Hiyas Savings and Loan Bank, Inc. vs. Hon. Edmundo T. Acuña

A petition for certiorari against an RTC order must be filed with the Court of Appeals under the doctrine of hierarchy of courts unless special and important reasons are clearly set out; and Article 151 of the Family Code applies only to suits exclusively between or among members of the same family, so that once a stranger is a party, earnest efforts toward a compromise are not a condition precedent and the provision may be invoked only by a family member.

Alberto Moreno is the husband of Remedios Moreno. Hiyas Savings and Loan Bank, Inc. is a lending institution; the other defendants in the underlying action are the spouses Felipe and Maria Owe and the Register of Deeds of Caloocan City. Article 151 of the Family Code, derived from Article 222 of the Civil Code, requires that no suit between members of the same family shall prosper unless the verified complaint or petition shows that earnest efforts toward a compromise have been made but failed. The provision defines family relations by reference to Article 150 of the Family Code and Article 217 of the Civil Code.

On November 24, 2000, Alberto Moreno filed with the RTC of Caloocan City a complaint against Hiyas Savings and Loan Bank, Inc., his wife Remedios, the spouses Felipe and Maria Owe, and the Register of Deeds of Caloocan City for cancellation of mortgage. He alleged that he did not secure any loan from Hiyas, nor did he sign or execute any contract of mortgage in its favor; that his wife, acting in conspiracy with Hiyas and the spouses Owe, who were the ones that benefited from the loan, made it appear that he signed the contract of mortgage; and that he could not have executed the contract because he was then working abroad.

On May 17, 2001, Hiyas filed a Motion to Dismiss on the ground that Moreno failed to comply with Article 151 of the Family Code, which provides that no suit between members of the same family shall prosper unless it appears from the verified complaint or petition that earnest efforts toward a compromise have been made but failed. Hiyas contended that because the complaint contained no fact or averment of such earnest efforts before its institution, the complaint should be dismissed for lack of cause of action.

Moreno filed a Comment on the Motion to Dismiss with Motion to Strike Out and to Declare Defendants in Default. He argued that where one of the parties is not a member of the same family as contemplated under Article 150 of the Family Code, failure to allege earnest efforts toward a compromise in the complaint is not a ground for a motion to dismiss. He asserted that because three of the party-defendants were not members of his family, the ground relied upon by Hiyas was inapplicable and unavailable. He also prayed that the defendants be declared in default for their failure to file their answer on time. Hiyas filed a Reply to the Comment with Opposition to the Motion to Strike and to Declare Defendants in Default, and Moreno filed a Rejoinder.

The RTC denied Hiyas's Motion to Dismiss and later denied its Motion for Partial Reconsideration. The RTC found that the case involved parties who were strangers to the family, so earnest efforts toward a compromise were not required before filing. It also stated that because Remedios Moreno was a member of the same family as Alberto and stood to be benefited by Article 151, only she could invoke that provision. Hiyas then filed the present petition for certiorari, arguing that the RTC committed grave abuse of discretion in applying Magbaleta vs. Gonong instead of De Guzman vs. Genato and in ruling that a stranger to the family could not invoke lack of earnest efforts as a ground for dismissal.

• Failure to Allege Earnest Efforts: Petitioner argued that private respondent failed to comply with Article 151 of the Family Code because the verified complaint did not allege that earnest efforts toward a compromise had been made but failed; the omission warranted dismissal for lack of cause of action.
• Applicable Precedent: Petitioner maintained that the RTC should have applied De Guzman vs. Genato, a case involving a husband and wife, rather than Magbaleta vs. Gonong, which involved brothers; thus lack of earnest efforts remained a ground for dismissal even with strangers in the suit.
• Invocation by a Stranger: Petitioner contended that the RTC committed grave abuse of discretion in ruling that a party who is a stranger to the family of the litigants could not invoke lack of earnest efforts toward a compromise as a ground for dismissal.
• Grave Abuse of Discretion: Petitioner argued that the RTC's rulings amounted to grave abuse of discretion amounting to lack or excess of jurisdiction.

• Presence of Strangers: Respondent Alberto Moreno argued that where one of the parties is not a member of the same family as contemplated under Article 150 of the Family Code, failure to allege in the complaint that earnest efforts toward a compromise had been made before filing is not a ground for a motion to dismiss.
• Inapplicability and Unavailability: Respondent asserted that because three of the party-defendants were not members of his family, the ground relied upon by Hiyas was inapplicable and unavailable.
• Default: Respondent prayed that the defendants be declared in default for their failure to file their answer on time.
• Invocation Limited to Family Member: Respondent maintained that only Remedios Moreno, being a member of the same family as Alberto, could invoke Article 151.

• Hierarchy of Courts: Whether the petition for certiorari should be dismissed for having been filed directly with the Supreme Court instead of the Court of Appeals, absent special and important reasons clearly set out in the petition.
• Applicability of Article 151 to Suits Involving Strangers: Whether lack of earnest efforts toward a compromise is a ground for dismissal in a suit between husband and wife when other parties who are strangers to the family are involved.
• Applicable Precedent: Whether the RTC committed grave abuse of discretion in applying Magbaleta vs. Gonong instead of De Guzman vs. Genato.
• Invocation by a Stranger: Whether a party who is a stranger to the family of the litigants may invoke lack of earnest efforts toward a compromise as a ground for dismissal.

• Hierarchy of Courts: Yes. The petition should have been filed with the Court of Appeals under the doctrine of hierarchy of courts; no special and important reason was shown for direct resort to the Supreme Court.
• Applicability of Article 151 to Suits Involving Strangers: No. Article 151 applies only when the suit is exclusively between or among members of the same family; once a stranger is a party, earnest efforts toward a compromise are not a condition precedent.
• Applicable Precedent: No grave abuse of discretion. Magbaleta vs. Gonong, not De Guzman vs. Genato, supplies the prevailing rule; the principle in Magbaleta was reiterated in later cases.
• Invocation by a Stranger: No. Since Article 151 applies only to suits exclusively between or among family members, it may be invoked only by a party who is a member of that same family.

• Hierarchy of Courts: Although the Supreme Court, Court of Appeals, and Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus, and injunction, the doctrine of hierarchy of courts determines the appropriate forum. Petitions for extraordinary writs against first-level inferior courts should be filed with the RTC, and those against the RTC with the Court of Appeals. Direct invocation of the Supreme Court's original jurisdiction is allowed only when special and important reasons are clearly and specifically set out in the petition. Hiyas offered no satisfactory explanation for filing directly with the Supreme Court, and there was no reason why the petition could not have been brought before the Court of Appeals. The petition was therefore dismissible on this ground. The Court cited Heirs of Bertuldo Hinog vs. Melicor and People vs. Cuaresma. The exceptional circumstances illustrated in Chavez vs. Romulo, Government of the United States of America vs. Purganan, Commission on Elections vs. Quijano-Padilla, Buklod ng Kawaning EIIB vs. Zamora, and Fortich vs. Corona were not present.
• Applicability of Article 151 to Suits Involving Strangers: Article 151 of the Family Code provides that no suit between members of the same family shall prosper unless it appears from the verified complaint or petition that earnest efforts toward a compromise have been made but failed; if no such efforts were made, the case must be dismissed. Article 222 of the Civil Code contains essentially the same provision. The Code Commission explained that litigation between family members is a sad and tragic spectacle and that every effort should be made toward compromise before litigation breeds hate and passion. In Magbaleta vs. Gonong, which involved brothers and a stranger to the family, the Court ruled that efforts to compromise need not be a jurisdictional prerequisite whenever a stranger to the family is a party, whether necessary or indispensable. It reasoned that a stranger should not be made to suffer the inconvenience and delay of family wranglings and that it is neither practical nor fair for the stranger's rights to depend on how family members settle their differences. Thus, once a stranger becomes a party to a suit involving members of the same family, the law no longer makes earnest efforts toward a compromise a condition precedent. De Guzman vs. Genato, involving spouses and the wife's alleged paramour, found substantial compliance with the requirement because of the husband's efforts through the Philippine Constabulary, but the principle in Magbaleta prevails because it was reiterated in Gonzales vs. Lopez, Esquivias vs. Court of Appeals, Spouses Hontiveros vs. Regional Trial Court, Branch 25, Iloilo City, and Martinez vs. Martinez. Article 151 therefore applies only when the suit is exclusively between or among family members. No special circumstance made Magbaleta inapplicable to suits involving husband and wife; Article 151 and Article 222 refer to "members of the same family" as defined in Article 150 of the Family Code and Article 217 of the Civil Code. Because Moreno's complaint included Hiyas, the spouses Owe, and the Register of Deeds as strangers, the RTC correctly ruled that earnest efforts toward a compromise were not required.
• Applicable Precedent: The RTC did not commit grave abuse of discretion in applying Magbaleta vs. Gonong instead of De Guzman vs. Genato. Although De Guzman was decided after Magbaleta and involved spouses, the principle announced in Magbaleta now prevails because it was reiterated in Gonzales vs. Lopez, Esquivias vs. Court of Appeals, Spouses Hontiveros vs. Regional Trial Court, Branch 25, Iloilo City, and Martinez vs. Martinez. The fact that the present case involves a husband and wife, while Magbaleta involved brothers, did not provide a specific, unique, or special circumstance making the Magbaleta rule inapplicable. Article 151 and Article 222 are clear that the provisions apply to suits involving "members of the same family" as contemplated under Article 150 of the Family Code and Article 217 of the Civil Code, which include husband and wife. Thus, the prevailing rule is that the requirement applies only to suits exclusively between or among family members.
• Invocation by a Stranger: Because the requirement under Article 151 applies only in cases exclusively between or among members of the same family, it necessarily follows that the provision may be invoked only by a party who is a member of that same family. Hiyas, not being a member of Moreno's family, could not invoke the lack of earnest efforts toward a compromise as a ground for dismissal. The RTC's ruling on this point was correct.

• Doctrine of Hierarchy of Courts — Although the Supreme Court, Court of Appeals, and Regional Trial Courts have concurrent jurisdiction to issue extraordinary writs, the hierarchy of courts determines the proper forum. Petitions for certiorari against RTC orders should be filed with the Court of Appeals; direct resort to the Supreme Court is allowed only when special and important reasons are clearly and specifically set out. In this case, Hiyas failed to explain its direct filing, so the petition was dismissed.
• Earnest Efforts Toward Compromise Under Article 151 of the Family Code — Article 151 requires that no suit between members of the same family shall prosper unless the verified complaint or petition shows that earnest efforts toward a compromise have been made but failed; if no such efforts were made, the case must be dismissed. The rule does not apply to cases that may not be the subject of compromise. The requirement applies only when the suit is exclusively between or among members of the same family. Once a stranger becomes a party, earnest efforts toward a compromise are not a condition precedent. Applied: Moreno's complaint included Hiyas, the spouses Owe, and the Register of Deeds as strangers, so the requirement did not apply.
• Invocation of Article 151 by a Family Member Only — Because Article 151 applies only to suits exclusively between or among members of the same family, only a party who is a member of that same family may invoke it. Applied: Hiyas, a stranger to Moreno's family, could not invoke the lack of earnest efforts as a ground for dismissal.
• Definition of Family Relations — Article 150 of the Family Code includes family relations between husband and wife, between parents and children, among other ascendants and descendants, and among brothers and sisters, whether of full or half blood. Article 217 of the Civil Code contains a similar enumeration. Applied: the Court used these definitions to confirm that husband and wife are members of the same family, but Article 151 still requires that the suit be exclusively among such family members.

• "No suit between members of the same family shall prosper unless it should appear from the verified complaint or petition that earnest efforts toward a compromise have been made, but that the same have failed. If it is shown that no such efforts were in fact made, the case must be dismissed." — This is the text of Article 151 of the Family Code, the controlling provision on earnest efforts toward a compromise.
• "Hence, once a stranger becomes a party to a suit involving members of the same family, the law no longer makes it a condition precedent that earnest efforts be made towards a compromise before the action can prosper." — This passage, quoted from Magbaleta vs. Gonong, states the ratio that a stranger's presence removes the Article 151 requirement as a condition precedent.
• "Thus, Article 151 of the Family Code applies to cover when the suit is exclusively between or among family members." — This is the Court's synthesized rule on the scope of Article 151.
• "Suffice it to say that since the Court has ruled that the requirement under Article 151 of the Family Code is applicable only in cases which are exclusively between or among members of the same family, it necessarily follows that the same may be invoked only by a party who is a member of that same family." — This passage states the rule that only a family member may invoke Article 151.

• Magbaleta vs. Gonong, G.R. No. L-44903, April 22, 1977, 76 SCRA 511 — Controlling precedent. Held that earnest efforts toward compromise need not be a jurisdictional prerequisite when a stranger to the family is a party; once a stranger is a party, the requirement is not a condition precedent.
• De Guzman vs. Genato, G.R. No. L-42260, April 30, 1979, 89 SCRA 674 — Cited by petitioner but not followed as controlling. Involved spouses and the wife's alleged paramour; substantial compliance with the requirement was found due to the husband's efforts through the Philippine Constabulary, but the Magbaleta principle was held to prevail.
• Gonzales vs. Lopez, G.R. No. L-48068, April 15, 1988, 160 SCRA 346 — Reiterated the Magbaleta principle.
• Esquivias vs. Court of Appeals, 339 Phil. 184 (1997) — Reiterated the Magbaleta principle.
• Spouses Hontiveros vs. Regional Trial Court, Branch 25, Iloilo City, 368 Phil. 653 (1999) — Reiterated the Magbaleta principle.
• Martinez vs. Martinez, G.R. No. 162084, June 28, 2005, 461 SCRA 562 — Most recent case cited as reiterating the Magbaleta principle.
• Heirs of Bertuldo Hinog vs. Melicor, G.R. No. 140954, April 12, 2005, 455 SCRA 460 — Cited for the doctrine of hierarchy of courts; direct resort to the Supreme Court requires special and important reasons.
• People vs. Cuaresma — Cited in the decision for the hierarchy-of-courts doctrine; no citation appears in the provided text.

• Article 151, Family Code — Provides that no suit between members of the same family shall prosper unless the verified complaint or petition shows that earnest efforts toward a compromise have been made but failed; if no such efforts were made, the case must be dismissed. It does not apply to cases that may not be subject of compromise. Applied: because Moreno's complaint included strangers to the family, the requirement did not apply.
• Article 222, Civil Code — Predecessor provision essentially containing the same requirement, subject to limitations in Article 2035. Applied: cited to show that Article 151 was taken from Article 222 and to interpret the requirement.
• Article 150, Family Code — Defines family relations to include husband and wife, parents and children, other ascendants and descendants, and brothers and sisters of full or half blood. Applied: used to confirm that husband and wife are members of the same family, but Article 151 still requires that the suit be exclusively among family members.
• Article 217, Civil Code — Defines family relations similarly. Applied: cited alongside Article 150.
• Article 2035, Civil Code — Lists questions that cannot be compromised: civil status of persons, validity of marriage or legal separation, any ground for legal separation, future support, jurisdiction of courts, and future legitime. Cited as the limitation referred to in Article 222. Applied: referenced in the Court's quotation of Article 222.
• Rule 65, Rules of Court — Governs petitions for certiorari. Applied: Hiyas filed the petition under Rule 65, but the Court held it should have been filed with the Court of Appeals under the hierarchy of courts.

Panganiban, C.J. (Chairperson), Ynares-Santiago, Callejo, Sr., and Chico-Nazario, JJ., concur.