G.R. No. 140954 - Heirs of Hinog vs. Melicor

On May 21, 1991, Custodio, Rufo, Tomas and Honorio Balane filed a complaint for “Recovery of Ownership and Possession, Removal of Construction and Damages” against Bertuldo Hinog, alleging:

They own a 1,399-sqm parcel (Lot No. 1714, Malayo Norte, Cortes, Bohol).
In March 1980, they allowed Hinog to occupy a portion for ten years at an annual rental of ₱100.00.
Upon lease expiry, they demanded return of possession and removal of the house, but Hinog refused and claimed ownership.

On July 2, 1991, Hinog answered, asserting ownership under a Deed of Absolute Sale dated July 2, 1980, executed by Tomas Pahac “with the knowledge and conformity” of the Balanes.

After pre-trial, private respondents rested their case on November 18, 1997. During Hinog’s direct examination, he died on June 24, 1998. Original counsel withdrew on August 4, 1998; Atty. Petalcorin substituted in.
On September 22 and October 2, 1998, new counsel moved to expunge the complaint and nullify proceedings for failure to specify the amount of damages (and thus underpayment of docket fees). Private respondents opposed on grounds of waiver, laches, lien on judgment, and counsel’s lack of substitution.

On January 21, 1999, the court ordered the complaint expunged and all proceedings nullified for non-payment of correct docket fees, but held that upon payment of deficiency the case could be reinstated.
Private respondents paid the deficiency on January 28, 1999, and moved for reinstatement. Petitioners opposed, but on March 22, 1999 the court reinstated the case (First Assailed Order).

Petitioners, by leave, filed a supplemental pleading on May 24, 1999 appending a November 15, 1982 Deed of Sale. Private respondents opposed.
On July 7, 1999, the court denied the supplemental pleading as a new matter waived under Section 1, Rule 9, and noted no party‐substitution after Hinog’s death.
Petitioners’ August 13, 1999 manifestation/rejoinder was denied (Second Assailed Order) for raising issues already decided and for failure to timely move for reconsideration of the March 22 order.
Petitioners’ motion for reconsideration filed August 25, 1999 was denied on October 15, 1999 (Third Assailed Order), the court citing modification of the Manchester rule in Sun Insurance Office, Ltd. vs. Asuncion and directing compliance with the substitution rule (Sec. 16, Rule 3).

On November 24, 1999, petitioners filed a Rule 65 petition with the Supreme Court, assailing the three trial court orders for grave abuse of discretion, claiming:

The court lost jurisdiction by expunging the complaint and could not reinstate it.
The complaint was defective for praying damages “in amounts justified by the evidence” (violating SC Circular No. 7).
Atty. Petalcorin lacked legal personality to appear for the heirs without proper substitution.

Whether the trial court gravely abused its discretion by reinstating a complaint it had earlier expunged for docket fee deficiency.
Whether petitioners were bound to file their extraordinary petition in the Court of Appeals under the hierarchy of courts.

Whether a complaint praying for unspecified damages deprives the court of jurisdiction under SC Circular No. 7.
Whether new counsel had legal personality to represent the heirs of a deceased party absent compliance with Section 16, Rule 3 of the Rules of Court.