Juaban vs. Espina

A plaintiff who is a party to an Agreement to Sell and to Buy and who has advanced part of the purchase price is a real party in interest with personality to sue and to sign the certification against forum shopping, even if he designated another as vendee, because his rights as a party to the contract are not extinguished by such designation. The signature of only one plaintiff in the certification against non-forum shopping substantially complies with the rules when all plaintiffs share a common interest and invoke a common cause of action or defense.

Petitioners Generoso A. Juaban and Francis M. Zosa were the counsels of the Heirs of Conrado Bancale in Civil Case No. 2309-L, a case for recovery of properties before the Lapu-Lapu City RTC, Branch 27. Respondent Rene Espina entered into a 31 January 1997 Agreement to Sell and to Buy with the Heirs of Bancale, designating respondent Cebu Discovery Bay Properties, Inc. (CDPI) as the vendee. The dispute arose from the intersection of the attorney's fees claim of petitioners in the recovery case and the rights of respondents under the Agreement to Sell and to Buy over the same properties.

Petitioners Generoso A. Juaban and Francis M. Zosa were the counsels of the Heirs of Conrado Bancale in Civil Case No. 2309-L, a case for recovery of properties before the Lapu-Lapu City RTC, Branch 27. On 31 January 1997, the Heirs of Bancale entered into an Agreement to Sell and to Buy with respondent Rene Espina, paragraph 5 of which provided that after title is transferred to their names, the Heirs of Bancale would execute an absolute deed of sale in favor of Espina or whoever he designated as vendee, with the ₱2,000,000.00 advanced by Espina forming part of the consideration. Espina paid the ₱2,000,000.00 advance and designated respondent Cebu Discovery Bay Properties, Inc. (CDPI) as the vendee.

On 26 August 1997, petitioners filed a Motion to fix their attorney's fees in Civil Case No. 2309-L, and the RTC, Branch 27, issued an Order on the same date granting the motion and fixing the fees at ₱9,000,000.00. The Heirs of Bancale filed a Motion for Reconsideration, which was denied on 22 September 1997. Without waiting for the expiration of the period to appeal, the RTC, Branch 27, issued on 10 October 1997 an Order declaring the 26 August 1997 Order final and executory and granting the motion for execution. On 14 October 1997, a Writ of Execution was issued directing Sheriff Juan A. Gato to satisfy the judgment for attorney's fees, despite the writ specifically directing that the fees be "taken from the money due from the buyer to the sellers under the agreement to buy and sell."

On 23 October 1997, Sheriff Gato levied on the rights, shares, interests and participation of the Heirs of Bancale in the subject properties, and issued a Notice of Sale on Execution dated 24 October 1997. Respondents filed a Third Party Claim on 18 November 1997, but on 28 November 1997, the subject properties were sold at public auction to petitioners for ₱9,000,000.00, with the sale registered on 3 December 1997. On 1 December 1998, the RTC, Branch 27, under a new presiding judge, set aside the 10 October 1997 Order and gave due course to the appeal of the Heirs of Bancale. Despite this, Sheriff Gato transmitted to petitioners the final Deed of Conveyance without the approval of the trial court, and petitioners registered the same with the Register of Deeds.

On 28 November 1997, respondents filed a complaint for injunction and damages with an application for a temporary restraining order, docketed as Civil Case No. 4871-L before the Lapu-Lapu City RTC, Branch 54, claiming they were unaware that the subject properties had already been sold at public auction. On 1 December 1998, respondents tendered ₱10,962,347.20 as payment for the redemption price of the subject properties. In a separate administrative case, A.M. No. P-02-1580, the Supreme Court found Sheriff Gato guilty of grave abuse of official functions and manifest partiality amounting to grave misconduct for his actions in the execution sale, noting that he showed manifest partiality in favor of petitioners and caused undue injury to respondents with evident bad faith.

• Lack of Cause of Action: Petitioners argued that respondent Espina had no more personal interest in the case, having assigned his rights to the subject properties to respondent CDPI, and therefore had no cause of action to file the injunction and damages case.
• Lack of Authority to Sue for CDPI: Petitioners claimed there was no authority or board resolution authorizing respondent Espina to file the complaint on behalf of his co-respondent CDPI, and that the complaint should have been dismissed for this defect.
• Improper Mode of Appeal: Petitioners contended that since only questions of law were raised in respondents' appeal to the Court of Appeals, the proper remedy should have been a Petition for Review filed directly with the Supreme Court under Rule 45, not an ordinary appeal.
• Error in Taking Cognizance of Other Records: Petitioners claimed the Court of Appeals erred in taking cognizance of the records in another case, Civil Case No. 2309-L, which were not offered and admitted as evidence, as basis for its findings of facts.
• Lack of Prayer for Permanent Injunction: Petitioners argued that respondents did not make any allegation in their Complaint that they were the owners of the disputed properties and there was no prayer in their Complaint for the issuance of a permanent injunction against petitioners prohibiting them from exercising acts of ownership.

• Real Party in Interest: Respondents maintained that Espina had personality to sue in his personal capacity, as the Agreement to Sell and to Buy designated him as the "Second Party" in his personal capacity, not as agent or representative of a corporate entity, and he had advanced ₱2,000,000.00 to the Heirs of Bancale.
• Substantial Compliance with Certification: Respondents argued that the signature of Espina alone in the certification against forum shopping substantially complied with the rules, as the plaintiffs shared a common interest and invoked a common cause of action.
• Questions of Fact on Appeal: Respondents contended that the appeal involved questions of fact, as the Court of Appeals was called upon to review the circumstances surrounding the transfer of the subject properties, which were "immoral, devious, and patently illegal."

• Cause of Action: Whether respondent Rene Espina had a cause of action to file the Injunction and Damages Case against petitioners.
• Jurisdiction: Whether the trial court acquired jurisdiction over the complaint and over CDPI in said case.
• Mode of Appeal: Whether only questions of law were raised in respondents' appeal, which allegedly required the Court of Appeals to dismiss said appeal.
• Judicial Notice: Whether the Court of Appeals erred in taking cognizance of the records in another case which were not offered and admitted as evidence as basis for its findings of facts.
• Permanent Injunction: Whether the Court of Appeals erred in issuing a permanent injunction against petitioners considering that there was allegedly no prayer in the complaint therefor.

• Cause of Action: Yes. Respondent Espina had a cause of action to file the injunction and damages case, being a real party in interest under Section 2, Rule 3 of the Rules of Court, as his rights as a party to the Agreement to Sell and to Buy were not extinguished by his designation of CDPI as vendee.
• Jurisdiction: Yes. The trial court acquired jurisdiction over the complaint and over CDPI, as the signature of respondent Espina alone in the certification against forum shopping substantially complied with the rules when all plaintiffs share a common interest and invoke a common cause of action.
• Mode of Appeal: No. The appeal before the Court of Appeals involved not only questions of law, because the appellate court was first called upon to make its own findings of facts significant to its complete and judicious resolution of the appeal.
• Judicial Notice: No. The Court of Appeals did not err in taking cognizance of the records in another case, as the circumstances in Civil Case No. 2309-L were too closely interwoven and so clearly interdependent with those in Civil Case No. 4871-L as to invoke the rule of judicial notice.
• Permanent Injunction: No. The issuance of a permanent injunction was included in respondents' prayer for "such orders as may be just, appropriate and equitable under the premises," and it is the material allegations of the fact in the complaint, not the legal conclusions made in the prayer, that determine the relief to which the plaintiff is entitled.

• Cause of Action: The Court quoted with approval the Court of Appeals' ruling that Espina's personality to sue in his personal capacity finds basis in the Agreement to Sell and to Buy, where he was designated as the "Second Party" in his personal capacity. His rights as a party to the contract were not extinguished just because he designated CDPI as vendee, and among his rights was the right to the full realization of the purpose of the contract. Having paid part of the purchase price for the subject properties, Espina had an interest therein and was a real party in interest under Section 2, Rule 3 of the Rules of Court.

• Jurisdiction: The Court held that the certification against forum shopping must be signed by the plaintiff or any of the principal parties, citing Mendigorin vs. Cabantog, Escorpizo vs. University of Baguio, and Condo Suite Club Travel, Inc. vs. National Labor Relations Commission. However, citing Cua vs. Vargas, the Court noted that the rules on forum shopping should not be interpreted with such absolute literalness as to subvert their own ultimate and legitimate objective, and that when all petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification substantially complies with the rules. The Court also noted that the allegation concerning the defect in the Certificate against Forum Shopping was raised for the first time on appeal, and that forum shopping as a ground for dismissal is distinct and separate from the failure to submit a proper Certificate against Forum Shopping.

• Mode of Appeal: The Court cited Microsoft Corporation vs. Maxicorp, Inc. and Morales vs. Skills International Company for the distinction between questions of law and questions of fact. A question of law exists when the doubt or difference centers on what the law is on a certain state of facts, while a question of fact exists if the doubt centers on the truth or falsity of the alleged facts. The Court found that the Court of Appeals was constrained to take a second look at the circumstances which gave rise to the appeal, which involved acts that were "immoral, devious, and patently illegal." The Court held that in case of doubt, the determination of the Court of Appeals of whether an appeal involves only questions of law or both questions of law and fact shall be affirmed.

• Judicial Notice: The Court cited Bongato vs. Malvar for the rule that courts may take judicial notice of proceedings in other cases that are closely connected to the matter in controversy, where such cases "may be so closely interwoven, or so clearly interdependent, as to invoke a rule of judicial notice." The Court found that the circumstances in Civil Case No. 2309-L were too closely interwoven and so clearly interdependent with those in Civil Case No. 4871-L, as petitioners and respondents were claiming the very same subject properties, and petitioners' right to the subject properties was rooted in the proceedings in Case No. 1. The Court also noted that Case No. 2, A.M. No. P-02-1580, had already been decided with finality by the Court.

• Permanent Injunction: The Court held that the issuance of a permanent injunction was included in respondents' prayer for "such orders as may be just, appropriate and equitable under the premises," citing Primelink Properties and Development Corporation vs. Lazatin-Magat. The Court also cited Banco Filipino Savings and Mortgage Bank vs. Court of Appeals and Arroyo, Jr. vs. Taduran for the rule that it is the allegations in the pleading which determine the nature of the action, and the Court shall grant relief warranted by the allegations and proof even if no such relief is prayed for. The Court reasoned that if respondents were seeking to enjoin the sale of the subject properties, in effect, to prevent the transfer of ownership to others, then such prayer must be deemed to logically and reasonably include the prayer to enjoin others from exercising rights of ownership over the subject properties.

• Real Party in Interest — Under Section 2, Rule 3 of the Rules of Court, a real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. The Court applied this doctrine in holding that Espina, having entered into the Agreement to Sell and to Buy and having advanced ₱2,000,000.00, had a personal interest in the case despite designating CDPI as vendee.

• Substantial Compliance with Certification Against Non-Forum Shopping — When all petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the rules. The Court applied this doctrine in holding that the absence of CDPI's authorized official's signature did not render the certification invalid, as Espina's signature as one of the plaintiffs sufficed.

• Litis Pendentia — The requisites of litis pendentia are: (a) identity of parties, or at least such parties who represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in the present case would amount to res judicata in another case. The Court applied this doctrine in holding that litis pendentia was not present between Civil Case No. 4871-L and Civil Case No. 2309-L, as the parties were not the same and there was no identity of rights asserted and reliefs prayed for.

• Question of Law vs. Question of Fact — A question of law exists when the doubt or difference centers on what the law is on a certain state of facts, while a question of fact exists if the doubt centers on the truth or falsity of the alleged facts. The Court applied this doctrine in affirming the Court of Appeals' determination that the appeal involved questions of fact, as the appellate court was called upon to review the circumstances surrounding the transfer of the subject properties.

• Judicial Notice of Closely Interwoven Cases — Courts may take judicial notice of proceedings in other cases that are closely connected to the matter in controversy, where such cases "may be so closely interwoven, or so clearly interdependent, as to invoke a rule of judicial notice." The Court applied this doctrine in holding that the Court of Appeals properly took cognizance of the records in Civil Case No. 2309-L, as petitioners and respondents were claiming the very same subject properties.

• Relief Warranted by Allegations and Proof — It is the material allegations of the fact in the complaint, not the legal conclusions made in the prayer, that determine the relief to which the plaintiff is entitled. The Court applied this doctrine in holding that the permanent injunction was properly issued despite the absence of a specific prayer therefor, as the prayer for "such orders as may be just, appropriate and equitable under the premises" justified the grant of a relief not otherwise specifically prayed for.

• "The personality of appellant Rene Espina to sue in his personal capacity finds basis in the Agreement to Sell and to Buy. It is readily apparent in the Agreement that he has been designated as the 'Second Party', in his personal capacity, and not as agent or representative of a corporate entity." — This passage establishes the basis for Espina's personality to sue as a real party in interest, which was central to the Court's ruling on the first issue.

• "The general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs or petitioners in a case and the signature of only one of them is insufficient. Nevertheless, the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert their own ultimate and legitimate objective." — This passage from Cua vs. Vargas articulates the doctrine of substantial compliance with the certification against forum shopping, which the Court applied in this case.

• "It is therefore without legal basis that notwithstanding those circumstances, the appellees, upon expiration of the temporary restraining order issued by this Court, immediately asked for the execution of a deed of sale in their favor 'since no redemption has been made' and managed to obtain titles in their names. Such consolidation of ownership is patently erroneous as the decision granting them attorney's fees is not yet final and executory and is in fact the subject of appeal in this Court under CA-GR CV No. 61696." — This passage from the Court of Appeals' Resolution on the preliminary injunction highlights the circumstances that constrained the appellate court to take a second look at the facts, supporting the determination that the appeal involved questions of fact.

• "It is the material allegations of the fact in the complaint, not the legal conclusions made in the prayer, that determine the relief to which the plaintiff is entitled." — This passage articulates the principle that the allegations in the pleading determine the nature of the action and the relief to which the plaintiff is entitled, which the Court applied in upholding the issuance of the permanent injunction.

• Mendigorin vs. Cabantog, 436 Phil. 483 (2002) — Cited for the rule that the certification against forum shopping must be signed by the plaintiff or any of the principal parties and not by counsel.
• Escorpizo vs. University of Baguio, 366 Phil. 166 (1999) — Cited for the same rule on certification against forum shopping.
• Condo Suite Club Travel, Inc. vs. National Labor Relations Commission, 380 Phil. 660 (2000) — Cited for the rule that the certification of non-forum shopping may be signed not only by the petitioners but also by any of the principal parties.
• Cua vs. Vargas, G.R. No. 156536, 31 October 2006, 506 SCRA 374 — Cited for the doctrine that the rules on forum shopping should not be interpreted with such absolute literalness as to subvert their own ultimate and legitimate objective, and that the signature of only one plaintiff substantially complies when all share a common interest.
• Bases Conversion and Development Authority vs. Uy, G.R. No. 144062, 2 November 2006, 506 SCRA 524 — Cited for the rule that the signature of a principal party is sufficient for verification and certification, and that dismissal of appeals purely on technical grounds is frowned upon.
• Spouses Melo vs. Court of Appeals, 376 Phil. 204 (1999) — Cited for the rule that compliance with the certification against forum shopping is separate from, and independent of, the avoidance of forum shopping itself.
• Microsoft Corporation vs. Maxicorp, Inc., G.R. No. 140946, 13 September 2004, 438 SCRA 224 — Cited for the distinction between questions of law and questions of fact.
• Morales vs. Skills International Company, G.R. No. 149285, 30 August 2006, 500 SCRA 186 — Cited for the same distinction between questions of law and questions of fact.
• First Bancorp Inc. vs. Court of Appeals, G.R. No. 151132, 22 June 2006, 492 SCRA 221 — Cited for the rule that an appeal under Rule 41 taken from the RTC to the CA raising only questions of law shall be dismissed.
• Bongato vs. Malvar, 436 Phil. 109 (2002) — Cited for the rule that courts may take judicial notice of proceedings in other cases that are closely connected to the matter in controversy.
• Primelink Properties and Development Corporation vs. Lazatin-Magat, G.R. No. 167379, 27 June 2006, 493 SCRA 444 — Cited for the rule that a prayer for "such orders as may be just and equitable" justifies the grant of a relief not otherwise specifically prayed for.
• Banco Filipino Savings and Mortgage Bank vs. Court of Appeals, 388 Phil. 27 (2000) — Cited for the rule that it is the allegations in the pleading which determine the nature of the action and the Court shall grant relief warranted by the allegations and proof even if no such relief is prayed for.
• Arroyo, Jr. vs. Taduran, 466 Phil. 173 (2004) — Cited for the rule that it is the material allegations of the fact in the complaint, not the legal conclusions made in the prayer, that determine the relief to which the plaintiff is entitled.
• Espina vs. Gato, 449 Phil. 7 (2003) — Cited as the administrative case where the Court found Sheriff Gato guilty of grave abuse of official functions and manifest partiality, which supported the Court of Appeals' findings of fact.

• Section 2, Rule 3, Rules of Court — Defines a real party in interest as the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. The Court applied this provision in holding that Espina had personality to file the complaint.
• Section 2, Rule 42, Revised Rules on Civil Procedure — Relates to the certification against forum shopping. The Court applied this provision in holding that the signature of one plaintiff substantially complies with the requirement when all plaintiffs share a common interest.
• Section 2, Rule 41, Rules of Court — Provides that an appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed. The Court applied this provision in determining that the appeal properly involved questions of fact.
• Section 15, Rule 44, Rules of Court — Provides the nature of issues appellant may include in his assignment of errors incorporated in his Brief as appellant. The Court applied this provision in explaining that it does not relate to the nature of the issues that may be raised on appeal, whether issues of fact or issues of law, or the mode of appeal.

• Ynares-Santiago, J. (Chairperson)
• Austria-Martinez, J.
• Nachura, J.
• Reyes, J.