Digest # 1
G.R. No. 79903 July 23, 1992
CONTECH CONSTRUCTION TECHNOLOGY & DEVELOPMENT
G.R. No. 79903 July 23, 1992
CONTECH CONSTRUCTION TECHNOLOGY & DEVELOPMENT
CORPORATION, JERRY A. KHO, WEIJEN A. KHO and WILLEN A. KHO,
petitioners, vs. COURT OF APPEALS and GREENBELT SQUARE, INC.,
respondents.
NOCON, J.:
FACTS:
on August 8, 1980, petitioner Contech Construction Technology & Development Corporation, as contractor, and private respondent Greenbelt Square, Inc., as owner, entered into an Agreement whereby the former undertook the construction, equipping, furnishing and supplying of materials for a theater and restaurant building for a consideration of P20,069,694.00.
Pursuant to said Agreement, petitioners Contech secured from the Philippine British Assurance Co., Inc. (Phil-British for brevity), a bond of P2,000.000.00 under Bond No. 0746 to guarantee the payment of the labor and materials used in connection with the construction project, from the Metropolitan Insurance Co. (Metropolitan for brevity); P4,000,000.00 under Surety No. 80/G(13)00853 to secure the full and faithful performance of the petitioners and Surety No. 80/G(10)00457 for P2,000,000.00 to guarantee the supply of cement and steel bars needed for said project.
On October 21, 1981, respondent Greenbelt terminated the Agreement upon petitioners' failure to comply with the terms and conditions of said Agreement.
Respondent Greenbelt, likewise, sent Phil-British and Metropolitan notices of claim for Contech's failure to perform their part of the Agreement.
Contech, thereafter, withdrew their men and equipments from the construction site and respondent Greenbelt contracted the services of R.N. Construction Co., Inc. to finish the building project.
However, upon Contechs' refusal to pay their obligation to Greenbelt, the latter, on March 24, 1982, simultaneously filed with the Court of First Instance of Rizal two separate complaints against petitioners and their sureties for breach of contract.
FIRST COMPLAINT: Collection of a sum of money against Contech & Phil-British SECOND COMPLAINT: Also collection of sum of money against Contech & Metropolitan
On June 3, 1982, petitioners filed a motion to dismiss the second complaint on the ground of the pendency of the first complaint likewise between the same parties for the same cause.
1ST SET OF DECISIONS OF LOWER COURTS:
*CFI-Rizal: denied the motion to dismiss.
*IAC: held that there was a splitting of a cause of action when the two complaints were filed simultaneously, hence, the orders of the trial court dated May 17, 1983 and July 25, 1983 denying the motion to dismiss and the motion for reconsideration were nullified. Said decision of the appellate court became final on August 2, 1984.
NOCON, J.:
FACTS:
on August 8, 1980, petitioner Contech Construction Technology & Development Corporation, as contractor, and private respondent Greenbelt Square, Inc., as owner, entered into an Agreement whereby the former undertook the construction, equipping, furnishing and supplying of materials for a theater and restaurant building for a consideration of P20,069,694.00.
Pursuant to said Agreement, petitioners Contech secured from the Philippine British Assurance Co., Inc. (Phil-British for brevity), a bond of P2,000.000.00 under Bond No. 0746 to guarantee the payment of the labor and materials used in connection with the construction project, from the Metropolitan Insurance Co. (Metropolitan for brevity); P4,000,000.00 under Surety No. 80/G(13)00853 to secure the full and faithful performance of the petitioners and Surety No. 80/G(10)00457 for P2,000,000.00 to guarantee the supply of cement and steel bars needed for said project.
On October 21, 1981, respondent Greenbelt terminated the Agreement upon petitioners' failure to comply with the terms and conditions of said Agreement.
Respondent Greenbelt, likewise, sent Phil-British and Metropolitan notices of claim for Contech's failure to perform their part of the Agreement.
Contech, thereafter, withdrew their men and equipments from the construction site and respondent Greenbelt contracted the services of R.N. Construction Co., Inc. to finish the building project.
However, upon Contechs' refusal to pay their obligation to Greenbelt, the latter, on March 24, 1982, simultaneously filed with the Court of First Instance of Rizal two separate complaints against petitioners and their sureties for breach of contract.
FIRST COMPLAINT: Collection of a sum of money against Contech & Phil-British SECOND COMPLAINT: Also collection of sum of money against Contech & Metropolitan
On June 3, 1982, petitioners filed a motion to dismiss the second complaint on the ground of the pendency of the first complaint likewise between the same parties for the same cause.
1ST SET OF DECISIONS OF LOWER COURTS:
*CFI-Rizal: denied the motion to dismiss.
*IAC: held that there was a splitting of a cause of action when the two complaints were filed simultaneously, hence, the orders of the trial court dated May 17, 1983 and July 25, 1983 denying the motion to dismiss and the motion for reconsideration were nullified. Said decision of the appellate court became final on August 2, 1984.
On August 8, 1984, respondent Corporation Greenbelt filed before the lower court
where the first complaint was pending, a MOTION FOR LEAVE TO AMEND ITS
COMPLAINT AND TO CONSOLIDATE THE CASES.
2ND SET OF DECISIONS:
*CFI-Rizal: motion denied.
*CFi-Rizal (MR): denied.
*IAC (petition for certiorari and mandamus with the appellate court alleging grave abuse of discretion on the part of the trial court in denying its motion to amend the complaint): gave due course to petition, directed trial court to admit amended complaint.
*IAC (MR by Contech): denied.
Hence, this petition for certiorari and prohibition with preliminary injunction to annul and set aside the decision dated July 24, 1987 of the Court of Appeals.
Petitioners contend that the appellate court acted without jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in admitting the amended complaint of the respondent Corporation, considering that the previous dismissal of the second complaint for violating the rule against splitting a cause of action barred its reinstitution by the amendment of the first complaint.
ISSUE:
Should the amended complaint be considered by the trial court?
HELD: YES.
Section 2, Rule 10 of the Revised Rules of Court provides that:
A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within ten (10) days after it is served.
In this case, the first and second complaint were not yet set for pre-trial or trial because petitioners had not yet filed any responsive pleading to both complaints, therefore the amendment should be allowed since said amendment will not delay the proceeding and there was no change in respondent Corporation's cause of action.
The amended complaint, in the instant case, was filed not to delay nor alter the cause of action of the first complaint but rather to obviate the splitting of the cause of action and to obtain a speedy determination of the controversy in one proceeding without regard to technicality.
The rationale behind the rule is to avoid multiplicity of suits and in order that the real controversies between the parties are presented, their rights are determined and the case decided on the merits without unnecessary delay. When the situation is such that if the proposed amendment is not allowed, another action would be instituted, thus
2ND SET OF DECISIONS:
*CFI-Rizal: motion denied.
*CFi-Rizal (MR): denied.
*IAC (petition for certiorari and mandamus with the appellate court alleging grave abuse of discretion on the part of the trial court in denying its motion to amend the complaint): gave due course to petition, directed trial court to admit amended complaint.
*IAC (MR by Contech): denied.
Hence, this petition for certiorari and prohibition with preliminary injunction to annul and set aside the decision dated July 24, 1987 of the Court of Appeals.
Petitioners contend that the appellate court acted without jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in admitting the amended complaint of the respondent Corporation, considering that the previous dismissal of the second complaint for violating the rule against splitting a cause of action barred its reinstitution by the amendment of the first complaint.
ISSUE:
Should the amended complaint be considered by the trial court?
HELD: YES.
Section 2, Rule 10 of the Revised Rules of Court provides that:
A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within ten (10) days after it is served.
In this case, the first and second complaint were not yet set for pre-trial or trial because petitioners had not yet filed any responsive pleading to both complaints, therefore the amendment should be allowed since said amendment will not delay the proceeding and there was no change in respondent Corporation's cause of action.
The amended complaint, in the instant case, was filed not to delay nor alter the cause of action of the first complaint but rather to obviate the splitting of the cause of action and to obtain a speedy determination of the controversy in one proceeding without regard to technicality.
The rationale behind the rule is to avoid multiplicity of suits and in order that the real controversies between the parties are presented, their rights are determined and the case decided on the merits without unnecessary delay. When the situation is such that if the proposed amendment is not allowed, another action would be instituted, thus
making two actions, two trials, and two appeals possible and probable, the said
amendment should be admitted in accordance with the mandate of the Rules of Court
that amendments to pleadings are favored and should be liberally allowed.
Digest #2
Digest #2
Rule on Splitting of Action
Contech Construction Technology Dev.
Corp. v. CA, Greenbelt Square, Inc.
Facts:
·
Petitioner
entered into a construction agreement with Greenbelt Square, Inc. (private
respondent) where Phil-British Assurance Co. guaranteed the payment of labor
and materials in connection with the project and Metropolitan insurance secured
the full and faithful performance of the petitioners;
·
Petitioner
failed to comply with its agreement with regards to the terms and conditions
and so respondent terminated the agreement;
·
Petitioner
withdraw its men and equipments and because it did refused to pay their
obligation to respondent, the latter filed at the CFI of Rizal two (2) separate
complaints against petitioner and its sureties;
·
1st:
against petitioner and Phil-British; and
·
2nd:
against petitioner and Metropolitan Insurance;
·
Petitioners
moved for motion to dismiss on the 2nd complaint due to splitting of
action;
Lower court rulings:
·
CFI
of Rizal: Motion to dismiss was denied
·
IAC:
There is a splitting of action
…so…
·
CFI
of Rizal (anent 1st complaint):
Motion for leave to amend its complaint
and to consolidate the two cases – denied
·
IAC:
Certiorari and Mandamus – Gave due course to motion
Issue: WON the previous dismissal of the 2nd complaint
for the violation of splitting of causes of action barred its reinstitution in
the amendment of the 1st complaint.
Ruling: No, the dismissal of the 2nd complaint did not
bar its reinstitution as an amendment to the 1st complaint.
Sec. 2,
Rule 10 of the RoC:
“A
party may amend his pleading once as a matter of right at any time before
responsive pleading is served or, in the case of a reply, at any time within
(10) days after it is served.”
In this
case, the 1st and 2nd complaint were not yet submitted
for pre-trial nor trial because petitioners had not yet filed any responsive
pleading to both complaints, therefore, the amendment should be allowed since
said amendment will not delay the proceeding and there was no change in
respondent corporation’s causes of action.
Under
the rules of court (Rule 10, Sec. 2), a party is given a right to file an
amended pleading within the time and upon the conditions specified in the rule
and without the necessity of obtaining leave of court since a party may amend
his pleading once as a matter of course at any time before a responsive
pleading is served.
The
amended complaint merely impleaded Metropolitan as a party defendant in the
first complaint and included in said complaint the cause of action alleged in
the second complaint which was already dismissed.
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