De la Cruz vs. Joaquin

Noncompliance or belated formal compliance with the rule on substitution of a deceased party does not affect the validity of a promulgated decision when the heirs' rights are actually recognized and protected and due process is thereby satisfied.

Pedro Joaquin filed a Complaint for recovery of possession and ownership, cancellation of title, and damages against Spouses Julita De La Cruz and Felipe De La Cruz in the Regional Trial Court of Baloc, Sto. Domingo, Nueva Ecija. According to respondent, he had obtained a loan of ₱9,000 from petitioners on June 29, 1974, payable after five years on June 29, 1979. To secure payment, he executed a Deed of Sale in their favor over a parcel of land in Pinagpanaan, Talavera, Nueva Ecija covered by TCT No. T-111802, and the parties also executed another document entitled Kasunduan. Respondent claimed the Kasunduan showed the Deed of Sale to be actually an equitable mortgage.

Petitioners, for their part, contended that the Kasunduan was merely an accommodation to allow repurchase of the property until June 29, 1979, a right respondent failed to exercise. Thereafter, respondent died on December 24, 1988 while the case was pending. On February 15, 2002, a Motion for Substitution of Party Plaintiff was filed before the Court of Appeals praying that the heirs of the deceased plaintiff-appellee as represented by his daughter Lourdes dela Cruz be substituted for Pedro Joaquin.

On April 23, 1990, the RTC issued a Decision in respondent's favor, declaring the Deed of Absolute Sale and Kasunduan to be a sale with right of repurchase. The trial court found that respondent had made a valid tender of payment on two separate occasions to exercise his right of repurchase within five years from the date of sale or until June 29, 1979. Accordingly, petitioners were required to execute a deed of reconveyance and yield possession upon payment of ₱9,000, and to pay ₱10,000 as actual and compensatory damages, ₱5,000 as exemplary damages, ₱5,000 as expenses of litigation, and ₱5,000 as attorney's fees. The Court of Appeals sustained these factual findings and affirmed in toto.

• Jurisdiction and Substitution: Petitioner argued that the RTC Decision was invalid for lack of jurisdiction because respondent died during the pendency of the case and there was no substitution by the heirs.
• Forum Shopping: Petitioner maintained that respondent was guilty of forum shopping warranting dismissal, claiming that prior to the present suit commenced on July 7, 1981, respondent had filed Civil Case No. SD-742 for recovery of possession and damages on June 25, 1979, which was allegedly dismissed by the Court of First Instance of Nueva Ecija for lack of interest to prosecute.

• Jurisdiction Upon Death and Substitution: Whether the trial court lost jurisdiction over the case upon the death of Pedro Joaquin without formal substitution by his heirs.
• Forum Shopping and Res Judicata: Whether respondent was guilty of forum shopping warranting dismissal of the Complaint.

• Jurisdiction Upon Death and Substitution: No. The judgment remained valid because the heirs voluntarily appeared and participated, and the rule on substitution is a due process requirement, not a jurisdictional defect where due process was satisfied.
• Forum Shopping and Res Judicata: No. Forum shopping and res judicata were not established, petitioners having offered only bare assertions without proving identity of parties, subject matter, cause of action, or a prior decision on the merits.

• Jurisdiction Upon Death and Substitution: When a party dies and the claim is not extinguished, Section 16 of Rule 3 requires substitution to protect due process, and judgments rendered without the legal representatives' appearance have been nullified for lack of jurisdiction over their persons. Formal substitution by heirs is nevertheless unnecessary when they themselves voluntarily appear, participate, and present evidence, thereby negating any due process violation. Here, the heirs filed a Motion for Substitution dated February 15, 2002 praying that the heirs as represented by daughter Lourdes dela Cruz be substituted, and the appellate court ordered the legal representatives to appear and substitute; the motion was thus deemed granted. Distinguished from Chittick vs. Court of Appeals, where the children refused substitution and substitution would have merged plaintiff and defendant, no such merger or objection occurred, and mere failure to substitute without proof of undeniable due process violation cannot nullify the decision.
• Forum Shopping and Res Judicata: Forum shopping exists upon institution of two or more actions involving the same parties for the same cause of action, tested by litis pendentia or res judicata, and willful violation may warrant summary dismissal. Because petitioners alleged prior litigation already decided, res judicata applied, requiring (1) final former judgment, (2) on the merits, (3) by a competent court, and (4) identity of parties, subject matter, and cause of action. The onus of proof rested on petitioners, yet they made only bare assertions about Civil Case No. SD-742 without specifications of the rights asserted, reliefs sought, or whether it was decided on the merits, so neither forum shopping nor res judicata was shown.

• Substitution of deceased party as due process requirement — When a party to a pending action dies and the claim is not extinguished, Section 16 of Rule 3 requires substitution of the legal representative to ensure the estate remains represented and no adjudication issues without a day in court. Strictly speaking, the rule is not a matter of jurisdiction but of due process; thus when the representative's or heir's rights are recognized and protected, noncompliance or belated formal compliance cannot affect the validity of the promulgated decision, and formal substitution is unnecessary where heirs voluntarily appear, participate, and present evidence.
• Forum shopping — Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively, on the supposition that one or the other court would make a favorable disposition. It includes resort to another forum after an adverse judgment other than by appeal or certiorari, trifles with courts and congests dockets, and willful and deliberate violation is ground for summary dismissal and may constitute direct contempt.
• Res judicata — A final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points determined. Its elements are (1) former judgment or order must be final, (2) rendered on the merits, (3) by a court with jurisdiction over subject matter and parties, and (4) identity of parties, subject matter, and cause of action between the first and second actions. In this case, petitioners' reliance on an alleged prior dismissal failed for lack of proof of these elements.
• Burden of proof for forum shopping and res judicata — The onus of proving allegations rests upon the party raising them. Mere mention of other civil cases without showing identity of rights asserted and reliefs sought, or whether the other case was decided on the merits, is insufficient to establish forum shopping or res judicata.

• "Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due process." — States the controlling characterization of Section 16 of Rule 3, explaining why belated or informal substitution does not void the judgment absent a due process violation.
• "Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision." — Articulates the ratio for sustaining the RTC Decision despite respondent's death during pendency and substitution only on appeal.
• "Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively, on the supposition that one or the other court would make a favorable disposition." — Provides the canonical definition applied to reject petitioners' forum-shopping charge.
• "Mere mention of other civil cases without showing the identity of rights asserted and reliefs sought is not enough basis to claim that respondent is guilty of forum shopping, or that res judicata exists." — Explains why petitioners' bare assertion of a prior Civil Case No. SD-742 failed to meet the burden of proof.

• Chittick vs. Court of Appeals, 166 SCRA 219, October 4, 1988 — Distinguished; nullification there rested on heirs' refusal to substitute and merger of plaintiff and defendant extinguishing the obligation, circumstances absent here.
• Brioso vs. Rili-Mariano, 444 Phil. 625, January 31, 2003 — Followed on nullification of proceedings without appearance of legal representatives, and on excusing formal substitution where heirs voluntarily appear and due process is satisfied.
• Vda. de Salazar vs. Court of Appeals, 320 Phil. 373, November 23, 1995 — Followed on substitution as due process protection and on voluntary appearance negating violation.
• Torres Jr. vs. Court of Appeals, 344 Phil. 348, September 5, 1997 — Cited for the due-process purpose of substitution and continued representation of the estate.
• R & E Transport Inc. vs. Latag, 422 SCRA 698, February 13, 2004 — Followed for the definition of forum shopping and resort to another forum after an adverse ruling.

• Section 16, Rule 3, Rules of Court — Governs duty of counsel to inform the court of a party's death, naming of legal representatives, court-ordered substitution within thirty days, and procurement of an executor or administrator if none appears; applied to hold that belated substitution on appeal cured the defect where heirs appeared.
• Section 1, Rule 87, Rules of Court — Identifies actions surviving against decedent's representatives, including recovery of real property or interest therein, enforcement of liens, and recovery of damages for injury to person or property; supports continuation of the recovery-of-possession and ownership action.
• Section 5, Rule 7, Rules of Court — Provides that willful and deliberate violation of the rule against forum shopping is ground for summary dismissal and may constitute direct contempt; cited in defining consequences, though no violation was found.
• Section 1, Rule 131, Rules of Court — Places the burden of proof on the party raising allegations; applied to reject petitioners' unsubstantiated forum-shopping and res judicata claims.

Sandoval-Gutierrez, J., Corona, J., Carpio-Morales, J., and Garcia, J., concur.