Amendment of Complaint
Amendment of Complaint
Amendment of Complaint
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II.
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III.
THE COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT'S RULING THAT
THE OLD CB CONTINUES TO EXIST AS PETITIONER CB-BOL. PETITIONER IS A
SEPARATE, DISTINCT AND INDEPENDENT ENTITY FROM THE DEFUNCT CB WHICH
HAS BEEN ABOLISHED UPON THE ENACTMENT OF THE NEW CENTRAL BANK ACT.
IV.
THE ISSUE
The crucial issue to be resolved here is whether the RTC erred in admitting Banco Filipino's Second
Amended/Supplemental Complaint in the consolidated civil cases before it.
OUR RULING
The Petition of the CB-BOL is impressed with merit.
It must be noted at this point that the BSP and its MB are not yet required to answer the RTC Complaint, as
the issue of their addition as parties is yet to be settled. Nevertheless, whether or not the BSP and its MB
are transferees or successors-in-interest of the CB and its MB, the former's addition or substitution as
parties to this case must comply with the correct procedure and form prescribed by law.
The second amendment of the
Complaint was improper.
Rule 10 of the 1997 Revised Rules of Court allows the parties to amend their pleadings (a) by adding or
striking out an allegation or a party's name; or (b) by correcting a mistake in the name of a party or
rectifying a mistaken or an inadequate allegation or description in the pleadings for the purpose of
determining the actual merits of the controversy in the most inexpensive and expeditious manner.49
The prevailing rule on the amendment of pleadings is one of liberality,50 with the end of obtaining
substantial justice for the parties. However, the option of a party-litigant to amend a pleading is not without
limitation. If the purpose is to set up a cause of action not existing at the time of the filing of the complaint,
amendment is not allowed. If no right existed at the time the action was commenced, the suit cannot be
maintained, even if the right of action may have accrued thereafter.51
In the instant case, the causes of action subject of the Second Amended/Supplemental Complaint only
arose in 1994 - well after those subject of the original Complaint. The original Complaint was based on the
alleged illegal closure of Banco Filipino effected in 1985 by the defunct CB and its MB.
On the other hand, the Second Amended/Supplemental Complaint stemmed from the alleged oppressive
and arbitrary acts committed by the BSP and its MB against Banco Filipino after respondent bank was
reopened in 1994. Since the acts or omissions allegedly committed in violation of respondent's rights are
different, they constitute separate causes of action.52
In its Comment53 on the present Petition, Banco Filipino contends, as the RTC and the CA similarly ruled,
that the Second Amended/Supplemental Complaint does not alter the substance of the original demand,
change the cause of action against the original defendants, or seek additional or new reliefs. 54 Rather,
respondent contends that the only change sought is the addition of the BSP and its MB as parties-
defendants. Respondent further argues that what petitioner erroneously views as new causes of action are
merely demonstrations to show that the BSP has come to adopt the same repressive and oppressive
attitude of the latter's alleged predecessor-in-interest.55
This contention is, however, belied by a closer examination of the Second Amended/Supplemental
Complaint, in which respondent asks the Court to order the defendants to pay, among others, actual
damages of at least ₱18.8 billion "as a consequence of the acts herein complained of."56
The "acts complained of'' cover not just the conservatorship, receivership, closure, and liquidation of Banco
Filipino in 1984 and 1985, but also the alleged acts of harassment committed by the BSP and its MB after
respondent bank was reopened in 1994. These acts constituted a whole new cause of action. In effect,
respondent raised new causes of action and asserted a new relief in the Second Amended/Supplemental
Complaint. If it is admitted, the RTC would need to look into the propriety of two entirely different causes of
action. This is not countenanced by law, as explained in the preceding paragraphs.
The second supplemental pleading
was improper.
Rule 10 of the 1997 Revised Rules of Court allows the parties to supplement their pleadings by setting forth
transactions, occurrences, or events that happened since the date of the pleading sought to be
supplemented.57
However, the option of a party-litigant to supplement a pleading is not without limitation. A supplemental
pleading only serves to bolster or add something to the primary pleading. Its usual function is to set up new
facts that justify, enlarge, or change the kind of relief sought with respect to the same subject matter as that
of the original complaint.58
This Court ruled in Leobrera v. CA59 that a supplemental complaint must be founded on the same cause of
action as that raised in the original complaint. Although in Planters Development Bank v. LZK Holdings &
Development Corporation,60 the Court clarified that the fact that a supplemental pleading technically states
a new cause of action should not be a bar to its allowance, still, the matter stated in the supplemental
complaint must have a relation to the cause of action set forth in the original pleading. That is, the matter
must be germane and intertwined with the cause of action stated in the original complaint so that the
principal and core issues raised by the parties in their original pleadings remain the same.61
In the instant case, Banco Filipino, through the Second Amended/Supplemental Complaint, attempted to
raise new and different causes of action that arose only in 1994. These causes of action had no relation
1a\^/phi1
whatsoever to the causes of action in the original Complaint, as they involved different acts or omissions,
transactions, and parties. If the Court admits the Second Amended/Supplemental Complaint under these
circumstances, there will be no end to the process of amending the Complaint. What indeed would prevent
respondent from seeking further amendments by alleging acts that may be committed in the future?
For these reasons, whether viewed as an amendment or a supplement to the original Complaint, the
Second Amended/Supplemental Complaint should not have been admitted.
The amendment/supplement violates
the rules on joinder of parties and
causes of action.
Moreover, the admission of the Second Amended/Supplemental Complaint is inappropriate because it
violates the rule on joinder of parties and causes of action. If its admission is upheld, the causes of action
set forth therein would be joined with those in the original Complaint. The joinder of causes of action is
indeed allowed under Section 5, Rule 2 of the 1997 Rules of Court;62 but if there are multiple parties, the
joinder is made subject to the rules on joinder of parties under Section 6, Rule 3. 63 Specifically, before
causes of action and parties can be joined in a complaint involving multiple parties, (1) the right to relief
must arise out of the same transaction or series of transactions and (2) there must be a question of law or
fact common to all the parties.64
In the instant case, Banco Filipino is seeking to join the BSP and its MB as parties to the complaint.
However, they have different legal personalities from those of the defunct CB and its MB: firstly, because
the CB was abolished by R.A. 7653, and the BSP created in its stead; and secondly, because the members
of each MB are natural persons. These factors make the BSP and its MB different from the CB and its MB.
Since there are multiple parties involved, the two requirements mentioned in the previous paragraph must
be present before the causes of action and parties can be joined. Neither of the two requirements for the
joinder of causes of action and parties was met.
First, the reliefs for damages prayed for by respondent did not arise from the same transaction or series of
transactions. While the damages prayed for in the first Amended/Supplemental Complaint arose from the
closure of Banco Filipino by the defunct CB and its MB, the damages prayed for in the Second
Amended/Supplemental Complaint arose from the alleged acts of oppression committed by the BSP and its
MB against respondent.
Second, there is no common question of fact or law between the parties involved. The acts attributed by
Banco Filipino to the BSP and its MB pertain to events that transpired after this Court ordered the
respondent bank's reopening in 1994. These acts bear no relation to those alleged in the original
Complaint, which related to the propriety of the closure and liquidation of respondent as a banking
institution way back in 1985.
The only common factor in all these allegations is respondent bank itself as the alleged aggrieved party.
Since the BSP and its MB cannot be joined as parties, then neither can the causes of action against them
be joined.
This ruling is confined to
procedural issues.
As mentioned at the outset, the Court will confine its ruling on this Petition to procedural issues pertaining
to the propriety of the admission of the Second Amended/Supplemental Complaint. We will not address the
issues raised by petitioner with regard the findings of the trial and the appellate court that the BSP is the
successor-in-interest of the defunct CB65 and is considered a transferee pendente lite66 in the civil cases.
These findings relate to the BSP's potential liability for the causes of action alleged in the original
Complaint. At issue here is Banco Filipino's attempt, through the Second Amended/Supplemental
Complaint, to hold the BSP and its MB liable for causes of action that arose in 1994. Respondent is not
without any relief. If the RTC finds that the BSP was indeed a transferee pendente lite, the failure to
implead it would not prevent the trial court from holding the BSP liable, should liability now attach for acts
alleged in the original Complaint.67
WHEREFORE, the Petition of the CB-BOL is GRANTED, and the Decision of the Court of Appeals dated
27 January 2006 and Resolution dated 27 June 2006 in CA-G.R. SP No. 86697 are
hereby REVERSED and SET ASIDE.
The RTC National Capital Judicial Region, Makati City, Branch 136 is hereby DIRECTED to proceed with
the trial of this case with utmost dispatch.
SO ORDERED.
MARIA LOURDES P.A. SERENO
Chief Justice
WE CONCUR:
Footnotes
* No part.
** On official leave.
1 Rollo. Vol. I, pp. 3-55.
2 Id. at
63-72; the Court of Appeals Decision dated 27 January 2006 in CA-G.R. SP No. 86697 was
penned by Associate Justice Josefina Guevara-Salonga and concurred in by Associate Justices
Fernanda Lampas Peralta and Sesinando E. Villon.
3 Id. at
374-383, 405-408; the Orders dated 27 January 2004 and 20 July 2004 were penned by
Judge Rebecca R. Mariano, Presiding Judge of the Regional Trial Court-Branch 136 (Makati City).
4 Id. at 63.
5 Id. at 21.
6 G.R. No. 70054, 11 December 1991, 204 SCRA 767.
7 Rollo, p. 6.
8 Id.
9 Id. at 64.
10 Records, Vol. I, p. 1.
11 Id. at 65.
12 Id. at 9.
13 Records, Vol. IV, p. 1955.
14 CA rollo. p. 246.
15 Rollo, p. 9.
16 Id. at 65.
17 Records, Vol. VII, p. 2861.
18 Rollo, p. 10.
19 Id. at 65.
20 R.A.7653, Sec. 132: Transfer of Assets and Liabilities. - - Upon the effectivity of this Act, three
(3) members of the Monetary Board, which may include the Governor, in representation of the
Bangko Sentral, the Secretary of Finance and the Secretary of Budger and Management in
representation of the National Government, and the Chairmen of the Committees on Banks of the
Senate and the House of constitution of the Monetary Board submitting a comprehensive report
with all its findings and justification.
xxxx
(e) any asset or liability of the Central Bank not transferred to the Bangko Sentral shall
be retained and administered, disposed of and liquidated by the Central Bank itself
which shall continue to exist as the CB Board of Liquidators only for the purposes
provided in this paragraph but not later than twenty-five (25) years or until such time
that liabilities have been liquidated: Provided, That the Bangko Sentra/ may financially
assist the Central Bank Board of Liquidators in the liquidation of CB
liabilities: Provided. finally, That upon disposition of said retained assets and liquidation
of said retained liabilities, the Central Bank shall be deemed abolished.
21 Rollo, p. 14.
22 Id.
23 Id. at 75-211.
24 Id.
25 Id. at 15.
26 Id. at213-216.
27 Id. at 219-356.
28 Id.at 16.
29 Id. at 348.
30 Id. at 349.
31 Id. at 350.
32 Id. at 351
33 Id. at 352.
34 Id. at 16.
35 Id.
36 Id. at 17-18.
37 Id. at 374-383.
38 Id. at 384-404.
39 Id. at 405-408.
40 Id. at 409-449.
41 Id. at415-419.
42 Id. at 63-72.
43 Id. at 70.
44 Id. at 71.
45 Id. at 72.
46 Id. at 501-549.
47 Id. at 74.
48 Id. at 21-24.
49 1997 RULES OF COURT, Rule 10, SECTION I. Amendments in general. - Pleadings may be
amended by adding or striking out an allegation or the name of any party, or by correcting a mistake
in the name of a party or a mistaken or inadequate allegation or description in any other respect, so
that the actual merits of the controversy may speedily be determined, without regard to
technicalities, and in the most expeditious and inexpensive manner.
50 Tiu v. Philippine Bank of Communications, G .R. No. 151932. 19 August 2009, 596 SCRA 432.
51 OSCAR M. HERRERA, REMEDIAL LAW Vol. I, 833-834 (2007), citing Limpangco v. Mercado, 10
Phil. 508 (1908).
52 Id.;
Rules of Court, Rule 2: Section 2. Cause of action, defined. – A cause of action is the act or
omission by which a party violates a right of another.
Section 3. One suit for a single cause of action. - A party may not institute more than one suit for a
single cause of action.
53 Rollo, pp. 601-636.
54 Id. at 617.
55 Id. at 633.
56 Id. at 352.
57 Rule 10, SECTION 6.
58 Planters Development Bank v. LZK Holdings & Development Corp., 496 Phil. 263 (2005).
59 G.R. No. 80001, 27 February 1989, 170 SCRA 711.
60 Supra note 58, citing Smith v. Biggs Boiler Works Co., 34 ALR 2d. 1125 (1952).
61 Id.
62 1997 RULES OF COURT: Rule 2, Section 5. Joinder of causes of action. - A party may in one
pleading assert, in the alternative or otherwise, as many causes of action as he may have against
an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of
parties;
(b) The joinder shall not include special civil actions or actions governed by special
rules;
(c) Where the causes of action are between the same parties but pertain to different
venues or jurisdictions, the joinder may be allowed in the Regional Trial Court provided
one of the causes of action falls within the jurisdiction of said court and the venue lies
therein; and
(d) Where the claims in all the causes action are principally for recovery of money, the
aggregate amount claimed shall be the test of jurisdiction.
63 Id.,Rule 3, Section 6. Permissive joinder of parties. - All persons in whom or against whom any
right to relief in respect to or arising out of the same transaction or series of transactions is alleged
to exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these
Rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or
fact common to all such plaintiffs or to all such defendants may arise in the action; but the court
may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed
or put to expense in connection with any proceedings in which he may have no interest.
64 Pantranco North Express Inc. v. Standard Insurance Co. Inc .. 493 Phil. 616 (2005).
65 Rollo, Vol. 1, p. 380-381.
66 Id.
67 Atransferee stands exactly in the shoes of his predecessor-in-interest, bound by the proceedings
and judgment in the case before the rights were assigned to him. xxx Essentially, the law already
considers the transferee joined or substituted in the pending action, commencing at the exact
moment when the transfer of interest is perfected between the original party-transferor and the
transferee pendente lite. (Natalia Realty, Inc. v. Court of Appeals, 440 Phil. I (2002).