to  the  clerk  of  court,  with  proof  of  
failure  of  both  personal  service  and  service  by  mail.    
 
d. Priority  (Rule  13,  Section  11)  
 
Section  11.  Priorities  in  modes  of  service  and  filing.  —  Whenever  practicable,  the  service  and  filing  
of   pleadings   and   other   papers   shall   be   done   personally.   Except   with   respect   to   papers  
emanating   from   the   court,   a   resort   to   other   modes   must   be   accompanied   by   a   written  
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explanation  why  the  service  or  filing  was  not  done  personally.  A  violation  of  this  Rule  may  be  
cause  to  consider  the  paper  as  not  filed.  (n)  
 
• The  service  and  filing  of  pleadings  and  other  papers  shall  be  done  personally,  whenever  
practicable.   This   is   the   preferred   mode   of   service   (Uy   v.   Medina).   If   another   mode   of  
service   is   used   other   than   personal   service,   the   service   must   be   accompanied   by   a  
written  explanation  why  the  service  or  filing  was  not  done  personally.  Exempt  from  this  
explanation   are   the   service   of   papers   emanating   from   the   court.   A   violation   of   this  
requirement  may  be  cause  for  the  paper  to  be  considered  as  not  having  been  filed.    
 
 
Upon  party  in  default  (Rule  9,  Section  3)  
 
Section   3.   Default;   declaration   of.   —   If   the   defending   party   fails   to   answer   within   the   time  
allowed   therefor,   the   court   shall,   upon   motion   of   the   claiming   party   with   notice   to   the  
defending   party,   and   proof   of   such   failure,   declare   the   defending   party   in   default.   Thereupon,  
the   court   shall   proceed   to   render   judgment   granting   the   claimant   such   relief   as   his   pleading  
may   warrant,   unless   the   court   in   its   discretion   requires   the   claimant   to   submit   evidence.   Such  
reception  of  evidence  may  be  delegated  to  the  clerk  of  court.    
 
 
Completion  of  service  (Rule  13,  Section  10)  
 
Section  10.  Completeness  of  service.  —  Personal  service  is  complete  upon  actual  delivery.  Service  
by  ordinary  mail  is  complete  upon  the  expiration  of  ten  (10)  days  after  mailing,  unless  the  court  
otherwise  provides.  Service  by  registered  mail  is  complete  upon  actual  receipt  by  the  addressee,  
or  after  five  (5)  days  from  the  date  he  received  the  first  notice  of  the  postmaster,  whichever  date  
is  earlier.  (8a)  
 
• Upon  actual  delivery,  personal  service  is  deemed  complete.    
 
• Service  by  ordinary  mail  is  complete  upon  the  expiration  of  ten  (10)  days  after  mailing,  
unless  the  court  otherwise  provides.    
 
• Substituted  service  is  complete  at  the  time  of  delivery  of  the  copy  to  the  clerk  of  court.    
 
 
Proof  of  filing  and  service  (Rule  13,  Secs.  12,  13)  
 
Section  12.  Proof  of  filing.  —  The  filing  of  a  pleading  or  paper  shall  be  proved  by  its  existence  in  
the  record  of  the  case.  If  it  is  not  in  the  record,  but  is  claimed  to  have  been  filed  personally,  the  
filing   shall   be   proved   by   the   written   or   stamped   acknowledgment   of   its   filing   by   the   clerk   of  
court   on   a   copy   of   the   same;   if   filed   by   registered   mail,   by   the   registry   receipt   and   by   the  
affidavit  of  the  person  who  did  the  mailing,  containing  a  full  statement  of  the  date  and  place  of  
depositing  the  mail  in  the  post  office  in  a  sealed  envelope  addressed  to  the  court,  with  postage  
fully  prepaid,  and  with  instructions  to  the  postmaster  to  return  the  mail  to  the  sender  after  ten  
(10)  days  if  not  delivered.  (n)  
 
Section   13.   Proof   of   Service.   —   Proof   of   personal   service   shall   consist   of   a   written   admission   of  
the   party   served,   or   the   official   return   of   the   server,   or   the   affidavit   of   the   party   serving,  
containing  a  full  statement  of  the  date,  place  and  manner  of  service.  If  the  service  is  by  ordinary  
mail,   proof   thereof   shall   consist   of   an   affidavit   of   the   person   mailing   of   facts   showing  
compliance  with  section  7  of  this  Rule.  If  service  is  made  by  registered  mail,  proof  shall  be  made  
 36  
 
by  such  affidavit  and  the  registry  receipt  issued  by  the  mailing  office.  The  registry  return  card  
shall  be  filed  immediately  upon  its  receipt  by  the  sender,  or  in  lieu  thereof  the  unclaimed  letter  
together  with  the  certified  or  sworn  copy  of  the  notice  given  by  the  postmaster  to  the  addressee.  
(10a)  
 
• The   filing   of   a   pleading   or   paper   shall   be   proved   by   its   existence   in   the   record   of   the  
case.  If  it  is  not  in  the  record,  but  is  claimed  to  have  been  filed  personally,  the  filing  shall  
proved  by  the  written  or  stamped  acknowledgment  of  its  filing  by  the  clerk  of  court  on  a  
copy  of  the  same.    
 
• If  the  pleading  or  paper  is  filed  by  registered  mail,  the  proof  of  filing  is  by  the  registry  
receipt   and   by   the   affidavit   of   the   person   who   did   the   mailing,   containing   a   full  
statement   of   the   date   and   place   of   depositing   the   mail   in   the   post   office   in   a   sealed  
envelope  addressed  to  the  court,  with  postage  fully  prepaid,  and  with  instructions  to  the  
postmaster  to  return  the  mail  to  the  sender  after  ten  (10)  days  if  not  delivered.    
 
• Proof   of   personal   service   shall   consist   of   the   written   admission   of   the   party   served.   It  
may   also   be   proven   by   the   official   return   of   the   server,   or   the   affidavit   of   the   party  
serving,  containing  full  information  of  the  date,  place  and  manner  of  service.    
 
• If   service   is   by   registered   mail,   the   proof   shall   consist   of   the   affidavit   of   the   person  
mailing  and  the  registry  receipt  issued  by  the  mailing  office.  The  registry  return  card  is  
to  be  filed  immediately  upon  its  receipt  by  the  sender,  or  in  lieu  thereof  the  unclaimed  
letter  together  with  the  certified  or  sworn  copy  of  the  notice  given  by  the  postmaster  to  
the  addressee.    
 
• If   the   service   is   by   ordinary   mail,   proof   thereof   shall   consists   of   the   affidavit   of   the  
person  mailing  of  the  facts  showing  compliance  with  Section  7,  Rule  13.    
 
 
Lis  Pendens  
 
Section  14.  Notice  of  lis  pendens.  —  In  an  action  affecting  the  title  or  the  right  of  possession  of  real  
property,  the  plaintiff  and  the  defendant,  when  affirmative  relief  is  claimed  in  his  answer,  may  
record   in   the   office   of   the   registry   of   deeds   of   the   province   in   which   the   property   is   situated  
notice  of  the  pendency  of  the  action.  Said  notice  shall  contain  the  names  of  the  parties  and  the  
object   of   the   action   or   defense,   and   a   description   of   the   property   in   that   province   affected  
thereby.  Only  from  the  time  of  filing  such  notice  for  record  shall  a  purchaser,  or  encumbrancer  
of  the  property  affected  thereby,  be  deemed  to  have  constructive  notice  of  the  pendency  of  the  
action,  and  only  of  its  pendency  against  the  parties  designated  by  their  real  names.  
 
The  notice  of  lis  pendens  hereinabove  mentioned  may  be  cancelled  only  upon  order  of  the  court,  
after  proper  showing  that  the  notice  is  for  the  purpose  of  molesting  the  adverse  party,  or  that  it  
is  not  necessary  to  protect  the  rights  of  the  rights  of  the  party  who  caused  it  to  be  recorded.  (24a,  
R-­‐‑14)  
 
 
 
 
 
 
 
 
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AMENDED  AND  SUPPLEMENTAL  PLEADINGS  
 
AMENDMENTS  
 
In  General  
 
Pleadings  may  be  amended:    
(1) by  adding  or  striking  out  an  allegation  or  the  name  of  any  party,  or    
(2) by  correcting  a  mistake  in  the  name  of  a  party  or  a  mistaken  or  inadequate  allegation  or  
description  in  any  other  respect  
 
Purpose:   So   that   the   actual   merits   of   the   controversy   may   speedily   be   determined,   without  
regard  to  technicalities,  and  in  the  most  expeditious  and  inexpensive  manner.  
 
 
Liberality  
 
Barfel  dev’t.  Corp  v.  CA  
G.R.  No.  98177,  8  June  1993.  
Facts:    
 
Barfel   sold   to   Reginas   two   parcels   of   land   with   two   houses   erected   thereon   in   Ayala  
Alabang,  stipulating  that  the  Barfel  will  apply  the  payment  of  the  cash  portion  of  the  purchase  
price  to  the  removal  of  any  and  all  liens  on  the  properties.  The  contract  stated  that  apart  from  a  
BPI   mortgage   and   the   Deed   of   Restrictions   annotated   at   the   back   of   the   title,   the   subject  
property  was  free  from  all  liens.  Reginas  made  the  downpayment  upon  signing  the  agreement.  
 
It   was   later   discovered   that   there   was   apparently   a   second   mortgage   with   the  
PISO/Central   Bank.     Upon   this   information,   Victor   Barrios   assured   the   buyer   that   the   second  
mortgage  has  been  reduced  and  that  he  will  submit  the  necessary  documents  to  support  a  legal  
and  valid  acceptable  arrangement  for  the  release  of  such  mortgage.    Thereafter,  the  PSB  granted  
Reginas  loan,  which  again  subjected  aforesaid  properties  to  a  mortgage.    PSB  now  promises  to  
pay   directly   to   BPI   from   the   proceeds   of   the   loan   and   pay   the   sellers   the   purchase   price.     The  
latter  conformed  to  the  arrangement.      
 
Given   the   prior   assurance   of   a   workable   arrangement   regarding   the   Central   Bank  
mortgage,  the  buyers  now  manifested  its  willingness  to  pay  P2M  ahead  of  the  proceeds  for  the  
PSB  loan.    Notwithstanding  such  negotiations  however,  the  sellers  here  are  in  gross  and  evident  
bad  faith  and  malicious  breach  of  contract  for  they  have  failed  to  comply  with  the  obligation  to  
release  the  second  mortgage.    BPI  further  averred  that  the  sellers  actually  disauthorized  them  to  
consummate  the  transaction  despite  previous  arrangements.      
 
Reginas   and   Zaragoza   filed   a   complaint   for   specific   performance   and   damages   against  
Barfel  and  the  Spouses  Barrios.    Pre-­‐‑trial  was  conducted  and  both  parties  presented  evidence.      
 
During   Barfel’s   presentation,   Reginas   filed   a   motion   for   leave   to   file   an   amended  
complaint   and   motion   to   admit   the   same.     The   amendment   sought   to   implead   PISO   bank   as  
additional   party   defendant   and   compel   it   to   accept   payment   of   the   existing   second   mortgage  
from  Reginas,  since  no  complete  relief  can  be  had  unless  the  second  mortgage  is  released.      
 
Barfel  opposed.  The  RTC  admitted  the  amended  complaint.    The  CA  sustained  the  lower  
court’s   order   saying   that   the   amendment   was   made   without   intent   to   delay   the   action.     The  
essence  of  liberal  construction  was  accorded  by  the  courts.      
 38  
 
 
Held:  The  amended  complaint  should  not  be  allowed.  The  amendment  was  made  with  intent  to  
delay  the  action  and  substantially  alters  the  cause  of  action  of  Reginas  and  the  defense  of  Barfel.  
After  the  case  is  set  for  hearing,  substantial  amendments  may  be  made  only  upon  leave  of  court.  
Such  leave  may  be  refused  if  it  appears  that  the  motion  was  made  with  intent  to  delay  the  action  
or  that  the  cause  of  action  or  defense  is  substantially  altered.  (Sec.  3,  Rule  10)  
   
The   amendment   sought   by   private   respondents,   which   is   to   include   a   new   party  
defendant   at   a   late   stage   in   the   proceeding,   is   not   a   formal   but   a   substantial   one.   Private  
respondents  will  have  to  present  additional  evidence  on  the  PISO  second  mortgage.  The  effect  
would   be   to   start   trial   anew   with   the   parties   recasting   their   theories   of   the   case.   The   correct  
amount   of   the   second   mortgage   owed   by   petitioners   to   PISO   bank   (apparently   a   controverted  
point),  would  have  to  be  litigated  and  this  could  be  time  consuming.  
As  a  general  policy,  liberality  in  allowing  amendments  is  greatest  in  the  early  stages  
of   a   law   suit,   decreases   as   it   progresses   and   changes   at   times   to   a   strictness   amounting   to   a  
prohibition.   This   is   further   restricted   by   the   condition   that   the   amendment   should   not  
prejudice  the  adverse  party  or  place  him  at  a  disadvantage.    
 
 
Form  
 
When  any  pleading  is  amended,  the  following  shall  be  filed:  
(1) a  new  copy  of  the  entire  pleading,    
(2) incorporating  the  amendments,  which  shall  be  indicated  by  appropriate  marks,.  (Sec.  7,  
Rule  13)  
 
Effect  
 
An  amended  pleading  supersedes  the  pleading  it  amends.    
§ However,   admissions   in   superseded   pleadings   may   be   received   in   evidence   against   the  
pleader;  and    
§ Claims   or   defenses   alleged   therein   not   incorporated   in   the   amended   pleading   shall   be  
deemed  waived.  (Sec.  8,  Rule  10)  
 
Kinds  of  amendment  
Amendments   may   either   be   formal   or   substantial.   Formal   amendment   is   one,   which   seeks   to  
correct  a  mere  defect  in  the  designation  of  the  parties  and  other  clearly  clerical  or  typographical  
error.  (Rule  10,  Sec.  4)  Amendments,  which  go  beyond  such  corrections,  are  substantial.    
 
Formal  amendments  may  be  corrected  by  the  court  at  any  stage  of  the  action,  at  its  initiative  or  
on  motion,  provided  no  prejudice  is  caused  thereby  to  the  adverse  party.  (Rule  10,  Sec.  4)  Except  
where   the   amendment   is   a   matter   of   right,   substantial   amendment   may   be   made   only   upon  
leave   of   court.   Such   leave   may   be   refused   if   it   appears   to   the   court   that   the   motion   was   made  
with  intent  to  delay.  
 
Godinez  vs.  Court  of  Appeals  
G.R.  No.  154330,  15  February  2007  
 
Facts:    
On   August   30,   2000,   Delfina   Village   Subdivision   Homeowners   Association   (DVSHA)  
(“respondent”),  filed  with  the  Regional  Trial  Court,  Tagum  City,  Davao  del  Norte,  an  amended  
complaint  for  injunction  and  damages  against  spouses  Zosimo  and  Elizabeth  Godinez  and  their  
son   Edwin   (“petitioners”),   The   complaint   alleges   that   petitioners   were   operating   a   mineral  
 39  
 
processing   plant   in   the   annex   of   their   residential   house   located  
within  Delfina  Village.  Municipal   Ordinance   No.   63   s.   1993,   has   classified   the   village,  as   a  
medium-­‐‑density  residential  district.  
   
On   September   13,   2000,   petitioners   filed   their   answer   raising   the   following   affirmative  
defenses:  a)  the  complaint  states  no  cause  of  action;  b)  respondent  has  no  capacity  to  sue;  c)  it  is  
not  a  real  party  in  interest;  d)  the  complaint  fails  to  implead  the  real  parties  in  interest;  and  e)  
respondent  failed  to  refer  the  case  for  conciliation  to  the  barangay  before  filing  its  complaint.  
   
On  April   3,   2001,   the   trial   court   issued   an   Order   directing   respondent   to   amend   its  
complaint   and   attach   thereto   proofs   showing   that   it   is   a   juridical   person   with   capacity   to   sue  
and  that  it  is  the  real  party  in  interest.  
   
On  April   16,   2001,   respondent   submitted   its   amended   complaint   impleading,   as  
additional   plaintiffs,   its   officers   and   members,   and   attaching   thereto   its   Certificate   of  
Registration   with   the   Home   Insurance   and   Guaranty   Corporation,   as   well   as   its   Articles   of  
Incorporation  and  By-­‐‑Laws.  
   
Held:   In   resolving   this   issue,   we   are   guided   by   two   principles.  First,   there   is   nothing   sacred  
about  processes  or  pleadings  and  their  forms  or  contents,  their  sole  purpose  being  to  facilitate  
the  application  of  justice  to  the  rival  claims  of  contending  parties.  Hence,  pleadings  as  well  as  
procedural   rules   should   be   construed   liberally.   Second,   the   judicial   attitude   has   always   been  
favorable   and   liberal   in   allowing   amendments   to   a   pleading   in   order   to   avoid   multiplicity   of  
suits   and   so   that   the   real   controversies   between   the   parties   are   presented,   their   rights  
determined,  and  the  case  decided  on  the  merits  without  unnecessary  delay.    
   
Here,  we  find  no  reason  to  deviate  from  the  foregoing  dicta.  It  is  on  record  that  in  its  first  
amended  complaint,  respondent  DVSHA  alleged  that  it  is  a  registered  association.  However,  it  
failed  to  attach  to  its  complaint  the  supporting  certificate  of  registration,  as  well  as  its  articles  of  
incorporation   and   by-­‐‑laws.  In   their   answer,   petitioners   promptly   assailed   respondent’s   lack   of  
personality  to  sue.  The  trial  court,  desiring  to  determine  if  indeed  respondent  has  the  capacity  
to   sue,   directed   respondent   to   amend   its   complaint   anew   by   attaching   thereto   the   necessary  
documents.  
   
Sections  1  and  4,  Rule  10  of  the  1997  Rules  of  Civil  Procedure,  as  amended,  provide:  
   
SEC.  1.  Amendments  in  general.  Pleadings  may  be  amended  by  adding  or  striking  
out  an  allegation  or  the  name  of  any  party,  or  by  correcting  a  controversy  may  speedily  
be   determined   without   regard   to   technicalities,   and   in   the   most   expeditious   and  
inexpensive  manner.  
   
SEC.  4.  Formal  amendments.  A  defect  in  the  designation  of  the  parties  and  other  
clearly   clerical   or   typographical   errors   may   be   summarily   corrected   by   the   court   at   any  
stage   of   the   action,   at   its   initiative   or   on   motion,  provided   no   prejudice   is   caused  
thereby  to  the  adverse  party.  
   
Here,  the  amendment  of  respondent’s  complaint  at  the  instance  of  the  trial  court  merely  
involves   the   designation   of   respondent   as   a   proper   party,  i.e.,   whether   it   has   a   juridical  
personality   and,   therefore,   can   sue   or   be   sued.   We   note   that   when   respondent   amended   its  
complaint   by   attaching   the   required   supporting   documents,  such   amendment   did   not   change  
its   cause   of   action.  Nor   was   its   action   intended   to   prejudice   petitioners.  Verily,   the   Court   of  
Appeals   correctly   ruled   that   the   RTC   did   not   gravely   abuse   its   discretion   when   it   ordered   the  
amendment  of  the  complaint.  
 
 40  
 
   
Amendments  as  a  matter  of  right  
 
A  party  has  the  right  to  amend  his  pleading  once  before  a  responsive  pleading  thereto  is  
served  by  the  other  party;  in  the  case  of  a  reply,  at  any  time  within  ten  (10)  days  after  is  served.  
(Rule  10,  Sec.  2)  
 
The  right  to  amend  a  pleading  as  a  matter  of  right  may  be  exercised  only  once,  Hence,  
even   if   no   responsive   pleading   has   yet   been   served,   if   the   amendment   is   subsequent   to   a  
previous  amendment  made  as  a  matter  of  right,  the  subsequent  amendment  must  be  with  leave  
of  court.  
 
A   motion   to   dismiss   is   not   a   responsive   pleading.   Even   if   the   motion   to   dismiss   is  
granted  by  the  court,  the  plaintiff  may  still  amend  his  complaint  as  a  matter  of  right  before  the  
dismissal   becomes   final   as   long   as   o   answer   has   yet   been   served   (Bautista   vs.   Maya-­‐‑Maya  
Cottages,  G.R  No.  148361,  November  29,  2005).  
 
The  court  would  be  in  error  if  it  refuses  to  admit  an  amended  pleading  when  its  exercise  
is  a  matter  of  right.  The  error  is  correctible  by  mandamus  (Breslin  vs.  Luzon  Stevedoring,  G.R.  No.  
L-­‐‑3346,   September   29,   1949)   because   the   trial   court’s   duty   to   admit   an   amendment   complaint  
made  as  a  matter  of  right  is  purely  ministerial.    
                         
Alpine  Lending  Investors  vs.  Corpuz  
G.R.  No.  157107,  24  November  2006.  
 
Facts:    
This   case   stemmed   from   a   complaint   for  replevin  filed   by  Estrella  Corpuz  
(“respondent”),  against  Alpine  Lending  Investors  (“Alpine”),  one  of  the  petitioners  herein,  and  
Zenaida   Lipata   (“Zenaida”).  The   complaint   alleges   that   Zenaida   was   respondents   former  
neighbor.  Pretending   to   help   respondent   in   securing   a   Garage   Franchise   from   the   Land  
Transportation   Office   (LTO),   Zenaida   took   from   her   the   original   registration   papers   of   her  
vehicle,   a   Toyota   Tamaraw   FX   with   Plate   No.  UMR   660.  Zenaida,   using   respondent’s  
registration   papers   in   representing   herself   as   the   owner   of   the   vehicle,   was   able   to   retrieve   it  
from  Richmond  Auto  Center  where   it   was   being   repaired.  Thereafter,   Zenaida   disappeared  
with   the   vehicle.  Respondent   then   reported   the   incident   to   the   LTO   Muntinlupa   City  
Branch.  There,   she   was   informed   that   Zenaida   mortgaged   her   vehicle   with   petitioner  
Alpine.  The   LTO   showed   respondent   the   Chattel   Mortgage   Contract   bearing   her   forged  
signature.  
   
Forthwith,  respondent  informed  Alpine  about  the  spurious  mortgage  and  demanded  the  
release   of   her   vehicle.  Alpine   promised   to   comply   with   her   request   on   condition   that   Zenaida  
should  first  be  charged  criminally.  
   
Respondent   then   caused   the   filing   with   the   Metropolitan   Trial   Court   of   Caloocan   City  
complaints   for   falsification   of   private   document   and   estafa   against   Zenaida.  Eventually,   a  
warrant   of   arrest   was   issued   against   her.  Respondent   informed   Alpine   about   these  
developments,  but  the  latter  still  refused  to  turn  over  the  vehicle  to  her.  
   
Instead   of   filing   an   answer   to   respondent’s   complaint,   Alpine   submitted   to   the   RTC   a  
motion  to  dismiss  on  the  ground  that  it  is  not  a  juridical  person,  hence,  not  a  proper  party  in  the  
case.  
   
 41  
 
In  an  Order  dated  September  2,  2002,  the  RTC  denied  Alpines  motion  to  dismiss.  Alpine  
then  filed  a  motion  for  reconsideration,  but  it  was  denied.  The  RTC  then  directed  respondent  to  
file  her  amended  complaint  within  ten  (10)  days.  
   
However,   respondent   filed   her   Amended   Complaint   with   an   accompanying   Motion   to  
Admit   Amended   Complaint   two   (2)   days   late.   Nonetheless,   in   an   Order   dated  December   13,  
2002,  the  RTC  admitted  the  amended  complaint.  
   
On  January   3,   2003,   Alpine   filed   a   Motion   to  Expunge  respondents   motion   to   admit  
amended   complaint   on   the   ground   that   the   latter   motion   was   not   accompanied   by   a   notice   of  
hearing.  
   
In  her  Comment  on  Alpines  motion  to  expunge,  respondent  averred  that  her  contested  
motion  need  not  be  accompanied  by  a  notice  of  hearing  as  it  is  a  non-­‐‑litigated  motion.  
   
On  January   24,   2003,   the   RTC   denied   Alpines   motion   to   expunge   for   lack   of  
merit.  Alpine   moved   for  a   reconsideration,   but   this   was   denied   in   an   Order   dated  January   28,  
2003.  
 
Held:  Sections  1  and  2,  Rule  10  of  the  1997  Rules  of  Civil  Procedure,  as  amended,  provide:  
   
SEC.  1.  Amendments  in  general.  Pleadings  may  be  amended  by  adding  or  striking  
an  allegation  or  the  name  of  any  party,  or  by  correcting  a  mistake  in  the  name  of  a  party  
or   a   mistaken   or   inadequate   allegation   or   description   in   any   other   respect,   so   that   the  
actual   merits   of   the   controversy   may   speedily   be   determined,   without   regard   to  
technicalities,  and  in  the  most  expeditious  and  inexpensive  manner.  
   
SEC.  2.  Amendments  as  a  matter  of  right.  A  party  may  amend  his  pleading  once  as  
a  matter  of  right  at  any  time  before  a  responsive  pleading  is  served  or,  in  the  case  of  a  
reply,  at  any  time  within  ten  (10)  days  after  it  is  served.  
   
As   earlier   mentioned,   what   petitioner   Alpine   filed   in   Civil   Case   No.  C-­‐‑20124   was   a  
motion  to  dismiss,  not  an  answer.  Settled  is  the  rule  that  a  motion  to  dismiss  is  not  a  responsive  
pleading   for   purposes   of   Section   2,   Rule   10.   As   no   responsive   pleading   had   been   filed,  
respondent   could   amend   her   complaint   in   Civil   Case   No.   C-­‐‑20124  as   a   matter   of  
right.  Following   this   Courts   ruling   in   Breslin  v.  Luzon  Stevedoring  Co.,   considering   that  
respondent  has  the  right  to  amend  her  complaint,  it  is  the  correlative  duty  of  the  trial  court  to  
accept   the   amended   complaint;   otherwise,  mandamus   would   lie   against   it.  In   other   words,   the  
trial   courts   duty   to   admit   the   amended   complaint   was   purely   ministerial.  In   fact,   respondent  
should  not  have  filed  a  motion  to  admit  her  amended  complaint.  
   
It   has   always   been   the   policy   of   this   Court   to   be   liberal   in   allowing   amendments   to  
pleadings  in  order  that  the  real  controversies  between  or  among  the  parties  may  be  presented  
and  cases  be  decided  on  the  merits  without  delay.  
 
 
Amendments  by  leave  of  court    
 
When   a   substantial   amendment   is   sought   to   be   made   after   a   responsive   pleading   has   already  
been   served,   it   is   necessary   for   the   party   seeking   such   amendment   to   obtain   leave   of   court.   A  
motion   must   be   filed   in   court   with   notice   to   the   adverse   party   who   shall   be   afforded   the  
opportunity  to  be  heard  (Rule  10,  Sec.  3)  
 
 
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Amendment  to  conform  to  or  authorize  presentation  of  evidence  
When   issues   not   raised   in   the   pleadings   are   tried   with   the   express   or   implied   consent   of   the  
parties,  they  shall  be  treated  as  if  they  had  been  raised  in  the  pleadings.  The  pleading  may  be  
amended   to   conform   to   evidence,   upon   motion   of   any   party   at   any   time,   even   after   judgment  
and  failure  to  amend  shall  not  affect  the  result  of  the  trial  on  these  issues.  (Rule  10,  Sec.  5)  
 
 
Philippine  Ports  Authority  vs.  William  Gothong  &  Aboitiz  (Wg&A),  Inc.,  
G.R.  No.  158401,  28  January  2008.  
 
Facts:  
Petitioner   William   Gothong   &   Aboitiz,   Inc.   (“WG&A”),   is   a   duly   organized   domestic  
corporation  engaged  in  the  shipping  industry.  Respondent  Philippine  Ports  Authority  (“PPA”),  
upon  the  other  hand,  is  a  government-­‐‑owned  and  controlled  company  created  and  existing  by  
virtue   of   the   provisions   of   P.D.   No.   87   and   mandated   under   its   charter   to   operate   and  
administer  the  country'ʹs  sea  port  and  port  facilities.  
 
After   the   expiration   of   the   lease   contract   of   Veterans   Shipping   Corporation   over   the  
Marine   Slip   Way   in   the   North   Harbor   on   December   31,   2000,   petitioner   WG&A   requested  
respondent   PPA   for   it   to   be   allowed   to   lease   and   operate   the   said   facility.   Thereafter,   then  
President  Estrada  issued  a  memorandum  dated  December  18,  2000  addressed  to  the  Secretary  of  
the   Department   of   Transportation   and   Communication   (DOTC)   and   the   General   Manager   of  
PPA,   stating   to   the   effect   that   in   its   meeting   held   on   December   13,   2000,   the   Economic  
Coordinating  Council  (ECC)  has  approved  the  request  of  petitioner  WG&A  to  lease  the  Marine  
Slip  Way  from  January  1  to  June  30,  2001  or  until  such  time  that  respondent  PPA  turns  over  its  
operations  to  the  winning  bidder  for  the  North  Harbor  Modernization  Project.  
 
The   said   contract   was   eventually   conformed   to   and   signed   by   the   petitioner   company,  
through  its  President/Chief  Executive  Officer  Endika  Aboitiz,  Jr.  Thereafter,  in  accordance  with  
the   stipulations   made   in   the   lease   agreement,   PPA   surrendered   possession   of   the   Marine   Slip  
Way  in  favor  of  the  petitioner.  
 
However,  believing  that  the  said  lease  already  expired  on  June  30,  2001,  respondent  PPA  
subsequently  sent  a  letter  to  petitioner  WG&A  dated  November  12,  2001  directing  the  latter  to  
vacate   the   contested   premises   not   later   than   November   30,   2001   and   to   turnover   the  
improvements  made  therein  pursuant  to  the  terms  and  conditions  agreed  upon  in  the  contract.  
 
In   response,   petitioner   WG&A   wrote   PPA   on   November   27,   2001   urging   the   latter   to  
reconsider  its  decision  to  eject  the  former.  Said  request  was  denied  by  the  PPA  via  a  letter  dated  
November  29,  2001.  
 
On   November   28,   2001,   petitioner   WG&A   commenced   an   Injunction   suit   before   the  
Regional   Trial   Court   of   Manila.   Petitioner   claims   that   the   PPA   unjustly,   illegally   and  
prematurely   terminated   the   lease   contract.   It   likewise   prayed   for   the   issuance   of   a   temporary  
restraining   order   to   arrest   the   evacuation.   In   its   complaint,   petitioner   also   sought   recovery   of  
damages  for  breach  of  contract  and  attorney'ʹs  fees.  
 
On  December  11,  2001,  petitioner  WG&A  amended  its  complaint  for  the  first  time.  The  
complaint   was   still   denominated   as   one   for   Injunction   with   prayer   for   TRO.   In   the   said  
amended   pleading,   the   petitioner   incorporated   statements   to   the   effect   that   PPA   is   already  
estopped  from  denying  that  the  correct  period  of  lease  is  "ʺuntil  such  time  that  the  North  Harbor  
Modernization   Project   has   been   bidded   out   to   and   operations   turned   over   to   the   winning  
bidder.  It  likewise  included,  as  its  third  cause  of  action,  the  additional  relief  in  its  prayer,  that  
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should  the  petitioner  be  forced  to  vacate  the  said  facility,  it  should  be  deemed  as  entitled  to  be  
refunded  of  the  value  of  the  improvements  it  introduced  in  the  leased  property.  
 
Following  the  first  amendment  in  the  petitioner'ʹs  complaint,  respondent  PPA  submitted  
its   answer   on   January   23,   2002.   Meanwhile,   the   TRO   sought   by   the   former   was   denied   by   the  
trial  court  by  way  of  an  order  dated  January  16,  2002.  
 
Petitioner   later   moved   for   the   reconsideration   of   the   said   Order   on   February   11,   2002.  
Shortly   thereafter,   petitioner   filed   a   Motion   to   Admit   Attached   Second   Amended   Complaint.  
This  time,  however,  the  complaint  was  already  captioned  as  one  for  Injunction  with  Prayer  for  
Temporary   Restraining   Order   and/or   Writ   of   Preliminary   Injunction   and   damages   and/or   for  
Reformation  of  Contract.  Also,  it  included  as  its  fourth  cause  of  action  and  additional  relief  in  its  
prayer,   the   reformation   of   the   contract   as   it   failed   to   express   or   embody   the   true   intent   of   the  
contracting  parties.  
 
The   admission   of   the   second   amended   complaint   met   strong   opposition   from   the  
respondent   PPA.   It   postulated   that   the   reformation   sought   for   by   the   petitioner   constituted  
substantial  amendment,  which  if  granted,  will  substantially  alter  the  latter'ʹs  cause  of  action  and  
theory  of  the  case.  
 
On  March  22,  2002,  the  respondent  judge  issued  an  Order  denying  the  Admission  of  the  
Second  Amended  Complaint.  Petitioner  filed  a  motion  for  reconsideration  of  the  aforesaid  order  
but  the  same  was  again  denied  in  an  order  dated  April  26,  2002.  
 
Held:   The   CA   did   not   err   in   finding   that   the   RTC   committed   grave   abuse   of   discretion   in  
issuing  the  Order  dated  March  22,  2002  denying  the  admission  of  respondent'ʹs  second  amended  
complaint.  
 
The  RTC  applied  the  old  Section  3,  Rule  10  of  the  Rules  of  Court:  
 
Section   3.   Amendments   by   leave   of   court.   –   after   the   case   is   set   for   hearing,  
substantial  amendments  may  be  made  only  upon  leave  of  court.  But  such  leave  may  be  
refused  if  it  appears  to  the  court  that  the  motion  was  made  with  intent  to  delay  the  action  
or  that  the  cause  of  action  or  defense  is  substantially  altered.  Orders  of  the  court  upon  the  
matters   provided   in   this   section   shall   be   made   upon   motion   filed   in   court,   and   after  
notice  to  the  adverse  party,  and  an  opportunity  to  be  heard.  
 
Instead  of  the  provisions  of  the  1997  Rules  of  Civil  Procedure,  amending  Section  3,  Rule  
10,  to  wit:  
 
SECTION   3.   Amendments   by   leave   of   court.   Except   as   provided   in   the   next  
preceding  section,  substantial  amendments  may  be  made  only  upon  leave  of  court.  But  
such   leave   may   be   refused   if   it   appears   to   the   court   that   the   motion   was   made   with  
intent   to   delay.  Orders   of   the   court   upon   the   matters   provided   in   this   section   shall   be  
made   upon   motion   filed   in   court,   and   after   notice   to   the   adverse   party,   and   an  
opportunity  to  be  heard.  
 
The   Court   has   emphasized   the   import   of   Section   3,   Rule   10   of   the   1997   Rules   of   Civil  
Procedure  in  Valenzuela  v.  Court  of  Appeals,  thus:  
 
Interestingly,  Section  3,  Rule  10  of  the  1997  Rules  of  Civil  Procedure  amended  the  
former   rule   in   such   manner   that   the   phrase   "ʺor   that   the   cause   of   action   or   defense   is  
substantially   altered"ʺ   was   stricken-­‐‑off   and   not   retained   in   the   new   rules.  The   clear  
import   of   such   amendment   in   Section   3,   Rule   10   is   that   under   the   new   rules,   "ʺthe  
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amendment  may  (now)  substantially  alter  the  cause  of  action  or  defense."ʺ  This  should  
only   be   true,   however,   when   despite   a   substantial   change   or   alteration   in   the   cause   of  
action  or  defense,  the  amendments  sought  to  be  made  shall  serve  the  higher  interests  of  
substantial  justice,  and  prevent  delay  and  equally  promote  the  laudable  objective  of  the  
rules  which  is  to  secure  a  "ʺjust,  speedy  and  inexpensive  disposition  of  every  action  and  
proceeding."ʺ  
   
The  application  of  the  old  Rules  by  the  RTC  almost  five  years  after  its  amendment  by  the  
1997  Rules  of  Civil  Procedure  patently  constitutes  grave  abuse  of  discretion.  
 
Panganiban  vs.  Sps.  Roldan  
G.R.  No.  163053,  25  November  2009.  
 
Facts:    
On   April   7,   1998,   petitioner   Agrifina   Panganiban   filed   a   complaint   against   herein  
respondents,   spouses   Romeo   Roldan   and   Elizabeth   Roldan,   for   recovery   of   possession   and  
damages  in  the  Municipal  Trial  Court  
 
(MTC),  Third  Judicial  Region,  Subic,  Zamabales.  She  alleged  that  she  was  the  registered  
owner  of  a  parcel  of  land  with  an  area  of  271  square  meters,  covered  by  Original  Certificate  of  
Title  (OCT)  No.  P-­‐‑12388,  located  in  Ilwas,  Subic,  Zambales;  that  sometime  in  1984,  respondents  
entered  the  land  and  built  a  small  hut  on  a  portion  thereof  without  her  knowledge  and  consent;  
that   respondents   asked   permission   if   they   could   temporarily   reside   thereat,   since   they   came  
from  Bicol  and  had  no  place  to  stay  in  Zambales;  that  she  took  pity  on  them  and  agreed  on  the  
condition   that   they   would   vacate   upon   demand;   that   in   1997,   petitioner   asked   respondents   to  
vacate   the   land,   as   she   would   be   putting   up   a   fence   thereon;   that   respondents,   who   were  
occupying  an  area  measuring  about  103  sq  m,  refused  to  vacate;  that  because  of  their  obstinate  
refusal   to   vacate,   she   suffered   mental   anxiety;   and   that   for   being   deprived   of   the   use   and  
enjoyment   of   the   land,   respondents   should   be   required   to   pay   a   rental   of  P500.00   per   month  
from  December  1997  until  they  vacate.  
 
In  their  defense,  respondents  denied  that  they  entered  into  an  agreement  with  petitioner  
allowing   them   to   stay   on   the   land.   They   claimed   that   they   had   been   occupying   the   lot   as  
caretakers  of  the  heirs  of  Concepcion  dela  Paz-­‐‑Lesaca  since  1973,  as  evidenced  by  a  Kasunduan.  
They  alleged  that  the  lot  was  part  of  the  land  covered  by  Transfer  Certificate  of  Title  (TCT)  No.  
14884   issued   in   1972,   registered   in   the   name   of   Concepcion   dela   Paz-­‐‑Lesaca;   and   that   in  
December   1997,   two   (2)   men   who   were   barangay   officials   went   to   the   premises   in   order   to  
survey   the   lot   for   purposes   of   putting   up   a   fence.   Respondents   thus   objected   to   the   intrusion  
knowing   that   petitioner   had   no   right   or   personality   to   eject   them   from   the   land.   Respondents  
averred  that  petitioner  was  merely  a  neighbor  and  that  they  were  surprised  to  find  out  that  she  
was  able  to  secure  a  new  title  over  their  portion  of  the  land.  
 
On   March   23,   2001,   the   MTC   rendered   judgment2  in   favor   of   petitioner.   The   MTC   did  
not   admit   respondents’   evidence   presented   during   the   trial   consisting   of:   (1)   the   TCT   of   the  
subject   property   registered   under   the   name   of   Concepcion   dela   Paz-­‐‑Lesaca;   and   (2)   the  
Kasunduan  purportedly  executed  by  Concepcion  dela  Paz-­‐‑Lesaca  allowing  Spouses  Roldan  to  
stay   on   the   land   on   the   ground   that   these   matters   were   not   raised   in   their   Answer   or   in   their  
Pre-­‐‑trial  Brief.  The  MTC  discerned  a  "ʺvariance  of  the  allegation  and  proof,"ʺ  and  thus  considered  
the  evidence  as  no  proof  at  all.  The  MTC  stated  that  in  such  situation,  the  remedy  was  to  amend  
the  Answer  to  conform  to  the  evidence,  and  this,  respondents  failed  to  do.    
 
Held:  Section  5,  Rule  10  of  the  Rules  of  Court  provides  that  issues  not  raised  by  the  pleadings  
may   be   tried   by   express   or   implied   consent   of   the   parties,   as   if   they   had   been   raised   in   the  
pleadings  and  the  court  can  validly  resolve  them.  There  is  express  consent  to  the  evidence  on  an  
 45  
 
issue  not  raised  in  the  pleading  when  the  adverse  party  agrees  to  its  presentation  by  the  other  
party.  There  is  implied  consent  when  the  adverse  party  fails  to  object  thereto.  
 
The  general  rule  is  that  a  judgment  must  conform  to  the  pleading  and  the  theory  of  the  
action  under  which  the  case  is  tried.  But  court  may  also  rule  and  render  judgment  on  the  basis  
of  the  evidence  before  it,  even  though  the  relevant  pleading  has  not  been  previously  amended,  
so  long  as  no  surprise  or  prejudice  to  the  adverse  party  is  thereby  caused  and  there  is  express  or  
implied  consent  to  the  presentation  of  evidence.  In  fact,  there  is  no  need  to  formally  amend  the  
pleadings   to   raise   the   issues   because   such   issues   are   considered   as   if   they   have   been   in   the  
pleadings.  
 
In   the   case   at   bench,   since   there   was   no   dispute   that   no   objection   was   interposed   by  
appellee  to  the  presentation  of  the  evidence,  the  same  should  have  been  admitted  by  the  court  a  
quo,  consonant  with  Section  5,  Rule  10  and  the  rule  on  liberal  construction  under  Section  2,  Rule  
1  of  the  Rules  of  Court.    
 
We  have  stressed  that  the  rule  on  amendment  need  not  be  applied  rigidly,  particularly  
where   no   surprise   or   prejudice   is   caused   the   objecting   party.   Where   there   is   a   variance   in  
defendant’s  pleadings  and  the  evidence  adduced  at  the  trial,  the  Court  may  treat  the  pleading  
as  if  it  had  been  amended  to  conform  to  the  evidence.  In  Royal  Cargo  Corporation  v.  DFS  Sports  
Unlimited,  Inc.,  the  Court  stated  that:  
 
The  failure  of  a  party  to  amend  a  pleading  to  conform  to  the  evidence  adduced  during  
trial   does   not   preclude   adjudication   by   the   court   on   the   basis   of   such   evidence   which   may  
embody  new  issues  not  raised  in  the  pleadings.  x  x  x  Although,  the  pleading  may  not  have  been  
amended   to   conform   to   the   evidence   submitted   during   trial,   judgment   may   nonetheless   be  
rendered,  not  simply  on  the  basis  of  the  issues  alleged  but  also  on  the  issues  discussed  and  the  
assertions  of  fact  proved  in  the  course  of  the  trial.  The  court  may  treat  the  pleading  as  if  it  had  
been   amended   to   conform   to   the   evidence,   although   it   had   not   been   actually   amended.   x   x   x  
Clearly,   a   court   may   rule   and   render   judgment   on   the   basis   of   the   evidence   before   it   even  
though   the   relevant   pleading   had   not   been   previously   amended,   so   long   as   no   surprise   or  
prejudice   is   thereby   caused   to   the   adverse   party.   Put   a   little   differently,   so   long   as   the   basic  
requirements   of   fair   play   had   been   met,   as   where   the   litigants   were   given   full   opportunity   to  
support   their   respective   contentions   and   to   object   to   or   refute   each   other’s   evidence,   the   court  
may   validly   treat   the   pleadings   as   if   they   had   been   amended   to   conform   to   the   evidence   and  
proceed  to  adjudicate  on  the  basis  of  all  the  evidence  before  it.    
 
Thus,   the   CA   cannot   be   faulted   for   admitting   the   evidence   because   it   found   them  
necessary   to   prove   respondents’   right   of   possession.   A   scrutiny   of   the   records   further   reveals  
that   there   is   no   prohibition   on   the   admission   of   the   Kasunduan   and   the   TCT.   The   evidence  
when  presented  and  offered  were  not  actually  excluded  by  the  lower  court.  In  the  pre-­‐‑trial  brief,  
respondents  (defendants  therein)  reserved  the  right  to  present  additional  documentary  exhibits  
in  the  course  of  the  trial,  considering  that  the  evidence  was  not  yet  available  at  the  time.   For  the  
proper   disposition   and   resolution   of   the   issue   as   to   who   has   the   right   of   possession   of   the  
subject  land,  the  admission  and  consideration  of  the  documents  were  in  order.  
 
 
 
 
 
 
 
 
 46  
 
REMEDIES    
 
Periods  to  answer  
 
a. Amendments  
 
Amendment  as  a  matter  of  right—  
The  defendant  shall  answer  the  same  within  fifteen  (15)  days  after  being  served  with  a  
copy  thereof.  
 
Amendment  not  a  matter  of  right—  
The  defendant  shall  answer  within  ten  (10)  days  from  notice  of  the  Order  admitting  the  
same.    
§ An  answer  earlier  filed  may  serve  as  the  answer  to  the  amended  complaint,  if  no  
new  answer  is  filed.  
 
Applicability  
This  Rule  shall  apply  to  the  answer  to    
(1) an  amended  counterclaim,    
(2) amended  cross-­‐‑claim,    
(3) amended  third  (fourth,  etc.)—  party  complaint,  and    
(4) amended  complaint-­‐‑in-­‐‑intervention.  (Sec.  3,  Rule  11)  
 
 
b.  Supplemental  complaint  
 
This   may   be   answered   within   ten   (10)   days   from   notice   of   the   order   admitting   the   same,  
unless  a  different  period  is  fixed  by  the  court.    
§ If  no  new  or  supplemental  answer  is  filed—  
The   answer   to   the   complaint   shall   serve   as   the   answer   to   the   supplemental  
complaint.  (Sec.  7,  Rule  11)  
 
 
c.    Supplemental  pleadings  
A   supplemental   pleading   setting   forth   transactions,   occurrences   or   events   which   have  
happened  since  the  date  of  the  pleading  sought  to  be  supplemented  may  be  permitted  
(1) upon  motion  of  a  party    
(2) reasonable  notice  and    
(3) upon  such  terms  as  are  just  
 
Period  to  answer  
The  adverse  party  may  plead  thereto  within  ten  (10)  days  from  notice  of  the  order  admitting  the  
supplemental  pleading.  (Sec.  6,  Rule  11)  
 
 
i.  Distinguished  from  amended  pleadings  
 
 
Shoemart,  Inc.  v.  CA  
G.R.  No.  86956,  1  October  1990.  
 
Facts:   Anson   Emporium   Corp.   (Anson)   leased   from   Shoemart   portion   of   a   building   for   two  
years.   The   lease   stipulated   that   if   after   termination   of   the   lease,   Shoemart   permits   Anson   to  
 47  
 
remain,   the   lease   shall   be   understood   to   be   on   a   month   to   month   basis   in   the   absence   of   a  
contrary  written  agreement.  
 
Anson   remained   in   possession   after   the   two-­‐‑year   period   but   on   an   increased   rental.    
Four  years  later,  Shoemart  terminated  the  lease  and  gave  notice  to  Anson  to  vacate,  which  the  
latter  refused.  A  complaint  for  ejectment  was  filed  against  him  with  the  MTC.  Shoemart  asked  
for,   and   was   granted,   leave   to   file   supplemental   complaint   which   alleged   that   the   rental   of   all  
tenants  of  the  premises  had  been  increased  to  P45,142.00,  which  Anson  refused  to  pay.  Anson  
alleged  that  Shoemart’s  claim  for  increased  rentals  has  been  barred.  MTC  ruled  for  Anson.  
 
The  RTC  reversed  the  judgment  and  ordered  Anson  to  vacate  the  premises  and  to  pay  
P34,622   and   P45,142   respectively   for   the   two   lease   agreements,   with   1%   interest   from   October  
1977.  Shoemart  filed  a  motion  for  reconsideration  of  the  award  of  damages,  saying  it  is  less  than  
what  is  really  due.  RTC  granted  this  motion.  
 
CA  affirmed  the  ejectment  of  respondent  but  reduced  the  damages  awarded  by  stating  
that   the   1%   interest   will   start   to   run   from   October   1987.   Private   respondent   sought   the  
correction  of  the  clerical  error  regarding  date  of  the  effectivity  of  the  payment  for  damages.  Said  
motion  was  granted    
   
Petitioner'ʹs   motion   for   reconsideration   seeking   the   reinstatement   of   the   RTC’s   decision  
was  denied.  CA  ruled  that  petitioner’s  claim  for  damages  is  limited  to  the  P45,142  alleged  in  the  
supplemental  complaint.    
 
Held:   The   subsequently   amended   complaint   in   the   case   at   bar   does   not   render   the   original  
complaint   abandoned   or   inexistent.   Petitioner'ʹs   recovery   is   not   limited   by   the   amount   of  
P45,142.00  prayed  for  in  the  supplemental  complaint  as  increased  rental.  This  is  not  a  case  of  a  
complaint   subsequently   amended,   the   effect   of   which   is   to   render   the   original   complaint  
abandoned  or  inexistent  and  let  the  amendment  take  form  as  the  sole  substitute  upon  which  the  
case  stands  for  trial.    
 
A   supplemental   complaint   or   pleading   supplies   deficiencies   in   aid   of   an   original  
pleading,  not  to  entirely  substitute  the  latter.  A  perusal  of  the  original  complaint  shows  that  it  
prayed,  among  others,  that  the  private  respondent  be  ordered  to  pay  petitioner  P34,622.00  and  
all  other  rentals  and  charges  that  may  be  due  until  respondent  vacates  the  premises.  Petitioner,  
therefore,   did   not   foreclose   its   right   to   demand   increased   rentals   that   may   be   recovered  
expressed   in   terms   of   the   fair   rental   value   or   the   reasonable   compensation   for   the   use   and  
occupation  of  the  real  property.  Unlike  in  an  amended  complaint,  the  original  complaint  exists  
side  by  side  with  the  supplemental  complaint.    
 
The   supplemental   pleading   merely   served   to   aver   supervening   facts   which   were   then  
not   ripe   for   judicial   relief   when   the   original   pleading   was   filed.   Supplemental   pleadings   are  
meant  to  supply  deficiencies  in  aid  of  the  original  pleading  and  not  to  dispense  with  the  latter.  
 
The   failure   of   petitioner   to   amend   its   complaint   or   file   additional   supplemental  
pleadings  to  allege  subsequent  rental  increases  is  of  no  moment.    
 
In   view   of   the   failure   of   private   respondent   to   object   to   the   presentation   of   evidence  
showing  that  there  were  four  (4)  rental  increases  on  the  subject  premises  although  three  (3)  of  
said  increases  are  not  alleged  in  the  pleadings,  judgment  may  be  rendered  validly  as  regards  the  
said  increases  or  issues  which  shall  be  considered  as  if  they  have  been  raised  in  the  pleadings.  
As   found   by   the   RTC,   private   respondent   did   not   controvert   the   evidence   submitted   by  
petitioner   in   determining   the   fair   rental   value   of   the   premises   including   those   imposed   on   all  
 48  
 
other   tenants   of   petitioner   occupying   the   Makati   Arcade.   If,   indeed,   the   rental   increases   were  
unconscionable,   respondent   should   have   at   least   presented   evidence   to   substantiate   its   claim.  
The   burden   of   proof   to   show   that   the   rental   demanded   is   unconscionable   or   exorbitant   rests  
upon  private  respondent  as  the  lessee.  
   
Private   respondent   failed   to   discharge   its   burden   when   it   omitted   to   present   any  
evidence  at  all  on  what  it  considers  is  the  fair  rental  value  other  than  what  were  submitted  by  
petitioner.   As   a   matter   of   fact,   all   the   other   tenants   did   not   question   the   reasonableness   of   the  
rental  increases.  
 
 
BILL  OF  PARTICULARS/INTERVENTION  
 
 
BILL  OF  PARTICULARS  
 
 
Definition  
 
A   bill   of   particulars   is   a   detailed   explanation   respecting   any   matter   which   is   not   averred   with  
sufficient  definiteness/particularity  in  the  complaint  as  to  enable  a  party  to  properly  prepare  his  
responsive  pleading  or  to  prepare  for  trial  (Rule  12,  Sec.  1).  
 
 
Office  and  Purpose:  
 
• The   proper   preparation   of   an   intelligent   answer   requires   information   as   to   the   precise  
nature,   character,   scope   and   extent   of   the   cause   of   action   in   order   that   the   pleader   may   be  
able   to   squarely   meet   the   issues   raised,   thereby   circumscribing   them   within   determined  
confines   and   preventing   surprises   during   trial,   and   in   order   that   he   may   set   forth   his  
defenses   which   may   not   be   so   readily   availed   of   if   the   allegation   controverted   are   vague,  
indefinite,  uncertain  or  are  mere  general  conclusions  (Virata  v.  Sandiganbayan,  221  SCRA  52,  
1993).    
 
• The  proper  office  of  a  bill  of  particulars  is  to  inform  the  opposite  party  and  the  court  of  the  
precise  nature  and  character  of  the  cause  of  action  (Tan  v.  Sandiganbayan,   G.R.  No.  84195,  11  
December  1989).  
 
Virata  v.  Sandiganbayan  
G.R.  No.  106527,  6  April  1993.  
 
Facts:    
Cesar   Virata   was   among   the   forty-­‐‑four   co-­‐‑defendants   of   Benjamin   (Kokoy)   Romualdez  
in   a   complaint   filed   by   the   Sandiganbayan.   The   complaint   was   amended   thrice,   the   last  
amendment  thereto  is  denominated  as  Second  Amended  Complaint.  The  plaintiff  alleged  four  
actionable   wrongs   against   petitioner:   (1)   his   participation   in   the   reduction   of   the   electric  
franchise  tax  and  the  tariff  duty  of  fuel  oil  imports  by  all  public  utilities  (2)  his  participation  in  
the  the  approval  of  the  'ʹ3-­‐‑Year  Program  for  the  Extension  of  MERALCO'ʹs  Services  to  Areas’  (3)  
his   participation   in   the   formation   of   Erectors   Holdings,   Inc.   and   (4)   his   acting   as   a   dummy   of  
corporations  controlled  by  Romualdez  and  Marcos.  
 
Petitioner   moved   to   dismiss   the   case   on   various   grounds   including   the   failure   of   the  
expanded   Second   Amended   Complaint   to   state   a   cause   of   action.   The   motion   was   denied   by  
 49  
 
Sandiganbayan.   SC   affirmed   the   Sandiganbayan,   and   advised   petitioner   that   if   he   perceive  
some  ambiguity  or  vagueness  therein,  the  remedy  is  not  a  motion  to  dismiss,  but  rather  for  a  bill  
of  particulars.  
 
Petitioner   filed   a   motion   for   bill   of   particulars,   claiming   that   the   general   and   sweeping  
allegations  of  the  Second  Amended  Complaint  and  the  purported  illegal  acts  imputed  to  them  
as   well   as   the   alleged   causes   of   actions   are   vague   and   ambiguous.   They   are   not   averred   with  
sufficient  definiteness  or  particularity  as  would  enable  defendant  Virata  to  properly  prepare  his  
answer   or   responsive   pleading.   Sandiganbayan   partially   granted   the   motion;   of   the   four  
actionable   wrongs,   it   granted   the   motion   with   respect   only   to   the   fourth,   since   the   other   three  
actionable  wrongs  are  not  squarely  under  the  Tantuico  case.  
 
Not   satisfied   with   the   partial   grant   of   the   motion,   petitioner   filed   the   instant   petition  
under  Rule  65  of  the  Revised  Rules  of  Court.  
 
Held:   The   Motion   for   Bill   of   Particulars   be   granted   totally.   It   was   grave   error   for   the  
Sandiganbayan   to   state   that   "ʺ[a]lleging   the   specific   nature,   character,   time   and   extent   of   the  
phrase   'ʹactive   collaboration'ʹ   would   be   a   mere   surplus   age   and   would   not   serve   any   useful  
purpose"ʺ   for   precisely,   without   any   amplification   or   particularization   thereof,   the   petitioner  
would  be  hard  put  in  meeting  the  charges  squarely  and  in  pleading  appropriate  defenses.  Nor  
can   We   accept   the   public   respondent'ʹs   postulation   that   "ʺany   question   as   to   the   validity   or  
legality  of  the  transactions  involved  in  the  charges  against  defendant-­‐‑movant  is  irrelevant  and  
immaterial  in  the  resolution  of  the  instant  incident,  inasmuch  as  the  same  is  a  matter  of  defense  
which  shall  have  its  proper  place  during  the  trial  on  the  merits,  and  on  the  determination  of  the  
liability  of  defendant-­‐‑movant  after  the  trial  proper."ʺ  This  is  absurd,  for  how  may  the  petitioner  
set  up  a  defense  at  the  time  of  trial  if  in  his  own  answer  he  was  not  able  to  plead  such  a  defense  
precisely  because  of  the  vagueness  or  indefiniteness  of  the  allegations  in  the  complaint?  Unless  
he  pleads  the  defense  in  his  answer,  he  may  be  deprived  of  the  right  to  present  the  same  during  
the  trial  because  of  his  waiver  thereof.    
 
  Since  the  issues  have  not  as  yet  been  joined  and  no  evidence  has  so  far  been  adduced  by  
the   parties   the   Sandiganbayan   was   in   no   position   to   conclude   that   the   matters   which   the.  
petitioner  seeks  are  "ʺwithin  his  intimate  or  personal  knowledge."ʺ  
 
  It   is   the   office   or   function,   as   well   as   object   or   purpose,   of   a   bill   of   particulars   to   (1)  
amplify  or  limit  a  pleading,  (2)  specify  more  minutely  and  particularly  a  claim  or  defense  set  up  
and   pleaded   in   general   terms,   (3)   give   information,   not   contained   in   the   pleading,   to   the  
opposite  party  and  the  court  as  to  the  precise  nature,  character,  scope,  and  extent  of  the  cause  of  
action  or  defense  relied  on  by  the  pleader,  and  (4)  apprise  the  opposite  party  of  the  case  which  
he  has  to  meet,  (a)  to  the  end  that  the  proof  at  the  trial  may  be  limited  to  the  matters  specified,  
and  (b)  in  order  that  surprise  at,  and  needless  preparation  for,  the  trial  may  be  avoided,  and  (c)  
that  the  opposite  party  may  be  aided  in  framing  his  answering  pleading  and  preparing  for  trial.  
It   has   also   been   stated   that   it   is   the   function   or   purpose   of   a   bill   of   particulars   to   (5)   define,  
clarify,   particularize,   and   limit   or   circumscribe   the   issues   in   the   case,   to   (6)   expedite   the   trial,  
and   assist   the   court.   A   general   function   or   purpose   of   a   bill   of   particulars   is   to   (7)   prevent  
injustice  or  do  justice  in  the  case  when  that  cannot  be  accomplished  without  the  aid  of  such  a  
bill.  
 
Moreover,  the  phrase  "ʺto  enable  him  properly  to  prepare  his  responsive  pleading  .  .  ."ʺ  in  
Section   1   of   Rule   12   implies   not   just   the   opportunity   to   (8)   properly   prepare   a   responsive  
pleading   but   also   to   (9)   prepare   an   intelligent   answer.   The   proper   preparation   of   an   intelligent  
answer  requires  information  as  to  the  precise  nature,  character,  scope  and  extent  of  the  cause  of  
action   in   order   that   the   pleader   may   be   able   to   squarely   meet   the   issues   raised,   thereby  
 50  
 
circumscribing  them  within  determined  confines  and,  preventing  surprises  during  the  trial,  and  
in   order   that   he   may   set   forth   his   defenses   which   may   not   be   so   readily   availed   of   if   the  
allegations  controverted  are  vague,  indefinite,  uncertain  or  are  mere  general  conclusions.    
 
• What  is  beyond  its  scope  
 
o The  complaint  for  which  a  bill  for  a  more  definite  statement  is  sought  need  only  inform  
the   defendant   of   the   essential   (or   ultimate)   facts   to   enable   him,   the   defendant,   to   prepare   his  
answer…  Any  more  ‘particulars’  in  that  event  would  be  evidentiary  in  character,  which  must  be  
adduced  at  the  trial  proper  (Tan  v.  Sandiganbayan,  supra.).  
 
o Notes:    
 
• If   the   purpose   is   for   preparation   for   trial,   the   appropriate   remedy   is   to   avail   discovery  
procedures  or  pre-­‐‑trial.  
 
• It   is   erroneous   to   require   disclosure   of   evidence   relied   upon   by   the   adverse   party   in   a  
motion  for  bill  of  particulars.  
 
• A   motion   for   bill   of   particulars   to   require   a   pleader   to   set   forth   matters   showing  
jurisdiction  of  a  court  to  render  its  judgment  is  not  proper.  
 
 
Tan  v.  Sandiganbayan  
G.R.  No.  84195,  11  December  1989  
 
Facts:    
The   PCGG   filed   a   complaint   against   the   twenty-­‐‑two   petitioners,   together   with   the   late  
Ferdinand   Marcos,   Mrs.   Imelda   Marcos,   Don   Ferry,   and   Federico   Moreno,   praying,   among  
others,   for   the   return   and   reconveyance   of   all   funds   and   other   property   impressed   with  
constructive  trust  in  favor  of  PCGG  and  the  Filipino  people,  as  well  as  funds  and  other  property  
acquired  by  Defendants  by  abuse  of  right  and  power  and  through  unjust  enrichment.  
 
Subsequently,   the   PCGG   filed   an   Expanded   Complaint.   In   essence,   these   are   the  
allegations  of  PCGG:  
 
1.   The  petitioner  Lucio  Tan  was  Mr.  Marcos'ʹ  business  partner;  
2.   Through   undue   influence,   coercion,   and   abuse   of   light   they   acquired  
shareholdings  from  various  firms,  and  built  a  business  empire  therefrom;  
3.   The  remaining  petitioners  acted  as  their  "ʺdummies,  nominees,  or  agents"ʺ;  
4.   Together   with   the   Marcoses,   they   maneuvered   their   way   into   these   firms   and  
acquired  control  thereof;    
5.   The  same  were  accomplished  through  unacceptable  machinations  such  as  insider  
trading  and  similar  acts,  in  violation  of  existing  laws;  
6.   They  also  unjustly  enriched  the  petitioners  at  the  expense  of  the  Republic  of  the  
Philippines  and  the  Filipino  people.    
 
Notwithstanding   this,   the   twenty-­‐‑two   petitioners   moved   for   a   bill   of   particulars.   The  
respondent   Court   denied   the   petitioners'ʹ   motion,   and   denied   reconsideration.   The   petitioners  
submit   that   the   PCGG'ʹs   averments   are   made   up   of   bare   generalizations,   presumptuous  
conclusions   of   fact   and   law,   and   plain   speculations,   for   which   a   motion   for   a   more   definite  
statement  or  for  a  bill  of  particulars  allegedly  lies.    
 
 51  
 
The   Sandiganbayan'ʹs   decided   that   Paragraphs   14   to   15,   inclusive   of   the   Expanded  
Complaint,   had   already   supplied   or   provided   the   specifications   and   particulars   theretofore  
lacking  in  the  original  Complaint.    
 
Held:  
The  Motion  for  Bill  of  Particulars  should  NOT  be  granted.  The  foregoing  allegations  of  
the   PCGG   are   actionable   wrongs   that   are   proper   for   a   complaint.   The   PCGG'ʹs  
Complaint/Expanded  Complaint  is  garbled  in  many  respects,  but  this  is  no  excuse  for  sloth  on  
the   part   of   the   petitioners.   The   Complaint/Expanded   Complaint   is   complete   enough   to   perish  
fears  of  the  PCGG  pulling  a  surprise  subsequently.    
 
It  is  not  the  office  of  a  bill  of  particulars  to  supply  material  allegations  necessary  to  the  
validity  of  a  pleading,  or  to  change  a  cause  of  action  or  defense  stated  in  the  pleading,  or  to  state  
a  cause  of  action  or  defense  other  than  the  one  stated.  Also  it  is  not  the  office  or  function,  or  a  
proper  object,  of  a  bill  of  particulars  to  set  forth  the  pleader'ʹs  theory  of  his  cause  of  action  or  a  
rule  of  evidence  on  which  he  intends  to  rely,  or  to  furnish  evidential  information  whether  such  
information   consists   of   evidence   which   the   pleader   proposes   to   introduce   or   of   facts   which  
constitute   a   defense   or   offset   for   the   other   party   or   which   will   enable   the   opposite   party   to  
establish  an  affirmative  defense  not  yet  pleaded.  The  PCGG'ʹs  complaint  (as  amended)  does  set  
out   allegations,   however   confusingly   put   in   print,   which,   interrelated   to   one   another,   are  
enough   to   support   a   formal   civil   charge.   If   the   petitioners   are   not   aware   of   the   PCGG'ʹs  
asseverations,   the   remedy   is   to   deny   the   same   in   their   answer   for   lack   of   "ʺknowledge   or  
information   sufficient   to   form   a   belief   as   to   the   truth   of   the   said   averments.   They   cannot,  
however,   demand   for   any   more   particulars   without   actually   making   the   PCGG   expose   its  
evidence  unnecessarily  before  the  trial  stage.  
 
 
When  to  file    
The  Motion  for  Bill  of  Particulars  should  be  filed  before  responding  to  a  pleading.  If  the  
pleading  is  a  reply,  the  motion  must  be  filed  within  ten  (10)  days  from  service  thereof.    
 
o If  directed  to  a  complaint,  the  motion  shall  be  filed  fifteen  (15)  days  after  service  of  
summons.  
o If  directed  to  a  counterclaim,  the  motion  shall  be  filed  ten  (10)  days  from  service  of  
the  counterclaim.  
o If  directed  to  a  reply,  the  motion  shall  be  filed  ten  (10)  days  from  the  service  of  said  
reply.  
 
 
Requisites    
 
The  Motion  for  Bill  of  Particulars  shall  point  out  
(a) defects  complained  of;  
(b) paragraphs  wherein  they  are  contained;  and  
(c) the  details  desired.  
 
 
Action  of  the  Court  (Sec.  2,  Rule  12)  
 
Upon  receipt  of  the  motion,  which  the  clerk  must  immediately  bring  to  the  court’s  attention,  the  
court  may:  
(a) deny  the  motion  outright;  
(b) grant  the  motion  outright;  or  
 52  
 
(c) hold  a  hearing  on  the  motion.  
 
 
 
Compliance  
   
o Compliance  with  the  order  granting  the  motion  —  If  the  motion  is  granted,  either  in  
whole  or  in  part,  the  compliance  therewith  must  be  effected  within  ten  (10)  days  from  notice  of  
the  order,  unless  a  different  period  is  fixed  by  the  court.  (Rule  12,  Section  3).    
 
o Effect  of  non-­‐‑compliance  (Rule  12,  Section  4)  —  If  the  order  is  not  obeyed,  or  in  case  
of  insufficient  compliance  therewith,  the  court  may:  
(a) order  the  striking  out  of  the  pleading  or  the  portions  thereof  to  which  the  order  
was  directed;  or    
(b) make  such  other  order  as  it  deems  just    
 
 
Stay  of  period  to  file  responsive  pleading    
 
After  service  of  the  bill  of  particulars  or  of  a  more  definite  pleading,  or  after  notice  of  denial  of  
his   motion,   the   moving   party   may   file   his   responsive   pleading   within   the   period   to   which   he  
was   entitled   at   the   time   of   filing   his   motion,   which   shall   not   be   less   than   five   (5)   days   in   any  
event  (Rule  12,  Sec.  5).  
 
 
Bill  a  part  of  pleading    
 
A  bill  of  particulars  becomes  part  of  the  pleading  for  which  it  is  intended  (Rule  12,  Sec.  6).  
 
 
INTERVENTION  
 
Definition    
 
• Intervention  is  a  legal  proceeding  by  which  a  person  who  is  not  a  party  to  the  action  is  
permitted   by   the   court   to   become   a   party   by   intervening   in   a   pending   action   after  
meeting   the   conditions   and   requirements   set   by   the   Rules   of   Court   (First   Philippine  
Holdings  Corporation  v.  Sandiganbayan,  253  SCRA  30;  Rule  19).  
 
• It   is   a   remedy   by   which   a   third   party,   not   originally   impleaded   in   the   proceedings,  
becomes  a  litigant  therein  to  enable  him  to  protect  or  preserve  a  right  or  interest  which  
may   be   affected   by   such   proceeding   (Office   of   the   Ombudsman   v.   Samaniego,   G.R.   No.  
175573,  11  September  2008).  
 
• It  is  never  an  independent  proceeding,  but  is  ancillary  and  supplemental  to  an  existing  
litigation.  Its  purpose  is  to  enable  a  stranger  to  an  action  to  become  a  party  to  protect  his  
interest  (Santiago  Land  Development  Corporation  v.  Court  of  Appeals,  267  SCRA  79;  See  Saw  
vs.  CA,  195  SCRA  740  and  Metropolitan  Bank  &  Trust  Co.  v.  Presiding  Judge,  182  SCRA  820,  
1990).  
 
Saw  v.  CA  
G.R.  No.  90580,  8  April  1991.  
 
 53  
 
Facts:   Equitable   Banking   Corporation   (“Equitable”)   filed   a   collection   suit   with   preliminary  
attachment   against   Freeman,   Inc.   (“Freeman”)   and   Saw   Chiao   Lian,   its   President   and   General  
Manager.   The   petitioners   moved   to   intervene,   alleging   that   (1)   the   loan   transactions   between  
Chiao   Lian   and   Equitable   were   not   approved   by   the   stockholders   representing   at   least   two  
thirds  (2/3)  of  corporate  capital;  (2)  Chiao  Lian  had  no  authority  to  contract  such  loans;  and  (3)  
there   was   collusion   between   the   officials   of   Freeman   and   Equitable   in   securing   the   loans.   The  
motion  to  intervene  was  denied,  and  the  petitioners  appealed  to  the  Court  of  Appeals.  
 
Meanwhile,  Equitable  and  Chiao  Lian  entered  into  a  compromise  agreement  which  was  
approved  by  the  lower  court.  However,  it  was  not  complied  with,  so  Equitable  secured  a  writ  of  
execution,  and  two  lots  owned  by  Freeman,  Inc.  were  levied  upon  and  sold  at  public  auction.  
 
The  CA  sustained  the  denial  of  the  motion  for  intervention,  holding  that  the  compromise  
agreement  will  not  necessarily  prejudice  petitioners  whose  rights  to  corporate  assets  are  at  most  
inchoate,  prior  to  the  dissolution  of  Freeman,  and  that  intervention  under  Sec.  2,  Rule  12  of  the  
Revised  Rules  of  Court  is  proper  only  when  one'ʹs  right  is  actual,  material,  direct  and  immediate  
and  not  simply  contingent  or  expectant.  
 
Held:  The  petitioners  may  NOT  be  allowed  to  intervene  in  the  action.  To  allow  intervention:  (a)  
it   must   be   shown   that   the   movant   has   legal   interest   in   the   matter   in   litigation,   or   otherwise  
qualified;  and  (b)  consideration  must  be  given  as  to  whether  the  adjudication  of  the  rights  of  the  
original   parties   may   be   delayed   or   prejudiced,   or   whether   the   intervenor'ʹs   rights   may   be  
protected   in   a   separate   proceeding   or   not.   Both   requirements   must   concur   as   the   first   is   not  
more  important  than  the  second.    
 
The  interest  which  entitles  a  person  to  intervene  in  a  suit  between  other  parties  must  be  
in   the   matter   in   litigation   and   of   such   direct   and   immediate   character   that   the   intervenor   will  
either  gain  or  lose  by  the  direct  legal  operation  and  effect  of  the  judgment.  Here,  the  interest,  if  
it  exists  at  all,  of  petitioners-­‐‑movants  is  indirect,  contingent,  remote,  conjectural,  consequential  
and   collateral.   While   a   share   of   stock   represents   a   proportionate   or   aliquot   interest   in   the  
property  of  the  corporation,  it  does  not  vest  the  owner  thereof  with  any  legal  right  or  title  to  any  
of   the   property,   his   interest   in   the   corporate   property   being   equitable   or   beneficial   in   nature.  
Shareholders   are   in   no   legal   sense   the   owners   of   corporate   property,   which   is   owned   by   the  
corporation  as  a  distinct  legal  person.  
 
Intervention   is   not   an   independent   proceeding,   but   an   ancillary   and   supplemental   one  
which,  in  the  nature  of  things,  unless  otherwise  provided  for  by  the  statute  or  Rules  of  Court,  
must  be  in  subordination  to  the  main  proceeding.  It  may  be  laid  down  as  a  general  rule  that  an  
intervenor  is  limited  to  the  field  of  litigation  open  to  the  original  parties.  In  the  case  at  bar,  there  
is  no  more  principal  action  to  be  resolved  as  a  writ  of  execution  had  already  been  issued  by  the  
lower   court   and   the   claim   of   Equitable   had   already   been   satisfied.   The   decision   of   the   lower  
court   had   already   become   final   and   in   fact   had   already   been   enforced.   There   is   therefore   no  
more  principal  proceeding  in  which  the  petitioners  may  intervene.  
 
 
Metropolitan  Bank  &  Trust  Co.  v.  Presiding  Judge  
G.R.  No.  89909,  21  September  1990.  
 
Facts:    
Metrobank  loaned  Good  Earth  Emporium  (GEE)  P4.9M,  and  the  latter  mortgaged  its  air  
conditioning   units   as   security.   Said   units   were   purchased   from   Raycor   Air   Control   systems.  
However,   Raycor   was   not   completely   paid   by   GEE   on   the   installation   costs   to   the   extent   of  
P150,000.  
 54  
 
 
When  GEE  was  foreclosed  by  BPI  Consortium,  Metrobank  filed  a  complaint  for  replevin  
to  recover  the  units.  The  defendants  consortium  filed  their  answer.  Subsequently,  Raycor  filed  a  
motion  for  leave  to  intervene,  which  was  granted.  
 
The   complaint   was   later   dismissed   with   prejudice   when   the   parties   agreed   to   a  
compromise  settlement,  without  informing  the  intervenor  Raycor.  
 
Held:  The  intervenor  in  a  pending  case  is  entitled  to  be  heard  like  any  other  party.There  is  here  
no  final  dismissal  of  the  main  case.  The  aforementioned  order  of  the  lower  court  has  the  effect  
not  only  of  allowing  the  intervention  suit  to  proceed  but  also  of  vacating  its  previous  order  of  
dismissal.  The  reinstatement  of  the  case  in  order  to  try  and  determine  the  claims  and  rights  of  
the   intervenor   is   proper.   The   joint   motion   of   therein   plaintiff   and   the   original   defendants   to  
dismiss  the  case,  without  notice  to  and  consent  of  the  intervenor,  has  the  effect  of  putting  to  rest  
only   the   respective   claims   of   the   said   original   parties   inter   se   but   the   same   cannot   in   any   way  
affect   the   claim   of   private   respondent   which   was   allowed   by   the   court   to   intervene   without  
opposition  from  the  original  parties.  
 
After  the  intervenor  has  appeared  in  the  action,  the  plaintiff  has  no  absolute  right  to  put  
the  intervenor  out  of  court  by  the  dismissal  of  the  action.  The  parties  to  the  original  suit  have  no  
power  to  waive  or  otherwise  annul  the  substantial  rights  of  the  intervenor.  When  an  intervening  
petition  has  been  filed,  a  plaintiff  may  not  dismiss  the  action  in  any  respect  to  the  prejudice  of  
the  intervenor.    
 
It   has   even   been   held   that   the   simple   fact   that   the   trial   court   properly   dismissed  
plaintiff’s   action   does   not   require   dismissal   of   the   action   of   the   intervenor.   An   intervenor   has  
the   right   to   claim   the   benefit   of   the   original   suit   and   to   prosecute   it   to   judgment.   The   right  
cannot   be   defeated   by   dismissal   of   the   suit   by   the   plaintiff   after   the   filing   of   the   petition   and  
notice   thereof   to   the   other   parties.   A   person   who   has   an   interest   in   the   subject   matter   of   the  
action  has  the  right,  on  his  own  motion,  to  intervene  and  become  a  party  to  the  suit,  and  even  
after  the  complaint  has  been  dismissed,  may  proceed  to  have  any  actual  controversy  established  
by  the  pleadings  determined  in  such  action.  The  trial  court'ʹs  dismissal  of  plaintiff’s  action  does  
not  require  dismissal  of  the  action  of  the  intervenor.      
 
The  intervenor  in  a  pending  case  is  entitled  to  be  heard  like  any  other  party.  A  claim-­‐‑in-­‐‑
intervention  that  seeks  affirmative  relief  prevents  a  plaintiff  from  taking  a  voluntary  dismissal  
of   the   main   action.     Where   a   complaint   in   intervention   was   filed   before   plaintiff'ʹs   action   had  
been  expressly  dismissed,  the  intervenor'ʹs  complaint  was  not  subject  to  dismissal  on  the  ground  
that   no   action   was   pending,   since   dismissal   of   plaintiffs   action   did   not   affect   the   rights   of   the  
intervenor  or  affect  the  dismissal  of  intervenor'ʹs  complaint.    An  intervenor'ʹs  petition  showing  it  
to   be   entitled   to   affirmative   relief   will   be   preserved   and   heard   regardless   of   the   disposition   of  
the  principal  action.  
 
 
• Intervention  cannot  alter  the  nature  of  the  action  and  the  issues  already  joined  (Castro  v.  
David,  100  Phil.  454).  
 
• It  is  neither  compulsory  nor  mandatory  but  only  optional  and  permissive  (Mabayo  Farms,  
Inc.  v.  Court  of  Appeals,  G.R.  No.  140058,  1  August  2002).  
 
 
 
 
 55  
 
Legal  interest    
 
The  legal  interest  must  be  one  that  is  actual  and  material,  direct  and  of  an  immediate  character,  
not  merely  contingent  or  expectant  so  that  the  intervenor  will  either  gain  or  lose  by  the  direct  
legal   operation   of   the   judgment   (Firestone   Ceramics   v.   Court   of   Appeals,   313   SCRA   522;   Office   of    
the  Ombudsman  v,  Samaniego,  supra.).  
 
 
Requisites;  Who  may  intervene  (Rule  19,  Sec.  1)  
 
(1)   There  must  be  a  motion  for  intervention  filed  before  rendition  of  judgment  by  the  trial  
court;    
 
(2)   The  movant  must  be  a  person  who  has  a  legal  interest    
(a) in  the  matter  in  litigation,    
(b) in  the  success  of  either  of  the  parties,  or  an  interest  against  both,  or    
(c) is   so   situated   as   to   be   adversely   affected   by   a   distribution   or   other   disposition   of  
property  in  the  custody  of  the  court  or  of  an  officer  thereof.    
 
(3)   The  intervention  must  not  unduly  delay  or  prejudice  the  adjudication  of  the  rights  of  the  
original   parties   and   that   the   intervenor’s   rights   may   not   be   fully   protected   in   a   separate  
proceeding  (Rule  19,  Sec.  1).  
 
 
Time  to  intervene    
 
The  motion  to  intervene  may  be  filed  at  any  time  before  rendition  of  judgment  by  the  trial  court  
(Rule  19,  Sec.  2).  
 
• A  copy  of  the  pleading-­‐‑in-­‐‑intervention  shall  be  attached  to  the  motion  and  served  on  the  
original  parties  
 
 
Strategic  Alliance  Development  Corporation  v.  Radstock  Securities  Limited  
G.R.  No.  178158,  4  December  2009.  
 
Facts:  
Construction   Development   Corporation   of   the   Philippines   (CDCP)   was   granted   a  
franchise   to   construct,   operate   and   maintain   toll   facilities   in   the   North   and   South   Luzon  
Tollways   and   Metro   Manila   Expressway.   CDCP   Mining   Corporation   (CDCP   Mining),   an  
affiliate   of   CDCP,   obtained   loans   from   Marubeni   Corporation   of   Japan   (Marubeni).   CDCP  
Mining  secured  the  Marubeni  loans  when  CDCP  and  CDCP  Mining  were  still  privately  owned  
and  managed.    
 
In   1983,   CDCP’s   name   was   changed   to   Philippine   National   Construction   Corporation  
(PNCC)  in  order  to  reflect  that  the  Government  already  owned  90.3%  of  PNCC  and  only  9.70%  
is  under  private  ownership.  Meanwhile,  the  Marubeni  loans  to  CDCP  Mining  remained  unpaid.  
On  20  October  2000  and  22  November  2000,  the  PNCC  Board  of  Directors  (PNCC  Board)  passed  
Board   Resolutions   admitting   PNCC’s   liability   to   Marubeni.   Previously,   for   two   decades   the  
PNCC  Board  consistently  refused  to  admit  any  liability  for  the  Marubeni  loans.  
 
In   January   2001,   Marubeni   assigned   its   entire   credit   to   Radstock   Securities   Limited  
(Radstock),   a   foreign   corporation.   Radstock   immediately   sent   a   notice   and   demand   letter   to  
 56  
 
PNCC.  On  15  January  2001,  Radstock  filed  an  action  for  collection  and  damages  against  PNCC  
before  the  Regional  Trial  Court  of  Mandaluyong  City,  Branch  213  (trial  court).  In  its  order  of  23  
January   2001,   the   trial   court   issued   a   writ   of   preliminary   attachment   against   PNCC.   The   trial  
court  ordered  PNCCs  bank  accounts  garnished  and  several  of  its  real  properties  attached.  On  14  
February  2001,  PNCC  moved  to  set  aside  the  23  January  2001  Order  and  to  discharge  the  writ  of  
attachment.  PNCC  also  filed  a  motion  to  dismiss  the  case.  The  trial  court  denied  both  motions.  
PNCC  filed  motions  for  reconsideration,  which  the  trial  court  also  denied.  PNCC  filed  a  petition  
for   certiorari   before   the   Court   of   Appeals,   docketed   as   CA-­‐‑G.R.   SP   No.   66654,   assailing   the  
denial   of   the   motion   to   dismiss.   On   30   August   2002,   the   Court   of   Appeals   denied   PNCC’s  
petition.  PNCC  filed  a  motion  for  reconsideration,  which  the  Court  of  Appeals  also  denied  in  its  
22   January   2003   Resolution.   PNCC   filed   a   petition   for   review   before   the   Supreme   Court,  
docketed  as  G.R.  No.  156887.  
   
The   trial   court   continued   to   hear   the   main   case.   On   10   December   2002,   the   trial   court  
ruled  in  favor  of  Radstock.  PNCC  thereafter  appealed  the  trial  courts’  decision  to  the  Court  of  
Appeals,   docketed   as   CA-­‐‑G.R.   CV   No.   87971..   In   a   Resolution   dated   4   December   2006   in   G.R.  
No.   156887,   the   Supreme   Court   referred   the   Compromise   Agreement   to   the   Commission   on  
Audit  (COA)  for  comment.  The  COA  recommended  approval  of  the  Compromise  Agreement.  
Thus,   the   Supreme   Court   noted   the   Compromise   Agreement   and   referred   it   to   the   Court   of  
Appeals   in   CA-­‐‑G.R.   CV   No.   87971.   In   its   25   January   2007   Decision,   the   Court   of   Appeals  
approved  the  Compromise  Agreement.  
 
PNCC   and   Radstock   entered   into   a   Compromise   Agreement.   Under   this   agreement,  
PNCC  shall  pay  Radstock  the  reduced  amount  of  P6,185,000,000.00  in  full  settlement  of  PNCC’s  
guarantee   of   CDCP   Mining’s   debt.   In   its   25   January   2007   Decision,   the   Court   of   Appeals  
approved  the  Compromise  Agreement.  
 
Strategic   Alliance   Development   Corporation   (STRADEC)   moved   for   reconsideration.  
STRADEC  alleged  that  it  has  a  claim  against  PNCC  as  a  bidder  of  the  National  Government’s  
shares,  receivables,  securities  and  interests  in  PNCC.  The  matter  is  subject  of  a  complaint  filed  
by   STRADEC   against   PNCC   and   the   Privatization   and   Management   Office   (PMO)   for   the  
issuance  of  a  Notice  of  Award  of  Sale  to  Dong-­‐‑A  Consortium  of  which  STRADEC  is  a  partner.  
The   case,   docketed   as   Civil   Case   No.   05-­‐‑882,   is   pending   before   the   Regional   Trial   Court   of  
Makati,  Branch  146  (RTC  Branch  146).  
 
The   Court   of   Appeals   treated   STRADEC’s   motion   for   reconsideration   as   a   motion   for  
intervention   and   denied   it   on   the   ground   that   the   motion   was   filed   only   after   the   Court   of  
Appeals  and  the  trial  court  had  promulgated  their  respective  decisions.  
 
Rodolfo   Cuenca   (Cuenca),   a   stockholder   and   former   PNCC   President   and   Board  
Chairman,  filed  an  intervention  before  the  Court  of  Appeals.  Cuenca  alleged  that  PNCC  had  no  
obligation  to  pay  Radstock.  The  Court  of  Appeals  also  denied  Cuenca’s  motion  for  intervention.  
Cuenca  did  not  appeal  the  denial  of  his  motion.  
 
Meanwhile,  Sison,  also  a  stockholder  and  former  PNCC  President  and  Board  Chairman,  
filed   a   Petition   for   Annulment   of   Judgment   Approving   Compromise   Agreement   before   the  
Court  of  Appeals.  The  case  was  docketed  as  CA-­‐‑G.R.  SP  No.  97982.  
 
Asiavest,   a   judgment   creditor   of   PNCC,   also   filed   an   Urgent   Motion   for   Leave   to  
Intervene   and   to   File   the   Attached  Opposition  and  Motion-­‐‑in-­‐‑Intervention   before   the   Court   of  
Appeals  in  CA-­‐‑G.R.  SP  No.  97982.  The  Court  of  Appeals  denied  Asiavest’s  urgent  motion.  
 
 
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Held:   The   Court   of   Appeals   improperly   denied   Asiavest’s   motions   for   intervention.   The   rule  
that  the  motion  for  intervention  must  be  filed  before  the  rendition  of  judgment  by  the  trial  court  
is  not  absolute.  The  rule  on  intervention,  like  all  other  rules  of  procedure,  is  intended  to  make  
the  powers  of  the  Court  completely  available  for  justice.  It  is  aimed  to  facilitate  a  comprehensive  
adjudication  of  rival  claims,  overriding  technicalities  on  the  timeliness  of  the  filing  of  the  claims.    
 
Concededly,   STRADEC   has   no   legal   interest   in   the   subject   matter   of   the   Compromise  
Agreement.  STRADECs  interest  is  dependent  on  the  outcome  of  Civil  Case  No.  05-­‐‑882.  Unless  
STRADEC  can  show  that  RTC  Branch  146  had  already  decided  in  its  favor,  its  legal  interest  is  
simply  contingent  and  expectant.  
 
However,   Asiavest   has   a   direct   and   material   interest   in   the   approval   or   disapproval   of  
the  Compromise  Agreement.  Asiavest  is  a  judgment  creditor  of  PNCC  and  a  court  has  already  
issued   a   writ   of   execution   in   its   favor.   Asiavest’s   interest   is   actual   and   material,   direct   and  
immediate  characterized  by  either  gain  or  loss  from  the  judgment  that  this  Court  may  render.  
Considering  that  the  Compromise  Agreement  involves  the  disposition  of  all  or  substantially  all  
of  the  assets  of  PNCC,  Asiavest,  as  PNCCs  judgment  creditor,  will  be  greatly  prejudiced  if  the  
Compromise  Agreement  is  eventually  upheld.  
   
 
Pleadings-­‐‑in-­‐‑intervention    
 
The  intervenor  shall  file  a  complaint-­‐‑in-­‐‑intervention  if  he  asserts  a  claim  against  either  or  all  of  
the   original   parties,   or   an   answer-­‐‑in-­‐‑intervention   if   he   unites   with   the   defending   party   in  
resisting  a  claim  against  the  latter  (Rule  19,  Sec.  3).  
 
Answer  to  complaint-­‐‑in-­‐‑intervention    
 
The  answer  to  the  complaint-­‐‑in-­‐‑intervention  shall  be  filed  within  fifteen  (15)  days  from  notice  of  
the  order  admitting  the  same,  unless  a  different  period  is  fixed  by  the  court  (Rule  19,  Sec.  4).