BOLETIN C-4. INVENTARIOS CONCEPTO

NON-FORUM SHOPPING SIGNED BY RESPONDENT ENRIQUE G. SANTOS ALONE IS A SUBSTANTIAL COMPLIANCE WITH SECTION 5, RULE 7 OF THE 1997 RULES OF CIVIL PROCEDURE AND IN APPLYING THE CASE OF GUDOY V. GUADALQUIVER, 429 SCRA 723, WITHOUT REGARD TO MORE RECENT JURISPRUDENCE. – NO.

RATIO: The issue in the present case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs. This Court held in Ateneo de Naga University v. Manalo, that the verification requirement is deemed substantially complied with when, as in the present case, only one of the heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in the petition (complaint), signed the verification attached to it. Such verification is deemed sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, not merely speculative.

The same liberality should likewise be applied to the certification against forum shopping. The general rule is that the certification must be signed by all plaintiffs in a case and the signature of only one of them is insufficient. However, the Court has also stressed in a number of cases that the rules on forum

shopping were designed to promote and facilitate the orderly administration of justice and thus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance may be availed of with respect to the contents of the certification. This is because the requirement of strict compliance with the provisions merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.

The substantial compliance rule has been applied by this Court in a number of cases: Cavile v.

Heirs of Cavile,where the Court sustained the validity of the certification signed by only one of petitioners because he is a relative of the other petitioners and co-owner of the properties in dispute; Heirs of Agapito T.

Olarte v. Office of the President of the Philippines, where the Court allowed a certification signed by only two petitioners because the case involved a family home in which all the petitioners shared a common interest; Gudoy v. Guadalquiver, where the Court considered as valid the certification signed by only four of the nine petitioners because all petitioners filed as co-owners pro indiviso a complaint against respondents for quieting of title and damages, as such, they all have joint interest in the undivided whole;

and Dar v. Alonzo-Legasto,where the Court sustained the certification signed by only one of the spouses as they were sued jointly involving a property in which they had a common interest.

It is noteworthy that in all of the above cases, the Court applied the rule on substantial compliance because of the commonality of interest of all the parties with respect to the subject of the controversy.

Applying the doctrines laid down in the above cases, we find and so hold that the CA did not err in affirming the application of the rule on substantial compliance.

In the instant case, the property involved is a 936-square-meter real property. Both parties have their respective TCTs over the property. Respondents herein who are plaintiffs in the case below have a common interest over the property being the heirs of the late Enrique Santos, the alleged registered owner of the subject property as shown in one of the TCTs. As such heirs, they are considered co-owners pro indiviso of the whole property since no specific portion yet has been adjudicated to any of the heirs. Consequently, as one of the heirs and principal party, the lone signature of Enrique G. Santos in the verification and certification is sufficient for the RTC to take cognizance of the case.

The commonality of their interest gave Enrique G.

Santos the authority to inform the RTC on behalf of the other plaintiffs therein that they have not commenced any action or claim involving the same issues in another court or tribunal, and that there is no other pending action or claim in another court or tribunal involving the same issues. Hence, the RTC correctly denied the motion to dismiss filed by petitioner.

Considering that at stake in the present case is the ownership and possession over a prime property in Quezon City, the apparent merit of the substantive

aspects of the case should be deemed as a special circumstance or compelling reason to allow the relaxation of the rule.

Time and again, this Court has held that rules of procedure are established to secure substantial justice. Being instruments for the speedy and efficient administration of justice, they may be used to achieve such end, not to derail it. In particular, when a strict and literal application of the rules on non-forum shopping and verification will result in a patent denial of substantial justice, these may be liberally construed.

The ends of justice are better served when cases are determined on the merits – after all parties are given full opportunity to ventilate their causes and defenses – rather than on technicality or some procedural imperfections.

REPUBLIC v. SANDIGANBAYAN

FACTS: On December 17, 1991, petitioner Republic, through the Presidential Commission on Good Government (PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for forfeiture against Marcos properties before the Sandiganbayan.

In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth.

The funds were previously held by the following five account groups, using various foreign foundations in certain Swiss banks. In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately acquired property.

A General Agreement and the Supplemental Agreements dated December 28, 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family. The agreements included a stipulation that the US$356 million presumed to be owned by the Marcoses under some conditions.

Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not a party to the motion for approval of the Compromise Agreement and that she owned 90% of the funds with the remaining 10% belonging to the Marcos estate.

Republic prayed for a summary judgement over the controversy which was opposed by respondent marcos.

Sandiganbayan granted the prayer of petitioner Republic and rendered a judgment in favour of the latter, declaring the Swiss deposits which were transferred to and now deposited in escrow at the Philippine National Bank in the total aggregate value equivalent to US$627,608,544.95 as of August 31, 2000 together with the increments thereof forfeited in favor of the State. However, in 2002 and upon the motion of Mrs. Araneta who adopted the motion for reconsideration of the respondent Marcoses, the

Sandiganbayan reversed its 2000 decision stating there was no basis for the forfeiture because there was no proof that the Marcoses owned the funds in escrow from the Swiss Banks.

ISSUE: Whether or not respondents raised any genuine issue of fact which would either justify or negate summary judgment? - No. The Court held that respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion of petitioner Republic, summary judgment should take place as a matter of right.

RATIO: In the early case of Auman vs. Estenzo, summary judgment was described as a judgment which a court may render before trial but after both parties have pleaded. It is ordered by the court upon application by one party, supported by affidavits, depositions or other documents, with notice upon the adverse party who may in turn file an opposition supported also by affidavits, depositions or other documents. This is after the court summarily hears both parties with their respective proofs and finds that there is no genuine issue between them. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure. The theory of summary judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for petitioner Republic.

The pleadings filed by respondent Marcoses are replete with indications of a spurious defense:

In their answer, respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner required by the rules. All they gave were stock answers like "they have no sufficient knowledge" or "they could not recall because it happened a long time ago," and, as to Mrs.

Marcos, "the funds were lawfully acquired," without stating the basis of such assertions.

Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:

A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is true and material and shall deny the remainder.

Where a defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state, and this shall have the effect of a denial.

The purpose of requiring respondents to make a specific denial is to make them disclose facts which

will disprove the allegations of petitioner at the trial, together with the matters they rely upon in support of such denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary expenses and waste of time by compelling both parties to lay their cards on the table, thus reducing the controversy to its true terms.

On the part of Mrs. Marcos, she claimed that the funds were “lawfully acquired”. However, she failed to particularly state the ultimate facts surrounding the lawful manner or mode of acquisition of the subject funds.

Despite the serious and specific allegations against them, the Marcoses responded by simply saying that they had no knowledge or information sufficient to form a belief as to the truth of such allegations. Such a general, self-serving claim of ignorance of the facts alleged in the petition for forfeiture was insufficient to raise an issue. Respondent Marcoses should have positively stated how it was that they were supposedly ignorant of the facts alleged.

Example of the allegations that were not specifically denied: The Marcoses used dummies/nominees, fronts or agents who formed those foundations or corporate entities, they opened and maintained numerous bank accounts to amass the

$356M and hide it. The Marcoses just replied that the said amount was “lawfully acquired” or “they had no knowledge” of such facts.

Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, has been held that the qualifying circumstances alone are denied while the fact itself is admitted.

Respondents' answer was thus a denial pregnant with admissions of the following substantial facts: (1) the Swiss bank deposits existed and (2) that the estimated sum thereof was US$356 million as of December, 1990.

Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum of about US$356 million, not having been specifically denied by respondents in their answer, were deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure.

Their claim of “lack of knowledge” of several matters, transactions and documents was also disproved (regarding the foundations and the money).

The Marcoses had their signatures on some of the

documents that proved the transactions in issue proving that they indeed had knowledge thereof.

When matters regarding which respondents claim to have no knowledge or information sufficient to form a belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of information will not be considered a specific denial. An unexplained denial of information within the control of the pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective denial.

Furthermore, the heirs of FM are bound by the general denial/admissions made by FM thus the children cannot claim also claim “lack of knowledge”.

It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the course of the trial either by verbal or written manifestations or stipulations; or (c) in other stages of judicial proceedings, as in the pre-trial of the case.

Thus, facts pleaded in the petition and answer, as in the case at bar, are deemed admissions of petitioner and respondents, respectively, who are not permitted to contradict them or subsequently take a position contrary to or inconsistent with such admissions.

Moreover, the opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000 of petitioner Republic was merely adopted by the Marcos children as their own opposition to the said motion. However, it was again not accompanied by affidavits, depositions or admissions as required by Section 3, Rule 35 of the 1997 Rules on Civil Procedure.

The absence of opposing affidavits, depositions and admissions to contradict the sworn declarations in the Republic's motion only demonstrated that the averments of such opposition were not genuine and therefore unworthy of belief.

In the Compromise/Supplemental Agreements, respondent Marcoses sought to implement the agreed distribution of the Marcos assets, including the Swiss deposits. This was, to the Court, an unequivocal admission of ownership by the Marcoses of the said deposits.

Summary:

Mere denials, if unaccompanied by any fact which will be admissible in evidence at a hearing, are not sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment. A summary judgment is one granted upon motion of a party for an expeditious settlement of the case, it appearing from the pleadings, depositions, admissions and affidavits that there are no important questions or issues of fact posed and, therefore, the movant is entitled to a judgment as a matter of law. A motion for summary judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the prompt disposition of a civil action where there exists no serious controversy. Summary judgment is a

procedural device for the prompt disposition of actions in which the pleadings raise only a legal issue, not a genuine issue as to any material fact. The theory of summary judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is established by affidavits, depositions or admissions that those issues are not genuine but fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for petitioner.

JUABAN v. ESPINA

FACTS This stemmed from 3 interlinked cases.

Heirs of Bancale sued for the recovery of certain properties against Eva Paras and others (Case No. 1).

Petitioners Juaban and Zosa were their counsels. The heirs then entered into an Agreemenet to Sell and to Buy with respondent Espina, where they agreed to sell the subject property to respondent or his assignee with the amount of P2M as advance payment on the purchase price. Espina duly paid the said amount. He then designated respondent Cebu Bay Discovery Properties, Inc. (CDPI) as the vendee. Subsequently, respondents found out that Juaban and Zosa had filed a motion to fix their attorneys’ fees which was granted and fixed by the RTC at P9M. The heirs moved for reconsideration but were denied. They filed a Notice of Appeal which was indirectly overruled when the court granted the motion for execution filed by petitioners. A writ of execution was then issued followed by the sale of the subject properties to petitioners for P9M, despite the express instruction of the writ that the attorneys’

fees were “to be taken from the money due from the buyer to the sellers under the agreement.”

However, the RTC, under a new presiding judge, reversed and granted the MR of the heirs.

Meanwhile, petitioners were able to obtain a final deed of sale from Sheriff Gato on the ground that no redemption of the subject properties was made (Thus, an administrative complaint against the sheriff was filed for allegedly acting with manifest bias and partiality [Case No. 2]).

Respondents also filed an injunction and damages case to enjoin the sale in a public auction by Sheriff Gato, allegedly unaware, at the time of the filing of said case, that the properties had already been sold (Case No. 3). The court granted petitioners’

Motion to Dismiss.

On appeal, CA reversed and ordered the writ of preliminary injunction to be made permanent.

RELEVANT ISSUEs

1. Whether respondent Espina has authority to file the case. YES

2. Whether the certificate of non-forum shopping is invalid given that it was only signed by one of the plaintiffs, i.e. respondent Espina. (Ergo, whether the complaint should be dismissed due to non-compliance with the requirements of the Rules.) NO & NO!

RULING: Petitioners claimed that the complaint should have been dismissed because Espina no longer had personal interest in the case as he had assigned his rights to CDPI and that he was not authorized to file on behalf of CDPI. However, citing Rule 3 Sec. 2 of the ROC, SC ruled that Espina is a real party in interest⁸ in this case. Thus, respondents’ right to the properties is based on the Agreement to Sell and to Buy executed between the heirs and respondent Espina. The said Agreement is the very source of the right, the violation of which constituted the cause of action in respondents’ complaint for injunction before the court

RULING: Petitioners claimed that the complaint should have been dismissed because Espina no longer had personal interest in the case as he had assigned his rights to CDPI and that he was not authorized to file on behalf of CDPI. However, citing Rule 3 Sec. 2 of the ROC, SC ruled that Espina is a real party in interest⁸ in this case. Thus, respondents’ right to the properties is based on the Agreement to Sell and to Buy executed between the heirs and respondent Espina. The said Agreement is the very source of the right, the violation of which constituted the cause of action in respondents’ complaint for injunction before the court