EN BANC

[G.R. No. L-27010. April 30, 1969.]

MARLENE DAUDEN-HERNAEZ, petitioner, vs. HON. WALFRIDO

DELOS ANGELES, Judge of the Court of First Instance of
Quezon City, HOLLYWOOD FAR EAST PRODUCTIONS, INC.,
AND RAMON VALENZUELA, respondents.

R. M . Coronado & Associates for petitioner.

Francisco Lavides for respondent.

SYLLABUS

1. REMEDIAL LAW; PLEADING AND PRACTICE; MOTION TO DISMISS:

WHEN COURT SUSTAINS SUCH MOTION PLAINTIFF SHOULD BE GIVEN
OPPORTUNITY TO AMEND HIS COMPLAINT. — It is well established rule in our
jurisprudence that when a court sustains a demurrer or motion to dismiss it
is error for the court to dismiss the complaint without giving the party
plaintiff an opportunity to amend his complaint if he so chooses. Insofar as
the first order of dismissal did not provide that the same was without
prejudice to amendment of the complaint, or reserve to the plaintiff the right
to amend his complaint, the said order was erroneous; and this error was
compounded when the motion to accept the amended complaint was denied
in the subsequent order of 3 October 1966. Hence, the petitioner-plaintiff
was within her rights in filing her so-called second motion for
reconsideration, which was actually a first motion against the refusal to
admit the amended complaint.
2. ID.; ID.; ID.; MOTION TO DISMISS IS NOT A RESPONSIVE
PLEADING; PLAINTIFF ENTITLED TO AMEND ORIGINAL DISMISSED
COMPLAINT. — Since a motion to dismiss is not a responsive pleading, the
plaintiff- petitioner was entitled as of right to amend the original dismissed
complaint.
3. ID.; ID.; MOTION FOR RECONSIDERATION; SECOND MOTION NOT
PRO FORMA WHEN BASED ON A DIFFERENT GROUND. — The second motion
for reconsideration was addressed to the court's refusal to allow an
amendment to the original complaint, and this was a ground not invoked in
the first motion for reconsideration. Thus, the second motion to reconsider
was really not pro forma, as it was based on a different ground, even if in its
first part it set forth in greater detail the arguments against the correctness
of the first order to dismiss.
4. ID.; ID.; REQUIREMENT OF 3 DAYS' NOTICE; NO DEPRIVATION OF
SUBSTANTIAL RIGHT DESPITE LACK OF SUCH NOTICE. — As to the lack of 3
days notice, the record shows that appellees had filed their opposition (in
detail) to the second motion to reconsider; so that even if it were true that
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 respondents were not given the full 3 days' notice, they were not deprived of
any substantial right.
5.CIVIL LAW; OBLIGATIONS AND CONTRACTS; CIVIL CODE'S
CONTRACTUAL SYSTEM FOLLOWS THAT OF THE SPANISH CIVIL CODE OF
1889 AND OF THE "ORDENAMIENTO DE ALCALA." — In the matter of
formalities, the contractual system of the Civil Code still follows that of the
Spanish Civil Code of 1889 and of the "Ordenamiento de Alcala" of upholding
the spirit and intent of the parties over formalities: hence, in general,
contracts are valid and binding from their perfection regardless of form,
whether they be oral or written. This is plain from Articles 1315 and 1356 of
the present Civil Code.
6. ID.; ID.; GENERAL RULE AS REGARDS FORM IN CONTRACT;
EXCEPTION. — The general rule that the form (oral and written) is irrelevant
to the binding effect inter partes of a contract that possesses the three
validating elements of consent, subject matter and causa, Article 1356 of the
Civil Code establishes only two exceptions, to wit: (a) Contracts or which the
law itself requires that they be in some particular form (writing) in order to
make them valid and enforceable (the so-called solemn contracts). Of these
the typical example are the donation of immovable property (Article 749)
and donation of movables worth more than P5,000.00 (Article 743);
contracts to pay interest on loans (mutuum) (Article 1956); and the
agreements contemplated by Articles 1744, 1773, 1874 and 2134 of the
present Civil Code. (b) Contracts that the law requires to be proved by some
writing (memorandum) of its terms, as in those covered by the old Statute of
Frauds, now Article 1403(2) of the Civil Code. Their existence not being
provable by mere oral testimony (unless whooly or partly executed), these
contracts are exceptional in requiring a writing embodying the terms thereof
for their enforceability by action in court.
7. ID.; ID.; CONTRACT FOR SERVICE; WRITTEN FORM THEREOF IS
NOT NECESSARY FOR ENFORCEMENT. — The contract sued upon by
petitioner (compensation for services) need not be in written form. It is true
that it appears included in Article 1358, last clause, providing that "all other
contracts where the amount involved exceeds five hundred pesos must
appear in writing, even a private one." But Article 1358 nowhere provides
that the absence of written form in this case will make the agreement invalid
or unenforceable. On the contrary, Article 1357 clearly indicates that
contracts covered by Article 1358 are binding and enforceable by action or
suit despite the absence of writing.

DECISION

REYES, J.B.L., Acting C.J : p

Petition for a writ of certiorari to set aside certain orders of the Court of
First Instance of Quezon City (Branch IV), in its Civil Case No. Q-10288,
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 dismissing a complaint for breach of contract and damages, denying
reconsideration, refusing to admit an amended complaint, and declaring the
dismissal final and unappealable.
The essential facts are the following:
Petitioner Marlene Dauden Hernaez, a motion picture actress, had filed
a complaint against herein private respondents, Hollywood Far East
Productions, Inc., and its President and General Manager, Ramon Valenzuela,
to recover P14,700.00 representing a balance allegedly due said petitioner
for her services as leading actress in two motion pictures produced by the
company, and to recover damages. Upon motion of defendants, the
respondent court (Judge Walfrido delos Angeles, presiding) ordered the
complaint dismissed, mainly because the "claim of plaintiff was not
evidenced by any written document, either public or private" and the
complaint "was defective on its face" for violating Articles 1356 and 1358 of
the Civil Code of the Philippines, as well as for containing defective
allegations. Plaintiff sought reconsideration of the dismissal and for
admission of an amended complaint, attached to the action. The court
denied reconsideration and the leave to amend, whereupon, a second
motion for reconsideration was filed. Nevertheless, the court also denied it
for being pro forma, as its allegations "are, more or less, the same as the
first motion," and for not being accompanied by an affidavit of merits, and
further declared the dismissal final and unappealable. In view of the attitude
of the Court of First Instance, plaintiff resorted to this Court.
The answer sets up the defense that "the proposed amended
complaint did not vary in any material respect from the original complaint
except in minor details, and suffers from the same vital defect of the original
complaint, " which is the violation of Article 1356 of the Civil Code, in that
the contract sued upon was not alleged to be in writing; that by Article 1358
the writing was absolute and indispensable, because the amount involved
exceeds five hundred pesos; and that the second motion for reconsideration
did not interrupt the period for appeal, because it was not served on three
days' notice.
We shall take up first the procedural question. It is a well established
rule in our jurisprudence that when a court sustains a demurrer or motion to
dismiss it is error for the court to dismiss the complaint without giving the
party plaintiff an opportunity to amend his complaint if he so chooses. 1
Insofar as the first order of dismissal (Annex D, Petition) did not provide that
the same was without prejudice to amendment of the complaint, or reserve
to the plaintiff the right to amend his complaint, the said order was
erroneous; and this error was compounded when the motion to accept the
amended complaint was denied in the subsequent order of 3 October 1966
(Annex F, Petition). Hence, the petitioner-plaintiff was within her rights in
filing her so-called second motion for reconsideration, which was actually a
first motion against the refusal to admit the amended complaint.
It is contended that the second motion for reconsideration was merely
pro forma and did not suspend the period to appeal from the first order of
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 dismissal (Annex D) because (1) it merely reiterated the first motion for
reconsideration and (2) it was filed without giving the counsel for defendant-
appellee the 3 days' notice provided by the rules. This argument is not
tenable, for the reason that the second motion for reconsideration was
addressed to the court's refusal to allow an amendment to the original
complaint, and this was a ground not invoked in the first motion for
reconsideration. Thus, the second motion to reconsider was really not pro
forma, as it was based on a different ground, even if in its first part it set
forth in greater detail the arguments against the correctness of the first
order to dismiss. And as to the lack of 3 days notice, the record shows that
appellees had filed their opposition (in detail) to the second motion to
reconsider (Answer, Annex 4); so that even if it were true that respondents
were not given the full 3 days' notice, they were not deprived of any
substantial right. Therefore, the claim that the first order of dismissal had
become final and unappealable must be overruled.
It is well to observe in this regard that since a motion to dismiss is not
a responsive pleading, the plaintiff-petitioner was entitled as of right to
amend the original dismissed complaint. In Paeste vs. Jaurigue, 94 Phil. 179,
181, this Court ruled as follows:
"Appellants contend that the lower court erred in not admitting
their amended complaint and in holding that their action had already
prescribed. Appellants are right on both counts.
"Amendments to pleadings are favored and should be liberally
allowed in the furtherance of justice (Torres vs. Tomacruz, 49 Phil.
913). Moreover, under Section 1 of Rule 17, Rules of Court, a party
may amend his pleading once as a matter of course, that is, without
leave of court, at any time before a responsive pleading is served. A
motion to dismiss is not a 'responsive pleading' (Moran on the Rules of
Court, vol. 1, 1952, ed., p. 376). As plaintiffs amended their complaint
before it was answered, the motion to admit the amendment should
not have been denied. It is true that the amendment was presented
after the original complaint had been ordered dismissed. But that order
was not yet final for it was still under reconsideration."

The foregoing observations leave this Court free to discuss the main
issue in this petition. Did the court below abuse its discretion in ruling that a
contract for personal services involving more than P500.00 was either
invalid or unenforceable under the last paragraph of Article 1358 of the Civil
Code of the Philippines?
We hold that there was abuse, since the ruling herein contested
betrays a basic and lamentable misunderstanding of the role of the written
form in contracts, as ordained in the present Civil Code.
In the matter of formalities, the contractual system of our Civil Code
still follows that of the Spanish Civil Code of 1889 and of the "Ordenamiento
de Alcala" 2 of upholding the spirit and intent of the parties over formalities:
hence, in general, contracts are valid and binding from their perfection
regardless or form, whether they be oral or written. This is plain from Articles
1315 and 1356 of the present Civil Code. Thus, the first cited provision
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 prescribes:
"ARTICLE 1315. Contracts are perfected by mere consent,
and from that moment the parties are bound not only to the fulfillment
of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith,
usage and law." (Emphasis supplied)

Concordantly, the first part of Article 1356 of the Code provides:

"ARTICLE 1356. Contracts shall be obligatory in whatever
form they may have been entered into, provided all the essential
requisites for their validity are present . . ." (Emphasis supplied)

These essential requisites last mentioned are normally (1) consent, (2)
proper subject matter, and (3) consideration or causa for the obligation
assumed (Article 1318). 3 So that once the three elements exist, the contract
is generally valid and obligatory, regardless of the form, oral or written, in
which they are couched.
To this general rule, the Code admits exceptions, set forth in the
second portion of Article 1356:
"However, when the law requires that a contract be in some form
in order that it may be valid or enforceable, or that a contract be
proved in a certain way, that requirement is absolute and
indispensable . . ."

It is thus seen that to the general rule that the form (oral or written) is
irrelevant to the binding effect inter partes of a contract that possesses the
three validating elements of consent, subject matter, and causa, Article 1356
of the Code establishes only two exceptions, to wit:
(a) Contracts for which the law itself requires that they be in some
particular form (writing) in order to make them valid and enforceable (the
so-called solemn contracts). Of these typical example is the donation of
immovable property that the law (Article 749) requires to be embodied in a
public instrument in order "that the donation may be valid," i.e., existing or
binding. Other instances are the donation of movables worth more than
P5,000.00 which must be in writing, "otherwise the donation shall be void"
(Article 748); contracts to pay interest on loans (mutuum) that must be
"expressly stipulated in writing" (Article 1956); and the agreements
contemplated by Articles 1744, 1773, 1874 and 2134 of the present Civil
Code.
(b) Contracts that the law requires to be proved by some writing
(memorandum) of its terms, as in those covered by the old Statute of
Frauds, now Article 1403(2) of the Civil Code. Their existence not being
provable by mere oral testimony (unless wholly or partly executed), these
contracts are exceptional in requiring a writing embodying the terms thereof
for their enforceability by action in court.
The contract sued upon by petitioner herein (compensation for
services) does not come under either exception. It is true that it appears
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 included in Article 1358, last clause, providing that "all other contracts where
the amount involved exceeds five hundred pesos must appear in writing,
even a private one." But Article 1358 nowhere provides that the absence of
written form in this case will make the agreement invalid or unenforceable.
On the contrary, Article 1357 clearly indicates that contracts covered by
Article 1358 are binding and enforceable by action or suit despite the
absence of writing.
"ARTICLE 1357. If the law requires a document or other
special form, as in the acts and contracts enumerated in the following
article, the contracting parties may compel each other to observe that
form, once the contract has been perfected. This right may be
exercised simultaneously with the action upon the contract." (Emphasis
supplied)

It thus becomes inevitable to conclude that both the court a quo as well
as the private respondents herein were grossly mistaken in holding that
because petitioner Dauden's contract for services was not in writing the
same could not be sued upon, or that her complaint should be dismissed for
failure to state a cause of action because it did not plead any written
agreement.
The basic error in the lower court's decision lies in overlooking that in
our contractual system it is not enough that the law should require that the
contract be in writing, as it does in Article 1358. The law must further
prescribe that without the writing the contract is not valid or not enforceable
by action.
WHEREFORE, the order dismissing the complaint is set aside, and the
case is ordered remanded to the court of origin for further proceedings not
at variance with this decision. Costs to be solidarily paid by private
respondents Hollywood Far Fast Productions, Inc., and Ramon Valenzuela.
Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Teehankee and
Barredo, JJ ., concur.
Concepcion, C .J . and Castro, J ., are on official leave.
Capistrano, J ., did not take part.

Footnotes
1.Macapinlac vs. Gutierrez Repide, 43 Phil. 774; Ibañez vs. Fortis, 17 Phil. 82;
Balderrama vs. Compañia General de Tabacos, 13 Phil. 609; Molina vs. La
Electricista, 6 Phil. 519; Mapua vs. Suburban Theaters, Inc., 87 Phil. 364.
Unless, of course, the defect is incurable, as in lack of jurisdiction.
2.Law 1, Title I, Book X, of the Novisima Recopilacion.
3.Plus a fourth requisite of delivery in so-called real contracts, such as deposit,
pledge and commodatum (Article 1316). But the contract here involved is
not of this class.

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