Siasoco vs. Court of Appeals

Where some but not all defendants have answered, the plaintiff may amend the 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 defendants who have already answered; certiorari is not the proper remedy to challenge a final adjudication where appeal is available.

Petitioners were the registered owners of nine parcels of land in Montalban, Rizal. Iglesia ni Cristo negotiated with them for the purchase of those properties, while Carissa Homes Development and Properties, Inc. was a separate party with whom petitioners allegedly contracted for the sale of the same properties. The procedural dispute implicated the Rules of Court on amendment of pleadings, particularly the right to amend once before a responsive pleading is served and the requirement of leave of court after such service.

Petitioners were the registered owners of nine parcels of land located in Montalban, Rizal. In December 1994, they began to offer the subject properties for sale. Iglesia ni Cristo negotiated with them, but the parties failed to agree on the terms of the purchase. More than a year later, both parties revived their discussion. In a letter dated December 16, 1996, petitioners made a final offer to INC. INC’s counsel sent a reply received by Petitioner Mario Siasoco on December 24, 1996, stating that the offer was accepted, but that INC was “not amenable to your proposal to an undervaluation of the total consideration.” In their letter dated January 8, 1997, petitioners claimed that INC had not really accepted the offer, adding that, prior to their receipt of the reply on December 24, 1996, they had already contracted with Carissa Homes Development and Properties, Inc. for the sale of the properties due to the absence of any response from INC.

Maintaining that a sale had been consummated, INC demanded that the corresponding deed be executed in its favor. Petitioners refused. On January 14, 1997, INC filed a civil suit for specific performance and damages against petitioners and Carissa Homes, docketed as Civil Case No. Q-97-29960. Petitioners filed a Motion to Dismiss on the grounds of improper venue and lack of capacity to sue. Carissa Homes filed its Answer to the Complaint on February 24, 1997.

Pending resolution of petitioners’ Motion to Dismiss, INC negotiated with Carissa Homes, culminating in INC’s purchase of the subject properties from Carissa Homes. On April 24, 1997, INC filed an Amended Complaint, dropping Carissa Homes as one of the defendants and changing the nature of the case to a mere case for damages. Petitioners filed a Motion to Strike Out Amended Complaint, contending that the complaint could not be amended without leave of court since a responsive pleading had been filed.

On August 11, 1997, the RTC issued the first assailed Order: it admitted the Amended Complaint, dropped Carissa Homes from the Complaint, and denied the Motion to Declare Defendants Siasoco et al. in Default. On August 31, 1997, petitioners filed a Motion for Suspension of Proceeding pending the resolution of their Motion to Dismiss. On September 11, 1997, the RTC denied the Motion for Suspension and directed petitioners to file their Answers to the Amended Complaint, stating that the Motion to Dismiss was moot and academic because the Amended Complaint changed the action from specific performance with damages to one for damages only.

The record showed that Carissa Homes had already filed its Answer, while petitioners had not. The claims against Carissa Homes and against petitioners were different. The Amended Complaint deleted the claims for specific performance and declaration of nullity of the sale, leaving the action as one for damages only.

• Admission of Amended Complaint: Petitioners argued that the lower courts erred in admitting INC’s Amended Complaint because Carissa Homes had already filed its Answer, a responsive pleading had been served, and INC therefore could not amend as a matter of right without leave of court.
• Substantial Alteration of Cause of Action: Petitioners maintained that leave of court could not have been granted because the amendment substantially altered the cause of action.
• Jurisdiction and Venue: Petitioners insisted that the RTC of Quezon City did not have jurisdiction over the original Complaint and that the action for specific performance involving parcels of land in Montalban, Rizal should have been filed in the RTC of that area; they contended that the CA misunderstood the distinction between territorial jurisdiction and venue.
• Motion for Suspension: Petitioners argued that the CA erred in affirming the RTC’s denial of their Motion for Suspension.
• TRO and Preliminary Injunction: Petitioners argued that the CA erred in refusing to hear their application for a temporary restraining order and writ of preliminary injunction.
• Propriety of Certiorari: Petitioners commenced the suit under Rule 65 and alleged that the CA committed grave abuse of discretion in issuing the challenged Decision.

• Propriety of Certiorari: Whether certiorari under Rule 65 was the proper remedy to challenge the CA Decision, or whether appeal under Rule 45 was the available remedy.
• Admission of Amended Complaint: Whether the CA erred in affirming the RTC’s admission of INC’s Amended Complaint despite Carissa Homes having filed an Answer.
• Substantial Alteration of Cause of Action: Whether the Amended Complaint substantially altered the cause of action such that leave of court could not be granted.
• RTC Jurisdiction and Venue: Whether the RTC of Quezon City had jurisdiction over the original Complaint for specific performance with damages involving land in Montalban, Rizal, or whether venue was improperly laid.
• Motion for Suspension: Whether the CA erred in affirming the RTC’s denial of petitioners’ Motion for Suspension.
• TRO and Preliminary Injunction: Whether the CA erred in refusing to hear petitioners’ application for a temporary restraining order and writ of preliminary injunction.

• Propriety of Certiorari: No. Certiorari under Rule 65 was improper because the CA Decision was a final disposition on the merits and appeal under Rule 45 was available; the Court nonetheless treated the petition as one for review under Rule 45.
• Admission of Amended Complaint: No. The RTC properly admitted the Amended Complaint because, although Carissa Homes had answered, petitioners had not, and INC could amend once as a matter of right as to claims against non-answering defendants.
• Substantial Alteration of Cause of Action: No. The amendment did not substantially alter any defense of petitioners, who had not filed a responsive pleading; the rule against substantial alteration applies after a responsive pleading has been served.
• RTC Jurisdiction and Venue: No. The RTC had jurisdiction because a complaint for specific performance with damages is a personal action that may be filed where any of the parties resides; the amendment did not confer jurisdiction.
• Motion for Suspension: No. The petition was devoid of merit; the RTC treated the Motion to Dismiss as moot in light of the Amended Complaint, and the CA’s denial of certiorari was sustained.
• TRO and Preliminary Injunction: No. The CA’s denial of the petition and lifting of the Temporary Restraining Order were sustained, no grave abuse of discretion having been shown.

• Propriety of Certiorari: Rule 65 requires the petitioner to show not only grave abuse of discretion but also that there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. The questioned CA Decision was a disposition on the merits with no remaining issue to resolve, so the proper remedy was a petition for review under Rule 45, not Rule 65. Certiorari also generally cannot issue unless the lower court has been given an opportunity to correct the imputed error through a motion for reconsideration, and petitioners did not claim any exception. For this procedural lapse, the petition should have been dismissed outright. Nonetheless, because the petition was filed within the 15-day period under Rule 45, the issue was important, and private respondent did not question the propriety of the petition, the Court treated the action as a petition for review under Rule 45 to accord substantial justice.
• Admission of Amended Complaint: Under Rule 10, Section 2, a party may amend his pleading once as a matter of right at any time before a responsive pleading is served. Where some but not all defendants have answered, the plaintiff may amend the 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. Here, Carissa Homes had already filed its Answer, but petitioners had not. The claims against Carissa Homes and against petitioners were different. INC could no longer amend as a matter of right against Carissa Homes, but it could do so against petitioners, who had not yet filed an answer. The RTC therefore properly admitted the Amended Complaint.
• Substantial Alteration of Cause of Action: Section 3, Rule 10 provides that after a responsive pleading has been filed, an amendment may be rejected when the defense is substantially altered. The rationale is that such an amendment prejudices the defendant and delays the action. Where a party has not yet filed a responsive pleading, there are no defenses that can be altered. Petitioners had not filed any responsive pleading, and they failed to prove that they were prejudiced by the Amended Complaint. The amendment did not delay the action; it simplified the case and tended to expedite its disposition. The Amended Complaint became simply an action for damages, since the claims for specific performance and declaration of nullity of the sale had been deleted.
• RTC Jurisdiction and Venue: An amendment cannot be allowed when the court has no jurisdiction over the original Complaint and the purpose of the amendment is to confer jurisdiction on the court. In this case, however, the RTC had jurisdiction because the original Complaint involved specific performance with damages. In La Tondeña Distillers vs. Ponferrada, the Court ruled that a complaint for specific performance with damages is a personal action and may be filed in the proper court where any of the parties resides. The action did not involve title to or ownership of real property. Venue was therefore not improperly laid, and the RTC had authority to allow the amendment.
• Motion for Suspension: The RTC denied the Motion for Suspension and directed petitioners to file their Answers, stating that the Motion to Dismiss was moot and academic because the Amended Complaint changed the action from specific performance with damages to one for damages only. The CA denied the petition for certiorari, and the Supreme Court found the petition devoid of merit. No grave abuse of discretion was shown.
• TRO and Preliminary Injunction: The CA denied the petition for certiorari, lifted its Temporary Restraining Order, and ordered the RTC to proceed. The Supreme Court sustained the CA and denied the petition for lack of merit. No grave abuse of discretion was shown.

• Amendment as a Matter of Right Against Non-Answering Defendants — Under Rule 10, Section 2, a party may amend once as a matter of course before a responsive pleading is served. Where some but not all defendants have answered, the plaintiff may amend once as a matter of right in respect to claims asserted solely against the non-answering defendants, but not as to claims against defendants who have already answered. The Court applied this because Carissa Homes had answered but petitioners had not, so INC could amend its complaint as of right against petitioners.
• Substantial Alteration of Defense — Under Rule 10, Section 3, after a responsive pleading has been filed, an amendment may be rejected when the defense is substantially altered. The rationale is that such amendment prejudices the defendant and delays the action; where no responsive pleading has been filed, there are no defenses that can be altered. The Court found no substantial alteration as to petitioners because they had not answered and showed no prejudice.
• Liberal Allowance of Amendments — Amendments to pleadings are generally favored and should be liberally allowed in furtherance of justice, so that cases may be determined on their real facts, trial expedited, and circuity of action and unnecessary expense prevented, unless there is inexcusable delay, surprise, or a similar circumstance. The Court found the amendment simplified the case and expedited disposition.
• Certiorari Not a Substitute for Appeal — Certiorari under Rule 65 requires grave abuse of discretion and no appeal or other plain, speedy, and adequate remedy in the ordinary course of law. A final disposition on the merits is reviewable by petition for review under Rule 45, not Rule 65. The Court treated the petition as one under Rule 45 to accord substantial justice because it was filed within the 15-day period and the issue was important.
• Specific Performance with Damages as a Personal Action — A complaint for specific performance with damages involving real property is a personal action, not an action involving title to or ownership of real property, and may be filed in the proper court where any of the parties resides. The Court applied this to hold that the RTC of Quezon City had jurisdiction and venue was not improperly laid.
• Amendment Cannot Confer Jurisdiction — An amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction on the court. The Court found this rule inapplicable because the RTC already had jurisdiction over the original complaint for specific performance with damages.

• "Notwithstanding the filing of a responsible pleading by one defendant, the complaint may still be amended once, as a matter of right, by the plaintiff in respect to claims against the non-answering defendant(s)." — This states the core procedural rule applied to allow INC’s amendment against petitioners despite Carissa Homes’ answer.
• "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 is the canonical formulation of the rule on partial amendment as a matter of right.
• "For the writ certiorari under Rule 65 to issue, the petitioner must show not only that the lower court acted with grave abuse of discretion, but also that "there is no appeal, or any other plain, speedy, and adequate remedy in the ordinary course of law."" — This states the requisites for certiorari and supports the ruling that Rule 45 was the proper remedy.
• "In La Tondeña Distillers v. Ponferrada,15 this Court ruled that a complaint for "specific performance with damages" is a personal action and may be filed in the proper court where any of the parties reside, viz.:" — This is the jurisdictional and venue rule applied to uphold the RTC’s authority to act on the original Complaint.

• La Tondeña Distillers vs. Ponferrada, 264 SCRA 540, November 21, 1996 — The Court relied on this case to hold that a complaint for specific performance with damages is a personal action that may be filed where any of the parties resides, thus upholding the RTC’s jurisdiction and venue.
• Philippine National Bank vs. Court of Appeals, 159 SCRA 433, March 30, 1988 — Cited for the rule that amendments to pleadings are generally favored and should be liberally allowed in furtherance of justice unless inexcusable delay or surprise justifies refusal.
• Campos Rueda Corporation vs. Bautista, 6 SCRA 240, September 29, 1962 and Tamayo vs. San Miguel Brewery, 10 SCRA 115, January 31, 1974 — Cited for the rule that an amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction.
• Gelindon vs. De la Rama, 228 SCRA 322, December 9, 1993 and Jose vs. Zulieta, 2 SCRA 574, May 31, 1961 — Cited for the requirement that certiorari under Rule 65 issue only when there is no appeal or other plain, speedy, and adequate remedy.
• Liberty Insurance Corp. vs. Court of Appeals, 222 SCRA 37, May 13, 1993 — Cited for the general rule that certiorari cannot issue unless the lower court has been given an opportunity to correct the imputed error through a motion for reconsideration.
• Pallant vs. Sinatra, D.C.N.Y. 1945, 7 F.R.D. 293 — Cited in Francisco’s treatise for the rule that where some but not all defendants have answered, the plaintiff may amend once as a matter of right as to claims against non-answering defendants.

• Section 2, Rule 10, Rules of Court — A party may amend his pleading once as a matter of course at any time before a responsive pleading is served. The Court applied this to allow INC’s amendment against petitioners, who had not yet answered, despite Carissa Homes’ answer.
• Section 3, Rule 10, Rules of Court — After a responsive pleading has been filed, an amendment may be rejected when the defense is substantially altered. The Court found no substantial alteration as to petitioners because they had not filed a responsive pleading.
• Section 1, Rule 65, Rules of Court — Certiorari requires grave abuse of discretion and no appeal or other plain, speedy, and adequate remedy. The Court held certiorari improper because the CA Decision was a final disposition on the merits and appeal under Rule 45 was available.
• Rule 45, Rules of Court — Petition for review. The Court treated the Rule 65 petition as a Rule 45 petition because it was filed within the 15-day period and to accord substantial justice.

Romero, Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.