121.

JOSE S. MATUTE vs. THE COURT OF APPEALS (Third Division) and MATIAS S.
MATUTE,
G.R. No. 26751 January 31, 1969

FACTS:
The antecedent events trace their origin to August 20, 1965 when Carlos S.
Matute, one of the Matute heirs and a full-blood brother of both the petitioner and the
respondent Matias S. Matute, filed in special proceeding 25876 (settlement of the Matute
estate) a petition praying for the removal of Matias as co-administrator and his (Carlos')
appointment in such capacity. Respondent Matias opposed and filed an amended
opposition.

The probate court issued an order removing Matias S. Matute as co-administrator.

Hence, the certiorari. The respondent contends that the disputed order removing him as
co-administrator is a patent nullity. Upon the other hand, the petitioner advances the
reason in support of the order of removal that the probate judge accorded the respondent
all the opportunity to adduce his evidence but the latter resorted to dilatory tactics such
as filing a motion to dismiss or demurrer to evidence.

ISSUE:

Whether or not Rule 33 regarding judgment on demurrer to evidence is applicable

to special proceedings such that it’s disregard by the probate court amounts to
grave abuse of discretion.

RULING:

Yes. Section 2, Rule 72 of the Rules of Court provides that in the absence of
special provisions, the rules provided for in ordinary civil actions shall be, as far
as practicable, applicable in special proceedings. The application of the above
cited Rule in special proceedings, like in this case, is authorized by the Rules.
Instead of resolving the foregoing motion, the probate judge issued the
controverted order removing the respondent as co-administrator without giving
him the opportunity to adduce his own evidence despite his explicit reservation
that he be afforded the chance to introduce evidence in his behalf in the event of
denial of his motion to dismiss and/or demurrer to evidence. The Court view that
the above actuation of the probate judge constituted grave abuse of discretion
which dooms his improvident order as nullity.

122.
ERLINDA GAJUDO, et al. vs. TRADERS ROYAL BANK
G.R. No. 151098 March 21, 2006
FACTS:
Petitioner filed a complaint against respondent to annul the extra-judicial
foreclosure and auction sale in favor of the latter, the conventional redemption thereof
and prayed for damages. Respondent was declared in default for failure to file its Answer.
The trial court issued a partial decision awarding damages to petitioner. It ruled that the
evidence presented is preponderant to support the claims. The Court of Appeals (CA)
reversed the decision stating that the evidence presented failed to establish the relief
prayed for.

ISSUE:
Is the decision correct?

RULING:
Yes. The mere fact that a defendant is declared in default does not automatically
result in the grant of the prayers of the plaintiff. To win, the latter must still present the
same quantum of evidence that would be required if the defendant were still present. A
party that defaults is not deprived of its rights, except the right to be heard and to present
evidence to the trial court. If the evidence presented does not support a judgment for the
plaintiff, the complaint should be dismissed, even if the defendant may not have been
heard or allowed to present any countervailing evidence.

123.
ALBERTO PINLAC, et al. v. COURT OF APPEALS et al.
G.R. 91486 January 19, 2001

FACTS:
Petitioners, their dependants and successors in interest filed a class suit for
quieting of title before the Regional Trial Court (RTC) of Quezon City. Service of
summons was made through publication. Other respondents failed to answer and were
thus declared in default. The trial court rendered a partial decision in favor of petitioners.
The respondents filed a petition for annulment of judgment with the CA for the reason that
the trial court had no jurisdiction over them and that the partial decision was null and void
on the grounds of lack of jurisdiction and extrinsic fraud.

The CA annulled the partial decision based on its finding that the trial court lacks
jurisdiction over the persons of respondents. Hence, this petition.

ISSUES:
1) Whether or not all the petitioners were duly served with summons by publication; and
2) Whether or not the CA is correct in annulling the partial decision.

RULING:
The publications of summons and the partial decision were invalid. The Partial
Decision is null and void since the respondents were not duly served with summons or
notified of the proceedings against them. The publications were invalid because the said
periodical is not considered a newspaper of general circulation in Quezon City where the
subject property is located. While the service of summons by publication may have been
done with the approval of the trial court, it does not cure the fatal defect that the said
newspaper is not one of general circulation in Quezon City.
The modes of service of summons should be strictly followed in order that the court
may acquire jurisdiction over the respondents, and failure to strictly comply with the
requirements of the rules regarding the order of its publication is a fatal defect in the
service of summons.

The action for annulment of judgment cannot and was not a substitute for the lost
remedy of appeal. The very purpose of the action for annulment of judgment was to have
the final and executory judgment set aside so that there will be a renewal of litigation.
Whether or not the assailed Partial Decision based solely on facts and evidence
presented by the petitioners is meritorious is irrelevant and immaterial. Thus, the Court of
Appeals did not err, nor did it violate the petitioner’s right to due process of law, when it
refused to consider all the factual issues raised by petitioners.

Finally, the conclusion that the Partial Decision of the trial court is void finds support
in Rule 10, Section 5(c) of the Rules of Court, which provides:

(c) Effect of partial default. - When a pleading asserting a claim states a common cause
of action against several defending parties, some of whom answer and the others fail to
do so, the court shall try the case against all upon the answers thus filed and render
judgment upon the evidence presented.

Considering that petitioners in their complaint stated a common cause of action

against all the named respondents, the trial court should have heard the case as against
all respondents, the defaulted respondents included. However, the trial court, proceeded
to receive evidence ex parte only against the defaulted respondents. The trial courts
disposition is not only violative of the rules but also a clear negation of the defaulted
respondents limited rights.
Whatever defense and evidence the non-defaulted respondents may present which would
be applicable to the situation of the defaulted respondents should inure to the benefit of
the latter. The Partial Decision is void.

124.
SULPICIA VENTURA vs. HON. FRANCIS J. MILITANTE, in His Capacity as Presiding
Judge and JOHN UY
G.R. No. 63145. October 5, 1999
FACTS:
Private respondent John Uy filed a Complaint for Sum of Money and Damages
against the Estate of Carlos Ngo as represented by his surviving spouse Ms. Sulpicia
Ventura. Petitioner Sulpicia Ventura moved to dismiss the complaint on the ground that
the estate of Carlos Ngo has no legal personality. Private respondent opposed the said
motion to dismiss and manifested that he was going to amend the complaint. Public
respondent then gave private respondent fifteen days to make amendments in the
complaint. Petitioner filed a motion for reconsideration of the said Order on the ground,
among others, that public respondent never acquired jurisdiction over the subject matter
of the case considering that an action to recover a sum of money from a deceased person
may only be heard by a probate court. Thereafter, private respondent filed his Amended
Complaint which substituted Sulpicia Ventura as defendant, and claiming that it was
Carlos Ngo and Sulpicia Ventura who incurred an indebtedness from him. Acting on both
issues, public respondent denied the Motion for Reconsideration and admitted the
Amended Complaint.
ISSUE:
Is the action of the public respondent correct?

RULING:
No. Neither a dead person nor his estate may be a party plaintiff in a court
action. A deceased person does not have such legal entity as is necessary to bring action
so much so that a motion to substitute cannot lie and should be denied by the court. An
action begun by a decedent's estate cannot be said to have been begun by a legal person,
since an estate is not a legal entity; such an action is a nullity and a motion to amend the
party plaintiff will not likewise lie, there being nothing before the court to
amend. Considering that capacity to be sued is a correlative of the capacity to sue, to the
same extent, a decedent does not have the capacity to be sued and may not be named
a party defendant in a court action.
Moreover, as correctly argued by petitioner, the conjugal partnership terminates upon
the death of either spouse. After the death of one of the spouses, in case it is necessary
to sell any portion of the conjugal property in order to pay outstanding obligations of the
partnership, such sale must be made in the manner and with the formalities established
by the Rules of Court for the sale of the property of deceased persons. Where a complaint
is brought against the surviving spouse for the recovery of an indebtedness chargeable
against said conjugal property, any judgment obtained thereby is void. The proper action
should be in the form of a claim to be filed in the testate or intestate proceedings of the
deceased spouse.

125.
CORNELIO R. CALABIG v. HONORABLE FLORENTINO M. VILLANUEVA, as Judge of
the Court of First Instance of Laguna, Branch V, and VENERANDO BALDEMOR
G.R. No. 56598 March 15, 1985.

FACTS:

In the election case, petitioner Calabig filed a motion for the admission of his Amended
Answer which grounds already previously alleged in his original Answer. The motion to
admit amended answer was denied. Petitioner then filed this petition for special civil
action for Certiorari and Prohibition with Preliminary Injunction and/or Restraining Order.

ISSUE:
Whether or not the petition is with merit.

RULING:
The petition is devoid of merit. Consequently, its dismissal is in order.

It cannot be denied and petitioner does not controvert, that nothing new is sought
to be introduced in his Amended Answer. He admits that the amendments incorporated
consist merely of allegations of ultimate facts in amplification or elaboration of the ground
already previously alleged in his original Answer.

Amendment of pleadings are favored and should be liberally allowed in the

furtherance of justice in order to determine every case as far as possible on its merits
without regards to technicalities, to speed up trial and to save party litigants from incurring
unnecessary expenses, so that a full hearing on the merits of every case may be had and
avoid multiplicity of suits. The only limitations to this liberal policy of allowing amendments
are: that the cause of action, defense or theory of the case is substantially changed
although this is not an inflexible rule; that the amendment will result in the alteration of a
final judgment on a substantial matter; that the amendment is for the purpose of making
the complaint confer jurisdiction upon the court when none existed before; that the
amendment is for the purpose of curing a premature or non-existing cause of action; and
finally, that the amendment is for purposes of delay. This last exception finds greater
applicability in election protest which does not merely concern the personal interest of
rival candidates for an office. Over and above their claims is the deep public interest
involved, the need to imperatively determine the correct expression of the will of the
electorate.

This last exception finds greater applicability in election protest which does not merely
concern the personal interest of rival candidates for an office. Over and above their claims
is the deep public interest involved, the need to imperatively determine the correct
expression of the will of the electorate. So much so that laws governing election protests
must be liberally interpreted to the end that the popular will expressed in the election of
public officers will not, by reason of purely technical objections, be defeated. Hence,
technicalities are not favored. This should be more so upon consideration that in an
election protest, public interests enter — thus, the need of ascertaining the free and true
will of the voters at the earliest possible time. Wherefore, the instant petition is dismissed.

126.
Citystate Savings Bank Inc. v. Aguinaldo
G.R. No. 200018 April 6, 2015

FACTS:
 Respondent Aguinaldo claimed that a certain Mojica fraudulently obtained a
certificate of title over the land he owned and possessed and who executed a real estate
mortgage over the subject property in favor of Citystate Savings Bank, Inc. (Citystate)
who foreclosed the property and later consolidated its title to the subject property. A new
certificate of title was issued in its name. Aguinaldo filed a Complaint for annulment of
title. After the parties have presented their evidence, but before the presentation of
rebuttal evidence, Aguinaldo filed a Motion to Admit Amended Complaint which was
denied and the motion for reconsideration was also denied. Aguinaldo filed a petition for
certiorari with the CA. The CA granted the petition. Citystate filed a motion for
reconsideration which was denied. Hence, this petition.

ISSUE:
Whether or not the Amended Complaint should be admitted.

RULING:
The petition is denied.
Section 3, Rule 10 of the Rules of Court provides that:
SEC. 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.

Verily, the business of the courts is not just merely to dispose of cases seen as clutters
in their dockets. Courts are in place to adjudicate controversies with the end in view of
rendering a definitive settlement, and this can only be done by going into the very core
and to the full extent of the controversy in order to afford complete relief to all the parties
involved.

In this case, the CA allowed the amended complaint in order to grant complete relief to
Aguinaldo. The additional reliefs being sought in the amended complaint does not alter
Aguinaldo’s cause of action or the theory of case. These are mere remedies to which
Aguinaldo became entitled to as a result of the alleged supervening events, which
rendered the relief being sought in the original complaint inadequate.

The amended complaint effected no change in the cause of action, defense, or theory of
the case since it remained to be an action for the nullity of a title that was erroneously
issued in another’s name.

In any case, a substantial alteration in the cause of action or defense is not a bar to amend
the original complaint so long as the amendment is not meant for delay. It is also quite
absurd that the party who filed the main case would himself resort to dilatory tactics to
prolong the disposition of his case. The amendment is allowed.
127.
DANIEL C. VALENZUELA et al. v. COURT OF APPEALS (CA) et al. G.R. No.
149449 February 20, 2006

FACTS:
An Accion Reinvidicatoria was filed against petitioners by private respondents, the Heirs
of Federico Salazar. Subject of the case is a parcel of land covered by Transfer Certificate
of Title (TCT) of which petitioners are alleged to be occupying part of the said land. During
the pre-trial, parties agreed to a re-survey of the property. However, the survey team
were refused entry to the disputed property by petitioner Daniel Valenzuela. After an
exchange of motions - respondents Motion to Issue Show Cause Order, petitioner’s
comment, private respondent’s answer, and while the motion was pending, the counsel
of the petitioner withdrew and the new counsel filed a rejoinder to the show cause motion,
petitioner’s Manifestation and Motion for Extension of time, Motion for Leave to file
Amended Answer, second motion for extension, the Motion for Leave to file Amended
Answer and a motion for reconsideration were denied by the court. Petitioner filed a
petition for certiorari. The CA dismissed the petition. Hence, this petition for review on
certiorari.

ISSUE:
Whether or not the petition for review is with merit.

RULING:
The petition lacks merit.
The denial of the Motion for Leave to File Amended Answer, the Court finds nothing
that could be interpreted to show grave abuse of discretion or a whimsical exercise of
judgment on the part of the trial court. Having filed an Answer way back on September
18, 1999, with pre-trial on-going, amendments to the Answer were no longer a matter of
right but at the discretion of the trial court. The pertinent provision would be Section 3 of
Rule 10, which reads:

SEC. 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 is aware that amendments to pleadings are allowed at any stage before
the rendition of final judgment. This is most especially permitted during pre-trial as one
of its goals is to consider the necessity or desirability of amendments to the pleadings.
Nevertheless, whether an amendment will be allowed is still discretionary upon the trial
court, taking into account the circumstances of each case with particular attention to the
possibility that the motion was made with intent to delay.
 The Court is therefore in agreement with the assessment of the Court of Appeals
that it is all too obvious that petitioners are resorting to dilatory tactics to prevent the case
from being decided. Consequently, grave abuse of discretion will not be ascribed to the
denial of the Motion for Leave to File Amended Answer.

128.
PHILIPPINE AIRLINES, INC., vs. COURT OF APPEALS and PEDRO ZAPATOS G.R.
No. L-82619 September 15, 1993

FACTS:
Private respondent filed a complaint for damages for breach of contract of carriage
against Philippine Airlines, Inc. (PAL) before the Regional Trial Court (RTC) of Ozamiz
City. The trial court rendered its decision in favor of the plaintiff. PAL appealed to the
Court of Appeals which affirmed the judgment of the trial court. PAL then sought recourse
to this Court by way of a petition for review on certiorari.

ISSUE:
(1) Can the Court of Appeals render a decision finding petitioner negligent and,
consequently, liable for damages on a question of substance which was neither raised on
a question nor proved at the trial?

(2) Can the Court of Appeals award actual and moral damages contrary to the evidence
and established by jurisprudence?

RULING:
Yes. When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had been raised in
the pleadings.

Moral damages are not intended to enrich the private respondent. They are
awarded only to enable the injured party to obtain means, diversion or amusements that
will serve to alleviate the moral suffering he has undergone by reason of the defendant's
culpable action. Since the award of moral damages is excessive the Court reduced the
same.
Actual or compensatory damages cannot be presumed but must be duly proved with
reasonable degree of certainty. The award of actual damages in the amount of P5,000.00
representing private respondent's alleged business losses occasioned by his stay at
Cotabato City, the Court find the same unwarranted.

129.
PADILLA MERCADO, et al. vs. SPOUSES AGUEDO and LOURDES ESPINA
G.R. No. 173987 February 25, 2012
FACTS:
Petitioners filed with the Regional Trial Court (RTC) a Complaint for Recovery of Property
and Declaration of Nullity of Deed of Sale. On June 29, 2000, Respondents filed a Motion
to Dismiss but the RTC denied and the motion for reconsideration was also denied.
Respondents then filed a special civil action for certiorari with the CA and the CA
dismissed the petition. Respondents filed a motion for reconsideration, but the same was
denied.

Meanwhile, on August 17, 2000, petitioners, by leave of court, filed an Amended

Complaint. Respondents filed a Motion to Dismiss Amended Complaint. On February 18,
2004 the RTC denied the Motion to Dismiss Amended Complaint. Respondents filed a
motion for reconsideration, but the RTC denied in its Order dated April 19, 2004.
Respondents filed a special civil action for certiorari with the CA praying that the February
18, 2004 and April 19, 2004 Orders of the RTC be set aside and petitioners' complaint
dismissed. On April 27, 2005, the CA granted the petition stating that the orders of the
RTC dated February 18, 2004 and April 19, 2004 be set aside and that the Complaint is
dismissed. The RTC of Maasin City was enjoined from proceeding with the case. The
petitioner filed this petition for review on certiorari.

ISSUES:

1) Procedurally, whether or not the CA erred in giving due course to the second motion
to dismiss;

2) Substantively, whether or not the CA erred in ordering the RTC to dismiss the case
and enjoining it from proceeding with the case.

HELD:

The petition lacks merit.

As to the first issue, there is no dispute that the issue of timeliness of respondents' Motion
to Dismiss petitioners' Amended Complaint was not raised by petitioners before the RTC.
Neither was this issue raised in their Comment to respondents' petition for certiorari filed
with the CA. It was only in their Motion for Reconsideration of the CA Decision that this
matter was raised. It is well established that issues raised for the first time on appeal and
not raised in the proceedings in the lower court are barred by estoppel. Points of law,
theories, issues, and arguments not brought to the attention of the trial court ought not to
be considered by a reviewing court, as these cannot be raised for the first time on appeal.
Basic considerations of due process impel the adoption of this rule. Moreover,
respondent's filing of their Motion to Dismiss Amended Complaint may not be considered
as a circumvention of the rules of procedure. Under Section 8, Rule 10 of the Rules of
Court, an amended complaint supersedes an original one. As a consequence, the original
complaint is deemed withdrawn and no longer considered part of the record. In this case,
the Amended Complaint is, thus, treated as an entirely new complaint. As such,
respondents had every right to move for the dismissal of the said Amended Complaint.
Were it not for the filing of the said Motion, respondents would not have been able to file
a petition for certiorari before the CA which, in turn, rendered the presently assailed
judgment in their favor.

With respect to the second issue, the CA correctly ruled that petitioners' Amended
Complaint failed to state a cause of action.

Failure to state a cause of action refers to the insufficiency of the pleading, and is a ground
for dismissal under Rule 16 of the Rules of Court.

A Complaint states a cause of action if it avers the existence of the three essential
elements of a cause of action, namely:

a) The legal right of the plaintiff;

b) The correlative obligation of the defendant; and

b) The act or omission of the defendant in violation of said legal right.

If the allegations in the complaint do not aver the concurrence of these elements, the
complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a
cause of action. A perusal of the Amended Complaint in the present case would show
that there is, indeed, no allegation of any act or omission on the part of respondents which
supposedly violated the legal rights of petitioners. Thus, the CA is correct in dismissing
the complaint on the ground of failure to state a cause of action.

130.
REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT vs. SANDIGANBAYAN (Second Division) and LUCIO C.
TAN, ET AL.
G.R. No. 115748. August 7, 1996

FACTS:
Petitioner filed an amended complaint for Reversion, Reconveyance, Restitution,
Accounting and Damages against private respondents. Some of the original defendants
and the additional ones had not yet filed their answers but instead filed a Motion for a
More Definite Statement of Bill of Particulars. Meanshile, others were not served
Summons but petitioned filed a Motion for Leave of court to take the Deposition of
Rolando Gapud, the main witness who was in Hongkong. Respondent court denied the
motion holding that the taking of deposition is premature because not all defendants have
been served with summons or have filed their answers to the complaint, and no special
circumstances existed to warrant the taking of such.

ISSUE:
 Is the decision correct?

RULING:
Yes. The pertinent rule states that depositions pending action may be conducted
by oral examination or written interrogatories, and may be taken at the instance of any
party, with or without leave of court. Leave of court is not necessary after an Answer
has been served. It is only when an answer has not yet been filed that prior leave of
court is required. In this case, the additional defendants had not yet filed their answer to
the amended complaint which actually contain different set of facts on different
occasions from the first complaint. They should be given the opportunity to respond to
the allegations against them and clarify the disputed facts before discovery procedures
may be resorted to. Additionally, no special circumstances exist to warrant the said
taking of deposition as petitioner has not alleged, nor is it apparent that the witness is
old, sick, or infirm as to necessitate the taking of his deposition. Indeed, no urgency has
been cited and no ground given that would make it prejudicial for petitioner to await
joinder of issues.

131.
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS (DPWH),
vs
SPOUSES SENANDO F. SALVADOR and JOSEFINA R. SALVADOR
G.R. No. 205428 June 7, 2017

FACTS:
This is an expropriation case filed by the petitioner against the respondents. The
respondents received payments of their properties and a corresponding Writ of
Possession was issued in favor of the Republic. The trial court in its decision directed the
Republic to pay respondents consequential damages equivalent to the value of the capital
gains tax and other taxes necessary for the transfer of the subject property in the
Republic’s name. The Republic moved for partial reconsideration but the trial court
denied the motion. As a result, the Republic filed this Petition for Review on Certiorari
assailing the RTC’s decision and order.

ISSUES:
1) Whether the RTC correctly denied the Motion for Partial Reconsideration for being filed
out of time; and
2) Whether the capital gains tax on the transfer of the expropriated property can be
considered as consequential damages.

RULING:
The petition is with merit.
 "Section 3, Rule 13 of the Rules of Court provides that if a pleading is filed by
registered mail, x x x the date of mailing shall be considered as the date of filing. It does
not matter when the court actually receives the mailed pleading."

In this case, the records show that the Republic filed its Motion for Partial
Reconsideration before the RTC via registered mail on September 28, 2012. Although
the trial court received the Republic's motion only on October 5, 2012, it should have
considered the pleading to have been filed on September 28, 2012, the date of its mailing,
which is clearly within the reglementary period of 15 days to file said motion, counted from
September 13, 2012, or the date of the Republic's receipt of the assailed Decision.

Given these circumstances, the RTC erred in denying the Republic's Motion for
Partial Reconsideration for having been filed out of time.

Likewise, the RTC committed a serious error when it directed the Republic to pay
respondents consequential damages equivalent to the value of the capital gains tax and
other taxes necessary for the transfer of the subject property.

"Just compensation is defined as the full and fair equivalent of the property sought
to be expropriated. The measure is not the taker's gain but the owner's loss. The
compensation, to be just, must be fair not only to the owner but also to the taker."

In order to determine just compensation, the trial court should first ascertain the
market value of the property by considering the cost of acquisition, the current value of
like properties, its actual or potential uses, and in the case of lands, their size, shape,
location, and the tax declarations thereon. If as a result of the expropriation, the remaining
lot suffers from an impairment or decrease in value, consequential damages may be
awarded by the trial court, provided that the consequential benefits which may arise from
the expropriation do not exceed said damages suffered by the owner of the property.

While it is true that "the determination of the amount of just compensation is within
the court's discretion, it should not be done arbitrarily or capriciously. Rather, it must
always be based on all established rules, upon correct legal principles and competent
evidence." The court cannot base its judgment on mere speculations and surmises.

In this case, the RTC deemed it fair and just that whatever is the value of the
capital gains tax and all other taxes necessary for the transfer of the subject property to
the Republic are but consequential damages that should be paid by the latter.
This is clearly an error. It is settled that the transfer of property through
expropriation proceedings is a sale or· exchange within the meaning of Sections 24(D)
and 56(A)(3) of the National Internal Revenue Code, and profit from the transaction
constitutes capital gain. Since capital gains tax is a tax on passive income, it is the seller,
or respondents in this case, who are liable to shoulder the tax.
In fact, the Bureau of Internal Revenue (BIR), in BIR Ruling No. 476-2013 dated
December 18, 2013, has constituted the DPWH as a withholding agent tasked to withhold
the 6'% final withholding tax in the expropriation of real property for infrastructure projects.
Thus, as far as the government is concerned, the capital gains tax in expropriation
proceedings remains a liability of the seller, as it is a tax on the seller's gain from the sale
of real property.

132.
JESUS G. SANTOS, vs. COURT OF APPEALS, REGIONAL, TRIAL COURT (RTC) OF
BULACAN, BRANCH 9 and OMAR H. YAPCHIONGCO
G.R. No. 128061. September 3, 1998

FACTS:
The petitioner was sued for damages. The trial court dismissed the complaint for
lack of merit. The Court of Appeals (CA) reversed the trial court and declared petitioner
liable for actual damages, moral damages and attorney's fees and litigation expenses.
The decision of the appellate court was sent by registered mail to petitioner's counsel.
On the same day, the corresponding notice of registered mail was sent to him. Two (2)
other notices were sent to the same addressee on different dates. But the mail remained
unclaimed and consequently returned to the sender.

On 27 July 1995 respondent court again sent its decision to the same addressee
by the same mode but after three (3) notices the decision was returned to the sender for
the same reason. On 27 September 1995 a notice of change of name and address of
law firm was sent by petitioner's counsel to respondent court. On 28 March 1996 the
same decision of respondent court was sent anew by registered mail to petitioner's
counsel at his present address which he finally received on 3 April 1996. On 17 April
1996 he withdrew his appearance as counsel for petitioners.

On 18 April 1996 petitioner's new counsel entered his appearance and moved for
reconsideration of respondent court's decision. Respondent Yapchiongco opposed the
motion on the ground that the period for its filing had already expired. He insisted that on
the basis of the dates of the notices and the notation "Unclaimed: Return to Sender"
stamped on the envelope containing the decision of respondent court, service by
registered mail was complete five (5) days from 15 June 1995, and thus commenced the
running of the period for reconsideration, the last day being 5 July 1995. Respondent
court sustained the opposition and denied the motion.

On 21 December 1996 petitioner moved for leave to admit his motion for
reconsideration raising the argument that it was filed on the fifteenth (15th) day from
actual receipt of the decision. On 30 January 1997 respondent court likewise denied
reconsideration based on the finding that the motion was in reality a second motion for
reconsideration which was prohibited under Sec. 6, Rule 9, of its Revised Internal Rules.

ISSUE:
Did respondent court commit grave abuse of discretion in denying both motions?
RULING:

Respondent Court of Appeals, indeed, committed grave abuse of discretion. Section 8,

Rule 13, of the Rules of Court provides:

Completeness of service. - Personal service is complete upon actual delivery. Service by

ordinary mail is complete upon the expiration of five (5) days after mailing, unless the
court otherwise provides. Service by registered mail is complete upon actual receipt by
the addressee; but if he fails to claim his mail from the post office within five (5) days from
the date of first notice of the postmaster, service shall take effect at the expiration of such
time.

It may, be observed that the rule on service by registered mail contemplates two (2)
situations: first, actual service the completeness of which is determined upon receipt by
the addressee of the registered mail and, second, constructive service the completeness
of which is determined, upon the expiration of five (5) days from the date of first notice of
the postmaster without the addressee having claimed the registered mail. The second
circumstance was appreciated by respondent court to obtain in the present case. Yet for
completeness of constructive service there must be conclusive proof that petitioner's
former counsel or somebody acting on his behalf was duly notified or had actually
received the notice, referring to the postmaster's certification to that effect. Here, private
respondent failed to present such proof before respondent court but only did so in the
present proceedings. Wherefore, the petition is granted.

133.
Manuel Bautista et al. v. Margarito Bautista
G.R. No. 202088 March 8, 2017

FACTS:
This case stemmed from a Complaint for Partition and Accounting with Prayer for
Temporary Restraining Order and/or Writ of Preliminary Injunction filed by the petitioners
against Margarito and the other defendants over several properties allegedly co-owned
by them, which included Sta. Monica property, the subject property.

Petitioners averred that Margarito and the others refused their demands for the partition.
On the other hand, Margarito contends that he exclusively owns the property since he
used his personal funds in purchasing the land.
The RTC ruled in favor of the petitioners and declared, among other things, that the Sta.
Monica property was commonly owned by the siblings. The RTC also ordered that the
property be partitioned among all of them and that an accounting of its income be held.
Margarito filed a Motion for Reconsideration, but the RTC denied. Aggrieved, Margarito
elevated the case before the CA. The CA reversed the decision of the RTC. Petitioners
filed a Motion for Reconsideration but it was denied. Hence, this petition.
ISSUE:
Whether or not an implied resulting trust existed among the parties.

RULING:
The petition is impressed with merit.

There is an implied trust when a property is sold and the legal estate is granted to one
party but the price is paid by another for the purpose of having the beneficial interest of
the property. This is sometimes referred to as a purchase money resulting trust, the
elements of which are: (a) an actual payment of money, property or services, or an
equivalent, constituting valuable consideration; and (b) such consideration must be
furnished by the alleged beneficiary of a resulting trust.

A trust, which derives its strength from the confidence one reposes on another especially
between families, does not lose that character simply because of what appears in a legal
document. From the foregoing, this Court finds that an implied resulting trust existed
among the parties. The pieces of evidence presented demonstrate their intention to
acquire the Sta. Monica property in the course of their business, just like the other
properties that were also the subjects of the partition case and the compromise
agreement they entered into. Although the Sta. Monica property was titled under the
name of Margarito, the surrounding circumstances as to its acquisition speak of the intent
that the equitable or beneficial ownership of the property should belong to the Bautista
siblings. Petitioners satisfactorily established that they are co-owners of the property and
are entitled to the reliefs prayed for.

134.
F. DAVID ENTERPRISES, et al. v. INSULAR BANK OF ASIA and AMERICA (IBAA) ET
AL. G.R. No. 78714 November 21, 1990

FACTS:
IBAA filed a petition for a writ of possession over the lot subject for extrajudicial
proceedings. The petition was granted and the writ prayed for was issued. The David
spouses filed a motion to recall the writ which the trial court granted. This prompted IBAA
to file a motion for reconsideration but was denied. IBAA filed a second motion for
reconsideration which was also denied. IBAA filed a manifestation and motion reiterating
its earlier arguments and adding that its second motion for reconsideration should at least
be treated as anew petition for a writ of possession that under the circumstances should
now be granted. This was likewise denied, the court ruled that a second motion for
reconsideration was not allowed, and much less a third, under the interim Rules.

IBAA filed a petition for certiorari and mandamus with preliminary mandatory injunction
with the Court of Appeals (CA). The respondent court reversed the trial court and ordered
it to issue the writ of possession. IBAA filed with the trial court a motion for the issuance
of the writ of possession directed by the Court of Appeals. Petitioner filed a motion to
reset hearing for the IBAA motion which was denied and the writ of possession was
issued. The Petitioner filed a motion for reconsideration but was denied. Hence, this
petition.

ISSUE:
Whether or not the motion for reconsideration was filed on time.
RULING:
A review of the material dates shows that the motion for reconsideration of the decision
of the respondent court was filed out of time.

The petitioner’s counsel was deemed served with a copy of the challenged decision on
December 8, 1986, five days after the first registry notice sent to him on December 3,
1986. The applicable rule is Rule 13, Section 8 of the Rules of Court reading as follows:

SEC. 8. Completeness of service. — Personal service is complete upon actual

delivery. Service by ordinary mail is complete upon the expiration of five (5) days after
mailing, unless the court otherwise provides. Service by registered mail is complete upon
actual receipt by the addressee; but if he fails to claim his mail from the post office within
five (5) days from the date of first notice of the postmaster, service shall take effect at the
expiration of such time.

The facts are incontrovertible. The decision of the respondent court was promulgated on
November 28, 1986. Conformably to Rule 13, Section 8, of the Rules of Court, service
thereof on the petitioner at his address of record was deemed completed on December
8, 1986. The petitioner had 15 days, or until December 23, 1986, within which to file a
motion for reconsideration. The motion was actually filed on March 12, 1987, or 79 days
later. The decision had then long become final and executory and could no longer be
disturbed. On this justification alone, the present petition can be denied outright.

As the respondent court correctly observed, the issuance of a writ of possession in a land
registration case is a mere post-judgment incident that is governed by special rules.

It is settled that the buyer in a foreclosure sale becomes the absolute owner of the
property purchased if it is not redeemed during the period of one year after the registration
of the sale. As such, he is entitled to the possession of the said property and can demand
it at any time following the consolidation of ownership in his name and the issuance to
him of a new transfer certificate of title. The buyer can in fact demand possession of the
land even during the redemption period except that he has to post a bond in accordance
with Section 7 of Act No. 3133 as amended. No such bond is required after the redemption
period if the property is not redeemed. Possession of the land then becomes an absolute
right of the purchaser as confirmed owner. Upon proper application and proof of title, the
issuance of the writ of possession becomes a ministerial duty of the court.
135.
MARTIN PEOSO and ELIZABETH PEOSO vs. MACROSMAN DONA
G.R. No. 154018 April 3, 2007

FACTS:
This case originated from a Complaint for Abatement of Nuisance filed with the Municipal
Trial Court (MTC) by Respondent Macrosman Dona against the petitioners. The MTC
rendered its Decision, in favor of the petitioners. Respondent appealed to the RTC. The
RTC reversed the MTC decision. The RTC denied the Motion for Reconsideration.
Petitioners filed a Petition for Review with the CA. The CA dismissed the Petition for
failure of the petitioners to include in their petition the required explanation on why
personal service upon the respondent was not resorted to pursuant to Sec. 11, Rule 13
of the 1997 Rules of Civil Procedure, as amended. Strict compliance with the rule is
mandated. Moreover, payment of the required docket and other legal fees is short by
P530.00.

A Motion for Reconsideration was filed by the petitioners attaching a Certification from
the Postmaster that the pleading in question had been actually received by the
respondent as well as a Letter to the CA Clerk of Court stating that if the docket fee is
insufficient, counsel for the petitioners shall remit the balance immediately, if any. But the
CA issued another Resolution denying the motion for reconsideration for lack of merit.
Petitioners subsequent compliance with the RULES does not cleanse the petition of its
infirmity. It was ordered that the two (2) Postal Money Orders for P530.00 be returned to
the petitioners. Hence, this Petition averring that the CA erred in dismissing the petition.

ISSUE:
Is the CA correct?

HELD:
The petition has merit.

Section 11, Rule 13 of the Rules of Court provides:

Sec. 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 explanation why the service or filing was not done personally. A violation of this
Rule may be caused to consider the paper as not filed. Jurisprudence holds that the rule
that a pleading must be accompanied by a written explanation why the service or filing
was not done personally is mandatory.

However, in Ello v. Court of Appeals, the Court defined the circumstances when the court
may exercise its discretionary power under Section 11 of Rule 13.

Considering the prima facie merit of the pleading involving the issues whether the
petitioners house is a public nuisance; whether the subject house is constructed on an
abandoned road; and whether the alleged nuisance is specially injurious to respondent;
and, considering further the fact that the MTC and the RTC decisions are conflicting, the
CA had valid grounds to refrain from dismissing the appeal solely on technical grounds.

Rules of procedure being designed to facilitate the attainment of justice, their rigid
application resulting in technicalities that tend to delay or frustrate rather than promote
substantial justice, must always be avoided.

Thus, in view of the foregoing jurisprudential trend to afford every party litigant the amplest
opportunity for a just determination of his case, free from the severities of technicalities;
the prima facie merit of the pleading; and, especially considering the conflicting rulings of
the MTC and the RTC, the CA erred in dismissing the appeal on mere technical grounds.

Furthermore, considering the peculiar circumstances of the case, the shortage of the
payment of the docketing fee cannot be used as a ground for dismissing petitioners
appeal before the CA. It is undisputed that they and their counsel are living in a remote
town and are not aware of the exact amount of the lawful fees for petitions for review.
Hence, it is understandable why they place sheer reliance on the Rules of Court, notably,
Section 1 of Rule 42, which only specifies the amount of P500.00 for the appeal cost in
question. Petitioners sent P500.00 with a request from the Clerk of Court for notification
of any insufficiency which will be sent immediately if there is any. The deficiency in
payment was not at all intentional. There was a willingness to comply should any
deficiency occur. In fine, the CA erred in dismissing the petition for review outright.

136.
CITY OF DUMAGUETE v. PHILIPPINE PORTS AUTHORITY
G.R. No. 168973 August 24, 2011

Facts :

The City of Dumaguete filed before the RTC an Application for Original Registration of
Title over the subject property. The application was opposed by the Republic of the
Philippines represented by the Director of Lands and the respondent, represented by the
Office of the Government Corporate Counsel. After several postponements of the
scheduled hearings, petitioner presented its first witness. However, before the next
hearing, respondent filed a Motion to Dismiss. An opposition to the motion to dismiss
was filed by the petitioner and a reply thereto was also filed. The RTC decreed in the end
that the instant application for original registration is dismissed for lack of merit. The RTC
initially agreed with respondent that the Motion for Reconsideration of petitioner violated
Sections 4 (Hearing of motion), 5 (Notice of hearing), and 6 (Proof of service necessary),
Rule 15 of the Rules of Court. Resultantly, the Motion for Reconsideration was considered
as not filed and did not toll the running of the period to file an appeal, rendering final and
executory the order of dismissal.

However, after taking into consideration the Supplemental Motion for Reconsideration of
petitioner, the RTC issued another Order setting aside its dismissal Order and resolving
to have a full-blown proceeding to determine factual issues in the LRC case. The
respondent filed a Motion for Reconsideration. The RTC denied the motion and admitted
that it made a mistake when it declared the said lot as shore lot when its adjoining lots
are already titled. And it is for this reason that the court reconsidered and set aside said
Order to correct the same. While it is true that said September 7, 2000 Order had attained
its finality, the Court cannot in conscience allow injustice to perpetuate in this case and
that hearing on the merits must proceed to determine the legality and truthfulness of its
application for registration.

Respondent sought relief from the Court of Appeals via a Certiorari and Prohibition
claiming that the RTC committed grave abuse of discretion amounting to lack or excess
of jurisdiction. The Court of Appeals found merit in the Petition of respondent and set
aside the RTC Orders. The appellate court, in its Resolution denied the Motion for
Reconsideration of petitioner. Hence the instant appeal to the Supreme Court as a final
recourse by petitioner.

ISSUE:
Is the order granting the motion for reconsideration of the plaintiff valid considering that it
has violated Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of Court?

Held:
The supreme Court ruled that procedural rules were conceived to aid the attainment of
justice. If a stringent application of the rules would hinder rather than serve the demands
of substantial justice, the former must yield to the latter. Although the Supreme Court has
held time and again that violation of the rules of the court pertaining to motion, notices
and services is fatal and makes the motion for reconsideration as a mere scrap of paper,
nevertheless the Court declares that a rigid application of that rule will result in a manifest
failure or miscarriage of justice, then the rule may be relaxed, especially if a party
successfully shows that the alleged defect in the questioned final and executory judgment
is not apparent on its face or from the recitals contained therein. Technicalities may thus
be disregarded in order to resolve the case. After all, no party can even claim a vested
right in technicalities. Litigations should, as much as possible, be decided on the merits
and not on technicalities.

137.
SIXTO N. CHU, v. MACH ASIA TRADING CORPORATION
G.R. No. 184333 April 1, 2013

Facts:
Petitioner Sixto N. Chu purchased on installment from the respondent one (1) Hitachi
Excavator and two (2) heavy equipments on two different occasions. The 12 monthly
installments will be paid through Prime Bank postdated checks and Land Bank postdated
checks, respectively. However, upon presentment of the checks for encashment, they
were dishonored by the bank.
The RTC issued an Order allowing the issuance of a writ of replevin on the subject heavy
equipments. The Sheriff proceeded at petitioner's given address for the purpose of
serving the summons. However, the Sheriff failed to serve the summons personally upon
the petitioner, since the latter was not there. The Sheriff then resorted to substituted
service by having the summons and the complaint received by a certain Rolando
Bonayon, a security guard of the petitioner.
Issue:
Whether or not there was a valid substituted service of summons.
Rulings:
No. As a rule, summons should be personally served on the defendant. It is only when
summons cannot be served personally within a reasonable period of time that substituted
service may be resorted to. It is to be noted that in case of substituted service, there
should be a report indicating that the person who received the summons in the
defendant's behalf was one with whom the defendant had a relation of confidence,
ensuring that the latter would actually receive the summons.
Also, impossibility of prompt personal service must be shown by stating that efforts have
been made to find the defendant personally and that such efforts have failed. This is
necessary because substituted service is in derogation of the usual method of service. It
is a method extraordinary in character, hence, may be used only as prescribed and in the
circumstances authorized by statute. The statutory requirements of substituted service
must be followed strictly, faithfully and fully, and any substituted service other than that
authorized by statute is considered ineffective.
In this case, it was not shown that the security guard who received the summons in behalf
of the petitioner was authorized and possessed a relation of confidence that petitioner
would definitely receive the summons. This is not the kind of service contemplated by
law. Thus, service on the security guard could not be considered as substantial
compliance with the requirements of substituted service.
The service of summons is a vital and indispensable ingredient of due process. As a rule,
if defendants have not been validly summoned, the court acquires no jurisdiction over
their person, and a judgment rendered against them is null and void. Since the RTC
never acquired jurisdiction over the person of the petitioner, the judgment rendered by
the court could not be considered binding upon him for being null and void.

138.
ALLEN A. MACASAET, et al. v. FRANCISCO GO JR.
G.R. No. 156759 June 5, 2013

FACTS:
Respondent filed a complaint against petitioner, et al. The sheriff, upon two failed
attempts to deliver the summons personally to petitioners, served substituted service as
the latter are always out of their office. The RTC held that since such summons cannot
be served within a reasonable time to the persons of all the defendants, substituted
service was validly applied. The CA upheld the decision saying that there are factual and
legal bases for the assailed orders.

ISSUE:
Is the ruling correct?

RULING:
Yes, although the service of summons must be effected on the defendant himself,
whenever practicable, the rules allow substituted service when the former cannot be done
within a reasonable time. The impossibility of prompt personal service should be shown
by stating the efforts made to find the defendant himself and the fact that such efforts
failed, which statement should be found in the proof of service or sheriff’s return.
Nonetheless, the requisite showing of the impossibility of prompt personal service as
basis for resorting to substituted service may be waived by the defendant either expressly
or impliedly.

In this case, the sheriff sufficiently followed the rule on such substituted service.
However, petitioners actually filed several pleadings in the RTC, including an Answer with
compulsory counterclaim and a pre-trial brief. Hence, they voluntarily appeared before
the court.

139.
JUANITA NAVAL vs. COURT OF APPEALS (CA), JUANITO CALLA et al. G.R.
No. 167412 February 22, 2006

FACTS:

Ildefonso Naval sold a parcel of land to Galarosa. The sale was recorded in the
Registry of Deeds (RD). Subsequently, Galarosa sold portions of the land to respondents
Balilla, Nacion, spouses Moya, and Camalla. The controversy arose when petitioner
Juanita Naval, the great granddaughter of Ildefonso, was issued by the RD an OCT
covering a portion of the subject land. She claimed that she bought the subject land from
Ildefonso.

Petitioner Juanita filed a complaint for recovery of possession against Aguirre,

Balila, Moya, and Nacion. However, the case was dismissed without prejudice for failure
to prosecute the action for an unreasonable length of time.
 Almost 20 years later petitioner re-filed the complaint for recovery of possession
with damages before the MCTC, against Camalla, Balila, Aguirre, Nacion and Moya. After
trial, the MCTC rendered its decision in favor of the plaintiff and against defendants,
declaring the plaintiff to be the legal owner of the land, ordering defendants Camalla,
Balila, Balila, Aguirre and Nacion to vacate the property in question and to deliver its
possession to the plaintiff and ordering Moya to vacate the land occupied by her and to
relinquish its possession to the plaintiff;

Aggrieved, respondents appealed the decision to the RTC, which affirmed in toto
the assailed decision. Respondents thereafter elevated the case to the CA. The CA
reversed the decision of the RTC. Hence, this petition for review.

ISSUE:
Is the Court of Appeals correct?

RULING:
The Court deny the petition.
The records show that during the trial, petitioner vigorously asserted that the subject land
was the exclusive property of Ildefonso who sold it to her in 1972. However, in this appeal,
petitioner assails the ownership not only of Gregorio but also of Ildefonso by alleging that
at the time the latter sold the land to Gregorio, the same was declared in the name of
Agrifina Avila. When a party adopts a certain theory in the court below, he is not allowed
to change his theory on appeal, for to allow him to do so would not only be unfair to the
other party, but it would also be offensive to the basic rules of fair play, justice and due
process.

140.
YUK LING ONG vs. BENJAMIN T. CO
G.R. No. 206653, February 25, 2015

Facts:
Petitioner Yuk Ling Ong (Ling), a British-Hong Kong national married to Benjamin Co, a
Filipino, was furnished documents regarding decisions for petition for declaration of nullity
of their marriage. Substituted service of summons allegedly made in the case, the RTC
proceeded to hear the case without her participation, and rendered the decision annulling
their marriage on the ground of psychological incapacity. On the basis thereof, Ling
Consequently filed a petition for annulment of judgment under Rule 47 of the Rules of
Court before the CA, claiming that she was never notified of the cases filed against her.
She prayed that the RTC decision, be nullified on the grounds of extrinsic fraud and lack
of jurisdiction. Petitioner alleged that first, respondent committed extrinsic fraud because
he deliberately indicated a wrong address to prevent her from participating in the trial;
second, jurisdiction over her person was not acquired because of an invalid substituted
service of summons as no sufficient explanation, showing impossibility of personal
service, was stated before resorting to substituted service of summons; third, the alleged
substituted service was made on a security guard of their townhouse and not on a
member of her household; and fourth, she was not psychologically incapacitated to
perform her marital obligations. The CA rendered the assailed decision finding the petition
for annulment of judgment to be devoid of merit. It held that there was no sufficient proof
to establish that respondent employed fraud to insure petitioner’s non-participation in the
trial of the case.
Issue:
Whether or not the facts proven by the petitioner constitute extrinsic fraud within the
purview of Rule 47 of the Rules of Court.
Held:
The Court finds merit on the petition.

Petitioner’s contention on the existence of extrinsic fraud, however, is too unsubstantial

to warrant consideration. The discussion shall then focus on the ground of lack of
jurisdiction.

Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is
either lack of jurisdiction over the subject matter or nature of the action, or lack of
jurisdiction over the person of the petitioner. The former is a matter of substantive law
because statutory law defines the jurisdiction of the courts over the subject matter or
nature of the action. The latter is a matter of procedural law, for it involves the service of
summons or other processes on the petitioner.

In this case, the summons was issued on July 29, 2002. In his server’s return, the process
server resorted to substituted service of summons on August 1, 2002. Surprisingly, the
process server immediately opted for substituted service of summons after only two (2)
days from the issuance of the summons.

Given that the meticulous requirements in Manotoc were not met, the Court is not
inclined to uphold the CA's denial of the petition for annulment of judgment for lack of
jurisdiction over the person of petitioner because there was an invalid substituted
service of summons. Accordingly, the decision in Civil Case No. 02-