4 That defendant is indebted to the plaintiff in the principal amount of P773,000.00 Philippine Currency with a stioulated interest. In her Answer with Counterclaim, defendantspecifically denied the material averments in ‘Paragraphs 2 of the complaintand then admitted she had secured loans from plaintiff Agrifina but argued that both plaintiff and defendant agreedthat the proceeds of the loan were re-lent to other borrowers at higher interest rates. Ruling: A general denial does not become specific by the use of the word "specifically." Thus, the answer should be so definite and certain in its allegations that the pleader’s adversary should Not be left in doubt as to what is admitted, what is denied, and what is covered by denials of knowledge as sufficient to form a belief. In her Answer, she specifically denied the allegations in paragraph 2 of the complaint, merely averring that plaintiff and herselfentered into an ‘agreement for the lending of money to interested borrowers at a higher interest rate. When a material allegation in a complaint is plainly and Necessarily within the defendant's _knowledge, his allegation of lack of knowledge and information will not be considered as a specific denial. IG.R. No. 128099. December 20, 2006.] CAMITAN vs, COURT OF APPEALS, Facts: Spouses Camitan sold to Fidelity Investment Corp. a parcel of land and delivered to the latter the land certificate of title. However, after the death of the spouses Camitan, the heirs of the ‘spouses filed a petition for the issuance of a new Owner's Copy. FidelityInvestment filed a Petition_for Annulment Of Judament_and cancellation of title , alleging that: The spouses Camitan sold the Property to petitioner, as documented by a "Deed of Absolute Sale" and petitioner has been in actual physical ‘possession and continuous occupation of the above-described Property and thas been the one paying the real estate taxes due on the Property. Defendants denied in this manner: Respondents deny specifically paragraph 4 of the said petition for lack of ‘knowledae and information sufficient to form a belief as to the truth of falsity of the allegations contained. Ruling: ‘A denial is not specific simply because it is so qualified by the defendant. When the matters of os the defendant alleges having no knowledge or information sufficient to form a belief, ind necessarily within the defendant's knowledge, his alleged ignorance or lack of iwenmadon will not be considered as a specific denial. When such matters were plainly within its knowledge and the defendant could not logically pretend ignorance as to the same, said defendant fails to properly tender an issue.eee nny RULES. Effect of Fallure to Plead ‘SECTION 2.COMPULSORY COUNTERCLAIM, OR CROSS-CLAIM, NOT SET UP BARRED. How should a compulsory counterclaim or cross-claim be set up? A compulsory counterclaim or cross-claim that a defending party has at the time he files his ‘answer shall be contained therein. (sec. 8 Rule 11). What is the reason behind the rule?It is designed to achieve resolution of the whole Controversy at one time and in one action and to avoid multiplicity of suits. (Baclayon v. CA 182 SCRA 761), ‘If a compulsory counterclaim or cross-claim not set up is made the subject of a Separate action, what is the remedy of the defendant? File a motion to dismiss or answer raising the ground of /itis pendentia if the first case is ending or the ground of res judicata if the first case is already final and unappealable. The basis for the latter is that under sec. 47 (b) Rule 39, the final judgment is conclusive not only with respect to the matter directly adjudged ss to any other matter that could have (Metals Engineering Resources Corp. v. CA G.R. No. 95631, 25" ‘eon raised in relation thereto, October 1991), | Rule 11 Section 9. Counterclaim or cross-claim arising after answer. “After-acquired Counterclaim”is permissive not compulsory. [G.R. No. 160354. August 25, 2005.] BANCO DE ORO UNIVERSAL BANK vs. THE HON. COURT OF APPEALS and SPS. GABRIEL G. LOCSIN, Facts: Plaintiff filed before the RTCa complaint against defendant bank for Specific Performance, and Damages, over a loan contract with mortgage.Defendant filed an ANSWER with Compulsory Counterclaim. Later, defendant bank, this time as plaintif, filed a complaint against plaintiff before the RTC for Collection of Sum of Moneyover the same loan for the obligation that fell due on the later date while the original case pends in court. Plaintiff filed a Motion ta Dismisson the ground that it should have been raised as compulsory counterclaim and now barred by the rules. Ruling: The bank's cause of action had not arisen yet when it filed its Answer with Counterclaim, as the amount due fell after it had filed its compulsory counterclaim. Section 8 Rule 11 refers to ‘a compulsory counterclaim or cross-claim that a defending party has at the time he files his ‘answer shall be contained therein.Thus, although a counterclaim arises out of or is necessarily connected with the transaction or occurrence of the plaintiff's suit but which did not exist or mature at the time said party files his answer is not thereby barred from interposing such claim in a future litigation. The setting up of such “after-acauired counterclaim,” is merely permissive, not compulsory. SECTION 3.DEFAULT. fault judgments are generally disfavoured, thus, defendant's answer that is filed beyond the reglementary period after filing a motion for extension of time, should ji it Jared him in default. ALL / be admitted where it was filed before the court has declared him in defaul aBuUeUUUUUuUuUuemieue eee IG.R. No, L-64276, March 4, 1986.] oe CATHAY PACIFIC ATRWAYS vs. HON. ROMILLO In a complaint for Damages, defendant Cathay Pacific fled two motions for extensk ; i extension to file its answer. No action was taken by the court on either motion. Before the expiration of the second extension requested, Cathay Pacific filed its answer.ARter the answer had been filed, the Plaintiffs fled a motion to declare the defendant in default, which the court issued. Ruling: Yas dant swe oul it ih¢ fore lared him in default, as default judgments are generally disfavouréd. This was counterbalanced by the delay of plaintiff's counsel in filing the motion to declafe the defendant in default. Moreover the answer contained valid defenses. Cases should as much as possible be decided on the ‘merits rather than on technicalities. There was no indication of an intent on the part of Petitioner to delay the case or that admission of the answer would in any way prejudice private Fespondents, David v. Judge Fruelga GR No. 170427 (Jan. 30, 2009) REMEDIES IN CASE OF DEFAULT : ) Before judgment , defendant file a motion under oath to set aside order of default upon Grounds of fraud, accident, mistake , excusable negligence and he has meritorious defense, b) If defendant discovered default judgment rendered by the court but which has not yet become final and executory , he may file a Motion For New Trial under sec. 1 (2) of Rule 32. ) If the defendant discovered default judgment after it has become final and executory , he may file a Petition for Relief From Judgment under sec. 1 Rule 38. d) He may also file a notice of appeal instead of motion to set aside the order of default , arguing that the judgment is contrary to the evidence or law (Rule 41 sec. 2). Effect of partial default ‘Where a complaint states a common cause of action against several defendants and ‘some appear to defend the case on the merits while others make default, the defense interposed by those who appear to litigate the case inures to the benefit of those who fall to appear. (Bueno v. Ortiz 23 SCRA 1151.) The defaulting defendant merely loses his standing in court, he not nti ice of notice in thi it in any way, He cann ice evidence; nor nor to appear in the suit in any way. He cannot adduce evidence; nor can he be heard at the final hearing although he may appeal the judgment rendered against him on the merits.(Moran, Rules of Court, Vol. 1, pp. 538-539.) A party who is declared in default may testify in behalf of the non-defaulted defendants. Cavill v. Florendo (G.R. No. 73939.9 October 1987) Facts: : P filed a complaint for collection of sum of money against solidary debtors D, E, and F before the RTC. D filed an answer within reglementary period but E and F did not. a) May E and F be declared in default upon motion of P? yes b) May P move for a default judgment against E and F? > ©) May E and F take part in the trial? Ho d) May E and F testify in behalf of 0? 35> Answers:2) Yes. Since E and F falled to fle an answer. b) No. This is a case of partial def: fault, (sec. 3 Rule 9). When a pleading asserting a cla S25 2 common cause of action against several defending parse eng cam srewer and the others fal to do so, the court shall try the cose against all upon the gnswers thus filed and render judgment upon the eviden ice presented, Here, the court Should try the case against 0, €, and F upon the evidence hea byD. . Note: The Rule shall not apply where several defendants are sued as Joint debtors (not MaeeTY debtors), since the complaint does not state @ common couse of tenon against the latter. In a joint obligation, each obligation ofthe joint debtors the other joint debtors. : ; a )_No. A party in default take part in the trial. ©) Yes. A defaulted party is not disqualified from testifying in court in behalf of a non- defaulted party. it shall be entitled to notice of subsequent proceedings but not to [G.R. No, L-40098. August 29, 1975.] ANTONIO LIM TANHU vs. HON. JOSE RAMOLETE Facts: Plaintif fled a complaint for liquidation and accounting of the business partnership againsté defendants alleging that, ina conspiracy, the latter misappropriated the partnership funds, In 2 single answer with counterclaim defendants denied specifically the allegations, Two of the fants fall ‘on the pre-trial for which they were declared in default by the Court. In the course of the trial, plaintiff moved to drop the non-defaulting defendants and have the case dismissed in so far as they are concerned. The trial court granted, Ruling It was error for the court to grant plaintiff's motion to dismiss the case as against the non-_ defaulted defendants and prosecute the case as against the defaulted defendants, since all the defendants, defaulted and non-defaulted, are indispensable parties. When one of the —~“ defendants is dropped, the other should also be dropped. XPT WT pewroKs; they Moe obit: Cae, oF mein Where the plaintiff moved or agreed for the dismissal of the complaint as to one of the defendants, the other co-defendant who is in default, and who is an indispensable party , shall also benefit a IG.R. No, 64591. January 17, 1985.] RUFINO CO vs. HON. EFICIO B. ACOSTA Facts: PEPSI issued 3 purchase orders to CTC Appliance Center owned by Rufino Co for the purchase of units of refrigerators. Co assigned his rights and interests to the 3 purchase orders to Refrigerations Industries, Inc.Refrigerations Co. filed a complaint for a sum of money against PEPSI and Rufino Co.PEPSI fled @ motion to dismiss the complaint against t on the basis of the "Joint Release, and Quitclaim" mutually agreed byit and the plaintiff,Then plaintiff Refrigerations filed amotion to deciarethe other defendant Rufino Co In default for noving failed to file his answer, which the court granted. The court then rendered its decision in favor of the plaintiff and against the defendant Rufino Co. ears for a sum of money with attachment against PEPSI and Rufino Co clearly shows that PEPSI and Co are indi ies to the ca f nhu v. Hon. Ramolete (66 SCRA 425) is applicable. The fact that in the Foals aplate wvaral eferdinht were aneinredt in rafanit ans them satenese ear Un By nee af Lim TRRMHMMMM RPee eee ea indispe Im AAPER A fakes 4 dip ee me AS deep op ay ie ee ne a answered the complaint were available to those who were in default, while in the Moment pei oe ruling in i Eien apr . a ig in the Lim Tanhu case was based on the fact that all the defendants therein dis abl i iff the droppir nc ‘similar to this case where both PEPSI and Rufino Co were Note:Compare it with the case of: Imson v. CA 239 S SB (1994) (1996 BAR)where it was declared that the cause of action Sgainst a (a) driver of a bus, (b)the company owner on a quasi-delict and (c) insurance Company on a TPL are different causes of action. As to the driver, itis based on Art. 2178 Civil Code, as to the owner itis anchored on Art. 2180 Civil Code. They are not indispensable parties but only necessary parties. Compromise settlement between the passenger and insurance mpany dismi inst the insur " ‘company dismissed the suit against the insurer, but won't cause dismissal of action against the driver and bus company. Extent of relief to be awarded: Unliquidated damages are those which are still subject to evidence before it can Properly be awarded such as presentation of receipts in terms of actual damages, moral damages.Liquidated damaaesare those which are already fixed and proof to establish the same are not required. Illustration: Q: P filed a complaint for collection of @ P500,000 loan against D. D did not file an answer and was declared in default. The clerk of court received P's evidence which proved that the amount of the loan was actually P850,000. May the court award 850,000 to P? ‘A: No. A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages. This is different from the rule where the defendant was not declared in default and which is covered by Sec. 5 Rule 10. DISTINCTION BETWEEN DEFAULT FOR FAILURE TO FILE AN ANSWER AND FAILURE TO ‘APPEAR ON TRIAL. MANGELIN V. CA 215 S 230 (1992) In default order, the judgment cannot exceed the amount or be different from what is. ao prayed.In failure to appear on tral, the limitation does not apply.tn default order, defendant , cannot participate in the trial although he is entitled to notices of the proceedings. In failure to OMAN appear on trial, the party simply waived his right to participate on that particular hearing but oe, not to all subsequent hearings.In default order ,he loses his standing In court, in the latter , ane to both: ex:parte presentation of evidence for fallure to fle answer and for fallure to appear on trial. GOLDEN COUNTRY FARM, INC. vs. SANVAR DEV'T CORP. 214 SCRA 295 ( 1992) oo Defendant filed a motion to dismiss on the 8 day. It was denied. So there is sti ost to file an answer. On the 15" day, instead of filing an answer, he filed a motion for reconsideration and such motion was denied, Then he filed an answer. Ruling: NO MORE. The fling of the motion to dismiss interrupted the perod to fle an answer. When you receive an order, you stil have to balance to file your answer. And you didnot fle an anawrer, inatend you file @ motion for reconsideration, You took the risk, So defendant's mo~="s=SBeU MUTE UL for reconsideration which merely reiterated his ground in the motion to dismiss did not stay the ‘running of the periad to file an answer.a a a a a a a a a : a a a a i i 1 1 1 ‘ 1 aoe be Hd aw cn RULE 10 dependent giled MO Pinte amente ie cleat ayn Amended and Supplemental Pleadings “¥" 9) “iht | mbsibtneaiyy He, WAND , AO U ok sepenioee Amendments asa matter of right. Wesley Alpine Lending Investors v. Corpuz (508 $ 45) ‘A motion to mend his defendar Amendments by leave of court. [G.R. No. 158401, January 28, 2008.) PHILIPPINE PORTS AUTHORITY vs. WG8.A INC. Facts: WG8A filed an Injunction with prayer for a temporary restraining order, damages , and attorney's fees before the RTC, claiming that the PPA unjustly and illegally terminated the lease contract. WG&A amended its complaint for Injunction with Prayer for TRO incorporating as its third cause of action, that should the plaintiff be forced to vacate the said facility, itis entitied to be refunded of the value of the improvements it introduced in the leased property. PPA filed its answer to the ‘amended complaint. Thereafter, plaintiff filed a Motion to Admit Attached Second Amended Complaint. The complaint was captioned as one for Injunction with revel for Temporary Restraining Order and/or Writ of Preliminary Injunction and damages! and/or for Reformation of Contract, Claiming that the contract failed to express or embody the true intent of the contracting parties. PPA opposed as it substantially alter the latter's cause of action and theory of the case. The judge denied admission of the Second Amended Complaint. Ruling: YN th, wet GE The RTC erred. The clear import of Section 3, Rule 10 is that under the new rules, “the amendment may (now) substantially alter the cause of action or defense." This should only be true, however, when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceeding." Note: There can be no amendment where no cause of action in the first place exists at the ime the complaint is_filed even if one of the promissory nk me pendency of the suit, (Swagman Hotels and Travel, Inc. v.CA455$175) ym covet tend, Moreover, no amendment is allowed to confer jurisdiction of the court. a EFFECT OF THE AMENDMENT ON THE ORIGINAL PLEADING: 6 Ta pat Pleadings superseded or amended disappear from the record, lose their status as pleadings and cease to be judicial admissions. While they may nonetheless be utilized against the pleader as i ns, they must, in order to have such effect, be formally offered in evidence. If not offered in evidence, the admission contained therein will not be considered. Section 5. Amendment to conform to or authorize presentation of evidence. 2att 7 Shustration: ‘A complaint filed by a guarantor to collect a sum state @ cause of action as it failed to all ‘guarantor. Yet during the proceeding, by debtor, the defect in the complai Foreign Loan Guarantee Corp. v. of money from debtor, and fails to leged that creditor of debtor has been paid by evidence of payment is offered without objection int Is cured by the evidence. (Phil. Export and Phil, Infrastructures Inc. 419 S 6). Section 6.Supplemental pleadings. G.R.NO. 182435, AUGUST 13, 2012 LILIA ADA vs. FLORANTE BAYLON Facts: fe Some heirs filed a complaint for partition, accounting and damages against the other ‘cirs involving real properties. While the case the court proceeding is pending, one of the defendant heirs donated a part of the land in controversy in favor of a co- Gefendant. These prompted plaintiffs-heirs to file a Supplemental Pleading for rescission of the deed of donation. Defendants-heirs argued that such supplemental pleading Presents new cause of action, thus proscribed by the Rules. Ruling: A supplemental pleading may raise a new cause of action as long as it has some relation to the original cause of action set forth in the original complaint, A ‘supplemental pleading only serves to bolster or add something to the primary pleading. A supplement exists side by side with the original. It does not replace that which it supplements. A supplemental pleading may property allege transactions, occurrences or events which had transpired after the filing of the pleading sought to be supplemented, even if the said supplemental facts constitute another cause of action. While a matter stated in a supplemental complaint should have some relation to the cause of action set forth in the original pleading, the fact th; lemental leading technicalh ne f should _n« 0 its allowan but only a mi nsidert he in the exercise of its discretion. In such cases, we stressed that a broad definition of “cause of action" should be applied. Effect of amended pleading to newly/additionally impleaded defendant: G.R. No. 161849 July 7, 2010 WALLEM PHILIPPINES SHIPPING, INC. vs. S.R. FARMS, INC. consignee S.R. FARMS filed a Complaint for Damages against the (a) owner of the vessel; (b) the ship agent RCS Shipping Agencies, (c) the arrastre operator;(d) and the customs broker claiming short of tons Inthe delivery of goods a5 stpulated inthe Bil of Lading. Later, plaintiff filed an Amended Complaint impleading Wallem Philippine Shipp! peters ship agent. Wallem Philippine Shipping in his answer with affirmative defense i ot ‘action is already prescribed, it being included as additional defendant nena 7 one prescriptive peri to file an action arising from contract of cariage by sea under Ruling:Srlainally alleged in the complaint relates back to the date of the ‘commencement of the action and is not barred by the statute of limitations. The ‘exception, however, would not apply to the Party impleaded for the first time in the amended complaint. ‘The Carriage of Goods by Sea Act {7 {COGSA), Section 3 (6) of which provides that a sult must be brought within one year from the date the goods are delivered, Petitioner was implieaded ag defendant beyond the one year period. Vlason Enterprises v. CA 310 S 49 Ruling: TF does not ipso facto follow that new summons is required whenever a complaint Is amended (regardless of whether or not it changes a cause of action). Where the defendant has already sPpeared in court by virtue of the summons on the original complaint, no need of new pummons (even if the amended complaint alleges new cause of action). When the defendant has not yet appeared in court and no summons had yet been served, new summons on the amended complaint must be served Eh: amended Phading dims act rednect bbe te g Pig Re oie phediegy KONs — plendy fist mal, Sopprrnt/m pritie peck cteady aed in TH Gia complaint (wehoach) Gee om Ge ed ee (da Te amet awe lainRULE 11 ‘When to File Responsive Pleadings Motion for Extension A metic ime is a nor-litigious motion which can be acted thon by the court ex parte. The granting of such a motion, including the duration thereof, lies within the discretion of the court to be exercised in accordance with the attendant circumstances of the case, It should be made before the period sought to be @xtended expires and for reasons are not only reasonable, but also in good faith, Such a motion Is allowed to give the defendant’s lawyer the opportunity to prepare the answer for his client property and intelligently. How is the period of time for a defendant to answer be computed as expressed In Sec. 1 of Rule 22 On “exclude the first but include the last." G.R. No. 139665. August 9, 2001 VILMA S, LABAD vs, THE USP Facts: ‘The CSC affirmed the decision of of the USP Board of Regents dismissing Vilma Labad as faculty member of.0n December 11, 1998, Labad received the Resolution of the CSC against her. Considering that the last day for her to file her petition for review fell on a Saturday, December 26, 1998, sHte filed with the Court of Appeals a Motion for Extension Of Period to File Petition for Review on December 28, 1998, asking for 15 day-extension or until January 12, 1999 reckoned from December 28, not from December 26, 1999. ‘The Court of Appeals granted the extension of 15 days, however, the period commenced from December 26, 1998 (Saturday, the last day for Labad to file her petition for review) or until January 10, 1999 within which Labad could file her petition for review. ‘Thereafter, the petition for review was dismissed on the ground that the petition for review was filed on January 12, 1999 by registered mail, which was beyond the extended period. Ruling: Under Section 1, Rule 22 ofthe Rules of Court, and as aplied in several cases, where the last day for doing any act required or permitted by law falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day. AS a rule, the extension should be tacked to the original period and commence immediately after the expiration of such period. However,we allowed the extended period to commence from the specific time prayed for in the motion for extension. The underpinning consideration of jurisprudence is the liberal interpretation of the Rules to achieve substantial justice.The motion for extension filed on December 28, 1998 was filed on time since it was filed before the expiration of the time sought to be extended.