University of the Philippines College of Law

Topic Amended and supplemental pleadings

Case Name Philippine Ports Authority v. William Gothong & Aboitiz, Inc
Ponente Austria-Martinez, j.

Parties
PPA – a GOCC created and existing by virtue of PD No 87 and is mandated under its charter to operate and
administer the country’s sea port and port facilities
WGA – a duly organized domestic corporation engaged in shipping industry

RELEVANT FACTS
1. WGA requested PPA for it to be allowed to lease and operate the Marine Slip Way in the North Harbor.
 Pres. Estrada issued a Memorandum approving the request of WGA to lease the Marine Slip Way
2. Contract of Lease was prepared by PPA and was then signed by the parties.
 Contract stipulated that the lease shall take effect on Jan 1 to June 30, 2001 or until such time
that PPA turns over its operation to the winning bidder for the North Harbor modernization
3. Believing that the said lease already expired on June 30, 2001, respondent PPA subsequently sent a letter
to WGA directing the it to vacate the contested premises not later than November 30, 2001 and to
turnover the improvements made therein pursuant to the terms and conditions agreed upon in the
contract
4. WGA asked for reconsideration but this was denied by PPA.
5. WGA filed a complaint for Injunction before the RTC Manila.
 Argued that: PPA unjustly, illegally and prematurely terminated the lease contract
 Also prayed for a TRO against the evacuation order of PPA.
 Also sought recovery of damages for breach of contract and attorney’s fees.
6. 1st Amendment: WGA then amended its complaint for the 1st time
 Still denominated as Injunction with prayer for TRO
 WGA incorporated statements to the effect that PPA is already estopped from denying that the
correct period of lease is “until such time that the North Harbor Modernization Project has been
bidded out to and operations turned over to the winning bidder.
 Also included, as its third cause of action, the additional relief in its prayer, that should WGA be
forced to vacate the said facility, it should be deemed as entitled to be refunded of the value of
the improvements it introduced in the leased property
7. After the 1st amendment, PPA submitted its Answer.
8. RTC denied the TRO.
9. 2nd Amendment: WGA filed a MFR and also a Motion to Admit Attached Second Amended Complaint.
 Now captioned as Injunction with prayer for TRO and/or Writ of Preliminary Injunction and
damages and/or Reformation of Contract.
 Also added 4th cause of action – reformation of the contract as it failed to express or embody the
true intent of the parties
10. PPA opposed the 2nd amended complaint because it will substantially alter WGA’s cause of action and
theory of the case.
11. RTC denied the admission of the 2nd amended complaint.
12. WGA filed a petition for Certiorari before the CA.
 CA granted.

ISSUE AND RATIO DECIDENDI

 University of the Philippines College of Law
Issue
W/N the Second Amended
Complaint should be admitted
WHEREFORE, …
Ratio
YES
RTC, in denying the 2nd Amended Complaint, applied the old Rules instead of
the 1997 Rules of Civil Procedure.
Old Rule New Rule
“Section 3. Amendments by leave of SECTION 3. Amendments by leave of
court.—after the case is set for court.—Except as provided in the
hearing, substantial amendments next preceding section, substantial
may be made only upon leave of amendments may be made only
court. But such leave may be upon leave of court. But such leave
refused if it appears to the court may be refused if it appears to the
that the motion was made with court that the motion was made
intent to delay the action or that the with intent to delay. Orders of the
cause of action or defense is court upon the matters provided in
substantially altered. Orders of the this section shall be made upon
court upon the matters provided in motion filed in court, and after
this section shall be made upon notice to the adverse party, and an
motion filed in court, and after opportunity to be heard.
notice to the adverse party,
and an opportunity to be heard.
Import of amendment: 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.
Thus, the application of the RTC if the old rules almost 5 years after its
amendment constitutes grave abuse of discretion.
RULING
SEPARATE OPINIONS
NOTES