Republic vs. Africa

A party may amend its pleading once as a matter of right at any time before a responsive pleading is served, and where some but not all defendants have answered, the plaintiff may amend its complaint once as a matter of right in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants. The exercise of this right does not depend upon the discretion or liberality of the court.

The Republic of the Philippines, through the Presidential Commission on Good Government, filed Civil Case No. 0178 before the Sandiganbayan against private respondents for the recovery of 3,305 shares of stock in the Eastern Telecommunications Philippines, Inc., allegedly held in trust for former President Ferdinand E. Marcos and Mrs. Imelda R. Marcos. The case was filed after the Supreme Court in a prior case, Republic vs. Sandiganbayan (334 Phil. 472 [1997]), ruled that the Republic's attempt to recover these shares in Civil Case No. 0009 without impleading private respondents was "highly irregular and seriously flawed" and directed the Republic to implead them in a complaint for recovery of the shares.

The Republic of the Philippines, through the Presidential Commission on Good Government, filed a Complaint before the Sandiganbayan on October 29, 1997 against private respondents for the recovery of 3,305 shares of stock in the Eastern Telecommunications Philippines, Inc. The shares, alleged to be held in trust for former President Ferdinand E. Marcos and Mrs. Imelda R. Marcos, were registered in the names of twenty private respondents in varying amounts, with some shares held in trust for others. The Republic alleged that private respondents' addresses were unknown but indicated that some could be served summons through relatives at 22 Acacia Road, Quezon City, while others could be served through Atty. Victor Africa and/or Atty. Juan de Ocampo at 12/F Telecoms Plaza, Sen. Gil J. Puyat Avenue, Makati City.

Eventually, all private respondents answered the Complaint except for Andres L. Africa, Racquel S. Dinglasan, Evelyn A. Romero, and Rosario Songco, there being no valid service of summons upon them. In the meantime, private respondents Andres L. Africa and Rosario A. Songco passed away. The complaint against Juan de Ocampo was dismissed by the Sandiganbayan's May 29, 1998 Order.

On January 27, 2005, the Republic filed a Motion for Leave to File Amended Complaint to implead the heirs of Andres L. Africa and Rosario A. Songco, and to properly summon Racquel S. Dinglasan and Evelyn A. Romero. The attached Amended Complaint identified the heirs of Andres L. Africa as Perla Africa, Rolando Africa, and Ronaldo "Ronnie" Africa, all non-residents with last known address at No. 95-A Melchor Street, Loyola Heights, Quezon City; the heirs of Rosario A. Songco as Enrico A. Songco, Rosanna S. Salak, and Epitacio A. Songco, Jr. with specified addresses; Racquel S. Dinglasan as a non-resident holding an American passport with last known address at #8 Eagle Street, Capitol Hills, Quezon City; and Evelyn A. Romero as a non-resident holding a Canadian passport with last known address at #106 10th Avenue, Quezon City.

The Sandiganbayan denied the first Motion for Leave to File Amended Complaint by Resolution of February 2, 2005 for failure to properly set it for hearing, and denied the motion for reconsideration by Resolution of May 3, 2005. The Republic filed another Motion for Leave to File Amended Complaint on July 4, 2005, attaching an Amended Complaint dated July 1, 2005, this time setting the motion for hearing on July 8, 2005 at 8:30 in the morning. The motion acknowledged the Sandiganbayan's leniency in granting four extensions of time and insisted on the inclusion of the additional defendants as necessary parties without whom no complete relief could be afforded, citing Section 11, Rule 3 of the Rules of Court.

By Resolution of November 15, 2005, the Sandiganbayan denied the Republic's Motion for Leave to File Amended Complaint, noting that the motion was denied when first filed because it was not set for hearing, and that although parties may be dropped or added by order of the court, this can only be made in accordance with the Rules of Court. The Sandiganbayan traced the Republic's delays from July 1987 when it filed Civil Case No. 0009 without including the present defendants, through the filing of the present complaint on October 28, 1997, and through multiple extensions of time granted from October 28, 2004 to January 5, 2005. The Sandiganbayan ruled that the grant of leave to file amended pleadings is a matter peculiarly within the sound discretion of the court, and with the Republic's "lame effort" and the court's earlier resolution denying the same motion, the Republic could not be heard on the same plea again. The Republic's Motion for Reconsideration Ad Cautela was denied by Resolution of March 6, 2006, prompting the Republic to file the present petition for certiorari and prohibition.

• Amendment as Matter of Right: The Republic argued that the parties, as well as the Sandiganbayan, were mistaken in their assumption that the case falls under Section 3 of Rule 10 of the Rules of Court (amendments by leave of court), for it falls under Section 2 of said Rule (amendments as a matter of right), which allows a party to amend its pleading once as a matter of right at any time before a responsive pleading is served.

• Application to Non-Answering Defendants: The Republic maintained that although most private respondents had already filed their respective answers, this did not bar it from amending its original Complaint once as a matter of right against Andres L. Africa, Racquel S. Dinglasan, Evelyn A. Romero, and Rosario Songco, the non-answering private respondents, citing Siasoco, et al. vs. Court of Appeals, et al. (362 Phil. 525 [1999]).

• Gravel Abuse of Discretion: The Republic contended that the Sandiganbayan gravely abused its discretion when it denied the Motion for Leave to File Amended Complaint, as the proposed amendments pertained only to the non-answering private respondents and could still be made as a matter of right, the exercise of which does not depend upon the discretion or liberality of the Sandiganbayan.

N/A — The decision does not recount the private respondents' arguments in response to the petition.

• Amendment as Matter of Right vs. Leave of Court: Whether the Republic's proposed amendment of its Complaint falls under Section 2 of Rule 10 of the Rules of Court (amendments as a matter of right) rather than Section 3 (amendments by leave of court), such that the Sandiganbayan's denial of the Motion for Leave to File Amended Complaint constituted grave abuse of discretion.

• Amendment as Matter of Right vs. Leave of Court: Yes. The proposed amendment falls under Section 2 of Rule 10 of the Rules of Court, as the Republic may amend its pleading once as a matter of right at any time before a responsive pleading is served, and where some but not all defendants have answered, the plaintiff may amend its complaint once as a matter of right in respect to claims asserted solely against the non-answering defendants. The Sandiganbayan gravely abused its discretion in denying the Republic's Motion for Leave to File Amended Complaint.

• Amendment as Matter of Right vs. Leave of Court: The Supreme Court pointed out that the parties, as well as the Sandiganbayan, were mistaken in their assumption that the case falls under Section 3 of Rule 10 of the Rules of Court (amendments by leave of court), for it falls under Section 2 of said Rule (amendments as a matter of right). Under Section 2 of Rule 10, a party may amend its pleading once as a matter of right at any time before a responsive pleading is served, and thereafter, only upon leave of court. While it was true that when the Republic filed its Motion for Leave to File Amended Complaint most of the private respondents had already filed their respective answers, this did not bar the Republic from amending its original Complaint once as a matter of right against Andres L. Africa, Racquel S. Dinglasan, Evelyn A. Romero, and Rosario Songco, the non-answering private respondents. The Court cited Siasoco, et al. vs. Court of Appeals, et al. (362 Phil. 525, 533 [1999]), which held that where some but not all defendants have answered, plaintiffs may amend their Complaint once as a matter of right in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants. As the proposed amendments pertained only to the non-answering private respondents, they may still be made as a matter of right. Being a matter of right, its exercise does not depend upon the discretion or liberality of the Sandiganbayan. In fine, the Sandiganbayan gravely abused its discretion when it denied the Republic's Motion for Leave to File Amended Complaint.

• Amendment as a Matter of Right (Section 2, Rule 10, Rules of Court) — A party may amend its pleading once as a matter of right at any time before a responsive pleading is served, and thereafter only upon leave of court. Where some but not all defendants have answered, the plaintiff may amend its complaint once as a matter of right in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants. The exercise of this right does not depend upon the discretion or liberality of the court. The Court applied this doctrine to hold that the Republic's proposed amendments, which pertained only to the non-answering private respondents, could be made as a matter of right, and the Sandiganbayan gravely abused its discretion in denying the motion.

• "It is clear that plaintiff x x x can amend its complaint once, as a matter of right, before a responsive pleading is filed. Contrary to the petitioners' contention, the fact that Carissa had already filed its Answer did not bar private respondent from amending its original Complaint once, as a matter of right, against herein petitioners. Indeed, where some but not all the defendants have answered, plaintiffs may amend their Complaint once, as a matter of right, in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants." — This passage, quoted from Siasoco, et al. vs. Court of Appeals, et al., states the controlling rule that where some but not all defendants have answered, the plaintiff may amend its complaint as a matter of right solely against the non-answering defendants.

• "It bears pointing out, at the outset, that the parties, as well as the Sandiganbayan, are mistaken in their assumption that this case falls under Section 3 of Rule 10 of the Rules of Court (amendments by leave of court). For it falls under Section 2 of said Rule (amendments as a matter of right)." — This passage identifies the correct rule applicable to the case and corrects the parties' and the Sandiganbayan's erroneous assumption.

• "As the proposed amendments pertain only to the non-answering private respondents, they may still be made as a matter of right. Being a matter of right, its exercise does not depend upon the discretion or liberality of the Sandiganbayan." — This passage articulates the ratio decidendi: because the amendments pertain only to non-answering defendants, the amendment is a matter of right, and the Sandiganbayan's discretion is not implicated.

• Siasoco, et al. vs. Court of Appeals, et al., 362 Phil. 525, 533 (1999) — Controlling precedent cited for the rule that where some but not all defendants have answered, plaintiffs may amend their Complaint once as a matter of right in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants.

• Republic vs. Sandiganbayan, 334 Phil. 472, 477 (1997) — Prior related litigation cited in the footnotes, where the Supreme Court ruled that the Republic's attempt to recover the shares of stock in Civil Case No. 0009 without impleading private respondents was "highly irregular and seriously flawed" and directed the Republic to implead them in a complaint for recovery of the shares.

• Section 2, Rule 10, Rules of Court — The provision governing amendments as a matter of right, which allows a party to amend its pleading once as a matter of right at any time before a responsive pleading is served, and thereafter only upon leave of court. The Court applied this provision to hold that the Republic's proposed amendment was a matter of right because it pertained solely to non-answering defendants.

• Section 3, Rule 10, Rules of Court — The provision governing amendments by leave of court, which the parties and the Sandiganbayan mistakenly assumed to be applicable. The Court clarified that this provision did not apply because the amendment was a matter of right under Section 2.

• Section 11, Rule 3, Rules of Court — The provision cited by the Republic in its Amended Complaint, which states that parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just.

• Leonardo A. Quisumbing (Chairperson)
• Antonio T. Carpio
• Dante O. Tinga
• Presbitero J. Velasco, Jr.

N/A — No dissenting opinions are noted in the decision.