Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 141180 January 11, 2005
GERTRUDES TEH, petitioner,
vs.
THE PEOPLE of !" PH#L#PP#NES, respondent.
D ! I S I O N
S$NDO%$L&GUT#ERRE', J.:
"efore us is the petition for revie# on certiorari $led b% &ertrudes Teh assailin' the Resolution
(
of the !ourt
of )ppeals dated October *, (+++ in !),&.R. !R No. -.*/- dis0issin' her petition for revie# and its
Resolution dated Nove0ber -+, (+++ den%in' her 0otion for reconsideration.
The factual bac1drop of this case is as follo#s2
Petitioner &ertrudes Teh and 3osalie "a'uio #ere char'ed #ith estafa before the Municipal Trial !ourts in
!ities 4MT!!5, "ranch -, Davao !it%. The Infor0ation, doc1eted as !ri0inal !ase No. *6,6*-,",+7, reads2
8That on or about Dece0ber (/, (++6, in the !it% of Davao, Philippines, and #ithin the 9urisdiction of this
Honorable !ourt, above,0entioned accused received on consi'n0ent basis fro0 Rodson:s !ollection
!enter, represented b% li;abeth . Maridable, 'oods #orth P(,6/..<< #ith the e=press obli'ation on her
part to sell the consi'ned ite0s and to re0it the proceeds fro0 the sale or to return the sa0e if unsold to
said co0plainant> but far fro0 co0pl%in' #ith the aforesaid obli'ation, #ith 'rave abuse of con$dence and
in violation of trust and #ith intent to defraud, the said accused #illfull% and unla#full% failed to re0it the
proceeds fro0 the sale nor to return the sa0e ite0s despite de0ands therefore, thereb% 0isappropriatin'
and convertin' the sa0e to her personal use and bene$t, to the da0a'e and pre9udice of herein
co0plainant in the said a0ount.
!ONTR)R? TO @)A.8
Bpon arrai'n0ent, petitioner, assisted b% counsel, pleaded not 'uilt% to the char'e. 3osalie "a'uio has
re0ained at lar'e.1a\^/phi1.net
The evidence for the prosecution sho# that petitioner #as for0erl% an area 0ana'er of Rodson:s
!ollection !enter #hich sells various personal products, such as ladies: T,shirts and perfu0es, 0en:s
colo'ne, care soap and shadin' strip. Bnder her #ere several dealers, one of #ho0 #as 3osalie "a'uio.
"ased on a 8ride on8 s%ste0, the area 0ana'er #as allo#ed in certain instances to #ithdra# stoc1s for
sale in the na0e of the dealer, provided that both #ould si'n a trust receipt a'ree0ent. The trust receipt
a'ree0ent provides that the% should re0it the proceeds of the 'oods sold #ithin a speci$ed ti0e. If not
sold, then the% should return the unsold ite0s to Rodson:s !ollection !enter.
On Dece0ber (/, (++6, petitioner and 3osalie "a'uio #ithdre# fro0 the Rodson:s !ollection !enter several
ite0s consistin' of 0en:s colo'ne, soap, and other sundries #orth P(,6/..<<. "oth si'ned the reCuired
trust receipt a'ree0ent.
Ho#ever, petitioner and 3osalie failed to re0it the proceeds of the sale despite Rodson:s !ollection
!enter:s several de0ands, hence, the% #ere char'ed #ith estafa.
Petitioner contends that #hile she si'ned the trust receipt a'ree0ent, ho#ever, she did so onl% for the
purpose of identif%in' her as the area 0ana'er of 3osalie "a'uio. She denied receivin' an% ite0. The
stoc1s #ithdra#n #ere for the account of 3osalie.
On Debruar% (6, (+++, the MT!! rendered its Decision, the dispositive portion of #hich reads2
8AHRDOR, $ndin' accused &RTRBDS TH 'uilt% be%ond reasonable doubt, she is hereb% sentenced
to an i0prison0ent of THR 4.5 MONTHS of arresto mayor as 0ini0u0 to TAO 4-5 ?)RS and DOBR 4*5
MONTHS of prision correccional as 0a=i0u0> to inde0nif% the oEended part% the su0 of ON THOBS)ND
DIV HBNDRD I&HT? THR PSOS 4P(,6/..<<5 and to pa% the proportionate share of the costs.
)ccused is further ordered to inde0nif% the oEended part% e=penses incurred in enforcin' her clai0 fro0
the ti0e the case #as $led in (++7 to its $nal ter0ination in (+++, #hich the !ourt hereb% $=ed as
reasonable in the a0ount of One Thousand Pesos 4P(,<<<.<<5.
)s re'ards accused 3OS)@I S. ")&BIO #ho re0ains at,lar'e, let the case be sent to the )R!HIVS to be
#ithdra#n therefro0 as soon as she is apprehended.1awphi1.nt
SO ORDRD.8
-
In $ndin' petitioner 'uilt% as char'ed, the MT!! ruled that inas0uch as she si'ned the trust receipt
a'ree0ent, she is bound b% the ter0s stipulated therein. Her failure to re0it the proceeds or to return the
'oods to Rodson:s !ollection !enter constitutes estafa under )rticle .(64(5 of the Revised Penal !ode.
On appeal, the Re'ional Trial !ourt 4RT!5, "ranch (<, Davao !it%, aFr0ed the MT!! Decision.
Petitioner then elevated the 0atter to the !ourt of )ppeals b% #a% of a petition for revie#.
Ho#ever, the !ourt of )ppeals dis0issed the petition for bein' insuFcient in for0, not bein' acco0panied
b% duplicate ori'inal or certi$ed true copies of the docu0ents and 0aterial parts of the record that #ould
support the alle'ations. Moreover, there #as no #ritten e=planation #h% service of the petition #as not
done personall%.
Petitioner $led a 0otion for reconsideration but #as denied b% the )ppellate !ourt.
Hence, the instant petition. Petitioner sub0its that the !ourt of )ppeals erred in holdin' that she failed to
co0pl% #ith Section -, Rule *- and Section ((, Rule (. of the (++G Rules of !ivil Procedure, as a0ended.
In his co00ent on the petition, the Solicitor &eneral 0aintains that the !ourt of )ppeals did not err in
dis0issin' the petition in !),&.R. !R No. -.*/-.
Section -, Rule *- of the sa0e Rules provides2
8S!. -. Form and contents. H The petition shall be $led in seven 4G5 le'ible copies, #ith the ori'inal cop%
intended for the court bein' indicated as such b% the petitioner, and shall 4a5 state the full na0es of the
parties to the case, #ithout i0pleadin' the lo#er courts or 9ud'es thereof either as petitioners or
respondents> 4b5 indicate the speci$c 0aterial dates sho#in' that it #as $led on ti0e> 4c5 set forth
concisel% a state0ent of the 0atters involved, the issues raised, the speci$cation of errors of fact or la#,
or both, alle'edl% co00itted b% the Re'ional Trial !ourt, and the reasons or ar'u0ents relied upon for the
allo#ance of the appeal> 4d5 be acco0panied b% clearl% le'ible duplicate ori'inals or true copies of the
9ud'0ents or $nal orders of both lo#er courts, certi$ed correct b% the cler1 of court of the Re'ional Trial
!ourt, the reCuisite nu0ber of plain copies thereof and of the pleadin's and other 0aterial portions of the
record as #ould support the alle'ations of the petition.
= = =8
Ae note that petitioner herself ad0its that the onl% docu0ents attached to the petition in !),&.R. !R No.
-.*/- #ere certi$ed true copies of the Decisions of the RT! and the MT!!. There #ere no copies of the
pleadin's $led belo# or other 0aterial portions of the record #hich #ould support the alle'ations in the
petition. Indeed, this is contrar% to Section -, Rule *- Cuoted above.
Section ((, Rule (. of the (++G Rules of !ivil Procedure reads2
8S!. ((. Priorities in modes of service and fling. H Ahenever practicable, the service and $lin' of
pleadin's and other papers shall be done personall%. =cept #ith respect to papers e0anatin' fro0 the
court, a resort to other 0odes 0ust be acco0panied b% a #ritten e=planation #h% the service or $lin' #as
not done personall%. ) violation of this Rule 0a% be cause to consider the paper as not $led.8
)'ain, petitioner ad0its that she failed to co0pl% #ith the above provision. She contends, ho#ever, that
no pre9udice #as caused to the parties b% her non,co0pliance.
!learl%, petitioner violated both provisions Cuoted above #hich #arrants the dis0issal of her petition b%
the !ourt of )ppeals.1awphi1.nt
Ae thus rule that in dis0issin' the petition in !),&.R. !R No. -.*/-, the !ourt of )ppeals did not co00it
an% error.
(HERE)ORE, the petition is DNID. The Resolutions of the !ourt of )ppeals dated October *, (+++ and
Nove0ber -+, (+++ in !),&.R. !R No. -.*/- are )DDIRMD. !osts a'ainst petitioner.
SO ORDRD.
Pan'aniban, 4!hair0an5, !orona, !arpio,Morales, and &arcia, 33., concur.
)oono"*
(
Rollo, pp. .7,./. Per )ssociate 3ustice Re0edios Sala;ar,Dernando and concurred in b% )ssociate
3ustices "uenaventura &uerrero 4retired5 and Portia )liIo,Hor0achuelos.
-
Id. at 6*,66.
SECOND D#%#S#ON

JU$N DE D#OS C$RLOS,
P"++on"r,




& ,"r*u* &




THE HONOR$-LE COURT O) $PPE$LS
an. SPOUSES PEDRO R. -$L-$NERO
an. JO%#T$ $M#THS -$L-$NERO,
R"*/on."n*.
G.R. No. 104410

Present2

PBNO, .! "hairperson!
S)NDOV)@,&BTIRRJ,
!ORON),
)J!BN), and
&)R!I), .


Pro0ul'ated2


March .<, -<<7

=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=



D E C # S # O N


G$RC#$, J.2





"% this petition for certiorari and 0anda0us under Rule 76 of the Rules of !ourt, petitioner 3uan De
Dios !arlos assails and see1s the settin' aside of the Ma% -<, (++/ Resolution
K(L
of the !ourt of )ppeals
4!)5 in "#$ %.R. "& 'o. ()*+( #hich denied his 0otion to dis0iss private respondents: appeal fro0 an
earlier decision of the Re'ional Trial !ourt 4RT!5 of Muntinlupa !it%, "ranch -67, in !ivil !ase No. +*,(+7*.
The 0anda0us aspect of the petition pra%s the !ourt to co0pel the !) to dis0iss said appeal.

The facts2

!ivil !ase No. +*,(+7*, entitled ,an de -ios "arlos v. Felicidad .. &da. de "arlos! et al.! is an action
for partition, recover% of propert%, reconve%ance #ith da0a'es. Petitioner is the plaintiE in that case #hile
the herein private respondents are t#o of the defendants therein. The case #as earlier concluded bet#een
the petitioner and the other defendants. Ho#ever, a full,blo#n trial transpired as bet#een the petitioner
and the herein private respondents.

Involved in that case is a parcel of land located at )laban', Muntinlupa !it%, covered b% Transfer
!erti$cate of Title 4T!T5 No. (.+<7( in the na0e of petitioner:s deceased brother Teo$lo !arlos. It
#as previousl% re'istered in the na0e of petitioner:s father, Deli= !arlos.

Prior to Deli=:s death, Teo$lo, a la#%er, advised his father to transfer all his properties to one of the
children in order to avoid pa%0ent of inheritance ta=es and other e=penses. Deli= a'reed, provided that the
ri'hts of all the other heirs #ill be respected and their shares dul% delivered to the0. The sub9ect propert%
#as a0on' those transferred to Teo$lo.

"efore the intended propert% partition could be eEected, ho#ever, Teo$lo died, survived b% his
spouse, Delicidad !arlos. So0eti0e in the earl% part of (++*, the petitioner de0anded the division of the
sub9ect propert% and as1ed Delicidad for rei0burse0ent of the e=penses he advanced for Teo$lo:s
hospitali;ation and burial. The reCuest ir1ed Delicidad #ho told the petitioner that the propert% no lon'er
pertained to the !arlos fa0il%, the sa0e havin' alread% been lost in a court case #ith the herein
respondent spouses Pedro "albanero and 3ovita )0iths,"albanero. This pro0pted the petitioner to $le the
partition case, "ivil "ase 'o. /0$1/*0! a'ainst Delicidad.

Petitioner #ould, upon inCuir%, later discover about a sales a'ree0ent over the sub9ect propert%
#hich his brother Teo$lo, durin' his lifeti0e, entered into #ith the private respondent spouses. This
a'ree0ent, as it turned out, #as the sub9ect of a liti'ation #hich cul0inated in the !) orderin' Teo$lo to
co0pl% #ith the ter0s thereof b% e=ecutin' in favor of the private respondent spouses a deed of absolute
sale for the entire propert% upon pa%0ent of the a'reed purchase price.

SubseCuent events sa# the petitioner as1in' the private respondents to e=clude his one,half
4(M-5 share in the propert% fro0 the sales transaction. Bpon bein' rebuEed, the petitioner proceeded to
i0plead the private respondents in the partition case.

)fter due proceedin's, the trial court, in a decision
K-L
dated Nove0ber -/, (++G, upheld the hereditar%
nature of the sub9ect propert% and declared that the re'istration of the title in the na0e of Teo$lo !arlos
established an i0plied trust in favor of the other co0pulsor% heirs, such as the petitioner, #ith respect to
their respective shares in the estate of the decedent Deli= !arlos. Dispositivel%, the decision reads2

AHRDOR, 9ud'0ent is hereb% rendered in favor of the plaintiE Kno# petitionerL
and a'ainst defendants Kno# respondentsL spouses "albanero as follo#s2

(. Declarin' and con$r0in' the o#nership b% plaintiE of an undivided one,half
4(M-5 share of the net area, after deductin' the -,..( sCuare 0eters
ad9udicated to the plaintiEs in !ivil !ase No. ((+G6 of the propert% covered b%
KT!TL No. (.+<7( of the Re'ister of Deeds of Ma1ati !it%.

-. Orderin' the e=clusion of the said plaintiE:s one,half 4(M-5 undivided share
fro0 an% deed of absolute sale should one be ordered e=ecuted in favor of
defendants spouses "albanero in !ivil !ase No. (/.6/ entitled NPedro
"albanero, et al. v. Teo$lo !arlos, et al.,O before "ranch 7<, Re'ional Trial
!ourt of Ma1ati !it%>

.. Declarin' that the other half of the said propert% covered b% T!T No. (.+<7(,
#hich pertained to Teo$lo !arlos, is sub9ect to plaintiE:s ri'ht of pre,e0ption
or rede0ption>

*. Orderin' defendants spouses "albanero to pa% plaintiE the a0ount of
Php(<<,<<<.<< as 0oral da0a'es and Php-6<,<<<.<< as attorne%:s fees>

6. Orderin' the dis0issal of defendants spouses "albanero:s counterclai0s.

!osts a'ainst defendants spouses "albanero.

SO ORDRD. 4Aords in brac1et added.5


Dro0 the afore0entioned decision, t#o 4-5 'otices of #ppeal #ere $led, the $rst, dated Dece0ber +,
(++G, bein' $led b% the private respondents: counsel #herein counsel ac1no#led'ed receipt of a cop% of
the sa0e decision on Dece0ber 6, (++G.
K.L
The second notice, dated Dece0ber /, (++G, #as $led b% a
certain )tt%. )le9andro )besa0is, #ho attached there#ith oFcial receipts in the a0ounts of P.6-.<<
and P*/.<<, or a total of P*<<.<<.
K*L
)tt%. )besa0is entered his appearance for the $rst ti0e at this sta'e.


)t the !), the appeal #as doc1eted as "#$%.R. "& 'o. ()*+(.

On March ., (++/, the petitioner, as plaintiE,appellee in the appellate proceedin's before the !),
$led a 1otion to -ismiss #ppeal
[5]
on 'round that the records alle'edl% do not sho# that the private
respondents have paid the correct a0ount of the appellate court doc1et and other la#ful fees. )s the
petitioner alle'ed, the a0ount thus paid for the appeal #as P-<.<< short of the le'al reCuire0ent.

In a resolution
K7L
dated March (7, (++/, the !) directed the
private respondents to re0it the P-<.<< balance of the doc1et fee.

On March -., (++/, the private respondents sub0itted their "ompliance
KGL
b% trans0ittin' a postal
0one% order for P-<.<<. On the sa0e da%, the petitioner interposed a 0otion for reconsideration of
the March (7, (++/ !) resolution.
On Ma% -<, (++/, the !) issued the herein challen'ed Resolution
K/L
den%in' petitioner:s
afore0entioned 1otion to -ismiss #ppeal, follo#ed b% another Resolution
K+L
den%in' petitioner:s 0otion
for reconsideration.

Petitioner is no# before us via the present recourse, basicall% faultin' the !) for not dis0issin' the
private respondents: appeal on account of their failure to tender the full pa%0ent of the appellate court
doc1et and other la#ful fees.

There is no dispute that the private respondents ti0el% $led their appeal to the !), re0ittin', in
consonance #ith Section *, Rule *( of the Rules of !ourt, the a0ount of P*<<.<< representin' the
appellate court doc1et and la#ful fees as $=ed and assessed b% the RT! cler1 of court. )ccordin'l%, #ith
such proof of pa%0ent of said fees, the RT! trans0itted to the !) the ori'inal records or the record on
appeal.

Private respondents: attention to the de$cienc% in their pa%0ent of appellate court doc1et and other
la#ful fees #as called for the $rst ti0e b% the petitioner hi0self #hen he 0oved for the dis0issal of the
for0er:s appeal. Instead, ho#ever, of issuin' the desired dis0issal action, the !) issued a resolution
dated March (7, (++/ reCuirin' the private respondents to re0it, #ithin $ve da%s fro0 their receipt
thereof, the additional a0ount of P-<.<< for pa%0ent of the appellate doc1et fee, #hich the% pro0ptl% did.
In their co00ent, private respondents attribute their inabilit% to pa% the correct a0ount of the
appellate court doc1et and other la#ful fees to the error in co0putation co00itted b% the RT! cler1 of
court. Pressin' the point, the% state that the cler1 of court overloo1ed Section G of the !) Revised Internal
Rules, as a0ended, #hich sets forth the trueMaccurate assess0ent
of doc1etin' fee and le'al research fund in ordinar% appeal in civil cases. Private respondents disclai0
an% participation in #hat turned out to be an erroneous assess0ent of doc1et and other appeal fees.
The% thus score the petitioner for 0a1in' 0uch of the 0ista1eMerror co00itted b% the RT! cler1 of court
and for capitali;in' on sheer technicalit% to deprive the0 of their ri'ht to due process.

Ae rule in favor of the private respondents.

It 0a% be, as the !ourt has consistentl% held, that the pa%0ent of doc1et
fees #ithin the prescribed period is 9urisdictional and is necessar% for the perfection
of an appeal.
K(<L
"ut ti0e and a'ain, the !ourt, bearin' in 0ind the i0portance and purpose of the
re0ed% of appeal in our 9udicial structure, has advised courts to proceed #ith caution on 0atters of doc1et
and appeal fees lest the% under0ine one:s ri'ht to appeal or deprive a part%,
liti'ant Nthe a0plest opportunit% for the proper and 9ust disposition of his cause, freed fro0 the
constraints of technicalities.O
K((L
In line #ith this sound polic%, #e have thus held that, in appealed cases,
the failure to pa% the appellate court doc1et fee does not, #ithout 0ore, auto0aticall% result in the
dis0issal of the appeal nor aEect the court:s 9urisdiction, the dis0issal bein' discretionar% on the part of
the appellate court. )s #e stressed in .antos v. "o,rt of #ppeals2
[12]


!ase after case, this !ourt stressed the rule that failure to pa% the appellate court
doc1et fee #ithin the re'le0entar% period confers a discretionar%, and not 0andator%, po#er
to dis0iss the proposed appeal, and that such po#er should be used in the e=ercise of the
court:s sound 9ud'0ent in accordance #ith the tenets of 9ustice and fair pla% and #ith a 'reat
deal of circu0spection considerin' all attendant circu0stances. Said Ndiscretion 0ust be
e=ercised #isel% and prudentl%, never capriciousl%, #ith a vie# to substantial 9ustice.O


Durther0ore, Section 6 of Rule (*( of the Rules of !ourt, on the pa%0ent of appellate doc1et fees in
appeals fro0 the RT! to the !) and this !ourt, provides in pertinent part2

Sec. 6. Fees to 3e paid 3y the advancing party. ,

=== If the fees are not paid, the court 0a% refuse to proceed #ith the action until
the% are paid and 0a% dis0iss the appeal or the action or proceedin'.

&iven the fore'oin' perspective, the appellate court 0a% ver% #ell e=tend the ti0e for the pa%0ent
of the doc1et fees should an appellant provide a 9usti$able reason for his failure to pa% the correct a0ount
of doc1et fees #ithin the prescribed period, such as fraud, accident, 0ista1e, e=cusable ne'li'ence, or a
si0ilar supervenin' casualt%, #ithout fault on the part of the appellant.
K(.L
In 1actan "e3, International
#irport #,thority v. "o,rt of #ppeals!
[14]
the !ourt held that the failure of the Solicitor &eneral to pa% the
doc1et fees #ithin the re'le0entar% period #as e=cusable since the (++G Rules of !ivil Procedure ,
reCuirin' the pa%0ent of the doc1et fees to the court #hich rendered the 9ud'0ent #ithin the period for
ta1in' an appeal H too1 eEect onl% fourteen da%s prior to the $lin' of the notice of appeal.

Here, there can be no Cuibblin' that the erroneous assess0ent b% the RT! cler1 of court accounted
for the private respondents: failure to pa% the correct a0ount of doc1et fees. )nd #hen so reCuired b% the
!) to address the de$cienc%, the% i00ediatel% co0plied.
K(6L

)ll told, the private respondents cannot be faulted #ith pre9udice for their failure to pa% the
reCuired doc1et fees. Dor, 'iven the prevailin' circu0stances, there #as no intention on their part to
en'a'e in dilator% tactics or circu0vent the Rules of !ourt. On the contrar%, their subseCuent pa%0ent of
the P-<.<< de$cienc% i00ediatel% #hen directed to do so b% the !) #as indicative of their 'ood faith and
#illin'ness to co0pl% #ith the Rules.
K(7L

(HERE)ORE, the petition is DEN#ED and the assailed Resolution of the !ourt of )ppeals
dated Ma% -<, (++/is $))#RMED.

SO ORDERED.






C$NC#O C. G$RC#$
)ssociate 3ustice

A !ON!BR2




RE3N$TO S. PUNO
)ssociate 3ustice
!hairperson



$NGEL#N$ S$NDO%$L&GUT#ERRE'
)ssociate 3ustice
REN$TO C. CORON$
)ssociate 3ustice



$DOL)O S. $'CUN$
)ssociate 3ustice




K(L
Penned b% )ssociate 3ustice Puirino D. )bad Santos, 3r. 4ret.5 #ith )ssociate 3ustices Ruben T.
Re%es 4no# Presidin' 3ustice5 and lo% R. "ello, 3r. 4ret.5, concurrin'> Rollo, p. .(.
K-L
Ori'inal Records, pp. 6./,666.
K.L
Rollo, p. .+.
K*L
Id. at *..
K6L
Id. at ./,*-.
K7L
Id. at -+.
KGL
Id. at G7,GG.
K/L
Id. at .(,...
K+L
Id. at .7.


K(<L
4y vs. "#! &.R. No. (-7..G, Debruar% (-, (++/, -/7 S!R) .*..
K((L
1oslares vs. "#! &.R. No. (-+GG*, 3une -7, (++/, -+( S!R) **<.
K(-L
.antos vs. "#, &.R. No. ((*G7-, Debruar% (*, (++7, -6. S!R) 7.-, citin' Fontana vs.
5ons,3re! &.R. No. @,67.(6, Nove0ber -6, (+/7, (*6 S!R) 77..
K(.L
%,evarra vs. "#, &.R. No. @,*.G(*, 3anuar% (6, (+//, (6G S!R) .-, citin' cases.
K(*L
1actan "e3, International #irport #,thority vs. 1ang,3at! &.R. No. (.7(-(, )u'ust (7, (+++,
.(- S!R) *7..
K(6L
Rollo, pp. G7,GG.
K(7L
6am3ao vs. "#! &.R. No. (*</+*, Nove0ber -G, -<<<, .*7 S!R) (*(.
G.R. No. 144580 $/r+6 4, 2001
C$RMELO C. -ERN$RDO, Petitioner,
vs.
PEOPLE O) THE PH#L#PP#NES an. ).T. 3L$NG&3L$NG M$R7ET#NG
CORPOR$T#ON, Respondents.
D ! I S I O N
C$RP#O MOR$LES, J.:
Petitioner !ar0elo !. "ernardo assails the Resolutions
(
of the !ourt of )ppeals 4!)5 dated 3ul%
.<, -<<* and 3anuar% (*, -<<6 dis0issin' his petition and den%in' reconsideration, respectivel%.
Petitioner #as char'ed before the Metropolitan Trial !ourt 4MeT!5 of Manila #ith si= counts of
violation of 5atas Pam3ansa 5lg. -- 4".P. --5, other#ise 1no#n as the "ouncin' !hec1s @a#, for
issuin' on Dece0ber ., (++G si= postdated chec1s in eCual a0ounts of P--,6<<. Save for the
chec1 nu0bers and dates of 0aturit%, four Infor0ations under !ri0inal !ase Nos. .-<+GG to
.-<+/< #ere si0ilarl% #orded as follo#s2
That on or about Dece0ber ., (++G, in the !it% of Manila, Philippines, the said accused, did then
and there #ilfull%, unla#full%, feloniousl% 0a1e or dra# and issue to D.T. ?@)N&,?@)N&
M)RQTIN&, !ORP. rep. b% Dennis Tan to appl% on account or for value PHI@IPPIN S)VIN&S
")NQ chec1 no. <<<G/<7 K<<<G/<6, <<<G/<*, <<<G/<.L dated )pril .<, KMarch .<, Debruar% -/,
3anuar% .<L (++/ pa%able to ?@)N&,?@)N& MD&. in the a0ount of P--,6<<.<< said accused #ell
1no#in' that at the ti0e of issue she did not have suFcient funds in or credit #ith the dra#ee
ban1 for pa%0ent of such chec1 in full upon its present0ent, #hich chec1 #hen presented for
pa%0ent #ithin ninet% 4+<5 da%s fro0 the date thereof #as subseCuentl% dishonored b% the
dra#ee ban1 for reason 8)ccount !losed8 and despite receipt of notice of such dishonor, said
accused failed to pa% said D.T. ?@)N&,?@)N& M)RQTIN& !ORP. the a0ount of the chec1 or to
0a1e arran'e0ent for full pa%0ent of the sa0e #ithin $ve 465 ban1in' da%s after receivin' said
notice.
!ontrar% to la#.
-
The t#o Infor0ations under !ri0inal !ase Nos. .-<+G6,G7 averred that !hec1 Nos. <<<G/</ and
<<<G/<G respectivel% dated 3une .<, (++/ and Ma% .<, (++/ 8#ould be dishonored b% the
dra#ee ban1 for the reason R)ccount !losed: if presented for pa%0ent as the account a'ainst
#hich it #as dra#n haKdL alread% been closed even before KtheirL said dateKsL.8
.
Bpon arrai'n0ent, petitioner, assisted b% a counsel de ofcio, pleaded 8not 'uilt%8 to the
oEenses char'ed. )t the pre,trial conference on )u'ust -6, (+++, petitioner failed to appear
despite notice, pro0ptin' "ranch -* of the MeT! to issue a #arrant of arrest a'ainst hi0 and set
the cases for trial in a3sentia.
)fter the prosecution presented its $rst #itness, petitioner $led a Aaiver of )ppearance, a
Motion to @ift Aarrant of )rrest, and a Motion to Puash on the 'round that the facts char'ed in
the Infor0ations under !ri0inal !ase Nos. .-<+G6,G7 do not constitute an oEense.
"% Order of )pril 6, -<<<, the trial court lifted the #arrant of arrest in vie# of petitioner:s
appearance but denied the Motion to Puash for lac1 of 0erit.
)t the follo#in' trial date, petitioner failed to appear despite notice, dra#in' the trial court to
proceed #ith his trial in a3sentia and issue #arrant of arrest
*
a'ainst hi0.
"% Decision
6
of October -., -<<( pro0ul'ated in a3sentia on Dece0ber (., -<<(, the trial court
found petitioner 'uilt% be%ond reasonable doubt of violatin' ".P. -- in all the cases. He #as, in
each case, sentenced to suEer the penalt% of i0prison0ent of One 4(5 ?ear, to pa% a $ne of
T#ent%,T#o Thousand Dive Hundred Pesos 4P--,6<<5, and to inde0nif% private co0plainant in the
a0ount of T#ent%,T#o Thousand Dive Hundred Pesos 4P--,6<<5.
Ten 0onths follo#in' the pro0ul'ation of the 9ud'0ent, petitioner posted a bond before another
branch of the court. Petitioner havin' been convicted and no 0otion havin' been $led for his
provisional libert% pendin' an% appeal fro0 or 0otion for reconsideration of the Decision, the
trial court cancelled the bond and issued an alias #arrant of arrest.
7
Petitioner thereupon $led an Br'ent Motion for Ne# Trial andMor to Set )side Trial and 3ud'0ent
4Motion for Ne# Trial5 #hich #as, b% Order
G
of 3anuar% (<, -<<., denied follo#in' his and his
counsel:s failure to appear at the hearin' of the 0otion and co0pl% #ith the rule on proper
service of a 0otion.
/
Petitioner:s Br'ent Motion for Reconsideration #as li1e#ise denied, b%
Order
+
of Ma% -7, -<<..
Petitioner appealed the Orders dated 3anuar% (<, -<<. and Ma% -7, -<<. as #ell as the Decision
dated October -., -<<( to the Re'ional Trial !ourt 4RT!5 of Manila, "ranch -7 of #hich, b%
Decision of Dece0ber --, -<<., aFr0ed
(<
the 9ud'0ent #ith 0odi$cation as to the penalties
i0posed, thus2
AHRDOR PRMISS !ONSIDRD, the appealed decision is hereb% aFr0ed #ith
0odi$cation. This !ourt $nds accusedMappellant !ar0elo !. "ernardo &BI@T? be%ond reasonable
doubt for Violation of "atas Pa0bansa "ilan' -- but set KsicL aside the penalt% of
i0prison0ent and hereb% sentences her KsicL to pa% a $ne of P--,6<<.<< in each case, #ith
subsidiar% i0prison0ent in case of insolvenc% or non,pa%0ent not to e=ceed si= 475 0onths,
and, to pa% private co0plainant D.T. ?@)N&,?@)N& M)RQTIN& !ORPOR)TION the total a0ount
of P((.,6<<.<< b% #a% of inde0nit%.
Mean#hile, the alias #arrant of arrest issued a'ainst accused = = =
is hereb% ordered lifted and set aside.
No pronounce0ent as to costs. 4Bnderscorin' supplied5
SO ORDRD.
((
Petitioner $led a Motion for Partial Reconsideration of the RT! decision but it #as denied.
Bnsatis$ed, petitioner elevated the case to the !).
Petitioner $led #ith the appellate court a Motion for =tension of Ti0e to Dile Petition for Revie#
#ithin .< da%s fro0 3une (, -<<*, the (6th da% fro0 his counsel:s receipt of the RT! Order
den%in' his Motion for Partial Reconsideration.
The !ourt of )ppeals, b% Resolution of 3une -(, -<<*, 'ranted petitioner an e=tension, but onl%
(6 da%s pursuant to Section ( of Rule *-,
(-
to $le his Petition.
)pparentl% una#are of the above,said Resolution of 3une -(, -<<* under #hich his petition
#ould be $led not later than 3une (7, -<<*, petitioner used up the .<,da% e=tension sou'ht and
$led his petition on 3ul% (, -<<*. Petitioner in fact received the 3une -(, -<<* Resolution onl% on
3ul% +, -<<*.
(.
"% Resolution
(*
of 3ul% .<, -<<*, the appellate court denied petitioner:s petition due course for
havin' been $led (6 da%s late and for failure to attach the MeT! Decision and other pertinent
and 0aterial docu0ents. Petitioner:s Motion for Reconsideration #as li1e#ise denied b%
Resolution
(6
of 3anuar% (*, -<<6, the appellate court notin' that the MeT! Decision attached to
the Motion for Reconsideration #as a 0ere photocop% and uncerti$ed.
Hence, the instant petition faultin' the appellate court2
). . . . IN R!QONIN& TH PRIOD OD (6 D)?S STNSION DROM TH SPIR? D)T OD TH
ORI&IN)@ PRIOD OD (6 D)?S DROM R!IPT OD TH D!ISION OD TH R&ION)@ TRI)@ !OBRT
OR DIN)@ ORDR )PP)@D DROM, INST)D OD DROM D)T OD TH R!IPT OD TH ORDR
&R)NTIN& STNSION>
". . . . IN )PP@?IN& TH RB@S OD PRO!DBR VR? STRI!T@? )ND IN BTTR DISR&)RD OD ITS
INTRN)@ RB@S AHI!H @I"R)@@? )@@OA !OMP@TION OD PORTIONS OD R!ORDS IN
!OMP@I)N! AITH TH RB@S )ND TH STT@D 3BRISPRBDN! )PP@?IN& @I"R)@@? TH
RB@S OD PRO!DBR>
!. . . . KIN NOTL !ONSIDRKIN&L TH MRITS OD TH PTITION DOR RVIA.
(7
4Bnderscorin'
supplied5
Petitioner ar'ues that the (6,da% e=tension 'ranted to hi0 b% the appellate court should be
rec1oned fro0 his date of receipt of its 3une -(, -<<* Resolution.
The ar'u0ent fails. ).M. No. <<,-,(*,S!
(G
issued on Debruar% -+, -<<< is clear. It provides that
8KaLn% e=tension of ti0e to $le the reCuired pleadin' should . . . be counted fro0 the e=piration
of the period . . .8 The e=tension should thus be tac1ed to the ori'inal period, to co00ence
i00ediatel% after the e=piration of such period. The court has no discretion to rec1on the
co00ence0ent of the e=tension fro0 a date later than the e=piration of such ori'inal period,
not even if the e=pir% date is a Saturda%, Sunda%, or a le'al holida%.
(/
Petitioner:s reliance on the (+/+ case of &da. de "ap,long v. 7or8men9s Ins,rance "o.! Inc.
(+
on
this point does not thus lie. Parentheticall%, the factual 0ilieus in Vda. de !apulon' and the
present case are dissi0ilar. The respondent in Vda. de !apulon' speci$call% 0oved that it be
'iven an additional period 8fro0 receipt of the order8 of the court allo#in' e=tension, and the
court 'ranted an e=tension of ti0e #ithout indicatin' #hen it #ould co00ence. In the present
case, petitioner pra%ed for a period of e=tension to be counted fro0 the e=piration of the ori'inal
period or 8fro0 3une (, -<<*,8 #hich date the appellate court correctl% used in rec1onin' the
e=tension.
-<
Petitioner 'oes on to fault the appellate court in not resolvin' his 0otion for e=tension before the
e=piration of the (6,da% e=tension so that he #ould have 1no#n that his reCuest for .< da%s #as
not 'ranted.
Petitioner:s position does not lie too.
Section ( of Rule *- is clear. The !ourt of )ppeals 0a% 'rant an 8additional period of (6 da%s
onl%8 #ithin #hich to $le the petition for revie#. )lbeit under the sa0e section, a 8further
e=tension8 not to e=ceed (6 da%s 0a% be 'ranted 8for the 0ost co0pellin' reason,8 petitioner
had no basis to assu0e that his reCuest for a .<,da% e=tension is 0eritorious and #ould be
'ranted.
-(
Motions for e=tension are not 'ranted as a 0atter of ri'ht but in the sound discretion of the
court, and la#%ers should never presu0e that their 0otions for e=tension or postpone0ent
#ould be 'ranted or that the% #ould be 'ranted the len'th of ti0e the% pra% for.
--
Petitioner clai0s, ho#ever, that his 0otion for e=tension presented a co0pellin' reason for the
'rant of a further e=tension. 3ustif%in' the .<,da% period sou'ht, petitioner e=plains that he #as
i0plicitl% see1in' both a (6,da% e=tension and a further e=tension of (6 da%s.
The #ordin' of the rule #ith respect to further e=tension is couched in restrictive ter0s. Section
( of Rule *- provides that 8KnLo further e=tension shall be 'ranted e=cept for the 0ost
co0pellin' reason and in no case to e=ceed $fteen 4(65 da%s.8
Petitioner:s 0otion for e=tension #as anchored on a lone 'round, his counsel:s bein' 8pre,
occupied in the preparation of petitions, 0e0oranda, briefs, and other len'th% pleadin's in
cases as i0portant as this case8 and in 8dail% court appearance and personal co00it0ents.8
Sustainin' petitioner:s lone 'round #ould obliterate the distin'uishin' essence of
a f,rther e=tension for it #ould do a#a% #ith the necessit% of presentin' co0pellin' 'rounds
addressed to the sound discretion of the court.
"ut creditin' ar'uendo petitioner:s 8i0plicit8 9usti$cation, this !ourt sees no reason to disturb
the e=ercise b% the appellate court of its discretion in den%in' a 8cu0ulative8 e=tension and in
eEectivel% rulin' that heav% #or1load of counsel is not a 0ost co0pellin' reason.
Respectin' the second assi'ned error, the !) correctl% dis0issed petitioner:s appeal for failure
to co0pl% #ith Section - 4d5 of Rule *-, #hich speci$call% reCuires that both lo#er courts:
9ud'0ents or $nal orders 0ust be attached to the petition in the reCuired for0 H clearl% le'ible
duplicate ori'inals or certi$ed true copies. Indeed, petitioner fell short in his co0pliance. He
attached to his petition onl% the RT! Decision of Dece0ber --, -<<. and its Order of Ma% *,
-<<*. He did not attach thereto the MeT! Orders dated 3anuar% (<, -<<. and Ma% -7, -<<., and
the Decision dated October -., -<<( #hich #ere appealed
-.
to the RT! and #hich #ere li1e#ise
adverse to hi0.
-*
Ahile to his Motion for Reconsideration, he attached the October -., -<<(
Decision, it #as not in the reCuired for0, and #hile he attached a duplicate ori'inal of the Ma%
-7, -<<. Order, he failed to sub0it the 3anuar% (<, -<<. Order.
There is no co'ent reason to deviate fro0 such reCuire0ent under Section -4d5 of Rule *-,
the 0andator% tenor of #hich has been held to be discernible and #ell settled.
-6
Petitioner havin' failed to perfect his appeal, the RT! 9ud'0ent had beco0e $nal and
e=ecutor%.
-7
This leaves it unnecessar% to d#ell on petitioner:s assertion that he #as denied due
process of la# and the ri'ht to counsel before the trial court.
SuFce it to state that the reCuisites of a valid trial in a3sentia, vi:, 4(5 the accused has alread%
been arrai'ned, 4-5 he has been dul% noti$ed of the trial, and 4.5 his failure to appear is
un9usti$able, are, as reTected above, present in the case.
-G
;strada v. People
-/
should, under the facts and circu0stances attendant to the case, dispel an%
lin'erin' doubts of petitioner on the validit% of the trial court:s proceedin's.
The holdin' of trial in a3sentia is authori;ed under Section (* 4-5, )rticle III of the (+/G
!onstitution #hich provides that 8after arrai'n0ent, trial 0a% proceed not#ithstandin' the
absence of the accused provided that he has been dul% noti$ed and his failure to appear is
un9usti$able.8 = = =
= = = Confor8a96y :+! our .";+*+on +n People v. Salas, <!"= "*;a/" *!ou6. !a," 9""n
;on*+."r". a :a+,"r of !"+r r+>! o 9" /r"*"n a !"+r r+a6, an. !" +na9+6+y of !"
;our o no+fy !"8 of !" *u9*"?u"n !"ar+n>* .+. no /r","n + fro8 ;on+nu+n>
:+! !"+r r+a6. T!"y :"r" .""8". o !a," r";"+,". no+;". The sa0e fact of their escape
0ade their failure to appear un9usti$ed because the% have, b% escapin', placed the0selves
be%ond the pale and protection of the la#. This bein' so, then pursuant to %imene: v. 'a:areno,
the trial a'ainst the fu'itives, 9ust li1e those of the others, should have been brou'ht to its
ulti0ate conclusion. T!"r"af"r, !" r+a6 ;our !a. !" .uy o ru6" on !" ",+."n;"
/r"*"n". 9y !" /ro*";u+on a>a+n* a66 !" a;;u*". an. o r"n."r +* @u.>8"n
a;;or.+n>6y. # *!ou6. no :a+ for !" fu>++,"*A r"&a//"aran;" or r"&arr"*. T!"y
:"r" .""8". o !a," :a+,". !"+r r+>! o /r"*"n ",+."n;" on !"+r o:n 9"!a6f an.
o ;onfron an. ;ro**&"Ba8+n" !" :+n"**"* :!o "*+C". a>a+n* !"8.
-+
40phasis
and italics in the ori'inal5
)s for the pro0ul'ation of 9ud'0ent in a3sentia! the follo#in' pertinent provision of Section 7 of
Rule (-< should li1e#ise put to rest an% doubts on its validit%2
The 9ud'0ent is pro0ul'ated b% readin' it in the presence of the accused and an% 9ud'e of the
court in #hich it #as rendered. Ho#ever, if the conviction is for a li'ht oEense, the 9ud'0ent
0a% be pronounced in the presence of his counsel or representative. Ahen the 9ud'e is absent
or outside the province or cit%, the 9ud'0ent 0a% be pro0ul'ated b% the cler1 of court.
= = = =
The proper cler1 of court shall 'ive notice to the accused personall% or throu'h his bonds0an or
#arden and counsel, reCuirin' hi0 to be present at the pro0ul'ation of the decision. #f !"
a;;u*". :a* r+". in absentia 9";au*" !" @u8/". 9a+6 or "*;a/". fro8 /r+*on, !"
no+;" o !+8 *!a66 9" *"r,". a !+* 6a* Dno:n a..r"**.
#n ;a*" !" a;;u*". fa+6* o a//"ar a !" *;!".u6". .a" of /ro8u6>a+on of
@u.>8"n ."*/+" no+;", !" /ro8u6>a+on *!a66 9" 8a." 9y r";or.+n> !" @u.>8"n
+n !" ;r+8+na6 .o;D" an. *"r,+n> !+8 a ;o/y !"r"of a !+* 6a* Dno:n a..r"** or
!ru !+* ;oun*"6.
= = = = 4Italics in the ori'inal> e0phasis supplied5
) #ord on the 0odi$ed penalt% i0posed b% the RT!. !ontrar% to its reasonin', the penalt% of
i0prison0ent in cases of violation of ".P. -- #as not deleted. )s clari$ed b% )d0inistrative
!ircular (.,-<<(, the clear tenor and intention of )d0inistrative !ircular (-,-<<< is not to
re0ove i0prison0ent as an alternative penalt%, but to la% do#n a rule of preference in the
application of the penalties provided for in ".P. --.
.<
Since the prosecution did not raise the 0atter as an issue and, at an% rate, there is no sho#in'
of repeated violation or #anton bad faith on the part of petitioner, the non,i0position of the
penalt% of i0prison0ent is in order.
AHRDOR, in li'ht of the fore'oin', the petition is DNID.
SO ORDRD.
CONCH#T$ C$RP#O MOR$LES
)ssociate 3ustice
A !ON!BR2
LEON$RDO $. EU#SUM-#NG
)ssociate 3ustice
!hairperson
$NTON#O T. C$RP#O
)ssociate 3ustice
D$NTE O. T#NG$
)sscociate 3ustice
PRES-#TERO J. %EL$SCO, JR.
)ssociate 3ustice
)oono"*
(
!) rollo, pp. *(, +*,+6, respectivel%. Penned b% 3ustice lie;er R. De @os Santos #ith the
concurrence of 3ustice Delilah Vidallon,Ma'tolis and 3ustice )rturo D. "rion. 3ustice Monina
)revalo Jenarosa, vice 3ustice "rion, concurred in the second Resolution.
-
Records, pp. 6,/.
.
Id. at .,*.
*
Records sho# that no 0otion to lift the Ma% ., -<<< Aarrant of )rrest #as $led b%
petitioner:s counsel de parte before his appearance as such #as considered #ithdra#n on
)u'ust (7, -<<<. This !ourt observes that the issuance of the #arrant of arrest
#as unnecessar% since petitioner alread% $led a #aiver of appearance and even
consented to the #aiver of appearance clause in his bond. Ahile petitioner could have
been still co0pelled to appear in court for identi$cation purposes, the )pril 6, -<<< Order
did notspecifcally reCuire petitioner to appear at said trial date nor #as the testi0on% of
the prosecution #itness intended to identif% petitioner. Notabl%, the 0atter of
identi$cation #as never raised as an issue as petitioner never disputed his identit% as the
accused in this case. 4Vide rollo, pp. .-, +(, (<-,(<*, -GG,-+(> "arredo v. People, &.R.
No. GG6*-, March (+, (++<, (/. S!R) -G.5
6
Id. at (/7,(/+. The Decision #as penned b% 3ud'e 3or'e 00anuel M. @orredo, then
pairin' 9ud'e of "ranch -*, MeT!, Manila.
7
Id. at --*,--6.
G
Id. at -**.
/
Rules of !ourt, Rule (6, Secs. 6,7, Rule (-(, Sec. *.
+
Records, p. -7G.
(<
The RT! denied the appeal s,3 silentio insofar as the Orders dated 3anuar% (<, -<<.
and Ma% -7, -<<. are concerned. No appeal 0a% be ta1en fro0 an order den%in' a
0otion for ne# trial, the appropriate recourse bein' a special civil action for certiorari.
4Vide Rules of !ourt, Rule *(, Sec. ( 4a5 in relation to Rule *<, Sec. +> "asalla v. People,
*.+ Phil. +6/ K-<<-L5 Moreover, petitioner #as barred fro0 availin' of the re0edies
allo#ed b% the Rules a'ainst the 9ud'0ent since he did not $le the proper 0otion for
leave of court #ithin the 'iven period. 4Vide Rules of !ourt, Rule (-<, Sec. 7, last
par.> <eope v. People, &.R. No. (*+7/G, )pril (*, -<<*, *-G S!R) 6*<5 The lo#er
courtMprosecution, ho#ever, failed to noticeMraise these 'rounds in dis0issin'Mopposin'
the appeal.
((
Id. at .--,.-.. Penned b% 3ud'e Oscar P. "arrientos in !ri0inal !ase Nos. <.,-(76-G to
.-.
(-
8= = = The petition shall be $led and served #ithin $fteen 4(65 da%s fro0 notice of the
decision sou'ht to be revie#ed or of the denial of petitioner:s 0otion for ne# trial or
reconsideration $led in due ti0e after 9ud'0ent. Bpon proper 0otion and the pa%0ent of
the full a0ount of the doc1et and other la#ful fees and the deposit for costs before the
e=piration of the re'le0entar% period, the !ourt of )ppeals 0a% 'rant an additional
period of $fteen 4(65 da%s onl% #ithin #hich to $le the petition for revie#. No further
e=tension shall be 'ranted e=cept for the 0ost co0pellin' reason and in no case to
e=ceed $fteen 4(65 da%s.8 40phasis supplied5
(.
Rollo, p. (7.
(*
Id. at .-.
(6
Id. at .6,.7.
(7
Id. at (6.
(G
8Ahereas, the aforecited provision KSection (, Rule --L applies in the 0atter of $lin' of
pleadin's in courts #hen the due date falls on a Saturda%, Sunda%, or le'al holida%, in
#hich case, the $lin' of the said pleadin' on the ne=t #or1in' da% is dee0ed on ti0e>
8Ahereas, the Cuestion has been raised if the period is e=tended ipso 9ure to the
ne=t #or1in' da% i00ediatel% follo#in' #here the last da% of the period is a
Saturda%, Sunda% or le'al holida% so that #hen a 0otion for e=tension of ti0e is
$led, the period of e=tension is to be rec1oned fro0 the ne=t #or1in' da% and not
fro0 the ori'inal e=piration of the period>
8NOA THRDOR, the !ourt Resolves, for the 'uidance of the "ench and the "ar,
to declare that Section (, Rule -- spea1s onl% of 8the last da% of the period8 so
that #hen a part% see1s an e=tension and the sa0e is 'ranted, the due date
ceases to be the last da% and hence, the provision no lon'er applies. )n%
e=tension of ti0e to $le the reCuired pleadin' should therefore be counted fro0
the e=piration of the period re'ardless of the fact that the said due date is a
Saturda%, Sunda% or le'al holida%.8 4Bnderscorin' supplied5
(/
=,: v. 'ational #mnesty "ommission, &.R. No. (6+G</, Septe0ber -*, -<<*, *.+ S!R)
(((.
(+
&.R. No. .<+7<, October 6, (+/+, (G/ S!R) .(*.
-<
Vide !) rollo, pp. *, G.
-(
Vide &ideogram Reg,latory 5oard v. "o,rt of #ppeals, ..- Phil. /-< 4(++75.
--
"osmo ;ntertainment 1anagement! Inc. v. =a &ille "ommercial "orporation, &.R. No.
(6-/<(, )u'ust -<, -<<*, *.G S!R) (*6, (6<.
-.
Records, p. -G<.
-*
!f. Ramos v. "o,rt of #ppeals, .*( Phil. (6G 4(++G5, #hich ruled that a petitioner is not
reCuired to attach to the petition before the !ourt of )ppeals a certi$ed true cop%H but
onl% a true or plain cop%H of the MeT! Decision since petitioner is not appealin'
therefro0 as it #as rendered in her favor.
-6
Vide #tillo v. 5om3ay, *<* Phil. (G+, (// 4-<<(5, as diEerentiated fro0 the director%
nature of the second part of the rule reCuirin' the attach0ent of 8pleadin's and other
0aterial portions of the record8 fro0 #hich the appellate court has the discretion to
deter0ine the suFcienc% to 0a1e out a prima facie case.
-7
Vide 5orlongan v. 5,enavent,ra, &.R. No. (7G-.*, Debruar% -G, -<<7, */. S!R) *<6,
*<7.
-G
Vide People v. .alas, --G Phil. (6- 4(+/75> Vide People v. Valeriano, &.R. Nos. (<.7<*,
7<6, Septe0ber -., (++., --7 S!R) 7+*, #here it #as held that one #ho 9u0ps bail can
never oEer a 9usti$able reason for his non,appearance durin' the trial.
-/
&.R. No. (7-.G(, )u'ust -6, -<<6, *7/ S!R) -...
-+
Id. at -*6,-*7.
.<
<an v. 1ende:! r., *.- Phil. G7<, GG. 4-<<-5.
THIRD DIVISION
G.R. No. 108111 S"/"89"r 22, 2004
JO3 G. T$N, petitioner,
vs.
S$L#C -. DUM$RP$, respondent.
D ! I S I O N
S$NDO%$L&GUT#ERRE', J.:
Suits should as 0uch as possible be decided on the 0erits and not on technicalities. In this re'ard, #e
have often ad0onished courts to be liberal as default 9ud'0ents are fro#ned upon and not loo1ed upon
#ith favor for the% 0a% a0ount to a positive and considerable in9ustice to petitioner and the possibilit% of
such serious conseCuences necessitates a careful e=a0ination of the 'rounds upon #hich petitioner as1s
that it be set aside.
(
"efore us is a petition for revie# on certiorari
-
assailin' the 3ud'0ent b% Default
.
dated 3anuar% -/, (+++
and the Order
*
dated Ma% ., (+++, both rendered b% the Re'ional Trial !ourt, "ranch +, Mara#i !it%, @anao
del Sur in !ivil !ase No. (*G*,+G, 8.alic 5. -,marpa vs. oy <an! doing 3,siness ,nder the name and style
of "asa 5lanca Resta,rant.8
The factual antecedents as borne b% the records are2
On Ma% .<, (++6, Prosecutor Ortillano D. Tan and other prosecutors of Re'ion SII $led #ith the
OFce of the O0buds0an in Mindanao a cri0inal co0plaint for 0alversation of public funds and
violation of Section . 4e5 of R.). No. .<(+
6
a'ainst then Re'ional State Prosecutor Salic ". Du0arpa,
respondent herein, doc1eted as !ase No. OM",MIN,+6,<6<7.
The co0plaint alle'es that so0eti0e in October (++-, Prosecutor Tan en'a'ed the services of 3o% &. Tan,
petitioner, as caterer for the Aitness Protection Securit% and "ene$t Pro'ra0 se0inar conducted on
October (7, (++- at Mara#i !it%. )fter the se0inar, Prosecutor Tan paid petitioner, throu'h Ailfredo !.
Sotto, P((,7.-.<< in cash and P(<,<<<.<< in PN" !hec1 No. ..<7< for her caterin' services. In turn,
petitioner issued to Tan the correspondin' receipt dated October (7, (++- 4cash invoice no. (<+.(5. @ater,
Prosecutor Tan found that Re'ional Prosecutor Du0arpa, respondent, to cover his cash advance
of P.<,<<<.<< fro0 the Depart0ent of 3ustice, obtained surreptitiousl% fro0 petitioner another receipt
4cash invoice no. (<//G5 sho#in' his pa%0ent for the latter:s caterin' services for t#o se0inars conducted
purportedl% in !otabato !it% and Mara#i !it%. In support of the above cri0inal co0plaint #ere aFdavits of
petitioner and Ailfredo !. Sotto.
Meanti0e, petitioner:s aFdavit denouncin' respondent for 0alversation of 'overn0ent funds #as
published in the Manila Standard, Manila Ti0es, "andera, and other ne#spapers of 'eneral circulation.
Respondent clai0ed that such 0alicious publication discredited his honor and reputation. Thus, he $led
#ith the OFce of the !it% Prosecutor of Mara#i !it% a cri0inal co0plaint for libel a'ainst petitioner,
doc1eted as I.S. No. +GD,<((<. The !it% Prosecutor found probable cause and reco00ended that
petitioner be char'ed #ith libel in court. Respondent also $led #ith the Re'ional Trial !ourt, "ranch +,
Mara#i !it% C+,+6 Ca*" No. 1414&51 a'ainst her for da0a'es #ith pra%er for issuance of a #rit of
attach0ent.
SubseCuentl%, petitioner $led in C+,+6 Ca*" No. 1414&51 her ans#er #ith 0otion to dis0iss the co0plaint
on the 'round of failure to state a cause of action. She alle'ed that her aFdavit a'ainst respondent #as
e=ecuted in 'ood faith and #ithout 0alice. -"+n> 8"r"6y a *u//or+n> aF.a,+ o a ;r+8+na6
;o8/6a+n for 8a6,"r*a+on C6". 9y Pro*";uor Tan a>a+n* r"*/on."n, !" *a8" +* a9*o6u"6y
/r+,+6">". an., !"r"for", no a;+ona96".
On March -7, (++/, the trial court ."n+". /"++on"rA* 8o+on o .+*8+** the co0plaint and set the
pre,trial conference on 3ul% .<, (++/. "ut durin' the pre,trial, petitioner and counsel did not appear.
)ccordin' to the trial court, the% #ere dul% noti$ed. Thus, petitioner #as declared as in default and
respondent #as allo#ed to present his evidence e>$parte. )fter he rested his case, the trial court rendered
the assailed 3ud'0ent b% Default dated 3anuar% -/, (+++, the dispositive portion of #hich reads2
8The plaintiE, havin' proven his clai0 preponderantl%, 9ud'0ent is hereb% rendered in favor of
plaintiE Salic ". Du0arpa and a'ainst defendant 3o% Tan, orderin' said defendant2
(. To pa% unto plaintiE Salic Du0arpa the su0 of Seven Hundred Thousand 4PG<<,<<<.<<5
Pesos as actual and co0pensator% da0a'es>
-. To pa% unto plaintiE the su0 of One Million 4P(,<<<,<<<.<<5 Pesos as 0oral da0a'es> and
the further su0 of P(<<,<<<.<< as attorne%:s fees and costs.
SO ORDRD.8
On Debruar% -7, (+++, petitioner $led a 0otion for reconsideration of the 3ud'0ent b% Default on the
'round that !"r ;oun*"6 .+. no r";"+," a ;o/y of !" Or."r ."ny+n> !"r 8o+on o .+*8+** an.
*"+n> !" /r"&r+a6 ;onf"r"n;" on Ju6y 00, 1558. On March ((, (+++, respondent $led a 0otion for
e=ecution and opposition to the 0otion for reconsideration.
On Ma% ., (+++, the trial court issued an Order resolvin' petitioner:s 0otion for reconsideration and
respondent:s 0otion for e=ecution. In this Order, the trial court denied petitioner:s 0otion for
reconsideration on the 'round that it does not alle'e speci$call% the $ndin's of fact #hich are not
supported b% evidence or conclusion contrar% to la#. The trial court then ruled that the 0otion is pro
forma and does not toll the runnin' of the period to appeal. Thus, the 3ud'0ent b% Default has beco0e
$nal and e=ecutor%. The trial court then 'ranted respondent:s 0otion for e=ecution.
Hence, petitioner, on 3une (, (+++, directl% $led #ith this !ourt the instant /"++on for r",+": on
;"r+orar+ assailin' ,
8(. TH PROPRIT? OD DI@IN& RSPONDNT:S !IVI@ !OMP@)INT DOR D)M)&S 4")SD ON )N
)@@&D @I"@OBS )!T !OMMITTD "? PTITIONR AHN SH S!BTD )N )DDID)VIT "DOR
TH ODDI! OD TH !IT? PROS!BTOR5 VN "DOR TH RSO@BTION OD TH !RIMIN)@
!OMP@)INT DOR @I"@.
8-. TH )PP@I!)"I@IT? OD TH @)A ON PRIVI@&D !OMMBNI!)TION ON PTITIONR:S )DDID)VIT.8
Respondent, in his co00ent, contends that the instant petition should be denied, not bein' the proper
re0ed%.
In Indiana #erospace 4niversity vs. "ommission on ?igher ;d,cation,
7
#e held2
8The re0edies available to a defendant declared in default are as follo#s2 4a5 a 0otion to set aside
the order of default under Section . 4b5, Rule + of the Rules of !ourt, if the default #as discovered
before 9ud'0ent could be rendered> 4-5 a 8o+on for n": r+a6 un."r S";+on 1GaH of Ru6" 01,
+f !" ."fau6 :a* .+*;o,"r". af"r @u.>8"n 9u :!+6" a//"a6 +* *+66 a,a+6a96"I 4.5 a
petition for relief under Rule ./, if 9ud'0ent has beco0e $nal and e=ecutor%> and 4*5 an a//"a6
fro8 !" @u.>8"n un."r S";+on 1, Ru6" 41, ","n +f no /"++on o *" a*+." !" or."r of
."fau6 !a* 9""n r"*or". o.8
Here, petitioner ca0e to 1no# of the 3ud'0ent b% Default after it #as pro0ul'ated b% the trial court #hile
appeal #as still available. In fact, she $led a 0otion for reconsideration #hich #as denied. Thereafter, #hat
she should have done pursuant to the Rules, #as to $le #ith the trial court a 0otion for ne# trial or
an or.+nary a//"a6
G
:+! !" Cour of $//"a6*. Instead, she ca0e directl% to this !ourt via the
instant/"++on for r",+": on ;"r+orar+.
Ho#ever, in the interest of 9ustice, #e consider the instant petition, pro hac vice, a petition for certiorari
under Rule 76 of the (++G Rules of !ivil Procedure, as a0ended. It appears prima facie fro0 petitioner:s
alle'ations that !" r+a6 ;our ;o88+". >ra," a9u*" of .+*;r"+on in renderin' the 3ud'0ent b%
Default. If such alle'ations are true and the trial court:s fatal error re0ains uncorrected, then petitioner #ill
suEer 'reat in9ustice.
Indeed, #here as here, there is a stron' sho#in' that 'rave 0iscarria'e of 9ustice #ould result fro0 the
strict application of the
Rules, #e #ill not hesitate to rela= the sa0e in the interest of substantial 9ustice.
/
In ",si$?ernande: vs. -ia:,
+
this !ourt, spea1in' throu'h Mr. 3ustice )rte0io V. Pan'aniban, held that
8cases should be deter0ined on the 0erits, after full opportunit% to all parties for ventilation of their
causes and defenses, rather than on technicalit% or so0e procedural i0perfections. In that #a%, the ends
of 9ustice #ould be served better.8
In fact, 8procedural rules are created not to hinder or dela% but to facilitate and pro0ote the ad0inistration
of 9ustice. It is far better to dispose of the case on the 0erits #hich is a pri0ordial end rather than on a
technicalit%, if it be the case that 0a% result in in9ustice.8
(<
In Paras vs. "aldado
((
and )lberto vs. !ourt of )ppeals,
(-
#e ruled that 84#5hat should 'uide 9udicial action
is the principle that a part%,liti'ant is to be 'iven the fullest opportunit% to establish the 0erits of his
co0plaint or defense rather than for hi0 to lose life, libert%, honor or propert% on technicalities. = = = 4T5he
rules of procedure should be vie#ed as 0ere tools desi'ned to facilitate the attain0ent of 9ustice. Their
strict and ri'id application, #hich #ould result in technicalities that tend to frustrate rather than pro0ote
substantial 9ustice, 0ust al#a%s be esche#ed.8
Ae thus resolve the basic issue of #hether or not the trial 9ud'e co00itted 'rave abuse of discretion in
renderin' the 3ud'0ent b% Default.
It 0a% be recalled that in den%in' petitioner:s 0otion for reconsideration of the 3ud'0ent b% Default, the
trial court held that petitioner failed to specif% 4a5 its $ndin's not supported b% evidence and 4b5 its
erroneous conclusion of la#. )ctuall%, the issue bein' raised b% petitioner in her 0otion is that she and her
counsel #ere not dul% noti$ed of the pre,trial on 3ul% .<, (++/. "ut the trial court did not resolve this issue
and denied outri'ht petitioner:s 0otion.
Had the trial court set the 0otion for hearin' and 'ave petitioner a chance to prove her alle'ation, it could
have deter0ined #hether she #as indeed noti$ed or not of the pre,trial set on 3ul% .<, (++/. Then the trial
court could have resolved #hether or not to reconsider the 3ud'0ent b% Default.
Veril%, b% den%in' petitioner:s 0otion for reconsideration on the #ron' 'round that it is pro forma and b%
declarin' her as in default and allo#in' respondent to present his evidence e> parte, the trial court
deprived petitioner of her ri'ht to due process, i.e., the funda0ental rule that a person be accorded an
opportunit% to be heard.
(.
To allo# a trial to proceed a'ainst petitioner #ho could not present her defenses
apparentl% for lac1 of notice, is a denial of her ri'ht to be heard, our 0ost basic understandin' of due
process. Ae stress that the essence of due process is si0pl% an o//orun+y o *""D a r";on*+."ra+on
of !" a**a+6". a;+on or ru6+n>, such as the trial court:s Order den%in' petitioner:s 0otion for
reconsideration and its 3ud'0ent b% Default. The trial court denied petitioner this opportunit%.
Ae, therefore, hold that the said Order and 3ud'0ent b% Default are tainted #ith a capricious, arbitrar%
and #hi0sical e=ercise of po#er. !learl%, the trial 9ud'e co00itted 'rave abuse of discretion.
(HERE)ORE, the instant petition, considered as one for certiorari, is GR$NTED. The 3ud'0ent b% Default
dated 3anuar% -/, (+++ and the Order dated Ma% ., (+++ are SET $S#DE. The Re'ional Trial !ourt, "ranch
+, Mara#i !it%, @anao del Sur is ordered to hear !ivil !ase No. (*G*,+G on !" 8"r+* #ith ."6+9"ra"
.+*/a;!.
SO ORDERED.
Pangani3an! "orona! and "arpio 1orales! .! concur.
)oono"*
(
See -ia: vs. -ia:, &.R. No. (.6//6, )pril -/, -<<<, ..( S!R) .<-, .--,.-., citin' %erales vs.
"o,rt of #ppeals, -(/ S!R) 7./ 4(++.5 and 1ontinola! r. vs. Rep,3lic Planters 5an8, (7( S!R) *6
4(+//5.
-
Pursuant to Section - 4c5, Rule *( of the (++G Rules of !ivil Procedure, as a0ended, #hich
provides2
8Sec. -. 1odes of appeal. H = = =
= = =
4c5 #ppeal 3y certiorari. , In all cases #here on6y ?u"*+on* of 6a: ar" ra+*". or
+n,o6,"., the appeal shall be to the Supre0e !ourt b% petition for revie# on
certiorari in accordance #ith Rule *6.8
.
)nne= 8D8, Petition, Rollo at -/,.*.
*
)nne= 8H8, id. at (.,(*.
6
Other#ise 1no#n as the )nti,&raft and !orrupt Practices )ct.
7
&.R. No. (.+.G(, )pril *, -<<(, .67 S!R) .7G, .G+, citin' =ina vs. "o,rt of #ppeals, (.6 S!R) 7.G
4(+/65.
G
See 4mandap vs. .a3io! r.! &.R. No. (*<-**, )u'ust -+, -<<<, ..+ S!R) -*., -6-.
/
"oronel vs. ?on. #niano #. -esierto, &.R. No. (*+<--, )pril /, -<<. at +, citin' People vs. Flores,
..7 Phil. 6/ 4(++G5.
+
&.R. No. (*<*.7, 3ul% (/, -<<<, ..7 S!R) ((., (-<, citin' Rep,3lic vs. "o,rt of #ppeals, -+- S!R)
-*. 4(++/5.
(<
#FP 1,t,al 5eneft #ssociation vs. "o,rt of #ppeals, &.R. No. (-7G*6, 3ul% -7, (+++, .(( S!R)
(*., (6G, citin' 4dan vs. #mon, -. S!R) /.G 4(+7/5 and 1edrano @ #ssociates! Inc. vs. Ro>as @
"o., (/. S!R) 6/< 4(++<5.
((
&.R. No. (*<G(., March /, -<<(, .6* S!R) (*(, (*6.
(-
&.R. No. ((+<//, 3une .<, -<<<, ..* S!R) G67.
(.
"ity %overnment of 1a8ati "ity vs. "ivil .ervice "ommission, &.R. No. (.(.+-, Debruar% 7, -<<-, .G7
S!R) -*/.
SECOND D#%#S#ON

!?NTHI) !. )@)")N, &.R. No. (67<-(
DR)N!IS !O@@)DO, 3OS
P. !O@@)DO, 3BDITH Present2
PROVIDO, !@)RIT) PROVIDO,
)@DRDO PROVIDO, M)NB@ PBNO, .!
PROVIDO, 3R., @ORN) DIN) "hairman!
. PROVIDO, SVRO )RN&), )BSTRI),M)RTINJ,
3R., SR&IO )RN&), DB)RDO !)@@3O, SR.,
)RN&), !)RO@ )RN&), RBTH TIN&), and
")")S), NORM) HI3)STRO, !HI!O,N)J)RIO, .
DO@ORS M. D@ORS, )NTONIO
M)RIN, 3R., 3OS M)RIN, SR., and
M)THI@D M)RIN, Pro0ul'ated2
Petitioners!
Septe0ber -., -<<6

, versus ,


!OBRT OD )PP)@S and
DR)N!IS!O H. PROVIDO,
Respondents.
=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=


D E C # S # O N

TIN&), .2

This is a petition for revie# of the Resol,tions
K(L
of the !ourt of )ppeals 4!)5 in !),&.R. SP No. 7+--(,
K-L
dis0issin' petitioners: petition for annul0ent of 9ud'0ent.

On / Nove0ber -<<<, respondent Drancisco Provido 4respondent5 $led a petition, doc1eted as SP
Proc. No. <<,(.6, for the probate of the =ast 7ill and <estament
K.L
of the late Soledad Provido
levencionado 4NdecedentO5, #ho died on -7 October -<<< in 3aniua%, Iloilo.
K*L
Respondent alle'ed that he
#as the heir of the decedent and the e=ecutor of her #ill. On .< Ma% -<<(, the Re'ional Trial !ourt 4RT!5,
"ranch 7/, in P.D. Monfort North, Du0an'as, Iloilo, rendered its -ecision!
K6L
allo#in' the probate of the #ill
of the decedent and directin' the issuance of letters testa0entar% to respondent.
K7L

More than four 4*5 0onths later, or on * October -<<(, herein petitioners $led a 0otion for the
reopenin' of the probate proceedin's.
KGL
@i1e#ise, the% $led an opposition to the allo#ance of the #ill of
the decedent, as #ell as the issuance of letters testa0entar% to respondent,
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clai0in' that the% are the
intestate heirs of the decedent. Petitioners clai0ed that the RT! did not acCuire 9urisdiction over the
petition due to non,pa%0ent of the correct doc1et fees, defective publication, and lac1 of notice to the
other heirs. Moreover, the% alle'ed that the #ill could not have been probated because2 4(5 the si'nature
of the decedent #as for'ed> 4-5 the #ill #as not e=ecuted in accordance #ith la#, that is, the #itnesses
failed to si'n belo# the attestation clause> 4.5 the decedent lac1ed testa0entar% capacit% to e=ecute and
publish a #ill> 4*5 the #ill #as e=ecuted b% force and under duress and i0proper pressure> 465 the
decedent had no intention to 0a1e a #ill at the ti0e of aF=in' of her si'nature> and 475 she did not 1no#
the properties to be disposed of, havin' included in the #ill properties #hich no lon'er belon'ed to her.
Petitioners pra%ed that the letters testa0entar% issued to respondent be #ithdra#n and the estate of the
decedent disposed of under intestate succession.
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On (( 3anuar% -<<-, the RT! issued an Arder
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den%in' petitioners: 0otion for bein' un0eritorious.
Resolvin' the issue of 9urisdiction, the RT! held that petitioners #ere dee0ed noti$ed of the hearin' b%
publication and that the de$cienc% in the pa%0ent of doc1et fees is not a 'round for the outri'ht dis0issal
of the petition. It 0erel% reCuired respondent to pa% the de$cienc%.
K((L
Moreover, the RT!:s -ecision #as
alread% $nal and e=ecutor% even before petitioners: $lin' of the 0otion to reopen.
K(-L

Petitioners thereafter $led a petition
K(.L
#ith an application for preli0inar% in9unction #ith the !),
see1in' the annul0ent of the RT!:s -ecision dated .< Ma% -<<( and Arder dated (( 3anuar% -<<-. The%
clai0ed that after the death of the decedent, petitioners, to'ether #ith respondent, held several
conferences to discuss the 0atter of dividin' the estate of the decedent, #ith respondent a'reein' to a
one,si=th 4(M75 portion as his share. Petitioners alle'edl% drafted a co0pro0ise a'ree0ent to i0ple0ent
the division of the estate. Despite receipt of the a'ree0ent, respondent refused to si'n and return the
sa0e. Petitioners opined that respondent fei'ned interest in participatin' in the co0pro0ise a'ree0ent
so that the% #ould not suspect his intention to secure the probate of the #ill.
K(*L
The% clai0ed that the%
learnt of the probate proceedin's onl% in 3ul% of -<<(, as a result of #hich the% $led their 0otion to reopen
the proceedin's and ad0it their opposition to the probate of the #ill onl% on * October -<<(. The% ar'ued
that the RT! -ecision should be annulled and set aside on the 'round of e=trinsic fraud and lac1 of
9urisdiction on the part of the RT!.
K(6L


In its Resol,tion
K(7L
pro0ul'ated on -/ Debruar% -<<-, the !) dis0issed the petition. It found that
there #as no sho#in' that petitioners failed to avail of or resort to the ordinar% re0edies of ne# trial,
appeal, petition for relief fro0 9ud'0ent, or other appropriate re0edies throu'h no fault of their o#n.
K(GL

Moreover, the !) declared as baseless petitioners: clai0 that the proceedin's in the RT! #as attended b%
e=trinsic fraud. Neither #as there an% sho#in' that the% availed of this 'round in a 0otion for ne# trial or
petition for relief fro0 9ud'0ent in the RT!, the !) added.
K(/L
Petitioners sou'ht reconsideration of
the Resol,tion, but the sa0e #as denied b% the !) for lac1 of 0erit.
K(+L

Petitioners no# co0e to this !ourt, assertin' that the !) co00itted 'rave abuse of discretion
a0ountin' to lac1 of 9urisdiction #hen it dis0issed their petition for the alle'ed failure to sho# that the%
have not availed of or resorted to the re0edies of ne# trial, appeal, petition for relief fro0 9ud'0ent or
other re0edies throu'h no fault of their o#n, and held that petitioners #ere not denied their da% in court
durin' the proceedin's before the RT!.
K-<L
In addition, the% assert that this !ourt has %et to decide a case
involvin' Rule *G of the Rules of !ourt and, therefore, the instant petition should be 'iven due course for
the 'uidance of the bench and bar.
K-(L

Dor his part, respondent clai0s that petitioners #ere in a position to avail of the re0edies provided in
Rules .G and ./, as the% in fact did #hen the% $led a 0otion for ne# trial.
K--L
Moreover, the% could have
resorted to a petition for relief fro0 9ud'0ent since the% learned of the RT!:s 9ud'0ent onl% three and a
half 0onths after its pro0ul'ation.
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Respondent li1e#ise 0aintains that no e=trinsic fraud e=ists to
#arrant the annul0ent of the RT!:s -ecision, since there #as no sho#in' that the% #ere denied their da%
in court. Petitioners #ere not 0ade parties to the probate proceedin's because the decedent did not
institute the0 as her heirs.
K-*L
"esides, assu0in' arg,endo that petitioners are heirs of the decedent, lac1
of notice to the0 is not a fatal defect since personal notice upon the heirs is a 0atter of procedural
convenience and not a 9urisdictional reCuisite.
K-6L
Dinall%, respondent char'es petitioners of foru0H
shoppin', since the latter have a pendin' suit involvin' the sa0e issues as those in SP No. <<,(.6, that is
SP No. ((/(
K-7L
$led before "ranch -., RT! of &eneral Santos !it% and subseCuentl% pendin' on appeal
before the !) in !),&.R. No.G*+-*.
K-GL

It appears that one of the petitioners herein, Dolores M. Dlores 4NDloresO5, #ho is a niece of the
decedent, $led a petition for letters of ad0inistration #ith the RT! of &eneral Santos !it%, clai0in' that the
decedent died intestate #ithout an% issue, survived b% $ve 'roups of collateral heirs. Dlores, ar0ed #ith a
Special Po#er of )ttorne% fro0 0ost of the other petitioners, pra%ed for her appoint0ent as ad0inistratri=
of the estate of the decedent. The RT! dis0issed the petition on the 'round of lac1 of 9urisdiction, statin'
that the probate court in 3aniua%, Iloilo has 9urisdiction since the venue for a petition for the settle0ent of
the estate of a decedent is the place #here the decedent died. This is also in accordance #ith the rule
that the $rst court acCuirin' 9urisdiction shall continue hearin' the case to the e=clusion of other courts,
the RT! added.
K-/L
On + 3anuar% -<<-, Dlores $led a 'otice of #ppeal
K-+L
and on -/ 3anuar% -<<-, the case
#as ordered for#arded to the !).
K.<L

Petitioners 0aintain that the% #ere not 0ade parties to the case in #hich the decision sou'ht to be
annulled #as rendered and, thus, the% could not have availed of the ordinar% re0edies of ne# trial, appeal,
petition for relief fro0 9ud'0ent and other appropriate re0edies, contrar% to the rulin' of the !). The%
aver that respondent:s oEer of a false co0pro0ise and his failure to notif% the0 of the probate of the #ill
constitute e=trinsic fraud that necessitates the annul0ent of the RT!:s 9ud'0ent.
K.(L

The petition is devoid of 0erit.

Section .G of the Rules of !ourt allo#s an a''rieved part% to $le a 0otion for ne# trial on the
'round of fraud, accident, 0ista1e, or e=cusable ne'li'ence. The sa0e Rule per0its the $lin' of a
0otion for reconsideration on the 'rounds of e=cessive a#ard of da0a'es, insuFcienc% of evidence to
9ustif% the decision or $nal order, or that the decision or $nal order is contrar% to la#.
K.-L
"oth 0otions
should be $led #ithin the period for ta1in' an appeal, or $fteen 4(65 da%s fro0 notice of the 9ud'0ent or
$nal order.

Mean#hile, a petition for relief fro0 9ud'0ent under Section . of Rule ./ is resorted to #hen a
9ud'0ent or $nal order is entered, or an% other proceedin' is thereafter ta1en, a'ainst a part% in an% court
throu'h fraud, accident, 0ista1e, or e=cusable ne'li'ence. Said part% 0a% $le a petition in the sa0e court
and in the sa0e case to set aside the 9ud'0ent, order or proceedin'. It 0ust be $led #ithin si=t% 47<5
da%s after the petitioner learns of the 9ud'0ent and #ithin si= 475 0onths after entr% thereof.
K..L

) 0otion for ne# trial or reconsideration and a petition for relief fro0 9ud'0ent are re0edies
available onl% to parties in the proceedin's #here the assailed 9ud'0ent is rendered.
K.*L
In fact, it has
been held that a person #ho #as never a part% to the case, or even su00oned to appear therein, cannot
avail of a petition for relief fro0 9ud'0ent.
K.6L


Ho#ever, petitioners in this case are 0ista1en in assertin' that the% are not or have not beco0e
parties to the probate proceedin's.

Bnder the Rules of !ourt, an% e=ecutor, devisee, or le'atee na0ed in a #ill, or an% other person
interested in the estate 0a%, at an% ti0e after the death of the testator, petition the court havin'
9urisdiction to have the #ill allo#ed.
K.7L
Notice of the ti0e and place for provin' the #ill 0ust be published
for three 4.5 consecutive #ee1s, in a ne#spaper of 'eneral circulation in the province,
K.GL
as #ell as
furnished to the desi'nated or other 1no#n heirs, le'atees, and devisees of the testator.
K./L
Thus, it has
been held that a proceedin' for the probate of a #ill is one in rem, such that #ith the correspondin'
publication of the petition the courtUs 9urisdiction e=tends to all persons interested in said #ill or in the
settle0ent of the estate of the decedent.
K.+L


Publication is notice to the #hole #orld that the proceedin' has for its ob9ect to bar inde$nitel% all
#ho 0i'ht be 0inded to 0a1e an ob9ection of an% sort a'ainst the ri'ht sou'ht to be established. It is the
publication of such notice that brin's in the #hole #orld as a part% in the case and vests the court #ith
9urisdiction to hear and decide it.
K*<L
Thus, even thou'h petitioners #ere not 0entioned in the petition for
probate, the% eventuall% beca0e parties thereto as a conseCuence of the publication of the notice of
hearin'.

)s parties to the probate proceedin's, petitioners could have validl% availed of the re0edies of
0otion for ne# trial or reconsideration and petition for relief fro0 9ud'0ent. In fact, petitioners $led a
0otion to reopen, #hich is essentiall% a 0otion for ne# trial, #ith petitioners pra%in' for the reopenin' of
the case and the settin' of further proceedin's. Ho#ever, the 0otion #as denied for havin' been $led out
of ti0e, lon' after the -ecision beca0e $nal and e=ecutor%.

!oncedin' that petitioners beca0e a#are of the -ecision after it had beco0e $nal, the% could have
still $led a petition for relief fro0 9ud'0ent after the denial of their 0otion to reopen. Petitioners clai0 that
the% learned of the -ecision onl% on * October -<<(, or al0ost four 4*5 0onths fro0 the ti0e
the-ecision had attained $nalit%. "ut the% failed to avail of the re0ed%.

Dor failure to 0a1e use #ithout suFcient 9usti$cation of the said re0edies available to the0,
petitioners could no lon'er resort to a petition for annul0ent of 9ud'0ent> other#ise, the% #ould bene$t
fro0 their o#n inaction or ne'li'ence.
K*(L
ven castin' aside the procedural reCuisite, the petition for
annul0ent of 9ud'0ent 0ust still fail for failure to co0pl% #ith the substantive reCuisites, as the appellate
court ruled.
)n action for annul0ent of 9ud'0ent is a re0ed% in la# independent of the case #here the
9ud'0ent sou'ht to be annulled #as rendered.
K*-L
The purpose of such action is to have the $nal and
e=ecutor% 9ud'0ent set aside so that there #ill be a rene#al of liti'ation. It is resorted to in cases #here
the ordinar% re0edies of ne# trial, appeal, petition for relief fro0 9ud'0ent, or other appropriate re0edies
are no lon'er available throu'h no fault of the petitioner,
K*.L
and is based on onl% t#o 'rounds2 e=trinsic
fraud, and lac1 of 9urisdiction or denial of due process.
K**L
) person need not be a part% to the 9ud'0ent
sou'ht to be annulled, and it is onl% essential that he can prove his alle'ation that the 9ud'0ent #as
obtained b% the use of fraud and collusion and he #ould be adversel% aEected thereb%.
K*6L

)n action to annul a $nal 9ud'0ent on the 'round of fraud lies onl% if the fraud is e=trinsic or
collateral in character.
K*7L
Draud is re'arded as e=trinsic #here it prevents a part% fro0 havin' a trial or
fro0 presentin' his entire case to the court, or #here it operates upon 0atters pertainin' not to the
9ud'0ent itself but to the 0anner in #hich it is procured. The overridin' consideration #hen e=trinsic fraud
is alle'ed is that the fraudulent sche0e of the prevailin' liti'ant prevented a part% fro0 havin' his da% in
court.
K*GL
To sustain their alle'ation of e=trinsic fraud, petitioners assert that as a result of respondent:s
deliberate o0ission or conceal0ent of their na0es, a'es and residences as the other heirs of the decedent
in his petition for allo#ance of the #ill, the% #ere not noti$ed of the proceedin's, and thus the% #ere
denied their da% in court. In addition, the% clai0 that respondent:s oEer of a false co0pro0ise even
before the $lin' of the petition prevented the0 fro0 appearin' and opposin' the petition for probate.
The !ourt is not convinced.
)ccordin' to the Rules, notice is reCuired to be personall% 'iven to 1no#n heirs, le'atees, and
devisees of the testator.
K*/L
) perusal of the #ill sho#s that respondent #as instituted as the sole heir of the
decedent. Petitioners, as nephe#s and nieces of the decedent, are neither co0pulsor% nor testate
heirs
K*+L
#ho are entitled to be noti$ed of the probate proceedin's under the Rules. Respondent had no
le'al obli'ation to 0ention petitioners in the petition for probate, or to personall% notif% the0 of the
sa0e.

"esides, assu0in' arg,endo that petitioners are entitled to be so noti$ed, the purported in$r0it% is
cured b% the publication of the notice. )fter all, personal notice upon the heirs is a 0atter of procedural
convenience and not a 9urisdictional reCuisite.
K6<L

The non,inclusion of petitioners: na0es in the petition and the alle'ed failure to personall% notif%
the0 of the proceedin's do not constitute e=trinsic fraud. Petitioners #ere not denied their da% in court,
as the% #ere not prevented fro0 participatin' in the proceedin's and presentin' their case before the
probate court.

One other vital point is the issue of foru0,shoppin' a'ainst petitioners. Doru0,shoppin' consists of
$lin' 0ultiple suits in diEerent courts, either si0ultaneousl% or successivel%, involvin' the sa0e parties, to
as1 the courts to rule on the sa0e or related causes andMor to 'rant the sa0e or substantiall% sa0e reliefs,
K6(L
on the supposition that one or the other court #ould 0a1e a favorable disposition.
K6-L
Obviousl%, the
parties in the instant case, as #ell as in the appealed case before the !), are the sa0e. "oth cases deal
#ith the e=istence and validit% of the alle'ed #ill of the decedent, #ith petitioners anchorin' their cause
on the state of intestac%. In the probate proceedin's, petitioners: position has al#a%s been that the
decedent left no #ill and if she did, the #ill does not co0pl% #ith the reCuisites of a valid #ill. Indeed, that
position is the bedroc1 of their present petition. Of course, respondent 0aintains the contrar% stance. On
the other hand, in the petition for letters of ad0inistration, petitioner Dlores pra%ed for her
appoint0ent as ad0inistratri= of the estate on the theor% that the decedent died intestate. The petition
#as dis0issed on the 'round of lac1 of 9urisdiction, and it is this order of dis0issal #hich is the sub9ect of
revie# in !),&.R. No. G*+-*. !learl%, therefore, there is foru0,shoppin'.
Moreover, petitioners failed to infor0 the !ourt of the said pendin' case in their certi$cation
a'ainst foru0, shoppin'. Neither have the% done so at an% ti0e thereafter. The !ourt notes that even in
the petition for annul0ent of 9ud'0ent, petitioners failed to infor0 the !) of the pendenc% of their appeal
in !),&.R. No. G*+-*, even thou'h the notice of appeal #as $led #a% before the petition for annul0ent of
9ud'0ent #as instituted.

AHRDOR, the petition is DNID. !osts a'ainst petitioners.

SO ORDRD.
D)NT O. TIN&a #ssociate ,stice




K(L
Dated / Debruar% -<<- and (- Nove0ber -<<-.

K-L
!%nthia !. )laban, et al. v. &erardo D. Dia;, et al.

K.L
Rollo, pp. *G,6-.

K*L
ntitled NIn Re2 Petition for Probate of Aill of Decedent Soledad Provido levencionado, Drancisco
H. Provido, PetitionerO> Id. at .(,.-.

K6L
Id. at .*,.G.

K7L
I3id.

KGL
Id. at ./,.+.

K/L
Id. at *(,*6.

K+L
Id. at *-,**.

K(<L
Id. at 6.,67.

K((L
Id. at 66, 67.

K(-L
Id. at 66.

K(.L
Doc1eted as !),&.R. SP No. 7+--(.

K(*L
Rollo, pp. 6/,6+.

K(6L
Id. at 7-.

K(7L
Id. at 7+.

K(GL
I3id.

K(/L
Id. at G<.

K(+L
Resolution dated (- Nove0ber -<<-, Id. at +-.

K-<L
Id. at (6.

K-(L
Id. at (6.

K--L
Id. at (<..

K-.L
Id. at (<G.

K-*L
Id. at (</

K-6L
Id. at (<+.

K-7L
ntitled NIn the Matter of the Issuance of @etters of )d0inistration in the Intestate state of
Soledad Provido,levencionado, Dolores M. Dlores, Petitioner.O

K-GL
Rollo, pp. (<+,((<.

K-/L
Id. at (-7.

K-+L
!) Rollo, p.G/.

K.<L
Id. at G+.

K.(L
Id. at -(.

K.-L
Sec. (, Rule .G.

K..L
Sec. (, Rule ./.

K.*L
Section ( of Rule .G of the Rules of !ourt provides2
Section (. %ro,nds of and period for fling motion for new trial or reconsideration.,
Aithin the period for ta1in' an appeal, theaggrieved party 0a% 0ove the trial court to
set aside the 9ud'0ent or $nal order and 'rant a ne# trial for one or 0ore of the
follo#in' causes 0ateriall% aEectin' the substantial ri'hts of said part%2
. . . .

Mean#hile, Sections ( and - of Rule ./ state2

Section (. Petition for relief from B,dgment! order! or other proceedings., Ahen a
9ud'0ent or $nal order is entered, or an% other proceedin' is thereafter ta1en against a
party in an% court throu'h fraud, accident, 0ista1e or e=cusable ne'li'ence, he 0a% $le a
petition in such court and in the sa0e case pra%in' that the 9ud'0ent, order or proceedin'
be set aside.

Section -. Petition for relief from denial of appeal., Ahen a 9ud'0ent or $nal order is
rendered b% an% court in a case, and a partythereto, b% fraud, accident, 0ista1e, or
e=cusable ne'li'ence, has been prevented fro0 ta1in' an appeal, he 0a% $le a petition in
such court and in the sa0e case pra%in' that the appeal be 'iven due course.
40phasis supplied.5

K.6L
Metropolitan "an1 and Trust !o. v. )le9o, &.R. No. (*(+G<, (< Septe0ber -<<(, .7* S!R) /(-,
/(G.

K.7L
Sec. (, Rule G7, Rules of !ourt.

K.GL
Sec. ., Rule G7, id.

K./L
Sec. *, Rule G7, id.

K.+L
)but v. )but, (6<,) Phil. 7G+, 7/. 4(+G-5.

K*<L
"arco v. !ourt of )ppeals, &.R. No. (-<6/G, -< 3anuar% -<<*, *-< S!R) (7-, (G*, citing )de;
Realt% v. !ourt of )ppeals, &.R. No. (<<7*., (* )u'ust (++-, -- S!R) 7-., 7-/.

K*(L
Manipor, et al. v. Spouses Ricafort, &.R. No. (6<(6+, -6 3ul% -<<., *<G S!R) -+/, .<..

K*-L
Isla0ic Da:Aah !ouncil of the Philippines v. !ourt of )ppeals, &.R. No. /</+-, -+ Septe0ber
(+/+, (G/ S!R) (/6, (/*.

K*.L
Sec. (, Rule *G, Rules of !ourt.

K**L
Pinlac v. !ourt of )ppeals, &.R. No. +(*/7, (+ 3anuar% -<<(, .*+ S!R) 7.6, 76<.

K*6L
Isla0ic Da:Aah !ouncil of the Philippines v. !ourt of )ppeals, s,pra note *- at (/G.

K*7L
"obis et al. v. !ourt of )ppeals, et al., &.R. No. ((.G+7, (* Dece0ber -<<<, .*/ S!R) -., -G,-/.

K*GL
Teodoro v. !ourt of )ppeals, *.G Phil. ..7, .*6 4-<<-5.

K*/L
Sec. ., Rule G7, Rules of !ourt.

K*+L
)rt. /*-, !ivil !ode.

K6<L
D.D. R&)@)DO, RMDI)@ @)A !OMPNDIBM, Vol. II 4-<<( ed.5 p. -G, citing In Re state of
3ohnson, .+ Phil (67> In Re Testate state of Deceased 3ose ". Sunta%, +6 Phil 6<<> )but v. )but, et al.,
(6<,) Phil. 7G+ 4(+G-5.

K6(L
3. DRI) V M.!.S. NO!H, !IVI@ PRO!DBR )NNOT)TD Vol. ( 4-<<(5 p. -+G.

K6-L
&at0a%tan v. !ourt of )ppeals, ..6 Phil. (66, (7G 4(++G5.
TH#RD D#%#S#ON
G.R. No. 128055 D";"89"r 20, 2004
)EL#J C$M#T$N, )R$NC#SCO C$M#T$N, SE%ERO C$M#T$N an. %#CTOR#$ C$M#T$N, petitioners,
vs.
THE HONOR$-LE COURT O) $PPE$LS an. THE )#DEL#T3 #N%ESTMENT
CORPOR$T#ON, respondents
DEC#S#ON
T#NG$, J.2
On (. Dece0ber (+7G, the spouses Mateo !a0itan and @oren;a )lca;ar 4spouses !a0itan5 sold to Didelit%
Invest0ent !orporation 4respondent5 a parcel of land covered b% Transfer !erti$cate of Title 4T!T5 No. T,
4((+/-5T,.(// located in "aran'a% Maunon', !ala0ba, @a'una. Bpon the e=ecution of the Deed of
)bsolute Sale, the spouses !a0itan delivered to respondent corporation 4respondent5 the o#ner:s
duplicate certi$cate of title 4O#ner:s !op%5. Dro0 then on, respondent has been pa%in' the real estate
ta=es due on the propert% and has re0ained in actual ph%sical possession thereof.
(
On -+ Dece0ber (++., after the death of the spouses !a0itan, #ithout the 1no#led'e of respondent, the
heirs of the spouses,petitioners herein , $led a petition for the issuance of a ne# O#ner:s !op%,
-
Ho#ever,
it appears that respondent #as not 'iven notice of such proceedin's. The trial court issued an order of
'eneral default.
.
)fter an e> parte presentation of evidence b% the petitioners, the trial court 'ranted the
petition and directed the Re'ister of Deeds of @a'una to issue a ne# O#ner:s !op%, #hile at the sa0e ti0e
declarin' void the $rst O#ner:s !op%, per its Order dated </ March (++6.
*
Ahen respondent learned of the petition and order for the $rst ti0e in March (++6, it caused the
annotation of a notice of sale on the title of the propert%. Thereafter, on -7 )pril (++6, it $led a Notice of
)dverse !lai0 #ith the Re'ister of Deeds of !ala0ba, @a'una.
6
In a Petition
7
for annul0ent of 9ud'0ent and cancellation of title before the !ourt of )ppeals, respondent
ar'ued that the Order dated </ March (++6 is null and void, havin' been issued b% the trial court #ithout
9urisdiction since the O#ner:s !op% of T!T No. T,4((+/-5T,.(// e=ists and has been in its possession, and
not lost as petitioners alle'ed. Moreover, it clai0ed that petitioners have no standin' to $le the petition,
not bein' the re'istered o#ners of the propert%, nor persons in interest, since all the ri'hts and interest of
the spouses !a0itan had alread% been transferred to respondent upon the sale of the propert%.
Respondent further accused petitioners of per9ur%> intentionall% suppressin' fro0 the trial court the fact
that the% #ere not in possession of the propert%> and not servin' notice on respondent despite 1no#led'e
that it #as in actual possession of the propert%.
G
The !ourt of )ppeals 'ranted the petition and ordered the annul0ent of the i0pu'ned Order.
/
It found that
the O#ner:s !op% is in the possession of respondent since (+7G. Thus, petitioners do not o#n the propert%,
nor do the% have an% interest thereon that could have been the sub9ect of succession. Moreover, the !ourt
of )ppeals found that petitioners co00itted per9ur% in e=ecutin' their 3oint )Fdavit of @oss in support of
their petition before the trial court as the% 0ade it appear that the O#ner:s !op% #as still in the
possession of the spouses !a0itan, #hen in fact, as earl% as (+7G, the sa0e had alread% been 'iven to
respondent. Dinall%, citin' -emetrio, v. "o,rt of #ppeals
+
the !ourt of )ppeals concluded that the trial
court could not have acCuired 9urisdiction over the petition because the O#ner:s
!op% #as never lost in the $rst place.
(<
Petitioners sou'ht reconsideration of the Resolution, but the 0otion
#as denied for lac1 of 0erit.
((
Petitioners no# clai0 that the% have no 1no#led'e of the purported sale and that the% #ere not a#are of
an% clai0 #hatsoever over the propert% in Cuestion for over t#ent%,seven,4-G5 %ears, stressin' that
propert% is still re'istered, declared for ta=ation, and realt% ta=es paid thereon in the na0e of the spouses
!a0itan.
(-
The% ar'ue that the !ourt of )ppeals erred in $ndin' that the O#ner:s !op% #as not lost but
#as in fact in the possession of respondent since there #as no docu0entar% proof to support such
conclusion. )ccordin' to petitioners, respondent #as not able to present even a photocop% of the O#ner:s
!op% to prove its possession thereof since (+7G and thus the !ourt of )ppeals did not acCuire 9urisdiction
over the petition for annul0ent.
(.
Petitioners add that respondent is 'uilt% of estoppel and laches in assertin' its alle'ed ri'hts over the
propert%. The une=plained conceal0ent for a lon' ti0e of its possession of the purported deed of absolute
sale and O#ner:s !op%, and its non,re'istration of the deed in its na0e run counter to the natural course
of thin's and are devoid of credence.
(*
@astl%, petitioners alle'e that the propert% in Cuestion could be a portion of the land surrendered to the
Presidential !o00ission on &ood &overn0ent 4P!&&5 as part of the ill,'otten #ealth of for0er President
Derdinand Marcos, and that the sole purpose of respondent:s conceal0ent of the deed of absolute sale is
to prevent seCuestration thereof.
(6
On the other hand, respondent ar'ues that its non,re'istration of title does not aEect its o#nership of the
propert% because b% the e=ecution of the deed of absolute sale, the spouses !a0itan had eEectivel%
divested the0selves of all the ri'hts, title and interest over the propert%. Moreover, save for their bare
alle'ations, petitioners have not been able to rebut the presu0ptive authenticit% of the deed of absolute
sale. @astl%, respondent posits that there is no basis for the alle'ation that the propert% in Cuestion is part
of the for0er President:s ill,'otten #ealth.
(7
)nent the clai0 that it failed to attach even a photocop% of the O#ner:s !op%, respondent clai0s that
there is no rule #hich reCuires that the such docu0ent should be included in a petition for annul0ent of
9ud'0ent. "esides, petitioners never disputed respondent:s possession of the title, but in fact 0erel%
cate'ori;ed such possession as one in bad faith. More i0portantl%, the ar'u0ent that respondents should
have attached the O#ner:s !op% of the title #as raised for the $rst ti0e in petitioners: 0otion for
reconsideration of this !ourt:s resolution dated (/ 3une (++G dis0issin' the instant petition.
(G
Dinall%,
respondent 0aintains that petitioners are estopped fro0 Cuestionin' the 9urisdiction of the !ourt of
)ppeals since the% activel% participated in the proceedin's therein.
(/
In a nutshell, the petition presents a ver% si0ple Cuestion2 Ahether the !ourt of )ppeals erred #hen it
ordered the annul0ent of the </ March (++6 Order of the trial court #hich directed the Re'ister of Deeds
to issue a second O#ner:s !op% of the title.
The !ourt of )ppeals did not. The petition 0ust be denied.
)nnul0ent of 9ud'0ent is a recourse eCuitable in character, allo#ed onl% in e=ceptional cases as #here
there is no available or other adeCuate re0ed%.
(+
)n action for annul0ent of 9ud'0ent is 'rounded onl% on
t#o 9usti$cations2 4(5 e=trinsic fraud> and 4-5 lac1 of 9urisdiction or denial of due process. The purpose of
such action is to have the $nal and e=ecutor% 9ud'0ent set aside so that there #ill be a rene#al of
liti'ation.
-<
The annul0ent of the Order dated </ March (++6 #as pre0ised on the lac1 of 9urisdiction of the trial court,
apparentl% brou'ht about b% the fact that, as found b% the !ourt of )ppeals, the duplicate certi$cate of the
title #as not lost nor destro%ed, but has re0ained in the possession of respondent #hich purchased the
real propert% fro0 the spouses !a0itan in (+7G. The !ourt $nds no reason to disturb the $ndin' of the
appellate court.
The petition for issuance of the ne# O#ner:s !op% before the trial court #as $led pursuant to Presidential
Decree No. (6-+, other#ise 1no#n as the 8Propert% Re'istration Decree,8 Section No. (<+ of #hich
provides2
S!. (<+. 'otice and replacement of lost d,plicate certifcate.WIn case of loss or theft of an
o#ner:s duplicate certi$cate of title, due notice under oath shall be sent b% the o#ner or b%
so0eone in his behalf to the Re'ister of Deeds of the province or cit% #here the land lies as soon as
the loss or theft is discovered. If a duplicate certi$cate is lost or destro%ed, or cannot be produced
b% a person appl%in' for the entr% of a ne# certi$cate to hi0 or for the re'istration of an%
instru0ent, a s#orn state0ent of the fact of such loss or destruction 0a% be $led b% the re'istered
o#ner or other person in interest and re'istered.
Bpon the petition of the re'istered o#ner or other person in interest, the court 0a%, after notice
and due hearin', direct the issuance of a ne# duplicate certi$cate, #hich shall contain a
0e0orandu0 of the fact that it is issued in place of the lost duplicate certi$cate, but shall in all
respects be entitled to li1e faith and credit as the ori'inal duplicate, and shall thereafter be
re'arded as such for all purposes of this decree.
Thus, before a duplicate certi$cate of title can be replaced, the petitioner under the fore'oin' provision
0ust establish that the duplicate certi$cate #as lost or destro%ed. This !ourt has consistentl% held that a
trial court does not acCuire 9urisdiction over a petition for the issuance of a ne# o#ner:s duplicate
certi$cate of title, if the ori'inal is in fact not lost but is in the possession of an alle'ed bu%er.
-(
In other
#ords, the fact of loss of the duplicate certi$cate is 9urisdictional.
Petitioners Cuestion the !ourt of )ppeals: Resolution, clai0in' that respondent failed to attach to its
petition for annul0ent of 9ud'0ent of the O#ner:s !op% itself, or even a photocop% thereof. Thus, the%
ar'ue there #as no proof that respondent has been in possession of the duplicate certi$cate. That bein'
the situation, the trial court validl% acCuired 9urisdiction over their petition for issuance of a ne# O#ner:s
!op%, petitioners conclude.
Respondent, so it appears, did not attach to its petition for annul0ent of 9ud'0ent the O#ner:s !op% of the
title. This lapse, ho#ever, does not suFce as basis to set aside the Cuestioned resolutions of the !ourt of
)ppeals.
) revie# of the records of the case sho#s that petitioners never Cuestioned respondent:s possession of the
O#ner:s !op%, its actual and ph%sical possession and occupation of the propert%, as #ell as its pa%0ent of
real estate ta=es due on the propert%.
In its petition for annul0ent before the !ourt of )ppeals, respondent alle'ed that2
*. On Dece0ber (., (+7G, the spouses !a0itan sold the Propert% to petitioner, as docu0ented b% a
8Deed of )bsolute Sale8 dated (. Dece0ber (+7G, a cop% of #hich is attached hereto as anne= 8!8.
Pursuant to the said Deed of )bsolute Sale, petitioner paid the purchase price in full.
6. Bpon the e=ecution of the Deed of )bsolute Sale, the vendors delivered to petitioner the o#ner:s
duplicate cop% of the Title, #hich Title has since been in the possession of petitioner. )lso, since
(+7G and to this da%, petitioner has been in actual ph%sical possession and continuous occupation
of the above,described Propert%. Moreover, petitioner has been the one pa%in' the real estate ta=es
due on the Propert%.
--
Ahile for its part, respondent treated the alle'ations perfunctoril% in this #ise in its !o00ent2
SP!IDI! DNI)@S
= = = =
-. Private respondents den% speci$call% para'raphs * and 6 of the said petition for lac1 of
1no#led'e and infor0ation suFcient to for0 a belief as to the truth of falsit% of the alle'ations
contained therein and as heretofore substantiated.
-.
The relevant provisions of the Rules of !ourt are Sections (< and ((, Rule /, #hich read2
S!. (<. .pecifc denial. W $ ."f"n.an 8u* */";+fy "a;! 8a"r+a6 a66">a+on of fa; !"
ru! of :!+;! !" .o"* no a.8+and, #henever practicable, shall set forth the substance of the
0atters upon #hich he relies to support his denial. Ahere a defendant desires to den% onl% a part
of an aver0ent, he shall specif% so 0uch of it as is true and 0aterial and shall den% onl% the
re0ainder. Ahere a defendant is #ithout 1no#led'e or infor0ation suFcient to for0 a belief as to
the truth of a 0aterial aver0ent 0ade in the co0plaint, he shall so state, and this shall have the
eEect of a denial. 40phasis supplied5
S!.((. #llegation not specifcally denied deemed admitted.W Ma"r+a6 a,"r8"n +n !"
;o8/6a+n, other than those as to the a0ount of unliCuidated da0a'es, shall be .""8".
a.8+". :!"n no */";+C;a66y ."n+".. )lle'ations of usur% in a co0plaint to recover usurious
interest are dee0ed ad0itted if not denied under oath. 40phasis supplied5
)lthou'h petitioners put their un0ista1abl% sparse denial of respondent:s alle'ations relative to the
e=ecution of the deed of sale in its favor and its possession of the O#ner:s !op% under the headin'
8SP!IDI! DNI)@S8 and antecedin' it #ith the adverb 8speci$call%,: the sa0e cannot function as an
operative denial #ithin the purvie# of the Rules. ) denial is not speci$c si0pl% because it is so Cuali$ed b%
the defendant. ) 'eneral denial does not beco0e speci$c b% the use of the #ord 8speci$call%.8 Ahen the
0atters of #hether the defendant alle'es havin' no 1no#led'e or infor0ation suFcient to for0 a belief,
are plainl% and necessaril% #ithin the defendant:s 1no#led'e, his alle'ed i'norance or lac1 of infor0ation
#ill not be considered as a speci$c denial.
-*
In one case, it #as held that #hen a respondent 0a1es a
8speci$c denial8 of a 0aterial alle'ation of the petition #ithout settin' forth the substance of the 0atters
relied upon to support its 'eneral denial, #hen such 0atters #ere plainl% #ithin its 1no#led'e and the
defendant could not lo'icall% pretend i'norance as to the sa0e, said defendant fails to properl% tender an
issue.
-6
Petitioners: 8speci$c denial8 in this case is ineEective and a0ounts to an ad0ission pursuant to
Rule /, Sec. (( of the Rules of !ourt.
Petitioners 0a1e an issue of the lac1 of 0aterial evidence to support the !ourt of )ppeals: conclusion that
the O#ner:s !op% #as not lost, because respondent failed to attach the said O#ner:s !op% or even a
photocop% thereof. The ar'u0ent is unavailin'.
Dirstl%, there is no need of proof because of petitioners: i0plied ad0ission thereof.
Secondl%, the 0atter should have been raised in the proceedin's before the !ourt of )ppeals and not
before this !ourt. Despite various opportunities, petitioners failed to do so before the !ourt of )ppeals. In
fact, it #as onl% in petitioners: Motion for Reconsideration of our
Resolution dated (/ 3une (++G dis0issin' their petition
-7
that the% clai0ed that the !ourt of )ppeals
co00itted 8'rave error tanta0ount to lac1 of 9urisdiction thereof #hen it declared annulled the contested
Order = = = = for lac1 of 0aterial evidence to support that the said title #as lost.8
-G
Ae have consistentl%
held that 0atters, theories or ar'u0ents not brou'ht out in the ori'inal proceedin's cannot be considered
on revie# or appeal #here the% are raised for the $rst ti0e.
-/
Dinall%, havin' activel% participated in the proceedin's before the !ourt of )ppeals, petitioners can no
lon'er Cuestion its authorit%.
-+
ver%thin' considered, the !ourt of )ppeals #as satis$ed that the O#ner:s !op% of the T!T No. 4T,((+/-5
T,.(// is not lost, but rather, as ad0itted b% petitioners, it has been in the possession of another person.
Ae $nd no reason to disturb the said $ndin'.
Petitioners: other clai0s, to #it2 4i5 respondent is 'uilt% of estoppel and laches in assertin' its ri'hts over
the propert%> 4ii5 respondent is 'uilt% of fraud and bad faith #hen it concealed the possession of the deed
of absolute sale of the propert% and the O#ner:s !op%, and #hen it failed to re'ister and have the title of
the propert% transferred to its na0e> and 4iii5 the propert% in Cuestion could be a part of ill,'otten #ealth
surrendered to the P!&&, are i00aterial and irrelevant to the case. Thus, there is no need to d#ell on
the0. The instant petition 0erel% Cuestions the propriet% of the annul0ent order on the 'round of the trial
court:s lac1 of 9urisdiction. )n% other issues, such as the o#nership of the propert%, or the 0otives for the
non,re'istration of the sale or the non,transfer of the title are be%ond the a0bit of the petition. "esides,
the deter0ination of said issues necessitates a factual inCuir% #hich this !ourt does not perfor0 in a
petition for revie#.
.<
AHRDOR, the petition is DNID and the challen'ed resolution of the !ourt of )ppeals is )DDIRMD,
#ith costs a'ainst petitioners.
SO ORDRD.
C,is,m3ing! .! "hairperson! "arpio! "arpio 1orales! and &elasco! r.!! .! concur.
)oono"*
(
Respondent:s Petition in the !ourt of )ppeals, Rollo, pp. /6,+*, /G.
-
Doc1eted as S@R! !ase No. ((++,(++.,!, raXed to "ranch .6, Re'ional Trial !ourt of !ala0ba.
.
Order dated </ March (++6, rollo, pp. 7(,7-.
*
Id. at /-,/*.
6
Id. at -*/.
7
Id. at (7(,(G< and -.G,-*7.
G
Id.
/
Resolution of the !ourt of )ppeals dated .( Ma% (++7, id. at ((6,((+.
+
&.R. No. ((66+6, (* Nove0ber (++*, -./ S!R) (6/, (7-.
(<
Rollo, pp. ((G,((/.
((
Id. at (.-.
(-
Id. at **.
(.
Repl% 4for the Petitioners5> id. at .(G,.-(.
(*
Id. at *6,*/.
(6
Id. at */,6<.
(7
Id. at -.-,-.*.
(G
The petition #as dis0issed for bein' $led out of ti0e and for failure to sub0it an aFdavit of service of
copies to respondents. The petition, ho#ever, #as reinstated on -6 )u'ust (++G upon the 0otion for
reconsideration $led b% petitioners.
(/
Id. at .-G,..<.
(+
spinosa v. !ourt of )ppeals, &.R. No. (-/7/7, -/ Ma% -<<*, *.< S!R) +7, (<., citin' "arco v. !ourt of
)ppeals, &.R. No. (-<6/G, -< 3anuar% -<<*, *-< S!R) (7-.
-<
Hi,Tone Mar1etin' !orporation v. "ai1al Realt% !orporation, &.R. No. (*+++-, -< )u'ust -<<*, *.G S!R)
(-(, (.(.
-(
Strai'ht Ti0es, Inc. v. !ourt of )ppeals, .67 Phil. -(G, --G,--/ 4(++/5> -emetrio, v. "o,rt of #ppeals,
supra note +> )rcelona. v. "o,rt of #ppeals!.*6 Phil. -6<, -76 4(++G5.
--
Rollo, p. /G.
-.
!o00ent to the petition for annul0ent, id. at +G,((., (((.
-*
Philippine National "an1 v. !ourt of )ppeals, &.R. No. (-7(6., (* 3anuar% -<<*, *(+ S!R) -/(, -/G,
citin' Ver'ara v. Suelto, (67 S!R) G6. 4(+/G5.
-6
3.P. 3uan V Sons, Inc. v. @ian'a Industries, Inc., (.+ Phil. GG, /*.
-7
Rollo, pp. (*/,(*+.
-G
Id. at (6..
-/
De Ra0a v. !ourt of )ppeals, &.R. No. (.((.7, -/ Debruar% -<<(, .6. S!R) +*, (</, citin' Salafranca v.
Phila0life Villa'e Ho0eo#ners )ssociation, Inc., .<< S!R) *7+, */< 4(++/5.
-+
Spouses Refu'ia, et al. v. !ourt of )ppeals, &.R. No. ((/-/*, <6 3ul% (++7, -6/ S!R) .(G, .67.
.<
'ag,iat v. "o,rt of #ppeals, *6+ Phil. -.G, -*( 4-<<.5.
SECOND D#%#S#ON


ST)T OD T)R!I@) VD). D
VI@@&)S,
Petitioner,


, versus , &.R. No. (*.<<7


3SBS R. &)"O?), 3OS !BN!O
"ORROMO, and RI!)RDO V. Present2
R?S, in their capacit% as
)d0inistrators of the Intestate state PBNO! .! "hairperson,
of Vito "orro0eo, !S)R &I@@)M)!, S)NDOV)@,&BTIRRJ,
in his capacit% as the Re'ister of Deeds !ORON),
of !ebu !it%, PI@)R N. VD). D )J!BN), and
"ORROMO, M)RI) ". PBTON&, &)R!I), .
DDRI!O V. "ORROMO, 3OS
"ORROMO, !ONSB@O V.
"ORROMO, !)NBTO V. Pro0ul'ated2
"ORROMO, 3R., P)TRO!INIO ".
HRRR), MI@IO ). "ORROMO, 3R., 3ul% (*, -<<7
!OR)JON ). "ORROMO, DB)RDO
"ORROMO, TOM)S "ORROMO,
)M@I) "ORROMO, !OSM
"ORROMO, PTR) !. "ORROMO,
3OS )NTONIO "ORROMO,
VIT)@I)N) "ORROMO VD). D
@ONTIN&, 3OS !. "ORROMO,
DORTBN)TO "ORROMO, )M@IND)
". T)@)M, )N&@IT) "ORROMO,
M)RI) ". VD). D RBNI@@),
3OSDIN) "ORROMO NRI,
PRS!I@@)NO TITO "ORROMO,
)M@I) R. "ORROMO, ST)T OD
S)@BD "ORROMO, M)RI) ". )T&),
SISTR ROS)RIO "ORROMO, SISTR
@BJ "ORROMO, HRMINI&I@D)
NONNNQ)MP, D "ORROMO
PBROS, HON. DRN)NDO RBIJ,
HON. NBMRI)NO STNJO, )TT?.
DI@I"RTO @ON)RDO, )TT?.
N)J)RIO P)!PBI)O, )TT?.
!IPRI)NO R)!)J), )TT?. MI@IO
"NITJ, 3R., )TT?. !)STOR ?.
HONT)NOS)S, )TT?. "N3)MIN
R)@@ON, )TT?. !)@ISTO P.
V)@@NT, )TT?. &)BDISIO !.
VI@@)&ONJ)@O, HON. )@DRDO
"NIP)?O, )TT?. !S)R &ONJ)@S,
)TT?. NI!O@)S 3BM)P)O, )TT?.
R)B@ SS"RNO, )TT?. MI&B@
!BN!O, )TT?. DI@MON
DRN)NDJ, )TT?. PBIRI!O D@
M)R, )TT?. DOMIN&O )NTI&B),
)TT?. VI!NT 3)?M, )TT?.
ROS)RIO D 3SBS )@)NO, )MP)RO
MR!)DO JOS), )TT?. DR)N!IS
JOS), )N&@O JOS), @ORN)
JOS), JONI) JOS), NOR) JOS),
RO@)NDO JOS), @"RT JOS),
V@?N JOS), 3O!@?N JOS),
M)NB@ JOS), 3R., and M).
@OBRDS JOS),
Respondents.
= ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =


DEC#S#ON

$'CUN$, J.:


This is a petition for revie# on certiorari of the Resolutions of the !ourt of )ppeals in !),&.R. !V No.
6G/6- pro0ul'ated on 3ul% -/, (+++ and )pril (/, -<<<. The Resolution dated 3ul% -/, (+++ dis0issed
petitioner:s appeal, #hile the Resolution dated)pril (/, -<<< denied petitioner:s 0otion for
reconsideration.

The antecedents are as follo#s2

Vito "orro0eo and 3uliana van'elista #ere husband and #ife. 3uliana died intestate on )u'ust (.,
(+.+, #hile Vito died onMarch (., (+6-. The% had no children but left e=tensive properties in
the province of !ebu.

Special Proceedings No. 916-

On )pril (+, (+6-, 3ose H. 3unCuera $led in the !ourt of Dirst Instance of !ebu a petition for the
probate of a docu0ent, purportedl% Vito "orro0eo:s #ill, devisin' all his properties to To0as, Dortunato
and )0elia, all surna0ed "orro0eo, in eCual and undivided shares, and desi'natin' 3unCuera as
e=ecutor. On Ma% -/, (+7<, in Special Proceedin's No. +(7,R, the trial court denied the probate as the #ill
#as found to be a for'er%. In ,nD,era v. 5orromeo!
K(L
pro0ul'ated on March .<, (+7G, this !ourt aFr0ed
the trial court:s decision.

Special Proceedin's No. +(7,R #as converted into an intestate proceedin' for the settle0ent of the
estate of Vito "orro0eo. Several persons appeared before the court clai0in' to be heirs of Vito "orro0eo.

On )pril (<, (+7+, the trial court, invo1in' )rticle +G- of the !ivil !ode, issued an order declarin' the
follo#in', to the e=clusion of all others, as the intestate heirs of Vito "orro0eo2 3ose !uenco "orro0eo,
3ud'e !rispin "orro0eo, Vitaliana "orro0eo, Patrocinio "orro0eo Herrera, Salud "orro0eo, )suncion
"orro0eo, Marcial "orro0eo, )0elinda "orro0eo de Tala0, and the heirs of !anuto "orro0eo. The trial
court also ordered that the assets of the intestate estate of Vito "orro0eo be divided into *M+ and 6M+
'roups and distributed in eCual shares a0on' the nine intestate heirs.

On )pril -( and .<, (+7+, the declared heirs, e=cept for Patrocinio ". Herrera, si'ned an a'ree0ent
to partition the properties of the deceased Vito "orro0eo. The a'ree0ent #as approved b% the trial court
in its Order of )u'ust (6, (+7+. In the Order, the trial court directed the )d0inistrator, )tt%. 3esus &abo%a,
3r., to partition the properties of the deceased in the #a% and 0anner the% #ere divided and partitioned in
the )'ree0ent of Partition.

On October -, (+7+, Tarcila Vda. de Ville'as $led a Third Part% !lai0 andMor !lai0 in Intervention in
Special Proceedin's No. +(7,R clai0in' o#nership and see1in' recover% of the one,half share of the late
3uliana van'elista de "orro0eo in the con9u'al properties left b% the Spouses Vito "orro0eo and 3uliana
van'elista. Tarcila Vda. de Ville'as #as the #ife of deceased )rturo Ville'as, alle'ed nephe# and heir of
3uliana van'elista. The trial court denied Tarcila:s clai0 in intervention on the 'round that as a probate
court, it had no 9urisdiction to deter0ine #ith $nalit% the Cuestion of o#nership over the said one,half
portion.

On )u'ust -6, (+G-, Dortunato "orro0eo, #ho had earlier clai0ed to be an heir under the for'ed
#ill, $led a 0otion before the trial court pra%in' that he be declared as one of the heirs of the deceased
Vito "orro0eo, alle'in' that he is an ille'iti0ate son of the deceased and that in the declaration of heirs
0ade b% the trial court, he #as o0itted, in disre'ard of the la# 0a1in' hi0 a forced heir entitled to
receive a le'iti0e li1e all other forced heirs.

On 3une -6, (+G., the trial court dis0issed the 0otion since it #as alread% barred b% the Order
dated )pril (<, (+7+ declarin' the persons na0ed therein as the le'al heirs of the deceased Vito
"orro0eo.

Dortunato $led a 0otion for reconsideration, and clai0ed that in a Aaiver of Hereditar% Ri'hts
dated 3ul% .(, (+7G, $ve of the nine heirs relinCuished to hi0 their shares in the disputed estate.

In an Order dated Dece0ber -*, (+G*, the trial court declared Dortunato "orro0eo as entitled to
6M+ of the estate of Vito "orro0eo after concludin' that the $ve declared heirs #ho si'ned the #aiver
a'ree0ent assi'nin' their hereditar% ri'hts to Dortunato had lost the sa0e ri'hts. ) 0otion for
reconsideration of the Order #as denied on 3ul% G, (+G6.

On appeal to the !ourt of )ppeals, the sa0e #as certi$ed to this !ourt as onl% Cuestions of la#
#ere involved. The case, doc1eted as &.R. No. @,*((G*, #as decided to'ether #ith four other
cases
K-L
ste00in' fro0 Special Proceedin's No. +(7,R in5orromeo$?errera v. 5orromeo
[!]
pro0ul'ated
on 3ul% -., (+/G. The dispositive portion of the Decision reads2

AHRDOR, ,,

4(5 In &.R. No. *((G(, the order of the respondent 9ud'e dated Dece0ber -*, (+G*,
declarin' the respondent entitled to 6M+ of the estate of the late Vito "orro0eo and
the order dated 3ul% G, (+G6, den%in' the petitioner:s 0otion for reconsideration of
the afore0entioned order are hereb% ST )SID for bein' NB@@ and VOID>

4-5 In &.R. No. 66<<<, the order of the trial court declarin' the #aiver docu0ent
valid is hereb% ST )SID>

4.5 In &.R. No. 7./(/, the petition is hereb% DNID. The issue in the decision of the
Inter0ediate )ppellate !ourt disCualif%in' and orderin' the inhibition of 3ud'e
Drancisco P. "ur'os fro0 further hearin' Special Proceedin's No. +(7,R is declared
0oot and acade0ic. The 9ud'e #ho has ta1en over the sala of retired 3ud'e
Drancisco P. "ur'os shall i00ediatel% conduct hearin's #ith a vie# to ter0inatin' the
proceedin's. In the event that the successor,9ud'e is li1e#ise disCuali$ed, the order
of the Inter0ediate )ppellate !ourt directin' the =ecutive 3ud'e of the
Re'ional Trial !ourt of !ebu to re,raXe the case shall be i0ple0ented>

4*5 In &.R. No. 76++6, the petition is hereb% &R)NTD. The issue see1in' to
restrain 3ud'e Drancisco P. "ur'os fro0 further actin' in &.R. No. 7./(/ is MOOT
and )!)DMI!>

465 In &.R. No. 7-/+6, the trial court is hereb% ordered to speedil% ter0inate the
4sic5 close Special Proceedin's No. +(7,R, sub9ect to the sub0ission of an inventor%
of the real properties of the estate and an accountin' of the cash and ban1
deposits b% the petitioner,ad0inistrator of the estate as reCuired b% this !ourt in its
Resolution dated 3une (6, (+/.> and

475 The portion of the Order of )u'ust (6, (+7+, se're'atin' *<Y of the 0ar1et
value of the estate fro0 #hich attorne%:s fees shall be ta1en and paid should be, as it
is hereb% D@TD. The la#%ers should collect fro0 the heirs,distributees #ho
individuall% hired the0, attorne%:s fees accordin' to the nature of the services
rendered but in a0ounts #hich should not e=ceed 0ore than -<Y of the 0ar1et
value of the propert% the latter acCuired fro0 the estate as bene$ciaries.

SO ORDRD.
K*L


On Ma% -+, (+/+, herein petitioner $led a Motion to @iCuidate the !on9u'al Properties and
Separate Paraphernal Properties of the Aife of Decedent Vito "orro0eo durin' the pendenc% of Special
Proceedin's No. +(7,R at the Re'ional Trial !ourt of !ebu. Petitioner also $led a 0otion for
resolution. "oth 0otions #ere denied b% the trial court in its Order of )u'ust -6, (+/+.

On October .(, (+/+, petitioner $led #ith the !ourt of )ppeals a petition for certiorari #ith a
pra%er for in9unction see1in' the annul0ent and settin' aside of the trial court:s Order dated )u'ust -6,
(+/+. The petition #as doc1eted as !),&.R. SP No. (+-/*, entitled ;state of <arcila &da. de &illegas v.
?onora3le %erman =ee! et al.
In a Decision
K6L
pro0ul'ated on )u'ust .<, (++<, the !ourt of )ppeals dis0issed the petition for lac1 of
0erit.

On Nove0ber -<, (++<, petitioner $led a petition for certiorari Cuestionin' the decision of the !ourt
of )ppeals #ith this !ourt, doc1eted as &.R. No. +/(G+. The petition #as denied due to failure to co0pl%
#ith the follo#in' reCuire0ents of the Rules of !ourt2 4(5 Dull pa%0ent of the prescribed doc1etin' and
other fees at the ti0e of the $lin' of the petition> and 4-5 a clearl% le'ible duplicate ori'inal or certi$ed
true cop% of the decision, 9ud'0ent, resolution or order sub9ect of the petition appended to the petition.

"ivil "ase No. -11#41

Meanti0e, on )u'ust -7, (+G<, petitioner state of Tarcila
K7L
$led #ith the Re'ional Trial !ourt of
!ebu the instant civil case for accountin', liCuidation of con9u'al partnership, separation and deliver% of
propert%, doc1eted as !ivil !ase No. R,((/*(, #hich #as incidentall% raXed oE to the sa0e branch tr%in'
Special Proceedin's No. +(7,R.

On Debruar% -/, (+/+, the trial court dis0issed !ivil !ase No. R,((/*(. The dispositive portion of
the Order of dis0issal reads2

(HERE)ORE, in vie# of the fact that the plaintiE has not pursued her clai0s
properl%, b% $lin' an intervention in Sp. Proc. No. +(7 and on account of laches, the
plaintiE:s clai0 in this case 0a% be dee0ed to have been barred b% laches as held in the
case of &o !hi &un V &o )#a%, et al. versus &o !ho, +7 Phil. 7--. This !ourt also hereb%
resolves to dis0iss this case for havin' beco0e 0oot and acade0ic b% virtue of the decision
of the Supre0e !ourt in the $ve enu0erated cases in relation to Sp. Proc. No. +(7.

#T #S SO ORDERED.
KGL


On Ma% (7, (+/+, the trial court denied the 0otion for reconsideration of the Order of dis0issal.

Petitioner appealed to the !ourt of )ppeals. In a Decision
K/L
dated Dece0ber /, (++- in !),&.R. !V
No. -(/-7, the !ourt of )ppeals set aside the Order of dis0issal and re0anded the case to the court of
ori'in for further proceedin's.

In a Resolution dated Debruar% (/, (++., the !ourt of )ppeals denied the 0otion for reconsideration
$led b% respondent Raul R. Sesbreno,
K+L
and a 0otion $led b% petitioner for the appellate court to direct the
Re'ional Trial !ourt of !ebu, "ranch (6 to se're'ate its alle'ed one,half portion fro0 the Vito "orro0eo
estate proceedin's pendin' deter0ination of !ivil !ase No. R,((/*(.

Raul Sesbreno $led before this !ourt a petition for revie# on certiorari of the Decision of the !ourt
of )ppeals datedDece0ber /, (++-, #hich set aside the Order of dis0issal of the trial court. This !ourt
denied the petition in a Resolution
K(<L
datedOctober (+, (++*.

Ahile so0e defendants $led their respective )ns#ers and counterclai0s #ith the trial court,
defendants 3ose "orro0eo, Maria ". Puton', Dederico "orro0eo, !onsuelo "orro0eo, "en9a0in S. Rallon,
and the state of Salud "orro0eo $led on October ((, (++7 an )0ended Motion to Dis0iss !ivil !ase No.
R,((/*( on the 'round that plaintiE:s cause of action #as alread% barred b% a prior 9ud'0ent, and the
plaintiE failed to prosecute its action for an unreasonable len'th of ti0e. PlaintiE 4petitioner5 $led an
Opposition to the )0ended Motion to Dis0iss.
On Septe0ber (6, (++G, the trial court issued an Order dis0issin' the case, the dispositive portion
of #hich reads2

AHRDOR, in vie# of the fore'oin' considerations, this !ourt resolves to $nall%
DISMISS this case on the 'rounds of prescription, laches and estoppel and, that the cause of
action is no# barred b% a prior 9ud'0ent.

SO ORDRD.
K((L


Petitioner appealed to the !ourt of )ppeals. Respondents $led a Motion to Dis0iss )ppeal on the
follo#in' 'rounds2 4a5 )ppellant did not state in the caption all the na0es of the defendants,appellees #ho
nu0ber 0ore that 6< in all in violation of Sec. (, Rule ** of the (++G Rules of !ivil Procedure> 4b5 appellant
failed to follo# Sec. *,
K(-L
Rule *(, Rules of !ivil Procedure> and 4c5 appellant failed to follo# Sec. (. 4a5, 4c5
and 4d5, Rule ** of the Rules of !ivil Procedure. Petitioner $led an Opposition to the 0otion.

In a Resolution pro0ul'ated on 3ul% -/, (+++ in !),&.R. !V No. 6G/6-, the !ourt of )ppeals stated
that appellant 4petitioner5 validl% refuted the $rst t#o 'rounds, but failed to 9ustif% its non,co0pliance #ith
the third 'round, that is, co0pliance #ith para'raphs 4a5, 4c5 and 4d5 of Sec. (., Rule ** of the Rules of
!ivil Procedure.

The !ourt of )ppeals found, thus2

) perusal of the appellant:s brief reveals that it does not have a sub9ect inde= #ith a
di'est of the ar'u0ents and pa'e references, a table of cases alphabeticall% arran'ed>
under the headin' OState0ent of the
!aseO there is no state0ent as to the su00ar% of the proceedin's, the appealed rulin's and
orders of the court> and there is no NState0ent of the DactsO sho#in' a clear and concise
state0ent in a narrative for0 the facts ad0itted b% both parties and those in controvers% in
clear violation of the Revised Rules of !ourt, thereb% #arrantin' dis0issal of the
appeal. The appeal can even be considered as dilator%.
K(.L


The dispositive portion of the Resolution reads2


AHRDOR, the 0otion to dis0iss appeal is 'ranted, and the appeal is hereb%
dis0issed.

SO ORDRD.
K(*L


In a Resolution
K(6L
dated )pril (/, -<<<, the !ourt of )ppeals denied petitioner:s 0otion for
reconsideration for lac1 of 0erit.

On 3une (., -<<<, petitioner $led this petition for revie# on certiorari of the decision of the !ourt of
)ppeals.

Petitioner raises the follo#in' issues2

I

AHTHR OR NOT TH )PP@@)NT:S "RID IN !),&.R. !V NO. 6G/6- SB"ST)NTI)@@?
!OMP@ID AITH TH RPBIRMNTS OD S!. (. 4)5, 4!5 )ND 4D5 RB@ ** OD TH (++G
RB@S OD !IVI@ PRO!DBR.

II

AHTHR OR NOT TH ORDR D)TD SPTM"R (6, (++G DISMISSIN& TH
!OMP@)INT IN !IVI@ !)S NO. R,((/*( IS NB@@ )ND VOID DOR "IN& !ONTR)R? TO TH
D!ISION OD TH !OBRT OD )PP)@S IN !),&.R. NO. -(/-7 AHI!H 3BSTIDIS STTIN&
)SID T!HNI!)@ITIS )ND TH )DORMNTIOND SPTM"R (6, (++G ORDR.
K(7L


Petitioner contends that it has substantiall% co0plied #ith the reCuire0ents of Sec. (. 4a5, 4c5 and
4d5, Rule ** of the Rules of !ivil Procedure. It pra%s for a liberal construction of the Rules in accordance
#ith Sec. 7, Rule ( of the Rules of !ourt in order to pro0ote its ob9ective of securin' a 9ust, speed% and
ine=pensive deter0ination of ever% action and proceedin'.

)n e=a0ination of the )ppellant:s "rief sho#s that, indeed, petitioner failed to co0pl% #ith the
reCuire0ents of Sec. (. 4a5, 4c5 and 4d5, Rule ** of the Rules of !ivil Procedure, #hich provides2

S!. (.. "ontents of appellant9s 3rief.,,The appellant:s brief shall contain, in the
order herein indicated, the follo#in'2

4a5 ) sub9ect inde= of the 0atter in the brief #ith a di'est of the ar'u0ents and
pa'e references, and a table of cases alphabeticall% arran'ed, te=tboo1s and statutes
cited #ith references to the pa'es #here the% are cited>
= = =
4c5 Bnder the headin' NState0ent of the !ase,O a clear and concise state0ent of
the nature of the action, a su00ar% of the proceedin's, the appealed rulin's and
orders of the court, the nature of the 9ud'0ent and an% other 0atters necessar% to
an understandin' of the nature of the controvers%, #ith pa'e references to the
record>

4d5 Bnder the headin' NState0ent of Dacts,O a clear and concise state0ent in a
narrative for0 of the facts ad0itted b% both parties and of those in controvers%,
to'ether #ith the substance of the proof relatin' thereto in suFcient detail to 0a1e it
clearl% intelli'ible, #ith pa'e references to the record.



The )ppellant:s "rief does not have a sub9ect inde= of the 0atter in the brief as speci$ed in Sec. (.
4a5, Rule ** of the Rules of !ourt. Moreover, the State0ent of the !ase has no state0ent of the su00ar%
of the proceedin's, the appealed rulin's and orders of the court, #ith pa'e references to the record as
reCuired b% Sec. (. 4c5, Rule ** of the Rules of !ourt. Durther, the )ppellant:s "rief has no portion entitled
NState0ent of Dacts,O and, therefore, no clear and concise state0ent in narrative for0 of the facts
ad0itted b% both parties and those in controvers%, #ith pa'e references to the record, in violation of Sec.
(. 4d5, Rule ** of the Rules of !ourt.

The !ourt of )ppeals #as, therefore, 9usti$ed in dis0issin' the appeal under Sec. ( 4f5, Rule 6< of
the Rules of !ourt, thus2

S!. (. %ro,nds for dismissal of appeal. H)n appeal 0a% be dis0issed b% the !ourt
of )ppeals, on its o#n 0otion or on that of the appellee, on the follo#in' 'rounds2

= = =

4f5 )bsence of speci$c assi'n0ent of errors in the appellant:s brief or of pa'e
references to the record as reCuired in section (., para'raphs 4a5, 4c5, 4d5 and 4f5 of Rule
**.
K(GL



In -el Rosario v. "o,rt of #ppeals
K(/L
and 5,cad v. "o,rt of #ppeals,
K(+L
the !ourt dis0issed the
appeal for a si0ilar violation b% the appellants of Sec. (, Rule 6< of the Rules of !ourt.

The ri'ht to appeal is a statutor% ri'ht and a part% #ho see1s to avail of the ri'ht 0ust faithfull%
co0pl% #ith the rules.
K-<L
Petitioner:s plea for liberal application of the rules #ould 0ean deviation fro0 the
afore0entioned rules, #hich cannot be tolerated. These rules are desi'ned to facilitate the orderl%
disposition of appealed cases.
K-(L


)s a result, there is no need to discuss the second issue raised b% petitioner.
Z(HERE)ORE, the petition is DEN#ED. The Resolutions of the !ourt of )ppeals dated 3ul% -/,
(+++ and )pril (/, -<<<are $))#RMED.

!osts a'ainst petitioner.

SO ORDERED.


$DOL)O S. $'CUN$
)ssociate 3ustice


(E CONCUR2



RE3N$TO S. PUNO
!hairperson
)ssociate 3ustice




$NGEL#N$ S$NDO%$L&GUT#ERRE' REN$TO C. CORON$
)ssociate 3ustice )ssociate 3ustice




C$NC#O C. G$RC#$
)ssociate 3ustice


K(L
No. @,(/*+/, (+ S!R) 767.
K-L
Doc1eted as &.R. No. @,66<<<, &.R. No. @,7-/+6, &.R. No. @,7./(/ and &.R. No. @,76++6.
K.L
&.R. No. @,*((G*, &.R. No. @,66<<<, &.R. No. @,7-/+6, &.R. No. @,7./(/ and &.R. No. @,
76++6, 3ul% -., (+/G, (6- S!R) (G(.
K*L
Id. at (+6,(+7.
K6L
Records, Vol. IV, p. -.
K7L
Tarcila died on )u'ust *, (+G<.
KGL
!) Decision, !),&.R. !V No. -(/-7, Rollo, p. /..
K/L
Id. at /(.
K+L
)lso spelled as NSesbreIo.O
K(<L
Records, Vol. IV, p. (..
K((L
Id. at -6/.
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S!. *. #ppellate co,rt doc8et and other lawf,l fees.WAithin the period for ta1in' an appeal,
the appellant shall pa% to the cler1 of the court #hich rendered the 9ud'0ent or $nal order
appealed fro0, the full a0ount of the appellate court doc1et and other la#ful fees. Proof of
pa%0ent of said fees shall be trans0itted to the appellate court to'ether #ith the ori'inal
record or the record on appeal.
K(.L
Rollo, p. *..
K(*L
Id. at **.
K(6L
Id. at *7.
K(7L
Id. at -G.
K(GL
Bnderscorin' supplied.
K(/L
&.R. No. ((./+<, Debruar% --, (++6, -*( S!R) 66..
K(+L
&.R. No. +.G/., Dece0ber ((, (++-, -(7 S!R) *-..
K-<L
.,pra, note (/, at 66G.
K-(L
I3id.
SPEC#$L SECOND D#%#S#ON
<G.R. No. 110542, Jun" 25, 2008=
)#L&EST$TE PROPERT#ES, #NC. $ND )$#R($3S $ND -LUE&($TERS RESORT $ND COUNTR3 CLU-,
#NC., PET#T#ONERS, %S. HON. M$R#ETT$ J. HOMEN$&%$LENC#$, #N HER C$P$C#T3 $S PRES#D#NG
JUDGE O) -R$NCH 1, REG#ON$L TR#$L COURT, 7$L#-O, $7L$N, $ND SULL#$N S3 N$%$L,
RESPONDENTS.
R E S O L U T # O N
T#NG$, J,2
Dor resolution is a Motion for Reconsideration
K(L
dated (+ Nove0ber -<<G $led b% petitioners Dil,state
Properties, Inc. and "lue,#aters Resort and !ountr% !lub, see1in' reconsideration of the Decision
K-L
of this
!ourt dated (6 October -<<G #hich denied their petition.
) brief recapitulation of the relevant facts, even thou'h the% have alread% been narrated in the Decision, is
in order.
In (++/, private respondent Sullian S% Naval $led a co0plaint
K.L
a'ainst petitioners, see1in' the recover% of
a parcel of land #hich petitioners had alle'edl% ta1en possession of b% constructin' a 'olf course #ithin
the vicinit% of her propert%. !ounsel for petitioners failed to attend the pre,trial, and onl% private
respondent presented evidence before the Re'ional Trial !ourt 4RT!5 of )1lan #hich heard the co0plaint.
The RT! rendered a decision
K*L
in favor of private respondent of #hich petitioners 0oved for
reconsideration.
The cru= of the present 0atter lies #ith the facts surroundin' the 0otion for reconsideration. The 0otion
#as $led on (< Ma% -<<<,
K6L
thirteen 4(.5 da%s after petitioners received their cop% of the RT!Us decision.
On -7 3ul% -<<<, the RT! issued an order
K7L
of even date den%in' the 0otion. Petitioners alle'ed in their
petition that the% received the order den%in' the 0otion for reconsideration on + )u'ust -<<<. The% $led a
Notice of )ppeal on (( )u'ust -<<<,
KGL
but the postal 0one% orders purchased and obtained to pa% the
$lin' fee #ere posted
onl% on -6 )u'ust -<<<, or be%ond the re'le0entar% period to perfect the appeal. !onseCuentl%, the RT!
denied the appeal
K/L
and such denial #as sustained b% the !ourt of )ppeals after petitioners $led a special
civil action for certiorari
K+L
assailin' the RT!Us refusal to 'ive due course to the appeal.
The Petition
K(<L
before this !ourt relied on a rather idios%ncratic theor% that onl% upon the adoption of the
a0end0ents to Section (., Rule *( of the Rules of !ivil Procedure eEective ( Ma% -<<< did it beco0e
obli'ator% on the part of trial courts to dis0iss appeals on account of the failure to pa% the full doc1et fees.
The !ourt, in its (6 October -<<G Decision,
K((L
re9ected this theor% and reaFr0ed the rule ordainin' the
disallo#ance of the appeal or notice of appeal #hen the doc1et fee is not paid in full #ithin the period for
ta1in' the appeal.
The present Motion for Reconsideration
K(-L
centers on a diEerent line of ar'u0ent2 that follo#in' our -<<6
decision in 'eypes v. "o,rt of #ppeals!
K(.L
their Notice of )ppeal #as perfected on ti0e as the full doc1et
fees #ere paid #ithin $fteen 4(65 da%s fro0 their receipt of the RT!Us order den%in' their 0otion for
reconsideration. 'eypeshas established a ne# rule #hereb% an appellant is 'ranted a fresh (6,da% period,
rec1oned fro0 receipt of the order den%in' the 0otion for reconsideration, #ithin #hich to perfect the
appeal.
Petitioners clarif% that the% received the RT!Us order den%in' their 0otion for reconsideration on (( )u'ust
-<<6,
K(*L
a fact #hich is con$r0ed b% the case records even thou'h the petition had 0isstated that said
order #as received on + )u'ust -<<6. Petitioners ar'ue that follo#in' 'eypes, the% #ere entitled to a ne#
(6,da% period, i.e., until -7 )u'ust -<<6 or one 4(5 da% after the% had posted the full appellate doc1et
fees, to perfect the appeal.
Most vitall%, petitioners point out that on (< October -<<G, or 9ust $ve 465 da%s before the pro0ul'ation of
the assailed Decision, the !ourt throu'h the Third Division rendered a decision in .ps. -e los .antos v.
&da. -e 1ang,3at
K(6L
declarin' that the'eypes rulin' indeed can be retroactivel% applied to prior
instances.
Private respondent $led her !o00ent
K(7L
on the Motion for Reconsideration. She insists that 'eypes should
not be retroactivel% applied, but she fails to cite an% authorit% on that ar'u0ent or other#ise contend #ith
the rulin' in .ps. -e los .antos.
The deter0inative issue is #hether the 8fresh period8 rule announced in 'eypes could retroactivel% appl%
in cases #here the period for appeal had lapsed prior to (* Septe0ber -<<6 #hen 'eypes #as
pro0ul'ated. That Cuestion 0a% be ans#ered #ith the 'uidance of the 'eneral rule that procedural la#s
0a% be 'iven retroactive eEect to actions pendin' and undeter0ined at the ti0e of their passa'e, there
bein' no vested ri'hts in the rules of procedure.
K(GL
)0end0ents to procedural rules are procedural or
re0edial in character as the% do not create ne# or re0ove vested ri'hts, but onl% operate in furtherance
of the re0ed% or con$r0ation of ri'hts alread% e=istin'.
K(/L
.ps. -e los .antos reaFr0s these principles and cate'oricall% #arrants that 'eypesbears the Cuested
retroactive eEect, to #it2
Procedural la# refers to the ad9ective la# #hich prescribes rules and for0s of procedure in order that
courts 0a% be able to ad0inister 9ustice. Procedural la#s do not co0e #ithin the le'al conception of a
retroactive la#, or the 'eneral rule a'ainst the retroactive operation of statues the% 0a% be 'iven
retroactive eEect on actions pendin' and undeter0ined at the ti0e of their passa'e and this #ill not
violate an% ri'ht of a person #ho 0a% feel that he is adversel% aEected, inso0uch as there are no vested
ri'hts in rules of procedure.
The 8fresh period rule8 is a procedural la# as it prescribes a fresh period of (6 da%s #ithin #hich an appeal
0a% be 0ade in the event that the 0otion for reconsideration is denied b% the lo#er court. Dollo#in' the
rule on retroactivit% of procedural la#s, the 8fresh period rule8 should be applied to pendin' actions, such
as the present case.
)lso, to den% herein petitioners the bene$t of the 8fresh period rule8 #ill a0ount to in9ustice, if not
absurdit%, since the sub9ect notice of 9ud'0ent and $nal order #ere issued t#o %ears later or in the %ear
-<<<, as co0pared to the notice of 9ud'0ent and $nal order in 'eypes#hich #ere issued in (++/. It #ill be
incon'ruous and illo'ical that parties receivin' notices of 9ud'0ent and $nal orders issued in the %ear
(++/ #ill en9o% the bene$t of the 8fresh period rule8 #hile those later rulin's of the lo#er courts such as in
the instant case, #ill not.
K(+L
Notabl%, the sub9ect incidents in .ps. -e los .antos occurred in )u'ust -<<<, at the sa0e 0onth as the
relevant incidents at bar. There is no reason to adopt herein a rule that is diver'ent fro0 that in .ps. -e
los .antos.
Ae have ree=a0ined the petition to ascertain #hether there is an% other i0pedi0ent to 'rantin' favorable
relief to petitioners based on the retroactive application of the'eypes doctrine.
Private respondent does ar'ue in her co00ent on the petition
K-<L
and on the 0otion for
reconsideration
K-(L
that petitionersU special civil action for certiorari before the !ourt of )ppeals #as not
ti0el% lod'ed. This ar'u0ent is pre0ised on petitionersU reCuested relief that direct that proceedin's de
novo be had startin' fro0 pre,trial, b% annullin' the RT!Us decision and the courtUs rulin' on the 0otion for
reconsideration, #hich #as $led b% petitioners be%ond the 7<,da% period 0andated b% Section *, Rule 76
of the Rules of !ourt for $lin' a special civil action for certiorari.
Petitioners, in their Repl%,
K--L
ar'ue that the certiorari action #as ti0el% $led since the RT! had disallo#ed
the notice of appeal in its (. Septe0ber -<<< Order, a cop% of #hich #as received b% petitioners on --
Septe0ber -<<< or #ithin the 7<,da% period prior to the $lin' of their certiorari petition.
!ertainl%, the RT!Us order den%in' the notice of appeal #as ti0el% assailed b% petitioners via a special civil
action $led #ith the !ourt of )ppeals. &rantin' positive relief on that point #ould have the eEect of 'ivin'
due course to the notice of appeal. "ut is there basis for this !ourt to ta1e the e=tra step as reCuested b%
petitioners and 'o as far as to annul the RT!Us rulin's that 'ranted the co0plaint $led b% private
respondent[
Ae dee0 the challen'es raised b% petitioners a'ainst the correctness of the RT!Us decision and its
subseCuent resolution on the 0otion for reconsideration as inappropriate for this !ourt to decide. Such
issues 0a% ver% #ell be tac1led in petitionersU appeal before the !ourt of )ppeals. )fter all, as is no#
conceded, the appeal #as ti0el% $led and the e=istence of such appeal #ould, per Section (, Rule 76, bar
the certiorari action fro0 correctin' errors #hich 0a% be reversed on appeal. "esides, the resolution of
such issues reCuires a certain level of factual deter0ination, especiall% as to the circu0stances
surroundin' the resi'nation of the counsel #ho had initiall% appeared in behalf of the petitioners, the
service of the order resettin' the pre,trial and all subseCuent notices of trial to petitioners after private
respondent had been allo#ed to present evidence e> parte. Bnli1e the !ourt of )ppeals, this !ourt is not a
trier of facts.
K-.L
AHRDOR, the 0otion for reconsideration is &R)NTD and the instant petition is &R)NTD IN P)RT. The
assailed rulin's of the !ourt of )ppeals and the RT! Order dated (. Septe0ber -<<< are ST )SID. The
!ourt of )ppeals is DIR!TD to 'ive due course to petitionersU appeal in !ivil !ase No. 67-7, and to hear
and decide such appeal #ith deliberate dispatch. No pronounce0ent as to costs.
SO ORDRD.
C,is,m3ing! E"hairpersonF! "arpio! "arpio$1orales! and &elasco! r.! concur.
K(L
Rollo, pp. *-*,*.7.
K-L
Id. at *<7,*-..
K.L
Id. at G-,GG.
K*L
Id. at ++,(</.
K6L
Id. at (<+,(((.
K7L
Id. at ((/,(-(.
KGL
Id. at (--,(-..
K/L
Id. at (-*,(-6.
K+L
Id. at (-7,(6..
K(<L
Id. at (<,67.
K((L
Supra note -.
K(-L
Supra note (.
K(.L
&.R. No. (*(6-*, (* Septe0ber -<<6, *7+ S!R) 7...
K(*L
Rollo, pp. *.-,*... Petitioners support this assertion b% attachin' to their Motion for Reconsideration a
cop% of the re'istr% receipt #hich indicated that its then counsel, )tt%. B%tiepo, received the order on
8/M((M<<.8 See id. at *./.
K(6L
&.R. No. (*+6</, (< October -<<G, 6.6 S!R) *((.
K(7L
Rollo, pp. **7,*66.
K(GL
Pf:er!Inc. v. %alan, *(< Phil. */., *+( 4-<<(5.
K(/L
Id.
K(+L
-e los .antos v. &da. -e 1ang,3at, supra note (6, at *--,*-..
K-<L
Rollo, pp. ..G,.6..
K-(L
Id. at **7,*67.
K--L
Id. at .6/,.G..
K-.L
See, e.g., 'ag,iat v. "o,rt of #ppeals, *6+ Phil. -.G, -*(,-*- 4-<<.5.





SECOND D#%#S#ON

3B)N D DIOS !)R@OS, &.R. No. (.6/.<
Petitioner!
Present2

PBNO, .!
, versus , "hairman!
)BSTRI),M)RTINJ,
!)@@3O, SR.,
TIN&), and
D@I!ID)D S)NDOV)@, also !HI!O,N)J)RIO, .
1no#n as D@I!ID)D S. VD).
D !)R@OS or D@I!ID)D S.
!)R@OS or D@I!ID)D Pro0ul'ated2
S)NDOV)@ D !)R@OS,
and TODI@O !)R@OS II,
Respondents. Septe0ber .<, -<<6

=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=

SIDD!OR 4no# M&) P)!IDI!5 &.R. No. (.7<.6
INSBR)N! !ORPOR)TION,
Petitioner!


, versus ,


D@I!I)D S)NDOV)@ VD). D
!)R@OS and TODI@O !)R@OS II,
Respondents.

=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=




SIDD!OR 4no# M&) P)!IDI!5 &.R. No. (.GG*.
INSBR)N! !ORPOR)TION,
Petitioner!


, versus ,


HON. !OBRT OD )PP)@S 4DORMR
SP!I)@ DOBRTH DIVISION5, HON.
)@"RTO @. @RM) andMor the
R&ION)@ TRI)@ !OBRT OD TH
!IT? OD MBNTIN@BP), "R)N!H -67,
D@I!ID)D S)NDOV)@, also 1no#n as
D@I!ID)D S. VD). D !)R@OS OR
D@I!ID)D S. !)R@OS OR D@I!ID)D
S)NDOV)@ !)R@OS OR D@I!ID)D
S)NDOV)@ VD). D !)R@OS and
TODI@O !)R@OS II,
Respondents.

=,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,=


D E C # S # O N

TIN&), .2

These consolidated petitions e0anated fro0 a civil case $led b% 3uan de Dios !arlos 4N!arlosO5
a'ainst respondents Delicidad Sandoval 4NSandovalO5 and Teo$lo !arlos II 4Teo$lo II5 doc1eted #ith the
Re'ional Trial !ourt 4RT!5 of Muntinlupa !it% as !ivil !ase No. +6,(.6.



In his "omplaint before the RT!, !arlos asserted that he #as the sole survivin' co0pulsor% heir of his
parents, Deli= ". !arlos and Delipa le0ia,
K(L
#ho had acCuired durin' their 0arria'e, si= parcels of land
4sub9ect properties5. His brother, Teo$lo 4NTeo$loO5, died intestate in (++-. )t the ti0e of his death, Teo$lo
#as apparentl% 0arried to Sandoval, and cohabitin' #ith her and their child, respondent Teo$lo II.
Nonetheless, !arlos alle'ed in his "omplaint that Teo$lo and Sandoval #ere not validl% 0arried as the%
had not obtained an% 0arria'e license.
K-L
Durther0ore, !arlos also asserted that Teo$lo II could not be
considered as Teo$lo:s child. )s a result, !arlos concluded that he #as also the sole heir of his brother
Teo$lo, since the latter had died #ithout leavin' an% heirs.

!arlos also clai0ed that Teo$lo, prior to their father Deli=:s death in (+7., developed a sche0e to
save the elder !arlos:s estate fro0 inheritance ta=es. Bnder the sche0e, the properties of the father #ould
be transferred to Teo$lo #ho #ould, in turn, see to it that the shares of the le'al heirs are protected and
delivered to the0. Deli= assented to the plan, and the sub9ect properties #ere transferred in the na0e of
Teo$lo. )fter Teo$lo:s death, !arlos entered into certain a'ree0ents #ith Sandoval in connection #ith the
sub9ect properties. !arlos did so, believin' that the latter #as the la#ful #ife of his brother Teo$lo.
SubseCuentl% thou'h, !arlos discovered that Sandoval and his brother #ere never validl% 0arried, as their
0arria'e #as contracted #ithout a 0arria'e license.
K.L

!arlos no# sou'ht to nullif% these a'ree0ents #ith Sandoval for #ant of consideration, the pre0ise
for these contracts bein' non,e=istent. Thus, !arlos pra%ed of the RT! to declare the alle'ed 0arria'e
bet#een Teo$lo and Sandoval void a3 initio, provided that Teo$lo died #ithout issue, order that ne# titles
coverin' the sub9ect properties be issued in the na0e of !arlos, and reCuire Sandoval to restitute !arlos in
the a0ount of P(/,+-*,/<<.<<.
K*L

!arlos li1e#ise pra%ed for the issuance of the provisional relief of preli0inar% attach0ent. The RT!
issued an Arder dated G Septe0ber (++6 'rantin' the pra%er for preli0inar% attach0ent, and on (6
Septe0ber (++6, a #rit of preli0inar% attach0ent. !arlos posted a bond for P-<,<<<,<<<.<< issued b%
herein petitioner
SIDD!OR Insurance !orporation 4SIDD!OR5.
K6L
Shortl% thereafter, a 'otice of %arnishment #as served upon
the Philippine National "an1 4PN"5 over the deposit accounts 0aintained b% respondents.

Respondents $led an 4rgent 1otion to -ischarge the 7rit of #ttachment, #hich #as opposed b%
!arlos. On * Dece0ber (++6, the RT! rendered an order den%in' the 0otion. This caused respondents to
$le a Petition for "ertiorari #ith the !ourt of )ppeals, see1in' to set aside the RT! order 'rantin' the #rit
of preli0inar% attach0ent den%in' the 0otion for the dischar'e of the #rit. This case #as doc1eted as !),
&.R. SP No. .+-7G.
K7L


On -G Debruar% (++7, the !ourt of )ppeals Second Division pro0ul'ated its -ecision in !),&.R. SP
No. .+-7G! #herein it 'ranted the Petition for "ertiorari and ordered the dischar'e and dissolution of the
Arit of )ttach0ent and Notice of &arnish0ent.
KGL
The !ourt of )ppeals found that there #as no suFcient
cause of action to #arrant the preli0inar% attach0ent, since !arlos had 0erel% alle'ed 'eneral aver0ents
in order to support his pra%er.
K/L
!arlos elevated the said Decision to this !ourt b% #a% ofPetition for Review
on "ertiorari! #hich #as doc1eted as &.R. No. @,(-6G(G. In a Resol,tion dated -( October (++7, the !ourt
denied !arlos:s Petition, and thus the !ourt of )ppeals: -ecision orderin' the dissolution of the Arit of
)ttach0ent and Notice of &arnish0ent beca0e $nal.

In the 0eanti0e, the hearin' on !arlos:s "omplaint ensued before the RT!. Respondents dul% $led
their #nswer and thereafter $led a 1otion for .,mmary ,dgment. !arlos opposed the 0otion and
countered #ith his o#n 1otion for .,mmary ,dgment. On / )pril (++7, the RT! rendered a su00ar%
9ud'0ent in favor of !arlos. !arlos:s victor% #as #holesale, #ith the RT! 0a1in' the follo#in'
pronounce0ents2

(. Declarin' the 0arria'e bet#een defendant Delicidad Sandoval and Teo$lo !arlos
sole0ni;ed at Silan', !avite, on Ma% (*, (+7-, evidenced b% the Marria'e !ontract sub0itted in
this case, null and void ab initio for lac1 of the reCuisite 0arria'e license>

-. Declarin' that the defendant 0inor, Teo$lo S. !arlos II, is not the natural, ille'iti0ate,
or le'all% adopted child of the late Teo$lo . !arlos>

.. Orderin' defendant Sandoval to pa% and restitute to plaintiE the su0
of P(/,+-*,/<<.<<, to'ether #ith the interest thereon at the le'al rate fro0 date of $lin' of the
instant co0plaint until full% paid>



*. Declarin' plaintiE as the sole and e=clusive o#ner of the parcel of land, less the
portion ad9udicated to the plaintiEs in !ivil !ase No. ((+G6, covered b% T!T No. (.+<7( of the
Re'ister of Deeds of Ma1ati !it%, and orderin' said Re'ister of Deeds to cancel said title and to
issue another title in the sole na0e of plaintiE herein>

6. Declarin' the !ontract, )nne= Q of the !o0plaint, bet#een plaintiE and defendant
Sandoval null and void, and orderin' the Re'ister of Deeds of Ma1ati !it% to cancel T!T No.
(.+<6/ in the na0e of Teo$lo !arlos, and to issue another title in the sole na0e of the plaintiE
herein>

7. Declarin' the !ontract, )nne= M of the !o0plaint, bet#een plaintiE and defendant
Sandoval null and void>

G. Orderin' the cancellation of T!T No. -(</GG in the na0es of defendant Sandoval and
defendant 0inor Teo$lo S. !arlos II and orderin' the Re'ister of Deeds of Manila to issue
another title in the e=clusive na0e of plaintiE herein.

/. Orderin' the cancellation of T!T No. -(</G/ in the na0es of defendant Sandoval and
defendant 0inor Teo$lo S. !arlos II and orderin' the Re'ister of Deeds of Manila to issue
another title in the sole na0e of plaintiE herein.
K+L


Bpon pro0ul'ation of the .,mmary ,dgment, !arlos 0oved before the RT! for e=ecution pendin'
appeal. The RT! 'ranted the 0otion for e=ecution pendin' appeal upon the $lin' of a bond.
K(<L
On -G Ma%
(++7, the RT! issued a 7rit of ;>ec,tion.


Mean#hile, respondents $led a 1otion for Reconsideration of the .,mmary ,dgment, #hich #as
denied in an Arder dated -< Ma% (++7. Respondents then appealed the RT! -ecision to the !ourt of
)ppeals, #herein such appeal #as doc1eted as !),&.R. !V No. 6.--+. The case #as raXed to the
appellate courts: Dourteenth Division for co0pletion of records. Sandoval and !arlos also $led a Petitionfor
"ertiorari with <emporary Restraining Arder dated - 3une (++7. This special civil action pri0aril% attac1ed
the allo#ance of e=ecution pendin' appeal, and pra%ed for the annul0ent of the Arder 'rantin' e=ecution
pendin' appeal, and of the 7rit of ;>ec,tion

On (< Dece0ber (++7, in !),&.R. !V No. 6.--+, respondents $led a 1otion for ,dgment An the
#ttachment 5ond. The% noted that the !ourt of )ppeals had alread% ruled that the 7rit of Preliminary
#ttachment issued b% the RT! #as i0properl% 'ranted and that its -ecision, as aFr0ed b% the Supre0e
!ourt, had attained $nalit%. )ccordin'l%, the% #ere entitled to da0a'es under Section -<, Rule 6G of the
then Rules of !ivil Procedure, #hich 'overned clai0s for da0a'es on account of unla#ful attach0ent. In
support of their alle'ation of da0a'es, the% cite the Notice of &arnish0ent served on PN" Malolos "ranch,
#here Delicidad !arlos 0aintained deposits a0ountin' to P(6,6*7,(-(.+/.
K((L
)lso presented in support of
the 0otion #as a Notice of Deliver%MPa%0ent b% the RT! SheriE, directin' the PN" Malolos "ranch to
deliver the a0ounts previousl% 'arnished b% virtue of the 7rit of ;>ec,tion dated -G Ma% (++7>
K(-L
a 1anifestation $led b% PN" dated (+ 3ul% (++7 in !),&.R. SP No. *</(+, statin' that PN" had alread%
delivered to the RT! SheriE on -G 3une (++7 the a0ount of P(6,./*,6<+.+/ dra#n a'ainst the accounts of
!arlos> and a !erti$cation to the sa0e eEect issued b% the PN" Malolos "ranch. In an #ddend,m to 1otion
for ,dgment on the #ttachment 5ond, respondents additionall% pra%ed for 0oral and e=e0plar% da0a'es.
K(.L

)fter various pleadin's #ere dul% $led b% the parties, the !ourt of )ppeals Special Dourth Division
issued a Resol,tion dated -. March (++/, certif%in' that all the necessar% pleadin's have been $led, and
that the case 0a% alread% be referred to the RaXe !o00ittee for assi'n0ent to a ponente for stud% and
report. The sa0e Resol,tion li1e#ise denied #ithout elaboration a 1otion to -ismiss on the 'round of
foru0,shoppin' $led earlier b% !arlos.
K(*L

On such denial, !arlos $led a 1otion for Reconsideration. Respondents li1e#ise $led a 1otion for
Partial Reconsideration dated (G )pril (++/, ar'uin' that under the Revised Internal Rules of the !ourt of
)ppeals 4RIR!)5, the case 0a% be re,raXed for assi'n0ent for stud% and report onl% after there is a
resolution that the case is dee0ed sub0itted for decision.
K(6L
The% pointed out that re,raXe could not %et
be eEected, as there #ere still pendin' incidents, particularl% the 0otions for reconsideration of !arlos
and the0selves, as #ell as the 1otion for ,dgment on #ttachment 5ond.

On -7 3une (++/, the !ourt of )ppeals Dor0er Special Dourth Division pro0ul'ated t#o resolutions.
K(7L
The $rst, in response to !arlos:s 1otion for Reconsideration, a'ain denied !arlos:s 1otion to
-ismiss the )ppeal and 1otion for .,spension, but e=plained the reasons for such denial.

The second resolution is at the center of the present petitions. The assailed Resol,tion a'reed #ith
respondents that it #as $rst necessar% to resolve the pendin' incidents before the case could be re,raXed
for stud% and report. )ccordin'l%, the !ourt of )ppeals
proceeded to rule on these pendin' incidents. Ahile the $rst resolution d#elt on the pendin' 0otions $led
b% !arlos, this Resol,tion tac1led the other 0atter left unresolved, the 1otion for ,dgment on #ttachment
5ond. The !ourt of )ppeals found the clai0 for da0a'es 0eritorious, citin' the earlier decisions rulin' that
!arlos #as not entitled to the preli0inar% attach0ent. Invo1in' Section -<, Rule 6G of the Rules of !ourt,
as #ell as 9urisprudence,
K(GL
the !ourt of )ppeals ruled that it #as not necessar% for the deter0ination of
da0a'es on the in9unction bond to a#ait the decision on appeal.

The !ourt of )ppeals then proceeded to deter0ine to #hat da0a'es respondents #ere entitled to. In
rulin' that the a#ard of actual da0a'es #as #arranted, the court noted2

It is also not disputed that the PN", on 3une -G, (++7, issued t#o 0ana'er:s
chec1s2 M! No. +./6*( for P*,+.-,7-(.<+ and M! +./6*- for P(<,*6(,///./+ pa%able to
the order of N@uis !. "uca%on II, SheriE IV, RT!, "ranch -67, MuntinlupaO, dul% received
b% the latter in the total a0ount of PSOS DIDTN MI@@ION THR HBNDRD I&HT?
DOBR THOBS)ND DIV HBNDRD NIN V +/M(<< 4P(6,./*,6<+.+/5, dra#n a'ainst the
accounts of Ms. Delicidad Sandoval Vda. de !arlos #hich #ere earlier 'arnished for the
satisfaction of the above,0entioned #rit of attach0ent 4)nne= NO, Motion for 3ud'0ent
on the )ttach0ent "ond, pp. G,/5
K(/L

. . . .

The contention of K!arlosL that the #rit of attach0ent #as not i0ple0ented
falls Tat on the face of the 0anifestation of PN" that the deliver% of the
'arnished P(6,./*,6<+.+/ to hi0 #as eEected throu'h the sheriE.
K(+L


The !ourt of )ppeals found that 0oral and e=e0plar% da0a'es #ere not #arranted, there bein' no
0alice in pursuin' the attach0ent. The appellate court also found the clai0 of P-,<<<,<<<.<< for
attorne%:s fees as e=cessive, and reduced the su0 b% half. !orrespondin'l%, the dispositive portion of the
assailed Resol,tion reads2

AHRDOR, pre0ises considered, 9ud'0ent is hereb% rendered a'ainst the
attach0ent bond, orderin' SIDD!OR INSBR)N! !ORPOR)TION and plaintiE,appellee to
pa% defendants,appellants, 9ointl% and severall%, the su0 of P(6,./*,6<+.+/ and (-Y
interest per annu0 fro0 3une -G, (++7 #hen the unla#ful 'arnish0ent #as eEected until
full% paid and P(,<<<,<<<.<< as attorne%:s fees #ith 7Y interest thereon fro0 the trial
court:s decision on )pril /, (+/7 until full% paid.

SO ORDRD.
K-<L

"oth !arlos and SIDD!OR $led their respective 0otions for reconsideration of the Resol,tion. Dor
their part, respondents $led a 1otion for Immediate ;>ec,tion dated G )u'ust (++/ in re'ard to
theResol,tion of -7 3une (++/ a#ardin' the0 da0a'es.

In the Resol,tion dated (< October (++/,
K-(L
the !ourt of )ppeals denied the 0otions for
reconsideration and 'ranted the 1otion for Immediate ;>ec,tion. In 'rantin' the 1otion for Immediate
;>ec,tion, the !ourt of )ppeals cited the reasons that the appeal to be underta1en fro0 the -7 3une
(++/ Resol,tion #as patentl% dilator%> that there #ere no 0aterial and substantial defenses a'ainst the
0otion for 9ud'0ent on the attach0ent bond, renderin' the appeal pro,for0a and dilator%> that Sandoval
#as of advanced a'e and 0i'ht not en9o% the fruits of the 9ud'0ent on the attach0ent bond> and that
i00ediate e=ecution #ould end her suEerin' due to the arbitrar% 'arnish0ent of her account pursuant to
an i0proper attach0ent.
K--L

In its 1otion for Reconsideration, SIDD!OR e=plicitl% assailed the allo#ance of the 1otion for
Immediate ;>ec,tion.
K-.L
This #as denied b% the !ourt of )ppeals in a Resol,tion dated -- Dece0ber (++/.
K-*L

Dro0 these antecedents, the follo#in' petitions #ere $led before this !ourt2

%.R. 'o. 1G(HGI

This #ppeal 3y "ertiorari with Prayer for <emporary Restraining Arder/Preliminary InB,nction dated -7
October (++/ $led b% !arlos assailed the t#o resolutions of the !ourt of )ppeals both dated -7 3une (++/,
as #ell as the Resol,tion of (< October (++/, #hich denied !arlos:s 0otion for reconsideration. !arlos
ar'ues that the !ourt of )ppeals, throu'h the Dor0er Special Dourth Division, could not have resolved
the 1otion for ,dgment on the #ttachment 5ond since the case had not %et been re,raXed under the t#o,
raXe s%ste0 for stud% and report> that the !ourt of )ppeals erred in resolvin' the 0otion #ithout
conductin' an% hearin'> that the !ourt of )ppeals had no 9urisdiction over the 0otion as the doc1etin'
fees had not %et been $led> that the 0otion for 9ud'0ent, #hich did not contain an% certi$cation a'ainst
foru0,shoppin', #as an application sub9ect to the reCuire0ents of certi$cation a'ainst foru0,shoppin'>
that there #as no supportin' evidence to support the a#ard of da0a'es> and that the !ourt of )ppeals
co00itted 'rave abuse of discretion in den%in' the 1otion for Reconsideration#ithout advertin' to
speci$c reasons 0entioned for the denial of each issue.
K-6L

!arlos li1e#ise ascribes 'rave abuse of discretion to the !ourt of )ppeals in its other Resol,tiondated
-7 3une (++/ for its refusal to dis0iss !),&.R. !V No. 6.--+ on the 'round of foru0,shoppin', addin' that
the appellate court should have deferred resolution of the 1otion for ,dgment on the #ttachment
5ond considerin' the pre9udicial Cuestion raised in !arlos:s 0otion to dis0iss the 0ain case on the 'round
of foru0,shoppin'.

%.R. 'o. 1G*IG(

This concerns a Petition for Review $led b% SIDD!OR, li1e#ise challen'in' the Resol,tion of -7 3une
(++/ of the !ourt of )ppeals and the (< October (++/ Resol,tion #herein Siddcor:s 1otion for
Reconsideration, a0on' others, #as denied. Siddcor ar'ues therein that the !ourt of )ppeals erred in
rulin' on the 0otion for da0a'es #ithout a#aitin' 9ud'0ent in the 0ain case> 'rantin' that da0a'es 0a%
be a#arded, these should enco0pass onl% such da0a'es incurred durin' the pendenc% of the appeal> and
that a hearin' #as necessar% to prove the clai0 for da0a'es and the appellate court erred in 'rantin' the
a#ard for da0a'es despite lac1 of hearin'.

%.R. 'o. 1G))0G

The third petition for ad9udication, a Petition for "ertiorari ,nder R,le *( with Prayer for <emporary
Restraining Arder or Preliminary InB,nction, #as also $led b% SIDD!OR. This petition, dated / March (+++,
speci$call% assails the allo#ance b% the !ourt of )ppeals of the i00ediate e=ecution of the a#ard of
da0a'es, 0ade throu'h the resolutions dated (< October (++/ and -- Dece0ber (++/.

SIDD!OR hereunder ar'ues that Section -, Rule .+ of the Rules of !ivil Procedure reCuires that
e=ecution of a 9ud'0ent or $nal order pendin' appeal 0a% be 0ade onl% on 0otion of the prevailin' part%
and 0a% be 0ade Neven before the e=piration of the period to appeal.O
K-7L
Respondents had ar'ued in
their 1otion for Immediate ;>ec,tion that the 9ud'0ent sou'ht to be e=ecuted 4that on the attach0ent
bond5 #as interlocutor% and not appealable, %et cited rulin's on e=ecution pendin' appeal under Section
-, Rule .+ in support of their position. SIDD!OR cites this inconsistenc% as proof of a chan'e of theor% on
the part of respondents #hich could not be done for the theories are inco0patible. Such bein' the case,
SIDD!OR ar'ues, the !ourt of )ppeals 'ravel% abused its discretion in 'rantin' i00ediate e=ecution since
respondents had $led its 0otion on the pre0ise that the a#ard on the 9ud'0ent bond #as interlocutor%
and not appealable. SIDD!OR also clai0s that the 9ud'0ent on the attach0ent bond is not interlocutor%,
citin' .tronghold Ins,rance "o.! Inc. v. "o,rt of #ppeals
K-GL
#herein it #as ruled that such indeed
constitutes a $nal and appealable order.

SIDD!OR points out that no hearin' #as conducted on the 1otion for Immediate ;>ec,tion despite
the reCuire0ent in Section -, Rule .+ that Ndiscretionar% e=ecution 0a% onl% issue upon 'ood reasons to
be stated in a special order after due hearin'.O SIDD!OR li1e#ise notes that the 0otion 'rantin'
i00ediate e=ecution #as 'ranted in the ver% sa0e resolution #hich had denied the 0otion for
reconsideration of the resolution sou'ht to be i00ediatel% e=ecuted. Dor SIDD!OR, such constituted a
denial of procedural due process insofar as its statutor% ri'ht to appeal #as concerned, as the resolution
that it intended to appeal fro0 #as alread% the sub9ect of i00ediate e=ecution.

Dinall%, SIDD!OR contests the special reasons cited b% the !ourt of )ppeals in 'rantin' the 1otion
for Immediate ;>ec,tion.

Facts #rising .,3seD,ent to the Filing of Instant Petitions

On G Ma% (+++, the !ourt of )ppeals issued a 7rit of ;>ec,tion directin' the enforce0ent of the
9ud'0ent on the attach0ent bond.
K-/L
Ho#ever, in a Resol,tion dated + 3une (+++, this !ourt throu'h the
Dirst Division issued a <emporary Restraining Arder, en9oinin' the enforce0ent of the said 7rit of
;>ec,tion.

On (6 October -<<-, the !ourt of )ppeals Dirst Division rendered a -ecision
K-+L
on the 0erits of !),
&.R. !V No. 6.--+, settin' aside the .,mmary ,dgment and orderin' the re0and of the case for further
proceedin's.
K.<L
"oth parties $led their respective 0otions for reconsideration.
K.(L
In addition, !arlos $led a
0otion to inhibit the author of the assailed decision, 3ustice Rebecca de &uia,Salvador,
K.-L
#ho thereafter
a'reed to inhibit herself.
K..L
Then on G )u'ust -<<., the !ourt of )ppeals Dor0er Dirst Division issued
a Resol,tion deferrin' action on the 0otions for reconsideration in li'ht of the te0porar% restrainin' order
issued b% this !ourt until the resolution of the present petitions.

The factual bac1'round 0a% be co0plicated, but the court need onl% concern itself #ith the
propriet% of the 9ud'0ent on the attach0ent bond and the subseCuent 0oves to secure i00ediate
e=ecution of such 9ud'0ent. Should this !ourt be called upon to tac1le the 0erits of the ori'inal action,
!arlos:s co0plaint, it shall be in the revie# of the $nal resolution of the !ourt of )ppeals in !),&.R. !V No.
6.--+.

"onsolidation of Iss,es in
%.R. 'os. 1G(HGI and 1G*IG(

The petitions in &.R. Nos. (.6/.< and (.7<.6 are concerned #ith the a#ard of da0a'es on the
attach0ent bond. The% 0a% be treated separatel% fro0 the petition in &.R. No. (.GG*., #hich relates to
the i00ediate e=ecution of the said a#ard.
Ae consolidate the 0ain issues in &.R. Nos. (.6/.< and (.7<.6, as follo#s2 4(5 #hether the
assailed 9ud'0ent on the attach0ent bond could have been rendered, as it #as, prior to the ad9udication
of the 0ain case> 4-5 #hether the !ourt of )ppeals properl% co0plied #ith the hearin' reCuire0ent under
Section -<, Rule 6G prior to its 9ud'0ent on the attach0ent bond> and 4.5 #hether the !ourt of )ppeals
properl% ascertained the a0ount of da0a'es it a#arded in the 9ud'0ent on the attach0ent bond.

Resolvin' these issues reCuires the deter0ination of the proper scope and i0port of Section -<,
Rule 6G of the (++G Rules of !ivil Procedure. The provision 'overns the disposal of clai0s for da0a'es on
account of i0proper, irre'ular or e=cessive attach0ent.

S!TION -<. !lai0 for da0a'es on account of i0proper, irre'ular or e=cessive
attach0ent.W)n application for da0a'es on account of i0proper, irre'ular or e=cessive
attach0ent 0ust be $led before the trial or before appeal is perfected or before the 9ud'0ent
beco0es e=ecutor%, #ith due notice to the attachin' obli'ee or his suret% or sureties, settin'
forth the facts sho#in' his ri'ht to da0a'es and the a0ount thereof. Su;! .a8a>"* 8ay 9"
a:ar.". on6y af"r /ro/"r !"ar+n> an. *!a66 9" +n;6u.". +n !" @u.>8"n on !" 8a+n
;a*".

If the 9ud'0ent of the appellate court be favorable to the part% a'ainst #ho0 the
attach0ent #as issued, he 0ust clai0 da0a'es sustained durin' the pendenc% of the appeal b%
$lin' an application in the appellate court #ith notice to the part% in #hose favor the
attach0ent #as issued or his suret% or sureties, before the 9ud'0ent of the appellate court
beco0es e=ecutor%. The appellate court 0a% allo# the application to be heard and decided b%
the trial court.

Nothin' herein contained shall prevent the part% a'ainst #ho0 the attach0ent #as
issued fro0 recoverin' in the sa0e action the da0a'es a#arded to hi0 fro0 an% propert% of
the attachin' obli'ee not e=e0pt fro0 e=ecution should the bond or deposit 'iven b% the latter
be insuFcient or fail to full% satisf% the a#ard. 40phasis supplied.5


Section -< essentiall% allo#s the application to be $led at an% ti0e before the 9ud'0ent beco0es
e=ecutor%. It should be $led in the sa0e case that is the 0ain action, and cannot be instituted separatel%.
K.*L
It should be $led #ith the court havin' 9urisdiction over the case at the ti0e of the application.
K.6L
The
re0ed% provided b% la# is e=clusive and b% failin' to $le a 0otion for the deter0ination of the da0a'es on
ti0e and #hile the 9ud'0ent is still under the control of the court, the clai0ant loses his ri'ht to da0a'es.
K.7L

There is no Cuestion in this case that the 1otion for ,dgment on the #ttachment 5ond $led b%
respondents on (< Dece0ber (++7 #as properl% $led since it #as $led #ith the !ourt of )ppeals durin'
the pendenc% of the appeal in the 0ain case and also as an incident thereto. The core Cuestions thou'h lie
in the proper interpretation of the condition under Section -<, Rule 6G that reads2 NSuch da0a'es 0a% be
a#arded onl% after proper hearin' and shall be included in the 9ud'0ent on the 0ain case.O Petitioners
assert that there #as no proper hearin' on the application for da0a'es and that the !ourt of )ppeals had
#ron'full% acted on the application in that it resolved it prior to the rendition of the 0ain 9ud'0ent.


J.,ch -amages 1ay 5e #warded
Anly #fter Proper ?earingK.L

Ae $rst discuss #hether the Nproper hearin'O reCuire0ent under Section -<, Rule 6G had been
satis$ed prior to the a#ard b% the !ourt of )ppeals of da0a'es on the attach0ent bond.

Section -< of Rule 6G reCuires that there be a Nproper hearin'O before the application for da0a'es
on the attach0ent bond 0a% be 'ranted. The hearin' reCuire0ent ties #ith the indispensable de0and of
procedural due process. Due notice to the adverse part% and its suret% settin' forth the facts supportin'
the applicantUs ri'ht to da0a'es and the a0ount thereof under the bond is essential. No 9ud'0ent for
da0a'es 0a% be entered and e=ecuted a'ainst the suret% #ithout 'ivin' it an opportunit% to be heard
as to the realit% or reasonableness of the da0a'es resultin' fro0 the #ron'ful issuance of the #rit.
K.GL

In Paramo,nt Ins,rance v. "o,rt of #ppeals,
K./L
the !ourt held that under the rule, it #as neither
0andator% nor fatal that there should be a separate hearin' in order that da0a'es upon the bond can be
clai0ed, ascertained and a#arded.
K.+L
Ahat is necessar% onl% is for the attachin' part% and his suret% or
sureties to be dul% noti$ed and 'iven the opportunit% to be heard.
K*<L

In this case, both !arlos and SIDD!OR #ere dul% noti$ed b% the appellate court of the 1otion for
,dgment on the #ttachment 5ond and #ere reCuired to $le their respective co00ents thereto.
K*(L
!arlos
and SIDD!OR $led their respective co00ents in opposition to private respondents: 0otion.
K*-L
!learl%,
all the relevant parties had been aEorded the bare ri'ht to be heard on the 0atter.

!oncededl%, the facts of this case diEer fro0 that in Paramo,nt, #herein the a#ard of da0a'es #as
predicated under Section /, Rule 6/, and the trial on the 0erits included the clai0 for da0a'es on the
attach0ent bond. The !ourt did note therein that the counsel of the suret% #as present durin' the
hearin's.
K*.L
In this case, unli1e in Paramo,nt, there #ere no open court hearin's conducted b% the !ourt of
)ppeals, and it is precisel% this absence that the petitioners assert as fatal.

Plainl%, there is no e=press reCuire0ent under the rule that the hearin' be done in open court, or
that the parties be allo#ed to confront adverse #itnesses to the clai0 of da0a'es on the bond. The proper
scope of the hearin' reCuire0ent #as e=plained before Paramo,nt in Pero>ide Philippines "orp. v. "o,rt of
#ppeals,
K**L
thus2

. . . KItL is undeniable that #hen the attach0ent is challen'ed for havin' been ille'all% or
i0properl% issued, there 0ust be a hearin' #ith the burden of proof to sustain the #rit bein' on
the attachin' creditor. That hearin' e0braces not onl% the ri'ht to present evidence but also a
reasonable opportunit% to 1no# the clai0s of the opposin' parties and 0eet the0. The ri'ht to
sub0it ar'u0ents i0plies that opportunit%, other#ise the ri'ht #ould be a barren one. It 0eans
a fair and open hearin'.


Dro0 this pronounce0ent, #e can discern that the Nproper hearin'O conte0plated #ould not 0erel%
enco0pass the ri'ht of the parties to sub0it their respective positions, but also to present evidence in
support of their clai0s, and to rebut the sub0issions and evidence of the adverse part%. This is especiall%
crucial considerin' that the necessar% ele0ents to be established in an application for da0a'es are
essentiall% factual2 na0el%, the fact of da0a'e or in9ur%, and the Cuanti$able a0ount of da0a'es
sustained. Such 0atters cannot be established on the 0ere sa%,so of the applicant, but reCuire evidentiar%
support. )t the sa0e ti0e, there #as no eCuivocal state0ent fro0 the !ourt in Pero>ide that the hearin'
reCuired under the rule should be a full,blo#n hearin' on the 0erits

In this case, #e rule that the de0ands of a Nproper hearin'O #ere satis$ed as of the ti0e the !ourt of
)ppeals rendered its assailed 9ud'0ent on the attach0ent bond. The circu0stances in this case that #e
consider particularl% tellin' are the settled pre0ises that the 9udicial $ndin' on the #ron'fulness of the
attach0ent #as then alread% conclusive and be%ond revie#, and that the a0ount of actual da0a'es
sustained #as li1e#ise indubitable as it indeed could be found in the oFcial case record in !),&.R. !V No.
6.--+. )s a result, petitioners #ould have been precluded fro0 either raisin' the defenses that the
preli0inar% attach0ent #as valid or disputin' the a0ount of actual da0a'es sustained b% reason of the
'arnish0ent. The onl% 0atter of controvers% that could be liti'able throu'h the traditional hearin' #ould
be the 0atter of 0oral and e=e0plar% da0a'es, but the !ourt of )ppeals appropriatel% chose not to a#ard
such da0a'es.

Moreover, petitioners #ere aEorded the opportunit% to counter the ar'u0ents e=tended b% the
respondents. The% full% availed of that ri'ht b% sub0ittin' their respective co00entsMoppositions. In $ne,
the due process 'uarantee has been satis$ed in this case.

It should be noted that this case poses a situation diEerent fro0 #hat is nor0all% conte0plated
under Section -<, Rule 6GW#herein the ver% #ron'fulness of the attach0ent re0ains one of the issues in
contention in the 0ain case. In such a case, there #ould be a 'reater de0and for a 0ore e=tensive
hearin' on the application of da0a'es. The 0odalit% of hearin' should re0ain #ithin the discretion of the
court havin' 9urisdiction to hear the application for da0a'es. The onl% de0and, concordant to due
process, #ould be the satisfaction of the ri'ht to be heard, to present evidence, and to rebut the evidence
and ar'u0ents of the opposin' part%.

So0e disCuisition is necessar% on #hether or not, as petitioners sub0it, a full,blo#n hearin' in
open court is co0pulsor% under Section -<, Rule 6G. To i0pose this as a 0andator% reCuire0ent #ould
ulti0atel% prove too onerous to our 9udicial s%ste0. Perhaps such a de0and #ould be less burdenso0e on
the re'ional trial courts, #hich, as a 0atter of routine, receive testi0onial or docu0entar% evidence
oEered de novo, and to for0ulate conclusions on the ad0issibilit% and credibilit% of the sa0e.

Ho#ever, a diEerent situation applies if it is the !ourt of )ppeals or the Supre0e !ourt before #hich
the application for da0a'es is $led. "oth these courts, #hich are capacitated to receive and act on such
actions, are 'enerall% not triers of facts, and do not, in the course of dail% routine, conduct hearin's. It is
partl% for such reason that Section -<, Rule 6G authori;es these appellate courts to refer the application for
da0a'es to the trial court for hearin' and decision. The trial courts are functionall% attuned to ascertain
and evaluate at the $rst instance the necessar% factual pre0ises that #ould establish the ri'ht to
da0a'es. Still, reference of the application for da0a'es to the trial court is discretionar% on the part of the
appellate courts. The latter, despite their traditional appellate 9urisdiction and revie# function, are still
e0po#ered under Section -< to rule on the application for da0a'es, not#ithstandin' the factual
di0ension such Cuestion presents.

To i0pose as 0andator% on the !ourt of )ppeals or the Supre0e !ourt to hear the application for
da0a'es throu'h full,blo#n hearin's in open court is supre0el% un#ise and be%ond the de0ands of
Section -<, Rule 6G. The eEect #ould be undul% disruptive on the dail% #or1To# of appellate courts such
as the !ourt of )ppeals and the Supre0e !ourt, #hich rarel% conduct open court hearin's. Neither could
the !ourt see #hat is so 0ar1edl% special about an application for da0a'es, fact,oriented as it 0a% be,
that #ould reCuire it to be heard b% the appellate courts in open court #hen no such 0andator% rule
applies to other 9udicial 0atters for resolution that are also factual in nature.

Dor e=a0ple, the revie# of death penalt% convictions b% the !ourt of )ppeals and the Supre0e
!ourt necessitates a thorou'h evaluation of the evidence presented, not#ithstandin' the prior factual
appreciation 0ade b% the trial court.
K*6L
Not#ithstandin' the factual nature of the Cuestions involved, there
is no rule reCuirin' the !ourt of )ppeals or the Supre0e !ourt to call death penalt% cases for hearin' or
oral ar'u0ent. If no such 0andator% rule for hearin' is i0posed on the appellate courts #hen the supre0e
penalt% of death is involved, #h% then should an e=ceptional rule be i0posed in the case for the relativel%
insi'ni$cant application for da0a'es on the attach0ent bond[

If open court hearin's are ever resorted to b% appellate courts, such result fro0 the e=ercise of
discretion rather than b% i0position b% statute or procedural rule. Indeed, there is no e=istin' statute,
procedural rule, or 9urisprudential $at that 0a1es it 0andator% on the !ourt of )ppeals or the Supre0e
!ourt to conduct an open,court hearin' on an% 0atter for resolution. There is nothin' de0onstrabl% ur'ent
#ith an application for da0a'es under Section -<, Rule 6G that #ould necessitate this !ourt to adopt an
unprecedented rule 0andatin' itself or the !ourt of )ppeals to conduct full,blo#n open court hearin's on a
particular t%pe of action.

This pronounce0ent does not contradict our rulin' in ?anil -evelopment v. I#",
K*7L
#hich !arlos
interprets as reCuirin' the !ourt of )ppeals to conduct a proper hearin' on an application for da0a'es on
the attach0ent bond. ?anil concerned the refusal b% the Inter0ediate )ppellate !ourt 4no# !ourt of
)ppeals5 to ta1e co'ni;ance of the application for da0a'es on the attach0ent bond, such refusal bein'
reversed b% the !ourt, #hich ruled that the Inter0ediate )ppellate !ourt 4I)!5 had 9urisdiction to accept
and rule on such application. Ahile the !ourt therein reco'ni;ed that the I)! #as e0po#ered to tr% cases
and conduct hearin's, or other#ise perfor0 acts necessar% to resolve factual issues in cases,
K*GL
it did not
reCuire the appellate court to conduct a hearin' in open court, but 0erel% to reinstate the application for
da0a'es.

)d0ittedl%, the dispositive portion of ?anil reCuired the !ourt of )ppeals to conduct hearin's on the
application for da0a'es,
K*/L
but no#here in the decision #as a 'eneral rule laid do#n 0andatin' the
appellate court to conduct such hearin's in open court. The ascertain0ent of the need to conduct full,
blo#n hearin's is best left to the discretion of the appellate court #hich chooses to hear the application. )t
the sa0e ti0e, the !ourt cautions the appellate courts to carefull% e=ercise their discretion in deter0inin'
the need for open,court hearin's on the application for da0a'es on the attach0ent bond. The !ourt does
not sanction the indolent a#ard of da0a'es on the attach0ent bond b% the appellate court #ithout
aEordin' the adverse part% and the bondin' co0pan% concerned the opportunit% to present their sides
and adduce evidence in their behalf, or on the basis of unsubstantiated evidence.

JK#nd .hall 3e Incl,ded in the
,dgment on the 1ain "aseL

Section -<, Rule 6G does state that the a#ard of da0a'es shall be included in the 9ud'0ent on the
0ain case, and see0in'l% indicates that it should not be rendered prior to the ad9udication of the 0ain
case.

The rule, #hich 'uarantees a ri'ht to da0a'es incurred b% reason of #ron'ful attach0ent, has lon'
been reco'ni;ed in this 9urisdiction.
K*+L
Bnder Section -<, Rule 6G of the (+7* Rules of !ourt, it #as
provided that there 0ust be $rst a 9ud'0ent on the action in favor of the part% a'ainst #ho0 attach0ent
#as issued before da0a'es can be clai0ed b% such part%.
K6<L
The !ourt ho#ever subseCuentl% clari$ed that
under the rule, Nrecover% for da0a'es 0a% be had b% the part% thus pre9udiced b% the #ron'ful
attach0ent, even if the 9ud'0ent be adverse to hi0.O
K6(L

The lan'ua'e used in the (++G revision of the Rules of !ivil Procedure leaves no doubt that there is
no lon'er need for a favorable 9ud'0ent in favor of the part% a'ainst #ho0 attach0ent #as issued in
order that da0a'es 0a% be a#arded. It is indubitable that even a part% #ho loses the action in 0ain but is
able to establish a ri'ht to da0a'es b% reason of i0proper, irre'ular, or e=cessive attach0ent 0a% be
entitled to da0a'es. This bolsters the notion that the clai0 for da0a'es arisin' fro0 such #ron'ful
attach0ent 0a% arise and be decided separatel% fro0 the 0erits of the 0ain action. )s noted b% the !ourt
in Philippine "harter Ins,rance "orp. v. "o,rt of #ppeals2
K6-L



The suret% does not, to be sure, beco0e liable on its bond si0pl% because 9ud'0ent is
subseCuentl% rendered a'ainst the part% #ho obtained the preli0inar% attach0ent. T!" *ur"y
9";o8"* 6+a96" on6y :!"n an. +f K!" ;our *!a66 Cna66y a.@u.>" !a !" a//6+;an
:a* no "n+6". o !" aa;!8"n.K T!+* +* *o r">ar.6"** of !" naur" an. ;!ara;"r
of !" @u.>8"n on !" 8"r+* of !" /r+n;+/a6 ;6a+8*, ;oun"r;6a+8* or ;ro**&;6a+8*,
";. a**"r". 9y !" /ar+"* a>a+n* "a;! o!"r. #n.""., *+n;" an a//6+;anL* ;au*" of
a;+on 8ay 9" "n+r"6y .+M"r"n fro8 !" >roun. r"6+". u/on 9y !+8 for a /r"6+8+nary
aa;!8"n, + 8ay :"66 9" !a a6!ou>! !" ",+."n;" :arran* @u.>8"n +n fa,or of
*a+. a//6+;an, !" /roof* 8ay n","r!"6"** a6*o "*a96+*! !a *a+. a//6+;anL*
/rof"rr". >roun. for aa;!8"n :a* +n"B+*"n or */";+ou* an. !"n;", !" :r+
*!ou6. no !a," +**u". a a66>i.e., he #as not entitled thereto in the $rst place. In that event,
the $nal verdict should lo'icall% a#ard to the applicant the relief sou'ht in his basic pleadin',
but at the sa0e ti0e sentence hi0Wusuall% on the basis of a counterclai0Wto pa% da0a'es
caused to his adversar% b% the #ron'ful attach0ent. K0phasis supplied.L


Moreover, a separate ruleWSection /, Rule 6/W covers instances #hen it is the trial court that
a#ards da0a'es upon the bond for preli0inar% in9unction of the adverse part%. Tellin'l%, it reCuires that
the a0ount of da0a'es to be a#arded be clai0ed, ascertained, and a#arded under the sa0e procedure
prescribed in Section -< of Rule 6G.

In this case, #e are confronted #ith a situation #herein the deter0ination that the attach0ent #as
#ron'ful did not co0e fro0 the trial court, or an% court havin' 9urisdiction over the 0ain action. It #as
rendered b% the !ourt of )ppeals in the e=ercise of its certiorari 9urisdiction in the ori'inal action revie#in'
the propriet% of the issuance of the 7rit of Preliminary #ttachment a'ainst the private respondents. Said
rulin' attained $nalit% #hen it #as aFr0ed b% this !ourt.

The courts are thus bound to respect the conclusiveness of this $nal 9ud'0ent, dee0in' as it does
the allo#ance b% the RT! of preli0inar% attach0ent as i0proper. This conclusion is no lon'er sub9ect to
revie#, even b% the court called upon to resolve the application for da0a'es on the attach0ent bond. The
onl% 0atter left for ad9udication is the proper a0ount of da0a'es.

Nevertheless, Section -<, Rule 6G e=plicitl% provides that the a#ard for da0a'es be included in the
9ud'0ent on the 0ain case. This point #as apparentl% not lost on the !ourt of )ppeals #hen it rendered
its Resol,tion dated -. March (++/, certif%in' that the case 0a% no# be referred to the RaXe !o00ittee
for assi'n0ent to a ponente. The appellate court stated therein2 NThe Resolution of defendants,appellants:
0otion for 9ud'0ent on the attach0ent 0a% be incorporated in the decision b% the ponentefor stud% and
report,O
K6.L
and such observation is in confor0it% #ith Section -<.

Ho#ever, this reasonin' #as assailed b% respondents, #ho ar'ued that the 0otion for 9ud'0ent on
the attach0ent bond #as a pendin' incident that should be decided before the case can be re,raXed to
aponente for decision. Respondents 0a% be 'enerall% correct on the point that a case can onl% be dee0ed
sub0itted for decision onl% after all pendin' incidents are resolved. ?et since Section -<, Rule 6G provides
that their application for da0a'es on the attach0ent bond Nshall be included in the 9ud'0ent on the 0ain
case,O it is clear that the a#ard for da0a'es need not be resolved before the case is sub0itted for
decision, but should instead be resolved and included in the 9ud'0ent on the 0ain case, or the decision on
the #ppeal 3y "ertiorari $led b% the respondents.

Thus, the action of the !ourt of )ppeals in resolvin' the application for da0a'es even before the
0ain 9ud'0ent #as issued does not confor0 to Section -<, Rule 6G. Ho#ever, the special particular
circu0stances of this case lead us to rule that such error is not 0ortal to the a#ard of da0a'es.

)s noted earlier, the a#ard of da0a'es #as 0ade after a proper hearin' had occurred #herein all
the concerned parties had been 'iven the opportunit% to present their ar'u0ents and evidence in support
and in rebuttal of the application for da0a'es. The pre0ature a#ard of da0a'es does not ne'ate the fact
that the parties #ere accorded due process, and indeed availed of their ri'ht to be heard.

Moreover, #e are co0pelled to appreciate the particular circu0stance in this case that the ri'ht of
private respondents to acCuire relief throu'h the a#ard of da0a'es on account of the #ron'ful preli0inar%
attach0ent has been conclusivel% aFr0ed b% the hi'hest court of the land. This diEers fro0 the nor0al
situation under Section -<, Rule 6G #herein the court havin' 9urisdiction over the 0ain action is still
reCuired to ascertain #hether the applicant actuall% has a ri'ht to da0a'es. To 0andatoril% reCuire that
the a#ard of da0a'es be included in the 9ud'0ent in the 0ain case 0a1es all the sense if the ri'ht to
da0a'es #ould be ascertained at the sa0e ti0e the 0ain 9ud'0ent is 0ade. Ho#ever, #hen the said
ri'ht is alread% 0ade viable b% reason of a $nal 9ud'0ent #hich is no lon'er sub9ect to revie#, there
should be no unnecessar% i0pedi0ents to its i00ediate i0ple0entation.

)nd $nall%, an% rulin' on our part voidin' the a#ard of da0a'es solel% for the reason that it #as not
included in the 9ud'0ent on the 0ain case, and re0andin' the 0otion to the !ourt of )ppeals for proper
ad9udication to'ether #ith the 0ain case 0a% e=hibit fealt% to the letter of the procedural rule, but not its
avo#ed ai0s of pro0otin' a 9ust and speed% disposition of ever% action and proceedin'. )fter all, if #e
#ere to co0pel the !ourt of )ppeals to decide a'ain on the application for da0a'es and incorporate its
rulin' in the 9ud'0ent on the 0ain action, the appellate court #ill be e=a0inin' e=actl% the sa0e evidence
and appl%in' e=actl% the sa0e rules as it alread% did #hen it issued the assailed resolution a#ardin'
da0a'es on the bond. This #ould be unnecessaril% redundant especiall% considerin' that the Supre0e
!ourt had alread% aFr0ed that there #as #ron'ful attach0ent in this case.

There is also the fact that re0andin' the Cuestion of da0a'es, sin'l% for the purpose of adherin' to
the letter of the procedural rule, #ould further prolon' the resolution of the 0ain case, #hich has been
#ith the !ourt of )ppeals for 0ore than nine %ears no#.
K6*L
Our Rules of !ourt precisel% reCuires liberal
construction of the procedural rules to pro0ote the ob9ective of securin' a 9ust, speed% and ine=pensive
disposition of ever% action and proceedin'.
K66L
Aith this precept, all the 0ore 9usti$cation is supplied for
allo#in' the a#ard for da0a'es despite its apparent pre0aturit%, if it is in all other respects proper.
The sa0e reasons appl% in resolvin' the Cuestion of #hether the !ourt of )ppeals could have
decided the 1otion for ,dgment on the #ttachment 5ond considerin' that the case had not %et been re,
raXed under the t#o,raXe s%ste0 for stud% and report. Bnder Section 6, Rule . of the RIR!), a case $led
#ith the !ourt of )ppeals under'oes t#o raXes for assi'n0ent to a particular 3ustice. The $rst raXe is
0ade for co0pletion of records.
K67L
)fter#ards, Nall raXed appealed cases, the records of #hich have been
co0pleted and sub0itted for decision, shall be re,raXed for assi'n0ent to a 3ustice for stud% and
report.O
K6GL

The fact that Section -<, Rule 6G provides that the a#ard of da0a'es on the attach0ent bond
Nshall be included in the 9ud'0ent on the 0ain caseO necessaril% i0plies that it is to be 0ade onl% after
the case has been re,raXed for stud% and report, and concurrentl% decided #ith the 9ud'0ent of
the ponentein the 0ain case. )'ain, the !ourt of )ppeals failed to consider Section -<, Rule 6G #hen it
acted upon the application even before the second raXe #as 0ade.

Had Section -<, Rule 6G been faithfull% co0plied #ith, a diEerent 3ustice of the !ourt of )ppeals
#ould have penned the rulin' on the application for da0a'es, in accordance #ith the RIR!). ?et this
circu0stance does not out#ei'h the other considerations earlier 0entioned that #ould #arrant a liberal
interpretation of the procedural rules in favor of respondents. The parties had adduced all their ar'u0ents
and evidence before the !ourt of )ppeals, and indeed, these #ere appreciated on $rst instance b% 3ustice
De0etria, #ho eventuall% penned the assailed resolutions. There #as alread% a $nal deter0ination that
the attach0ent #as #ron'ful. )nd an% dela% brou'ht about b% reCuirin' that it be theponencia,
deter0ined after the second raXe, #ho decides the application for da0a'es 0a% bear pro
formaadherence to the letter of the rule, but #ould onl% cause the dela% of the resolution of this lon',
pendin' case. Procedural rules are desi'ned, and 0ust therefore be so interpreted as, to 'ive eEect to
la#ful and valid clai0s and not to frustrate the0.
K6/L

ven SIDD!OR ac1no#led'es that there are reco'ni;ed instances #here the a#ard of da0a'es or
9ud'0ent on the attach0ent bond 0a% not be included in the decision on the 0ain case, such as if the
0ain case #as dis0issed for lac1 of 9urisdiction and no clai0 for da0a'es could have been presented in
the 0ain case.
K6+L

.cope of -amages
Properly #warda3le


Ne=t, #e e=a0ine the particular a#ard of da0a'es 0ade in this case, consistin' of P(6,./*,6<+.+/,
plus interest, as #ell as P(,<<<,<<<.<< as attorne%:s fees. There see0s to be no dispute that the for0er
a0ount constituted the a0ount dra#n a'ainst the account of Sandoval b% reason of the #rit of e=ecution
issued b% the trial court on -G Ma% (++7. This fact #as con$r0ed b% the PN", in its 1anifestation dated(+
3ul% (++7, con$r0in' the 'arnish0ent.

Respondents: burden in provin' da0a'es in this case #as considerabl% lessened b% the fact that
there #as alread% a $nal 9ud'0ent, no lon'er sub9ect to revie#, that the preli0inar% attach0ent allo#ed
b% the trial court #as indeed #ron'ful. Hence, all that #as necessar% to be proved #as the a0ount of
da0a'e actuall% sustained b% respondents b% reason of the #ron'ful attach0ent. It is unCuestioned that
b% virtue of the #rit of preli0inar% attach0ent, a 'otice of %arnishment #as served upon the PN" over
deposit accounts 0aintained b% respondents. Said 'otice of %arnishment placed under the control of the
RT! all the accounts 0aintained b% respondents, and prevented the transfer or disposition of these
accounts.
K7<L
Then the subseCuent 7rit of ;>ec,tion dated -G Ma% (++7 ordered the deliver% to !arlos of
these accounts earlier sub9ected to 'arnish0ent.
K7(L

!learl%, the a0ount of actual pecuniar% loss sustained b% respondents has been #ell established.
The 1anifestation sub0itted b% the PN" further aFr0ed the actual a0ount sei;ed b% !arlos, an a0ount
#hich could not have been acCuired had it not been for the #rit of preli0inar% attach0ent #hich #as
#ron'full% issued.

!arlos la0el% ar'ues in his petition that there #as no concrete or supportin' evidence to 9ustif% the
a0ount of actual da0a'es, a clai0 that is belied b% the oFcial case records. The 0ore substantive
ar'u0ent is presented b% SIDD!OR, #hich sub0its that an% da0a'es that 0a% be a#arded to
respondents can include onl% those that #ere incurred, if an%, durin' the pendenc% of the appeal. "ut this
contention is belied b% Section *, Rule 6G of the (++G Rules of !ivil Procedure, #hich provides that the
bond issued for preli0inar% attach0ent is conditioned that the applicant N#ill pa% all the costs #hich 0a%
be ad9ud'ed to the adverse part% an. a66 .a8a>"* :!+;! !" 8ay *u*a+n 9y r"a*on of !"
aa;!8"n, +f !" ;our *!a66 Cna66y a.@u.>" !a !" a//6+;an :a* no "n+6". !"r"o.O
K7-L

The case Paramo,nt Ins,rance "orp. v. "o,rt of #ppeals
K7.L
is instructive. It discusses the scope of the
bond e=ecuted b% upon an application for preli0inar% in9unction,
K7*L
#hich si0ilarl% covers Nall da0a'es
#hich K0a% beL sustainKedL b% reason of the in9unction or te0porar% restrainin' order if the court should
$nall% decide that the applicant #as not entitled thereto.O
K76L
The suret% in that case clai0ed that it could
be liable Nonl% to the a0ount of da0a'es accruin' fro0 the ti0e the in9unction bond #as issued until the
ter0ination of the case, and not fro0 the ti0e the suit #as co00enced.O
K77L
In rebuttin' this clai0, the
!ourt ruled2


. . . . Rule 6/, Section *4b5, provides that a bond is e=ecuted in favor of the part% en9oined to
ans#er for all da0a'es #hich he 0a% sustain b% reason of the in9unction. This !ourt alread% had
occasion to rule on this 0atter in Mendo;a v. !ru;, #here it held that 84t5he in9unction bond is
intended as a securit% for da0a'es in case it is $nall% decided that the in9unction ou'ht not to
have been 'ranted. # +* ."*+>n". o ;o,"r a66 .a8a>"* :!+;! !" /ary "n@o+n". ;an
/o**+96y *uM"r. #* /r+n;+/a6 /ur/o*" +* o /ro"; !" "n@o+n". /ary a>a+n* 6o** or
.a8a>" 9y r"a*on of an +n@un;+on.K No .+*+n;+on :a* 8a." a* o :!"n !"
.a8a>"* *!ou6. !a," 9""n +n;urr"..
K7GL


Our rulin' in Philippine "harter Ins,rance "orp. v. "o,rt of #ppeals, relied upon b% the !ourt of
)ppeals, sCuarel% applies to this case2

Bnder the circu0stances, too, there can be no 'ainsa%in' the suret%:s full a#areness of
its underta1in's under its bond2 that, as the la# puts it2 8the plaintiE #ill pa% all costs #hich
0a% be ad9ud'ed to the defendant4s5, and all da0a'es #hich 0a% be sustained b% reason of the
attach0ent, if the sa0e shall $nall% be ad9ud'ed to have been #ron'ful and #ithout cause,8
and that those da0a'es plainl% co0prehended not onl% those sustained durin' the trial of the
action but also those durin' the pendenc% of the appeal. This is the la#, and this is ho# the
suret%Us liabilit% should be understood. The suret%Us liabilit% 0a% be enforced #hether the
application for da0a'es for #ron'ful attach0ent be sub0itted in the ori'inal proceedin's
before the Trial !ourt, or on appeal, so lon' as the 9ud'0ent has not beco0e e=ecutor%. T!"
*ur"yL* 6+a9+6+y +* no an. ;anno 9" 6+8+". o !" .a8a>"* ;au*". 9y !" +8/ro/"r
aa;!8"n on6y .ur+n> !" /"n."n;y of !" a//"a6. T!a :ou6. 9" a9*ur.. T!" /6a+n
an. /a"n +n"n.8"n of !" 6a: +* !a !" *ur"y *!a66 an*:"r for a66 .a8a>"* !a
!" /ary 8ay *uM"r a* a r"*u6 of !" +66+;+ aa;!8"n, for a66 !" +8" !a !"
aa;!8"n :a* +n for;"I fro8 6",y o .+**o6u+on. . . .

T!" fa; !a !" *";on. /ara>ra/! of !" ru6" */"aD* on6y of K.a8a>"*
*u*a+n". .ur+n> !" /"n."n;y of !" a//"a6K +* of no 8o8"nI + o9,+ou*6y /ro;"".*
fro8 !" a**u8/+on +n !" Cr* /ara>ra/! !a !" a:ar. for !" .a8a>"* *uM"r".
.ur+n> !" /"n."n;y of !" ;a*" +n !" r+a6 ;our :a* +n fa; K+n;6u.". +n !" Cna6
@u.>8"nK 4or applied for therein before the appeal #as perfected or the 9ud'0ent beca0e
e=ecutor%5> hence, it states that the da0a'es additionall% suEered thereafter, i.e., durin' the
pendenc% of the appeal, should be clai0ed before the 9ud'0ent of the appellate tribunal
beco0es e=ecutor%. # !o:","r 9"ar* r"/"a+n> !a :!"r". a* +n !" ;a*" a 9ar, !"
@u.>8"n of !" Tr+a6 Cour !a* "B/r"**6y or +8/6+".6y *u*a+n". !" aa;!8"n an.
!u* !a* >+,"n r+*" o no o;;a*+on o */"aD of, 8u;! 6"**, C6" an a//6+;a+on for
.a8a>"* for :ron>fu6 aa;!8"n, an. + +* on6y +n !" .";+*+on of !" Cour of
$//"a6* !a !" aa;!8"n +* .";6ar". :ron>fu6 an. !a !" a//6+;an K:a* no
"n+6". !"r"o,K !" ru6" +*, a* + *!ou6. 9", !a + +* "n+r"6y /ro/"r a !+* +8" for
!" a//6+;a+on for .a8a>"* for *u;! :ron>fu6 aa;!8"n o 9" C6".Ni.e., for a66
!" .a8a>"* *u*a+n". !"r"9y, .ur+n> a66 !" +8" !a + :a* +n for;", no
on6y .ur+n> !" /"n."n;y of !" a//"a6. . . .
K7/L


The rule is thus #ell,settled that the bond issued upon an application for preli0inar% attach0ent
ans#ers for all da0a'es, incurred at #hatever sta'e, #hich are sustained b% reason of the attach0ent.
The a#ard of actual da0a'es b% the !ourt of )ppeals is thus proper in a0ount. Ho#ever, #e disa'ree that
the rate of le'al interest be counted fro0 the date of the Nunla#ful 'arnish0ent,O or on -G 3une (++7.
Properl%, interest should start to accrue onl% fro0 the 0o0ent it had been $nall% deter0ined that the
attach0ent #as unla#ful, since it is on that basis that the ri'ht to da0a'es co0es to e=istence. In this
case, le'al interest co00ences fro0 the date the !ourt of )ppeals decision in !),&.R. SP No. .+-7G
beca0e $nal, b% reason of its aFr0ation b% this !ourt.

The a#ard of attorne%:s fees in the a0ount of P(,<<<,<<<.<< is also Cuestioned before this !ourt,
considerin' that the !ourt of )ppeals did not a#ard 0oral or e=e0plar% da0a'es. The 'eneral rule 0a% be
that an a#ard of attorne%:s fees should be deleted #here the a#ard of 0oral and e=e0plar% da0a'es are
eli0inated.
K7+L
Nonetheless, attorne%:s fees 0a% be a#arded under the !ivil !ode #here the court dee0s it
9ust and eCuitable that attorne%:s fees and e=penses of liti'ation should be recovered,
KG<L
even if 0oral and
e=e0plar% da0a'es are unavailin'.
KG(L

Particularl%, the !ourt has reco'ni;ed as 9ust and eCuitable that attorne%Us fees be a#arded #hen a
part% is co0pelled to incur e=penses to lift a #ron'full% issued #rit of attach0ent.
KG-L
The a0ount of 0one%
'arnished, and the len'th of ti0e respondents have been deprived fro0 use of their 0one% b% reason of
the #ron'ful attach0ent, all 0ilitate to#ards a $ndin' that attorne%:s fees are 9ust and eCuitable under
the circu0stances. Ho#ever, #e dee0 the a0ount of P(,<<<,<<<.<< as e=cessive, and 0odif% the a#ard of
attorne%:s fees to P6<<,<<<.<< #hich represents 0erel% appro=i0atel% three percent of the actual
da0a'es suEered b% and a#arded to respondents. Ae also delete the i0position of le'al interest 0ade b%
the !ourt of )ppeals on the a#arded attorne%:s fees.

Ather Iss,es Raised in %.R. 'o. 1G(HGI

The issues raised in &.R. No. (.7<.6 have been dispensed #ith, and the re0ainin' issues in &.R. No.
(.6/.< are relativel% 0inor. There is no need to d#ell at len'th on the0.

!arlos insists that respondents #ere liable to have paid doc1et fees upon $lin' of their 1otion for
,dgment on #ttachment 5ond, on the theor% that the% clai0ed therein for the $rst ti0e the alle'ed
da0a'es resultin' fro0 the dissolved attach0ent. The said 0otion is characteri;ed as an initiator%
proceedin' because it is clai0ed therein for the $rst ti0e, the da0a'es arisin' fro0 the attach0ent. In the
sa0e vein, !arlos ar'ues that the absence of a certi$cation a'ainst foru0,shoppin' attached to the
0otion renders the said 0otion as fatal. )'ain, it is pointed out that initiator% pleadin's 0ust contain the
said certi$cation a'ainst foru0,shoppin'.

Our rulin' in .anto <omas 4niversity ?ospital v. .,rla
KG.L
is instructive. It #as ar'ued therein that the
reCuire0ent of the certi$cation a'ainst foru0,shoppin', as contained in )d0inistrative !ircular No. <*,+*,
KG*L
covered co0pulsor% counterclai0s. The !ourt ruled other#ise2

It bears stressin', once a'ain, that the real oFce of )d0inistrative !ircular No. <*,+*,
0ade eEective on <( )pril (++*, is to curb the 0alpractice co00onl% referred to also as
foru0,shoppin'. . . . The lan'ua'e of the circular distinctl% su''ests that it is pri0aril%
intended to cover an initiator% pleadin' or an incipient application of a part% assertin' a clai0
for relief.

# *!ou6. no 9" oo .+F;u6, !" for">o+n> ra+ona6" of !" ;+r;u6ar a/6y
aD"n, o *u*a+n !" ,+": !a !" ;+r;u6ar +n ?u"*+on !a* no, +n fa;, 9""n
;on"8/6a". o +n;6u." a D+n. of ;6a+8 :!+;!, 9y +* ,"ry naur" a* 9"+n> auB+6+ary
o !" /ro;"".+n> +n !" *u+ an. a* ."r+,+n> +* *u9*an+," an. @ur+*.+;+ona6
*u//or !"r"fro8, ;an on6y 9" a//ro/r+a"6y /6"a.". +n !" an*:"r an. no r"8a+n
ou*an.+n> for +n."/"n."n r"*o6u+on "B;"/ 9y !" ;our :!"r" !" 8a+n ;a*"
/"n.*. Prescindin' fro0 the fore'oin', the proviso in the second para'raph of Section 6, Rule
/, of the (++G Rules of !ivil Procedure, i.e., that the violation of the anti,foru0 shoppin' rule
8shall not be curable b% 0ere a0end0ent . . . but shall be cause for the dis0issal of the case
#ithout pre9udice,8 bein' predicated on the applicabilit% of the need for a certi$cation a'ainst
foru0 shoppin', o9,+ou*6y .o"* no +n;6u." a ;6a+8 :!+;! ;anno 9" +n."/"n."n6y
*" u/.
KG6L
40phasis supplied.5


It is clear that under Section -<, Rule 6G, the application for da0a'es on the attach0ent bond cannot
be independentl% set up, but 0ust be $led in the 0ain case, before the 9ud'0ent therein beco0es $nal
and e=ecutor%. .anto <omas sCuarel% applies in deter0inin' that no certi$cation a'ainst foru0,shoppin'
#as reCuired in the 1otion for ,dgment on the #ttachment 5ond. The sa0e reasonin' also sustains a
rulin' that neither le'al fees #ere reCuired for the $lin' of the said 0otion. Section (, Rule (*( of the Rules
of !ourt provides that le'al fees are prescribed upon the $lin' of the pleadin' or other application #hich
initiates an action or proceedin'.
KG7L
Since the said application for 9ud'0ent on the attach0ent bond cannot
be considered as an initiator% pleadin', as it cannot be independentl% set up fro0 the 0ain action, it is not
li1e#ise char'eable #ith le'al fees.

)s to the issue relatin' to the other Resol,tion dated -7 3une (++/ den%in' the 0otion to dis0iss
appeal on the 'round of foru0,shoppin', #e $nd !arlos:s ar'u0ents as un0eritorious. Doru0,shoppin'
alle'edl% e=isted because petitioners had $led t#o cases before the !ourt of )ppeals, !),&.R. !V No.
6.--+, and the Petition for "ertiorari with <emporary Restraining Arder dated - 3une (++7 attac1in' the
allo#ance of e=ecution pendin' appeal. videntl%, the t#o causes of action in these t#o petitions are
diEerent, !),&.R. !V No. 6.--+ bein' an appeal fro0 the .,mmary ,dgment rendered b% the RT!, and
the second petition assailin' the subseCuent allo#ance b% the RT! of e=ecution pendin' appeal. There is
no identit% bet#een these t#o causes of action that #ould #arrant a $ndin' of foru0,shoppin'.

Iss,es Raised in %.R. 'o. 1G))0G

To recount, respondents, havin' obtained a favorable decision on their 1otion for ,dgment on the
#ttachment 5ond, $led a 1otion for Immediate ;>ec,tion of the a#ard of da0a'es. This #as 'ranted b%
the !ourt of )ppeals in its Resol,tion dated (7 October (++/, said resolution no# speci$call% assailed b%
SIDD!OR in &.R. No. (.GG*..

In their 1otion for Immediate ;>ec,tion, respondents: theor% in see1in' the i00ediate e=ecution of
the a#ard of da0a'es #as that said a#ard #as not sub9ect to appeal, the rulin' thereupon bein' an
interlocutor% order.
KGGL
This position #as not adopted b% the !ourt of )ppeals in its (7 October
(++/Resol,tion, #hich #as other#ise favorabl% disposed to respondents. Instead, the !ourt of )ppeals
predicated the i00ediate e=ecution on the follo#in' 'rounds2 4(5 that the 9udicial $ndin' that the #rit of
preli0inar% attach0ent #as #ron'ful #as alread% $nal and be%ond revie#> 4-5 there #ere no 0aterial and
substantial defenses a'ainst the 0otion for the issuance of the 9ud'0ent bond> 4.5 Sandoval #as elderl%
and sic1l%, #ithout 0eans of livelihood and 0a% not be able to en9o% the fruits of the 9ud'0ent on the
attach0ent bond> 4*5 that i00ediate e=ecution #ould end her suEerin' caused b% the arbitrar%
'arnish0ent of her PN" account.

There is no doubt that a 9ud'0ent on the attach0ent bond is a $nal and appealable order. )s stated
earlier, it is, under nor0al course, included in the 0ain 9ud'0ent, #hich in turn is $nal and appealable.
Respondents ad0it that the% had erred in earlier characteri;in' the said 9ud'0ent as an interlocutor%
order. Still, SIDD!OR ar'ues that such earlier error is fatal, and that the !ourt of )ppeals abused its
discretion in rulin' on the 0otion on a theor% diEerent fro0 that ur'ed on b% respondents.

"% no 0eans could respondents be dee0ed as estopped fro0 chan'in' their le'al theor%, since the
rule on estoppel applies to Cuestions of fact and not Cuestions of la#.
KG/L
Moreover, courts are e0po#ered
to decide cases even if the parties raise le'al rationales other than that #hich #ould actuall% appl% in the
case. The basis of #hether respondents are entitled to i00ediate e=ecution arises fro0 la#, particularl%
Section -4a5, Rule .+ of the Rules of !ourt, and not solel% on #hatever alle'ations 0a% be raised b% the
0ovant.

Thus, #e $nd no 'rave abuse of discretion on the part of the !ourt of )ppeals, even thou'h it allo#ed
e=ecution pendin' appeal on a le'al basis diEerent fro0 that ori'inall% adduced b% respondents. )fter all,
the reasonin' ulti0atel% e0plo%ed b% the appellate court is correct, and it hardl% #ould be 9udicious to
reCuire the lo#er court to adhere to the 0ovant:s erroneous ratiocination and preclude the proper
application of the la#.

Ae need not revie# in len'th the 9usti$cation of the !ourt of )ppeals in allo#in' e=ecution pendin'
appeal. The standard set under Section -4a5, Rule .+ 0erel% reCuires N'ood reasons,O a Nspecial order,O
and Ndue hearin'.O Due hearin' #ould not reCuire a hearin' in open court, but si0pl% the ri'ht to be
heard, #hich SIDD!OR availed of #hen it $led its opposition to the 0otion for i00ediate e=ecution.
TheResol,tion dated (7 October (++/ satis$es the Nspecial orderO reCuire0ent, and it does enu0erate at
len'th the N'ood reasonsO for allo#in' e=ecution pendin' appeal. )s to the appreciation of N'ood reasons,O
#e si0pl% note that the advanced a'e alone of Sandoval #ould have suFcientl% 9usti$ed e=ecution
pendin' appeal, pursuant to the #ell,settled 9urisprudential rule.
KG+L
The #ron'fulness of the attach0ent,
and the len'th of ti0e respondents have been deprived of their 0one% b% reason of the #ron'ful
attach0ent further 9usti$es e=ecution pendin' appeal under these circu0stances.

AHRDOR, the petitions are DISMISSD. The Te0porar% Restrainin' Order issued in
theResol,tion dated + 3une (+++ is hereb% @IDTD. The assailed Resol,tion of the !ourt of )ppeals Special
Dourth Division dated -7 3une (++/ is )DDIRMD #ith the MODIDI!)TIONS that the le'al interest on the
a#ard of actual da0a'es should co00ence fro0 the date of the $nalit% of the -ecision of the !ourt of
)ppeals in !) &.R. SP No. .+-7G and that the a#ard of attorne%:s fees is in the a0ount of P6<<,<<<. !osts
a'ainst petitioners.

SO ORDRD. D)NT O. TIN&) #ssociate ,stice


A !ON!BR2

R?N)TO S. PBNO
#ssociate ,stice
!hair0an


M). )@I!I) )BSTRI),M)RTINJ ROMO 3. !)@@3O, SR.
#ssociate ,stice #ssociate ,stice



MINIT) V. !HI!O,N)J)RIO
#ssociate ,stice



K(L
!arlos alle'ed that there #ere other co0pulsor% heirs of his parents, but the% had #aived all their
clai0s, ri'hts and participations in the properties in the estate. .ee &.R. No. (.7<.6, Rollo, p. /..

K-L
Id. at /G.

K.L
I3id.

K*L
Id. at ++,(<(.

K6L
&.R. No. (.6/.< Rollo, p. *. SIDD!OR is no# 1no#n as Me'a Paci$c Insurance !orporation.

K7L
I3id.

KGL
In a Decision penned b% then !ourt of )ppeals 3ustice Didel T. Purisi0a, and concurred in b%
3ustices D. Martin, 3r. and !. !arpio,Morales. 3ustices Purisi0a and !arpio,Morales #ere subseCuentl%
elevated to the Supre0e !ourt. 3ustice Purisi0a has retired fro0 the !ourt.

K/L
Records, p. .(.

K+L
&.R. No. (.7<.6, Rollo, pp. (.G,(./.

K(<L
Records, p. (7..

K((L
Records, p. (/. Sandoval 0aintained a Savin's )ccount #ith P6*7,(-(.+/, a Ti0e Deposit
)ccount of P(<,<<<,<<<.<<, and Treasur% "ills #orth P6,<<<,<<<.<<.

K(-L
Records, p. .*. Stran'el% enou'h, the Notice of Deliver%MPa%0ent is actuall% addressed to the
"ranch Mana'er of the "an1 of the Philippine Islands, Malolos "ranch, thou'h respondents characteri;ed
the docu0ent in their Motion as havin' been addressed to the "ranch Mana'er of PN"
Malolos. .ee Records, p. (..

K(.L
Records, p. *-.

K(*L
Records, p. *...

K(6L
Id. at *6<.

K(7L
"oth resolutions penned b% 3ustice D. De0etria, concurred in b% 3ustices O. )0in and R.
"arcelona.

K(GL
Particularl% the cases of Ra%0undo v. !arpio, .. Phil. .+6 4(+<*5 and Hanil Develop0ent !o., @td.
v. I!), --/ Phil. 6-+ 4(+/75. Record, pp. *6/,*7<.

K(/L
Records, p. *7..

K(+L
Id. at *7/.

K-<L
&.R. No. (.6/.<, Rollo, p. 6+.

K-(L
Records, pp. (<-.,(<-7.

K--L
Id. at (<-*,(<-6.

K-.L
&.R. No. (.GG*., Rollo, pp. +7,(<6.

K-*L
Id. at .-.

K-6L
&.R. (.6/.<, Rollo, p. (<.

K-7L
.ee Section -, Rule .+, (++G Rules of !ivil Procedure> Records, p. (((*.


K-GL
&.R. No. /*+G+, 7 Nove0ber (+/+, (G+ S!R) ((G.


K-/L
&.R. No. (.7<.6 Rollo, pp. --/,-.(.

K-+L
Penned b% 3ustice R. de &uia,Salvador, concurred in b% 3ustices !. &arcia 4no# )ssociate 3ustice of
this !ourt5 and ". )besa0is.

K.<L
Records, p. (676.

K.(L
Respondents ar'ued that the !ourt of )ppeals should decide the case itself rather than re0and
the 0atter to the trial court. Records, pp. (/7/,(/G<.

K.-L
.ee Records, pp. (+.<,(+.7.

K..L
In a Resolution dated (( Debruar% -<<..

K.*L
.ee Para0ount Insurance !orp. v. !ourt of )ppeals, .7+ Phil. 7*( 4(+++5.

K.6L
) necessar% conclusion follo#in' our pronounce0ent in Rivera v. Talavera, ((- Phil. -<+ 4(+7(5.
NBpon the other hand, it #as i0proper for the plaintiEs to as1 the !ourt of Dirst Instance to assess
da0a'es a'ainst the sureties #hile the appeal #as pendin', unless the !ourt of )ppeals had 'ranted
per0ission to do so. The reason is plain2 It #as the !ourt of )ppeals that had 9urisdiction over the case.
The trial court had lost 9urisdiction upon perfection of the appeal, and could no lon'er act e=cept to adopt
conservator% 0easures. It follo#s then . . . that the !ourt of Dirst Instance could not validl% entertain the
supple0ental co0plaint see1in' to hold the sureties liable, unless the !ourt of )ppeals referred the 0atter
to it.O

K.7L
.ee Heirs of Manin'o v. I)!, &.R. Nos. G.66+,7-, -7 March (++<, (/. S!R) 7+( citing !antos v.
Mair, .7 Phil. .6< 4(+G<5> 3apco v. The !it% of Manila, */ Phil. /6( 44(+-75> !ru; v. Manila Suret% V Didelit%
!o., Inc., et al., +- Phil. 7++ 4(+6.5.

K.GL
International Ter0inal !ontainer Services v. !ourt of )ppeals, &.R. No. +<6.<, G October (++-,
-(* S!R) *67.

K./L
.7+ Phil. 7*( 4(+++5.

K.+L
Id. at 76-.

K*<L
I3id.

K*(L
Records, p. 7+.

K*-L
.ee Records, pp. 6.,6+, 7*,77.

K*.L
Para0ount Insurance !orp. v. !ourt of )ppeals, s,pra note .* at 76-.

K**L
&.R. No. +-/(., .( 3ul% (++(, (++ S!R) //-.

K*6L
NAhere life and libert% are at sta1e, all possible avenues to deter0ine his 'uilt or innocence 0ust
be accorded an accused, and no care in the evaluation of the facts can ever be overdone.O People v.
Mateo, &.R. Nos. (*G7G/,/G, *.. S!R) 7*< 4-<<*5.

K*7L
.,pra note (G.

K*GL
Id. at 67G.

K*/L
Id. at 6G<.

K*+L
.ee! e.g., Ra%0undo v. !arpio, .. Phil. .+6, .+7 4(+(75.

K6<L
The relevant portion of Section -<, Rule 6G of the (+7* Rules of !ourt reads2

S!TION -<. "laim for damages on acco,nt of improper! irreg,lar or e>cessive
attachment.W#f !" @u.>8"n on !" a;+on 9" +n fa,or of !" /ary a>a+n* :!o8
aa;!8"n :a* +**u"., !" 8ay r";o,"r, u/on !" 9on. >+,"n or ."/o*+ 8a." 9y !"
aa;!+n> ;r".+or, any .a8a>"* r"*u6+n> fro8 !" aa;!8"n. Such da0a'es 0a% be
a#arded onl% upon application and after proper hearin', and shall be included in the $nal
9ud'0ent. The application 0ust be $led before the trial or before appeal is perfected or before
the 9ud'0ent beco0es e=ecutor%, #ith due notice to the attachin' creditor and his suret% or
sureties, settin' forth the facts sho#in' his ri'ht to da0a'es and the a0ount thereof. . . .
40phasis supplied.5


K6(L
.ee Jara'osa v. Didelino, &.R. No. @,-+G-., (7. S!R) **. 4(+//5. NIt thus see0s indeed that the
$rst sentence of Section -< precludes recover% of da0a'es b% a part% a'ainst #ho0 an attach0ent is
issued and enforced if the 9ud'0ent be adverse to hi0. This is not ho#ever correct. )lthou'h a part% be
ad9ud'ed liable to another, if it be established that the attach0ent issued at the latterUs instance #as
#ron'ful and the for0er had suEered in9ur% thereb%, recover% for da0a'es 0a% be had b% the part% thus
pre9udiced b% the #ron'ful attach0ent, even if the 9ud'0ent be adverse to hi0. Sli'ht reTection #ill sho#
the validit% of this proposition. Dor it is entirel% possible for a plaintiE to have a 0eritorious cause of action
a'ainst a defendant but have no proper 'round for a preli0inar% attach0ent. In such a case, if the plaintiE
nevertheless applies for and so0eho# succeeds in obtainin' an attach0ent, but is subseCuentl% declared
b% $nal 9ud'0ent as not entitled thereto, and the defendant sho#s that he has suEered da0a'es b%
reason of the attach0ent, there can be no 'ainsa%in' that inde0ni$cation is 9ustl% due the latter.O

K6-L
&.R. No. //.G+, (G+ S!R) *7/ 4(+/+5.

K6.L
Records, p. *...

K6*L
)s noted earlier, a 9ud'0ent on the 0ain case #as rendered b% the !ourt of )ppeals in -<<-, but
the 0otions for reconsideration $led b% the parties #ere deferred resolution, pendin' ad9udication of these
petitions no# before the !ourt. .,pra note -+.

K66L
.ee Section 7, Rule (, (++G Rules of !ivil Procedure.


K67L
.ee Section 64a5, Rule ., RIR!).

K6GL
.ee Section 64b5, i3id.

K6/L
Mobil Oil, Philippines v. !ourt of )ppeals, &.R. No. (<.<G-, -< )u'ust (++., --6 S!R) */7.

K6+L
&.R. No. (.7<.6, Rollo, p. *-, citing Santos v. !ourt of )ppeals, +6 Phil. .7< 4(+6*5.

K7<L
Records, p. ...

K7(L
Id. at .*.

K7-L
Section *, Rule 6G, Rules of !ourt.

K7.L
.,pra note .*.

K7*L
Bnder Section *4b5, Rule 6/, Rules of !ourt.

K76L
I3id.

K77L
Para0ount Insurance !orp. v. !ourt of )ppeals, s,pra note .* at 76..

K7GL
I3id. 0phasis supplied.

K7/L
.,pra note 6- at *GG,*G/.

K7+L
.ee P)@ v. Miano, .(- Phil. -/G 4(++65> Ibaan Rural "an1 v. !ourt of )ppeals, .G/ Phil. G<G
4(+++5> !atha% Paci$c v. Spouses Va;Cue;, **G Phil. .<7 4-<<.5.

KG<L
.ee )rticle --</4((5, !ivil !ode.

KG(L
.ee scobin v. N@R!, .6( Phil. +G. 4(++/5> People v. Torpio, &.R. No. (./+/*, * 3une -<<*, .*-
S!R) -(.> Aildvalle% Shippin' !orp. v. !ourt of )ppeals, &.R. No. ((+7<-, 7 October -<<<, .*- S!R)
-(..

KG-L
M! n'ineerin', Inc. v. !ourt of )ppeals, *-+ Phil. 7.*, 77G 4-<<-5> @a;atin v. T#aIo, ((- Phil.
G.. 4(+7(5.

KG.L
.66 Phil. /<* 4(++/5.

KG*L
Since incorporated in Section 6, Rule G, (++G Rules of !ivil Procedure.

KG6L
Santo To0as Bniversit% Hospital v. Surla, s,pra note G. at /(.,/(6.

KG7L
.ee Section (, Rule (*(, Rules of !ourt.

KGGL
&.R. No. (.GG*., Rollo, pp. /+,+<.

KG/L
TaIada and Macapa'al v. !uenco, (<. Phil. (<+. 4(+6/5.

KG+L
.ee "or9a v. !ourt of )ppeals, &.R. No. @,.G+**, .< 3une (+//, (7. S!R) (G6> De @eon v.
Soriano, +6 Phil. /<7 4(+6*5> Philippine "an1 of !o00unications v. !ourt of )ppeals, .** Phil. GGG 4(++G5.
S!OND DIVISION
G.R. No. 142101 Jun" 8, 2004
-$N7 O) THE PH#L#PP#NE #SL$NDS Gfor8"r6y )$R E$ST -$N7 $ND TRUST
COMP$N3H, Petitioner,
vs.
COURT O) $PPE$LS an. J#MM3 T. GO, Respondents.
D ! I S I O N
$'CUN$, J.:
This is a petition for revie# on certiorari $led b% "an1 of the Philippine Islands of the decision
and resolution of the !ourt of )ppeals, #hich in turn partiall% denied a petition for certiorari
Cuestionin' the te0porar% restrainin' order 4TRO5 and preli0inar% in9unction issued b% 3ud'e
Brbano !. Victorio, Sr.
(
The facts as narrated in the !ourt of )ppeals decision are as follo#s2
Petitioner, Dar ast "an1 and Trust !o0pan%, 'ranted a total of ei'ht 4/5 loans to Noah:s )rc
Merchandisin' 4Noah:s )r1, for brevit%5. Per !erti$cate of Re'istration issued b% the Depart0ent
of Trade and Industr% 4Rollo, p. *<5, Noah:s )r1 is a sin'le proprietorship o#ned b% Mr. )lbert T.
@oo%u1o. The said loans #ere evidenced b% identical Pro0issor% Notes all si'ned b% )lbert T.
@oo%u1o, private respondent 3i00% T. &o and one Ailson &o. @i1e#ise, all loans #ere secured b%
real estate 0ort'a'e constituted over a parcel of land covered b% Transfer !erti$cate of Title
KNo.L (7<-GG re'istered in the na0es of Mr. @oo%u1o and herein private respondent. Petitioner,
clai0in' that Noah:s )r1 defaulted in its obli'ations, e=tra9udiciall% foreclosed the 0ort'a'e. The
auction sale #as set on (* )pril (++/ but on / )pril (++/ private respondent $led a co0plaint
for da0a'es #ith pra%er KforL issuance of TRO andMor #rit of preli0inar% in9unction see1in' KtoL
en9oin the auction sale. KILn the Order dated (* )pril (++/ a te0porar% restrainin' order #as
issued and in the sa0e order the application for Preli0inar% In9unction #as set for hearin' KiLn
the afternoon of the sa0e da% 4Rollo, p. (*-5.
-
In an order
.
dated )pril (6, (++/, 3ud'e Victorio e=tended the TRO for another (6 da%s, for a
total of -< da%s. The !ourt of )ppeals decision continues thus2
)fter hearin', the G Ma% (++/ Order 'ranted the application for preli0inar% in9unction #hich
shall ta1e eEect upon postin' of a bond in the a0ount of T#o Hundred Thousand Pesos
4P-<<,<<<.<<5. The dispositive portion read2
8AHRDOR, it appearin' that the acts co0plained of #ould be in violation of plaintiE:s ri'ht
and #ould #or1 in9ustice to the plaintiE and so as not to render ineEectual #hatever 9ud'0ent
0a% be issued in this case, the application KforL preli0inar% in9unction is hereb% 'ranted and the
defendants and all persons actin' in their behalf are hereb% ordered to cease, desist, and refrain
fro0 proceedin' #ith the scheduled foreclosure and public auction sale of the 0ort'a'ed
propert% covered b% T!T No. (7<-GG until further orders fro0 this !ourt.
This Order shall be eEective upon petitioner:s $lin' of a bond in the a0ount of T#o Hundred
Thousand Pesos 4P-<<,<<<.<<5 to ans#er for an% and all da0a'es that defendants 0a% suEer b%
reason of the issuance of the #rit of preli0inar% in9unction.
)s pra%ed for, defendants are hereb% directed to $le their ans#er on or before Ma% (*, (++/.
!op% furnished plaintiE.
SO ORDRD.8 4Rollo p. (G65
Private,respondent then $led a bond as reCuired b% the order. Petitioner 0oved for a
reconsideration of the afore0entioned order #hich 0otion #as denied in the Order dated .< 3ul%
(++/ on the 'round that the e=tra9udicial foreclosure #as pre0ature as to four 4*5 pro0issor%
notes. The dispositive portion read2
8AHRDOR, pre0ises considered, the 0otion for reconsideration is hereb% denied and the
other pendin' incident pertainin' thereto are noted and this case be set for pre,trial.
@T THRDOR, a notice of pre,trial be sent to the parties.
SO ORDRD.8 4Rollo, p. -(+5
*
)fter petitioner:s 0otion for reconsideration #as denied in an order dated 3ul% .<, (++/,
petitioner $led a petition for certiorari #ith the !ourt of )ppeals, pra%in' that the orders dated
Ma% G, (++/ and 3ul% .<, (++/, 'rantin' the #rit of preli0inar% in9unction and den%in' the
0otion for reconsideration, respectivel%, be annulled and set aside and the #rit of preli0inar%
in9unction be dissolved. Durther0ore, petitioner as1ed to be allo#ed to proceed #ith the auction
sale of the propert%.
The !ourt of )ppeals pro0ul'ated its decision dated )u'ust -7, (+++ #hich partiall% denied the
petition for certiorari, statin' as follo#s2
The issue in this case is2 8Ahether the trial court erred in the issuance of the Arit of Preli0inar%
In9unction or not.8
Petitioner averred that private respondent had not sho#n an% ri'ht #hich should be protected b%
an in9unction. Private respondent naturall% clai0ed other#ise and asserted that since four 4*5 of
the pro0issor% notes have not %et 0atured there #as no basis to foreclose the 0ort'a'e
4!o00ent, p (65. He also clai0ed that his ri'ht to due process entitles hi0 to le'al de0and
prior to the $lin' of the foreclosure proceedin's a'ainst the sub9ect propert% 4!o00ent, p. (75.
It has been held that an in9unction 0a% be issued in order to preserve the status Cuo. Thus,
in "agayan de Aro "ity =andless Residents #ssociation! Inc.! v. "o,rt of #ppeals 4-6* S!R) --<
K(++7L5 it #as held2
)s an e=traordinar% re0ed%, in9unction is calculated to preserve the status Cuo of thin's and is
'enerall% availed of to prevent actual or threatened acts, until the 0erits of the case can be
heard. = = =. 4-6* S!R) --/5.
In the case at bar, there is a need to $rst settle the Cuestion of #hether the de0and 0ade b%
petitioner #as suFcient to render private respondent in default or not. In Rose Pac8ing "o.! Inc.
v. "o,rt of #ppeals 4(7G S!R) .<+ K(+//L5 it #as held that the Cuestion of #hether the debtor is
in default should $rst be settled to deter0ine if the foreclosure #as proper. In the sa0e case it
#as also held that said Cuestion should be resolved b% the trial court, to #it2
Ahile petitioner corporation does not den%, in fact, it ad0its its indebtedness to respondent
ban1 4"rief for Petitioner, pp. G,((5, there #ere 0atters that needed the preservation of the
status Cuo bet#een the parties. The foreclosure sale #as pre0ature.
Dirst #as the Cuestion of #hether or not petitioner corporation #as alread% in default.
= = =
Petitioner corporation alle'es that there had been no de0and on the part of respondent ban1
previous to its $lin' a co0plaint a'ainst petitioner and Rene Qnecht personall% for collection on
petitioner:s indebtedness 4"rief for Petitioner, p.(.5. Dor an obli'ation to beco0e due there 0ust
'enerall% be a de0and. Default 'enerall% be'ins fro0 the 0o0ent the creditor de0ands the
perfor0ance of the obli'ation. Aithout such de0and, 9udicial or e=tra9udicial, the eEects of
default #ill not arise. 4'amarco v. Federation of 4nited 'amarco -istri3,tors! Inc. *+ S!R) -./
K(+G.L> 5orBe v. "FI of 1isamis Accidental! // S!R) 6G7 K(+G+L. Ahether petitioner corporation
is alread% in default or not and #hether de0and had been properl% 0ade or not had to be
deter0ined in the lo#er court. 41*) ."R# G1)$G1HF.
Ae no# co0e to the 0atter of suFcienc% of the bond $led b% private respondent. Petitioner
clai0s that the P-<<,<<<.<< bond is 'rossl% insuFcient. It ar'ued, thus2
"% en9oinin' petitioner fro0 conductin' the auction sale of the 0ort'a'ed propert%, petitioner
has alread% suEered da0a'es in the a0ount of PG(6,<GG.G/ representin' $lin' and publication
fees. ?et da0a'es to be incurred b% petitioner b% reason of the in9unction are not li0ited to $lin'
and publication fees, 'rantin' that the case #ill dra' on for 0ore thaKnL a %ear, #hich is usuall%
the case. The in9unction #ould deprive petitioner D"T! of its o#n inco0e fro0 the foreclosed
propert% or fro0 the proceeds of the foreclosure sale. Obviousl% it is easil% 0ore
than P-<<,<<<.<< 4Rollo, p. .(5.
The !ourt a'rees #ith petitioner that the a0ount of the bond is insuFcient. In &alencia v. "o,rt
of #ppeals, 4-7. S!R) -G6 K(++7L5 the Supre0e !ourt e=plained that the bond is for the
protection a'ainst loss or da0a'e b% reason of the in9unction, to #it2
The said bond #as supposed to ans#er onl% for da0a'es #hich 0a% be sustained b% private
respondents, a'ainst #ho0 the 0andator% in9unction #as issued, b% reason of the issuance
thereof, and not to ans#er for da0a'es caused b% the actuations of petitioner, #hich 0a% or
0a% not be related at all to the i0ple0entation of the 0andator% in9unction. The purpose of the
in9unction bond is to protect the defendant a'ainst loss or da0a'e b% reason of the in9unction in
case the court $nall% decides that the plaintiE #as not entitled to it, and the bond is usuall%
conditioned accordin'l%. Thus, the bonds0en are obli'ated to account to the defendant in the
in9unction suit for all da0a'es, or costs and reasonable counsel:s fees incurred or sustained b%
the latter in case it is deter0ined that the in9unction #as #ron'full% issued. 4-7. S!R) -//,-/+5
Private respondent:s contention that considerin' the 0ar1et value of the propert%, the bond is
reasonable and proper 4Rollo, p. -*<5 cannot be upheld considerin' that no proof of the value of
the propert% #as even presented to buttress this assertion.
Ho#ever, the insuFcienc% of the a0ount of the bond prescribed b% the trial court does not
#arrant the liftin' of the #rit of in9unction. The !ourt notes that under Section G, Rule 6/ of the
(++G Rules of !ivil Procedure the applicant, in case the bond is insuFcient, 0a% still $le one
suFcient in a0ount, to #it2
Sec. G. .ervice of copies of 3ondM eNect of disapproval of same. , , = = =. If the applicant:s bond
is found to be insuFcient in a0ount, or if the suret% or sureties thereon fail to 9ustif%, and a bond
suFcient in a0ount #ith suFcient sureties approved after 9usti$cation is not $led forth#ith, the
in9unction shall be dissolved. = = =.
The !ourt considers a bond of Dive Million Pesos 4P6,<<<,<<<.<<5 to be 0ore appropriate in the
present case.
AHRDOR, considerin' the fore'oin' pre0ises the petition for certiorari is DNID> ho#ever,
private respondent is ordered to $le an in9unctive bond in the a0ount of P6,<<<,<<<.<<.
SO ORDRD.
6
Petitioner $led a 0otion for reconsideration #hich #as denied in a resolution dated )pril ., -<<<
b% the !ourt of )ppeals on the 'round that all the 0atters raised in the 0otion for
reconsideration had alread% been passed upon in the decision.
7
Petitioner $led the instant petition for revie# on certiorari Cuestionin' the )u'ust -7, (+++
decision and the )pril ., -<<< resolution. The follo#in' issues #ere raised b% petitioner2
..( Ahether the Honorable !ourt of )ppeals can resolve the issue of the suFcienc% of
de0and.
..- Ahether private respondent &o is entitled to a te0porar% restrainin' order and a #rit
of preli0inar% in9unction.
... Ahether the !o0plaint of private respondent &o has been rendered 0oot and
acade0ic.
Dor the purpose of clarit%, the issues are restated thus2
(. Ahether or not the private respondent #as entitled to the TRO and #rit of preli0inar%
in9unction.
-. Ahether or not the TRO and #rit of preli0inar% in9unction #ere properl% issued b%
3ud'e Victorio.
On the $rst issue, this !ourt $nds that private respondent #as not entitled to the TRO and the
#rit of preli0inar% in9unction. Section . of Rule 6/ of the Rules of !ourt provides the 'rounds for
the issuance of a preli0inar% in9unction, to #it2
) preli0inar% in9unction 0a% be 'ranted #hen it is established2
4a5 That the applicant is entitled to the relief de0anded, and the #hole or part of such
relief consists in restrainin' the co00ission or continuance of the act or acts co0plained
of, or in reCuirin' the perfor0ance of an act or acts, either for a li0ited period or
perpetuall%>
4b5 That the co00ission, continuance or non,perfor0ance of the act or acts co0plained
of durin' the liti'ation #ould probabl% #or1 in9ustice to the applicant> or
4c5 That a part%, court, a'enc% or person is doin', threatenin', or is atte0ptin' to do, or
is procurin' or suEerin' to be done, so0e act or acts probabl% in violation of the ri'hts of
the applicant respectin' the sub9ect of the action or proceedin', and tendin' to render
the 9ud'0ent ineEectual.
)s #ill be discussed belo#, private respondent is not entitled to the relief of in9unction a'ainst
the e=tra9udicial foreclosure and auction sale. Neither are the e=tra9udicial foreclosure and
auction sale violative of private respondent:s ri'hts.
Private respondent clai0ed that de0and #as not 0ade upon hi0, in spite of the fact that he co,
si'ned the pro0issor% notes. He also ar'ues that onl% four of the ei'ht pro0issor% notes secured
b% the 0ort'a'e had beco0e due. ) readin' of the pro0issor% notes discloses that as co,si'nor,
private respondent #aived de0and. Durther0ore, the pro0issor% notes contain an acceleration
clause, to #it2
Bpon the happenin' of an% of the follo#in' events, )$R E$ST -$N7 $ND TRUST COMP$N3
or !" !o6."r, 8ay a +* o/+on, for!:+! a;;"6"ra" 8aur+y an. !" un/a+. 9a6an;"
of !" /r+n;+/a6, as #ell as interest and other char'es #hich have accrued, *!a66 9";o8" .u"
an. /aya96" :+!ou ."8an. or noticeK2L4(5 default in pa%0ent or perfor0ance of an%
obli'ation of an% of the undersi'ned to D)R )ST ")NQ )ND TRBST !OMP)N? or its aFliated
co0panies>
= = =
IMAe hereb% #aive an% dili'ence, present0ent, ."8an., protest or notice of non,pa%0ent oKrL
dishonor #ith respect to this note or an% e=tension thereof.
G
40phasis added5
The !ivil !ode in )rticle ((7+
/
provides that one incurs in dela% or is in default fro0 the ti0e the
obli'or de0ands the ful$ll0ent of the obli'ation fro0 the obli'ee. Ho#ever, the la# e=pressl%
provides that de0and is not necessar% under certain circu0stances, and one of these
circu0stances is #hen the parties e=pressl% #aive de0and. Hence, since the co,si'nors
e=pressl% #aived de0and in the pro0issor% notes, de0and #as unnecessar% for the0 to be in
default.
Private respondent further ar'ues that b% #ithholdin' the lease pa%0ents Dar ast "an1 and
Trust !o0pan% 4D"T!5 o#ed Noah:s )r1 for the space D"T! #as leasin' fro0 Noah:s )r1 and
appl%in' said a0ounts to the outstandin' obli'ation of Noah:s )r1, as e=pressed in a letter fro0
D"T! dated Ma% (+, (++/,
+
D"T! has #aived default, novated the contract of loan as
e0bodied in the pro0issor% notes and is therefore estopped fro0 foreclosin' on the 0ort'a'ed
propert%.
This !ourt disa'rees. D"T!:s act of #ithholdin' the lease pa%0ents and appl%in' the0 to the
outstandin' obli'ation of Noah:s )r1 is 0erel% an ac1no#led'e0ent of the le'al co0pensation
that occurred b% operation of la# bet#een the parties. The !ourt has e=pounded on
co0pensation and 0ore speci$call% on le'al co0pensation as follo#s2
= = = co0pensation is a 0ode of e=tin'uishin' to the concurrent a0ount the obli'ations of
persons #ho in their o#n ri'ht and as principals are reciprocall% debtors and creditors of each
other. @e'al co0pensation ta1es place b% operation of la# #hen all the reCuisites are present, as
opposed to conventional co0pensation #hich ta1es place #hen the parties a'ree to co0pensate
their 0utual obli'ations even in the absence of so0e reCuisites.
(<
The !ivil !ode enu0erates the reCuisites of le'al co0pensation, thus2
)rt. (-G/. !o0pensation shall ta1e place #hen t#o persons, in their o#n ri'ht, are creditors and
debtors of each other.
)rt. (-G+. In order that co0pensation 0a% be proper, it is necessar%2
4(5 That each one of the obli'ors be bound principall%, and that he be at the sa0e ti0e a
principal creditor of the other>
4-5 That both debts consist in a su0 of 0one%, or if the thin's due are consu0able, the%
be of the sa0e 1ind, and also of the sa0e Cualit% if the latter has been stated>
4.5 That the t#o debts be due>
4*5 That the% be liCuidated and de0andable>
465 That over neither of the0 there be an% retention or controvers%, co00enced b% third
persons and co00unicated in due ti0e to the debtor.
It is clear fro0 the facts that D"T! and Noah:s )r1 are both principal obli'ors and creditors of
each other. Their debts to each other both consist in a su0 of 0one%. )s discussed above, the
ei'ht pro0issor% notes of Noah:s )r1 are all due> and the lease pa%0ents o#ed b% D"T!
beco0e due each 0onth. Noah:s )r1:s debt is liCuidated and de0andable> and D"T!:s lease
pa%0ents are liCuidated and are de0andable ever% 0onth as the% fall due. @astl%, there is no
retention or controvers% co00enced b% third persons over either of the debts.
Novation did not occur as private respondent ar'ued. The !ourt has declared that a contract
cannot be novated in the absence of a ne# contract e=ecuted bet#een the parties.
((
The le'al
co0pensation, #hich #as ac1no#led'ed b% D"T! in its Ma% (+, (++/ letter, occurred b%
operation of la#, as discussed above. )s a conseCuence, it cannot be considered a ne# contract
bet#een the parties. Hence, the loan a'ree0ent, as e0bodied in the pro0issor% notes and the
real estate 0ort'a'e, subsists.
Since the co0pensation bet#een the parties occurred b% operation of la#, D"T! did not #aive
Noah:s )r1:s default.
)s a result of the absence of novation or #aiver of default, D"T! is therefore not estopped fro0
proceedin' #ith the foreclosure.
Private respondent further ar'ues in his 0e0orandu0 that D"T! #as in bad faith #hen it
initiated the foreclosure proceedin's because Noah:s )r1 had been reCuestin' for accountin'
and reconciliation of its account and the application of interest pa%0ent, and that there #ere on,
'oin' ne'otiations #ith D"T! for the settle0ent and restructurin' of the loan obli'ation. Dro0
the evidence on hand, it is clear that D"T! #as actin' #ithin its ri'hts. Private respondent did
not present an% other a'ree0ent si'ned b% the parties subseCuent to the pro0issor% notes and
0ort'a'e contract #hich can be considered as replacin', alterin', or novatin' the contractual
ri'hts bet#een the parties. ven if Noah:s )r1 #as tr%in' to see1 an accountin' and
reconciliation of its account and even if it #as tr%in' to ne'otiate a restructurin' of its loan
obli'ation, it cannot den% the fact that it had alread% defaulted on the entire loan obli'ation. This
'ave D"T! the ri'ht to e=ercise its contractual ri'hts to foreclose on the securit% of the debt,
#hich in this case #as the real estate 0ort'a'e sub9ect of this case. D"T! #as therefore 9ust
e=ercisin' its contractual ri'hts #hen it initiated foreclosure proceedin's and cannot be
considered to have acted in bad faith.
Aith re'ard to the second issue, this !ourt $nds that the TRO and the #rit of preli0inar%
in9unction #ere i0properl% issued b% 3ud'e Victorio. Dirst of all, on substantive 'rounds, as
discussed above, private respondent #as not entitled to the TRO and the #rit of preli0inar%
in9unction.
Second, the issuance of the TRO #as, on procedural 'rounds, irre'ular. Section 6, Rule 6/ of the
Rules of !ivil Procedure provides2
Preliminary inB,nction not granted witho,t noticeM e>ception. O No preli0inar% in9unction shall be
'ranted #ithout hearin' and prior notice to the part% or person sou'ht to be en9oined. If it shall
appear fro0 facts sho#n b% aFdavits or b% the veri$ed application that 'reat or irreparable
in9ur% #ould result to the applicant before the 0atter can be heard on notice, the court to #hich
the application for preli0inar% in9unction #as 0ade, 0a% issue a te0porar% restrainin' order to
be eEective onl% for a period of t#ent% 4-<5 da%s fro0 notice to the part% or person sou'ht to be
en9oined. Aithin the said t#ent%,da% period, the court 0ust order said part% or person to sho#
cause, at a speci$ed ti0e and place, #h% the in9unction should not be 'ranted, deter0ine #ithin
the sa0e period #hether or not the preli0inar% in9unction shall be 'ranted, and accordin'l%
issue the correspondin' order.
3ud'e Victorio, in an order dated )pril (*, (++/, issued a TRO for $ve da%s, then, in an order
dated )pril (6, (++/, e=tended it for $fteen 0ore da%s, totalin' t#ent% da%s. Ho#ever, in the
$rst order, 3ud'e Victorio e=cluded Saturda%s and Sunda%s> and in the latter order he added
le'al holida%s to the e=clusions. )s Cuoted above, a TRO is eEective onl% for a period of t#ent%
da%s fro0 notice to the part% sou'ht to be en9oined. The rule does not specif% that the countin'
of the t#ent%,da% period is onl% li0ited to #or1in' da%s or that Saturda%s, Sunda%s and le'al
holida%s are e=cluded fro0 the t#ent%,da% period. The la# si0pl% states t#ent% da%s fro0
notice. Section (, Rule -- of the Rules of !ourt is pertinent, to #it2
?ow to comp,te time. H In co0putin' an% period of ti0e prescribed or allo#ed b% these Rules, or
b% order of the court, or b% an% applicable statute, the da% of the act or event fro0 #hich the
desi'nated period of ti0e be'ins to run is to be e=cluded and the date of perfor0ance included.
If the last da% of the period, as thus co0puted, falls on a Saturda%, a Sunda%, or a le'al holida%
in the place #here the court sits, the ti0e shall not run until the ne=t #or1in' da%.
It is clear fro0 the last sentence of this section that non,#or1in' da%s 4Saturda%s, Sunda%s and
le'al holida%s5 are e=cluded fro0 the countin' of the period onl% #hen the last da% of the period
falls on such da%s. The Rule does not provide for an% other circu0stance in #hich non,#or1in'
da%s #ould aEect the countin' of a prescribed period. Hence, 3ud'e Victorio e=ceeded the
authorit% 'ranted to lo#er courts, in Section 6, Rule 6/ of the Rules of !ourt, #hen he e=cluded
non,#or1in' da%s fro0 the countin' of the t#ent%,da% period.
In su0, private respondent #as not entitled to the TRO nor to the preli0inar% in9unction, and the
period 'ranted in the TRO issued b% 3ud'e Victorio e=ceeded that prescribed in the Rules of
!ourt.
(HERE)ORE, the petition is GR$NTED and the decision
(-
and resolution
(.
of the !ourt of
)ppeals dated )u'ust -7, (+++ and )pril ., -<<<, respectivel%, are P$RT#$LL3
RE%ERSED and SET $S#DE, retainin' onl% the portion #hich increases the a0ount of the
in9unctive bond to Dive Million Pesos 4P6,<<<,<<<5. The #rit of preli0inar% in9unction issued b%
3ud'e Brbano !. Victorio, Sr., in an order
(*
dated Ma% G, (++/ in !ivil !ase No. +/,//-77, is
hereb% D#SSOL%ED. No costs.
SO ORDERED.
$DOL)O S. $'CUN$
)ssociate 3ustice
(E CONCUR2
RE3N$TO S. PUNO
!hairperson
)ssociate 3ustice
$NGEL#N$ S$NDO%$L&GUT#ERRE'
)ssociate 3ustice
REN$TO C. CORON$
)sscociate 3ustice
C$NC#O C. G$RC#$
)ssociate 3ustice
)oono"*
(
"% virtue of a 0er'er of the "an1 of the Philippine Islands and Dar ast "an1 and Trust
!o0pan% the corporate life of the latter has ter0inated and the 0er'ed entit% is no#
called "an1 of the Philippine Islands> .ee! Manifestation and Br'ent Motion for =tension
of Ti0e, dated )pril -6, -<<<> !) Rollo, unnu0bered.
-
Rollo, p. .+.
.
Records, p. 7<.
*
Rollo, pp. .+,*(.
6
Rollo, pp. *(,*6.
7
Id. at *G.
G
Rollo, pp. 6<,6G.
/
)RT. ((7+. Those obli'ed to deliver or to do so0ethin' incur in dela% fro0 the ti0e the
obli'ee 9udiciall% or e=tra9udiciall% de0ands fro0 the0 the ful$ll0ent of their obli'ation.
Ho#ever, the de0and b% the creditor shall not be necessar% in order that dela%
0a% e=ist2
4(5 Ahen the obli'ation or la# e=pressl% so declare> = = =.
+
NO)H:S )RQ "BI@DIN&
scolta, Manila
)ttention 2 MS. 3B@IT T. &O
)d0inistrator
This is to infor0 %ou that in vie# of the non,pa%0ent of Noah:s )r1 Merchandisin'
of its loan obli'ation #ith Dar ast "an1 and Trust !o0pan%, #e have #ithheld the
Debruar% (++/ to Ma% (++/ rental pa%0ents to %our oFce and have
correspondin'l% applied said a0ount to the outstandin' obli'ation of Noah:s )r1
Merchandisin'. Ae #ill continue to do so for the succeedin' 0onths until such
ti0e said loan is full% settled.
Please note that #e have not been delinCuent in our rental pa%0ents and should
not be char'ed #ith penalties for non,re0ittance of the sa0e. = = =
(<
P'5 1;-;"AR v. 4y! *(6 Phil. .*/, .6+ 4-<<(5.
((
5ert AsmePa @ #ssociates Inc. v. "#, -<6 Phil. .-/ 4(+/.5> <i, .i,co v. ?a3ana, *6 Phil.
G<G 4(+-*5.
(-
Rollo, pp. ./H*6.
(.
Id. at *G.
(*
Records, pp. ((.,((6.
S!OND DIVISION
&.R. No. (*-G.( 3une /, -<<7
")NQ OD TH PHI@IPPIN IS@)NDS 4for0erl% D)R )ST ")NQ )ND TRBST !OMP)N?5, Petitioner,
vs.
!OBRT OD )PP)@S and 3IMM? T. &O, Respondents.
D ! I S I O N
)J!BN), 3.2
This is a petition for revie# on certiorari $led b% "an1 of the Philippine Islands of the decision
and resolution of the !ourt of )ppeals, #hich in turn partiall% denied a petition for certiorari
Cuestionin' the te0porar% restrainin' order 4TRO5 and preli0inar% in9unction issued b% 3ud'e
Brbano !. Victorio, Sr. (
The facts as narrated in the !ourt of )ppeals decision are as follo#s2
Petitioner, Dar ast "an1 and Trust !o0pan%, 'ranted a total of ei'ht 4/5 loans to Noah:s )rc
Merchandisin' 4Noah:s )r1, for brevit%5. Per !erti$cate of Re'istration issued b% the Depart0ent
of Trade and Industr% 4Rollo, p. *<5, Noah:s )r1 is a sin'le proprietorship o#ned b% Mr. )lbert T.
@oo%u1o. The said loans #ere evidenced b% identical Pro0issor% Notes all si'ned b% )lbert T.
@oo%u1o, private respondent 3i00% T. &o and one Ailson &o. @i1e#ise, all loans #ere secured b%
real estate 0ort'a'e constituted over a parcel of land covered b% Transfer !erti$cate of Title
KNo.L (7<-GG re'istered in the na0es of Mr. @oo%u1o and herein private respondent. Petitioner,
clai0in' that Noah:s )r1 defaulted in its obli'ations, e=tra9udiciall% foreclosed the 0ort'a'e. The
auction sale #as set on (* )pril (++/ but on / )pril (++/ private respondent $led a co0plaint
for da0a'es #ith pra%er KforL issuance of TRO andMor #rit of preli0inar% in9unction see1in' KtoL
en9oin the auction sale. KILn the Order dated (* )pril (++/ a te0porar% restrainin' order #as
issued and in the sa0e order the application for Preli0inar% In9unction #as set for hearin' KiLn
the afternoon of the sa0e da% 4Rollo, p. (*-5.-
In an order. dated )pril (6, (++/, 3ud'e Victorio e=tended the TRO for another (6 da%s, for a
total of -< da%s. The !ourt of )ppeals decision continues thus2
)fter hearin', the G Ma% (++/ Order 'ranted the application for preli0inar% in9unction #hich
shall ta1e eEect upon postin' of a bond in the a0ount of T#o Hundred Thousand Pesos
4P-<<,<<<.<<5. The dispositive portion read2
8AHRDOR, it appearin' that the acts co0plained of #ould be in violation of plaintiE:s ri'ht
and #ould #or1 in9ustice to the plaintiE and so as not to render ineEectual #hatever 9ud'0ent
0a% be issued in this case, the application KforL preli0inar% in9unction is hereb% 'ranted and the
defendants and all persons actin' in their behalf are hereb% ordered to cease, desist, and refrain
fro0 proceedin' #ith the scheduled foreclosure and public auction sale of the 0ort'a'ed
propert% covered b% T!T No. (7<-GG until further orders fro0 this !ourt.
This Order shall be eEective upon petitioner:s $lin' of a bond in the a0ount of T#o Hundred
Thousand Pesos 4P-<<,<<<.<<5 to ans#er for an% and all da0a'es that defendants 0a% suEer b%
reason of the issuance of the #rit of preli0inar% in9unction.
)s pra%ed for, defendants are hereb% directed to $le their ans#er on or before Ma% (*, (++/.
!op% furnished plaintiE.
SO ORDRD.8 4Rollo p. (G65
Private,respondent then $led a bond as reCuired b% the order. Petitioner 0oved for a
reconsideration of the afore0entioned order #hich 0otion #as denied in the Order dated .< 3ul%
(++/ on the 'round that the e=tra9udicial foreclosure #as pre0ature as to four 4*5 pro0issor%
notes. The dispositive portion read2
8AHRDOR, pre0ises considered, the 0otion for reconsideration is hereb% denied and the
other pendin' incident pertainin' thereto are noted and this case be set for pre,trial.
@T THRDOR, a notice of pre,trial be sent to the parties.
SO ORDRD.8 4Rollo, p. -(+5*
)fter petitioner:s 0otion for reconsideration #as denied in an order dated 3ul% .<, (++/,
petitioner $led a petition for certiorari #ith the !ourt of )ppeals, pra%in' that the orders dated
Ma% G, (++/ and 3ul% .<, (++/, 'rantin' the #rit of preli0inar% in9unction and den%in' the
0otion for reconsideration, respectivel%, be annulled and set aside and the #rit of preli0inar%
in9unction be dissolved. Durther0ore, petitioner as1ed to be allo#ed to proceed #ith the auction
sale of the propert%.
The !ourt of )ppeals pro0ul'ated its decision dated )u'ust -7, (+++ #hich partiall% denied the
petition for certiorari, statin' as follo#s2
The issue in this case is2 8Ahether the trial court erred in the issuance of the Arit of Preli0inar%
In9unction or not.8
Petitioner averred that private respondent had not sho#n an% ri'ht #hich should be protected b%
an in9unction. Private respondent naturall% clai0ed other#ise and asserted that since four 4*5 of
the pro0issor% notes have not %et 0atured there #as no basis to foreclose the 0ort'a'e
4!o00ent, p (65. He also clai0ed that his ri'ht to due process entitles hi0 to le'al de0and
prior to the $lin' of the foreclosure proceedin's a'ainst the sub9ect propert% 4!o00ent, p. (75.
It has been held that an in9unction 0a% be issued in order to preserve the status Cuo. Thus,
in !a'a%an de Oro !it% @andless Residents )ssociation, Inc., v. !ourt of )ppeals 4-6* S!R) --<
K(++7L5 it #as held2
)s an e=traordinar% re0ed%, in9unction is calculated to preserve the status Cuo of thin's and is
'enerall% availed of to prevent actual or threatened acts, until the 0erits of the case can be
heard. = = =. 4-6* S!R) --/5.
In the case at bar, there is a need to $rst settle the Cuestion of #hether the de0and 0ade b%
petitioner #as suFcient to render private respondent in default or not. In Rose Pac1in' !o., Inc.
v. !ourt of )ppeals 4(7G S!R) .<+ K(+//L5 it #as held that the Cuestion of #hether the debtor is
in default should $rst be settled to deter0ine if the foreclosure #as proper. In the sa0e case it
#as also held that said Cuestion should be resolved b% the trial court, to #it2
Ahile petitioner corporation does not den%, in fact, it ad0its its indebtedness to respondent
ban1 4"rief for Petitioner, pp. G,((5, there #ere 0atters that needed the preservation of the
status Cuo bet#een the parties. The foreclosure sale #as pre0ature.
Dirst #as the Cuestion of #hether or not petitioner corporation #as alread% in default.
= = =
Petitioner corporation alle'es that there had been no de0and on the part of respondent ban1
previous to its $lin' a co0plaint a'ainst petitioner and Rene Qnecht personall% for collection on
petitioner:s indebtedness 4"rief for Petitioner, p.(.5. Dor an obli'ation to beco0e due there 0ust
'enerall% be a de0and. Default 'enerall% be'ins fro0 the 0o0ent the creditor de0ands the
perfor0ance of the obli'ation. Aithout such de0and, 9udicial or e=tra9udicial, the eEects of
default #ill not arise. 4Na0arco v. Dederation of Bnited Na0arco Distributors, Inc. *+ S!R) -./
K(+G.L> "or9e v. !DI of Misa0is Occidental, // S!R) 6G7 K(+G+L. Ahether petitioner corporation
is alread% in default or not and #hether de0and had been properl% 0ade or not had to be
deter0ined in the lo#er court. 4(7G S!R) .(G,.(/5.
Ae no# co0e to the 0atter of suFcienc% of the bond $led b% private respondent. Petitioner
clai0s that the P-<<,<<<.<< bond is 'rossl% insuFcient. It ar'ued, thus2
"% en9oinin' petitioner fro0 conductin' the auction sale of the 0ort'a'ed propert%, petitioner
has alread% suEered da0a'es in the a0ount of PG(6,<GG.G/ representin' $lin' and publication
fees. ?et da0a'es to be incurred b% petitioner b% reason of the in9unction are not li0ited to $lin'
and publication fees, 'rantin' that the case #ill dra' on for 0ore thaKnL a %ear, #hich is usuall%
the case. The in9unction #ould deprive petitioner D"T! of its o#n inco0e fro0 the foreclosed
propert% or fro0 the proceeds of the foreclosure sale. Obviousl% it is easil% 0ore
than P-<<,<<<.<< 4Rollo, p. .(5.
The !ourt a'rees #ith petitioner that the a0ount of the bond is insuFcient. In Valencia v. !ourt
of )ppeals, 4-7. S!R) -G6 K(++7L5 the Supre0e !ourt e=plained that the bond is for the
protection a'ainst loss or da0a'e b% reason of the in9unction, to #it2
The said bond #as supposed to ans#er onl% for da0a'es #hich 0a% be sustained b% private
respondents, a'ainst #ho0 the 0andator% in9unction #as issued, b% reason of the issuance
thereof, and not to ans#er for da0a'es caused b% the actuations of petitioner, #hich 0a% or
0a% not be related at all to the i0ple0entation of the 0andator% in9unction. The purpose of the
in9unction bond is to protect the defendant a'ainst loss or da0a'e b% reason of the in9unction in
case the court $nall% decides that the plaintiE #as not entitled to it, and the bond is usuall%
conditioned accordin'l%. Thus, the bonds0en are obli'ated to account to the defendant in the
in9unction suit for all da0a'es, or costs and reasonable counsel:s fees incurred or sustained b%
the latter in case it is deter0ined that the in9unction #as #ron'full% issued. 4-7. S!R) -//,-/+5
Private respondent:s contention that considerin' the 0ar1et value of the propert%, the bond is
reasonable and proper 4Rollo, p. -*<5 cannot be upheld considerin' that no proof of the value of
the propert% #as even presented to buttress this assertion.
Ho#ever, the insuFcienc% of the a0ount of the bond prescribed b% the trial court does not
#arrant the liftin' of the #rit of in9unction. The !ourt notes that under Section G, Rule 6/ of the
(++G Rules of !ivil Procedure the applicant, in case the bond is insuFcient, 0a% still $le one
suFcient in a0ount, to #it2
Sec. G. Service of copies of bond> eEect of disapproval of sa0e. , , = = =. If the applicant:s bond
is found to be insuFcient in a0ount, or if the suret% or sureties thereon fail to 9ustif%, and a bond
suFcient in a0ount #ith suFcient sureties approved after 9usti$cation is not $led forth#ith, the
in9unction shall be dissolved. = = =.
The !ourt considers a bond of Dive Million Pesos 4P6,<<<,<<<.<<5 to be 0ore appropriate in the
present case.
AHRDOR, considerin' the fore'oin' pre0ises the petition for certiorari is DNID> ho#ever,
private respondent is ordered to $le an in9unctive bond in the a0ount of P6,<<<,<<<.<<.
SO ORDRD.6
Petitioner $led a 0otion for reconsideration #hich #as denied in a resolution dated )pril ., -<<<
b% the !ourt of )ppeals on the 'round that all the 0atters raised in the 0otion for
reconsideration had alread% been passed upon in the decision.7
Petitioner $led the instant petition for revie# on certiorari Cuestionin' the )u'ust -7, (+++
decision and the )pril ., -<<< resolution. The follo#in' issues #ere raised b% petitioner2
..( Ahether the Honorable !ourt of )ppeals can resolve the issue of the suFcienc% of de0and.
..- Ahether private respondent &o is entitled to a te0porar% restrainin' order and a #rit of
preli0inar% in9unction.
... Ahether the !o0plaint of private respondent &o has been rendered 0oot and acade0ic.
Dor the purpose of clarit%, the issues are restated thus2
(. Ahether or not the private respondent #as entitled to the TRO and #rit of preli0inar%
in9unction.
-. Ahether or not the TRO and #rit of preli0inar% in9unction #ere properl% issued b% 3ud'e
Victorio.
On the $rst issue, this !ourt $nds that private respondent #as not entitled to the TRO and the
#rit of preli0inar% in9unction. Section . of Rule 6/ of the Rules of !ourt provides the 'rounds for
the issuance of a preli0inar% in9unction, to #it2
) preli0inar% in9unction 0a% be 'ranted #hen it is established2
4a5 That the applicant is entitled to the relief de0anded, and the #hole or part of such relief
consists in restrainin' the co00ission or continuance of the act or acts co0plained of, or in
reCuirin' the perfor0ance of an act or acts, either for a li0ited period or perpetuall%>
4b5 That the co00ission, continuance or non,perfor0ance of the act or acts co0plained of
durin' the liti'ation #ould probabl% #or1 in9ustice to the applicant> or
4c5 That a part%, court, a'enc% or person is doin', threatenin', or is atte0ptin' to do, or is
procurin' or suEerin' to be done, so0e act or acts probabl% in violation of the ri'hts of the
applicant respectin' the sub9ect of the action or proceedin', and tendin' to render the 9ud'0ent
ineEectual.
)s #ill be discussed belo#, private respondent is not entitled to the relief of in9unction a'ainst
the e=tra9udicial foreclosure and auction sale. Neither are the e=tra9udicial foreclosure and
auction sale violative of private respondent:s ri'hts.
Private respondent clai0ed that de0and #as not 0ade upon hi0, in spite of the fact that he co,
si'ned the pro0issor% notes. He also ar'ues that onl% four of the ei'ht pro0issor% notes secured
b% the 0ort'a'e had beco0e due. ) readin' of the pro0issor% notes discloses that as co,si'nor,
private respondent #aived de0and. Durther0ore, the pro0issor% notes contain an acceleration
clause, to #it2
Bpon the happenin' of an% of the follo#in' events, D)R )ST ")NQ )ND TRBST !OMP)N? or the
holder, 0a% at its option, forth#ith accelerate 0aturit% and the unpaid balance of the principal,
as #ell as interest and other char'es #hich have accrued, shall beco0e due and pa%able
#ithout de0and or noticeK2L4(5 default in pa%0ent or perfor0ance of an% obli'ation of an% of the
undersi'ned to D)R )ST ")NQ )ND TRBST !OMP)N? or its aFliated co0panies>
= = =
IMAe hereb% #aive an% dili'ence, present0ent, de0and, protest or notice of non,pa%0ent oKrL
dishonor #ith respect to this note or an% e=tension thereof.G 40phasis added5
The !ivil !ode in )rticle ((7+/ provides that one incurs in dela% or is in default fro0 the ti0e the
obli'or de0ands the ful$ll0ent of the obli'ation fro0 the obli'ee. Ho#ever, the la# e=pressl%
provides that de0and is not necessar% under certain circu0stances, and one of these
circu0stances is #hen the parties e=pressl% #aive de0and. Hence, since the co,si'nors
e=pressl% #aived de0and in the pro0issor% notes, de0and #as unnecessar% for the0 to be in
default.
Private respondent further ar'ues that b% #ithholdin' the lease pa%0ents Dar ast "an1 and
Trust !o0pan% 4D"T!5 o#ed Noah:s )r1 for the space D"T! #as leasin' fro0 Noah:s )r1 and
appl%in' said a0ounts to the outstandin' obli'ation of Noah:s )r1, as e=pressed in a letter fro0
D"T! dated Ma% (+, (++/,+ D"T! has #aived default, novated the contract of loan as
e0bodied in the pro0issor% notes and is therefore estopped fro0 foreclosin' on the 0ort'a'ed
propert%.
This !ourt disa'rees. D"T!:s act of #ithholdin' the lease pa%0ents and appl%in' the0 to the
outstandin' obli'ation of Noah:s )r1 is 0erel% an ac1no#led'e0ent of the le'al co0pensation
that occurred b% operation of la# bet#een the parties. The !ourt has e=pounded on
co0pensation and 0ore speci$call% on le'al co0pensation as follo#s2
= = = co0pensation is a 0ode of e=tin'uishin' to the concurrent a0ount the obli'ations of
persons #ho in their o#n ri'ht and as principals are reciprocall% debtors and creditors of each
other. @e'al co0pensation ta1es place b% operation of la# #hen all the reCuisites are present, as
opposed to conventional co0pensation #hich ta1es place #hen the parties a'ree to co0pensate
their 0utual obli'ations even in the absence of so0e reCuisites.(<
The !ivil !ode enu0erates the reCuisites of le'al co0pensation, thus2
)rt. (-G/. !o0pensation shall ta1e place #hen t#o persons, in their o#n ri'ht, are creditors and
debtors of each other.
)rt. (-G+. In order that co0pensation 0a% be proper, it is necessar%2
4(5 That each one of the obli'ors be bound principall%, and that he be at the sa0e ti0e a
principal creditor of the other>
4-5 That both debts consist in a su0 of 0one%, or if the thin's due are consu0able, the% be of
the sa0e 1ind, and also of the sa0e Cualit% if the latter has been stated>
4.5 That the t#o debts be due>
4*5 That the% be liCuidated and de0andable>
465 That over neither of the0 there be an% retention or controvers%, co00enced b% third
persons and co00unicated in due ti0e to the debtor.
It is clear fro0 the facts that D"T! and Noah:s )r1 are both principal obli'ors and creditors of
each other. Their debts to each other both consist in a su0 of 0one%. )s discussed above, the
ei'ht pro0issor% notes of Noah:s )r1 are all due> and the lease pa%0ents o#ed b% D"T!
beco0e due each 0onth. Noah:s )r1:s debt is liCuidated and de0andable> and D"T!:s lease
pa%0ents are liCuidated and are de0andable ever% 0onth as the% fall due. @astl%, there is no
retention or controvers% co00enced b% third persons over either of the debts.
Novation did not occur as private respondent ar'ued. The !ourt has declared that a contract
cannot be novated in the absence of a ne# contract e=ecuted bet#een the parties.(( The le'al
co0pensation, #hich #as ac1no#led'ed b% D"T! in its Ma% (+, (++/ letter, occurred b%
operation of la#, as discussed above. )s a conseCuence, it cannot be considered a ne# contract
bet#een the parties. Hence, the loan a'ree0ent, as e0bodied in the pro0issor% notes and the
real estate 0ort'a'e, subsists.
Since the co0pensation bet#een the parties occurred b% operation of la#, D"T! did not #aive
Noah:s )r1:s default.
)s a result of the absence of novation or #aiver of default, D"T! is therefore not estopped fro0
proceedin' #ith the foreclosure.
Private respondent further ar'ues in his 0e0orandu0 that D"T! #as in bad faith #hen it
initiated the foreclosure proceedin's because Noah:s )r1 had been reCuestin' for accountin'
and reconciliation of its account and the application of interest pa%0ent, and that there #ere on,
'oin' ne'otiations #ith D"T! for the settle0ent and restructurin' of the loan obli'ation. Dro0
the evidence on hand, it is clear that D"T! #as actin' #ithin its ri'hts. Private respondent did
not present an% other a'ree0ent si'ned b% the parties subseCuent to the pro0issor% notes and
0ort'a'e contract #hich can be considered as replacin', alterin', or novatin' the contractual
ri'hts bet#een the parties. ven if Noah:s )r1 #as tr%in' to see1 an accountin' and
reconciliation of its account and even if it #as tr%in' to ne'otiate a restructurin' of its loan
obli'ation, it cannot den% the fact that it had alread% defaulted on the entire loan obli'ation. This
'ave D"T! the ri'ht to e=ercise its contractual ri'hts to foreclose on the securit% of the debt,
#hich in this case #as the real estate 0ort'a'e sub9ect of this case. D"T! #as therefore 9ust
e=ercisin' its contractual ri'hts #hen it initiated foreclosure proceedin's and cannot be
considered to have acted in bad faith.
Aith re'ard to the second issue, this !ourt $nds that the TRO and the #rit of preli0inar%
in9unction #ere i0properl% issued b% 3ud'e Victorio. Dirst of all, on substantive 'rounds, as
discussed above, private respondent #as not entitled to the TRO and the #rit of preli0inar%
in9unction.
Second, the issuance of the TRO #as, on procedural 'rounds, irre'ular. Section 6, Rule 6/ of the
Rules of !ivil Procedure provides2
Preli0inar% in9unction not 'ranted #ithout notice> e=ception. H No preli0inar% in9unction shall be
'ranted #ithout hearin' and prior notice to the part% or person sou'ht to be en9oined. If it shall
appear fro0 facts sho#n b% aFdavits or b% the veri$ed application that 'reat or irreparable
in9ur% #ould result to the applicant before the 0atter can be heard on notice, the court to #hich
the application for preli0inar% in9unction #as 0ade, 0a% issue a te0porar% restrainin' order to
be eEective onl% for a period of t#ent% 4-<5 da%s fro0 notice to the part% or person sou'ht to be
en9oined. Aithin the said t#ent%,da% period, the court 0ust order said part% or person to sho#
cause, at a speci$ed ti0e and place, #h% the in9unction should not be 'ranted, deter0ine #ithin
the sa0e period #hether or not the preli0inar% in9unction shall be 'ranted, and accordin'l%
issue the correspondin' order.
3ud'e Victorio, in an order dated )pril (*, (++/, issued a TRO for $ve da%s, then, in an order
dated )pril (6, (++/, e=tended it for $fteen 0ore da%s, totalin' t#ent% da%s. Ho#ever, in the
$rst order, 3ud'e Victorio e=cluded Saturda%s and Sunda%s> and in the latter order he added
le'al holida%s to the e=clusions. )s Cuoted above, a TRO is eEective onl% for a period of t#ent%
da%s fro0 notice to the part% sou'ht to be en9oined. The rule does not specif% that the countin'
of the t#ent%,da% period is onl% li0ited to #or1in' da%s or that Saturda%s, Sunda%s and le'al
holida%s are e=cluded fro0 the t#ent%,da% period. The la# si0pl% states t#ent% da%s fro0
notice. Section (, Rule -- of the Rules of !ourt is pertinent, to #it2
Ho# to co0pute ti0e. H In co0putin' an% period of ti0e prescribed or allo#ed b% these Rules, or
b% order of the court, or b% an% applicable statute, the da% of the act or event fro0 #hich the
desi'nated period of ti0e be'ins to run is to be e=cluded and the date of perfor0ance included.
If the last da% of the period, as thus co0puted, falls on a Saturda%, a Sunda%, or a le'al holida%
in the place #here the court sits, the ti0e shall not run until the ne=t #or1in' da%.
It is clear fro0 the last sentence of this section that non,#or1in' da%s 4Saturda%s, Sunda%s and
le'al holida%s5 are e=cluded fro0 the countin' of the period onl% #hen the last da% of the period
falls on such da%s. The Rule does not provide for an% other circu0stance in #hich non,#or1in'
da%s #ould aEect the countin' of a prescribed period. Hence, 3ud'e Victorio e=ceeded the
authorit% 'ranted to lo#er courts, in Section 6, Rule 6/ of the Rules of !ourt, #hen he e=cluded
non,#or1in' da%s fro0 the countin' of the t#ent%,da% period.
In su0, private respondent #as not entitled to the TRO nor to the preli0inar% in9unction, and the
period 'ranted in the TRO issued b% 3ud'e Victorio e=ceeded that prescribed in the Rules of
!ourt.
AHRDOR, the petition is &R)NTD and the decision(- and resolution(. of the !ourt of
)ppeals dated )u'ust -7, (+++ and )pril ., -<<<, respectivel%, are P)RTI)@@?
RVRSD and ST )SID, retainin' onl% the portion #hich increases the a0ount of the
in9unctive bond to Dive Million Pesos 4P6,<<<,<<<5. The #rit of preli0inar% in9unction issued b%
3ud'e Brbano !. Victorio, Sr., in an order(* dated Ma% G, (++/ in !ivil !ase No. +/,//-77, is
hereb% DISSO@VD. No costs.
SO ORDRD.
)DO@DO S. )J!BN)
)ssociate 3ustice
A !ON!BR2
R?N)TO S. PBNO
!hairperson
)ssociate 3ustice
$NGEL#N$ S$NDO%$L&GUT#ERRE'
)ssociate 3ustice
REN$TO C. CORON$
)sscociate 3ustice
!)N!IO !. &)R!I)
)ssociate 3ustice
Dootnotes
( "% virtue of a 0er'er of the "an1 of the Philippine Islands and Dar ast "an1 and Trust
!o0pan% the corporate life of the latter has ter0inated and the 0er'ed entit% is no# called
"an1 of the Philippine Islands> See, Manifestation and Br'ent Motion for =tension of Ti0e, dated
)pril -6, -<<<> !) Rollo, unnu0bered.
- Rollo, p. .+.
. Records, p. 7<.
* Rollo, pp. .+,*(.
6 Rollo, pp. *(,*6.
7 Id. at *G.
G Rollo, pp. 6<,6G.
/ )RT. ((7+. Those obli'ed to deliver or to do so0ethin' incur in dela% fro0 the ti0e the obli'ee
9udiciall% or e=tra9udiciall% de0ands fro0 the0 the ful$ll0ent of their obli'ation.
Ho#ever, the de0and b% the creditor shall not be necessar% in order that dela% 0a% e=ist2
4(5 Ahen the obli'ation or la# e=pressl% so declare> = = =.
+ NO)H:S )RQ "BI@DIN&
scolta, Manila
)ttention 2 MS. 3B@IT T. &O
)d0inistrator
This is to infor0 %ou that in vie# of the non,pa%0ent of Noah:s )r1 Merchandisin' of its loan
obli'ation #ith Dar ast "an1 and Trust !o0pan%, #e have #ithheld the Debruar% (++/ to Ma%
(++/ rental pa%0ents to %our oFce and have correspondin'l% applied said a0ount to the
outstandin' obli'ation of Noah:s )r1 Merchandisin'. Ae #ill continue to do so for the succeedin'
0onths until such ti0e said loan is full% settled.
Please note that #e have not been delinCuent in our rental pa%0ents and should not be char'ed
#ith penalties for non,re0ittance of the sa0e. = = =
(< PN" MD!OR v. B%, *(6 Phil. .*/, .6+ 4-<<(5.
(( "ert Os0eIa V )ssociates Inc. v. !), -<6 Phil. .-/ 4(+/.5> Tiu Siuco v. Habana, *6 Phil. G<G
4(+-*5.
(- Rollo, pp. ./H*6.
(. Id. at *G.
(* Records, pp. ((.,((6.



)#RST D#%#S#ON


SPOUSES M$NUEL O LU#S$ T$N
LEE, REN(#C7 ($RREN LEE an.
J$NSSEN TH$DDEUS LEE,
Petitioners,

G.R. No. 141151


Present2

P)N&)NI")N, "..
!hairperson,
?N)RS,S)NTI)&O,


, vers,s ,



HON. COURT O) $PPE$LS an.
CH#N$ -$N7#NG CORPOR$T#ON ,
Respondents.
)BSTRI),M)RTINJ,
!)@@3O, SR., and
!HI!O,N)J)RIO, .


Pro0ul'ated2

3ul% -G, -<<7
=, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,=


D E C # S # O N


!HI!O,N)J)RIO, .2

This is a Petition for Revie# on "ertiorari under Rule *6 of the Rules of !ourt, #ith pra%er for the
issuance of a Te0porar% Restrainin' Order 4TRO5 or a Preli0inar% In9unction a'ainst the Decision
K(L
of the
!ourt of )ppeals pro0ul'ated on -* October -<<< and its Resolution
K-L
dated (+ Debruar% -<<(, #hich
nulli$ed and set aside the Orders dated -6 March (+++ and (( Ma% (+++ of Hon. Drancisco @. !alin'in,
Presidin' 3ud'e of "ranch --, Re'ional Trial !ourt 4RT!5, Misa0is Oriental. In said Orders, 3ud'e !alin'in
issued a Arit of Preli0inar% In9unction a'ainst respondent !hina "an1in' !orporation 4!"!5 fro0
conductin' and proceedin' #ith the e=tra9udicial foreclosure and public auction sale of the sub9ect
0ort'a'ed properties.

The facts as found b% the !ourt of )ppeals are as follo#s2

In (++-, !"! 'ranted the spouses @ee credit facilities in the a0ount of P6 Million. Dor
this facilit%, private respondents constituted onDebruar% ((, (++- a real estate 0ort'a'e
4RM5 over the "or9a propert% 4)nne= N"O, Petition5.

)'ainst the secured credit acco00odation, the spouses @ee initiall% borro#ed P6
Million, the loan covered b% pro0issor% note 4PMN5 \T@S,-< that #as to 0ature KiLn Debruar%
(++G. Ahile pa%in' their a0orti;ation obli'ation under this note, the spouses @ee #ere able
to secure as the% did secure additional loans dra#n a'ainst the usableMavailable portion of
the credit facilit%.

SubseCuentl%, to $nance a buildin' construction pro9ect, the spouses @ee:s ori'inal
credit facilit% #as increased to P-< Million. To secure the increased facilit% and all loan
avail0entsMdra#in's 0ade or to be 0ade a'ainst such facilit%, the RM over the "or9a
propert% #as correspondin'l% a0ended. The N)0end0ent to Real state Mort'a'eO 4)nne=
N",(O, Petition5, #as si'ned b% private respondents and Ren#ic1 Aarren:s #ife, Marivic.

)'ainst this facilit% as increased, !"!, as participant of the @and "an1 of the
PhilippineKsL 4@"P5,ad0inistered !ountr%side @oan Dund 4!@D5 a'reed to 'rant the spouses
@ee, via brid'e $nancin', a P-< Million loan to be sourced fro0 its 4!"!:s5 avail0ent under
the !@! pro'ra0. In a letter,notice of 3une (7, (++G, !"!,"or9a "ranch 0ana'er Ronaldo B%
infor0ed Manuel @ee of the approval b% the "an1:s =ecutive co00ittee of his ter0 loan in
the a0ount of P-< Million to be funded out of the @"P,!@D, sub9ect, inter alia, to the
follo#in' ter0sMconditions2

N. #gainst Real ;state 1ortgage ER;1F on the three parcels of land
descri3ed ,nder <"< 'os. (++)G! (*G+1 and (*G++ together with the
proposed G$storey commercial 3,ilding! located at .R. 5orBa .treet . . . .O
4)nne= RD:, Petition5.

Manuel @ee hand#rote his confor0it% to the conditions aforestated on the letter,
notice itself.

On Septe0ber --, (++G, Manuel @ee and !"! for0ali;ed the P-< Million loan b%
e=ecutin' a N=A#' #%R;;1;'<O 4)nne= N&O, Petition5, #hich thus paved the #a% for the
release of the funds under the @"P,!@D to the for0er. Bnder the ter0s of this a'ree0ent,
the loan ofP-< Million shall be secured b% a real estate 0ort'a'e over the "or9a
propert%. The series of replace0ents andMor conversion of the pro0issor% notes vis$a$vis the
P-< Million dra#n do#n led to the e=ecution of PMN \T@S,--/ for P(G,-7<,<<<.<< and PMN
\T@S,--+ for P-,G*<,<<<.<< 4)nne= N!O, Petition5.

Mean#hile, KiLn 3anuar% (++6, the spouses @ee e=ecuted in favor of the "an1 RM
over the @u0bia propert% as securit% for a P- Million credit facilit% 4)nne= NIO, Petition5. The%
#ould later e=ecute the N)0end0ent to the Real state Mort'a'eO 4)nne= NI,(O5 over the
land KNdescribed under T!T No. T,-.-(6OL to secure an increased credit facilit%. Dro0 this
facilit%, the spouses @ee obtained a loan of P6 Million as evidenced, after rene#al or
restructurin', b% PMN "DS,-<-( and PMN "DS,-(-6 dated Debruar% (., (++G and October .(,
(++G, respectivel%, for P-.6 Million each 4)nne= NDO, Petition5.

SubseCuent events sho# the spouses @ee defaultin', startin' Nove0ber (++G, on
their 0onthl% a0orti;ation pa%0ents under the t#o 4-5 separate secured
facilities. !onseCuentl%, and o#in' to the acceleration clause e0bodied in the coverin'
pro0issor% notes, !"!, thru its Mr. B%, sent the spouses @ee a letter dated 3une --,
(++/ de0andin' a full settle0ent of account 4)nne= N3O, Petition5. )nother de0and letter
dated )u'ust ((, (++/ #ith a threat of foreclosure of 0ort'a'e follo#ed 4)nne= NQO,
Petition5.

In a letter of 3ul% /, (++/, Manuel @ee, respondin' to the $rst de0and letter, infor0ed
B% that he 4@ee5 could not, due to cash To# proble0, re0it the reCuired full pa%0ent. Mr.
@ee, ho#ever, assured pa%0ent Nas soon as f,nds wo,ld 3e availa3leO 4)nne= N@O, Petition5.

On October +, (++/, !"!, thru counsel, #rote the spouses @ee, a'ain de0andin' full
liCuidation of overdue accounts speci$call% covered b% PMN Nos. T@S,--/, T@S,--+, "DS,-<-(
and "DS,-(-6, this ti0e totalin' P-*,/..,.....*, or face e=tra,9udicial foreclosure of
0ort'a'es 4)nne= NMO, Petition5. )ns#erin', Mr. @ee, in his letter of October -., (++/,
reiterated his co00it0ent to pa% the fa0il%:s account covered b% the afore0entioned 4*5
four pro0issor% notes. He, ho#ever, in eEect pleaded for the defer0ent of the foreclosure
of their 0ort'a'es so as not Nto preB,dice the negotiations QtheyR are p,rs,ing ... to prod,ce
the f,nds to pay oN o,r loans with QtheR 5an8O 4)nne= NNO, Petition5.

To#ards the end of (++/, !"! sent a fourth de0and letter dated Dece0ber -(,
(++/. In their repl%,letter of 3anuar% 7, (+++, the spouses @ee ac1no#led'ed receipt of
the Dece0ber -(, (++/ letter and reCuested that the% be 'iven up to March (+++ to
settle. In the sa0e breath, the% as1 that the "an1 0a1e Nrepresentation with
QitsR 1anila =awyer! to hold in a3eyance whatever legal action they wish to ta8eO 4)nne= NPO,
Petition5.

Bnbe1no#nst to !"! #hile it #as earnestl% de0andin' pa%0ent, the spouses @ee,
9oined b% their sons, $led on Dece0ber -/, (++/ a suit #ith the Re'ional Trial !ourt at
!a'a%an de Oro !it% a'ainst the "an1 for speci$c perfor0ance and cancellation of real
estate 0ort'a'e. There, the% contended that the real estate 0ort'a'e on the "or9a
propert% had been eEectivel% ter0inated, the sa0e havin' been constituted to secure a
loan of P6 Million under PMN \T@S,-< #hich had alread% been paid. Doc1eted as !ivil !ase
No. +/,G76, the co0plaint #as raXed to "ranch -- of the !ourt presided b% the respondent
9ud'e.

In reaction to #hat it presentl% describes as a Ncon Bo3 done on it 3y the private
respondent,O !"! set in 0otion the deferred e=tra9udicial foreclosure proceedin's and
scheduled, per Notice of )uction Sale b% Notar% Public Vir'ilio !abanlet dated 3anuar% (/,
(+++ 4)nne= NPO, Petition5, the auction sale of the "or9a and the @u0bia properties on
Debruar% (6, (+++. Thereupon, the @ees $led an ;> parte motion for in9unctive relief,
alle'in' that the foreclosure, if not restrained, #ill cause irreparable in9ur% to the0 and
#ould pre9udice their ri'hts before the trial court.

On Debruar% (-, (+++, the respondent 9ud'e issued a te0porar% restrainin' order
4TRO5 en9oinin' !"!, et al., fro0 proceedin' #ith the scheduled auction and set hearin'
dates on the application for preli0inar% in9unction. Due to this develop0ent, !"! reset the
foreclosure sale toMarch -+, (+++, or after the eEectivit% of the TRO thus issued. Reactin',
the @ees interposed a 0otion to cite !"!, et al., in conte0pt of court for violatin' the anti,
foru0 shoppin' rule, #ith a pra%er to restrain those concerned fro0 proceedin' #ith
the March -+, (+++ auction sale.

In the hearin' on the issuance of the in9unction, Manuel @ee in essence testi$ed that
he and the rest of his fa0il% si'ned the N#mendment to Real ;state 1ortgageL 4)nne= N",(O,
supra5 in blan1, thin1in' that it covered the @u0bia propert%. He also alle'ed that the onl%
obli'ation, represented b% PMN \T@S,-< for P6 Million, secured b% the 0ort'a'e on the "or9a
Propert% dated Debruar% ((, (++- 4)nne= N"O, supra5, had alread% been paid. On this
pre0ise, he added, there #as hardl% an% necessit% to a0end the said 0ort'a'e docu0ent.

!"!, for its part, adduced testi0onial evidence to traverse the @ees: clai0 respectin'
the si'nin' of afore0entioned deed in blan1 and about the alle'ed settle0ent of their
loan. It also presented docu0entar% evidence inter alia consistin' of the de0and letters
adverted to earlier, the $ft%,$ve 4665 pro0issor% notes the spouses @ee had e=ecuted in the
"an1:s favor, the 3une (7, (++/ letter of B% to Manuel @ee, supra, and a cop% of the N@oan
)'ree0entO 4)nne= N&,O supra5.

)fter the conclusion of the March (+, (+++ settin', another hearin' #as scheduled
for March -+, (+++.

On March -6, (+++, ho#ever, respondent 9ud'e issued the $rst assailed order 4)nne=
N)O, Petition5, 'rantin' private respondents: 0otion for the issuance of preli0inar% in9unction
#ith the follo#in' proferred 9usti$cation2

N"ased on plaintiEs evidence presented and because of another
purported e=tra 9udicial foreclosure on March -+, (+++, #hich this !ourt $nds
to be an utter disre'ard of the proceedin' #hich is still on'oin' and there
bein' bad faith on the part of the defendants in pursuin' the sa0e. . . this
!ourt $nds enou'h reason for the issuance of the #rit of preli0inar% in9unction
. . . so as . . . to prevent an% irreparable da0a'es or in9uries to plaintiEs, and
li1e#ise to prevent the clai0 of plaintiEs #hich is still to be investi'ated,
heard and ad9udicated, fro0 beco0in' 0oot and acade0ic.O

On Ma% ((, (+++, the respondent 9ud'e issued his second assailed order den%in'
!"!:s 0otion for reconsideration, as a0ended 4)nne= N),-O, Petition5.
K.L



On (+ 3ul% (+++, !"! $led a Petition for "ertiorari a'ainst petitioners and 3ud'e !alin'in #ith the
!ourt of )ppeals, pra%in' for the annul0ent of the Orders rendered on -6 March (+++ and (( Ma% (+++.

On (+ )u'ust (+++, the !ourt of )ppeals dis0issed the Petition for havin' been belatedl%
$led. Bpon 0otion for reconsideration $led b% respondent !"!, the !ourt of )ppeals reinstated the
petition on (< 3anuar% -<<<.

On -* October -<<<, the !ourt of )ppeals issued the assailed Decision, disposin' of the case as
follo#s2

AHRDOR, the instant petition is hereb% &R)NTD. )ccordin'l%, the assailed
orders of the respondent 9ud'e dated March -6, (+++and Ma% ((, (+++, are hereb%
NB@@IDID and ST )SID.
K*L


On (* Nove0ber -<<<, petitioners $led a 0otion for reconsideration #ith pra%er for the Issuance of
a Te0porar% Restrainin' Order or Preli0inar% In9unction to stop the sale of the sub9ect properties. The
!ourt of )ppeals issued a TRO on (- Dece0ber -<<<.

Respondent !"!, nonetheless, proceeded #ith the conduct of the public auction sale on (*
Dece0ber -<<<. SubseCuentl%, the !ourt of )ppeals denied petitioners: 0otion for reconsideration in its
assailed Resolution dated (+ Debruar% -<<(.

Hence, this petition #here petitioners brin' before this !ourt the follo#in' assi'n0ent of errors2

(. TH)T TH PB"@I! RSPONDNT !OBRT OD )PP)@S &R)V@? RRD IN
RNDRIN& TH D!ISION D)TD O!TO"R -*, -<<< AHN IT ")SD TH )@@&)TIONS OD
D)!TS NTIR@? DROM KTHL NST)TMNT OD D)!TS PROPOBNDD "? TH PB"@I!
RSPONDNT !"! IN ITS PTITION DOR !RTIOR)RI IN !),&.R. SP NO. 6.G/+ AHI!H )R
NOT TH D)!TS ST)"@ISHD OR PROVN IN TH H)RIN& DOR TH PBRPOS OD
DTRMININ& TH PROPRIT? OD TH ISSB)N! OD TH ARIT OD PR@IMIN)R? IN3BN!TION
ISSBD "? TH TRI)@ !OBRT ON M)R!H -6, (+++ )ND R,)DDIRMD ON M)? ((, (+++ IN
!IVI@ !)S NO. +/,G76.

-. TH)T, PB"@I! RSPONDNT !OBRT OD )PP)@S &R)V@? RRD IN DINDIN& TH)T
&R)V )"BS OD DIS!RTION A)S !OMMITTD "? TH TRI)@ !OBRT AHN IT M)SBRD
)ND DTRMIND TH )!TB)TIONS OD TH S)ID !OBRT ")SD BPON TH D)!TS NOT
PRSNTD )ND ST)"@ISHD, )S ?T IN TH TRI)@ !OBRT, TH D)!T "IN& TH)T, TRI)@
ON TH MRIT IN !IVI@ !)S NO. +/,G76 H)S NOT ?T ST)RTD "DOR TH S)ID !OBRT.

.. TH)T, TH PB"@I! RSPONDNT !OBRT OD )PP)@S &R)V@? RRD AHN IT
NB@@IDID )ND ST )SID THM)R!H -6, (+++ )ND M)? ((, (+++ ORDRS OD TH TRI)@
!OBRT IN !IVI@ !)S NO. +/,G76 THR"? VIO@)TD TH !ONSTITBTION)@ RI&HT OD TH
HRIN PTITIONRS TO DB PRO!SS IN THIR !OMP@)INT )&)INST PRIV)T
RSPONDNT "!)BS IT RNDRD TH ISSBS IN S)ID !)S TO "!OM MOOT )ND
)!)DMI!, )ND, PR3BDI!I)@ TO TH PROPRIT)R? RI&HTS OD PTITIONRS, TH)T AOB@D
!)BS IRRP)R)"@ D)M)& TO THM ID NOT TIM@? R!)@@D OR RVRSD "? TH
ISSB)N! OD THIS HONOR)"@ SBPRM !OBRT OD ) TROMPR@IMIN)R? IN3BN!TION>
DBRTHR, TH !IVI@ !)S "DOR RT!, "R)N!H --, !)&)?)N D ORO !IT?, AOB@D RSB@T
IN ITS DISMISS)@ "? TH IMP@MNT)TION OD TH O!TO"R -*, -<<< D!ISION OD TH
PB"@I! RSPONDNT !OBRT OD )PP)@S.

*. TH)T, TH PB"@I! RSPONDNT !OBRT OD )PP)@S &R)V@? RRD IN
NB@@ID?IN& TH M)R!H -6, (+++)ND M)? ((, (+++ INTR@O!BTOR? ORDRS OD TH TRI)@
!OBRT IN !IVI@ !)S NO. +/,G76 "? DISR&)RDIN& TH TIM,HONORD )ND 3BDI!I)@@?
M)ND)TD PRIN!IP@ TH)T NTH )SSSSMNTS )ND V)@B)TION OD D)!TS IN TH
ISSB)N! OD ) ARIT OD PR@IMIN)R? IN3BN!TION, INVO@VS D)!TB)@ DINDIN&S,
ORDIN)RI@? @DT TO TH TRI)@ !OBRT DOR ITS !ON!@BSION )ND DTRMIN)TIONO>
HN!, THR IS NO )"BS, MB!H @SS &R)V )"BS, OD DIS!RTION HR 4@OPJ V.
!OBRT OD )PP)@S, .-- S!R) 7/7, 7+. K-<<<L> R?S V. !OBRT OD )PP)@S, .-( S!R)
.7/, .G* K(+++L> S)B@O& V. !OBRT OD )PP)@S, -7- S!R) 6(, 6+ K(++7L> INTR,)SI)
SRVI!S !ORP. KINTRN)TION)@L V. !OBRT OD )PP)@S, -7. S!R) *</, *(6 K(++7L5.

6, TH)T, TH )@@&D )B!TION S)@ !ONDB!TD "? PRIV)T RSPONDNT THRB
ITS )&NT NOT)R? PB"@I!, )TT?. VIR&I@IO !)")N@T ON TH R)@ ST)T PROPRTIS OD
PTITIONRS SB"3!T TO TH ARIT OD PR@IMIN)R? IN3BN!TION ISSBD "? TH TRI)@
!OBRT IN !IVI@ !)S NO. +/,G76 ON D!M"R (*, -<<<, IS NB@@ )ND VOID.

7. TH)T, TH PB"@I! RSPONDNT RRD IN T)QIN& 3BRISDI!TION OVR TH
PTITION DOR !RTIOR)RI DI@D "? PRIV)T RSPONDNT IN !),&.R. SP. NO. 6.G/+ )DTR
IT DOBND TH PTITION TO H)V "N DI@D OBT OD TIM.
K6L


<?; I'.<#'< P;<I<IA' I. 'A< R;'-;R;- 1AA< 56 <?;
#4"<IA'.#=; ?;=- A' 10 -;";15;R +III


Since respondent !"! alle'es that the issue as to the propriet% of a Arit of Preli0inar% In9unction is
0ooted b% the sale of the sub9ect properties at public auction, it is but proper to resolve this issue $rst.

Petitioners clai0 that the alle'ed auction sale conducted on (* Dece0ber -<<< #as ille'all%
conducted for t#o reasons2 4(5 the alle'ed public auction sale #as not conducted in accordance #ith the
Resolution of this !ourt in )d0inistrative Matter No. ++,(<,<6,< issued on (* Dece0ber (+++> and 4-5 the
!ourt of )ppeals issued a TRO dated (- Dece0ber -<<< restrainin' and en9oinin' !"! and its a'ent,
notar% public Vir'ilio 3. !abanlet, fro0 sellin' the sub9ect propert% on (* Dece0ber -<<<.
K7L

In )d0inistrative Matter No. ++,(<,<6,<, this !ourt laid do#n the procedure for an e=tra,9udicial
foreclosure of a 0ort'a'e. The sa0e provides in part that2

KNLo auction sale shall be held unless there are at least t#o 4-5 participatin' bidders,
other#ise the sale shall be postponed to another date. If on the ne# date set for the sale
there shall not be at least t#o 4-5 bidders, the sale shall then proceed. The na0es of the
bidders shall be reported b% the sheriE or the notar% public #ho conducted the sale to the
!ler1 of !ourt before the issuance of the certi$cate of sale.


Petitioners clai0 !abanlet never 0ade an% report to the !ler1 of !ourt of =ecutive 3ud'e of the
RT! of !a'a%an de Oro !it% on the fact of the presence of at least t#o bidders present in the auction sale
of (* Dece0ber -<<<. Petitioners further clai0 that the% #ere present durin' the public auction and
revealed that the onl% bidder present #as respondent !"!.
KGL


)s further proof of the irre'ularit% of the conduct of the (* Dece0ber -<<< auction sale, petitioners
disclose an alle'ed discrepanc% in the a0ount clai0ed to be the bid of respondent !"! and that contained
in the certi$cate of sale e=ecuted b% !abanlet. The !erti$cate of Sale sho#ed the hi'hest bid b%
respondent !"! #as P.-,*<<,<<<.<<,
K/L
#hile in the -( Ma% -<<< letter of respondent !"! throu'h its
counsel, the hi'hest bid #as stated as P*/,+<<,<<<.<<.
K+L

)ccordin' to respondent !"!, there #as no discrepanc% as petitioners had 0ort'a'ed t#o
properties , the "or9a propert% and the @u0bia propert% H #hich #ere covered b% diEerent Transfer
!erti$cates of Title. It e=plained that in the sa0e public auction, the "or9a propert% #as sold
for P.-,*<<,<<<.<< per the !erti$cate of Sale 0entioned above, #hile the @u0bia propert% #as, in turn,
sold for P(7,6<<,<<<.<< as evidenced b% another !eri$cate of Sale.
K(<L
Hence, the total a0ount
of P*/,+<<,<<<.<< #as stated as the proceeds of the auction sale.
K((L

On the clai0 that )d0inistrative Matter No. ++,(<,<6,< had not been co0plied #ith, respondent
!"! points to the fact that the !erti$cates of Sale contain a !erti$cation e=ecuted b% !ler1 of !ourt )tt%.
"everl% S. "e9a and =ecutive 3ud'e Noli T. !atli aFri0in' co0pliance #ith the above,cited ad0inistrative
0atter, vi:2

THIS IS TO !RTID? that the fore'oin' foreclosure #as done in accordance #ith
)d0inistrative Order No. ++,(<,<6,< of the Supre0e !ourt dated Dece0ber (*,(+++ and all
pertinent la#s on the 0atter.

4S&D.5 )TT?. "VR@? S. "3)
!ler1 of !ourt
)pproved2

4S&D.5 NO@I T. !)T@I
=ecutive 3ud'e
K(-L


Respondent !"! clai0s that the presu0ptions that oFcial dut% has been re'ularl% perfor0ed and
that the la# has been obe%ed $nd application herein. Thus, it 0aintains that there is no necessit% for the
pertinent !erti$cate of Sale or the !erti$cation issued b% the !ler1 of !ourt to state #ith particularit% that
at least t#o bidders #ere present at the public auction held on (* Dece0ber -<<<.
K(.L

On this point, it bears to e0phasi;e that the reCuire0ent under )d0inistrative Matter No. ++,(<,<6,
< #as for !" *!"r+M or !" noary /u96+; o r"/or !" na8"* of !" 9+.."r* o !" C6"rD of
Cour be$ore t%e iss&ance o$ t%e "erti'cate o$ Sale. Such reCuire0ent cannot be e=panded to
include a state0ent in the !erti$cate of Sale 0entionin' the na0es of the bidders or even the fact that at
least t#o bidders #ere present. The presu0ption of re'ularit% in the perfor0ance of oFcial duties
further0ore 'ives petitioners the burden to prove the irre'ularities the% alle'e attended the proceedin's in
the public auction of the sub9ect properties. This bare assertions #ill not suFce to overturn such
presu0ption, and hence, petitioners: $rst 'round for the nullit% of the (* Dece0ber -<<< auction sale
4violation of )d0inistrative Matter No. ++,(<,<6,<5 0ust fail.

Ae no# 'o to the alle'ed ille'al holdin' of the auction sale on (* Dece0ber -<<< despite the
issuance of a TRO b% the !ourt of )ppeals restrainin' and en9oinin' respondent !"! and its a'ent, notar%
public Vir'ilio 3. !abanlet, fro0 auctionin' the sub9ect propert%.

The !ourt of )ppeals issued on (- Dece0ber -<<< a TRO providin' as follo#s2

Pendin' resolution of private respondents: Motion for Reconsideration relative to this
!ourt:s decision of October -*, -<<<, and it bein' alle'ed in the sa0e Motion that petitioner
has scheduled the auction sale of the properties sub9ect hereof to Dece0ber (*, -<<<, a
te0porar% restrainin' order is hereb% issued en9oinin' petitioner and those actin' for and in
its behalf or under its supervision, direction and control fro0 proceedin' #ith the scheduled
auction sale on Dece0ber (*, -<<< or at an% other date until further orders fro0 this court.

Mean#hile, petitioner is hereb% reCuired, #ithin ten 4(<5 da%s fro0 notice hereof, to
$le its co00ent to respondents: afore0entioned Motion for Reconsideration and their
subseCuent BR&NT MOTION DOR OR)@ )R&BMNT ON MOTION DOR R!ONSIDR)TION.
K(*L


Petitioners clai0 that the TRO issued on (- Dece0ber -<<< #as served to respondent !"! throu'h
!abanlet, #ho received a 0achine cop% of the sa0e on (. Dece0ber -<<<. The% further clai0 that the
Nori'inal duplicate cop%O thereof #as sho#n to !abanlet and !"! "ranch Mana'er Ro0ualdo B% on (*
Dece0ber -<<< at (< a.0. at the entrance of the !it% Hall of !a'a%an de Oro !it%, but !abanlet and B%
#ere advised b% respondent !"!:s counsel to disre'ard said notice.
K(6L

Respondent !"! 0aintains that !abanlet is not their counsel of record in the instant action, and
therefore service to hi0 cannot be considered as service on the ban1. Petitioners, ho#ever, clai0 that, as
a 'eneral rule, N#hatever is suFcient to put a prudent person on inCuir% a0ounts to notice, provided that
inCuir% #ould lead to the discover% of the reCuisite fact b% the e=ercise of dili'ence and
understandin'.O
K(7L
Petitioners further clai0 that !abanlet is the locall% retained la#%er of respondent !"!
for its !a'a%an de Oro !it% branches.
K(GL

Respondent !"! has not denied actual 1no#led'e on the part of its oFcers re'ardin' the TRO,
stubbornl% parr%in' all of petitioners: alle'ations #ith their ar'u0ent that !abanlet is not their counsel of
record in the instant action.

In 'eneral, one cannot be punished for violatin' an in9unction or an order for an in9unction unless it
is sho#n that such in9unction or order #as served on hi0 personall% or that he had notice of the issuance
or 0a1in' of such in9unction or order. Ahere, ho#ever, a part% has actual notice of an in9unction, clearl%
infor0in' hi0 fro0 #hat he 0ust abstain, he is bound b% the in9unction fro0 that ti0e, and #ill be
punished for a violation thereof, even thou'h it 0a% not have served, or 0a% have been served on hi0
defectivel%.
K(/L

It is alto'ether i00aterial ho# defendant acCuires infor0ation of the e=istence of the in9unction>
#hen once he has been apprised of the fact he is le'all% bound to desist fro0 #hat he is restrained and
inhibited fro0 doin'. Persons #ho are parties to a proceedin' for an in9unction onl% b% representation, and
are not served personall% #ith notice of the in9unction, 0a% be found 'uilt% of conte0pt for violatin' the
in9unction #here it is sho#n that the% 0ust have 1no#n of the in9unction and its contents.
K(+L

In &er:osa v. "o,rt of #ppeals,
K-<L
petitioner Ailfredo Ver;osa sou'ht to have the propert%
0ort'a'ed b% respondent De Bson foreclosed. Respondent Bson $led an a0ended
K-(L
co0plaint for
annul0ent of 0ort'a'e #ith pra%er for the issuance of a #rit of preli0inar% in9unction. Dive da%s later, the
foreclosure sale proceeded and the propert% #as sold to respondent Ver;osa as the hi'hest bidder. Bpon
Bson:s application for a preli0inar% in9unction e0bodied in a second a0ended co0plaint, the trial court
issued an order directin' the subseCuent bu%er of the propert% to cease and desist fro0 enterin', 0a1in'
constructions, and perfor0in' an% act of possession or o#nership upon the land in Cuestion. Petitioner
assailed the order as it alle'edl% 'rants an in9unction to restrain consu00ated acts. This !ourt, spea1in'
throu'h then )ssociate 3ustice )rte0io Pan'aniban 4no# !hief 3ustice5, held2

Ahere the acts have been perfor0ed prior to the $lin' of the in9unction suit, the
'eneral rule is that the consu00ated acts can no lon'er be restrained b% in9unction.
Ho#ever, N#here the acts are perfor0ed after the in9unction suit is brou'ht, a defendant
0a% not as Ka 0atterL of ri'ht proceed to perfor0 the acts sou'ht to be restrained and then
be heard to assert in the suit that the in9unction #ill not lie because he has perfor0ed these
acts before $nal hearin' has been had, but after the be'innin' of the action. ) defendant
thus acts at his peril.O It has been held that NKtLhe 'eneral rule of la# is that, :!"r" a
."f"n.an ;o8/6""*, af"r !" 9">+nn+n> of an a;+on, !" a; !"r"9y *ou>! o
9" r"*ra+n"., an. 9"for" !" +**u" of any Cna6 or."r or .";r"", !" ;our !a* !"
/o:"r o, an. 8ay, ;o8/"6, 9y a 8an.aory +n@un;+on, !" r"*ora+on of !"
for8"r ;on.++on of !+n>* an. !"r"9y /r","n !" >+,+n> of an a.,ana>" 9y
r"a*on of !" :ron>fu6 a;. $n. :!"r" a ."f"n.an .o"* no a; !u* *ou>! o
9" r"*ra+n"., !" /ro;"".* a !+* /"r+6, an. !" ;our +n :!+;! !" a;+on +*
/"n.+n> 8ay ;o8/"6 a r"*ora+on of !" for8"r *au* or >ran o !" /6a+n+M
*u;! r"6+"f a* 8ay 9" /ro/"r.O

In this case, an action #as brou'ht to en9oin Petitioner Ver;osa fro0 proceedin' #ith
the 0ort'a'e sale, %et he proceeded to do so #hile the action #as still pendin'. Such
conduct is reprehensible. N#f on" +n !" fa;" of a /"n.+n> *u+ for +n@un;+on, .o"*
!" !+n> *ou>! o 9" "n@o+n"., !" ;anno !u* ou:+ "?u+y an. !" ;our, 9u
8u* r"*or" !" *au* ?uo. = = = ven #here an in9unction has not been issued, if the
suit is one for in9unction, the defendant, if he does the thin' sou'ht to be en9oined does so
at his peril. Hence, in proceedin' #ith the 0ort'a'e sale and subseCuentl% sellin' the
propert% to Pilar Martine;, Petitioner Ver;osa #as actin' at his peril.O
K--L
40phases
supplied.5


Durther0ore, not#ithstandin' the stand of both parties, the fact re0ains that the Decision of the
!ourt of )ppeals annullin' the 'rant of preli0inar% in9unction in favor of petitioners has not %et beco0e
$nal on (* Dece0ber -<<<. In fact, such Decision has not %et beco0e $nal and e=ecutor% even on the
ver% date of this Decision, in vie# of petitioners: appeal #ith us under Rule *6 of the (++G Rules of !ivil
Procedure. The preli0inar% in9unction, therefore, issued b% the trial court re0ains valid until the Decision
of the !ourt of )ppeals annullin' the sa0e attains $nalit%, and violation thereof constitutes indirect
conte0pt
K-.L
#hich, ho#ever, reCuires either a for0al char'e or a veri$ed petition.
K-*L

The #illful disobedience of an in9unction order 0a% constitute a cri0inal, as #ell as a civil,
conte0pt. Ho#ever, it has been held that the violation of an in9unction is not direct cri0inal conte0pt
#ithin the conte0plation of a statute pertainin' to conduct su00aril% punishable as direct cri0inal
conte0pt. Such violation is an indirect conte0pt #here it does not occur in the i00ediate presence of the
court or so close as to interrupt or disturb court proceedin's.
K-6L

)n in9unction or restrainin' order #hich is not void 0ust be obe%ed #hile it re0ains in full force and
eEect, and has not been overturned, that is, in 'eneral, until the in9unction or restrainin' order has been
set aside, vacated, or 0odi$ed b% the court #hich 'ranted it, or until the order or decree a#ardin' it has
been reversed on appeal or error. The in9unction 0ust be obe%ed irrespective of the ulti0ate validit% of
the order, and no 0atter ho# unreasonable and un9ust the in9unction 0a% be in its ter0s. Defendant
cannot avoid co0pliance #ith the co00ands, or e=cuse his violation, of the in9unction b% si0pl% 0ovin' to
dissolve it, or b% the pendenc% of a 0otion to 0odif% it.
K-7L
The fact that an in9unction or restrainin' order
has been dissolved or ter0inated, or has e=pired, does not necessaril% protect a person in a proceedin'
a'ainst hi0 for a violation of the in9unction or order #hile it #as in force, as b% acts bet#een 'rantin' of
the in9unction and its ter0ination, at least #here the proceedin' is one to punish for a cri0inal conte0pt.
K-GL

Respondent !"! see0ed so ea'er and an=ious to render 0oot the petition for cancellation of real
estate 0ort'a'e contract, ta1in' advanta'e for that 0atter of a perceived 'ap bet#een a preli0inar%
in9unction and a TRO to proceed #ith the contested public auction. Their actuations e0ulate those of the
respondent in the case of 'ational Power "orporation v. Province of =anao del .,r,
K-/L
#here #e held2

The fact that the tele'raphic te0porar% restrainin' order issued b% this !ourt #as
received b% the respondent 'overnor of @anao del Sur at -2.< p.0. and b% respondent
provincial treasurer at .2<< p.0. of 3anuar% --, (++(, or an hour and an hour and a half,
respectivel%, after the re'istration of the sale #ith the Re'ister of Deeds of the province, and
several hours after the close of the auction sale, is of no 0o0ent. Ordinaril%, this !ourt
#ould have been over9o%ed to hear about said Re'ister of Deeds 4or an% 'overn0ent
functionar% for that 0atter5 0ovin' #ith blindin' speed, e=cept that in this case, it is 0ore
than patent that such precipitate action #as pro0pted not in the least b% respondents:
anticipation that this !ourt #as about to act on petitioner:s application for a #rit of
preli0inar% in9unction andMor te0porar% restrainin' order. The respondents: all,too,obvious
atte0pt at renderin' nu'ator% and inutile an% in9unctive relief this !ourt 0a% 'rant is
useless and brin's the0 onl% rebu1e and conde0nation. !learl%, le'all% and eCuitabl%
rooted in and proceedin' fro0 the fore'oin' discussion is the ineludible conclusion that the
auction sale and re'istration of sub9ect properties are totall% bereft of an% le'al basis and
therefore null and void, and cannot vest title over the said real properties nor over the
h%droelectric po#er plant co0ple= built upon the0, in favor of respondent province.


!ourts, ho#ever, have a li0ited inherent po#er to void acts done in violation of an
in9unction. Transfers in violation of an in9unction are invalid as to the person see1in' the in9unction or
those clai0in' under that person, and 0a% be set aside if attac1ed in a proper 0anner.
K-+L

Ho#ever, because an in9unction operates in personam, an act done in violation of an in9unction is
not a nullit% as to third persons. If an in9unction prohibits the defendant fro0 transferrin' propert%, but the
defendant transfers the propert% to an innocent third person, the transferee obtains 'ood title and the
in9unction does not aEect the transferee:s ri'ht.
K.<L

"ased on the fore'oin', #e have t#o possible courses of action2 4(5 if the sub9ect propert% has not
been alienated to a third person, to declare the auction sale on (* Dece0ber -<<< as void> or 4-5 if the
sub9ect propert% has been alienated to a third person not a part% to this petition, to en9oin acts si0ilar to
those en9oined in &er:osa, dependin' on the status of the 0ain case and of the sub9ect propert%. Since #e
are, as of the 0o0ent, una#are of such develop0ents, it is suFcient to sa% for the 0eanti0e that the
issue re'ardin' the validit% of the preli0inar% in9unction issued b% the trial court has not %et beco0e 0oot.

<?; "A4R< AF #PP;#=. "ARR;"<=6 %#&; -4; "A4R.; <A
R;.PA'-;'< "5"9. P;<I<IA' FAR !RTIOR)RI


)s stated above, it #as on (+ 3ul% (+++ #hen respondent !"! $led a Petition for "ertiorari a'ainst
petitioners and 3ud'e !alin'in #ith the !ourt of )ppeals, pra%in' for the annul0ent of the Orders of the
trial court rendered on -6 March (+++ and (( Ma% (+++. Respondent !"! received notice of the -6 March
(+++ and (( Ma% (+++ Orders on -+ March (+++ and (/ Ma% (+++, respectivel%. (+ 3ul% (+++ is thus ((-
da%s and 7- da%s fro0 said Orders, respectivel%.

Section *, Rule 76 of the (++G Rules of !ivil Procedure ori'inall% provides2

S!. *. 7here petition fled. H The petition 0a% be $led not later than si=t% 47<5 da%s
fro0 notice of the 9ud'0ent, order or resolution sou'ht to be assailed in the Supre0e !ourt
or, if it relates to the acts or o0issions of a lo#er court or of a corporation, board, oFcer or
person, in the Re'ional Trial !ourt e=ercisin' 9urisdiction over the territorial area as de$ned
b% the Supre0e !ourt. It 0a% also be $led in the !ourt of )ppeals #hether or not the sa0e
is in aid of its appellate 9urisdiction, = = =.


On (+ )u'ust (+++, the !ourt of )ppeals dis0issed the petition for havin' been belatedl%
$led. Bpon 0otion for reconsideration $led b% respondent !"! on -- Septe0ber (+++, the !ourt of
)ppeals reinstated the petition on (< 3anuar% -<<<.
K.(L
The !ourt of )ppeals stated that it did so N4i5n the
interest of substantial 9ustice, and in line #ith the rulin' that rules of procedure are not to be applied #ith
severit% or ri'idit%.O
K.-L

Petitioners clai0 that such reinstate0ent of the petition constitutes a reversible error on the part of
the !ourt of )ppeals, as the latter had alle'edl% lost 9urisdiction to entertain a petition Cuestionin' the -6
March (+++ and (/ Ma% (+++ Orders, as the sa0e has alread% beco0e N$nal and unappealable.O
K..L

Petitioners: clai0 is devoid of 0erit.

)s re'ards the (( Ma% (+++ Order, the !ourt of )ppeals had clearl% not %et lost 9urisdiction to
entertain respondent !"!:s Petition for "ertiorari Cuestionin' the sa0e, as the petition should be
considered to have been $led #ithin the 7<,da% period. The 7<
th
da% fro0 the notice of denial of
respondent !"!:s Motion for Reconsideration or (G 3ul% (+++, falls on a Saturda%, and therefore the last
da% of the 7<,da% period should be considered to be that of the ne=t #or1in' da%.
K.*L

)s re'ards the -6 March (+++ Order, it can be 'leaned fro0 respondent !"!:s Motion for
Reconsideration
K.6L
and )0endedMSupple0ental Motion for Reconsideration
K.7L
that the% believed in 'ood
faith that the% had co0plied #ith Section *, Rule 76 of the (++G Rules of !ivil Procedure. Respondent !"!
ar'ued in said 0otions that the then Section *, Rule 76 should be interpreted in the li'ht of the
reCuire0ent under Section ( of the sa0e Rule that a Petition for "ertiorari 0a% be availed of onl% #hen
there is no other adeCuate re0ed% available in the ordinar% course of la#. )nd since a Motion for
Reconsideration, is an adeCuate re0ed% #hich should be availed of, it asserts that the 7<,da% period
should be counted fro0 the notice of the denial of the sa0e, in the absence of a provision, si0ilar to that
in Section ., Rule *(,
K.GL
providin' for the 0ere interruption of the period.

Section *, Rule 76 #as, in fact, a0ended and is no# #orded accordin' to ho# respondent !"!
perceived it to be2

S!. *. 7hen and where petition fled. H The petition shall be $led not later than si=t%
47<5 da%s fro0 notice of the 9ud'0ent, order or resolution. In case a 0otion for
reconsideration or ne# trial is ti0el% $led, #hether such 0otion is reCuired or not, the si=t%
47<5 da% period shall be counted fro0 notice of the denial of said 0otion.


Dollo#in', therefore, the 0andate contained in Section 7, Rule ( of the (++G Rules of !ivil
Procedure,
K./L
#e have held that, #hen the hi'her consideration of 9ustice so de0ands, technical rules 0a%
be rela=ed to sta% the dis0issal of an appeal or li1e recourse on 0ere technicalities. This ideal beco0es all
the 0ore i0perative #hen non,co0pliance is not intended for dela%.
K.+L

<?;R; 7#. %R#&; #54.; AF -I."R;<IA' A' <?; P#R< AF
<?; <RI#= "A4R<

Havin' brushed aside all the collateral issues in this petition, #e $nall% 'o into the 0erits of
petitioners: clai0 that the Re'ional Trial !ourt had not 'ravel% abused its discretion in 'rantin' a #rit of
preli0inar% in9unction in favor of petitioners. )s inti0ated b% respondents, such deter0ination involves an
anal%sis of the Order alle'ed to be a product of 'rave abuse of discretion.
K*<L
Such Order provides in full
the follo#in'2

This is a veri$ed co0plaint for speci$c perfor0ance and cancellation of real estate
0ort'a'e contract #ith da0a'es $led b% plaintiEs over parcels of land covered b% Transfer
!erti$cate of Titles Nos. T,67.--, T,6--G., T,67.-(, and T,-.-(6. "efore $lin' their ans#er
defendants $led an e=tra9udicial foreclosure of the above,described properties, and
conseCuentl% for the auction sale of the properties b% a Notar% Public, #hich #as scheduled
on Debruar% (6, (+++. PlaintiEs, throu'h counsel, in a separate veri$ed petition
dated Debruar% (, (+++, pra%ed for the issuance of a #rit of preli0inar% in9unction en9oinin'
Notar% Public Vir'ilio 3. !abanlet fro0 conductin' the e=tra9udicial foreclosure and auction
sale on the date above,0entioned of the aforesaid parcels of land. On Debruar% (-,
(+++ after su00ar% hearin', the !ourt issued a te0porar% restrainin' order, thereb%
en9oinin' said Notar% Public Vir'ilio 3. !abanlet fro0 conductin' the e=tra9udicial foreclosure
and auction sale on Debruar% (6, (+++. The life span of the TRO is onl% for t#ent% 4-<5 da%s,
and in the 0eanti0e, the hearin' on the propriet% for the issuance of preli0inar% in9unction
is still on'oin' and the ne=t schedule is on March -+, (+++ for the reception of evidence for
the defendants herein. Ho#ever, this !ourt is dul% infor0ed that another e=tra9udicial
foreclosure and auction sale of afore0entioned 0ort'a'ed parcels of land is scheduled
on March -+, (+++ b% defendants, a'ain throu'h Notar% Public Vir'ilio 3. !abanlet, pro0ptin'
plaintiEs to as1 the !ourt to en9oin the purported e=tra9udicial foreclosure and sale at public
auction.

"ased on plaintiEs: evidence alread% presented and because of another purported
e=tra9udicial foreclosure on March -+, (+++, #hich this !ourt $nds to be an utter disre'ard of
the proceedin' #hich is still on'oin' and there bein' bad faith on the part of defendants in
pursuin' the sa0e despite pendenc% of this case, this !ourt $nds enou'h reason for the
issuance of the #rit of preli0inar% in9unction pra%ed for so as to preserve the status Cuo, to
prevent an% irreparable da0a'es or in9uries to plaintiEs, and li1e#ise to prevent the clai0 of
plaintiEs #hich is still to be investi'ated, heard and ad9udicated, fro0 beco0in' 0oot and
acade0ic.

AHRDOR, let a #rit of preli0inar% in9unction be issued forth#ith in this case,
orderin' defendants herein !hina "an1in' !orporation, Ro0ualdo I. B%, and "ernardo T.
Moradas, and Notar% Public Vir'ilio 3. !abanlet or an% of their representative, a'ent, or
person actin' on their behalf, to cease and desist fro0 conductin' and proceedin' #ith the
e=tra9udicial foreclosure and public auction sale on March -+, (+++ on the 0ort'a'ed
properties described and 0entioned in the notice of auction sale b% Notar% Public Vir'ilio 3.
!abanlet, dated March *, (+++. This #rit of preli0inar% in9unction shall continue to be
enforced until the $nal deter0ination of the 0ain issue of this case or until further orders
fro0 this !ourt and upon $lin' of the bond b% plaintiEs as provided for in the rules in the
a0ount of ON MI@@ION PSOS 4P(,<<<,<<<.<<5
K*(L


In brief, the !ourt of )ppeals nulli$ed the above order on the 'round of 'rave abuse of discretion,
sustainin' respondent !"!:s clai0 that there #as an absence of le'al basis or reCuisites to 9ustif% the
issuance of the #rit of preli0inar% in9unction, and that 3ud'e !alin'in issued the #rit despite the ad0itted
defaults incurred b% the spouses @ee in the pa%0ent of their loans 9u=taposed #ith the validit% and
continued eEectivit% of the 0ort'a'es on the "or9a and @u0bia properties. The !ourt of )ppeals further
ruled2

Private respondents: posture that the% #ere duped into si'nin' in blan1 #hat turned
out to be the a0end0ent to the ori'inal real estate 0ort'a'e 4)nne= N",(O5 over the "or9a
propert% thin1in' that the docu0ent covered the s0aller @u0bia propert% 0a% be 'iven
plausibilit% if all of the0 are unlettered, #hich the% do noKtL appear to be. Si'ni$cantl%,
private respondents, alon' #ith respondent Ren#ic1 Aarren:s #ife, Marivic, si'ned )nne=
N",(.O It should be noted, ho#ever, that the @u0bia propert% is re'istered in the na0e of
the spouses @ee onl%. The fact, ho#ever, that 3anssen Thaddeus and Ren#ic1 Aarren both
si'ned )nne= N",(,O #hen onl% the spouses @ee:s si'nature thereon is necessar% if the
intention #as to 0ort'a'e the @u0bia lot, shatters their posture about bein' duped.

Aith the vie# Ae ta1e of this case, private respondents are latchin' their case on this
proposition2 that the% had settled all their accountabilities #ith the "an1, and, therefore,
allo#in' the latter to foreclose on the 0ort'a'e heretofore constituted to secure their loans
#ould cause the0 irreparable in9ur%.

Ae are not the least persuaded. "ased on the entire sho#in' fro0 both sides durin'
the hearin' for in9unction, respondents Manuel @ee and @uisa @ee have not paid their
overdue loans and other avail0ents 'ranted the0 under the credit facilities in Cuestion to
#arrant the cancellation of the 0ort'a'es put up to secure the credit acco00odations. On
the other hand, petitioner has clearl% established its status as unpaid 0ort'a'or,creditor
entitled to foreclose the 0ort'a'es, a re0ed% provided b% la# 4!alte= vs. I)!, (G7 S!R)
G*(5, and the 0ort'a'e contract itself. In short, the 0ini0u0 le'al reCuisites for a
preli0inar% in9unction to issue have not been satis$ed. The assailed issuance, therefore, b%
the respondent 9ud'e of the #rit of in9unction is un9usti$ed.

!ontrar% to #hat the respondent 9ud'e #rote, there #as no ur'ent necessit% to issue
the #rit to protect the ri'hts and interest of private respondents over either the "or9a or the
@u0bia propert% durin' the pendenc% of !ivil !ase No. +/,G76. )ssu0in' for ar'u0ent that
private respondents: ri'hts over said propert% need le'al protection, an annotation of lis
pendens #ould, as petitioner pointed out belo#, have been an adeCuate protection. )nd
besides, the% could participate in the foreclosure sale and 'et their properties
unencu0bered b% pa%in' the obli'ations that the% ad0it in the $rst place o#in'.

Si'ni$cantl%, respondent 9ud'e issued the #rit of in9unction on the $ndin' that
petitioner acted in bad faith in schedulin' a foreclosure sale Ndespite QtheR pendency of this
case.O Ae vie# the perceived bad faith of the petitioner to be of little 0o0ent. Dor, the
3ona fdes of the author of the act a'ainst #hich the in9unction is directed is not, in the strict
le'al vie#point, a reco'ni;ed reCuisite to 9ustif% the issuance of an in9unction.
K*-L


Petitioners assail the !ourt of )ppeals Decision pri0aril% on the 'round that it based its $ndin's of
facts on evidence not for0all% oEered and sub0itted to the trial court durin' the hearin' on the propriet%
of the issuance of the Arit of Preli0inar% In9unction.
K*.L

Respondent !"! counters that, althou'h it #as allo#ed to be'in presentation of its evidence before
the trial court, it #as not 'iven b% said court #ith the opportunit% to conclude its presentation and to
for0all% rest its case. Respondent !"! #as still in the 0iddle of presentin' its evidence #hen the trial
court issued the Cuestioned -6 March (+++ Order.
K**L
Respondent !"! thus clai0s that it should not be
faulted for its supposed failure to for0all% oEer its evidence, #hich it #ould certainl% have 0ade if the trial
court had not ter0inated the hearin's.

Petitioner 0aintains that it #as respondent !"!:s fault #h% the% #ere not able to $nish presentin'
their evidence, Cuotin' the trial court:s Order den%in' respondent !"!:s 0otion for reconsideration2

Moreover, the preli0inar% in9unction in Cuestion #as issued after due hearin', #herein the
parties are 'iven a chance to present evidence in support of their respective case. In that
hearin', it #as ver% apparent that defendants e0plo%ed tactics #hich have dela%ed the
proceedin's in order that the Te0porar% Restrainin' Order 4TRO5 earlier issued b% the !ourt,
#hich has a lifeti0e of onl% t#ent% 4-<5 da%s, #ill e=pire and so that the% could proceed
a'ain #ith the e=tra9udicial foreclosure and sale at public auction of the properties involved
in this case, thin1in' that the !ourt cannot issue a second TRO durin' the pendenc% of the
hearin' of the application for a preli0inar% in9unction.

Defendants, durin' the hearin', presented volu0inous docu0ents #hich are no
lon'er relevant to the issue #hich #as the propriet% for issuance of a preli0inar% in9unction
but #hich dealt 0ostl% on 0atters involved in the 0ain case. In the 0eanti0e, after the
e=piration of the TRO, defendants $led a'ain a Petition for =tra9udicial Doreclosure and
scheduled the Sale at Public )uction of the propert% on March -+, (+++. It #as at this
9uncture that the !ourt, $ndin' that there is bad faith on the part of the defendants and
ta1in' into account that plaintiEs #ill suEer 'reat and irreparable da0a'e, and the case #ill
be rendered 0oot and acade0ic, issued the preli0inar% in9unction. There is no truth to the
alle'ation of defendants that there #as an understandin' bet#een the parties and the !ourt
that the public auction sale of the properties #as to be rescheduled after the e=piration of
the TRO and even before the ter0ination of the hearin'.
K*6L
4Bnderscorin' supplied b%
petitioners.5


Ae $nd that there #as, indeed, 'rave abuse of discretion on the part of 3ud'e !alin'in. Ahile #e
a'ree #ith petitioners that Nthe assess0ent and evaluation of evidence in the issuance of the #rit of
preli0inar% in9unction involves $ndin's of facts ordinaril% left to the trial court for conclusive
deter0ination,O
K*7L
and that the !ourt of )ppeals had been in error #hen it sou'ht to deter0ine the facts
based on evidence not presented or oEered in evidence in the trial court, #e #ould still $nd 'rave abuse of
discretion on the part of the trial court even if the facts contested b% petitioners are deter0ined in their
favor. Section 6, Rule 6/ of the (++G Rules on !ivil Procedure provides2

Sec.6. Preliminary inB,nction not granted witho,t noticeM e>ception. H No
/r"6+8+nary +n@un;+on *!a66 9" >ran". :+!ou !"ar+n> an. /r+or no+;" o !"
/ary or /"r*on *ou>! o 9" "n@o+n".. If it shall appear fro0 facts sho#n b% aFdavits
or b% the veri$ed application that 'reat or irreparable in9ur% #ould result to the applicant
before the 0atter can be heard on notice, the court to #hich the application for preli0inar%
in9unction #as 0ade, 0a% issue e> parte a te0porar% restrainin' order to be eEective onl%
for a period of t#ent% 4-<5 da%s fro0 service on the part% or person sou'ht to be en9oined,
e=cept as herein provided. (+!+n !" *a+. :"ny&.ay /"r+o., !" ;our 8u* or."r
*a+. /ary or /"r*on o *!o: ;au*", a a */";+C". +8" an. /6a;", :!y !"
+n@un;+on *!ou6. no 9" >ran"., .""r8+n" :+!+n !" *a8" /"r+o. :!"!"r or
no !" /r"6+8+nary +n@un;+on *!a66 9" >ran"., an. a;;or.+n>6y +**u" !"
;orr"*/on.+n> or."r. 40phases supplied.5


The trial court failed to co0pl% #ith the above provision #hen it failed to let respondent !"! $nish
its presentation of its evidence provin' #h% in9unction should not be 'ranted.

Hearin's on the application for preli0inar% in9unction #ere held on -6 Debruar% (+++, - March
(+++, (7 March (+++, and (+ March (+++. )s pointed out b% respondent !"!, the hearin' on (+ March
(+++ #as ad9ourned upon 0otion of petitioners: counsel and over the ob9ections of counsel for respondent
!"! and despite the fact that there #as a0ple ti0e left for further proceedin's on that da%. The
application #as also set for hearin' on (/ March (+++> ho#ever, said hearin' #as canceled at the instance
of petitioners: counsel.

On the hearin' held on (+ March (+++, respondent !"!:s counsel tried to have the continuation of
the hearin's set before -+ March (+++, the date at #hich the e=tra,9udicial foreclosure sale of the sub9ect
propert% #as re,scheduled> to no avail.

)s earl% as (7 March (+++ and before the hearin' of (+ March (+++, petitioners and the presidin'
9ud'e of the trial court #ere a#are of the public auction set on -+ March (+++. )t the hearin' held on (+
March (+++, petitioners could, therefore, have 9oined respondent !"! in the latter:s eEorts to have the
hearin's continued on a date prior to -+ March (+++. Instead of doin' so, petitioners: counsel, ho#ever,
infor0ed the court that he did not have an% available date in his calendar for that #ee1.

Section 6, Rule (.6 of the (++G Rules of !ivil Procedure provides2

Sec. 6. Inherent powers of co,rts. H ver% court shall have the po#er2 = = = 4b5 to
enforce order in proceedin's before it, or before a person or persons e0po#ered to conduct
a 9udicial investi'ation under its authorit%> = = = 4d5 to control, in furtherance of 9ustice, the
conduct of its 0inisterial oFcers, and of all other persons in an% 0anner connected #ith a
case before it, in ever% 0anner appertainin' thereto> = = =

"% 0eans of its inherent po#ers stated in the above provision, the trial court should have forced
respondent !"!, under pain of conte0pt, to $nish presentin' its evidence #ithin the scheduled hearin's,
and to focus onl% on the 0ost i0portant evidence. It should have proceeded #ith 0arathon hearin's if
necessar%, #hich #ould seldo0 be the case because of its po#er to li0it the sa0e in accordance #ith the
su00ar% nature of such proceedin'. "ut the trial court cannot issue a #rit of preli0inar% in9unction based
solel% on plaintiE:s evidence, as #as e=pressl% stated in the Order itself.
K*GL
The trial court cannot, #ithout
'ravel% abusin' its discretion, issue such #rit prior to the ter0ination of the presentation of evidence b%
the part% a'ainst #ho0 the in9unction shall be issued. The order to sho# cause 4#h% the in9unction should
not be 'ranted5 stated in Section 6, Rule 6/, is precisel% directed on such part%, and not on the part%
as1in' for the in9unction, and therefore it #as an error for the trial court to have 'iven priorit% to
petitioners: presentation of evidence.

(HERE)ORE, the Decision and Resolution, dated -* October -<<< and (+ Debruar% -<<(,
respectivel%, of the !ourt of )ppeals are hereb% $))#RMED. !osts a'ainst petitioners.

SO ORDERED.


M#N#T$ %. CH#CO&N$'$R#O
)ssociate 3ustice



K(L
!),&.R. SP No. 6.G/+. Penned b% )ssociate 3ustice 4no# Supre0e !ourt )ssociate 3ustice5
!ancio !. &arcia #ith )ssociate 3ustices Ro0eo ). "ra#ner and )ndres ". Re%es, 3r.,
concurrin'. !) rollo, pp. .<G,.--.

K-L
!) rollo, p. *(7.
K.L
Rollo! pp. *G,6..
K*L
Id. at 7(.
K6L
Id. at *</,*(<.
K7L
Id. at *--.
KGL
Id. at *-*,*-6.
K/L
Id. at .**,.*7.
K+L
Id. at .G*,.G/.
K(<L
Id. at *GG,*G+.
K((L
Id. at *G-.
K(-L
Id. at *G..
K(.L
Id. at *G..
K(*L
!) rollo, p. .67.
K(6L
Id. at *-..
K(7L
.ec,rity First 'ational 5an8 v. .artori, .* !al )pp -d *</, +. P-d /7..
K(GL
Rollo, p. *-7.
K(/L
*.) !.3.S. , In9unctions, Sec. -//.
K(+L
Id.
K-<L
.6+ Phil. *-6 4(++/5.
K-(L
The ori'inal co0plaint $led earlier #as dis0issed on the 'round that it #as not properl% veri$ed.
K--L
&er:osa v. "o,rt of #ppeals, supra note (/ at *./,*.+.
K-.L
NS!... Indirect contempt to 3e p,nished after charge and hearing. H )fter a char'e in #ritin'
has been $led, and an opportunit% 'iven to the respondent to co00ent thereon #ithin such period
as 0a% be $=ed b% the court and to be heard b% hi0self or counsel, a person 'uilt% of an% of the
follo#in' acts 0a% be punished for indirect conte0pt2
= = = =
4b5 Disobedience of or resistance to a la#ful #rit, process, order, or 9ud'0ent of a court,
includin' the act of a person #ho, after bein' dispossessed or e9ected fro0 an% real propert% b%
the 9ud'0ent or process of an% court of co0petent 9urisdiction, enters or atte0pts or induces
another to enter into or upon such real propert%, for the purpose of e=ecutin' acts of o#nership or
possession, or in an% 0anner disturbs the possession 'iven to the person ad9ud'ed to be entitled
thereto> = = =O 4Rules of !ourt, Rule G(.5
K-*L
NS!. *. ?ow proceedings commenced. H Proceedin's for indirect conte0pt 0a% be
initiated mot, proprio b% the court a'ainst #hich the conte0pt #as co00itted b% an order or an%
other for0al char'e reCuirin' the respondent to sho# cause #h% he should not be punished for
conte0pt.
In all other cases, char'es for indirect conte0pt shall be co00enced b% a veri$ed
petition #ith supportin' particulars and certi$ed true copies of docu0ents or papers involved
therein, and upon full co0pliance #ith the reCuire0ents for $lin' initiator% pleadin's for civil
actions in the court concerned. If the conte0pt char'es arose out of or are related to the principal
action pendin' in the court, the petition for conte0pt shall alle'e that fact but said petition shall be
doc1eted, heard and decided separatel%, unless the court in its discretion orders the consolidation
of the conte0pt char'e and the principal action for 9oint hearin' and decision.O 4Rules of !ourt,
Rule G(.5
K-6L
*.) !.3.S., In9unctions, Sec. -/6.
K-7L
Id., Sec. -/7.
K-GL
Id.
K-/L
-7* S!R) -G( 4(++75.
K-+L
*- )0 3ur -d, Sec. .(G.
K.<L
Id.
K.(L
!) rollo, p. -6..
K.-L
Id.
K..L
Rollo, p. *-/.
K.*L
Section (, Rule --2 NS!. (. ?ow to comp,te time. H In co0putin' an% period of ti0e prescribed
or allo#ed b% these Rules, or b% order of the court, or b% an% applicable statute, the da% of the act
or event fro0 #hich the desi'nated period of ti0e be'ins to run is to be e=cluded and the date of
perfor0ance included. If the last da% of the period, as thus co0puted, falls on a Saturda%, Sunda%,
or a le'al holida% in the place #here the court sits, the ti0e shall not run until the ne=t #or1in'
da%.O
K.6L
!) rollo, pp. -<6,-(-.
K.7L
Id. at --<,-.<.
K.GL
Section .. N= = = The period of appeal shall be interrupted b% a ti0el% 0otion for ne# trial or
reconsideration. No 0otion for e=tension of ti0e to $le a 0otion for ne# trial or reconsideration
shall be allo#ed.O 4Rules of !ourt, Rule *(.5
K./L
Section 7, Rule (2 NS!. 7. "onstr,ction. H These Rules shall be liberall% construed in order to
pro0ote their ob9ective of securin' a 9ust, speed% and ine=pensive disposition of ever% action or
proceedin'.O
K.+L
.oriano v. "o,rt of #ppeals, &.R. No. (<<6-6, -6 Ma% (++., --- S!R) 6*6, 66..
K*<L
Rollo, pp. 67,6G.
K*(L
Id. at +<,+(.
K*-L
Id. at 6/,7<.
K*.L
Id. at *((.
K**L
Id. at **/.
K*6L
!) rollo, p. 6(.
K*7L
=ope: v. "o,rt of #ppeals, &.R. No. ((<+-+, -< 3anuar% -<<<, .-- S!R) 7/7, 7+..
K*GL
"ased on plaintiEs: evidence alread% presented and because of another
purported e=tra9udicial foreclosure on March -+, (+++, #hich this !ourt $nds to be an utter
disre'ard of the proceedin' #hich is still on'oin' and there bein' bad faith on the part of
defendants in pursuin' the sa0e despite pendenc% of this case, this !ourt $nds enou'h
reason for the issuance of the #rit of preli0inar% in9unction pra%ed for so as to preserve the
status Cuo, to prevent an% irreparable da0a'es or in9uries to plaintiEs, and li1e#ise to
prevent the clai0 of plaintiEs #hich is still to be investi'ated, heard and ad9udicated, fro0
beco0in' 0oot and acade0ic. 4!) rollo, p. *..5
<G.R. No. 144111. $u>u* 22, 2004=
HON. EJECUT#%E SECRET$R3, et al. v. SOUTH(#NG HE$%3 #NDUSTR#ES, #NC., et al.
En -an;
S+r*PM"*.a8"*2
C,oted here,nder! for yo,r information! is a resol,tion of this "o,rt dated $UG. 22, 2004
&.R. No. (7*(G( 4?on. ;>ec,tive .ecretary! et al. v. .o,thwing ?eavy Ind,stries! Inc.! et al.5>
&.R. No. (7*(G- 4?on. ;>ec,tive .ecretary! et al. v. .,3ic Integrated 1acro &ent,res "orp.! etc.5>
&.R. No. (7/G*( 4?on. ;>ec,tive .ecretary! et al. v. 1otor &ehicle Importers #ssociation of .,3ic 5ay
Freeport! Inc.! etc.5
This resolves the separate Motions for !lari$cation and Reconsideration $led b%
respondents South#in' Heav% Industries, Inc., 4SOBTHAIN&5, Bnited )uctioneers, Inc. 4BNITD
)B!TIONRS5, and Microvan, Inc. 4MI!ROV)N5> Subic Inte'rated Macro Ventures !orporation 4M)!RO
VNTBRS5> and Motor Vehicle I0porters )ssociation of Subic "a% Dreeport, Inc.
4)SSO!I)TION5. Respondents see1 a de$nite rulin' on #hether used 0otor vehicles 0a% no# be i0ported
into the Philippines in vie# of the issuance on )pril *, -<<6 b% the OFce of the President of =ecutive
Order 4.O.5 No. *(/, i0posin' an i0port dut% of P6<<,<<<.<< on used 0otor vehicles, e=cept truc1s, buses
and special purpose vehicles. The% contend that .O. No. *(/ i0pliedl% repealed .O. No. (67 #hich
prohibits the i0portation of used 0otor vehicles. The% thus pra%ed that the !ourtUs Decision
dated Debruar% -<, -<<7 be r";on*+."r". 9y ;6ar+fy+n> that used 0otor vehicles 0a% no# be i0ported
into the countr%, sub9ect onl% to the pa%0ent of the additional i0port dut%.
In its Motion for Partial Reconsideration, respondent )SSO!I)TION clai0s that .O. No. (67 is void
because it failed to satisf% the reCuisites of a valid dele'ation of le'islative po#er, hence, i0portation of
used 0otor vehicles should be allo#ed sub9ect to the pa%0ent of additional duties as provided in .O. No.
*(/.
The 0otions are #ithout 0erit.
In the Debruar% -<, -<<7 Decision of the !ourt, #e held that .O. No. (67 #hich i0poses a ban on the
i0portation of used 0otor vehicles is applicable onl% in the Philippine territor% outside the presentl%
secured fenced,in for0er Subic Naval "ase area as stated in Section (.( of .O. No. +G,). Si0pl% put,
respondents 0a% i0port used 0otor vehicles into the presentl% secured fenced,in for0er Subic Naval "ase
area, but since entr% of said used 0otor vehicles is prohibited in other parts of the Philippine territor%, the%
0a% be stored, used or traded in the presentl% secured fenced,in for0er Subic Naval "ase area, or
e=ported to other countries, but the% cannot be introduced in the other parts of the Philippine territor%.
The subseCuent issuance of .O. No. *(/ increasin' the i0port duties on used 0otor vehicles did not
alter the polic% of the e=ecutive depart0ent to prohibit the i0portation of said vehicles. In his !o00ent,
the =ecutive Secretar% throu'h the Solicitor &eneral stated a clear and uneCuivocal intention to ban the
i0portation of used 0otor vehicles into the countr%, not#ithstandin' the issuance of .O. No.
*(/. Moreover, there is nothin' in the te=t of .O. No. *(/ #hich e=pressl% repeals .O. No.
(67. The !on'ress, or the OFce of the President in this case, is presu0ed to 1no# the e=istin' la#s, such
that #henever it intends to repeal a particular or speci$c provision of la#, it does so e=pressl%. The failure
to add a speci$c repealin' clause indicates that the intent #as not to repeal previous ad0inistrative
issuances.
K(L
In order to eEect a repeal b% i0plication, the later statute 0ust be so irreconcilabl%
inconsistent and repu'nant #ith the e=istin' la# that the% cannot be 0ade to reconcile and stand
to'ether. The clearest case possible 0ust be 0ade before the inference of i0plied repeal 0a% be dra#n,
for inconsistenc% is never presu0ed.
K-L
There 0ust be sho#in' of repu'nance clear and convincin' in
character. The lan'ua'e used in the later statute 0ust be such as to render it irreconcilable #ith #hat has
been for0erl% enacted. )n inconsistenc% that falls short of that standard does not suFce. Dor it is a #ell
settled rule in statutor% construction that repeal of statues b% i0plication is not favored.
K.L
In the instant case, .O. No. (67 is ver% e=plicit in its prohibition on the i0portation of used 0otor
vehicles. On the other hand, .O. No. *(/ 0erel% 0odi$es the tariE and no0enclature rates of i0port dut%
on used 0otor vehicles. Nothin' therein e=pressl% revo1es the i0portation ban. The full te=t thereof,
reads2
S!BTIV ORDR NO. *(/
MODID?IN& TH T)RRID NOMN!@)TBR )ND R)TS OD IMPORT DBT? ON BSD MOTOR
VHI!@S BNDR S!TION (<* OD TH T)RIDD )ND !BSTOMS !OD OD (+G/ 4PRSIDNTI)@
D!R NO. (*7*, )S )MNDD5
AHR)S, it is the polic% of the State to 0aintain a balance bet#een develop0ent and environ0ental
protection, and hence, bet#een 0otori;ation and air Cualit% 0ana'e0ent.
AHR)S, it is the polic% of the State to protect the public a'ainst unreasonable ris1s to in9ur% associated
#ith consu0er products>
AHR)S, there is a need to 0iti'ate the i0pact of used 0otor vehicle tradin' on air Cualit% and road
safet%>
AHR)S, )rticle II2( 4b5 of the (++* &eneral )'ree0ent on TariEs and Trade allo#s the unilateral
i0position of other duties and char'es on tariE ite0s that #ere not previousl% the sub9ect of concession>
AHR)S, 0otor vehicles #ere not covered b% Schedule @SSV , Philippine Schedule of !oncessions and
therefore, do not have tariE bindin's>
AHR)S, of Section *<( of the TariE and !usto0s !ode of (+G/, as a0ended, e0po#ers the President of
the Republic of the Philippines to increase, reduce, or re0ove e=istin' rates of i0port dut%, as #ell as to
0odif% the for0 of dut% and the tariE no0enclature under Section (<* of the !ode>
NOA, THRDOR, I, &@ORI) M)!)P)&)@ )RRO?O, President of the Republic of the Philippines, b% virtue of
the po#ers vested in 0e b% la#, do hereb% orderK2L
S!TION (. The articles speci$call% listed in )nne= N)O hereof, as classi$ed under Section (<* of the TariE
and !usto0s !ode of (+G/, as a0ended, shall be sub9ect to the rates of i0port dut% indicated opposite
each article, e=cept for truc1s, buses and special purpose vehicles.
S!. -. In addition to the re'ular rates of i0port dut%, the articles speci$call% listed in )nne= 8)8 hereof, as
classi$ed under Section (<* of the TariE and !usto0s !ode of (+G/, as a0ended, shall be sub9ect to
additional speci$c dut% of PhP6<<,<<<.<<.
S!. .. The a0ount of speci$c dut% #ill be inde=ed b% the Secretar% of Dinance once ever% t#o 4-5 %ears if
the chan'e in the e=chan'e rate of the Philippine peso a'ainst the Bnited States 4B.S.5 dollar is 0ore than
ten percent 4(<Y5 fro0 the date of the eEectivit% of this Order, in the case of initial ad9ust0ent and fro0
the last revision date in the case of subseCuent ad9ust0ents.
In case the chan'e in the e=chan'e rate of the Philippine peso a'ainst the BS dollar is 0ore than t#ent%
percent 4-<Y5 at an% ti0e #ithin the t#o,%ear period referred to above, the Secretar% of Dinance shall
inde= the a0ount b% the full rate of depreciation or appreciation, as the case 0a% be.
S!. *. The follo#in' 0otor vehicles shall be considered NusedO and shall be sub9ect to the duties herein
prescribed2 4a5 all 0otor vehicles that have been sold, re'istered and operated in the roadsMhi'h#a%s of
an% forei'n state or countr%> or 4b5 all i0ported 0otor vehicles that has a 0ilea'e of 0ore than -<<
1ilo0eters re'ardless of %ear 0odel.
S!. 6. Bpon the eEectivit% of this =ecutive Order, the articles, speci$call% listed in the aforesaid )nne=,
#hich are entered and #ithdra#n fro0 #arehouses in the Philippines, shall be levied the rates of i0port
and speci$c duties herein prescribed.
S!. 7. )ll Presidential issuances, ad0inistrative rules and re'ulations, or parts thereof, #hich are
inconsistent #ith this =ecutive Order are hereb% revo1ed or 0odi$ed accordin'l%.
S!. G. This =ecutive Order shall ta1e eEect thirt% 4.<5 da%s follo#in' its co0plete publication in t#o 4-5
ne#spapers of 'eneral circulation in the Philippines.
S S S S
The positive and cate'orical lan'ua'e of the proscription on the i0portation of used 0otor vehicles
and the clear intent of the e=ecutive depart0ent to enforce the ban can onl% be superseded b% another
issuance revo1in' the sa0e in ter0s so certain and un0ista1able that needs no further interpretation or
construction. Since no such e=press repeal is stated in .O. No. *(/, the conclusion is that the said
e=ecutive issuance did not supersede .O. No. (67.
Ahere it is possible to do so, it is the dut% of courts, in the construction of statutes, to har0oni;e and
reconcile the0, and to adopt a construction #hich reconciles the0 #ith other statutor% provisions. The
fact that a later enact0ent 0a% relate to the sa0e sub9ect 0atter as that of an earlier statute is not of
itself suFcient cause of an i0plied repeal.
K*L
)s asserted b% petitioners, .O. No. *(/ is onl% a te0porar%
0easure to address the inTu= of used 0otor vehicles in the countr% #hile .O. No. (67 is under le'al
challen'e. Aith the cate'orical intent of the OFce of the President to ban the i0portation of used 0otor
vehicles, .O. No. *(/ should be 0ade operative onl% pendin' the $nalit% of this decision upholdin' the
po#er of the President to ban the i0portation of used 0otor vehicles. This #a%, #e can 'ive eFcac% not
onl% to the e=ecutive polic% proscribin' the i0portation of used 0otor vehicles but also to the e=ecutive
issuance increasin' the applicable i0port duties that #ould discoura'e the entr% into the countr% of the
sa0e vehicles pendin' the $nalit% of this decision sustainin' the po#er of the President to issue an
i0portation ban to protect the local auto0otive industr%.
@i1e#ise, the Motion for Partial Reconsideration of respondent )SSO!I)TION 0ust fail. It ar'ues that
.O. No. (67 is in eEect e=tended to the Dreeport because 0otor vehicle i0porters can no lon'er continue
their respective business if the% cannot brin' the i0ported used 0otor vehicles into other parts of the
Philippine territor%. Respondent, ho#ever, totall% 0isses the point. Ahile the presentl% secured fenced,in
for0erSubic Naval "ase area en9o%s the privile'e of bein' considered as a 8forei'n territor%,8 and
therefore, entr% of used 0otor vehicles cannot be proscribed b% .O. No. (67, such privile'e should be
construed as operative onl% #ithin said area. )n% 0ove0ent or entr% of used 0otor vehicles to other
parts of the Philippine territor% #ould lo'icall% sub9ect said vehicles to the la#s of the custo0s territor%,
speci$call% the i0portation ban. To rule other#ise #ould be to put pre0iu0 on the interest of a fe#
business0en and to deprive the !on'ress or the President of the po#er to issue 0easures protective of
our do0estic 0ar1ets and air Cualit%.
)s e=haustivel% discussed in our Debruar% -<, -<<7 Decision, the issuance of .O. No. (67 has
constitutional and statutor% bases and the issuance thereof #as in accordance #ith the prescribed
procedure. Ae also held therein that issuance of the ban to protect the do0estic industr% and the
environ0ent includin' its air sheds a'ainst pollution fro0 0obile sources is a reasonable e=ercise of police
po#er. Respondent)SSO!I)TIONUs contention that petitioners failed to prove that the i0portation of used
0otor vehicles caused the deterioration of the local auto0otive industr% lac1s 0erit. @a#s and other
ad0inistrative issuance en9o% the presu0ption of validit% and the burden of provin' its invalidit% rests
upon those #ho assert the contrar%.
K6L
It is therefore the obli'ation of respondents and not of petitioners to
sho# factual basis in support of their alle'ation that .O. No. (67 is void. Ho#ever, respondents failed to
do this because the% 0oved for rendition of su00ar% 9ud'0ent on the 'round that there are no issues of
facts necessar% to be resolved in the instant controvers%.
K7L
stoppel in presentin' factual basis in support
of their ar'u0ent operates a'ainst respondents. This !ourt is not a trier of facts and the alle'ation of
factual 0atters b% the )SSO!I)TION can no lon'er be entertained.
$CCORD#NGL3, respondentsU separate 0otions for clari$cation and reconsideration
are DEN#ED. Not#ithstandin' the issuance of .O. No. *(/, used 0otor vehicles i0ported via the
presentl% secured fenced,in for0er Subic Naval "ase area cannot further be i0ported into the other parts
of the Philippine territor%. Bsed 0otor vehicles 0a% be i0ported into, stored, used, and traded #ithin the
presentl% secured fenced,in for0er Subic Naval "ase area, or e=ported to other countries, but entr%
thereof into the other parts of the Philippine territor% is prohibited pursuant to .O. No. (67. 4!orona,
3., On leave5
Ver% trul% %ours,
GS>..H M$. LU#S$ D. %#LL$R$M$
!ler1 of !ourt
K(L
%ayo v. &erceles, &.R. No. (6<*GG, Debruar% -/, -<<6, *6- S!R) 6<*, 6(/.
K-L
#g,Betas v. "o,rt of #ppeals, .-+ Phil. G-(, G*6,G*7 4(++75.
K.L
Id.
K*L
Philippine <rading International "orporation v. #ngeles, ..( Phil. G-., G*/ 4(++75.
K6L
?eirs of #rdona v. Reyes, -(< Phil. (/G, -<G 4(+/.5.
K7L
Decision, rollo of &.R. No. (7*(G(, p. (-> Motion for Su00ar% 3ud'0ent, rollo of (7*(G-, pp. -66,-67>
Decision, rollo &.R. No. (7/G*(, p. (G.
G.R. No. 144111 )"9ruary 20, 2004
HON. EJECUT#%E SECRET$R3, HON. SECRET$R3 O) THE DEP$RTMENT O)
TR$NSPORT$T#ON $ND COMMUN#C$T#ONS GDOTCH, COMM#SS#ONER O) CUSTOMS,
$SS#ST$NT SECRET$R3, L$ND TR$NSPORT$T#ON O))#CE GLTOH, COLLECTOR O)
CUSTOMS, SU-#C -$3 )REE PORT 'ONE, $ND CH#E) O) LTO, SU-#C -$3 )REE PORT
'ONE, Petitioners,
vs.
SOUTH(#NG HE$%3 #NDUSTR#ES, #NC., r"/r"*"n". 9y +* Pr"*+."n JOSE T. D#'ON,
UN#TED $UCT#ONEERS, #NC., r"/r"*"n". 9y +* Pr"*+."n DOM#N#C S3T#N, an.
M#CRO%$N, #NC., r"/r"*"n". 9y +* Pr"*+."n M$R#$NO C. SONON, Respondents.
= , , , , , , , , , , , , , , , =
G.R. No. 144112 )"9ruary 20, 2004
HON. EJECUT#%E SECRET$R3, SECRET$R3 O) THE DEP$RTMENT O) TR$NSPORT$T#ON
$ND COMMUN#C$T#ON GDOTCH, COMM#SS#ONER O) CUSTOMS, $SS#ST$NT SECRET$R3,
L$ND TR$NSPORT$T#ON O))#CE GLTOH, COLLECTOR O) CUSTOMS, SU-#C -$3 )REE
PORT 'ONE $ND CH#E) O) LTO, SU-#C -$3 )REE PORT 'ONE, Petitioners,
vs.
SU-#C #NTEGR$TED M$CRO %ENTURES CORP., r"/r"*"n". 9y +* Pr"*+."n 3OL$ND$
$M-$R, Respondent.
= , , , , , , , , , , , , , , , =
G.R. No. 148141 )"9ruary 20, 2004
HON. EJECUT#%E SECRET$R3, HON. SECRET$R3 O) )#N$NCE, THE CH#E) O) THE L$ND
TR$NSPORT$T#ON O))#CE, THE COMM#SS#ONER O) CUSTOMS, an. THE COLLECTOR O)
CUSTOMS, SU-#C SPEC#$L ECONOM#C 'ONE, Petitioners,
vs.
MOTOR %EH#CLE #MPORTERS $SSOC#$T#ON O) SU-#C -$3 )REEPORT, #NC.,
r"/r"*"n". 9y +* Pr"*+."n $L)REDO S. G$L$NG,Respondent.
D ! I S I O N
3N$RES&S$NT#$GO, J.:
The instant consolidated petitions see1 to annul and set aside the Decisions of the Re'ional Trial
!ourt of Olon'apo !it%, "ranch G-, in !ivil !ase No. -<,<,<* and !ivil !ase No. --,<,<*, both
dated Ma% -*, -<<*> and the Debruar% (*, -<<6 Decision of the !ourt of )ppeals in !),&.R. SP.
No. /.-/*, #hich declared )rticle -, Section ..( of =ecutive Order No. (67 4O (675
unconstitutional. Said e=ecutive issuance prohibits the i0portation into the countr%, inclusive of
the Special cono0ic and Dreeport Jone or the Subic "a% Dreeport 4S"D or Dreeport5, of used
0otor vehicles, sub9ect to a fe# e=ceptions.
The undisputed facts sho# that on Dece0ber (-, -<<-, President &loria Macapa'al,)rro%o,
throu'h =ecutive Secretar% )lberto &. Ro0ulo, issued O (67, entitled 8Providin' for a
co0prehensive industrial polic% and directions for the 0otor vehicle develop0ent pro'ra0 and
its i0ple0entin' 'uidelines.8 The challen'ed provision states2
0.1 T!" +8/ora+on +no !" ;ounry, +n;6u*+," of !" )r""/or, of a66 y/"* of
u*". 8oor ,"!+;6"* +* /ro!+9+"., "B;"/ for !" fo66o:+n>2
..(.( ) vehicle that is o#ned and for the personal use of a returnin' resident or
i00i'rant and covered b% an authorit% to i0port issued under the No,dollar
I0portation Pro'ra0. Such vehicles cannot be resold for at least three 4.5 %ears>
..(.- ) vehicle for the use of an oFcial of the Diplo0atic !orps and authori;ed to
be i0ported b% the Depart0ent of Dorei'n )Eairs>
..(.. Truc1s e=cludin' pic1up truc1s>
(. #ith &VA of -.6,7.< tons covered b% an authorit% to i0port issued b% the
DTI.
-. Aith &VA above 7.< tons.
..(.* "uses2
(. #ith &VA of 7,(- tons covered b% an authorit% to i0port issued b% DTI>
-. #ith &VA above (- tons.
..(.6 Special purpose vehicles2
(. $re truc1s
-. a0bulances
.. funeral hearseMcoaches
*. crane lorries
6. tractor heads and truc1 tractors
7. boo0 truc1s
G. tan1er truc1s
/. tan1 lorries #ith hi'h pressure spra% 'un
+. reefers or refri'erated truc1s
(<. 0obile drillin' derric1s
((. transitMconcrete 0i=ers
(-. 0obile radiolo'ical units
(.. #rec1ers or to# truc1s
(*. concrete pu0p truc1s
(6. aerialMbuc1et Tat,for0 truc1s
(7. street s#eepers
(G. vacuu0 truc1s
(/. 'arba'e co0pactors
(+. self loader truc1s
-<. 0an lift truc1s
-(. li'htin' truc1s
--. truc1s 0ounted #ith special purpose eCuip0ent
-.. all other t%pes of vehicle desi'ned for a speci$c use.
The issuance of O (67 spa#ned three separate actions for declarator% relief before "ranch G-
of the Re'ional Trial !ourt of Olon'apo !it%, all see1in' the declaration of the unconstitutionalit%
of )rticle -, Section ..( of said e=ecutive order. The cases #ere $led b% herein respondent
entities, #ho or #hose 0e0bers, are classi$ed as Subic "a% Dreeport nterprises and en'a'ed in
the business of, a0on' others, i0portin' andMor tradin' used 0otor vehicles.
G.R. No. 1441112
On 3anuar% (7, -<<*, respondents South#in' Heav% Industries, Inc., 4South#in'5 Bnited
)uctioneers, Inc. 4Bnited )uctioneers5, and Microvan, Inc. 4Microvan5, instituted a declarator%
relief case doc1eted as !ivil !ase No. -<,<,<*,
(
a'ainst the =ecutive Secretar%, Secretar% of
Transportation and !o00unication, !o00issioner of !usto0s, )ssistant Secretar% and Head of
the @and Transportation OFce, Subic "a% Metropolitan )uthorit% 4S"M)5, !ollector of !usto0s
for the Port at Subic "a% Dreeport Jone, and the !hief of the @and Transportation OFce at Subic
"a% Dreeport Jone.
South#in', Bnited )uctioneers and Microvan pra%ed that 9ud'0ent be rendered 4(5 declarin'
)rticle -, Section ..( of O (67 unconstitutional and ille'al> 4-5 directin' the Secretar% of
Dinance, !o00issioner of !usto0s, !ollector of !usto0s and the !hair0an of the S"M) to allo#
the i0portation of used 0otor vehicles> 4-5 orderin' the @and Transportation OFce and its
subordinates inside the Subic Special cono0ic Jone to process the re'istration of the i0ported
used 0otor vehicles> and 4.5 in 'eneral, to allo# the uni0peded entr% and i0portation of used
0otor vehicles sub9ect onl% to the pa%0ent of the reCuired custo0s duties.
Bpon $lin' of petitioners: ans#erMco00ent, respondents South#in' and Microvan $led a 0otion
for su00ar% 9ud'0ent #hich #as 'ranted b% the trial court. On Ma% -*, -<<*, a su00ar%
9ud'0ent #as rendered declarin' that )rticle -, Section ..( of O (67 constitutes an unla#ful
usurpation of le'islative po#er vested b% the !onstitution #ith !on'ress. The trial court further
held that the proviso is contrar% to the 0andate of Republic )ct No. G--G 4R) G--G5 or the "ases
!onversion and Develop0ent )ct of (++- #hich allo#s the free To# of 'oods and capital #ithin
the Dreeport. The dispositive portion of the said decision reads2
AHRDOR, 9ud'0ent is hereb% rendered in favor of petitioner declarin' =ecutive Order (67
K)rticle -, SectionL ..( for bein' unconstitutional and ille'al> directin' respondents !ollector of
!usto0s based at S"M) to allo# the i0portation and entr% of used 0otor vehicles pursuant to
the 0andate of R) G--G> directin' respondent !hief of the @and Transportation OFce and its
subordinates inside the Subic Special cono0ic Jone or S"M) to process the re'istration of
i0ported used 0otor vehicle> and in 'eneral, to allo# uni0peded entr% and i0portation of used
0otor vehicles to the Philippines sub9ect onl% to the pa%0ent of the reCuired custo0s duties.
SO ORDRD.
-
Dro0 the fore'oin' decision, petitioners sou'ht relief before this !ourt via a petition for revie#
on certiorari, doc1eted as &.R. No. (7*(G(.
G.R. No. 1441122
On 3anuar% -<, -<<*, respondent Subic Inte'rated Macro Ventures !orporation 4Macro Ventures5
$led #ith the sa0e trial court, a si0ilar action for declarator% relief doc1eted as !ivil !ase No.
--,<,<*,
.
#ith the sa0e pra%er and a'ainst the sa0e parties
*
as those in !ivil !ase No. -<,<,<*.
In this case, the trial court li1e#ise rendered a su00ar% 9ud'0ent on Ma% -*, -<<*, holdin' that
)rticle -, Section ..( of O (67, is repu'nant to the constitution.
6
levated to this !ourt via a
petition for revie# on certiorari, !ivil !ase No. --,<,<* #as doc1eted as &.R. No. (7*(G-.
G.R. No. 148141
On 3anuar% --, -<<., respondent Motor Vehicle I0porters )ssociation of Subic "a% Dreeport, Inc.
4)ssociation5, $led another action for declarator% relief #ith essentiall% the sa0e pra%er as those
in !ivil !ase No. --,<,<* and !ivil !ase No. -<,<,<*, a'ainst the =ecutive Secretar%, Secretar%
of Dinance, !hief of the @and Transportation OFce, !o00issioner of !usto0s, !ollector of
!usto0s at S"M) and the !hair0an of S"M). This #as doc1eted as !ivil !ase No. .<,<,
-<<.,
7
before the sa0e trial court.
In a decision dated March (<, -<<*, the court a Cuo 'ranted the )ssociation:s pra%er and
declared the assailed proviso as contrar% to the !onstitution, to #it2
AHRDOR, 9ud'0ent is hereb% rendered in favor of petitioner declarin' =ecutive Order (67
K)rticle -, SectionL ..( for bein' unconstitutional and ille'al> directin' respondents !ollector of
!usto0s based at S"M) to allo# the i0portation and entr% of used 0otor vehicles pursuant to
the 0andate of R) G--G> directin' respondent !hief of the @and Transportation OFce and its
subordinates inside the Subic Special cono0ic Jone or S"M) to process the re'istration of
i0ported used 0otor vehicles> directin' the respondent !hair0an of the S"M) to allo# the entr%
into the Subic Special cono0ic Jone or S"M) i0ported used 0otor vehicle> and in 'eneral, to
allo# uni0peded entr% and i0portation of used 0otor vehicles to the Philippines sub9ect onl% to
the pa%0ent of the reCuired custo0s duties.
SO ORDRD.
G
)''rieved, the petitioners in !ivil !ase No. .<,<,-<<., $led a petition for certiorari
/
#ith the
!ourt of )ppeals 4!),&.R. SP. No. /.-/*5 #hich denied the petition on Debruar% (*, -<<6 and
sustained the $ndin' of the trial court that )rticle -, Section ..( of O (67, is void for bein'
repu'nant to the constitution. The dispositive portion thereof, reads2
AHRDOR, the instant petition for certiorari is hereb% DNID. The assailed decision of the
Re'ional Trial !ourt, Third 3udicial Re'ion, "ranch G-, Olon'apo !it%, in !ivil !ase No. .<,<,-<<.,
accordin'l%, ST)NDS.
SO ORDRD.
+
The aforeCuoted decision of the !ourt of )ppeals #as elevated to this !ourt and doc1eted as
&.R. No. (7/G*(. In a Resolution dated October *, -<<6,
(<
said case #as consolidated #ith &.R.
No. (7*(G( and &.R. No. (7*(G-.
Petitioners are no# before this !ourt contendin' that )rticle -, Section ..( of O (67 is valid and
applicable to the entire countr%, includin' the Dreeeport. In support of their ar'u0ents, the%
raise procedural and substantive issues bearin' on the constitutionalit% of the assailed proviso.
The /ro;".ura6 +**u"* are2 the lac1 of respondents: loc,s standi to Cuestion the validit% of O
(67, the propriet% of challen'in' O (67 in a declarator% relief proceedin' and the applicabilit%
of a 9ud'0ent on the pleadin's in this case.
Petitioners ar'ue that respondents #ill not be aEected b% the i0portation ban considerin' that
their certi$cate of re'istration and ta= e=e0ption do not authori;e the0 to en'a'e in the
i0portation andMor tradin' of used cars. The% also aver that the actions $led b% respondents do
not Cualif% as declarator% relief cases. Section (, Rule 7. of the Rules of !ourt provides that a
petition for declarator% relief 0a% be $led before there is a breach or violation of ri'hts.
Petitioners clai0 that there #as alread% a breach of respondents: supposed ri'ht because the
cases #ere $led 0ore than a %ear after the issuance of O (67. In fact, in !ivil !ase No. .<,<,
-<<., nu0erous #arrants of sei;ure and detention #ere issued a'ainst i0ported used 0otor
vehicles belon'in' to respondent )ssociation:s 0e0bers.
Petitioners: ar'u0ents lac1 0erit.
The established rule that the constitutionalit% of a la# or ad0inistrative issuance can be
challen'ed b% one #ho #ill sustain a direct in9ur% as a result of its enforce0ent
((
has been
satis$ed in the instant case. The broad sub9ect of the prohibited i0portation is 8a66 y/"* of
u*". 8oor ,"!+;6"*.8 Respondents #ould de$nitel% suEer a direct in9ur% fro0 the
i0ple0entation of O (67 because their certi$cate of re'istration and ta= e=e0ption authori;e
the0 to trade andMor i0port ne# and used 8oor ,"!+;6"* an. */ar" /ar*, e=cept 8used
cars.8
(-
Other t%pes of 0otor vehicles i0ported andMor traded b% respondents and not fallin'
#ithin the cate'or% of u*". ;ar* #ould thus be sub9ected to the ban to the pre9udice of their
business. Bndoubtedl%, respondents have the le'al standin' to assail the validit% of O (67.
)s to the propriet% of declarator% relief as a vehicle for assailin' the e=ecutive issuance, suFce
it to state that an% breach of the ri'hts of respondents #ill not aEect the case. In "ommission on
#,dit of the Province of "e3, v. Province of "e3,,
(.
the !ourt entertained a suit for declarator%
relief to $nall% settle the doubt as to the proper interpretation of the conTictin' la#s involved,
not#ithstandin' a violation of the ri'ht of the part% aEected. Ae $nd no reason to deviate fro0
said rulin' 0indful of the si'ni$cance of the present case to the national econo0%.
So also, su00ar% 9ud'0ents #ere properl% rendered b% the trial court because the issues
involved in the instant case #ere pure Cuestions of la#. ) 0otion for su00ar% 9ud'0ent is
pre0ised on the assu0ption that the issues presented need not be tried either because these
are patentl% devoid of substance or that there is no 'enuine issue as to an% pertinent fact. It is a
0ethod sanctioned b% the Rules of !ourt for the pro0pt disposition of a civil action in #hich the
pleadin's raise onl% a le'al issue, not a 'enuine issue as to an% 0aterial fact.
(*
)t an% rate, even assu0in' the procedural Ta#s raised b% petitioners trul% e=ist, the !ourt is not
precluded fro0 brushin' aside these technicalities and ta1in' co'ni;ance of the action $led b%
respondents considerin' its i0portance to the public and in 1eepin' #ith the dut% to deter0ine
#hether the other branches of the 'overn0ent have 1ept the0selves #ithin the li0its of the
!onstitution.
(6
Ae no# co0e to the substantive issues, #hich are2 4(5 #hether there is statutor% basis for the
issuance of O (67> and 4-5 if the ans#er is in the aFr0ative, #hether the application of )rticle
-, Section ..( of O (67, reasonable and #ithin the scope provided b% la#.
The 0ain thrust of the petition is that O (67 is constitutional because it #as issued pursuant to
O --7, the O0nibus Invest0ent !ode of the Philippines and that its application should be
e=tended to the Dreeport because the 'uarantee of R) G--G on the free To# of 'oods into the
said ;one is 0erel% an e=e0ption fro0 custo0s duties and ta=es on ite0s brou'ht into the
Dreeport and not an open Tood'ate for all 1inds of 'oods and 0aterials #ithout restriction.
In &.R. No. (7/G*(, the !ourt of )ppeals invalidated )rticle -, Section ..( of O (67, on the
'round of lac1 of an% statutor% basis for the President to issue the sa0e. It held that the
prohibition on the i0portation of used 0otor vehicles is an e=ercise of police po#er vested on
the le'islature and absent an% enablin' la#, the e=ercise thereof b% the President throu'h an
e=ecutive issuance, is void.
Police po#er is inherent in a 'overn0ent to enact la#s, #ithin constitutional li0its, to pro0ote
the order, safet%, health, 0orals, and 'eneral #elfare of societ%. It is lod'ed pri0aril% #ith the
le'islature. "% virtue of a valid dele'ation of le'islative po#er, it 0a% also be e=ercised b% the
President and ad0inistrative boards, as #ell as the la#0a1in' bodies on all 0unicipal levels,
includin' the baran'a%.
(7
Such dele'ation confers upon the President ?ua*+&6">+*6a+,"
/o:"r #hich 0a% be de$ned as the authorit% dele'ated b% the la#,0a1in' bod% to the
ad0inistrative bod% to adopt rules and re'ulations intended to carr% out the provisions of the
la# and i0ple0ent le'islative polic%.
(G
To be valid, an ad0inistrative issuance, such as an
e=ecutive order, 0ust co0pl% #ith the follo#in' reCuisites2
4(5 Its pro0ul'ation 0ust be authori;ed b% the le'islature>
4-5 It 0ust be pro0ul'ated in accordance #ith the prescribed procedure>
4.5 It 0ust be #ithin the scope of the authorit% 'iven b% the le'islature> and
4*5 It 0ust be reasonable.
(/
!ontrar% to the conclusion of the !ourt of )ppeals, O (67 actuall% satis$ed the Cr*
r"?u+*+" of a valid ad0inistrative order. It has both constitutional and statutor% bases.
Dele'ation of le'islative po#ers to the President is per0itted in Section -/4-5 of )rticle VI of the
!onstitution. It provides2
4-5 The !on'ress 0a%, b% 6a:, authori;e the President to $= #ithin speci$ed li0its, and sub9ect
to such li0itations and restrictions as it 0a% i0pose, tariE rates, i0port and e=port Cuotas,
tonna'e and #harfa'e dues, and other duties or i0posts #ithin the fra0e#or1 of the national
develop0ent pro'ra0 of the &overn0ent.
(+
40phasis supplied5
The relevant statutes to e=ecute this provision are2
(5 The Tar+M an. Cu*o8* Co." #hich authori;es the President, in the interest of national
econo0%, 'eneral #elfare andMor national securit%, to, inter alia, prohibit the i0portation of an%
co00odit%. Section *<( thereof, reads2
Sec. *<(. Dle=ible !lause. W
a. #n !" +n"r"* of na+ona6 ";ono8y, >"n"ra6 :"6far" an.Por na+ona6 *";ur+y, an.
*u9@"; o !" 6+8+a+on* !"r"+n /r"*;r+9"., !" Pr"*+."n, u/on r";o88"n.a+on of
!" Na+ona6 E;ono8+; an. D","6o/8"n $u!or+y G!"r"+naf"r r"f"rr". o a* NED$H,
+* !"r"9y "8/o:"r".2 = = = 4-5 o "*a96+*! +8/or ?uoa or o 9an +8/or* of any
;o88o.+y, a* 8ay 9" n";"**aryI= = = Provided, That upon periodic investi'ations b% the
TariE !o00ission and reco00endation of the ND), the President 0a% cause a 'radual
reduction of protection levels 'ranted in Section One hundred and four of this !ode, includin'
those subseCuentl% 'ranted pursuant to this section. 40phasis supplied5
-5 =ecutive Order No. --7, the O0nibus Invest0ent !ode of the Philippines #hich #as issued
on 3ul% (7, (+/G, b% then President !ora;on !. )Cuino, in the e=ercise of le'islative po#er under
the Provisional Dreedo0 !onstitution,
-<
e0po#ers the President to approve or re9ect the
prohibition on the i0portation of an% eCuip0ent or ra# 0aterials or $nished products. Pertinent
provisions thereof, read2
)RT. *. !o0position of the board. The "oard of Invest0ents shall be co0posed of seven 4G5
'overnors2 The Secretar% of Trade and Industr%, three 4.5 Bndersecretaries of Trade and Industr%
to be chosen b% the President> and three 4.5 representatives fro0 the 'overn0ent a'encies and
the private sector = = =.
)RT. G. Po#ers and duties of the "oard.
= = = =
4(-5 Dor0ulate and i0ple0ent rationali;ation pro'ra0s for certain industries #hose operation
0a% result in dislocation, overcro#din' or ineFcient use of resources, thus i0pedin' econo0ic
'ro#th. Dor this purpose, the "oard 0a% for0ulate 'uidelines for pro'ressive 0anufacturin'
pro'ra0s, local content pro'ra0s, 0andator% sourcin' reCuire0ents and dispersal of
industries. #n a//ro/r+a" ;a*"* an. u/on a//ro,a6 of !" Pr"*+."n, !" -oar. 8ay
r"*r+;, "+!"r oa66y or /ar+a66y, !" +8/ora+on of any "?u+/8"n or ra: 8a"r+a6*
or Cn+*!". /ro.u;* +n,o6,". +n !" ra+ona6+Qa+on /ro>ra8I 40phasis supplied5
.5 Republic )ct No. //<<, other#ise 1no#n as the 8Safe'uard Measures )ct8 4SM$5, and entitled
8)n )ct Protectin' @ocal Industries "% Providin' Safe'uard Measures To "e Bnderta1en In
Response To Increased I0ports )nd Providin' Penalties Dor Violation Thereof,8
-(
desi'nated the
Secretaries
--
of the Depart0ent of Trade and Industr% 4DTI5 and the Depart0ent of )'riculture,
in their capacit% as alter egos of the President, as the i0ple0entin' authorities of the safe'uard
0easures, #hich include, inter alia, 0odi$cation or i0position of an% Cuantitative restriction on
the i0portation of a product into the Philippines. The purpose of the SM) is stated in the
declaration of polic%, thus2
S!. -. Declaration of Polic%. H The State shall pro0ote co0petitiveness of do0estic industries
and producers based on sound industrial and a'ricultural develop0ent policies, and eFcient use
of hu0an, natural and technical resources. In pursuit of this 'oal and in the public interest, the
State shall provide safe'uard 0easures to protect do0estic industries and producers fro0
increased i0ports #hich cause or threaten to cause serious in9ur% to those do0estic industries
and producers.
There are thus e=plicit constitutional and statutor% per0ission authori;in' the President to ban
or re'ulate i0portation of articles and co00odities into the countr%.
)nent the *";on. r"?u+*+", that is, that the order 0ust be issued or pro0ul'ated in
accordance #ith the prescribed procedure, it is necessar% that the nature of the ad0inistrative
issuance is properl% deter0ined. )s in the enact0ent of la#s, the 'eneral rule is that, the
pro0ul'ation of ad0inistrative issuances reCuires previous notice and hearin', the onl%
e=ception bein' #here the le'islature itself reCuires it and 0andates that the re'ulation shall be
based on certain facts as deter0ined at an appropriate investi'ation.
-.
This e=ception pertains
to the issuance of 6">+*6a+," ru6"* as distin'uished fro0 +n"r/r"a+," ru6"* #hich 'ive no
real conseCuence 0ore than #hat the la# itself has alread% prescribed>
-*
and are desi'ned
0erel% to provide 'uidelines to the la# #hich the ad0inistrative a'enc% is in char'e of
enforcin'.
-6
) 6">+*6a+," ru6", on the other hand, is in the nature of subordinate le'islation,
crafted to i0ple0ent a pri0ar% le'islation.
In "ommissioner of Internal Reven,e v. "o,rt of #ppeals,
-7
and "ommissioner of Internal
Reven,e v. 1ichel . =h,illier Pawnshop! Inc.,
-G
the !ourt enunciated the doctrine that #hen an
ad0inistrative rule 'oes be%ond 0erel% providin' for the 0eans that can facilitate or render less
cu0berso0e the i0ple0entation of the la# and substantiall% increases the burden of those
'overned, it behooves the a'enc% to accord at least to those directl% aEected a chance to be
heard and, thereafter, to be dul% infor0ed, before the issuance is 'iven the force and eEect of
la#.
In the instant case, O (67 is obviousl% a le'islative rule as it see1s to i0ple0ent or e=ecute
pri0ar% le'islative enact0ents intended to protect the do0estic industr% b% i0posin' a ban on
the i0portation of a speci$ed product not previousl% sub9ect to such prohibition. The due process
reCuire0ents in the issuance thereof are e0bodied in Section *<(
-/
of the TariE and !usto0s
!ode and Sections 6 and + of the SM)
-+
#hich essentiall% 0andate the conduct of investi'ation
and public hearin's before the re'ulator% 0easure or i0portation ban 0a% be issued.
In the present case, respondents neither Cuestioned before this !ourt nor #ith the courts belo#
the procedure that paved the #a% for the issuance of O (67. Ahat the% challen'ed in their
petitions before the trial court #as the absence of 8substantive due process8 in the issuance of
the O.
.<
Their 0ain contention before the court a D,o is that the i0portation ban is illo'ical and
unfair because it unreasonabl% drives the0 out of business to the pre9udice of the national
econo0%.
!onsiderin' the settled principle that in the absence of stron' evidence to the contrar%, acts of
the other branches of the 'overn0ent are presu0ed to be valid,
.(
and there bein' no ob9ection
fro0 the respondents as to the procedure in the pro0ul'ation of O (67, the presu0ption is that
said e=ecutive issuance dul% co0plied #ith the procedures and li0itations i0posed b% la#.
To deter0ine #hether O (67 has co0plied #ith the third and fourth reCuisites of a valid
ad0inistrative issuance, to #it, that it #as issued #ithin the scope of authorit% 'iven b% the
le'islature and that it is reasonable, an e=a0ination of the nature of a Dreeport under R) G--G
and the pri0ordial purpose of the i0portation ban under the Cuestioned O is necessar%.
R) G--G #as enacted providin' for, a0on' other thin's, the sound and balanced conversion of
the !lar1 and Subic 0ilitar% reservations and their e=tensions into alternative productive uses in
the for0 of Special cono0ic and Dreeport Jone, or the Subic "a% Dreeport, in order to pro0ote
the econo0ic and social develop0ent of !entral @u;on in particular and the countr% in 'eneral.
The Rules and Re'ulations I0ple0entin' R) G--G speci$call% de$nes the territor% co0prisin'
the Subic "a% Dreeport, referred to as the Special cono0ic and Dreeport Jone in Section (- of
R) G--G as 8a separate custo0s territor% consistin' of the !it% of Olon'apo and the Municipalit%
of Subic, Province of Ja0bales, the lands occupied b% the Subic Naval "ase and its conti'uous
e=tensions as e0braced, covered and de$ned b% the (+*G Philippine,B.S. Militar% "ase
)'ree0ent as a0ended and #ithin the territorial 9urisdiction of Moron' and Her0osa, Province
of "ataan, the 0etes and bounds of #hich shall be delineated b% the President of the Philippines>
provided further that pendin' establish0ent of secure peri0eters around the entire S"D, the S"D
shall refer to the area de0arcated b% the S"M) pursuant to Section (.
.-
hereof.8
)0on' the salient provisions of R) G--G are as follo#s2
S!TION (-. .,3ic .pecial ;conomic Sone. W
= = = =
The above0entioned ;one shall be sub9ect to the follo#in' policies2
= = = =
4a5 Aithin the fra0e#or1 and sub9ect to the 0andate and li0itations of the !onstitution
and the pertinent provisions of the @ocal &overn0ent !ode, the Subic Special cono0ic
Jone shall be developed into a self,sustainin', industrial, co00ercial, $nancial and
invest0ent center to 'enerate e0plo%0ent opportunities in and around the ;one and to
attract and pro0ote productive forei'n invest0ents>
4b5 The Subic Special cono0ic Jone shall be operated and 0ana'ed as a separate
custo0s territor% ensurin' free To# or 0ove0ent of 'oods and capital #ithin, into and
e=ported out of the Subic Special cono0ic Jone, as #ell as provide incentives such as
ta= and dut%,free i0portations of ra# 0aterials, capital and eCuip0ent. Ho#ever,
e=portation or re0oval of 'oods fro0 the territor% of the Subic Special cono0ic Jone to
the other parts of the Philippine territor% shall be sub9ect to custo0s duties and ta=es
under the !usto0s and TariE !ode and other relevant ta= la#s of the Philippines>
The Dreeport #as desi'ned to ensure free To# or 0ove0ent of 'oods and capital #ithin a
portion of the Philippine territor% in order to attract investors to invest their capital in a business
cli0ate #ith the least 'overn0ental intervention. The concept of this ;one #as e=plained b%
Senator &uin'ona in this #ise2
Senator &uin'ona. Mr. President, the special econo0ic ;one is successful in 0an% places,
particularl% Hon' Qon', #hich is a free port. The diEerence bet#een a special econo0ic ;one
and an industrial estate is si0pl% e=pansive in the sense that the co00ercial activities,
includin' the establish0ent of ban1s, services, $nancial institutions, a'ro,industrial activities,
0a%be a'riculture to a certain e=tent.
T!+* ."6+n"a"* !" a;+,++"* !a :ou6. !a," !" 6"a* of >o,"rn8"n +n"r,"n+on,
an. !" runn+n> of !" aMa+r* of !" */";+a6 ";ono8+; Qon" :ou6. 9" run /r+n;+/a66y
9y !" +n,"*or* !"8*"6,"*, *+8+6ar o a !ou*+n> *u9.+,+*+on, :!"r" !" *u9.+,+*+on
o:n"r* "6"; !"+r r"/r"*"na+,"* o run !" aMa+r* of !" *u9.+,+*+on, o *" !"
/o6+;+"*, o *" !" >u+."6+n"*.
(" :ou6. 6+D" o *"" Su9+; ar"a ;on,"r". +no a 6+6" Hon> 7on>, Mr. Pr"*+."n,
:!"r" !"r" +* a !u9 of fr"" /or an. fr"" "nry, fr"" .u+"* an. a;+,++"* o a
8aB+8u8 */ur >"n"ra+on of +n,"*8"n an. @o9*.
Ahile the investor is reluctant to co0e in the Philippines, as a rule, because of red tape and
perceived dela%s, #e envision this special econo0ic ;one to be an area #here there #ill be
0ini0u0 'overn0ent interference.
The initial outla% 0a% not onl% co0e fro0 the &overn0ent or the )uthorit% as envisioned here,
but fro0 the0 the0selves, because the% #ould be encoura'ed to invest not onl% for the land
but also for the buildin's and factories. )s lon' as the% are convinced that in such an area the%
can do business and reap reasonable pro$ts, then 0an% fro0 other parts, both local and forei'n,
#ould invest, Mr. President.
..
40phasis, added5
Aith 0ini0u0 interference fro0 the 'overn0ent, investors can, in 'eneral, en'a'e in an% 1ind
of business as #ell as i0port and e=port an% article into and out of the Dreeport. These are
a0on' the ri'hts accorded to Subic "a% Dreeport nterprises under Section .+ of the Rules and
Re'ulations I0ple0entin' R) G--G, thus H
S!. .+. Ri'hts and Obli'ations., S"D nterprises shall have the follo#in' ri'hts and obli'ations2
a. To freel% en'a'e in an% business, trade, 0anufacturin', $nancial or service activit%, and to
i0port and e=port freel% all t%pes of 'oods into and out of the S"D, sub9ect to the provisions of
the )ct, these Rules and other re'ulations that 0a% be pro0ul'ated b% the S"M)>
!itin', inter alia, the interpellations of Senator nrile, petitioners clai0 that the 8free To# or
0ove0ent of 'oods and capital8 onl% 0eans that 'oods and 0aterial brou'ht #ithin the
Dreeport shall not be sub9ect to custo0s duties and other ta=es and should not be construed as
an open Tood'ate for entr% of all 1inds of 'oods. The% thus sur0ise that the i0portation ban on
0otor vehicles is applicable #ithin the Dreeport. Pertinent interpellations of Senator nrile on the
concept of Dreeport is as follo#s2
Senator nrile2 Mr. President, I thin1 #e are tal1in' here of soverei'n concepts, not territorial
concepts. The concept that #e are supposed to craft here is to carve out a portion of our
terrestrial do0ain as #ell as our ad9acent #aters and sa% to the #orld2 8Aell, %ou can set up
%our factories in this area that #e are circu0scribin', and brin'in' %our eCuip0ent and brin'in'
%our 'oods, %ou are not sub9ect to an% ta=es and duties because %ou are not #ithin the custo0s
9urisdiction of the Republic of the Philippines, #hether %ou store the 'oods or onl% for purposes
of transship0ent or #hether %ou 0a1e the0 into $nished products a'ain to be ree=ported to
other lands.8
= = = =
My un."r*an.+n> of a Kfr"" /orK +*, :" ar" +n "M"; ;ar,+n> ou a /ar of our
"rr+ory an. 8aD" + a* +f + :"r" for"+>n "rr+ory for /ur/o*"* of our ;u*o8* 6a:*,
an. !a /"o/6" ;an ;o8", 9r+n> !"+r >oo.*, *or" !"8 !"r" an. 9r+n> !"8 ou
a>a+n, a* 6on> a* !"y .o no ;o8" +no !" .o8"*+; ;o88"r;" of !" R"/u96+;.
Ae do not reall% care #hether these 'oods are stored here. The onl% thin' that #e care is for our
people to have an e0plo%0ent because of the entr% of these 'oods that are bein' dischar'ed,
#arehoused and reloaded into the ships so that the% can be e=ported. That #ill 'enerate
e0plo%0ent for us. Dor as lon' as that is done, #e are sa%in', in eEect, that #e have the least
contact #ith our tariE and custo0s la#s and our ta= la#s. Therefore, #e consider these 'oods as
outside of the custo0s 9urisdiction of the Republic of the Philippines as %et, until #e dra# the0
fro0 this territor% and brin' the0 inside our do0estic co00erce. In #hich case, the% have to
pass throu'h our custo0s 'ate. I thou'ht #e are carvin' out this entire area and convert it into
this 1ind of concept.
.*
Ho#ever, contrar% to the clai0 of petitioners, there is nothin' in the fore'oin' e=cerpts #hich
absolutel% li0its the incentive to Dreeport investors onl% to e=e0ption fro0 custo0s duties and
ta=es. Mindful of the le'islative intent to attract investors, enhance invest0ent and boost the
econo0%, the le'islature could not have li0ited the entice0ent onl% to e=e0ption fro0 ta=es.
The 0ini0u0 interference polic% of the 'overn0ent on the Dreeport e=tends to the 1ind of
business that investors 0a% e0bar1 on and the articles #hich the% 0a% i0port or e=port into
and out of the ;one. ) contrar% interpretation #ould defeat the ver% purpose of the Dreeport and
drive a#a% investors.
It does not 0ean, ho#ever, that the ri'ht of Dreeport enterprises to i0port all t%pes of 'oods and
article is absolute. Such ri'ht is of course sub9ect to the li0itation that articles absolutel%
prohibited b% la# cannot be i0ported into the Dreeport.
.6
Nevertheless, in deter0inin' #hether
the prohibition #ould appl% to the Dreeport, resort to the purpose of the prohibition is necessar%.
In issuin' O (67, particularl% the prohibition on i0portation under )rticle -, Section ..(, the
President envisioned to rationali;e the i0portation of used 0otor vehicles and to enhance the
capabilities of the Philippine 0otor 0anufacturin' $r0s to be 'loball% co0petitive producers of
co0pletel% build,up units and their parts and co0ponents for the local and e=port 0ar1ets.
.7
In
9ustif%in' the issuance of O (67, petitioners alle'ed that there has been a decline in the sales
of ne# vehicles and a re0ar1able 'ro#th of the sales of i0ported used 0otor vehicles. To
address the sa0e, the President issued the Cuestioned O to prevent further erosion of the
alread% depressed 0ar1et base of the local 0otor vehicle industr% and to curtail the har0ful
eEects of the increase in the i0portation of used 0otor vehicles.
.G
Ta1in' our bearin's fro0 the fore'oin' discussions, #e hold that the i0portation ban runs afoul
the !+r. r"?u+*+" for a valid ad0inistrative order. To be valid, an ad0inistrative issuance 0ust
not be ,ltra vires or be%ond the li0its of the authorit% conferred. It 0ust not supplant or 0odif%
the !onstitution, its enablin' statute and other e=istin' la#s, for such is the sole function of the
le'islature #hich the other branches of the 'overn0ent cannot usurp. )s held in 4nited 5F
?omeowner9s #ssociation v. 5F ?omes! Inc.2
./
The rule,0a1in' po#er of a public ad0inistrative bod% is a dele'ated le'islative po#er, #hich it
0a% not use either to abrid'e the authorit% 'iven it b% !on'ress or the !onstitution or to enlar'e
its po#er be%ond the scope intended. !onstitutional and statutor% provisions control #hat rules
and re'ulations 0a% be pro0ul'ated b% such a bod%, as #ell as #ith respect to #hat $elds are
sub9ect to re'ulation b% it. It 0a% not 0a1e rules and re'ulations #hich are inconsistent #ith the
provisions of the !onstitution or a statute, particularl% the statute it is ad0inisterin' or #hich
created it, or #hich are in dero'ation of, or defeat, the purpose of a statute.
In the instant case, the sub9ect 0atter of the la#s authori;in' the President to re'ulate or forbid
i0portation of used 0otor vehicles, is the.o8"*+; +n.u*ry. O (67, ho#ever, e=ceeded the
scope of its application b% e=tendin' the prohibition on the i0portation of used cars to the
Dreeport, #hich R) G--G, considers to so0e e=tent, a forei'n territor%.
The .o8"*+; +n.u*ry #hich the O see1s to protect is actuall% the 8;u*o8* "rr+ory8
#hich is de$ned under the Rules and Re'ulations I0ple0entin' R) G--G, as follo#s2
8!" /or+on of !" P!+6+//+n"* ou*+." !" Su9+; -ay )r""/or :!"r" !" Tar+M an.
Cu*o8* Co." of !" P!+6+//+n"* an. o!"r na+ona6 ar+M an. ;u*o8* 6a:* ar" +n
for;" an. "M";.8
.+
The proscription in the i0portation of used 0otor vehicles should be operative onl% outside the
Dreeport and the inclusion of said ;one #ithin the a0bit of the prohibition is an invalid
0odi$cation of R) G--G. Indeed, #hen the application of an ad0inistrative issuance 0odi$es
e=istin' la#s or e=ceeds the intended scope, as in the instant case, the issuance beco0es void,
not onl% for bein' ,ltra vires, but also for bein' unreasonable.
This brin's us to the four! r"?u+*+". It is an a=io0 in ad0inistrative la# that ad0inistrative
authorities should not act arbitraril% and capriciousl% in the issuance of rules and re'ulations. To
be valid, such rules and re'ulations 0ust be reasonable and fairl% adapted to secure the end in
vie#. If sho#n to bear no reasonable relation to the purposes for #hich the% #ere authori;ed to
be issued, then the% 0ust be held to be invalid.
*<
There is no doubt that the issuance of the ban to protect the .o8"*+; +n.u*ry is a reasonable
e=ercise of police po#er. The deterioration of the local 0otor 0anufacturin' $r0s due to the
inTu= of i0ported used 0otor vehicles is an ur'ent national concern that needs to be s#iftl%
addressed b% the President. In the e=ercise of dele'ated police po#er, the e=ecutive can
therefore validl% proscribe the i0portation of these vehicles. Thus, in <a>ica3 Aperators of 1etro
1anila! Inc. v. 5oard of <ransportation,
*(
the !ourt held that a re'ulation phasin' out ta=i cabs
0ore than si= %ears old is a valid e=ercise of police po#er. The re'ulation #as sustained as
reasonable holdin' that the purpose thereof #as to pro0ote the convenience and co0fort and
protect the safet% of the passen'ers.
The proble0, ho#ever, lies #ith respect to the application of the i0portation ban to the Dreeport.
The !ourt $nds no lo'ic in the all enco0passin' application of the assailed provision to the
Dreeport #hich is outside the custo0s territor%. )s lon' as the used 0otor vehicles do not enter
the custo0s territor%, the in9ur% or har0 sou'ht to be prevented or re0edied #ill not arise. The
application of the la# should be consistent #ith the purpose of and reason for the la#. Ratione
cessat le>! et cessat le>. Ahen the reason for the la# ceases, the la# ceases. It is not the letter
alone but the spirit of the la# also that 'ives it life.
*-
To appl% the proscription to the Dreeport
#ould not serve the purpose of the O. Instead of i0provin' the 'eneral econo0% of the
countr%, the application of the i0portation ban in the Dreeport #ould subvert the avo#ed
purpose of R) G--G #hich is to create a 0ar1et that #ould dra# investors and ulti0atel% boost
the national econo0%.
In si0ilar cases, #e also declared void the ad0inistrative issuance or ordinances concerned for
bein' unreasonable. To illustrate, in -e la "r,: v. Paras,
*.
the !ourt held as unreasonable and
unconstitutional an ordinance characteri;ed b% overbreadth. In that case, the Municipalit% of
"ocaue, "ulacan, prohibited the operation of all ni'ht clubs, cabarets and dance halls #ithin its
9urisdiction for the protection of public 0orals. )s e=plained b% the !ourt2
= = = It cannot be said that such a s#eepin' e=ercise of a la#0a1in' po#er b% "ocaue could
Cualif% under the ter0 reasonable. The ob9ective of fosterin' public 0orals, a #orth% and
desirable end can be attained b% a 0easure that does not enco0pass too #ide a $eld. !ertainl%
the ordinance on its face is characteri;ed b% overbreadth. The purpose sou'ht to be achieved
could have been attained b% reasonable restrictions rather than b% an absolute prohibition. The
ad0onition in Salaveria should be heeded2 8The 3udiciar% should not li'htl% set aside le'islative
action #hen there is not a clear invasion of personal or propert% ri'hts under the 'uise of police
re'ulation.8 It is clear that in the 'uise of a police re'ulation, there #as in this instance a clear
invasion of personal or propert% ri'hts, personal in the case of those individuals desirous of
patroni;in' those ni'ht clubs and propert% in ter0s of the invest0ents 0ade and salaries to be
earned b% those therein e0plo%ed.
=,pangco v. "o,rt of #ppeals,
**
is a case involvin' a resolution issued b% the Professional
Re'ulation !o00ission #hich prohibited e=a0inees fro0 attendin' revie# classes and receivin'
handout 0aterials, tips, and the li1e three da%s before the date of e=a0ination in order to
preserve the inte'rit% and purit% of the licensure e=a0inations in accountanc%. "esides bein'
unreasonable on its face and violative of acade0ic freedo0, the 0easure #as found to be 0ore
s#eepin' than #hat #as necessar%, vi;2
Needless to sa%, the enforce0ent of Resolution No. (<6 is not a 'uarantee that the alle'ed
lea1a'es in the licensure e=a0inations #ill be eradicated or at least 0ini0i;ed. Ma1in' the
e=a0inees suEer b% deprivin' the0 of le'iti0ate 0eans of revie# or preparation on those last
three precious da%s W #hen the% should be refreshin' the0selves #ith all that the% have
learned in the revie# classes and preparin' their 0ental and ps%cholo'ical 0a1e,up for the
e=a0ination da% itself W #ould be li1e uprootin' the tree to 'et rid of a rotten branch. Ahat is
needed to be done b% the respondent is to $nd out the source of such lea1a'es and stop it ri'ht
there. If corrupt oFcials or personnel should be ter0inated fro0 their loss, then so be it. Di=ers
or s#indlers should be Tushed out. Strict 'uidelines to be observed b% e=a0iners should be set
up and if violations are co00itted, then licenses should be suspended or revo1ed. = = =
In =,cena %rand "entral <erminal! Inc. v. #" =iner! Inc.,
*6
the !ourt li1e#ise struc1 do#n as
unreasonable and overbreadth a cit% ordinance 'rantin' an e=clusive franchise for -6 %ears,
rene#able for another -6 %ears, to one entit% for the construction and operation of one co00on
bus and 9eepne% ter0inal facilit% in @ucena !it%. Ahile professedl% ai0ed to#ards alleviatin' the
traFc con'estion alle'ed to have been caused b% the e=istence of various bus and 9eepne%
ter0inals #ithin the cit%, the ordinance #as held to be be%ond #hat is reasonabl% necessar% to
solve the traFc proble0 in the cit%.
"% parit% of reasonin', the i0portation ban in this case should also be declared void for its too
s#eepin' and unnecessar% application to the Dreeport #hich has no bearin' on the ob9ective of
the prohibition. If the ai0 of the O is to prevent the entr% of used 0otor vehicles fro0 the
Dreeport to the custo0s territor%, the solution is not to forbid entr% of these vehicles into the
Dreeport, but to intensif% 'overn0ental ca0pai'n and 0easures to th#art ille'al in'ress of used
0otor vehicles into the custo0s territor%.
)t this 9uncture, it 0ust be 0entioned that on 3une (+, (++., President Didel V. Ra0os issued
=ecutive Order No. +G,), 8Durther !larif%in' The Ta= )nd Dut%,Dree Privile'e Aithin The Subic
Special cono0ic )nd Dree Port Jone,8 Section ( of #hich provides2
S!TION (. The follo#in' 'uidelines shall 'overn the ta= and dut%,free privile'e #ithin the
Secured )rea of the Subic Special cono0ic and Dree Port Jone2
(.(. The Secured )rea consistin' of the presentl% fenced,in for0er Subic Naval "ase shall be the
onl% co0pletel% ta= and dut%,free area in the SSDPJ. "usiness enterprises and individuals
4Dilipinos and forei'ners5 residin' #ithin the Secured )rea are free to i0port ra# 0aterials,
capital 'oods, eCuip0ent, and consu0er ite0s ta= and dutr%,free. !onsu0ption ite0s, ho#ever,
0ust be consu0ed #ithin the Secured )rea. Re0oval of ra# 0aterials, capital 'oods, eCuip0ent
and consu0er ite0s out of the Secured )rea for sale to non,SSDPJ re'istered enterprises shall
be sub9ect to the usual ta=es and duties, e=cept as 0a% be provided herein.
In Tiu v. !ourt of )ppeals
*7
as reiterated in !oconut Oil Re$ners )ssociation, Inc. v. Torres,
*G
this
provision li0itin' the special privile'es on ta= and dut%,free i0portation in the presentl% fenced,
in for0er Subic Naval "ase has been declared valid and constitutional and in accordance #ith R)
G--G. !onsistent #ith these rulin's and for easier 0ana'e0ent and 0onitorin' of activities and
to prevent fraudulent i0portation of 0erchandise and s0u''lin', the free To# and i0portation
of used 0otor vehicles shall be operative onl% #ithin the 8secured area.8
In su0, the !ourt $nds that )rticle -, Section ..( of O (67 is void insofar as it is 0ade
applicable to the presentl% secured fenced,in for0er Subic Naval "ase area as stated in Section
(.( of O +G,). Pursuant to the separabilit% clause
*/
of O (67, Section ..( is declared valid
insofar as it applies to the custo0s territor% or the Philippine territor% outside the presentl%
secured fenced,in for0er Subic Naval "ase area as stated in Section (.( of O +G,). Hence, used
0otor vehicles that co0e into the Philippine territor% via the secured fenced,in for0er Subic
Naval "ase area 0a% be stored, used or traded therein, or e=ported out of the Philippine
territor%, but the% cannot be i0ported into the Philippine territor% outside of the secured fenced,
in for0er Subic Naval "ase area.
AHRDOR, the petitions are P)RTI)@@? &R)NTD and the Ma% -*, -<<* Decisions of "ranch
G-, Re'ional Trial !ourt of Olon'apo !it%, in !ivil !ase No. -<,<,<* and !ivil !ase No. --,<,<*>
and the Debruar% (*, -<<6 Decision of the !ourt of )ppeals in !),&.R. SP No. 7.-/*, are
MODIDID insofar as the% declared )rticle -, Section ..( of =ecutive Order No. (67, void in its
entiret%.
Said provision is declared V)@ID insofar as it applies to the Philippine territor% outside the
presentl% fenced,in for0er Subic Naval "ase area and VOID #ith respect to its application to the
secured fenced,in for0er Subic Naval "ase area.
SO ORDRD.
CONSUELO 3N$RES&S$NT#$GO
)ssociate 3ustice
A !ON!BR2
$RTEM#O %. P$NG$N#-$N
!hief 3ustice
RE3N$TO S. PUNO
)ssociate 3ustice
LEON$RDO $. EU#SUM-#NG
)sscociate 3ustice
$NGEL#N$ S$NDO%$L&GUT#ERRE'
)ssociate 3ustice
$NTON#O T. C$RP#O
)sscociate 3ustice
M$. $L#C#$ $USTR#$&M$RT#NE'
)ssociate 3ustice
REN$TO C. CORON$
)sscociate 3ustice
CONCH#T$ C$RP#O&MOR$LES
)ssociate 3ustice
ROMEO J. C$LLEJO, SR.
)sscociate 3ustice
$DOL)O S. $'CUN$
)ssociate 3ustice
D$NTE O. T#NG$
)sscociate 3ustice
M#N#T$ %. CH#CO&N$'$R#O
)ssociate 3ustice
C$NC#O C. G$RC#$
)sscociate 3ustice
! R T I D I ! ) T I O N
Pursuant to Section (., )rticle VIII of the !onstitution, it is hereb% certi$ed that the conclusions
in the above Decision #ere reached in consultation before the case #as assi'ned to the #riter of
the opinion of the !ourt.
$RTEM#O %. P$NG$N#-$N
!hief 3ustice
)oono"*
(
Rollo 4&.R. No. (7*(G(5, pp. /(,+<.
-
Id. at 7/> rollo 4&.R. No. (7*(G-5, p. 76. Penned b% 3ud'e liodoro &. Bbiadas.
.
Rollo 4&.R. No. (7*(G-5, pp. G/,/7.
*
The =ecutive Secretar%, Secretar% of Transportation and !o00unication,
!o00issioner of !usto0s, )ssistant Secretar% and Head of the @and Transportation
OFce, Subic "a% Metropolitan )uthorit% 4S"M)5, !ollector of !usto0s for the Port at
Subic "a% Dreeport Jone, and the !hief of the @and Transportation OFce at Subic "a%
Dreeport Jone.
6
The dispositive portion thereof is identicall% #orded as the Cuoted decretal portion of
the decision in !ivil !ase No. -<,<,<*.
7
Rollo 4&.R. No. (7/G*(5, pp. (.+,(6..
G
Id. at -7*. Penned b% 3ud'e liodoro &. Bbiadas.
/
Doc1eted as !),&.R. SP. No. /.-/*.
+
Dated Debruar% (*, -<<6, rollo 4&.R. No. (7/G*(5, p. (-6. Penned b% )ssociate 3ustice
Perlita 3. Tria Tirona and concurred in b% )ssociate 3ustices Delilah Vidallon,Ma'tolis and
3ose !. Re%es, 3r. Petitioners $led a 0otion for reconsideration but #as denied b% the
!ourt of )ppeals on 3une -/, -<<*, id. at (-7.
(<
Id. at .6*.
((
Miranda v. )'uirre, .G. Phil. ./7, .+G 4(+++5.
(-
Rollo 4&.R. No. (7*(G(5, pp. +*,+7 and rollo 4&.R. No. (7*(G-5, p. //.
(.
*-- Phil. 6(+, 6.( 4-<<(5.
(*
Republic v. Sandi'anba%an, &.R. No. (6-(6*, Nove0ber (/, -<<., *(7 S!R) (.., (*<.
(6
!oconut Oil Re$ners )ssociation, Inc. v. Torres, &.R. No. (.-6-G, 3ul% -+, -<<6, *76
S!R) *G, 7-.
(7
"amarines 'orte ;lectric "ooperative! Inc. v. <orres, .6< Phil. .(6, ..( 4(++/5.
(G
!ru;, Philippine )d0inistrative @a#, -<<. dition, p. -*.
(/
Id. at *(.
(+
ssentiall% the sa0e provision is e0bodied in the (+.6 and (+G. !onstitutions.
!onstitution 4(+.65, )rt. VI, Sec --, par. 4-52
The !on'ress 0a% b% la# authori;e the President, sub9ect to such li0itations and
restrictions as it 0a% i0pose, to $=, #ithin speci$ed li0its, tariE rates, i0port or
e=port Cuotas, and tonna'e and #harfa'e dues.
!onstitution 4(+G.5, )rt. VII, Sec (G, par. 4-52
The "atasan' Pa0bansa 0a% b% la# authori;e the President to $= #ithin speci$ed
li0its, and sub9ect to such li0itations and restrictions as it 0a% i0pose, tariE
rates, i0port and e=port Cuotas, tonna'e and #harfa'e dues, and other duties or
i0posts.
-<
"ernas, S.3., The (+/G !onstitution of the Philippines2 ) !o00entar%, (++7 dition, p.
7(<.
-(
nacted on 3ul% (G, -<<<. See Filipino 1etals "orporation v. .ecretary of <rade and
Ind,stry, &.R. No. (6G*+/, 3ul% (6, -<<6, *7. S!R) 7(7, 7(+.
--
8Secretar%8 as de$ned under Section * 4n5 of the SM) refers to either the Secretar% of
the Depart0ent of Trade and Industr% in the case of non,a'ricultural products or the
Secretar% of the Depart0ent of )'riculture in the case of a'ricultural products.
-.
!ru;, s,pra note (G at 6..
-*
"ommissioner of Internal Reven,e v. "o,rt of #ppeals, .-+ Phil. +/G, (<<G 4(++75.
-6
1isamis Ariental #ssociation of "oco <raders! Inc. v. -epartment of Finance
.ecretary! &.R. No. (</6-*, Nove0ber (<, (++*, -./ S!R) 7., 7+.
-7
.,pra.
-G
*6. Phil. (<*., (<6/ 4-<<.5.
-/
Sec. *<(. Dle=ible !lause. W
a. In the interest of national econo0%, 'eneral #elfare andMor national securit%,
and sub9ect to the li0itations herein prescribed, the President, upon
reco00endation of the National cono0ic and Develop0ent )uthorit%
4hereinafter referred to as ND)5, is hereb% e0po#ered2 4(5 to increase, reduce or
re0ove e=istin' protective rates of i0port dut% 4includin' an% necessar% chan'e
in classi$cation5. The e=istin' rates 0a% be increased or decreased but in no case
shall the reduced rate of i0port dut% be lo#er than the basic rate of ten 4(<5 per
cent ad valore0, nor shall the increased rate of i0port dut% be hi'her than a
0a=i0u0 of one hundred 4(<<5 per cent ad valore0> 4-5 to establish i0port Cuota
or to ban i0ports of an% co00odit%, as 0a% be necessar%I and 4.5 to i0pose an
additional dut% on all i0ports not e=ceedin' ten 4(<5 per cent ad valore0
#henever necessar%> Provided, That upon periodic investi'ations b% the TariE
!o00ission and reco00endation of the ND), the President 0a% cause a 'radual
reduction of protection levels 'ranted in Section One Hundred and Dour of this
!ode, includin' those subseCuentl% 'ranted pursuant to this section.
b. "efore an% reco00endation is sub0itted to the President b% the ND)
pursuant to the provisions of this section, e=cept in the i0position of an additional
dut% not e=ceedin' ten 4(<5 per cent ad valore0, the !o00ission shall conduct an
investi'ation in the course of #hich the% shall hold public hearin's #herein
interested parties shall be aEorded reasonable opportunit% to be present, produce
evidence and to be heard. The !o00ission shall also hear the vie#s and
reco00endations of an% 'overn0ent oFce, a'enc% or instru0entalit% concerned.
The !o00ission shall sub0it their $ndin's and reco00endations to the ND)
#ithin thirt% 4.<5 da%s after the ter0ination of the public hearin's.
-+
S!. 6. !onditions for the )pplication of &eneral Safe'uard Measures. H The Secretar%
shall appl% a 'eneral safe'uard 0easure upon a positive $nal deter0ination of the
!o00ission that a product is bein' i0ported into the countr% in increased Cuantities,
#hether absolute or relative to the do0estic production, as to be a substantial cause of
serious in9ur% or threat thereof to the do0estic industr%> ho#ever, in the case of non,
a'ricultural products, the secretar% shall $rst establish that the application of such
safe'uard 0easures #ill be in the public interest.
S!. +. Dor0al Investi'ation. H Aithin $ve 465 #or1in' da%s fro0 receipt of the
reCuest fro0 the Secretar%, the !o00ission shall publish the notice of the
co00ence0ent of the investi'ation, and public hearin's #hich shall aEord
interested parties and consu0ers an opportunit% to be present, or to present
evidence, to respond to the presentation of other parties and consu0ers, and
other#ise be heard. vidence and positions #ith respect to the i0portation of the
sub9ect article shall be sub0itted to the !o00ission #ithin $fteen 4(65 da%s after
the initiation of the investi'ation b% the !o00ission.
The !o00ission shall co0plete its investi'ation and sub0it its report to the
Secretar% #ithin one hundred t#ent% 4(-<5 calendar da%s fro0 receipt of the
referral b% the Secretar%, e=cept #hen the Secretar% certi$es that the sa0e is
ur'ent, in #hich case the !o00ission shall co0plete the investi'ation and sub0it
the report to the Secretar% #ithin si=t% 47<5 da%s.
.<
Rollo 4&.R. No. (7/G*(5, pp. (**,(*6> rollo 4&.R. No. (7*(G-5, pp. -<6,-<7> rollo 4&.R.
No. (7*(G(5, pp. /G,/7.
.(
"ocon,t Ail Refners #ssociation! Inc. v. Torres, s,pra note (6 at 7-,7..
.-
Section (. of the Rules and Re'ulations I0ple0entin' R) G--G provides2 stablish0ent
of Secure Peri0eters, Points of ntr% and Dut% and Ta= Dree )reas of the S"D. , Pendin'
the establish0ent of secure peri0eters around the entire S"D, the S"M) shall have the
authorit% to establish and de0arcate areas of the S"D #ith secure peri0eters #ithin
#hich articles and 0erchandise free of duties and internal revenue ta=es 0a% be li0ited,
#ithout pre9udice to the avail0ent of other bene$ts conferred b% the )ct and these Rules
in the S"D outside such areas. The S"M) shall further0ore have the authorit% to
establish, re'ulate and 0aintain points of entr% to the S"D or to an% li0ited dut% and ta=,
free areas of the S"D.
..
Records, Senate /th con'ress, Session 43anuar% (*, (++-5.
.*
Id.
.6
S!. *6. I0portation of )rticles. H In 'eneral, all articles 0a% be i0ported b% S"D
nterprises into the S"D free of custo0s and i0port duties and national internal revenue
ta=es, e=cept those articles prohibited b% the S"M) and those absolutel% prohibited b%
la#. 4Rules and Re'ulations I0ple0entin' R) G--G5
.7
Ahereas clauses of O (67.
.G
Rollo 4&.R. No. (7/G*(5, pp. GG,G+> rollo 4&.R. No. (7*(G-5, p. *7> rollo 4&.R. No.
(7*(G(5, p. */.
./
.7+ Phil. 67/, 6G+,6/< 4(+++5.
.+
De$nitions, Section . 4n5.
*<
=,pangco v. "o,rt of #ppeals, &.R. No. @,GG.G-, )pril -+, (+//, (7< S!R) /*/, /6/,
/6+.
*(
-<- Phil. +-6, +.6,+.7 4(+/-5.
*-
&ergara v. People, &.R. No. (7<.-/, Debruar% *, -<<6, *6< S!R) *+6, 6</.
*.
-</ Phil. *+<, *++,6<< 4(+/.5.
**
.,pra note *< at /7<.
*6
&.R. No. (*/..+, Debruar% -., -<<6, *6- S!R) (G*.
*7
.7( Phil. --+ 4(+++5.
*G
Supra note (6.
*/
)rticle G, Section .2
Sec. .. Separabilit% !lause. H The provisions of this =ecutive Order are hereb%
declared separable and in the event an% of such provisions is declared
unconstitutional, the other provisions, #hich are not aEected, thereb% re0ain in
force and eEect.
EN -$NC
G.R. No. 145444 May 5, 2001
DEP$RTMENT O) -UDGET $ND M$N$GEMENT, r"/r"*"n". 9y SECRET$R3 ROMULO L.
NER#, PH#L#PP#NE N$T#ON$L POL#CE, r"/r"*"n". 9y POL#CE D#RECTOR GENER$L
$RTURO L. LOM#-$O, N$T#ON$L POL#CE COMM#SS#ON, r"/r"*"n". 9y CH$#RM$N
$NGELO T. RE3ES, $ND C#%#L SER%#CE COMM#SS#ON, r"/r"*"n". 9y CH$#RPERSON
7$R#N$ C. D$%#D, P"++on"r*,
,*.
M$N#L$AS )#NEST RET#REES $SSOC#$T#ON, #NC., r"/r"*"n". 9y PPCOL. )EL#C#S#MO G.
L$'$RO GRET.H, $ND $LL THE OTHER #NP RET#REES, R"*/on."n*.
D E C # S # O N
G$RC#$, J.2
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45 of !" Ru6"* of Cour ar" !" fo66o:+n> +**uan;"* of !" Cour of $//"a6* GC$H +n
C$&G.R. C% No. 18200, o :+2
1. D";+*+on1 .a". Ju6y 1, 2005 :!+;! aFr8". +n oo !" .";+*+on of !" R">+ona6
Tr+a6 Cour of Man+6a, -ran;! 02, +n C+,+6 Ca*" No. 02&100102, a *u+ for .";6araory
r"6+"f, .";6ar+n> !" !"r"+n r"*/on."n* "n+6". o !" *a8" r"+r"8"n 9"n"C*
a;;or.". u/on r"+r""* of !" P!+6+//+n" Na+ona6 Po6+;" GPNPH un."r R"/u96+; $;
GR.$.H No. 4515, a* a8"n.". 9y R.$. No. 8551, an. or."r+n> !" !"r"+n /"++on"r* o
+8/6"8"n !" /ro/"r a.@u*8"n* on r"*/on."n*A r"+r"8"n 9"n"C*I an.
2. R"*o6u+on2 .a". $u>u* 24, 2005 :!+;! ."n+". !" /"++on"r*A 8o+on for
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T!" an";"."n fa;*2
#n 1515, Pr"*+."n+a6 D";r"" GP.D.H No. 145 :a* +**u". ;on*+u+n> !" #n">ra".
Na+ona6 Po6+;" G#NPH o 9" ;o8/o*". of !" P!+6+//+n" Con*a9u6ary GPCH a* !"
nu;6"u* an. !" +n">ra". /o6+;" for;"* a* ;o8/on"n* !"r"of. Co8/6"8"n+n> P.D.
No. 145 :a* P.D. No. 11840.a". $u>u* 24, 1511 G#NP La:, !"r"+naf"rH +**u". o
/rof"**+ona6+Q" !" #NP an. /ro8o" ;ar""r .","6o/8"n !"r"+n.
On D";"89"r 10, 1550, R"/u96+; $; GR.$.H No. 4515, "n+6". K$N $CT EST$-L#SH#NG
THE PH#L#PP#NE N$T#ON$L POL#CE UNDER $ REORG$N#'ED DEP$RTMENT O) THE
#NTER#OR $ND LOC$L GO%ERNMENT, $ND )OR OTHER PURPOSES,K !"r"+naf"r
r"f"rr". o a* PNP La:, :a* "na;".. Un."r S";+on 20 of *a+. 6a:, !" P!+6+//+n"
Na+ona6 Po6+;" GPNPH :ou6. +n++a66y ;on*+* of !" 8"89"r* of !" #NP, ;r"a". un."r
P.D. No. 145, a* :"66 a* !" oF;"r* an. "n6+*". /"r*onn"6 of !" PC. #n /ar, S";+on
20 r"a.*2
SEC. 20. Co8/o*++on. R Su9@"; o !" 6+8+a+on /ro,+.". for +n !+* $;, !"
P!+6+//+n" Na+ona6 Po6+;", !"r"+naf"r r"f"rr". o a* !" PNP, +* !"r"9y "*a96+*!".,
+n++a66y ;on*+*+n> of !" 8"89"r* of !" /o6+;" for;"* :!o :"r" +n">ra". +no !"
#n">ra". Na+ona6 Po6+;" G#NPH /ur*uan o Pr"*+."n+a6 D";r"" No. 145, an. !"
oF;"r* an. "n6+*". /"r*onn"6 of !" P!+6+//+n" Con*a9u6ary GPCH.
$ 6+6" 6"** !an "+>! G8H y"ar* 6a"r, or on )"9ruary 25, 1558, R.$. No. 4515 :a*
a8"n.". 9y R.$. No. 8551, o!"r:+*" Dno:n a* !" KPH#L#PP#NE N$T#ON$L POL#CE
RE)ORM $ND REORG$N#'$T#ON $CT O) 1558.K $8on> o!"r !+n>*, !" a8"n.aory
6a: r""n>+n""r". !" r"+r"8"n *;!"8" +n !" /o6+;" or>an+Qa+on. R"6",an6y, PNP
/"r*onn"6, un."r !" n": 6a:, *oo. o ;o66"; 8or" r"+r"8"n 9"n"C* !an :!a
#NP 8"89"r* of "?u+,a6"n ranD, :!o !a. r"+r". un."r !" #NP La:, r";"+,"..
T!" #NP r"+r""* +66u*ra". !" r"*u6+n> .+*/ar+y +n !" r"+r"8"n 9"n"C* 9":""n
!"8 an. !" PNP r"+r""* a* fo66o:*24
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H"n;", on Jun" 0, 2002, +n !" R">+ona6 Tr+a6 Cour GRTCH of Man+6a, a66 #NP r"+r""*,
*/"ar!"a.". 9y !" Man+6aA* )+n"* R"+r""* $**o;+a+on, #n;., or !" M)R$#
G!"r"+naf"r ;o66";+,"6y r"f"rr". o a* !" #NP R"+r""*H, C6". a /"++on for
.";6araory r"6+"f,5 !"r"un."r +8/6"a.+n>, a* r"*/on."n*, !" D"/ar8"n of
-u.>" an. Mana>"8"n GD-MH, !" PNP, !" Na+ona6 Po6+;" Co88+**+on
GN$POLCOMH, !" C+,+6 S"r,+;" Co88+**+on GCSCH an. !" Go,"rn8"n S"r,+;"
#n*uran;" Sy*"8 GGS#SH. Do;D"". +n !" RTC a* C+,+6 Ca*" No. 02&100102, :!+;! :a*
raS". o -ran;! 22 !"r"of, !" /"++on a66">". +n >+* !a #NP r"+r""* :"r" "?ua66y
*+ua". a* !" PNP r"+r""* 9u :!o*" r"+r"8"n 9"n"C* /r+or o !" "na;8"n of
R.$. No. 4515, a* a8"n.". 9y R.$. No. 8551, :"r" un;on*;+ona96y an. ar9+rar+6y
"B;"/". fro8 !" !+>!"r ra"* an. a.@u*". 9"n"C* a;;or.". o !" PNP r"+r""*.
$;;or.+n>6y, +n !"+r /"++on, !" /"++on+n> #NP r"+r""* /ray !a a R
DECL$R$TOR3 JUDGMENT 9" r"n."r". +n !"+r fa,or, DECL$R#NG :+! ;"ra+ny !a
!"y, a* #NP&r"+r""*, ar" ru6y a9*or9". an. "?ua66y ;on*+."r". a* PNP&r"+r""* an.
!u*, "n+6". o "n@oy !" S$ME or #DENT#C$L r"+r"8"n 9"n"C* 9"+n> 9"*o:". o
PNP&r"+r""* 9y ,+ru" of *a+. PNP La: or R"/u96+; $; No. 4515, a* a8"n.". 9y
R"/u96+; $; 8551, :+! !" ;oro66ary 8an.a" for !" r"*/on."n*&>o,"rn8"n
a>"n;+"* o "M"; !" +88".+a" a.@u*8"n on !"+r /r",+ou*6y r";"+,". .+*/ara"
r"+r"8"n 9"n"C*, r"roa;+," o +* "M";+,+y, an. :+! .u" /ay8"n !"r"of.
T!" GS#S 8o,". o .+*8+** !" /"++on on >roun.* of 6a;D of @ur+*.+;+on an. ;au*" of
a;+on. On !" o!"r !an., !" CSC, D-M, N$POLCOM an. PNP, +n !"+r r"*/";+,"
an*:"r*, a**"r". !a !" /"++on"r* ;ou6. no ;6a+8 !" 8or" >"n"rou* r"+r"8"n
9"n"C* un."r R.$. No. 4515 9";au*" a no +8" .+. !"y 9";o8" PNP 8"89"r*,
!a,+n> r"+r". /r+or o !" "na;8"n of *a+. 6a:. D-M, N$POLCOM an. PNP
af"r:ar.* C6". !"+r r"*/";+," /r"&r+a6 9r+"f*.
T!" "n*u+n> 6">a6 *D+r8+*! +* no r"6",an o !" .+*/o*++on of !" +n*an ;a*". T!"
9oo8 6+n" +* !a, on Mar;! 21, 2000, !" RTC ;a8" ou :+! +* .";+*+on4 !o6.+n>
!a R.$. No. 4515, a* a8"n."., .+. no a9o6+*! !" #NP 9u 8"r"6y /ro,+.". for !"
a9*or/+on of +* /o6+;" fun;+on* 9y !" PNP, an. a;;or.+n>6y r"n."r". @u.>8"n for
!" #NP r"+r""*, o :+2
(HERE)ORE, !+* Cour !"r"9y r"n."r* JUDGMENT DECL$R#NG !" #NP R"+r""*
"n+6". o !" *a8" or +."n+;a6 r"+r"8"n 9"n"C* an. *u;! o!"r 9"n"C* 9"+n>
>ran"., a;;or.". an. 9"*o:". u/on !" PNP R"+r""* un."r !" PNP La: GR$ No.
4515, a* a8"n.".H.
T!" r"*/on."n* Go,"rn8"n D"/ar8"n* an. $>"n;+"* *!a66 #MMED#$TEL3 E))ECT
an. #MPLEMENT !" /ro/"r a.@u*8"n* on !" #NP R"+r""*A r"+r"8"n an. *u;!
o!"r 9"n"C*, RETRO$CT#%E o +* .a" of "M";+,+y, an. RELE$SE an. P$3 o !"
#NP R"+r""* !" .u" /ay8"n* of !" a8oun*.
SO ORDERED.
On $/r+6 2, 2000, !" r+a6 ;our +**u". :!a + ."no8+na". a* Su//6"8"n o !"
D";+*+on :!"r"un."r + >ran". !" GS#SA 8o+on o .+*8+** an. !u* ;on*+."r". !"
9a*+; /"++on a* :+!.ra:n :+! r"*/"; o !" 6a"r.
)ro8 !" a.,"r*" .";+*+on of !" r+a6 ;our, !" r"8a+n+n> r"*/on."n*, na8"6y,
D-M, PNP, N$POLCOM an. CSC, +n"r/o*". an a//"a6 o !" C$ :!"r"a !"+r
a//"66a" r";our*" :a* .o;D"". a* C$&G.R. C% No. 18200.
$* *a". a !" !r"*!o6. !"r"of, !" C$, +n +* .";+*+on of Ju6y 1, 2005,1 aFr8".
!a of !" r+a6 ;our u/!o6.+n> !" "n+6"8"n of !" #NP r"+r""* o !" *a8" or
+."n+;a6 r"+r"8"n 9"n"C* a;;or.". u/on PNP r"+r""* un."r R.$. No. 4515, a*
a8"n."..
T!"+r 8o+on for r";on*+."ra+on !a,+n> 9""n ."n+". 9y !" C$ +nT +* "?ua66y a**a+6".
r"*o6u+on of $u>u* 24, 2005,8 !"r"+n /"++on"r* ar" no: :+! !+* Cour ,+a !"
+n*an r";our*" on !"+r *+n>u6ar *u98+**+on !a &
THE COURT O) $PPE$LS COMM#TTED $ SER#OUS ERROR #N L$( #N $))#RM#NG THE
DEC#S#ON O) THE TR#$L COURT NOT(#THST$ND#NG TH$T #T #S CONTR$R3 TO L$(
$ND EST$-L#SHED JUR#SPRUDENCE.
(" DEN3.
#n !" 8a+n, + +* /"++on"r*A /o*ur" !a R.$. No. 4515 ;6"ar6y a9o6+*!". !" #NP an.
;r"a". +n +* *"a. a n": /o6+;" for;", !" PNP. Pr"*;+n.+n> !"r"fro8, /"++on"r*
;on"n. !a *+n;" !" PNP +* an or>an+Qa+on "n+r"6y .+M"r"n fro8 !" #NP, +
fo66o:* !a #NP r"+r""* n","r 9";a8" PNP 8"89"r*. Er>o, !"y ;anno a,a+6
!"8*"6,"* of !" r"+r"8"n 9"n"C* a;;or.". o PNP 8"89"r* un."r R.$. No. 4515
an. +* a8"n.aory 6a:, R.$. No. 8551.
$ Ua*!9a;D a !+*ory +* /ro/"r.
$* 8ay 9" r";a66"., R.$. No. 4515 :a* "na;". +no 6a: on D";"89"r 10, 1550, or @u*
a9ou four G4H y"ar* af"r !" 1584 E.*a R",o6u+on o//6". .o:n !" .+;aor*!+/
r">+8". E>>". on 9y !" ;urr"n *"n+8"n of !" +8"* >"n"ra". 9y !" 6on> /"r+o.
of 8ar+a6 ru6" .ur+n> :!+;! !" /o6+;" for;", !" PC&#NP, !a. a 8+6+ary ;!ara;"r,
9"+n> !"n a 8a@or *"r,+;" of !" $r8". )or;"* of !" P!+6+//+n"*, an. +n,ar+a96y
8o,". 9y a fr"*! ;on*+u+ona6 8an.a" for !" "*a96+*!8"n of on" /o6+;" for;"
:!+;! *!ou6. 9" na+ona6 +n *;o/" an., 8o* +8/oran6y, /ur"6y ;+,+6+an +n
;!ara;"r,5 Con>r"** "na;". R.$. No. 4515 "*a96+*!+n> !" PNP an. /6a;+n> + un."r
!" D"/ar8"n of #n"r+or an. Lo;a6 Go,"rn8"n. To un."r*;or" !" ;+,+6+an
;!ara;"r of !" PNP, R.$. No. 4515 8a." + "8/!a+;a66y ;6"ar +n +* .";6ara+on of
/o6+;y !" fo66o:+n>2
S";+on 2. D";6ara+on of /o6+;y & # +* !"r"9y .";6ar". o 9" !" /o6+;y of !" Sa" o
/ro8o" /"a;" an. or."r, "n*ur" /u96+; *af"y an. fur!"r *r"n>!"n 6o;a6
>o,"rn8"n ;a/a9+6+y a+8". o:ar.* !" "M";+," ."6+,"ry of !" 9a*+; *"r,+;"* o
!" ;++Q"nry !rou>! !" "*a96+*!8"n of a !+>!6y "F;+"n an. ;o8/""n /o6+;"
for;" !a +* na+ona6 +n *;o/" an. ;+,+6+an +n ;!ara;"r. BBB.
T!" /o6+;" for;" *!a66 9" or>an+Q"., ra+n". an. "?u+//". /r+8ar+6y for !"
/"rfor8an;" of /o6+;" fun;+on*. #* na+ona6 *;o/" an. ;+,+6+an ;!ara;"r *!a66 9"
/ara8oun. No "6"8"n of !" /o6+;" for;" *!a66 9" 8+6+ary nor *!a66 any /o*++on
!"r"of 9" o;;u/+". 9y a;+," 8"89"r* of !" <$)P=. GE8/!a*+* an. :or. +n 9ra;D"
*u//6+"..H
Pur*uan o S";+on 20, *u/ra, of R.$. No. 4515, !" PNP +n++a66y ;on*+*". of !"
8"89"r* of !" /o6+;" for;"* :!o :"r" +n">ra". +no !" #NP 9y ,+ru" of P.D. No.
145, :!+6" S";+on 8410 of !" *a8" 6a: /ro,+."* for !" a**u8/+on 9y !" PNP of
!" /o6+;" fun;+on* of !" #NP an. +* a9*or/+on 9y !" for8"r, +n;6u.+n> +*
a//ro/r+a+on*, fun.*, r";or.*, "?u+/8"n, ";., a* :"66 a* +* /"r*onn"6.11 $n. o
>o,"rn !" *au"A* +8/6"8"na+on, S";+on 85 of !" $; */"66". ou !" fo66o:+n>
a9*or/+on /!a*"*2
P!a*" # R EB"r;+*" of o/+on 9y !" un+for8". 8"89"r* of !" <PC=, !" PC "6"8"n*
a**+>n". :+! !" Nar;o+;* Co88an., C#S, an. !" /"r*onn"6 of !" ";!n+;a6
*"r,+;"* of !" $)P a**+>n". :+! !" PC o +n;6u." !" r">u6ar C#S +n,"*+>a+n>
a>"n* an. !" o/"ra+,"* an. a>"n* of !" N$POLCOM #n*/";+on. #n,"*+>a+on an.
#n"66+>"n;" -ran;!, an. !" /"r*onn"6 of !" a9*or9". Na+ona6 $;+on Co88+"" on
$n+&H+@a;D+n> GN$C$HH of !" D"/ar8"n of Na+ona6 D"f"n*" o 9" ;o8/6"".
:+!+n *+B G4H 8on!* fro8 !" .a" of !" "M";+,+y of !+* $;. $ !" "n. of !+*
/!a*", a66 /"r*onn"6 fro8 !" #NP, PC, $)P T";!n+;a6 S"r,+;"*, N$C$H, an. N$POLCOM
#n*/";+on, #n,"*+>a+on an. #n"66+>"n;" -ran;! *!a66 !a," 9""n ;o,"r". 9y oF;+a6
or."r* a**+>n+n> !"8 o !" PNP, )+r" an. Ja+6 )or;"* 9y !"+r r"*/";+," un+*.
P!a*" ## R $//ro,a6 of !" a96" of or>an+Qa+on an. "?u+/8"n of a66 9ur"au* an.
oF;"* ;r"a". un."r !+* $;, /r"/ara+on an. C66+n> u/ of !"+r *aFn> /a"rn,
ran*f"r of a**"* o !" <D#LG= an. or>an+Qa+on of !" Co88+**+on, o 9" ;o8/6"".
:+!+n :"6," G12H 8on!* fro8 !" "M";+,+y .a" !"r"of. $ !" "n. of !+* /!a*",
a66 /"r*onn"6 o 9" a9*or9". 9y !" <D#LG= *!a66 !a," 9""n +**u". a//o+n8"n
/a/"r*, an. !" or>an+Q". Co88+**+on an. !" PNP *!a66 9" fu66y o/"ra+ona6.
T!" PC oF;"r* an. "n6+*". /"r*onn"6 :!o !a," no o/". o @o+n !" PNP *!a66 9"
r"a**+>n". o !" $r8y, Na,y or $+r )or;", or *!a66 9" a66o:". o r"+r" un."r "B+*+n>
$)P ru6"* an. r">u6a+on*. $ny PC&#NP oF;"r or "n6+*". /"r*onn"6 8ay, :+!+n !"
:"6,"&8on! /"r+o. fro8 !" "M";+,+y of !+* $;, r"+r" an. 9" /a+. r"+r"8"n
9"n"C* ;orr"*/on.+n> o a /o*++on :o G2H ranD* !+>!"r !an !+* /r"*"n >ra.",
*u9@"; o !" ;on.++on* !a a !" +8" !" a//6+"* for r"+r"8"n, !" !a* r"n."r".
a 6"a* :"ny G20H y"ar* of *"r,+;" an. *+66 !a*, a 8o*, :"ny&four G24H 8on!* of
*"r,+;" r"8a+n+n> 9"for" !" ;o8/u6*ory r"+r"8"n a>" a* /ro,+.". 9y "B+*+n> 6a:
for !+* oF;".
P!a*" ### R $.@u*8"n of ranD* an. "*a96+*!8"n of on" G1H 6+n"a6 ro*"r of oF;"r*
an. ano!"r for non&oF;"r*, an. !" ra+ona6+Qa+on of ;o8/"n*a+on an. r"+r"8"n
*y*"8*I aD+n> +no ;on*+."ra+on !" "B+*+n> ;o8/"n*a+on *;!"8"* an.
r"+r"8"n an. *"/ara+on 9"n"C *y*"8* of !" .+M"r"n ;o8/on"n* of !" PNP, o
"n*ur" !a no 8"89"r of !" PNP *!a66 *uM"r any .+8+nu+on +n 9a*+; 6on>",+y an.
+n;"n+," /ay*, a66o:an;"* an. r"+r"8"n 9"n"C* .u" !"8 9"for" !" ;r"a+on* of
!" PNP, o 9" ;o8/6"". :+!+n "+>!""n G18H 8on!* fro8 !" "M";+,+y of !+* $;.
BBB.
U/on !" "M";+,+y of !+* $;, !" <D#LG= S";r"ary *!a66 "B"r;+*" a.8+n+*ra+,"
*u/"r,+*+on a* :"66 a* o/"ra+ona6 ;onro6 o,"r !" ran*f"rr"., 8"r>". an.Por
a9*or9". $)P an. #NP un+*. T!" +n;u89"n D+r";or G"n"ra6 of !" PC&#NP *!a66
;on+nu" o a; a* D+r";or G"n"ra6 of !" PNP un+6 V r"/6a;". V. GE8/!a*+* an.
:or.* +n 9ra;D"* *u//6+"..H
)ro8 !" for">o+n>, + a//"ar* ;6"ar o u* !a !" #NP :a* n","r, a* /o*+". 9y !"
/"++on"r*, a9o6+*!". or "r8+na". ou of "B+*"n;" 9y R.$. No. 4515. )or *ur",
no:!"r" +n R.$. No. 4515 .o"* !" :or.* Ka9o6+*!K or K"r8+na"K a//"ar +n r"f"r"n;"
o !" #NP. #n*"a., :!a !" 6a: /ro,+."* +* for !" Ka9*or/+on,K Kran*f"r,K an.Por
K8"r>"rK of !" #NP, a* :"66 a* !" o!"r oF;"* ;o8/r+*+n> !" PC&#NP, :+! !" PNP.
To Ka9o6+*!K +* o .o a:ay :+!, o annu6, a9ro>a" or ."*roy ;o8/6""6yI12 o
Ka9*or9K +* o a**+8+6a", +n;or/ora" or o aD" +n.10 KM"r>"K 8"an* o ;au*" o
;o89+n" or un+" o 9";o8" 6">a66y a9*or9". or "B+n>u+*!". 9y 8"r>"r14 :!+6"
Kran*f"rK ."no"* 8o,"8"n fro8 on" /o*++on o ano!"r. C6"ar6y, Ka9o6++onK ;anno
9" "?ua". :+! Ka9*or/+on.K
Tru" + +* !a S";+on 5015 of R.$. No. 4515 */"aD* of !" #NP K<;"a*+n>= o "B+*K
u/on !" "M";+,+y of !" 6a:. # ou>! o 9" *r"**"., !o:","r, !a *u;! ;"**a+on
+* 9u !" 6o>+;a6 ;on*"?u"n;" of !" #NP 9"+n> a9*or9". 9y !" PNP.1aWXP/!+1.n"
)ar fro8 9"+n> a9o6+*!". !"n, !" #NP, a !" 8o*, :a* 8"r"6y ran*for8". o
9";o8" !" PNP, 8+nu* of ;our*" +* 8+6+ary ;!ara;"r an. ;o8/6"B+on.
E,"n !" /"++on"r*A "Mor a .+*;6o*+n> !" 6">+*6a+," +n"n 9"!+n. !" "na;8"n
of R.$. No. 4515 ;anno *u//or !"+r !"ory of a9o6++on. Ra!"r, !" S"na" an.
Hou*" ."6+9"ra+on* on !" 9+66 !a ","nua66y 9";a8" R.$. No. 4515 r","a6 :!a !a*
;orr";6y 9""n !"6. 9y !" C$ +n +* a**a+6". .";+*+on2 !a !" PNP :a* /r";+*"6y
;r"a". o "ra*" !" *+>8a */a:n". 9y !" 8+6+ar+Qa+on of !" /o6+;" for;" un."r
!" PC&#NP *ru;ur". T!" ra+ona6" 9"!+n. !" /a**a>" of R.$. No. 4515 :a*
a."?ua"6y ar+;u6a". 9y no 6"** !an !" */on*or14 of !" ;orr"*/on.+n> Hou*" 9+66
+n !+* */on*or*!+/ */"";!, !u*2
-y r"8o,+n> !" /o6+;" for;" fro8 un."r !" ;onro6 an. *u/"r,+*+on of 8+6+ary
oF;"r*, !" 9+66 *""D* o r"*or" an. un."r*;or" !" ;+,+6+an ;!ara;"r of /o6+;" :orD
& an o!"r:+*" un+,"r*a6 ;on;"/ !a :a* 8u..6". u/ 9y !" 8ar+a6 6a: y"ar*.
#n.""., :"r" !" 6">+*6a+," +n"n :a* for !" #NPA* a9o6++on *u;! !a no!+n>
:ou6. 9" 6"f of +, !" :or. Ka9o6+*!K or :!a /a**"* for + ;ou6. !a," "a*+6y foun. +*
:ay +no !" ,"ry "B of !" 6a: +*"6f, :!a :+! !" a9un.an u*" of !" :or.
.ur+n> !" 6">+*6a+," ."6+9"ra+on*. -u a* ;an 9" >6"an". fro8 *a+. ."6+9"ra+on*,
!" 6a:8aD"r*A ;on;"rn ;"n"r". on !" fa; !a +f !" "n+r" PC&#NP ;or/* @o+n !"
PNP, !"n !" PC&#NP :+66 n";"**ar+6y 9" a9o6+*!"., for :!o !"n :ou6. 9" +*
8"89"r*Y Of 8or" ;on*"?u"n;", !" 6a:8aD"r* :"r" on" +n *ay+n> !a !"r" *!ou6.
n","r 9" :o na+ona6 /o6+;" a>"n;+"* a !" *a8" +8".
(+! !" ;on;6u*+on !"r"+n r"a;!". !a !" #NP :a* no +n fa; a9o6+*!". 9u :a*
8"r"6y ran*for8". o 9";o8" !" PNP, 8"89"r* of !" #NP :!+;! +n;6u." !" !"r"+n
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/ro,+*+on* of *";+on* 2, 0a, 09, 5, an. 4 of !+* r"*o6u+on, !" *!a66, a !+* o/+on,
r";"+," a >rau+y "?u+,a6"n V an. 6on>",+y /ay VI Pro,+."., T!a *u;! r"+r"8"n
/ay *!a66 9" *u9@"; o a.@u*8"n on !" /r",a+6+n> *;a6" of 9a*" /ay of /o6+;"
/"r*onn"6 +n !" a;+," *"r,+;"I Pro,+."., )ur!"r8or", T!a :!"n !" r"+r"*, !" *!a66
9" "n+6". a !+* o/+on, o r";"+," +n a.,an;" an. +n 6u8/ *u8 !+* annua6 r"+r"8"n
/ay for !" Cr* !r"" G0H y"ar* an. !"r"af"r r";"+," !+* annua6 r"+r"8"n /ay
/aya96" +n "?ua6 8on!6y +n*a668"n a* !"y a;;ru"I Pro,+."., )+na66y, !a +f !" .+"*
:+!+n !" !r""&y"ar /"r+o. fo66o:+n> !+* r"+r"8"n an. +* *ur,+,". 9y 9"n"C;+ar+"*
a* ."Cn". +n !+* r"*o6u+on, !" 6a"r *!a66 on6y r";"+," !" ."r+,a+," 9"n"C*
!"r"un."r *ar+n> !" Cr* 8o!"r af"r !" afor";+". !r""&y"ar /"r+o.. No!+n>
on !+* S";+on *!a66 9" ;on*ru". a* au!or+Q+n> /ay8"n of any .+M"r"n+a6 +n
r"+r"8"n /ay o oF;"r* an. non&oF;"r* :!o ar" a6r"a.y r"+r". /r+or o !"
"M";+,+y of R$ 4515. #.. a 155.
22 #n fu66, !+* *";+on r"a.*2 S";. 08. Ra+ona6+Qa+on of R"+r"8"n an. S"/ara+on
-"n"C*. R T!" Co88+**+on *!a66 for8u6a" a ra+ona6+Q". r"+r"8"n an. *"/ara+on
9"n"C* *;!".u6" an. /ro>ra8 :+!+n on" G1H y"ar fro8 !" "M";+,+y of !+* $; for
a//ro,a6 9y ;on>r"**2 Pro,+."., T!a !" a//ro,". *;!".u6" an. /ro>ra8 *!a66 !a,"
r"roa;+," "M"; +n fa,or of PNP 8"89"r* an. oF;"r* r"+r". or *"/ara". fro8 !"
+8" */";+C". +n !" 6a:, un6"** !" r"+r"8"n or *"/ara+on +* for ;au*" an. !"
.";+*+on ."n+"* !" >ran of 9"n"C*.
20 Ro66o, /. 155.
24 $r+;6" J%#, S";+on 8, P!+6. Con*+u+on.
25 R"/u96+; $; No. 1402, S";+on 4.
24 R"?u"* of C6"rD of Cour T"**+" L. Ga8a+an for Pay8"n of R"+r"8"n -"n"C*
of Hon. $**o;+a" Ju*+;" Jor>" S. #8/"r+a6, $.M. No. 5111&R"., $u>u* 24, 1555, 010
SCR$ 104, 140.
21 G.R. No. 124511, $/r+6 00, 2000, 402 SCR$ 154.
28 #.. a 201, ;++n> %+*ayan Pa;D+n> Cor/ora+on ,. R"/ara+on* Co88+**+on, No. L&
25410, No,"89"r 12, 1581, 155 SCR$ 542, 544.
25 G.R. No. L&28108, $u>u* 10, 1584, 140 SCR$ 404, 408&405.
THIRD DIVISION
G.R. No. 155022 )"9ruary 20, 2005
Mayor EDG$RDO G. )LORES, petitioner
vs.
S$NGGUN#$NG P$NL$L$(#G$N O) P$MP$NG$, GO%ERNOR M$NUEL M. L$P#D O) P$MP$NG$,
MUN#C#P$L COUNC#LORS %$N'$LON ). T#'ON, ROMULO N. M$ND$P, EDG$RDO P. 3$M-$O,
JEROME M. TONGOL, M$RC#$NO L. S$CD$L$N, an. R#C73 3. N$RC#SO, respondents.
D ! I S I O N
S$NDO%$L&GUT#ERRE', J.:
Dor our resolution is the petition for revie# on certiorari assailin' the Decision
(
of the !ourt of )ppeals
dated Debruar% (G, -<<., in !),&.R. SP No. G-+6/ and its Resolution
-
dated 3une -G, -<<..
On Dece0ber (+, -<<(, an ad0inistrative co0plaint for dishonest% and 'ross 0isconduct a'ainst then
Ma%or d'ardo &. Dlores of Minalin, Pa0pan'a, petitioner, #as $led #ith the .angg,niang Panlalawigan of
the sa0e province, one of the respondents herein. The co0plainants #ere the 0unicipal councilors of
Minalin, na0el%2 Van;alon D. Ti;on, Ro0ulo N. Mandap, d'ardo P. ?a0bao, 3ero0e M. Ton'ol, Marciano @.
Sacdalan, and Ric1% ?. Narciso, no# respondents.
The ad0inistrative co0plaint a'ainst petitioner alle'ed that on )u'ust (, -<<(, he e=ecuted Purchase
ReCuest No. ( for the acCuisition of a co00unication eCuip0ent a0ountin' to P-+.,<<<.<< #ithout an%
Resolution or Ordinance enacted b% the .angg,niang 5ayan of Minalin. The #innin' bidder #as one Qai
lectronics. On )u'ust 7, -<<(, or #hile the biddin' #as still bein' conducted, Qai lectronics delivered the
co00unication eCuip0ent to the 0unicipalit% of Minalin. The Notice of )#ard of "id to Qai lectronics
states that the biddin' too1 place also on )u'ust (, -<<( #hen respondent e=ecuted the Purchase ReCuest
No. (. The co00unication eCuip0ent delivered b% Qai lectronics #as overpriced b% 0ore than one
hundred percent 4(<<Y5 or in the a0ount of P(-+,7<<.<<.
On Septe0ber +, -<<-, respondent .angg,niang Panlalawigan issued an Order reco00endin' to &overnor
Manuel M. @apid of Pa0pan'a, also a respondent, that petitioner be preventivel% suspended fro0 oFce for
a period of si=t% 47<5 da%s.
Aithout see1in' a reconsideration of the Order of respondent .angg,niang Panlalawigan, petitioner sent a
letter dated Septe0ber (-, -<<- to respondent &overnor @apid reCuestin' hi0 8to veto8 the sa0e.
)lso, #ithout #aitin' for respondent &overnor @apid:s action on his letter, petitioner, on Septe0ber -*,
-<<-, $led #ith the !ourt of )ppeals a petition for certiorari,
.
doc1eted as !),&.R. SP No. G-+6/. He
contended that respondent .angg,niang Panlalawigan acted #ith 'rave abuse of discretion in issuin' the
Order of preventive suspension, hence, the sa0e should be nulli$ed.1awphi1.nt
On Debruar% (G, -<<., the !ourt of )ppeals rendered its Decision, the dispositive portion of #hich reads2
8AHRDOR, the instant petition is DNID and DISMISSD for lac1 of 0erit. The assailed Order dated
Septe0ber +, -<<- issued b% respondent .angg,niang Panlalawigan of Pa0pan'a in )d0inistrative !ase
No. <-,-<<( is )DDIRMD.
SO ORDRD.8
*
In rulin' a'ainst the petitioner, the !ourt of )ppeals held that !" fa+6". o "B!au* a66 a.8+n+*ra+,"
r"8".+"* 9"for" >o+n> o ;our. Moreover, respondent .angg,niang Panlalawigan of Pa0pan'a did not
'ravel% abuse its discretion #hen it issued the challen'ed Order considerin' that the alle'ation of
overpricin' is supported b% docu0entar% evidence. There is also suFcient evidence to prove that the
biddin' and the a#ardin' of the contract to Qai lectronics #ere done under Cuestionable circu0stances.
Petitioner then $led a 0otion for reconsideration, but this #as denied b% the )ppellate !ourt in its
Resolution dated 3une -G, -<<..
Hence, the instant petition.
The pivotal issue here is #hether the !ourt of )ppeals erred in holdin' that the petition in !),&.R. SP No.
G-+6/ #as pre0aturel% $led as petitioner failed to e=haust $rst all ad0inistrative re0edies.
Section 7( of Republic )ct No. G(7< 4the @ocal &overn0ent !ode of (++(5 partl% provides2
8S!. 7(. Form and Filing of #dministrative "omplaints. H ) veri$ed co0plaint a'ainst an% errin' local
elective oFcial shall be prepared as follo#s2
= = =>
4b5 ) co0plaint a'ainst any "6";+," oF;+a6 of a 8un+;+/a6+y shall be C6". 9"for"
!" Sangg&niang Panlala(igan #hose decision 0a% be appealed to the OFce of the President>
and
= = =.8 4underscorin' ours5
The ad0inistrative co0plaint a'ainst petitioner #as $led #ith respondent .angg,niang Panlalawigan of
Pa0pan'a in accordance #ith the above provision. )fter receivin' the Order of respondent .angg,niang
Panlalawigan preventivel% suspendin' hi0 fro0 oFce, petitioner should have $led a 0otion for
reconsideration in order to 'ive the latter the opportunit% to correct itself if there #as an% error on its part.
Such 0otion is a condition sine D,a non before $lin' a petition for certiorari under Rule 76 of the (++G
Rules of !ivil Procedure, as a0ended.
6
Section ( of the sa0e Rule reCuires that petitioner 0ust not onl%
sho# that respondent .angg,niang Panlalawigan, in issuin' the Cuestioned Order, 8acted #ithout or in
e=cess of its 9urisdiction, or #ith 'rave abuse of discretion a0ountin' to lac1 or e=cess of 9urisdiction,8 but
that 8there is no appeal, nor an% plain, speed%, and adeCuate re0ed% in the ordinar% course of la#.8
7
Ae
have held that the 8plain8 and 8adeCuate re0ed%8 referred to in Section ( of Rule 76 is a 8o+on for
r";on*+."ra+on of the assailed Order or Resolution.
G
Petitioner 0a% not arro'ate to hi0self the
deter0ination of #hether a 0otion for reconsideration is necessar% or not.
/
To dispense #ith the
reCuire0ent of $lin' a 0otion for reconsideration, petitioner 0ust sho# a concrete, co0pellin', and valid
reason for doin' so.
+
This, petitioner failed to do. Thus, the !ourt of )ppeals correctl% held that petitioner
should have $rst interposed a 0otion for reconsideration of the Cuestioned Order issued b%
respondent .angg,niang Panlalawigan.
Ae 0ust add that petitioner, before $lin' #ith the !ourt of )ppeals his petition for certiorari, should have
#aited for respondent &overnor @apid:s action on the reco00endation of respondent .angg,niang
Panlalawigan that he be preventivel% suspended fro0 oFce> and on his letter reCuestin' the &overnor to
veto the Cuestioned Order, considerin' that the latter is the one e0po#ered b% la# to i0pose preventive
suspension upon hi0.l^vvphi1.net Section 7. of the @ocal &overn0ent !ode of (++( partl%
provides21awphi1.nt
8S! 7.. Preventive .,spension. H
4a5 Pr","n+," *u*/"n*+on 8ay 9" +8/o*".2
4(5 "% the President, if the respondent is an elective oFcial of a province, a hi'hl% urbani;ed
or an independent co0ponent cit%>
4-5 -y !" >o,"rnor, +f !" r"*/on."n +* an "6";+," oF;+a6 of a co0ponent cit%
or 8un+;+/a6+y> or
4.5 "% the 0a%or, if the respondent is an elective oFcial of the 3arangay.
= = =.8 4underscorin' ours5
Petitioner has not sho#n an% valid and co0pellin' reason #h%, #ithout #aitin' for the &overnor:s action
on the 0atter, he i00ediatel% $led #ith the !ourt of )ppeals a petition for certiorari. "% doin' so,
petitioner eEectivel% deprived the &overnor of his dut% to ta1e appropriate action on the controvers%.
It is a #ell,settled rule that #here, as here, the petitioner has available re0edies #ithin the ad0inistrative
0achiner% a'ainst the action of an ad0inistrative board, bod%, or oFcer, the intervention of the courts can
be resorted to b% hi0 onl% after havin' e=hausted all such re0edies.
(<
The rationale of this rule rests upon
the presu0ption that the ad0inistrative bod%, if 'iven the chance to correct its 0ista1e or error, 0a%
a0end its decision on a 'iven 0atter and decide it properl%. The strict application of the doctrine of
e=haustion of ad0inistrative re0edies #ill also prevent unnecessar% and pre0ature resort to the
court.
((
Ae cannot countenance petitioner:s utter disre'ard of this procedural nor0 and frustrate its
purpose of attainin' a 9ust, speed%, ine=pensive and orderl% 9udicial proceedin's.
Ae li1e#ise $nd untenable petitioner:s contention that respondent .angg,niang Panlalawigan 8acted
capriciousl% and arbitraril% b% reason of passion and personal hostilit%8 #hen it issued the challen'ed
Order 8#ithout constitutin' itself into a !o00ittee of the Ahole, as reCuired b% its rules of procedure, = = =
and #ithout a !o00ittee Report havin' been prepared %et = = =.8
(-
SuFce it to sa% that this issue involves
an e=a0ination of factual 0atters and could have been properl% raised b% petitioner in a 0otion for
reconsideration of the Cuestioned Order before the .angg,niang Panlalawigan of Pa0pan'a, the proper
foru0. "ut he did not do so. He thus forfeited such an i0portant procedural re0ed%.
(HERE)ORE, the petition is DNID. The appealed Decision dated Debruar% (G, -<<. and Resolution
dated 3une -G, -<<. of the !ourt of )ppeals in !),&.R. SP No. G-+6/ are )DDIRMD. !osts a'ainst
petitioner.
SO ORDRD.
Pan'aniban, 4!hair0an5, !orona, !arpio,Morales, and &arcia, 33., concur.
)oono"*
(
Per )ssociate 3ustice "ernardo P. )besa0is 4retired5 and concurred in b% 3ustices 3uan P. nriCue;,
3r., and d'ardo D. Sundia0>Rollo, -7,.6.
-
Rollo at ./.
.
Diled under Rule 76 of the (++G Rules of !ivil Procedure, as a0ended.
*
Rollo at .6.
6
6a, vs. 1anila 5an8ing "orporation! %.R. 'o. 1+*)G1, 3ul% ((, -<<-, ./* S!R) .*<> Rep,3lic vs.
;>press <elecomm,nication "o.! Inc.! %.R. 'o. 10)I/*, 3anuar% (6, -<<-, .G. S!R) .(7> =ee vs.
People! %.R. 'o. 1G)/10, Dece0ber *, -<<-, .+. S!R) .+G.
7
4nion of 'estle 7or8ers "agayan de Aro Factory vs. 'estle Philippines! Inc.! %.R. 'o. 10HGIG,
October (G, -<<-, .+( S!R) -<*.
G
1etro <ransit Argani:ation! Inc. vs. "o,rt of #ppeals! %.R. 'o. 10+1GG, Nove0ber (+, -<<-, .+-
S!R) --+.
/
Id.
+
Id.
(<
=ope: vs. "ity of 1anila! %.R. 'o. 1+)1G/, Debruar% (+, (+++, .<. S!R) **/.
((
Id., citin' "r,: vs. -el Rosario, + S!R) G66 4(+7.5> ao Igco vs. .h,ster, (< Phil. **/
4(+</5> =am3 vs. Phipps, -- Phil. *67 4(+(-5> 1ig,el vs. Reyes, &.R. No. @,*/6(, 3ul% .(,
(+6.> #rnedo vs. #ldanese, 7. Phil. G7/ 4(+.75> <,an Tay vs. Import "ontrol "ommission, &.R. No.
@,**-G, )pril .(, (+6-> &eloso vs. 5oard of #cco,ntancy, &.R. No. @,6G7<, )pril -<, (+6.> =,3,gan!
et al. vs. "astrillo and 1alinay, &.R. No. @,(<6-(, Ma% -+, (+6G.
(-
Petition, Rollo at (+.
THIRD DIVISION
G.R. No. 105458 Jun" 21, 2005
PO0 (#LL#$M M. MENDO'$, petitioner,
vs.
N$T#ON$L POL#CE COMM#SS#ON, REG#ON$L $PPELL$TE -O$RD an. THE D#STR#CT D#RECTOR,
SOUTHERN POL#CE D#STR#CT, PH#L#PP#NE N$T#ON$L POL#CE, respondents.
D ! I S I O N
S$NDO%$L&GUT#ERRE', J.:
"efore us for resolution is a petition for revie# on certiorari
(
assailin' the Decision
-
dated )u'ust (-, (+++
of the !ourt of )ppeals in !),&.R. SP No. *7./G, entitled 8<he 'ational Police "ommission E'#PA="A1F
Regional #ppellate 5oard ER#5F and -istrict -irector! .o,thern Police -istrict! Philippine 'ational Police
EP'PF! Petitioners! vers,s ?on. Fernando 5. %orospe! Presiding ,dge! Regional <rial "o,rt of 1a8ati "ity!
5ranch *1! and PAG 7illiam 1. 1endo:a! Respondents.8
This case ste00ed fro0 the aFdavit,co0plaint for ille'al arrest, ille'al detention, ph%sical in9uries, and
robber% $led b% Teodoro V. !onti a'ainst PO. Aillia0 M. Mendo;a, no# petitioner, and PO- )n'elita
Ra0os. "oth #ere 0e0bers of the Philippine National Police 4PNP5.
On the basis of the co0plaint, PM!hief Superintendent Orlando H. Macaspac, then District Director of the
PNP Southern Police District OFce 4SPDO5, National !apital Re'ion, ad0inistrativel% char'ed petitioner and
PO- Ra0os #ith 'rave 0isconduct Cuoted as follo#s2
8That on or about -2.< a.0., -( Debruar% (++., inside the HI,PIT!H Disco !lub located at Ro=as "oulevard,
Pasa% !it%, t#o 4-5 above,na0ed respondents forcibl% arrested one Teodoro !onti % Viceran, Dloor Mana'er
of Ni11o:s Music @oun'e and at 'unpoint brou'ht the victi0 to the OFce of the District Special Operations
Bnit 4DSOB5. Ahile inside said OFce, PO- R)MOS ordered the victi0 to re0ove his 'old nec1lace, then
forced hi0 to s#allo# it. Ahen the victi0 resisted, PO- R)MOS struc1 hi0 #ith the butt of the 'un and
subseCuentl% inserted the barrel of the 'un to the 0outh of the victi0. Thereafter, both the above,na0ed
respondents 0auled the victi0, thereb% inTictin' 0ultiple in9uries on the face of the latter. Durther0ore,
the respondents placed the victi0 inside a detention cell and too1 his 0one% a0ountin' to NIN HBNDRD
SVNT? PSOS 4P+G<.<<5, includin' three 4.5 pieces of 9e#elr%2 'old nec1lace, #rist #atch, and 'old
bracelet.8
Petitioner and PO- Ra0os sub0itted their 9oint,aFdavit den%in' the char'e.
On )pril (6, (++., after conductin' a su00ar% proceedin', PNP Re'ional Director Oscar T. )Cuino
rendered a Decision $ndin' the t#o police0en 'uilt% as char'ed and orderin' their dis0issal fro0 the
service.
!lai0in' that the% #ere denied due process, the t#o police oFcers interposed an appeal to the Re'ional
)ppellate "oard 4R)"5 of the National Police !o00ission 4N)PO@!OM5, National !apital Re'ion.
On )u'ust -., (++., the R)" rendered its Decision aFr0in' the Decision of the PNP Re'ional Director.
Petitioner then $led a 0otion for reconsideration on the 'round that he 8#as not able to participate in the
clari$cator% hearin'.8 Ho#ever, the R)", in its Resolution dated Dece0ber (G, (++., denied his 0otion for
lac1 of 0erit.
Thereafter, petitioner $led #ith the Re'ional Trial !ourt 4RT!5, "ranch 7(, Ma1ati !it% a petition
for certiorari, doc1eted as Special !ivil !ase No. +7,<G*. In his petition, he alle'ed that he #as denied due
process and pra%ed that the R)" Decision dated )u'ust -., (++. and Resolution dated Dece0ber (G,
(++. be annulled.
The R)", throu'h the OFce of the Solicitor &eneral 4OS&5, $led a 0otion to dis0iss the petition,
contendin' that petitioner failed to e=haust all ad0inistrative re0edies> that before see1in' 9udicial
intervention, he should have $rst appealed the R)" Decision to the Secretar% of the Depart0ent of the
Interior and @ocal &overn0ent 4DI@&5, then to the !ivil Service !o00ission 4!S!5> and that contrar% to
petitioner:s clai0, he #as accorded due process durin' the ad0inistrative proceedin's before the R)".
In its Order dated )pril -(, (++G, the RT! denied petitioner:s 0otion to dis0iss for lac1 of 0erit, holdin'
that 8as an e=ception to the rule on non,e=haustion of ad0inistrative re0edies, a part% 0a% 'o directl% to
the court #here = = = the controverted acts #ere alle'edl% perfor0ed #ithout or in e=cess of 9urisdiction
for utter disre'ard of due process.8
.
The R)" $led a 0otion for reconsideration but #as denied b% the RT! in an Order dated Septe0ber -7,
(++G.
Thereafter, the R)", a'ain assisted b% the OS&, $led #ith the !ourt of )ppeals a petition
for certiorari
*
alle'in' that the RT!, in den%in' the 0otion to dis0iss, co00itted 'rave abuse of discretion
a0ountin' to lac1 or in e=cess of 9urisdiction. Despite due notice, herein petitioner did not $le his co00ent
thereon.
In its Decision, the !ourt of )ppeals 'ranted the petition and dis0issed Special !ivil )ction No. +7,<G* $led
#ith the RT!.
Aithout $lin' a 0otion for reconsideration, petitioner $led #ith this !ourt the instant petition for revie#
oncertiorari.
Petitioner contends that the !ourt of )ppeals, in renderin' its challen'ed Decision, 8co00itted 'rave error
of la#8 in dis0issin' Special !ivil )ction No. +7,<G* on the 'round that he failed to e=haust all
ad0inistrative re0edies.
The petition 0ust fail.
It is si'ni$cant to note that petitioner, as stated earlier, did not $le his co00ent on the R)":s petition
for certioraribefore the !ourt of )ppeals. )nd #hen the said court rendered the assailed Decision 'rantin'
the petition and dis0issin' petitioner:s petition in Special !ivil )ction No. +7,<G*, he a'ain did not
interpose a 0otion for reconsideration thereof. He did not even e=plain #h% he failed to do so. !ertainl%,
this is not the nor0al actuation of a part% #ho clai0s so a''rieved b% an adverse court decision. Such
o0issions b% petitioner indicate that his cause lac1s 0erit and his appeal is frivolous.
The i0portance of a 0otion for reconsideration cannot be overe0phasi;ed. Ae have held that such 0otion
is a 8plain,8 8speed%,8 and 8adeCuate re0ed%8 in the ordinar% course of 9udicial proceedin's.
6
The $lin' of a
0otion for reconsideration #ill 'ive the court the opportunit% to either 4a5 correct the errorMs i0puted to it
or 4b5 clarif% and stren'thened its rulin' on the issue and hopefull% convince the 0ovant of his #ron'
position. In either case, the controvers% ends ri'ht there, thus preventin' unnecessar% and pre0ature
resort to appellate proceedin's.
7
!onseCuentl%, #e cannot countenance petitioner:s disre'ard of this
procedural nor0 and frustrate its purpose of attainin' speed%, ine=pensive, and orderl% 9udicial
proceedin's.
!o0in' no# to the 0erits of the case, Section *6 of Republic )ct No. 7+G6, other#ise 1no#n as 8The
Depart0ent of the Interior and @ocal &overn0ent )ct of (++<,8 provides2
8S!. *6. Finality of -isciplinary #ction. H The disciplinar% action i0posed upon a 0e0ber of the PNP shall
be $nal and e=ecutor%> Provided, <hat a .+*;+/6+nary a;+on +8/o*". 9y !" R">+ona6 D+r";or or b%
the P@"+n,o6,+n> de0otion or .+*8+**a6 fro8 !" *"r,+;" 8ay 9" a//"a6". o !" R">+ona6
$//"66a" -oar.#ithin ten 4(<5 da%s fro0 receipt of the cop% of the notice of decision2 Provided! f,rther!
<hat the disciplinar% action i0posed b% the !hief of the PNP involvin' de0otion or dis0issal 0a% be
appealed to the National )ppellate "oard #ithin ten 4(<5 da%s fro0 receipt thereof2 Provided! f,rthermore!
<hat, the Re'ional or National )ppellate "oard, as the case 0a% be, shall decide the appeal #ithin si=t%
47<5 da%s fro0 receipt of the notice of appeal2 Provided! fnally, <hat failure of the Re'ional )ppellate
"oard to act on the appeal #ithin said period shall render the decision $nal and e=ecutor% :+!ou
/r"@u.+;", !o:","r, o !" C6+n> of an a//"a6 9y "+!"r /ary :+! !" S";r"ary.8 4Bnderscorin'
supplied5
It is clear fro0 the above provisions that the Decision of the PNP Re'ional Director i0posin' upon a PNP
0e0ber the ad0inistrative penalt% of dis0issal fro0 the service is appealable to the R)". Dro0 the R)"
Decision, the a''rieved part% 0a% then appeal to the Secretar% of the DI@&.
Here, petitioner did not interpose an appeal to the DI@& Secretar%.
It bears e0phasis that in the event the Secretar% renders an unfavorable decision, petitioner 0a% still
elevate his case to the !ivil Service !o00ission.
Section 7, )rticle SVI of the !onstitution provides that the State shall establish and 0aintain one police
force #hich shall be civilian in character. !onseCuentl%, the PNP falls under the civil service pursuant to
Section -4(5, )rticle IS,", also of the !onstitution, #hich states2
8Section -. 4(5. The civil service e0braces all branches, subdivisions, instru0entalities and a'encies of the
&overn0ent, includin' 'overn0ent,o#ned or controlled corporations #ith ori'inal charters.8
!orollaril%, Section +( of the DI@& )ct of (++< provides2
8S!. +(. #pplication of "ivil .ervice =aws. H The !ivil Service @a# and its i0ple0entin' rules and
re'ulations shall appl% to all personnel of the Depart0ent KDI@&L.8
Section *G of the !ivil Service @a#
G
provides inter alia that in cases #here the decision rendered b% a
bureau or oFce is appealable to the !ivil Service !o00ission, !" *a8" 8ay +n++a66y 9" a//"a6". o
!" D"/ar8"n an. Cna66y o !" Co88+**+on.
Petitioner:s failure to e=haust all ad0inistrative re0edies is fatal to his cause. It is ele0entar% that #here,
as here, a re0ed% is available #ithin the ad0inistrative 0achiner%, this should $rst be resorted to.
/
Ae thus $nd that the !ourt of )ppeals, in its assailed Decision, did not co00it a reversible error.
(HERE)ORE, the instant petition for revie# on certiorari is hereb% DNID. The challen'ed Decision
dated )u'ust (-, (+++ of the !ourt of )ppeals in !),&.R. SP No. *7./G is )DDIRMD. !osts a'ainst
petitioner.
SO ORDRD.
Pan'aniban, 4!hair0an5, !orona, !arpio,Morales, and &arcia, 33., concur.
)oono"*
(
Diled under Rule *6, (++G Rules of !ivil Procedure, as a0ended.
-
Penned b% ustice )rte0on D. @una and concurred in b% ustice "ernardo P. )besa0is and ustice
!andido V. Rivera, all retired.
.
Rollo at (+,-<.
*
Doc1eted as !),&.R. SP No. *7./G.
6
See 1etro <ransit Argani:ation! Inc. vs. "o,rt of #ppeals! %.R. 'o. 10+1GG, Nove0ber (+, -<<-,
.+- S!R) --+> 1ayor ;dgardo %. Flores vs. .angg,niang Panlalawigan of Pampanga! et al.! %.R.
'o. 1(/I++, Debraur% -(, -<<6.
7
6a, vs. 1anila 5an8ing "orporation! %.R. 'o. 1+*)G1, 3ul% ((, -<<-, ./* S!R) .*<.
G
"oo1 V 4Subtitle )5, )d0inistrative !ode of (+/G.
/
=ope: vs. "ity of 1anila! %.R. 'o. 1+)1G/, Debruar% (+, (+++> #D,ino vs. 1ariano, &.R. No. @,
.<*/6, Ma% .(, (+/*.
G.R. No. 141154 Jun" 15, 2005
REPU-L#C O) THE PH#L#PP#NES, R"/r"*"n". 9y THE PRES#DENT#$L COMM#SS#ON ON GOOD
GO%ERNMENT, petitioner,
vs.
S$ND#G$N-$3$N G4! D+,+*+onH an. POTENC#$NO T. #LUSOR#O, Su9*+u". 9y Ma. Er6+n.a
#6u*or+o -+6.n"r, respondents.
= , , , , , , , , , , , , , , , , , , , , , , ,=
G.R. No. 141804 Jun" 15, 2005
#NDEPENDENT RE$LT3 CORPOR$T#ON an. M#D&P$S#G L$ND DE%ELOPMENT
CORPOR$T#ON, petitioners,
vs.
S$ND#G$N-$3$N G4! D+,+*+onH an. POTENC#$NO T. #LUSOR#O, Su9*+u". 9y Ma. Er6+n.a
#6u*or+o -+6.n"r, respondents.
D ! I S I O N
S$NDO%$L&GUT#ERRE', J.:
"efore us for resolution are t#o 4-5 consolidated petitions for certiorari
(
assailin' the Resolution
-
dated
Dece0ber -<, (+++ of the Sandi'anba%an in !ivil !ase No. <<<+, entitled 8Rep,3lic of the Philippines!
plaintiN! vers,s ose =. #frica! 1an,el ?. 'ieto! r.! Ferdinand ;. 1arcos! Imelda R. 1arcos! Ferdinand R.
1arcos! r.! Ro3erto .. 5enedicto! ,an Ponce ;nrile! and Potenciano Il,sorio.8 The Resolution denied the
above,na0ed petitioners: separate 0otions to vacate the Sandi'anba%an:s Order dated 3une /, (++/
approvin' the !o0pro0ise )'ree0ent entered into bet#een the Presidential !o00ission on &ood
&overn0ent 4P!&&5 and Potenciano Ilusorio.
The antecedent facts are as follo#s2
I00ediatel% after the people po#er revolution on Debruar% -6, (+/7 at DS), then President !ora;on !.
)Cuino issued =ecutive Order No. ( dated Debruar% -/, (+/7 creatin' the Presidential !o00ission on
&ood &overn0ent 4P!&&5. The tas1 of the P!&& is to 8assist the President in ] the recover% of all ill,
'otten #ealth accu0ulated b% for0er President Derdinand . Marcos, his i00ediate fa0il%, relatives,
subordinates and close associates, #hether located in the Philippines or abroad, includin' the ta1eover or
seCuestration of all business enterprises and entities o#ned or controlled b% the0 durin' his
ad0inistration, directl% or throu'h no0inees, b% ta1in' undue advanta'e of their public oFce andMor usin'
their po#ers, authorit%, inTuence, connections or relationships.8
.
SubseCuentl%, 3ose ?. !a0pos, 8a confessed cron% of for0er President Derdinand . Marcos,8 voluntaril%
surrendered or turned over to the P!&& the properties, assets and corporations he held in trust for the
deposed President. )0on' the corporations he surrendered #ere the Independent Realt% !orporation and
the Mid,Pasi' @and Develop0ent !orporation, no# petitioners in &.R. No. (*(/<*.
On 3ul% --, (+/G, the Republic of the Philippines 4no# petitioner in &.R. No. (*(G+75, represented b% the
P!&& and assisted b% the Solicitor &eneral, $led #ith the Sandi'anba%an a co0plaint
*
for 8reconve%ance,
reversion, accountin', restitution and da0a'es,8 doc1eted as S" !ivil !ase No. <<<+. I0pleaded as
defendants #ere 3ose @. )frica, Manuel H. Nieto, 3r., for0er President Derdinand . Marcos, for0er Dirst @ad%
I0elda R. Marcos, Derdinand R. Marcos, 3r., Roberto S. "enedicto, 3uan Ponce nrile and the late Potenciano
Ilusorio 4no# respondent5.
The co0plaint alle'ed inter alia that the defendants 8acted in collaboration #ith each other as du00ies,
no0inees andMor a'ents of defendants Derdinand . Marcos, I0elda R. Marcos and Derdinand R. Marcos, 3r.
in several corporations, such as the Mid,Pasi' @and Develop0ent !orporation 4M@D!5 and Independent
Realt% !orporation 4IR!5 #hich, throu'h 0anipulations b% said defendants, appropriated a substantial
portion of the shareholdin's in Philippine Overseas Teleco00unications !orporation 4POT!5HPhilippine
!o00unications Satellite !orporation 4PHI@!OMS)T5 held b% the late Honorio Poblador, 3r., 3ose Valde; and
Drancisco Re%es, thereb% further advancin' defendants: sche0e to 0onopoli;e the teleco00unications
industr%.8
6
Throu'h their ille'al acts, the defendants acCuired ill,'otten #ealth. Their acts constitute
8breach of public trust and the la#, abuse of ri'hts and po#er, and un9ust enrich0ent.8 Their ill,'otten
#ealth, real and personal, 8are dee0ed to have been acCuired 4b% the05 for the bene$t of the plaintiE
4Republic5 and are, therefore, i0pressed #ith constructive trust in favor of 4the latter5 and the Dilipino
people.8
7
The co0plaint thus pra%ed for 4a5 the reconve%anceMreversion to the Republic of all the funds,
properties and assets ille'all% acCuired b% the defendants, or their eCuivalent value> 4b5 accountin'> and
4c5 da0a'es.
Traversin' the co0plaint, respondent Potenciano Ilusorio, in his #mended #nswer with "ross$"laim
Eagainst the 1arcosesF and <hird$Party "omplaint Eagainst 1=-" and IR"F, denied that he acCuired ill,
'otten #ealth and un9ustl% enriched hi0self b% conspirin' #ith an% of the defendants in co00ittin' a
breach of public trust or abuse of ri'ht or po#er, since 8he has never held an% public oFce nor has he
been a 'overn0ent e0plo%ee.8 He further denied bein' a du00% or a'ent of the Marcoses. He interposed
the aFr0ative defense that he o#ned 6,*<< POT! shares of stoc1, havin' acCuired the0 throu'h his
honest toil. Ho#ever, 8he incurred the ire of I0elda Marcos,8 hence, the Marcos spouses too1 fro0 hi0 the
said shares throu'h threats and inti0idation, #ithout an% valuable consideration, and placed the0 in the
na0es of their alter e'os, na0el%2 the IR! H .,7** shares> the M@D! H (,G66 shares> and Derdinand Marcos,
3r. H ( share. He thus beca0e 8the hapless victi0 of in9ustice.8 He pra%ed that the said shares be returned
to hi0, to'ether #ith their correspondin' dividends.
Dor failure to ans#er respondent Ilusorio:s third,part% co0plaint, despite notice, the Sandi'anba%an
declared petitioner M@D! in default.
G
Its 0otion to lift the order of default #as denied.
Dor its part, petitioner IR! $led its ans#er
/
to the third,part% co0plaint, ad0ittin' inter alia that it is 8no#
o#ned b% the &overn0ent8 after it #as turned over to the latter b% 3ose ?. !a0pos> and that 8the .,7**
POT! shares of stoc1 under the na0e of Independent Realt% !orporation is part and parcel of the ill,'otten
#ealth of the deposed President Marcos and his fa0il%, #hich #ere acCuired durin' his incu0benc% under
the circu0stances alle'ed in the plaintiE:s co0plaint.8 "ein' no lon'er the o#ner of said shares, petitioner
IR! pra%ed for the dis0issal of the third,part% co0plaint for lac1 of cause of action.
+
On 3une -/, (++7, the P!&&, actin' in behalf of petitioners Republic, IR! and M@D!, entered into a
!o0pro0ise )'ree0ent #ith respondent Ilusorio.
(<
The a'ree0ent #as later approved b% then President
Didel V. Ra0os. In a 0ar'inal note dated October 6, (++7, he directed its sub0ission to the Sandi'anba%an
for approval.
((
The pertinent portions of the !o0pro0ise )'ree0ent read2
8AHR)S, this !o0pro0ise )'ree0ent covers the full, co0prehensive and $nal settle0ent of the clai0s
of the &OVRNMNT a'ainst I@BSORIO in !ivil !ase No. S",<<+, pendin' before the Third Division of the
Sandi'anba%an> the !ross,!lai0 involvin' several properties located in ParaIaCue, Metro Manila> and, the
Third,Part% !o0plaint $led b% I@BSORIO, in the sa0e case, involvin' the Dive Thousand Dour Hundred
46,*<<5 shares of stoc1s re'istered in the na0es of Mid,Pasi' @and Develop0ent !orporation 4M@D!5 and
Independent Realt% !orporation 4IR!5, respectivel%, in the Philippine Overseas Teleco00unications
!orporation 4POT!5>
AHR)S, the &OVRNMNT and I@BSORIO desirin' o a,o+. a ;o*6y an. /rora;". 6++>a+on,
8o+,a". 9y !"+r ."*+r" o "M"; !" /ro/"r r"*+u+on of /ro/"r+"*, a**"* an. o!"r
+n"r"** o !"+r r+>!fu6 o:n"r*, 9"n"C !" )+6+/+no /"o/6" !rou>! an "F;+"n an.
";ono8+;a6 "6";o88un+;a+on* *y*"8, and in order that the% be able to freel% use their respective
properties, assets and other interests in the peaceful and nor0al pursuit of their le'iti0ate
endeavors, !a," .";+.". o :+!.ra: !"+r 8uua6 ;6a+8* an. ;oun"r;6a+8* +n !"
afor"8"n+on". ;a*">
NOA, THRDOR, for and in consideration of the fore'oin' pre0ises and the covenants hereafter
contained, the &OVRNMNT and I@BSORIO have 0utuall% a'reed on a settle0ent, as the% hereb% a'ree,
on the follo#in'2
(.< !ession and !oncessions
(.( #LUSOR#O r";o>n+Q"* !" r+>! an. o:n"r*!+/ of !" GO%ERNMENT o,"r )our
T!ou*an. S","n Hun.r". T:"ny S","n G4,121H *!ar"* of *o;D* +n POTC un."r
!" na8"* of #RC an. MLDC, r"*/";+,"6y, an. !" GO%ERNMENT r";o>n+Q"* !"
r+>! an. o:n"r*!+/ of #LUSOR#O o,"r S+B Hun.r". S","ny T!r"" G410H *!ar"*.
(.- #LUSOR#O :a+,"* +n fa,or of !" GO%ERNMENT a66 !+* ;6a+8*, r+>!* an.
+n"r"** o !" ;a*! .+,+."n.* a//"ra+n+n> a* of !" *+>n+n> of !+* $>r""8"n
o a66 !" *!ar"* of *o;D* 8"n+on". +n /ar. 1.1, +n;6u.+n> !o*" a//"ra+n+n> o
!" S+B Hun.r". S","ny T!r"" G410H *!ar"*.
(.. The &OVRNMNT and I@BSORIO shall have a ri'ht of $rst refusal over the transfer of
their respective shares covered b% this !o0pro0ise )'ree0ent in POT! and in the Philippine
!o00unications Satellite !orporation 4PHI@!OMS)T5.
(.* (+! r"*/"; o !" !ou*"* an. 6o* an. a66 +8/ro,"8"n* !"r"on ;o,"r". 9y
Tran*f"r C"r+C;a"* of T+6" No*. S&54804, S&54851 an. S&54804, r"*/";+,"6y, a66
of !" R">+*"r of D"".* for M"ro Man+6a, D+*r+; #%, 6o;a". +n Para\a?u", M"ro
Man+6a, :!+;! :"r" urn". o,"r 9y Mr. Jo*" 3. Ca8/o* o !" GO%ERNMENT,
#LUSOR#O !"r"9y :a+,"* any an. a66 ;6a+8*, r+>!* an. +n"r"** !" !a* o,"r *u;!
/ro/"r+"*.
(.6 T!" GO%ERNMENT an. #LUSOR#O !"r"9y :a+," any an. a66 ;6a+8* "a;! on"
8ay !a," a>a+n* !" o!"r :+! r"*/"; o o!"r /ro/"r+"*, a**"* an. +n"r"**
+n,o6,". +n C+,+6 Ca*" No. S-&005 an. *u;! o!"r /ro/"r+"*, a**"* an. +n"r"**
a* 8ay !"r"af"r 9" +."n+C"..
(.7 T!" GO%ERNMENT an. #LUSOR#O r";o>n+Q" !+* Co8/ro8+*" $>r""8"n a*
fu66, ;o8/r"!"n*+," an. Cna6 *"6"8"n of !"+r ;6a+8* an. ;oun"r;6a+8* a>a+n*
"a;! o!"r, an. !"r"9y r"noun;" any +n"r"* +n a66 /a*, /r"*"n an. fuur" ;a*"*
an. +n,"*+>a+on*.
(.G I@BSORIO shall defend the ri'ht of the &OVRNMNT over the assets above0entioned.
(./ I@BSORIO underta1es to full% cooperate #ith the &OVRNMNTMPresidential !o00ission
on &ood &overn0ent in all investi'ations, cri0inal prosecutions, and civil actions, #hether
in the Philippines or abroad, in connection #ith the recover% of ill,'otten #ealth of Derdinand
. Marcos and I0elda R. Marcos, 0e0bers of their fa0ilies and all the Marcos cronies
a'ainst #ho0 the &OVRNMNTMPresidential !o00ission on &ood &overn0ent is currentl%
suin' or 0a% sue to recover ill,'otten #ealth, includin' 'ivin' evidence for the
&OVRNMNTMPresidential !o00ission on &ood &overn0ent in the aforesaid cases.
-.< Mechanics for I0ple0entation
T!" GO%ERNMENT an. #LUSOR#O *!a66 B B B C6" :+! !" San.+>an9ayan !"
a//ro/r+a" Jo+n Mo+on for !" a//ro,a6 of !+* Co8/ro8+*" $>r""8"n2 for !"
GO%ERNMENT o .ro/ #LUSOR#O a* ."f"n.an +n C+,+6 Ca*" No. S-&005I for
#LUSOR#O o .ro/ !+* Cro**&Co8/6a+nI for #LUSOR#O o .ro/ !+* T!+r.&Pary
Co8/6a+n> and, for I@BSORIO to drop his Motion for In9unction and !onte0pt in !ivil !ase
No. S",<<+ a'ainst the &OVRNMNT, its oFcers and a'ents involved in the e=ercise b% the
&OVRNMNT of its pree0ptive ri'hts over shares in Oriental Petroleu0 and Minerals
!orporation 4OPM!5.
= = =
..< !ooperation in PreservationMRecover% Eorts
The &OVRNMNT and I@BSORIO hereb% underta1e to cooperate #ith each other in the
preservation or recover% of properties and businesses, includin' a 9oint action or defense in
the enforce0ent or resistance, as the case 0a% be, of clai0s related to, involved in, or
connected #ith, this !o0pro0ise )'ree0ent.
*.< Aarrant% and )uthorit%
Her0ilo R. Rosal, #hose si'nature is aF=ed hereto in a representative capacit%, and
Potenciano T. Ilusorio represent and #arrant that the% are dul% authori;ed to e=ecute this
!o0pro0ise )'ree0ent for the0selves and on behalf of, and to bind, the entities on #hose
behalf their si'natures are aF=ed.
6.< Durther )cts or Docu0ents
The &OVRNMNT and I@BSORIO a'ree to e=ecute and perfor0 such other and further acts
and authori;ations, includin' the e=ecution and deliver% of such other and further
docu0ents as 0a% be reasonabl% necessar% to carr% out the, provisions of this !o0pro0ise
)'ree0ent.
7.< "indin' Eect
)ll provisions of this !o0pro0ise )'ree0ent shall e=tend and be bindin' on the
&OVRNMNT and I@BSORIO and on each of their respective oFcers, e0plo%ees, directors,
a'ents, heirs, e=ecutors, ad0inistrators, le'al successors and assi'ns.
G.< Eectivit%
T!+* Co8/ro8+*" $>r""8"n *!a66 9" "M";+," +88".+a"6y u/on +* a//ro,a6 9y !"
San.+>an9ayan in accordance #ith e=istin' la# and rules.
IN AITNSS AHROD, the parties have hereunto aF=ed their si'natures on the date and at the place
above0entioned.
RPB"@I! OD TH PHI@IPPINS
"%2
4S&D5 HRMI@O R. ROS)@
!o00issioner
Presidential !o00ission
On &ood &overn0ent
4S&D5 POTN!I)NO T. I@BSORIO8
(-
4underscorin' ours5
On 3une /, (++/, upon 0otion of the parties, the Sandi'anba%an issued an Order
(.
'rantin' the sa0e and
approvin' the !o0pro0ise )'ree0ent, thus2
8AHRDOR, and as pra%ed for in the Motion dated 3une ., (++/, #hich is hereb% >ran".2
(. The fore'oin' !o0pro0ise )'ree0ent dated 3une -/, (++7 e=ecuted b% and bet#een the
plaintiE and defendant Potenciano T. Ilusorio is hereb% approved, the sa0e not bein' contrar% to
la#, 'ood 0orals and public polic%. The parties thereto are hereb% en9oined to strictl% abide b% and
co0pl% #ith the ter0s and conditions of the said !o0pro0ise )'ree0ent>
-. The co0plaint as a'ainst defendant Potenciano T. Ilusorio onl% in the above,entitled case No.
<<<+ is hereb% .+*8+**".>
.. The Motions for In9unction and !onte0pt, respectivel%, $led b% defendant Potenciano T. Ilusorio
a'ainst the &overn0entMP!&&, its oFcers and a'ents, in !ivil !ase No. <<<+ are
hereb% :+!.ra:n>
*. The Third,Part% !o0plaint and the !ross !lai0 of defendant Potenciano T. Ilusorio are
hereb%.+*8+**".> and
6. The "oard of Directors, President and !orporate Secretar% of the Philippine Overseas
Teleco00unications !orporation are hereb% or."r". to issue the correspondin' stoc1 certi$cates
to, and in the na0es of Potenciano T. Ilusorio, Mid,Pasi' @and Develop0ent !orporation, and
Independent Realt% !orporation, respectivel%.
SO ORDRD.8
SubseCuentl%, petitioner M@D! $led a 0otion dated )u'ust (7, (++/ see1in' to vacate the above Order.
On October +, (++/, petitioner IR! li1e#ise $led a si0ilar 0otion. In the 0ain, both petitioners alle'ed in
their 0otions that2 4(5 the !o0pro0ise )'ree0ent does not bind the0 because the% are not parties
thereto, althou'h the% have substantial interests in the POT! shareholdin's sub9ect of the a'ree0ent> and
4-5 the !o0pro0ise )'ree0ent is void since its ter0s are 'rossl% and 0anifestl% disadvanta'eous to the
&overn0ent, hence, contrar% to la#, 'ood 0orals and public polic%.
!o00entin' on the above 0otions, the present P!&& stated that it is in full accord #ith the position of
M@D! and IR!, and that the !o0pro0ise )'ree0ent is fatall% defective for lac1 of a P!&& Resolution
authori;in' for0er !o00issioner Her0ilo Rosal to enter into such a'ree0ent in behalf of the &overn0ent.
Respondent Ilusorio vehe0entl% opposed petitioners: 0otions.
The Sandi'anba%an, in its Resolution dated Dece0ber -<, (+++, denied the 0otions for lac1 of 0erit, thus2
8(HERE)ORE, pre0ises considered, third part% defendant Mid,Pasi':s Kno# petitioner in &.R. No.
(*(/<*L1otion to &acate Resol,tion #pproving "ompromise #greement dated #,g,st 1*! 1//H, and third
part% defendant Independent Realt% !orporation:s Kno# petitioner in &.R. No. (*(/<*L 1anifestation and
1otion dated October -, (++/, and the redundant and inappropriate concurrence of the P!&& Kno#
petitioner in &.R. No. (*(G+7L and the OS& are hereb% ."n+". for lac1 of 0erit.
The court also declares all POT! shares in the na0e of Mid,Pasi' and IR! as null and void. )ccordin'l%, out
of the 6,*<< POT! shares, si= hundred sevent% three 47G.5 is hereb% directed to be issued in the na0e of
Potenciano Ilusorio and four thousand seven hundred t#ent% seven 4*,G-G5 in the na0e of the Republic of
the Philippines. The "oard of Directors, President and !orporate Secretar% of the POT! are hereb% ordered
to co0pl% #ith this reCuire0ent #ithin ten 4(<5 da%s fro0 receipt of this Resolution.
On the 0atter of the pro=% or side a'ree0ent or arran'e0ent, #hich is not included in the !o0pro0ise
)'ree0ent, the court resolves to receive evidence on the 0atter. Dor said purpose, the 0otion of the OS&
and the P!&& for the court to declare the pro=% a'ree0ent as null and void is hereb% set for hearin' on
3anuar% -6, -<<< at /2.< a.0.
Dinall%, lest this Resolution create a 0isi0pression that the case is alread% dee0ed ter0inated #ith the
approval b% this court of the !o0pro0ise )'ree0ent, #e reiterate that the present !o0pro0ise
)'ree0ent concerns onl% defendant Potenciano Ilusorio and does not include the other defendants in this
case.
SO ORDRD.8
(*
In den%in' petitioners: 0otions, the Sandi'anba%an ruled that2 4(5 the 3une /, (++/ Order approvin' the
!o0pro0ise )'ree0ent is i00ediatel% e=ecutor%> 4-5 M@D! has no le'al standin' to $le the 0otion to
vacate since it has been declared in default in the Resolution dated Ma% (6, (+/+, and its 0otion for
reconsideration and subseCuent 0otion to lift the Order of default #ere denied in the Order dated )u'ust
(/, (+/+ and Resolution of Ma% (+, (++-, respectivel%> 4.5 the P!&& has full authorit% to act in behalf of
petitioners Republic, M@D! and IR! on the Cuestioned POT! shares since the sa0e #ere alread% turned
overMsurrendered b% 3ose ?. !a0pos to the &overn0ent, as ad0itted cate'oricall% b% M@D! and IR!> and
4*5 the !o0pro0ise )'ree0ent #as properl% e=ecuted b% the P!&& in behalf of the Republic and #as in
fact approved b% then President Didel V. Ra0os.
(+!ou C6+n> a 8o+on for r";on*+."ra+on of the Resolution approvin' the !o0pro0ise )'ree0ent,
petitioners separatel% interposed the present petitions for certiorari alle'in' that the Sandi'anba%an, in
issuin' the said Resolution, acted 8#ith 'rave abuse of discretion a0ountin' to lac1 or e=cess of
9urisdiction.8
The instant petitions 0ust fail.
)s a rule, the special civil action of certiorari under Rule 76 of the (++G Rules of !ivil Procedure, as
a0ended, lies onl% #hen the lo#er court has been 'iven the opportunit% to correct the error i0puted to it
throu'h a 0otion for reconsideration of the assailed order or resolution.
(6
The rationale of the rule rests
upon the presu0ption that the court or ad0inistrative bod% #hich issued the assailed order or resolution
0a% a0end the sa0e, if 'iven the chance to correct its 0ista1e or error. The 0otion for reconsideration,
therefore, is a ;on.++on sine )&a nonbefore $lin' a petition for certiorari.
(7
Here, petitioners $led the instant petitions for certiorari #ithout interposin' a 0otion for reconsideration of
the assailed Resolution of the Sandi'anba%an. Section ( of the sa0e Rule 76 reCuires that petitioners 0ust
not onl% sho# that the trial court, in issuin' the Cuestioned Resolution, 8acted #ithout or in e=cess of its
9urisdiction, or #ith 'rave abuse of discretion a0ountin' to lac1 or e=cess of 9urisdiction,8 but that 8there is
no appeal, nor an% plain, speed%, and adeCuate re0ed% in the ordinar% course of la#.8
(G
Ae have held that
the 8plain,8 8speed%,8 and 8adeCuate re0ed%8 referred to in Section ( of Rule 76 is a 8o+on for
r";on*+."ra+on of the Cuestioned Order or Resolution.
(/
It bears stressin' that the strict application of
this rule #ill also prevent unnecessar% and pre0ature resort to appellate proceedin's. Ae thus cannot
countenance petitioners: disre'ard of this procedural nor0 and frustrate its purpose of attainin' speed%,
ine=pensive, and orderl% 9udicial proceedin's.
In 9ustif%in' their failure to $le the reCuired 0otion for reconsideration, petitioners vehe0entl% assert that
the% #ere 8deprived of due process and there is e=tre0e ur'enc% for relief, and that under the
circu0stances, a 0otion for reconsideration #ould be useless.8
(+
Ae are not persuaded.
Petitioners 0a% not arro'ate to the0selves the deter0ination of #hether a 0otion for reconsideration is
necessar% or not.
-<
To dispense #ith the reCuire0ent of $lin' a 0otion for reconsideration, petitioners 0ust
sho# concrete, co0pellin', and valid reason for doin' so.
-(
The% 0ust de0onstrate that the
Sandi'anba%an, in issuin' the assailed Resolution, acted capriciousl%, #hi0sicall% and arbitraril% b% reason
of passion and personal hostilit%.
--
Such capricious, #hi0sical and arbitrar% acts 0ust be apparent on the
face of the assailed Resolution. These, the% failed to do.
In den%in' petitioners: 0otions to vacate the !o0pro0ise )'ree0ent, the Sandi'anba%an held2
8Ae $nd the sub9ect 0otions 4to vacate the Order approvin' the !o0pro0ise )'ree0ent5 to be devoid of
0erit. No procedural basis e=ists for the instant 0otions of Mid,Pasi' 4referrin' to M@D!5 and IR!. = = =.
Moreover, #e should point out that Mid,Pasi' has been declared in default b% this court in its Resolution
dated Ma% (6, (+/+ and its 1otion for Reconsideration of the sa0e has been denied b% the court in its
Order dated )u'ust (/, (+/+. @i1e#ise, its 1otion to =ift Arder of -efa,lt etc. dated Dece0ber -., (++(
#as denied b% this court in the Resolution of Ma% (+, (++-. Hence, bein' in default, Mid,Pasi' has no le'al
standin' to $le the sub9ect 0otion dated )u'ust (7, (++/.
= = =
= = =. Si'ni$cantl%, Mid,Pasi' does not dispute the authorit% of the P!&& to si'n the !o0pro0ise
)'ree0ent on its behalf. The onl% issue it raised in this re'ard is the alle'ed absence of a Resolution
adopted b% the P!&& approvin' the !o0pro0ise )'ree0ent. Ho#ever, in its Reply Eto Apposition of
Potenciano Il,sorio! etc.F, it avers that P!&& !o00issioner Rosal had not been authori;ed either b% Mid,
Pasi' or b% IR! to ne'otiate the 7G. POT! shares> that his act of disposin' shares of stoc1s belon'in' to
corporations not parties to the a'ree0ent is fraudulent and tainted #ith bad faith and that such
unauthori;ed disposition of shares of stoc1s constitutes unla#ful deprivation of propert% #ithout due
process.
The fore'oin' ar'u0ents are Ta#ed. Bndoubtedl%, the P!&& had full authorit% to act on behalf of the
Republic and on behalf of Mid,Pasi' and IR!, as #ell as to dispose of 7G. of the 6,*<< POT! shares
re'istered in Mid,Pasi' and IR!:s na0es in favor of Potenciano Ilusorio, as an inte'ral part of the
!o0pro0ise )'ree0ent. In fact, it is our vie# that Mid,Pasi' and IR! have no ri'ht to, or interest to protect
over the POT! shares. In its Ma% ., (+/+#nswer to the <hird Party "omplaint, Mid,Pasi' averred2
R*. It ad0its that defendant,third part% plaintiE reCuested the P!&& to seCuester M@D! but !" *a8" !a.
+n fa; 9""n urn". o,"r a* an a.8+". /ar an. /ar;"6 of !" +66&>o"n :"a6! of !"
."f"n.an* Mar;o*"* an. ;ron+"*.:
arlier, IR! 0ade si0ilar ad0issions in its veri$ed #nswer dated Septe0ber -+, (+//, #here it alle'ed2
R-. That it speci$call% denies the alle'ations under para'raph G6 of the <hird$Party "omplaint, the truth of
the 0atter bein' that an*:"r+n> !+r.&/ary ."f"n.an !a* 9""n *"?u"*"r". 9y !" Pr"*+."n+a6
Co88+**+on on Goo. Go,"rn8"n GPCGGH an. + +* no: o:n". 9y !" Go,"rn8"n af"r *a8"
:a* ,o6unar+6y urn". o,"r o + +n a;;or.an;" :+! !" ;o8/ro8+*" *"6"8"n "n"r". +no
9y an. 9":""n J.3. Ca8/o*, Sr. an. !+* $**o;+a"* an. !" PCGGI ;on*"?u"n6y, Mr. Jo*" 3.
Ca8/o* !a* no!+n> o .o any8or" :+! !" #n."/"n."n R"a6y Cor/ora+on an. +*
*u9*+.+ar+"* ;or/ora+on*>
= = =
*. That it speci$call% denies the alle'ations under para'raph GG of the <hird$Party "omplaint, the truth of
the 0atter bein' !" 0,444 *!ar"* of *o;D of POTC un."r !" na8" of #n."/"n."n R"a6y
Cor/ora+on +* /ar an. /ar;"6 of !" +66&>o"n :"a6! of !" ."/o*". Pr"*+."n Mar;o* an. !+*
fa8+6y an. !" *a8" :a* a;?u+r". .ur+n> !" +n;u89"n;y of Mar;o* un."r !" ;+r;u8*an;"*
a66">". +n !" /6a+n+MA* ;o8/6a+n>
6. That it speci$call% denies the alle'ations under para'raph G/ of the <hird$Party "omplaint, althou'h
there #as such reCuest, !" PCGG *"?u"*"r". #n."/"n."n R"a6y Cor/ora+on 9";au*" + for8*
/ar of !" +66">a66y a;?u+r". :"a6! of Mar;o* an. !+* fa8+6y an. ;ron+"*>
7. That it speci$call% denies the alle'ations under para'raph G+ of the <hird$Party "omplaint, the truth of
the 0atter bein' those alle'ed in the plaintiE:s co0plaint #hich #e are adoptin' as for0in' an inte'ral
part of our#nswer herein> 0oreover, #RC a;?u+r". !" *!ar"* of *o;D* of POTC +n ?u"*+on for an.
on 9"!a6f of Mar;o* an. !+* fa8+6y in the 0anner described in the co0plaint $led b% plaintiE, and !a*
no r+>! :!a*o","r on !" *a+. *!ar"* of *o;D a* !"y no: 9"6on> o an. o:n". 9y !"
Go,"rn8"n 9";au*" #RC :a* ,o6unar+6y *urr"n."r". 9y Jo*" 3. Ca8/o*, Sr. o !" PCGG.
R )NSAR TO )@@&)TIONS !OMMON TO TH
!ROSS !@)IM )ND THIRD P)RT? !OMP@)INT
= = =
/. That it speci$call% denies the alle'ations under para'raph /( of the <hird$Party "omplaint, the truth of
the 0atter bein' that +n*ofar a* !" *!ar"* of *o;D* of POTC a;?u+r". 9y #RC ar" ;on;"rn"., !"
Go,"rn8"n +* no: !" o:n"r !"r"of and that third,part% plaintiE has no ri'hts #hatsoever thereon
since the% for0ed part of the hidden #ealth of Marcos, his fa0il% and cronies.
"? A)? OD )DDIRM)TIV )ND SP!I)@ DDNSS, THIRD P)RT? DDND)NT
RSP!TDB@@? ST)TS, THROB&H !OBNS@
= = =
(<. That the $lin' of <hird$Party "omplaint a'ainst IR! is i0proper and procedurall% incorrect since + +*
no: o:n". 9y !" Go,"rn8"n #ho is the plaintiE in the 0ain case and as such no cause of action for
the <hird$Party "omplaint 0a% be established herein a'ainst IR!.:
videntl%, 9y M+.&Pa*+> an. #RCA* o:n a.8+**+on*, !"y !a," 9""n urn". o,"r o !"
Go,"rn8"n. H"n;", 9o! ;or/ora+on* !a," no r+>! or +n"r"* o,"r !" *u9@"; POTC *!ar"*
*urr"n."r". 9y Jo*" 3. Ca8/o* o !" Go,"rn8"n. Mid,Pasi' and IR! the0selves #ere seCuestered,
and then voluntaril% surrendered as part of the res covered b% the !a0pos !o0pro0ise )'ree0ent.
Moreover, there is nothin' inconsistent #ith the P!&&:s role as conservator of Mid,Pasi' and IR!, and its
enterin' into a !o0pro0ise )'ree0ent on behalf of the Republic and of Mid,Pasi' and IR!, over the
sub9ect POT! shares precisel% because,+n*ofar a* M+.&Pa*+> an. #RC ar" ;on;"rn"., !"y !a,"
r"6+n?u+*!". a66 r+>!* or +n"r"* o,"r a66 POTC *!ar"* r">+*"r". +n !"+r na8"* +n fa,or of !"
R"/u96+; r"/r"*"n". 9y PCGG.
M+.&Pa*+>, in its Motion to @ift Order of Default and to !onsider the )ns#er of Third,Part% Defendant
Independent Realt% !orporation as the )ns#er andMor inurin' to the "ene$t of Third,Part% Defendant Mid,
Pasi' @and Develop0ent !orporation dated Dece0ber -., (++(, a6*o 8a." !" fo66o:+n> a.8+**+on2
R-. T!a !" !+r.&/ary ."f"n.an ;or/ora+on* ar" :o of !" ;or/ora+on* urn". o,"r o !"
PCGG 9y Mr. Jo*" 3. Ca8/o* #ho alon' #ith Mr. Rolando &apud, e=ecuted an aFdavit that third,part%
defendant corporations #ere in fact or'ani;ed b% Mr. 3ose ?. !a0pos for and in behalf of the late for0er
President Derdinand Marcos.:
= = =
#n 6+>! of !"*" a.8+**+on* an. ;+r;u8*an;"*, :" .o no *"" :!a +n"r"* M+.&Pa*+> or #RC
:ou6. *+66 !a," o,"r !" POTC *!ar"* !"y !"8*"6,"* !a," a;Dno:6".>". a* no 6on>"r
9"6on>+n> o !"8. T!"y ;anno /r""n. !a !"y *+66 !a," *"/ara" @ur+.+;a6 /"r*ona6++"* o
/o**"** *u;! *!ar"* +n !"+r o:n r+>!, ;on*+."r+n> !a !"+r "r*:!+6" ,"+6 of ;or/ora" C;+on
!a," 6on> 9""n .+*;ar.". an. *!r".."., r","a6+n> !"8 a* 8"r" *+6!ou""* /ur/o*"6y
;r"a". o n"* an. *!"6"r +66&>o"n :"a6!. $ for+or+, M+.&Pa*+> an. #RC ar" +n "*o//"6 o
;6a+8 o!"r:+*", *u;! !a, :+! r"*/"; o !" POTC *!ar"* *u9@"; of !" Co8/ro8+*"
$>r""8"n, M+.&Pa*+> an. #RC !a," no .+*;"rn+96" +n"r"* !"r"+n, nor !"y /o**"** any 6">a6
/"r*ona6+y o ?u"*+on !" PCGGA* au!or+y on 9"!a6f of !" R"/u96+; o "n"r +no a
Co8/ro8+*" $>r""8"n o,"r *u;! *urr"n."r". *!ar"*. There is, therefore, rh%0e and reason to
re9ect as baseless Mid,Pasi' and IR!:s clai0 of an% real or 0aterial interest in the POT! shares, or of the
alle'ed 'rave or irreparable in9ur% the% stand to suEer.8
-.
4underscorin' supplied5
)s re'ards the contention of petitioner Republic,P!&& that the !o0pro0ise )'ree0ent is fatall% defective
because it lac1s a Resolution fro0 the P!&& authori;in' for0er !o00issioner Rosal to enter into such
a'ree0ent #ith respondent Ilusorio, the Sandi'anba%an ruled2
8The sub9ect !o0pro0ise )'ree0ent #hich #as si'ned b% P!&& !o00issioner Her0ilo R. Rosal on 3une
(/, (++7 #as thereafter endorsed for e=ecutive approval in a 1emorand,m for President Didel V. Ra0os
dated Septe0ber -<, (++7. The said endorse0ent #as si'ned b% P!&& !o00issioner Her0inio ).
Mendo;a and P!&& !hair0an Ma'tan''ol &uni'undo. On the other hand, the 1otion to -ismiss and for
#pproval of "ompromise #greement dated 3une ., (++/ #as si'ned b% P!&& !o00issioner Her0inio ).
Mendo;a on behalf of the plaintiE Republic of the Philippines. These circu0stances clearl% sho# that three
4.5 out of the $ve 465 0e0bers of the !o00ission had participated sin'l% or 9ointl% in the docu0entation
of the !o0pro0ise )'ree0ent, in its endorse0ent to the President for e=ecutive aFr0ations, and in its
eventual sub0ission to this court for 9udicial approval. Thus, it is reasonable to assu0e that the% acted in
accordance #ith a !o00ission decision to enter into the sub9ect !o0pro0ise )'ree0ent. This confor0s to
the presu0ption of re'ularit% in the perfor0ance b% public oFcers of their functions 4Sec. 6K0L, Rule (.(,
Rules of !ourt5. Durther0ore, in the 3anuar% -<, (+++ P!&&:s letter addressed to Mr. )le9andro S. Soler of
Mid,Pasi' 4)nne= 8b,8 P"%%9s ReBoinder Kto the "onsolidated Reply of Potenciano Il,sorioL5, the follo#in'
infor0ation #as rela%ed to the addressee2
]P"r ,"r+C;a+on :+! a,a+6a96" r";or.*PM+nu"* of !" EB";u+," M""+n> !"6. on2
(. 08 )"9ruary 1554 a !" PCGG Conf"r"n;" Roo8, 4! )6oor, P!+6;o8;"n -u+6.+n>, Or+>a*
$,"nu", Pa*+> C+y, !" fo66o:+n> :a* r"*o6,".2
]1.0 POTENC#$NO #LUSOR#O
](+! !" C!a+r8an +n!+9++n> !+8*"6f fro8 !" ."6+9"ra+on, !" four Co88+**+on"r*
unan+8ou*6y a>r"". o +**u" a R"*o6u+on au!or+Q+n> !" C!a+r8an o *+>n !" Co8/ro8+*"
$>r""8"n :+! Mr. Po"n;+ano #6u*or+o, a* a//ro,". 9y !" Co88+**+on en banc +n +* 6a*
8""+n>.A
-. 15 D";"89"r 1554 a !" PCGG Conf"r"n;" Roo8, 4! )6oor, P!+6;o8;"n -u+6.+n>, Or+>a*
$,"nu", Pa*+> C+y, !" fo66o:+n> :a* r"*o6,".2
]2.1 JO#NT MOT#ON TO D#SM#SS RE2 COMPROM#SE $GREEMENT -ET(EEN RP $ND #LUSOR#O
]Co88. M"n.oQa /r"*"n". o !" Co88+**+on !" Joint *otion to +is,iss o 9" C6". :+! !"
San.+>an9ayan r"6a+," o !" Co8/ro8+*" $>r""8"n 9":""n !" R"/u96+; of !" P!+6+//+n"*
an. Po"n;+ano T. #6u*or+o.
R)fter the discussion, the !o00ission reCuired proof of the surrender of the ParaIaCue propert% before the
0otion could be $led in court. The !hair0an inhibited hi0self.:
T!" for">o+n> *a"8"n* ;6"ar6y *!o: !a !" Co8/ro8+*" $>r""8"n .a". Jun" 28, 1554
:a* a//ro,". 9y !" Co88+**+on en banc, an. !a !" *+>n+n> an. C6+n> 9"for" !+* ;our of
!" *u9@";*otion -to +is,iss and .or /pproval o$ "o,pro,ise /gree,ent0 9y Po"n;+ano
#6u*or+o, !ru ;oun*"6, .a". Jun" 0, 1558 :a* ;onfor8". o 9y !" PCGG a* r"/r"*"n". 9y
Co88+**+on"r H"r8+n+o $. M"n.oQa.
# 9"ar* "8/!a*+* !a any /"r;"+,". ."C;+"n;y :+! r"*/"; o !" PCGGA* a//ro,a6 of !"
Co8/ro8+*" $>r""8"n !a* 9""n ;ur". 9y no 6"** !an Pr"*+."n Ra8o*A a//ro,a6 of !"
6a"r an. !" OSGA* ;on;urr"n;" +n +* ,a6+.+y.K
-*
Gun."r*;or+n> *u//6+".H
@i1e#ise, the Sandi'anba%an properl% re9ected petitioners: assertion that the !o0pro0ise )'ree0ent
should be nulli$ed as its ter0s are 'rossl% and 0anifestl% disadvanta'eous to the &overn0ent. It bears
stressin' that under the !o0pro0ise )'ree0ent, the &overn0ent is 'iven *u9*an+a6 shares
of 4,121 out of the 6,*<< POT! shares, as a'ainst Ilusorio:s 8"a*6y shares of 410. The% cannot clai0 that
the ter0s of the settle0ent are unconscionable considerin' that the &overn0ent #as able to secure fro0
Ilusorio a :a+,"r +n +* fa,or of Ka66 !+* ;6a+8*, r+>!* an. +n"r"**K +n2 GaH !" ;a*! .+,+."n.* on
a66 !" POTC *!ar"* of *o;D* >+,"n o !" Go,"rn8"n, +n;6u.+n> !+* o:n *!ar"*I an. G9H !"
,a6ua96" /ro/"r+"* G!ou*"*, 0 +6". 6o* an. a66 +8/ro,"8"n* !"r"onH 6o;a". +n Para\a?u",
M"ro Man+6a. It is not surprisin' then that the P!&& and then President Ra0os 'ave their i0pri0atur to
the !o0pro0ise )'ree0ent.
The Republic, throu'h the present P!&&, further contends that the !o0pro0ise )'ree0ent violates the
letter and spirit of =ecutive Order No. ( because the &overn0ent reconve%ed to respondent Ilusorio the
7G. POT! shares #hich #ere part of the ill,'otten #ealth previousl% surrendered or turned over b% 3ose ?.
!a0pos to the P!&&. Ahat petitioners are sa%in' is that the &overn0ent cannot 'ive to Ilusorio a portion
of the ill,'otten #ealth earlier surrendered b% !a0pos.1avvphi1.:wU
Ae are not convinced. It bears stressin' that this case ta1es its roots fro0 the co0plaint $led #ith the
Sandi'anba%an b% petitioner Republic,P!&& a'ainst respondent Ilusorio and other defendants for
reconve%ance of ill,'otten #ealth. )0on' the properties sou'ht to be forfeited #ere the 6,*<< shares of
stoc1s issued b% POT!. The co0plaint alle'ed that that the defendants therein acted in collaboration #ith
each other as du00ies of defendants Marcoses in several corporations, such as the M@D! and IR! #hich,
throu'h their 0anipulations, appropriated to the0selves substantial portion of the shareholdin's in POT!.
Ilusorio, in his #mended #nswer with "ross$"laim and <hird Party "omplaint, denied the 0aterial
alle'ations of the co0plaint, clai0in' that he o#ns the 6,*<< POT! shares #hich the Marcoses later too1
fro0 hi0, throu'h threats and inti0idation and #ithout an% valuable consideration, and placed the0 in the
na0es of their alter e'os 4IR! H .,7** shares> M@D! H (,G66> and Marcos, 3r. H (5. Ilusorio pra%ed for the
recover% of said shares and the correspondin' dividends.
"% den%in' the 0aterial alle'ations of the co0plaint in his ans#er, and settin' up the aFr0ative defense
that he o#ns the Cuestioned shares, respondent #6u*or+o !a* ."Cn+"6y @o+n". +**u"* :+! !"
/6a+n+M R"/u96+; a* o !" o:n"r*!+/ of !o*" *!ar"*. $* *u;!, !" !a* !" r+>! o /ro," !+*
a66">a+on* .ur+n> !" r+a6 on !" 8"r+*. Ho#ever, the Republic,P!&& and Ilusorio chose not to 'o to
trial but to settle their respective clai0s a0icabl%. Thus, the% entered into a !o0pro0ise )'ree0ent #ith
respect to the Cuestioned shares and their correspondin' dividends, as #ell as his ri'hts and interests over
the houses and lots in ParaIaCue !it%. Their settle0ent #as 80otivated b% their desire to avoid a costl%
and protracted liti'ation>8 8to eEect the proper restitution of properties, assets and other interest to their
ri'htful o#ners>8 to 8bene$t the Dilipino people throu'h an eFcient and econo0ical teleco00unications
s%ste0>8 and 8in order that the% be able to freel% use their respective properties, assets and other
interests in the peaceful and nor0al pursuit of their le'iti0ate endeavors.8
-6
Aith the i0pri0atur of no less than the for0er President Didel V. Ra0os and the approval of the
Sandi'anba%an, the !o0pro0ise )'ree0ent 0ust be accorded ut0ost respect. Su;! a8+;a96"
*"6"8"n +* no on6y a66o:". 9u ","n "n;oura>".. Thus, in Rep,3lic vs. .andigan3ayan,
-7
#e
held2
8It is advocated b% the P!&& that respondent "enedicto retainin' a portion of the assets is anathe0a to,
and incon'ruous #ith, the ;ero,retention polic% of the 'overn0ent in the pursuit for the recover% of all ill,
'otten #ealth pursuant to Section -4a5 of =ecutive Order No. (. (!+6" fu66 r";o,"ry +* +."a6, !" PCGG
+* no /r";6u.". fro8 "n"r+n> +no a Co8/ro8+*" $>r""8"n :!+;! "na+6*
r";+/ro;a6 concessions +f on6y o "B/".+" r";o,"ry *o !a !" r"8a+n+n> ]fun.*, a**"* an.
o!"r /ro/"r+"* 8ay 9" u*". o !a*"n na+ona6 ";ono8+; r";o,"ryA 4.rd AHR)S clause,
=ecutive Order No. (*,)5. To 9" *ur", !" *o&;a66". Q"ro r""n+on 8"n+on". +n S";+on 2GaH of
EB";u+," Or."r No. 1 !a. 9""n 8o.+C". o r"a.2
](HERE$S, !" Pr"*+."n+a6 Co88+**+on on Goo. Go,"rn8"n :a* ;r"a". on )"9ruary 28,
1584 9y EB";u+," Or."r No. 1 o a**+* !" Pr"*+."n +n !" recover1 o$ ill-gotten
(ealt% a;;u8u6a". 9y for8"r Pr"*+."n )"r.+nan. E. Mar;o*, !+* +88".+a" fa8+6y, r"6a+,"*,
*u9or.+na"* an. ;6o*" a**o;+a"*IA
:!+;! un.ou9".6y *u>>"** a ."/arur" fro8 !" for8"r >oa6 of oa6 r"*+u+on.
= = =
T!" au!or+y of !" PCGG o "n"r +no Co8/ro8+*" $>r""8"n* +n ;+,+6 ;a*"* an. o >ran
+88un+y, un."r ;"ra+n ;+r;u8*an;"*, +n ;r+8+na6 ;a*"* +* no: *"6". an. "*a96+*!"..
In Rep,3lic of the Philippines and ose A. "ampos! r. vs. .andigan3ayan! et al. 4(G. S!R) G- K(+/+L5, !+*
Cour ;a">or+;a66y *a". !a a8+;a96" *"6"8"n* an. ;o8/ro8+*"* ar" no on6y a66o:".
9u a;ua66y "n;oura>". +n ;+,+6 ;a*"*. $ */";+C; >ran of +88un+y fro8 ;r+8+na6 /ro*";u+on*
:a* a6*o *u*a+n".. In 5enedicto vs. 5oard of #dministrators of <elevision .tations RP'! 55"! and
I5" 4-<G S!R) 76+ K(++-L5, !" Cour ru6". !a !" au!or+y of !" PCGG o ,a6+.6y "n"r +no
Co8/ro8+*" $>r""8"n for !" /ur/o*" of a,o+.+n> 6++>a+on or /u+n> an "n. o on" a6r"a.y
;o88"n;". :a* +n.+*/ua96". = = =. 4underscorin' supplied5
Havin' been sealed #ith court approval, the !o0pro0ise )'ree0ent has the force of res B,dicata bet#een
the parties and should be co0plied #ith in accordance #ith its ter0s.
-G
Pursuant thereto, Victoria !. de los
Re%es, !orporate Secretar% of the POT!, trans0itted to Mr. Ma'dan'al ". l0a, then !hief Presidential
@e'al !ounsel and !hair0an of P!&&, Stoc1 !erti$cate No. (.( dated 3anuar% (<, -<<<, issued in the
na0e of the Republic of the Philippines, for *,G-G POT! shares.
-/
Thus, the !o0pro0ise )'ree0ent #as
partl% i0ple0ented.
(HERE)ORE, the instant petitions are hereb% DISMISSD.
SO ORDRD.
!orona, !arpio,Morales, and &arcia, 33., concur.
Pan'aniban, 4!hair0an5, no part, for0er counsel of part% in the case of ori'in.
)oono"*
(
Diled under Rule 76, (++G Rules of !ivil Procedure, as a0ended.
-
Penned b% ustice Rodolfo &. Palattao and concurred in b% ustice Narciso S. Nario 4both retired5
andustice &odofredo @. @e'aspi.
.
Section - 4a5 of =ecutive Order No. (, dated Debruar% -/, (+/7.
*
Rollo at /G,((7.
6
Para'raph (6 4e5, Republic:s !o0plaint in !ivil !ase No. <<<+> Rollo at ++, (<(,(<-. The co0plaint
also alle'ed2
8*. Defendants 3OS @. )DRI!), M)NB@ H. NITO, 3r., for0er )0bassador to Spain,
RO"RTO S. "NDI!TO, for0er )0bassador to 3apan, 3B)N PON! NRI@, for0er Minister
of National Defense, and POTN!I)NO I@BSORIO #ere close associates and con$dants of
defendants Derdinand . Marcos and I0elda R. Marcos. )0on' the corporations in #hich
defendants had substantial shares #ere2 4a5 Philippine Overseas Teleco00unications
!orporation 4POT!5> 4b5 astern Teleco00unications Phils., Inc. 4TPI5> 4c5 Philippine Satellite
!o00unication !orporation 4PHI@!OMS)T5> 4d5 Do0estic Satellite !o00unication
!orporation 4DOMS)T5> and 4e5 Oceanic Aireless Net#or1, Inc. = = =.
= = =
(6. Defendants 3ose @. )frica, Manuel H. Nieto, 3r., Roberto S. "enedicto, Potenciano Ilusorio,
3uan Ponce nrile and Derdinand . Marcos, 3r. b% the0selves andMor in unla#ful concert #ith
defendants Derdinand . Marcos and I0elda R. Marcos, and ta1in' undue advanta'e of their
relationship, inTuence and association, desired sche0es and strata'e0s to acCuire and
conceal their ill,'otten #ealth in various #a%s, such as2
4a5 1no#in'l% and #illin'l% actin' as du00ies, no0inees andMor a'ents of defendants
Derdinand . Marcos and I0elda R. Marcos in several corporations, such as the Philippine
Overseas Teleco00unications !orporation 4POT!5 #hich, throu'h 0anipulations and
dubious arran'e0ents #ith oFcers and 0e0bers of the "oard of the National Develop0ent
!orporation 4ND!5, a corporation o#ned and controlled b% the 'overn0ent, purchased
ND!:s shareholdin's in the Philippine !o00unications Satellite !orporation 4PHI@!OMS)T5,
also a 'overn0ent o#ned and controlled corporation, under hi'hl% unconscionable ter0s
and conditions 0anifestl% disadvanta'eous to PlaintiE and the Dilipino people>
= = =>
4c5 ille'all% 0anipulated, under the 'uise of e=pandin' the operations of PHI@!OMS)T, the
purchase of 0a9or shareholdin's of !able and Aireless @i0ited, a @ondon,based
teleco00unication co0pan%, in astern Teleco00unications Philippines, Inc. 4TPI5> = = =
= = =.8 4Rollo at +<, +/,(<-5
7
Id. at (<..
G
Resolution dated Ma% (6, (+/+, cited in Resolution dated Dece0ber -<, (+++, Rollo at 7G.
/
Dated Septe0ber -+, (+//.
+
Petitioner IR!:s )ns#er to Third,Part% !o0plaint of respondent Ilusorio, pars. -, *,7, /, (<, cited in
Resolution dated Dece0ber -<, (+++, Rollo at G<,G(.
(<
Order dated 3une /, (++/, Rollo at (6-,(67.
((
Resolution dated Dece0ber -<, (+++, Rollo at 66,67.
(-
Rollo at (6-,(67.
(.
Penned b% 3ustice Sabino R. de @eon, 3r. 4retired 0e0ber of the Supre0e !ourt, no# deceased5,
and concurred in b% 3ustice Narciso S. Nario 4retired5 and 3ustice Teresita @oenardo,De !astro 4no#
Presidin' 3ustice of the Sandi'anba%an5> Rollo at (67.
(*
Rollo at /6,/7.
(6
6a, vs. 1anila 5an8ing "orporation! %.R. 'o. 1+*)G1, 3ul% ((, -<<-, ./* S!R) .*<.
(7
1ayor ;dgardo %. Flores vs. .angg,niang Panlalawigan of Pampanga! et al.! %.R. 'o. 1(/I++,
Debruar% -(, -<<6, citin' 6a, vs. 1anila 5an8ing "orporation! id.M Rep,3lic vs. ;>press
<elecomm,nication "o.! Inc.! %.R. 'o. 10)I/*, 3anuar% (6, -<<-, .G. S!R) .(7> =ee vs. People!
%.R. 'o. 1G)/10, Dece0ber *, -<<-, .+. S!R) .+G.
(G
4nion of 'estle 7or8ers "agayan de Aro Factory vs. 'estle Philippines! Inc.! %.R. 'o. 10HGIG,
October (G, -<<-, .+( S!R) -<*, cited in 1ayor ;dgardo %. Flores vs. .angg,niang Panlalawigan
of Pampanga! et al., id.
(/
1etro <ransit Argani:ation! Inc. vs. "o,rt of #ppeals! %.R. 'o. 10+1GG, Nove0ber (+, -<<-, .+-
S!R) --+, cited in 1ayor ;dgardo %. Flores vs. .angg,niang Panlalawigan of Pampanga! et al., id.
(+
Petition, Rollo at (7.
-<
1ayor ;dgardo %. Flores vs. .angg,niang Panlalawigan of Pampanga! et al., s,pra> 1etro <ransit
Argani:ation! Inc. vs. "o,rt of #ppeals, s,pra.
-(
Id.
--
-,ero vs. "o,rt of #ppeals! %.R. 'o. 1G1+H+, 3anuar% *, -<<-, .G. S!R) ((> &da. de -raNon vs.
"o,rt of #ppeals! %.R. 'o. 1+/I1), )u'ust -<, -<<-, ./G S!R) *-G.
-.
)ssailed Sandi'anba%an Resolution dated Dece0ber -<, (+++, Rollo at 7G,G*.
-*
Id., Rollo at G*,G7.
-6
-nd AHR)S of the !o0pro0ise )'ree0ent.
-7
&.R. No. (</-+-, Septe0ber (<, (++., --7 S!R) .(*.
-G
Rep,3lic vs. .andigan3ayan, id., citin' #raneta vs. Pere:, G S!R) +-. 4(+7.5.
-/
)nne=es 8)8 and 8!8 of Respondents: !o00ent, Rollo at -++,.<<, .*+.
D ! I S I O N
G.R. No. 144425 D";"89"r 15, 2005
REPU-L#C O) THE PH#L#PP#NES, R"/r"*"n". 9y EB";u+," S";r"ary E.uar.o R. Er8+a, !"
DEP$RTMENT O) TR$NSPORT$T#ON $ND COMMUN#C$T#ONS GDOTCH, an. !"
M$N#L$ #NTERN$T#ON$L $#RPORT $UTHOR#T3 GM#$$H, Petitioners,
vs.
HON. HENR#C7 ). G#NGO3ON, #n !+* ;a/a;+y a* Pr"*+.+n> Ju.>" of !" R">+ona6 Tr+a6 Cour,
-ran;! 111, Pa*ay C+y an.
PH#L#PP#NE #NTERN$T#ON$L $#R TERM#N$LS CO., #NC., Respondents
T#NG$, J.:
The Nino% )Cuino International )irport Passen'er Ter0inal III 4N)I) .5 #as conceived, desi'ned and
constructed to serve as the countr%Us sho# #indo# to the #orld. Re'rettabl%, it has spa#ned controversies.
Re'rettabl% too, despite the apparent co0pletion of the ter0inal co0ple= #a% bac1 it has not %et been
operated. This has caused i00easurable econo0ic da0a'e to the countr%, not to 0ention its deplorable
discredit in the international co00unit%.
In the $rst case that reached this !ourt, )'an v. PI)T!O,
(
the contracts #hich the &overn0ent had #ith the
contractor #ere voided for bein' contrar% to la# and public polic%. The second case no# before the !ourt
involves the 0atter of 9ust co0pensation due the contractor for the ter0inal co0ple= it built. Ae decide
the case on the basis of fairness, the sa0e nor0 that pervades both the !ourtUs -<<* Resolution in the $rst
case and the latest e=propriation la#.
The present controvers% has its roots #ith the pro0ul'ation of the !ourtUs decision in )'an v.
PI)T!O,
-
pro0ul'ated in -<<. 4-<<. Decision5. This decision nulli$ed the 8!oncession )'ree0ent for the
"uild,Operate,and,Transfer )rran'e0ent of the Nino% )Cuino International )irport Passen'er Ter0inal III8
entered into bet#een the Philippine &overn0ent 4&overn0ent5 and the Philippine International )ir
Ter0inals !o., Inc. 4PI)T!O5, as #ell as the a0end0ents and supple0ents thereto. The a'ree0ent had
authori;ed PI)T!O to build a ne# international airport ter0inal 4N)I) .5, as #ell as a franchise to operate
and 0aintain the said ter0inal durin' the concession period of -6 %ears. The contracts #ere nulli$ed,
a0on' others, that Paircar'o !onsortiu0, predecessor of PI)T!O, did not possess the reCuisite $nancial
capacit% #hen it #as a#arded the N)I) . contract and that the a'ree0ent #as contrar% to public polic%.
.
)t the ti0e of the pro0ul'ation of the -<<. Decision, the N)I) . facilities had alread% been built b% PI)T!O
and #ere nearin' co0pletion.
*
Ho#ever, the ponencia #as silent as to the le'al status of the N)I) .
facilities follo#in' the nulli$cation of the contracts, as #ell as #hatever ri'hts of PI)T!O for rei0burse0ent
for its e=penses in the construction of the facilities. Still, in his Separate Opinion, 3ustice Pan'aniban, 9oined
b% 3ustice !alle9o, declared as follo#s2
Should 'overn0ent pa% at all for reasonable e=penses incurred in the construction of the Ter0inal[ Indeed
it should, other#ise it #ill be un9ustl% enrichin' itself at the e=pense of Piatco and, in particular, its funders,
contractors and investors , both local and forei'n. )fter all, there is no Cuestion that the State needs and
#ill 0a1e use of Ter0inal III, it bein' part and parcel of the critical infrastructure and transportation,related
pro'ra0s of 'overn0ent.
6
PI)T!O and several respondents,intervenors $led their respective 0otions for the reconsideration of the
-<<. Decision. These 0otions #ere denied b% the !ourt in its Resolution dated -( 3anuar% -<<* 4-<<*
Resolution5.
7
Ho#ever, the !ourt this ti0e sCuarel% addressed the issue of the ri'hts of PI)T!O to refund,
co0pensation or rei0burse0ent for its e=penses in the construction of the N)I) . facilities. The holdin' of
the !ourt on this crucial point follo#s2
This !ourt, ho#ever, is not un0indful of the realit% that the structures co0prisin' the N)I) IPT III facilit%
are al0ost co0plete and that funds have been spent b% PI)T!O in their construction. Dor the 'overn0ent
to ta1e over the said facilit%, it has to co0pensate respondent PI)T!O as builder of the said structures. The
co0pensation 0ust be 9ust and in accordance #ith la# and eCuit% for the 'overn0ent can not un9ustl%
enrich itself at the e=pense of PI)T!O and its investors.
G
)fter the pro0ul'ation of the rulin's in )'an, the N)I) . facilities have re0ained in the possession of
PI)T!O, despite the avo#ed intent of the &overn0ent to put the airport ter0inal into i00ediate operation.
The &overn0ent and PI)T!O conducted several rounds of ne'otiation re'ardin' the N)I) . facilities.
/
It
also appears that arbitral proceedin's #ere co00enced before the International !ha0ber of !o00erce
International !ourt of )rbitration and the International !entre for the Settle0ent of Invest0ent
Disputes,
+
althou'h the &overn0ent has raised 9urisdictional Cuestions before those t#o bodies.
(<
Then, on -( Dece0ber -<<*, the &overn0ent
((
$led a !o0plaint for e=propriation #ith the Pasa% !it%
Re'ional Trial !ourt 4RT!5, to'ether #ith an )pplication for Special RaXe see1in' the i00ediate holdin' of
a special raXe. The &overn0ent sou'ht upon the $lin' of the co0plaint the issuance of a #rit of
possession authori;in' it to ta1e i00ediate possession and control over the N)I) . facilities.
The &overn0ent also declared that it had deposited the a0ount of P.,<<-,(-6,<<<.<<
(-
4. "illion5
(.
in !ash
#ith the @and "an1 of the Philippines, representin' the N)I) . ter0inalUs assessed value for ta=ation
purposes.
(*
The case
(6
#as raXed to "ranch ((G of the Pasa% !it% RT!, presided b% respondent 9ud'e Hon. Henric1 D.
&in'o%on 4Hon. &in'o%on5. On the sa0e da% that the !o0plaint #as $led, the RT! issued an
Order
(7
directin' the issuance of a #rit of possession to the &overn0ent, authori;in' it to 8ta1e or enter
upon the possession8 of the N)I) . facilities. !itin' the case of !it% of Manila v. Serrano,
(G
the RT! noted
that it had the 0inisterial dut% to issue the #rit of possession upon the $lin' of a co0plaint for
e=propriation suFcient in for0 and substance, and upon deposit 0ade b% the 'overn0ent of the a0ount
eCuivalent to the assessed value of the propert% sub9ect to e=propriation. The RT! found these reCuisites
present, particularl% notin' that 8KtLhe case record sho#s that Kthe &overn0ent hasL deposited the
assessed value of the KN)I) . facilitiesL in the @and "an1 of the Philippines, an authori;ed depositar%, as
sho#n b% the certi$cation attached to their co0plaint.8 )lso on the sa0e da%, the RT! issued a Arit of
Possession. )ccordin' to PI)T!O, the &overn0ent #as able to ta1e possession over the N)I) . facilities
i00ediatel% after the Arit of Possession #as issued.
(/
Ho#ever, on * 3anuar% -<<6, the RT! issued another Order desi'ned to supple0ent its -( Dece0ber -<<*
Order and the Arit of Possession. In the * 3anuar% -<<6 Order, no# assailed in the present petition, the RT!
noted that its earlier issuance of its #rit of possession #as pursuant to Section -, Rule 7G of the (++G Rules
of !ivil Procedure. Ho#ever, it #as observed that Republic )ct No. /+G* 4Rep. )ct No. /+G*5, other#ise
1no#n as 8)n )ct to Dacilitate the )cCuisition of Ri'ht,of,Aa%, Site or @ocation for National &overn0ent
Infrastructure Pro9ects and Dor Other Purposes8 and its I0ple0entin' Rules and Re'ulations 4I0ple0entin'
Rules5 had a0ended Rule 7G in 0an% respects.
There are at least t#o crucial diEerences bet#een the respective procedures under Rep. )ct No. /+G* and
Rule 7G. Bnder the statute, the &overn0ent is reCuired to 0a1e i00ediate pa%0ent to the propert% o#ner
upon the $lin' of the co0plaint to be entitled to a #rit of possession, #hereas in Rule 7G, the &overn0ent
is reCuired onl% to 0a1e an initial deposit #ith an authori;ed 'overn0ent depositar%. Moreover, Rule 7G
prescribes that the initial deposit be eCuivalent to the assessed value of the propert% for purposes of
ta=ation, unli1e Rep. )ct No. /+G* #hich provides, as the relevant standard for initial co0pensation, the
0ar1et value of the propert% as stated in the ta= declaration or the current relevant ;onal valuation of the
"ureau of Internal Revenue 4"IR5, #hichever is hi'her, and the value of the i0prove0ents andMor
structures usin' the replace0ent cost 0ethod.
)ccordin'l%, on the basis of Sections * and G of Rep. )ct No. /+G* and Section (< of the I0ple0entin'
Rules, the RT! 0ade 1e% Cuali$cations to its earlier issuances. Dirst, it directed the @and "an1 of the
Philippines, "aclaran "ranch 4@"P,"aclaran5, to i00ediatel% release the a0ount of BS^7-,.*.,(G6.GG to
PI)T!O, an a0ount #hich the RT! characteri;ed as that #hich the &overn0ent 8speci$call% 0ade available
for the purpose of this e=propriation>8 and such a0ount to be deducted fro0 the a0ount of 9ust
co0pensation due PI)T!O as eventuall% deter0ined b% the RT!. Second, the &overn0ent #as directed to
sub0it to the RT! a !erti$cate of )vailabilit% of Dunds si'ned b% authori;ed oFcials to cover the pa%0ent
of 9ust co0pensation. Third, the &overn0ent #as directed 8to 0aintain, preserve and safe'uard8 the N)I)
. facilities or 8perfor0 such as acts or activities in preparation for their direct operation8 of the airport
ter0inal, pendin' e=propriation proceedin's and full pa%0ent of 9ust co0pensation. Ho#ever, the
&overn0ent #as prohibited 8fro0 perfor0in' acts of o#nership li1e a#ardin' concessions or leasin' an%
part of KN)I) .L to other parties.8
(+
The ver% ne=t da% after the issuance of the assailed * 3anuar% -<<6 Order, the &overn0ent $led an Br'ent
Motion for Reconsideration, #hich #as set for hearin' on (< 3anuar% -<<6. On G 3anuar% -<<6, the RT!
issued another Order, the second no# assailed before this !ourt, #hich appointed three 4.5 !o00issioners
to ascertain the a0ount of 9ust co0pensation for the N)I) . !o0ple=. That sa0e da%, the &overn0ent
$led a Motion for Inhibition of Hon. &in'o%on.
The RT! heard the Br'ent Motion for Reconsideration and Motion for Inhibition on (< 3anuar% -<<6. On the
sa0e da%, it denied these 0otions in an O0nibus Order dated (< 3anuar% -<<6. This is the third Order no#
assailed before this !ourt. Nonetheless, #hile the O0nibus Order aFr0ed the earlier dispositions in the *
3anuar% -<<6 Order, it e=cepted fro0 aFr0ance 8the superTuous part of the Order prohibitin' the plaintiEs
fro0 a#ardin' concessions or leasin' an% part of KN)I) .L to other parties.8
-<
Thus, the present Petition for !ertiorari and Prohibition under Rule 76 #as $led on (. 3anuar% -<<6. The
petition pra%ed for the nulli$cation of the RT! orders dated * 3anuar% -<<6, G 3anuar% -<<6, and (< 3anuar%
-<<6, and for the inhibition of Hon. &in'o%on fro0 ta1in' further action on the e=propriation case. )
concurrent pra%er for the issuance of a te0porar% restrainin' order and preli0inar% in9unction #as 'ranted
b% this !ourt in a Resolution dated (* 3anuar% -<<6.
-(
The &overn0ent, in i0putin' 'rave abuse of discretion to the acts of Hon. &in'o%on, raises $ve 'eneral
ar'u0ents, to #it2
4i5 that Rule 7G, not Rep. )ct No. /+G*, 'overns the present e=propriation proceedin's>
4ii5 that Hon. &in'o%on erred #hen he ordered the i00ediate release of the a0ount of BS^7-..
Million to PI)T!O considerin' that the assessed value as alle'ed in the co0plaint #as onl% P.
"illion>
4iii5 that the RT! could not have prohibited the &overn0ent fro0 en9oinin' the perfor0ance of acts
of o#nership>
4iv5 that the appoint0ent of the three co00issioners #as erroneous> and
4v5 that Hon. &in'o%on should be co0pelled to inhibit hi0self fro0 the e=propriation case.
--
"efore #e delve into the 0erits of the issues raised b% the &overn0ent, it is essential to consider the
crucial holdin' of the !ourt in its -<<* Resolution in )'an, #hich #e repeat belo#2
This !ourt, ho#ever, is not un0indful of the realit% that the structures co0prisin' the N)I) IPT III facilit%
are al0ost co0plete and that funds have been spent b% PI)T!O in their construction. Dor the 'overn0ent
to ta1e over the said facilit%, it has to co0pensate respondent PI)T!O as builder of the said structures. The
co0pensation 0ust be 9ust and in accordance #ith la# and eCuit% for the 'overn0ent can not un9ustl%
enrich itself at the e=pense of PI)T!O and its investors.
-.
This pronounce0ent contains the funda0ental pre0ises #hich per0eate this decision of the !ourt. Indeed,
)'an, $nal and e=ecutor% as it is, stands as 'overnin' la# in this case, and an% disposition of the present
petition 0ust confor0 to the conditions laid do#n b% the !ourt in its -<<* Resolution.
The -<<* Resolution Ahich Is @a# of This !ase &enerall% Per0its =propriation
The pronounce0ent in the -<<* Resolution is especiall% si'ni$cant to this case in t#o aspects, na0el%2 4i5
that PI)T!O 0ust receive pa%0ent of 9ust co0pensation deter0ined in accordance #ith la# and eCuit%>
and 4ii5 that the 'overn0ent is barred fro0 ta1in' over N)I) . until such 9ust co0pensation is paid. The
parties cannot be allo#ed to evade the directives laid do#n b% this !ourt throu'h an% 0ode of 9udicial
action, such as the co0plaint for e0inent do0ain.
It cannot be denied thou'h that the !ourt in the -<<* Resolution prescribed 0andator% 'uidelines #hich
the &overn0ent 0ust observe before it could acCuire the N)I) . facilities. Thus, the actions of respondent
9ud'e under revie#, as #ell as the ar'u0ents of the parties 0ust, to 0erit aFr0ation, pass the threshold
test of #hether such propositions are in accord #ith the -<<* Resolution.
The &overn0ent does not contest the eFcac% of this pronounce0ent in the -<<* Resolution,
-*
thus its
application to the case at bar is not a 0atter of controvers%. Of course, Cuestions such as #hat is the
standard of 89ust co0pensation8 and #hich particular la#s and eCuitable principles are applicable, re0ain
in dispute and shall be resolved forth#ith.
The &overn0ent has chosen to resort to e=propriation, a re0ed% available under the la#, #hich has the
added bene$t of an inte'rated process for the deter0ination of 9ust co0pensation and the pa%0ent
thereof to PI)T!O. Ae appreciate that the case at bar is a hi'hl% unusual case, #hereb% the &overn0ent
see1s to e=propriate a buildin' co0ple= constructed on land #hich the State alread% o#ns.
-6
There is an
inherent illo'ic in the resort to e0inent do0ain on propert% alread% o#ned b% the State. )t $rst blush,
since the State alread% o#ns the propert% on #hich N)I) . stands, the proper re0ed% should be a1in to an
action for e9ect0ent.
Ho#ever, the reason for the resort b% the &overn0ent to e=propriation proceedin's is understandable in
this case. The -<<* Resolution, in reCuirin' the pa%0ent of 9ust co0pensation prior to the ta1eover b% the
&overn0ent of N)I) ., eEectivel% precluded it fro0 acCuirin' possession or o#nership of the N)I) .
throu'h the unilateral e=ercise of its ri'hts as the o#ner of the 'round on #hich the facilities stood. Thus,
as thin's stood after the -<<* Resolution, the ri'ht of the &overn0ent to ta1e over the N)I) . ter0inal
#as preconditioned b% la#ful order on the pa%0ent of 9ust co0pensation to PI)T!O as builder of the
structures.
The deter0ination of 9ust co0pensation could ver% #ell be a'reed upon b% the parties #ithout 9udicial
intervention, and it appears that steps to#ards that direction had been en'a'ed in. Still, ulti0atel%, the
&overn0ent resorted to its inherent po#er of e0inent do0ain throu'h e=propriation proceedin's. Is
e0inent do0ain appropriate in the $rst place, #ith due re'ard not onl% to the la# on e=propriation but also
to the !ourtUs -<<* Resolution in )'an[
The ri'ht of e0inent do0ain e=tends to personal and real propert%, and the N)I) . structures, adhered as
the% are to the soil, are considered as real propert%.
-7
The public purpose for the e=propriation is also
be%ond dispute. It should also be noted that Section ( of Rule 7G 4on =propriation5 reco'ni;es the
possibilit% that the propert% sou'ht to be e=propriated 0a% be titled in the na0e of the Republic of the
Philippines, althou'h occupied b% private individuals, and in such case an aver0ent to that eEect should
be 0ade in the co0plaint. The instant e=propriation co0plaint did aver that the N)I) . co0ple= 8stands on
a parcel of land o#ned b% the "ases !onversion Develop0ent )uthorit%, another a'enc% of Kthe Republic
of the PhilippinesL.8
-G
)d0ittedl%, e0inent do0ain is not the sole 9udicial recourse b% #hich the &overn0ent 0a% have acCuired
the N)I) . facilities #hile satisf%in' the reCuisites in the -<<* Resolution. 0inent do0ain thou'h 0a% be
the 0ost eEective, as #ell as the speediest 0eans b% #hich such 'oals 0a% be acco0plished. Not onl%
does it enable i00ediate possession after satisfaction of the reCuisites under the la#, it also has a built,in
procedure throu'h #hich 9ust co0pensation 0a% be ascertained. Thus, there should be no Cuestion as to
the propriet% of e0inent do0ain proceedin's in this case.
Still, in appl%in' the la#s and rules on e=propriation in the case at bar, #e are i0pelled to appl% or
construe these rules in accordance #ith the !ourtUs prescriptions in the -<<* Resolution to achieve the end
eEect that the &overn0ent 0a% validl% ta1e over the N)I) . facilities. Insofar as this case is concerned,
the -<<* Resolution is eEective not onl% as a le'al precedent, but as the source of ri'hts and prescriptions
that 0ust be 'uaranteed, if not enforced, in the resolution of this petition. Other#ise, the inte'rit% and
eFcac% of the rulin's of this !ourt #ill be severel% di0inished.
It is fro0 these pre0ises that #e resolve the $rst Cuestion, #hether Rule 7G of the Rules of !ourt or Rep.
)ct No. /+G* 'overns the e=propriation proceedin's in this case.
)pplication of Rule 7G Violates the -<<* )'an Resolution
The &overn0ent insists that Rule 7G of the Rules of !ourt 'overns the e=propriation proceedin's in this
case to the e=clusion of all other la#s. On the other hand, PI)T!O clai0s that it is Rep. )ct No. /+G* #hich
does appl%. arlier, #e had adverted to the basic diEerences bet#een the statute and the procedural rule.
Durther elaboration is in order.
Rule 7G outlines the procedure under #hich e0inent do0ain 0a% be e=ercised b% the &overn0ent. ?et b%
no 0eans does it serve at present as the solitar% 'uideline throu'h #hich the State 0a% e=propriate
private propert%. Dor e=a0ple, Section (+ of the @ocal &overn0ent !ode 'overns as to the e=ercise b% local
'overn0ent units of the po#er of e0inent do0ain throu'h an enablin' ordinance. )nd then there is Rep.
)ct No. /+G*, #hich covers e=propriation proceedin's intended for national 'overn0ent infrastructure
pro9ects.
Rep. )ct No. /+G*, #hich provides for a procedure e0inentl% 0ore favorable to the propert% o#ner than
Rule 7G, inescapabl% applies in instances #hen the national 'overn0ent e=propriates propert% 8for national
'overn0ent infrastructure pro9ects.8
-/
Thus, if e=propriation is en'a'ed in b% the national 'overn0ent for
purposes other than national infrastructure pro9ects, the assessed value standard and the deposit 0ode
prescribed in Rule 7G continues to appl%.
Bnder both Rule 7G and Rep. )ct No. /+G*, the &overn0ent co00ences e=propriation proceedin's throu'h
the $lin' of a co0plaint. Bnli1e in the case of local 'overn0ents #hich necessitate an authori;in'
ordinance before e=propriation 0a% be acco0plished, there is no need under Rule 7G or Rep. )ct No. /+G*
for le'islative authori;ation before the &overn0ent 0a% proceed #ith a particular e=ercise of e0inent
do0ain. The 0ost crucial diEerence bet#een Rule 7G and Rep. )ct No. /+G* concerns the particular
essential step the &overn0ent has to underta1e to be entitled to a #rit of possession.
The $rst para'raph of Section - of Rule 7G provides2
S!. -. ntr% of plaintiE upon depositin' value #ith authori;ed 'overn0ent depositor%. , Bpon the $lin' of
the co0plaint or at an% ti0e thereafter and after due notice to the defendant, the plaintiE shall have the
ri'ht to ta1e or enter upon the possession of the real propert% involved if he deposits #ith the authori;ed
'overn0ent depositar% an a0ount eCuivalent to the assessed value of the propert% for purposes of
ta=ation to be held b% such ban1 sub9ect to the orders of the court. Such deposit shall be in 0one%, unless
in lieu thereof the court authori;es the deposit of a certi$cate of deposit of a 'overn0ent ban1 of the
Republic of the Philippines pa%able on de0and to the authori;ed 'overn0ent depositar%.
In contrast, Section * of Rep. )ct No. /+G* relevantl% states2
S!. *. &uidelines for =propriation Proceedin's., Ahenever it is necessar% to acCuire real propert%
for the ri'ht,of,#a%, site or location for an% national 'overn0ent infrastructure pro9ect throu'h
e=propriation, the appropriate proceedin's before the proper court under the follo#in' 'uidelines2
a5 Bpon the $lin' of the co0plaint, and after due notice to the defendant, the i0ple0entin' a'enc%
shall i00ediatel% pa% the o#ner of the propert% the a0ount eCuivalent to the su0 of 4(5 one
hundred percent 4(<<Y5 of the value of the propert% based on the current relevant ;onal valuation
of the "ureau of Internal Revenue 4"IR5> and 4-5 the value of the i0prove0ents andMor structures as
deter0ined under Section G hereof> . . .
c5 In case the co0pletion of a 'overn0ent infrastructure pro9ect is of ut0ost ur'enc% and
i0portance, and there is no e=istin' valuation of the area concerned, the i0ple0entin' a'enc%
shall i00ediatel% pa% the o#ner of the propert% its proEered value ta1in' into consideration the
standards prescribed in Section 6 hereof.
Bpon co0pletion #ith the 'uidelines above0entioned, the court shall i00ediatel% issue to the
i0ple0entin' a'enc% an order to ta1e possession of the propert% and start the i0ple0entation of the
pro9ect.
"efore the court can issue a Arit of Possession, the i0ple0entin' a'enc% shall present to the court a
certi$cate of availabilit% of funds fro0 the proper oFcial concerned. . . .
)s can be 'leaned fro0 the above,Cuoted te=ts, Rule 7G 0erel% reCuires the &overn0ent to deposit #ith
an authori;ed 'overn0ent depositar% the assessed value of the propert% for e=propriation for it to be
entitled to a #rit of possession. On the other hand, Rep. )ct No. /+G* reCuires that the &overn0ent 0a1e a
direct pa%0ent to the propert% o#ner before the #rit 0a% issue. Moreover, such pa%0ent is based on the
;onal valuation of the "IR in the case of land, the value of the i0prove0ents or structures under the
replace0ent cost 0ethod,
-+
or if no such valuation is available and in cases of ut0ost ur'enc%, the
proEered value of the propert% to be sei;ed.
It is Cuite apparent #h% the &overn0ent #ould prefer to appl% Rule 7G in lieu of Rep. )ct No. /+G*. Bnder
Rule 7G, it #ould not be obli'ed to i00ediatel% pa% an% a0ount to PI)T!O before it can obtain the #rit of
possession since all it need do is deposit the a0ount eCuivalent to the assessed value #ith an authori;ed
'overn0ent depositar%. Hence, it devotes considerable eEort to point out that Rep. )ct No. /+G* does not
appl% in this case, not#ithstandin' the undeniable realit% that N)I) . is a national 'overn0ent pro9ect. ?et,
these eEorts fail, especiall% considerin' the controllin' eEect of the -<<* Resolution in )'an on the
ad9udication of this case.
It is the $ndin' of this !ourt that the sta'in' of e=propriation proceedin's in this case #ith the e=clusive
use of Rule 7G #ould allo# for the &overn0ent to ta1e over the N)I) . facilities in a fashion that directl%
rebu1es our -<<* Resolution in )'an. This !ourt cannot sanction deviation fro0 its o#n $nal and e=ecutor%
orders.
Section - of Rule 7G provides that the State 8shall have the ri'ht to ta1e or enter upon the possession of
the real propert% involved if Kthe plaintiEL deposits #ith the authori;ed 'overn0ent depositar% an a0ount
eCuivalent to the assessed value of the propert% for purposes of ta=ation to be held b% such ban1 sub9ect
to the orders of the court.8
.<
It is thus apparent that under the provision, all the &overn0ent need do to
obtain a #rit of possession is to deposit the a0ount eCuivalent to the assessed value #ith an authori;ed
'overn0ent depositar%.
Aould the deposit under Section - of Rule 7G satisf% the reCuire0ent laid do#n in the -<<* Resolution that
8KfLor the 'overn0ent to ta1e over the said facilit%, it has to co0pensate respondent PI)T!O as builder of
the said structures8[ videntl% not.
If Section - of Rule 7G #ere to appl%, PI)T!O #ould be en9oined fro0 receivin' a sin'le centavo as 9ust
co0pensation before the &overn0ent ta1es over the N)I) . facilit% b% virtue of a #rit of possession. Such
an in9unction sCuarel% contradicts the letter and intent of the -<<* Resolution. Hence, the position of the
&overn0ent sanctions its o#n disre'ard or violation the prescription laid do#n b% this !ourt that there
0ust $rst be 9ust co0pensation paid to PI)T!O before the &overn0ent 0a% ta1e over the N)I) . facilities.
Thus, at the ver% least, Rule 7G cannot appl% in this case #ithout violatin' the -<<* Resolution. ven
assu0in' that Rep. )ct No. /+G* does not 'overn in this case, it does not necessaril% follo# that Rule 7G
should then appl%. )fter all, adherence to the letter of Section -, Rule 7G #ould in turn violate the !ourtUs
reCuire0ent in the -<<* Resolution that there 0ust $rst be pa%0ent of 9ust co0pensation to PI)T!O before
the &overn0ent 0a% ta1e over the propert%.
It is the plain intent of Rep. )ct No. /+G* to supersede the s%ste0 of deposit under Rule 7G #ith the
sche0e of 8i00ediate pa%0ent8 in cases involvin' national 'overn0ent infrastructure pro9ects. The
follo#in' portion of the Senate deliberations, cited b% PI)T!O in its Me0orandu0, is #orth Cuotin' to
co'itate on the purpose behind the plain 0eanin' of the la#2
TH !H)IRM)N 4SN. !)?T)NO5. 8= = = "ecause the Senate believes that, %ou 1no#, #e have to
pa% the lando#ners i00ediatel% not b% treasur% bills but b% cash.
Since #e are deprivin' the0, %ou 1no#, upon pa%0ent, Uno, of possession, #e 0i'ht as #ell pa%
the0 as 0uch, Uno, hindi lan' 6< percent.
= = =
TH !H)IRM)N 4RP. VR&)R)5. )ccepted.
= = =
TH !H)IRM)N 4SN. !)?T)NO5. Oo. "ecause this is reall% in favor of the lando#ners, e.
TH !H)IRM)N 4RP. VR&)R)5. ThatUs #h% #e need to reall% secure the availabilit% of funds.
= = =
TH !H)IRM)N 4SN. !)?T)NO5. No, no. ItUs the sa0e. It sa%s here2 i%on' $rst para'raph, di ba[
I%on' ;onal , tala'an' 0a'baba%ad 0una. In other #ords, %ou 1no#, there 0ust be a pa%0ent
1aa'ad. 4TSN, "ica0eral !onference on the Disa'reein' Provisions of House "ill (*-- and Senate
"ill -((G, )u'ust -+, -<<<, pp. (*,-<5
= = =
TH !H)IRM)N 4SN. !)?T)NO5. O1a%, o1a%, Uno. Bnan',una, it is not deposit, Uno. ItUs pa%0ent.8
RP. ")TRIN). ItUs pa%0ent, ho, pa%0ent.8 4Id., p. 7.5
.(
It li1e#ise bears notin' that the appropriate standard of 9ust co0pensation is a substantive 0atter. It is
#ell #ithin the province of the le'islature to $= the standard, #hich it did throu'h the enact0ent of Rep.
)ct No. /+G*. Speci$call%, this prescribes the ne# standards in deter0inin' the a0ount of 9ust
co0pensation in e=propriation cases relatin' to national 'overn0ent infrastructure pro9ects, as #ell as the
0anner of pa%0ent thereof. )t the sa0e ti0e, Section (* of the I0ple0entin' Rules reco'ni;es the
continued applicabilit% of Rule 7G on procedural aspects #hen it provides 8all 0atters re'ardin' defenses
and ob9ections to the co0plaint, issues on uncertain o#nership and conTictin' clai0s, eEects of appeal on
the ri'hts of the parties, and such other incidents aEectin' the co0plaint shall be resolved under the
provisions on e=propriation of Rule 7G of the Rules of !ourt.8
.-
&iven that the -<<* Resolution 0ilitates a'ainst the continued use of the nor0 under Section -, Rule 7G, is
it then possible to appl% Rep. )ct No. /+G*[ Ae $nd that it is, and 0oreover, its application in this case
co0ple0ents rather than contravenes the prescriptions laid do#n in the -<<* Resolution.
Rep. )ct No. /+G* Dits to the Situation at "ar and !o0ple0ents the -<<* )'an Resolution
Rep. )ct No. /+G* is entitled 8)n )ct To Dacilitate The )cCuisition Of Ri'ht,Of,Aa%, Site Or @ocation Dor
National &overn0ent Infrastructure Pro9ects )nd Dor Other Purposes.8 Obviousl%, the la# is intended to
cover e=propriation proceedin's intended for national 'overn0ent infrastructure pro9ects. Section - of Rep.
)ct No. /+G* e=plains #hat are considered as 8national 'overn0ent pro9ects.8
Sec. -. National &overn0ent Pro9ects. , The ter0 8national 'overn0ent pro9ects8 shall refer to all national
'overn0ent infrastructure, en'ineerin' #or1s and service contracts, includin' pro9ects underta1en b%
'overn0ent,o#ned and controlled corporations, all pro9ects covered b% Republic )ct No. 7+6G, as a0ended
b% Republic )ct No. GG(/, other#ise 1no#n as the "uild,Operate,and,Transfer @a#, and other related and
necessar% activities, such as site acCuisition, suppl% andMor installation of eCuip0ent and 0aterials,
i0ple0entation, construction, co0pletion, operation, 0aintenance, i0prove0ent, repair and rehabilitation,
re'ardless of the source of fundin'.
)s ac1no#led'ed in the -<<. Decision, the develop0ent of N)I) . #as 0ade pursuant to a build,
operate,and,transfer arran'e0ent pursuant to Republic )ct No. 7+6G, as a0ended,
..
#hich pertains
to infrastructure or develop0ent pro9ects nor0all% $nanced b% the public sector but #hich are no#
#holl% or partl% i0ple0ented b% the private sector.
.*
Bnder the build,operate,and,transfer sche0e,
it is the pro9ect proponent #hich underta1es the construction, includin' the $nancin', of a 'iven
infrastructure facilit%.
.6
In Tatad v. &arcia,
.7
the !ourt ac1no#led'ed that the operator of the DS)
@i'ht Rail Transit pro9ect under a "OT sche0e #as the o#ner of the facilities such as 8the rail trac1s,
rollin' stoc1s li1e the coaches, rail stations, ter0inals and the po#er plant.8
.G
There can be no doubt that PI)T!O has o#nership ri'hts over the facilities #hich it had $nanced
and constructed. The -<<* Resolution sCuarel% reco'ni;ed that ri'ht #hen it 0andated the
pa%0ent of 9ust co0pensation to PI)T!O prior to the ta1eover b% the &overn0ent of N)I) .. The
fact that the &overn0ent resorted to e0inent do0ain proceedin's in the $rst place is a concession
on its part of PI)T!OUs o#nership. Indeed, if no such ri'ht is reco'ni;ed, then there should be no
i0pedi0ent for the &overn0ent to sei;e control of N)I) . throu'h ordinar% e9ect0ent proceedin's.
Since the ri'hts of PI)T!O over the N)I) . facilities are established, the nature of these facilities
should no# be deter0ined. Bnder Section *(64(5 of the !ivil !ode, these facilities are ineluctabl%
i00ovable or real propert%, as the% constitute buildin's, roads and constructions of all 1inds
adhered to the soil.
./
!ertainl%, the N)I) . facilities are of such nature that the% cannot 9ust be
pac1ed up and transported b% PI)T!O li1e a travelin' circus caravan.
Thus, the propert% sub9ect of e=propriation, the N)I) . facilities, are real propert% o#ned b% PI)T!O. This
point is critical, considerin' the &overn0entUs insistence that the N)I) . facilities cannot be dee0ed as the
8ri'ht,of,#a%8, 8site8 or 8location8 of a national 'overn0ent infrastructure pro9ect, #ithin the covera'e of
Rep. )ct No. /+G*.
There is no doubt that the N)I) . is not, under an% sensible conte0plation, a 8ri'ht,of,#a%.8 ?et #e cannot
a'ree #ith the &overn0entUs insistence that neither could N)I) . be a 8site8 or 8location8. The petition
Cuotes the de$nitions provided in "lac1Us @a# Dictionar% of 8locationU8 as the speci$c place or position of a
person or thin' and UsiteU as pertainin' to a place or location or a piece of propert% set aside for speci$c
use.U8
.+
?et even "lac1Us @a# Dictionar% provides that 8KtLhe ter0 KsiteL does not of itself necessaril% 0ean
a place or tract of land $=ed b% de$nite boundaries.8
*<
One #ould assu0e that the &overn0ent, to bac1 up
its contention, #ould be able to point to a clear,cut rule that a 8site8 or 8location8 e=clusivel% refers to soil,
'rass, pebbles and #eeds. There is none.
Indeed, #e cannot accept the &overn0entUs proposition that the onl% properties that 0a% be e=propriated
under Rep. )ct No. /+G* are parcels of land. Rep. )ct No. /+G* conte0plates #ithin its covera'e such real
propert% constitutin' land, buildin's, roads and constructions of all 1inds adhered to the soil. Section ( of
Rep. )ct No. /+G*, #hich sets the declaration of the la#Us polic%, refers to 8real propert% acCuired for
national 'overn0ent infrastructure pro9ects are pro0ptl% paid 9ust co0pensation.8
*(
Section * is Cuite
e=plicit in statin' that the scope of the la# relates to the acCuisition of 8real propert%,8 #hich under civil
la# includes buildin's, roads and constructions adhered to the soil.
It is 0oreover apparent that the la# and its i0ple0entin' rules co00onl% provide for a rule for the
valuation of i0prove0ents andMor structures thereupon separate fro0 that of the land on #hich such are
constructed. Section - of Rep. )ct No. /+G* itself reco'ni;es that the i0prove0ents or structures on the
land 0a% ver% #ell be the sub9ect of e=propriation proceedin's. Section *4a5, in relation to Section G of the
la# provides for the 'uidelines for the valuation of the i0prove0ents or structures to be e=propriated.
Indeed, nothin' in the la# #ould prohibit the application of Section G, #hich provides for the valuation
0ethod of the i0prove0ents and or structures in the instances #herein it is necessar% for the &overn0ent
to e=propriate onl% the i0prove0ents or structures, as in this case.
The la# classi$es the N)I) . facilities as real properties 9ust li1e the soil to #hich the% are adhered. )n%
sub,classi$cations of real propert% and diver'ent treat0ent based thereupon for purposes of e=propriation
0ust be based on substantial distinctions, other#ise the eCual protection clause of the !onstitution is
violated. There 0a% be perhaps a 0olecular distinction bet#een soil and the inor'anic i0prove0ents
adhered thereto, %et there are no purposive distinctions that #ould 9ustif% a variant treat0ent for purposes
of e=propriation. "oth the land itself and the i0prove0ents thereupon are susceptible to private o#nership
independent of each other, capable of pecuniar% esti0ation, and if ta1en fro0 the o#ner, considered as a
deprivation of propert%. The o#ner of i0prove0ents sei;ed throu'h e=propriation suEers the sa0e de'ree
of loss as the o#ner of land sei;ed throu'h si0ilar 0eans. Cual protection de0ands that all persons or
thin's si0ilarl% situated should be treated ali1e, both as to ri'hts conferred and responsibilities i0posed.
Dor purposes of e=propriation, parcels of land are si0ilarl% situated as the buildin's or i0prove0ents
constructed thereon, and a disparate treat0ent bet#een those t#o classes of real propert% infrin'es the
eCual protection clause.
ven as the provisions of Rep. )ct No. /+G* call for that la#Us application in this case, the threshold test
0ust still be 0et #hether its i0ple0entation #ould confor0 to the dictates of the !ourt in the -<<*
Resolution. Bnli1e in the case of Rule 7G, the application of Rep. )ct No. /+G* #ill not contravene the -<<*
Resolution, #hich reCuires the pa%0ent of 9ust co0pensation before an% ta1eover of the N)I) . facilities b%
the &overn0ent. The -<<* Resolution does not particulari;e the e=tent such pa%0ent 0ust be eEected
before the ta1eover, but it unCuestionabl% reCuires at least so0e de'ree of pa%0ent to the private
propert% o#ner before a #rit of possession 0a% issue. The utili;ation of Rep. )ct No. /+G* 'uarantees
co0pliance #ith this bare 0ini0u0 reCuire0ent, as it assures the private propert% o#ner the pa%0ent of,
at the ver% least, the proEered value of the propert% to be sei;ed. Such pa%0ent of the proEered value to
the o#ner, follo#ed b% the issuance of the #rit of possession in favor of the &overn0ent, is precisel% the
sche0atic under Rep. )ct No. /+G*, one #hich faciall% co0plies #ith the prescription laid do#n in the -<<*
Resolution.
!learl% then, #e see no error on the part of the RT! #hen it ruled that Rep. )ct No. /+G* 'overns the
instant e=propriation proceedin's.
The Proper )0ount to be Paid under Rep. )ct No. /+G*
Then, there is the 0atter of the proper a0ount #hich should be paid to PI)T!O b% the &overn0ent before
the #rit of possession 0a% issue, consonant to Rep. )ct No. /+G*.
)t this 9uncture, #e 0ust address the observation 0ade b% the OFce of the Solicitor &eneral in behalf of
the &overn0ent that there could be no 8"IR ;onal valuations8 on the N)I) . facilit%, as provided in Rep. )ct
No. /+G*, since ;onal valuations are onl% for parcels of land, not for airport ter0inals. The !ourt a'rees
#ith this point, %et does not see it as an i0pedi0ent for the application of Rep. )ct No. /+G*.
It 0ust be clari$ed that PI)T!O cannot be rei0bursed or 9ustl% co0pensated for the value of the parcel of
land on #hich N)I) . stands. PI)T!O is not the o#ner of the land on #hich the N)I) . facilit% is
constructed, and it should not be entitled to 9ust co0pensation that is inclusive of the value of the land
itself. It #ould be hi'hl% disin'enuous to co0pensate PI)T!O for the value of land it does not o#n. Its
entitle0ent to 9ust co0pensation should be li0ited to the value of the i0prove0ents andMor structures
the0selves. Thus, the deter0ination of 9ust co0pensation cannot include the "IR ;onal valuation under
Section * of Rep. )ct No. /+G*.
Bnder Rep. )ct No. /+G*, the &overn0ent is reCuired to 8i00ediatel% pa%8 the o#ner of the propert% the
a0ount eCuivalent to the su0 of 4(5 one hundred percent 4(<<Y5 of the value of the propert% based on the
current relevant ;onal valuation of the K"IRL> and 4-5 the value of the i0prove0ents andMor structures as
deter0ined under Section G. )s stated above, the "IR ;onal valuation cannot appl% in this case, thus the
a0ount sub9ect to i00ediate pa%0ent should be li0ited to 8the value of the i0prove0ents andMor
structures as deter0ined under Section G,8 #ith Section G referrin' to the 8i0ple0entin' rules and
re'ulations for the eCuitable valuation of the i0prove0ents andMor structures on the land.8 Bnder the
present i0ple0entin' rules in place, the valuation of the i0prove0entsMstructures are to be based usin'
8the replace0ent cost 0ethod.8
*-
Ho#ever, the replace0ent cost is onl% one of the factors to be
considered in deter0inin' the 9ust co0pensation.
In addition to Rep. )ct No. /+G*, the -<<* Resolution in )'an also 0andated that the pa%0ent of 9ust
co0pensation should be in accordance #ith eCuit% as #ell. Thus, in ascertainin' the ulti0ate a0ount of
9ust co0pensation, the dut% of the trial court is to ensure that such a0ount confor0s not onl% to the la#,
such as Rep. )ct No. /+G*, but to principles of eCuit% as #ell.
)d0ittedl%, there is no #a%, at least for the present, to i00ediatel% ascertain the value of the
i0prove0ents and structures since such valuation is a 0atter for factual deter0ination.
*.
?et Rep. )ct No.
/+G* per0its an e=pedited 0eans b% #hich the &overn0ent can i00ediatel% ta1e possession of the
propert% #ithout havin' to a#ait precise deter0ination of the valuation. Section *4c5 of Rep. )ct No. /+G*
states that 8in case the co0pletion of a 'overn0ent infrastructure pro9ect is of ut0ost ur'enc% and
i0portance, and there is no e=istin' valuation of the area concerned, the i0ple0entin' a'enc% shall
i00ediatel% pa% the o#ner of the propert% its proferred value, ta1in' into consideration the standards
prescribed in Section 6 Kof the la#L.8
**
The 8proEered value8 0a% stri1e as a hi'hl% sub9ective standard
based solel% on the intuition of the 'overn0ent, but Rep. )ct No. /+G* does provide relevant standards b%
#hich 8proEered value8 should be based,
*6
as #ell as the certaint% of 9udicial deter0ination of the propriet%
of the proEered value.
*7
In $lin' the co0plaint for e=propriation, the &overn0ent alle'ed to have deposited the a0ount of P.
"illion ear0ar1ed for e=propriation, representin' the assessed value of the propert%. The 0a1in' of the
deposit, includin' the deter0ination of the a0ount of the deposit, #as underta1en under the erroneous
notion that Rule 7G, and not Rep. )ct No. /+G*, is the applicable la#. Still, as re'ards the a0ount, the !ourt
sees no i0pedi0ent to reco'ni;e this su0 of P. "illion as the proEered value under Section *4b5 of Rep.
)ct No. /+G*. )fter all, in the initial deter0ination of the proEered value, the &overn0ent is not strictl%
reCuired to adhere to an% predeter0ined standards, althou'h its proEered value 0a% later be sub9ected to
9udicial revie# usin' the standards enu0erated under Section 6 of Rep. )ct No. /+G*.
Ho# should #e appreciate the Cuestioned order of Hon. &in'o%on, #hich pe''ed the a0ount to be
i00ediatel% paid to PI)T!O at around ^7-.. Million[ The Order dated * 3anuar% -<<6, #hich 0andated
such a0ount, proves proble0atic in that re'ard. Ahile the initial su0 of P. "illion 0a% have been based on
the assessed value, a standard #hich should not ho#ever appl% in this case, the RT! cites #ithout
Cuali$cation Section *4a5 of Rep. )ct No. /+G* as the basis for the a0ount of ^7-.. Million, thus leavin' the
i0pression that the "IR ;onal valuation 0a% for0 part of the basis for 9ust co0pensation, #hich should not
be the case. Moreover, respondent 9ud'e 0ade no atte0pt to appl% the enu0erated 'uidelines for
deter0ination of 9ust co0pensation under Section 6 of Rep. )ct No. /+G*, as reCuired for 9udicial revie# of
the proEered value.
The !ourt notes that in the (< 3anuar% -<<6 O0nibus Order, the RT! noted that the concessions
a'ree0ent entered into bet#een the &overn0ent and PI)T!O stated that the actual cost of buildin' N)I) .
#as 8not less than8 BS^.6< Million.
*G
The RT! then proceeded to observe that #hile Rep. )ct No. /+G*
reCuired the i00ediate pa%0ent to PI)T!O the a0ount eCuivalent to (<<Y of the value of N)I) ., the
a0ount deposited b% the &overn0ent constituted onl% (/Y of this value. )t this point, no bindin' i0port
should be 'iven to this observation that the actual cost of buildin' N)I) . #as 8not less than8 BS^.6<
Million, as the $nal conclusions on the a0ount of 9ust co0pensation can co0e onl% after due
ascertain0ent in accordance #ith the standards set under Rep. )ct No. /+G*, not the declarations of the
parties. )t the sa0e ti0e, the e=pressed lin1a'e bet#een the "IR ;onal valuation and the a0ount of 9ust
co0pensation in this case, is revelator% of erroneous thou'ht on the part of the RT!.
Ae have alread% pointed out the irrelevance of the "IR ;onal valuation as an appropriate basis for
valuation in this case, PI)T!O not bein' the o#ner of the land on #hich the N)I) . facilities stand. The
sub9ect order is Ta#ed insofar as it fails to Cualif% that such standard is inappropriate.
It does appear that the a0ount of BS^7-.. Million #as based on the certi$cation issued b% the @"P,
"aclaran that the Republic of the Philippines 0aintained a total balance in that branch a0ountin' to such
a0ount. ?et the actual representation of the ^7-.. Million is not clear. The @and "an1 !erti$cation
e=pressin' such a0ount does state that it #as issued upon reCuest of the Manila International )irport
)uthorit% 8purportedl% as 'uarant% deposit for the e=propriation co0plaint.8
*/
The &overn0ent clai0s in its
Me0orandu0 that the entire a0ount #as 0ade available as a 'uarant% fund for the $nal and e=ecutor%
9ud'0ent of the trial court, and not 0erel% for the issuance of the #rit of possession.
*+
One could readil%
conclude that the entire a0ount of BS^7-.. Million #as intended b% the &overn0ent to ans#er for
#hatever 'uaranties 0a% be reCuired for the purpose of the e=propriation co0plaint.
Still, such intention the &overn0ent 0a% have had as to the entire BS^7-.. Million is onl% inferentiall%
established. In ascertainin' the proEered value adduced b% the &overn0ent, the a0ount of P. "illion as
the a0ount deposited characteri;ed in the co0plaint as 8to be held b% K@and "an1L sub9ect to the KRT!UsL
orders,8
6<
should be dee0ed as controllin'. There is no clear evidence that the &overn0ent intended to
oEer BS^7-.. Million as the initial pa%0ent of 9ust co0pensation, the #ordin' of the @and "an1
!erti$cation not#ithstandin', and credence should be 'iven to the consistent position of the &overn0ent
on that aspect.
In an% event, for the RT! to be able to 9ustif% the pa%0ent of BS^7-.. Million to PI)T!O and not P. "illion
Pesos, he #ould have to establish that the hi'her a0ount represents the valuation of the
structuresMi0prove0ents, and not the "IR ;onal valuation on the land #herein N)I) . is built. The Order
dated 6 3anuar% -<<6 fails to establish such inte'ral fact, and in the absence of contravenin' proof, the
proEered value of P. "illion, as presented b% the &overn0ent, should prevail.
Stri1in'l%, the &overn0ent sub0its that assu0in' that Rep. )ct No. /+G* is applicable, the deposited
a0ount of P. "illion should be considered as the proEered value, since the a0ount #as based on
co0parative values 0ade b% the !it% )ssessor.
6(
)ccordin'l%, it should be dee0ed as havin' faithfull%
co0plied #ith the reCuire0ents of the statute.
6-
Ahile the !ourt a'rees that P. "illion should be
considered as the correct proEered value, still #e cannot dee0 the &overn0ent as havin' faithfull%
co0plied #ith Rep. )ct No. /+G*. Dor the la# plainl% reCuires direct pa%0ent to the propert% o#ner, and
not a 0ere deposit #ith the authori;ed 'overn0ent depositar%. Aithout such direct pa%0ent, no #rit of
possession 0a% be obtained.
Arit of Possession Ma% Not "e I0ple0ented Bntil )ctual Receipt b% PI)T!O of Proferred Value
The !ourt thus $nds another error on the part of the RT!. The RT! authori;ed the issuance of the #rit of
possession to the &overn0ent not#ithstandin' the fact that no pa%0ent of an% a0ount had %et been
0ade to PI)T!O, despite the clear co00and of Rep. )ct No. /+G* that there 0ust $rst be pa%0ent before
the #rit of possession can issue. Ahile the RT! did direct the @"P,"aclaran to i00ediatel% release the
a0ount of BS^7- Million to PI)T!O, it should have li1e#ise suspended the #rit of possession, na%,
#ithdra#n it alto'ether, until the &overn0ent shall have actuall% paid PI)T!O. This is the inevitable
conseCuence of the clear co00and of Rep. )ct No. /+G* that reCuires i00ediate pa%0ent of the initiall%
deter0ined a0ount of 9ust co0pensation should be eEected. Other#ise, the overpo#erin' intention of
Rep. )ct No. /+G* of ensurin' pa%0ent $rst before transfer of repossession #ould be eviscerated.
Rep. )ct No. /+G* represents a si'ni$cant chan'e fro0 previous e=propriation la#s such as Rule 7G, or
even Section (+ of the @ocal &overn0ent !ode. Rule 7G and the @ocal &overn0ent !ode 0erel% provided
that the &overn0ent deposit the initial a0ounts
6.
antecedent to acCuirin' possession of the propert% #ith,
respectivel%, an authori;ed
&overn0ent depositar%
6*
or the proper court.
66
In both cases, the private o#ner does not receive
co0pensation prior to the deprivation of propert%. On the other hand, Rep. )ct No. /+G* 0andates
i00ediate pa%0ent of the initial 9ust co0pensation prior to the issuance of the #rit of possession in favor
of the &overn0ent.
Rep. )ct No. /+G* is plainl% clear in i0posin' the reCuire0ent of i00ediate prepa%0ent, and no
a0ount of statutor% deconstruction can evade such reCuisite. It enshrines a ne# approach to#ards
e0inent do0ain that reconciles the inherent unease attendin' e=propriation proceedin's #ith a
position of funda0ental eCuit%. Ahile e=propriation proceedin's have al#a%s de0anded 9ust
co0pensation in e=chan'e for private propert%, the previous deposit reCuire0ent i0peded
i00ediate co0pensation to the private o#ner, especiall% in cases #herein the deter0ination of the
$nal a0ount of co0pensation #ould prove hi'hl% disputed. Bnder the ne# 0odalit% prescribed b%
Rep. )ct No. /+G*, the private o#ner sees i00ediate 0onetar% reco0pense #ith the sa0e de'ree
of speed as the ta1in' of hisMher propert%.
Ahile e0inent do0ain lies as one of the inherent po#ers of the State, there is no reCuire0ent that it
underta1e a prolon'ed procedure, or that the pa%0ent of the private o#ner be protracted as far as
practicable. In fact, the e=pedited procedure of pa%0ent, as hi'hli'hted under Rep. )ct No. /+G*, is
inherentl% 0ore fair, especiall% to the la%person #ho #ould be hard,pressed to full% co0prehend the social
value of e=propriation in the $rst place. I00ediate pa%0ent placates to so0e de'ree #hatever ill,#ill that
arises fro0 e=propriation, as #ell as satis$es the de0and of basic fairness.
The !ourt has the dut% to i0ple0ent Rep. )ct No. /+G* and to direct co0pliance #ith the
reCuire0ent of i00ediate pa%0ent in this case. )ccordin'l%, the Arit of Possession dated -(
Dece0ber -<<* should be held in abe%ance, pendin' proof of actual pa%0ent b% the &overn0ent
to PI)T!O of the proEered value of the N)I) . facilities, #hich totals P.,<<-,(-6,<<<.<<.
Ri'hts of the &overn0ent upon Issuance of the Arit of Possession
Once the &overn0ent pa%s PI)T!O the a0ount of the proEered value of P. "illion, it #ill be entitled
to the Arit of Possession. Ho#ever, the &overn0ent Cuestions the Cuali$cation i0posed b% the RT!
in its * 3anuar% -<<6 Order consistin' of the prohibition on the &overn0ent fro0 perfor0in' acts of
o#nership such as a#ardin' concessions or leasin' an% part of N)I) . to other parties. To be
certain, the RT!, in its (< 3anuar% -<<6 O0nibus Order, e=pressl% stated that it #as not aFr0in'
8the superTuous part of the Order Kof * 3anuar% -<<6L prohibitin' the plaintiEs fro0 a#ardin'
concessions or leasin' an% part of N)I) K.L to other parties.8
67
Still, such state0ent #as predicated
on the notion that since the &overn0ent #as not %et the o#ner of N)I) . until $nal pa%0ent of 9ust
co0pensation, it #as obviousl% incapacitated to perfor0 such acts of o#nership.
In decidin' this Cuestion, the -<<* Resolution in )'an cannot be i'nored, particularl% the
declaration that 8KfLor the 'overn0ent to ta1e over the said facilit%, it has to co0pensate
respondent PI)T!O as builder of the said structures.8 The obvious i0port of this holdin' is that
unless PI)T!O is paid 9ust co0pensation, the &overn0ent is barred fro0 8ta1in' over,8 a phrase
#hich in the strictest sense could enco0pass even a bar of ph%sical possession of N)I) ., 0uch
less operation of the facilities.
There are critical reasons for the !ourt to vie# the -<<* Resolution less strin'entl%, and thus allo#
the operation b% the &overn0ent of N)I) . upon the eEectivit% of the Arit of Possession. Dor one,
the national presti'e is di0inished ever% da% that passes #ith the N)I) . re0ainin' 0othballed. Dor
another, the continued non,use of the facilities contributes to its ph%sical deterioration, if it has not
alread%. )nd still for another, the econo0ic bene$ts to the &overn0ent and the countr% at lar'e are
be%ond dispute once the N)I) . is put in operation.
Rep. )ct No. /+G* provides the appropriate ans#er for the standard that 'overns the e=tent of the
acts the &overn0ent 0a% be authori;ed to perfor0 upon the issuance of the #rit of possession.
Section * states that 8the court shall i00ediatel% issue to the i0ple0entin' a'enc% an order to
ta1e possession of the propert% and start the i0ple0entation of the pro9ect.8 Ae hold that
accordin'l%, once the Arit of Possession is eEective, the &overn0ent itself is authori;ed to perfor0
the acts that are essential to the operation of the N)I) . as an international airport ter0inal upon
the eEectivit% of the Arit of Possession. These #ould include the repair, reconditionin' and
i0prove0ent of the co0ple=, 0aintenance of the e=istin' facilities and eCuip0ent, installation of
ne# facilities and eCuip0ent, provision of services and facilities pertainin' to the facilitation of air
traFc and transport, and other services that are inte'ral to a 0odern,da% international airport.
The &overn0entUs position is 0ore e=pansive than that adopted b% the !ourt. It ar'ues that #ith the #rit
of possession, it is enabled to perfor0 acts de 9ure on the e=propriated propert%. It cites Republic v.
Ta'le,
6G
as #ell as the state0ent therein that 8the e=propriation of real propert% does not include 0ere
ph%sical entr% or occupation of land,8 and fro0 the0 concludes that 8its 0ere ph%sical entr% and
occupation of the propert% fall short of the ta1in' of title, #hich includes all the ri'hts that 0a% be
e=ercised b% an o#ner over the sub9ect propert%.8
This conclusion is indeed lifted directl% fro0 state0ents in Ta'le,
6/
but not fro0 the ratio decidendi of that
case. Ta'le concerned #hether a #rit of possession in favor of the &overn0ent #as still necessar% in li'ht
of the fact that it #as alread% in actual possession of the propert%. In rulin' that the &overn0ent #as
entitled to the #rit of possession, the !ourt in Ta'le e=plains that such #rit vested not onl% ph%sical
possession, but also the le'al ri'ht to possess the propert%. !ontinues the !ourt, such le'al ri'ht to
possess #as particularl% i0portant in the case, as there #as a pendin' suit a'ainst the Republic for
unla#ful detainer, and the #rit of possession #ould serve to safe'uard the &overn0ent fro0 eviction.
6+
)t the sa0e ti0e, Ta'le confor0s to the obvious, that there is no transfer of o#nership as of %et b%
virtue of the #rit of possession. Ta'le 0a% concede that the &overn0ent is entitled to e=ercise
0ore than 9ust the ri'ht of possession b% virtue of the #rit of possession, %et it cannot be construed
to 'rant the &overn0ent the entire panopl% of ri'hts that are available to the o#ner. !ertainl%,
neither Ta'le nor an% other case or la#, lends support to the &overn0entUs proposition that it
acCuires bene$cial or eCuitable o#nership of the e=propriated propert% 0erel% throu'h the #rit of
possession.
Indeed, this !ourt has been vi'ilant in defense of the ri'hts of the propert% o#ner #ho has been
validl% deprived of possession, %et retains le'al title over the e=propriated propert% pendin'
pa%0ent of 9ust co0pensation. Ae reiterated the various doctrines of such i0port in our recent
holdin' in Republic v. @i02
7<
The reco'ni;ed rule is that title to the propert% e=propriated shall pass fro0 the o#ner to the e=propriator
onl% upon full pa%0ent of the 9ust co0pensation. 3urisprudence on this settled principle is consistent both
here and in other de0ocratic 9urisdictions. In )ssociation of S0all @ando#ners in the Philippines, Inc. et al.,
vs. Secretar% of )'rarian Refor0K
7(
L, thus2
8Title to propert% #hich is the sub9ect of conde0nation proceedin's does not vest the conde0nor until the
9ud'0ent $=in' 9ust co0pensation is entered and paid, but the conde0norUs title relates bac1 to the date
on #hich the petition under the 0inent Do0ain )ct, or the co00issionerUs report under the @ocal
I0prove0ent )ct, is $led.
= = = )lthou'h the ri'ht to appropriate and use land ta1en for a canal is co0plete at the ti0e of entr%, title
to the propert% ta1en re0ains in the o#ner until pa%0ent is actuall% 0ade. 40phasis supplied.5
In Qenned% v. Indianapolis, the BS Supre0e !ourt cited several cases holdin' that title to propert% does not
pass to the conde0nor until 9ust co0pensation had actuall% been 0ade. In fact, the decisions appear to be
unifor0 to this eEect. )s earl% as (/./, in Rubotto0 v. Mc@ure, it #as held that Uactual pa%0ent to the
o#ner of the conde0ned propert% #as a condition precedent to the invest0ent of the title to the propert%
in the StateU albeit Unot to the appropriation of it to public use.U In Re=ford v. Qni'ht, the !ourt of )ppeals of
Ne# ?or1 said that the construction upon the statutes #as that the fee did not vest in the State until the
pa%0ent of the co0pensation althou'h the authorit% to enter upon and appropriate the land #as co0plete
prior to the pa%0ent. Qenned% further said that Uboth on principle and authorit% the rule is . . . that the
ri'ht to enter on and use the propert% is co0plete, as soon as the propert% is actuall% appropriated under
the authorit% of la# for a public use, but that the title does not pass fro0 the o#ner #ithout his consent,
until 9ust co0pensation has been 0ade to hi0.8
Our o#n Supre0e !ourt has held in Visa%an Re$nin' !o. v. !a0us and Paredes, that2
UIf the la#s #hich #e have e=hibited or cited in the precedin' discussion are attentivel% e=a0ined it #ill be
apparent that the 0ethod of e=propriation adopted in this 9urisdiction is such as to aEord absolute
reassurance that no piece of land can be $nall% and irrevocabl% ta1en fro0 an un#illin' o#ner until
co0pensation is paid....U840phasis supplied.5
!learl%, #ithout full pa%0ent of 9ust co0pensation, there can be no transfer of title fro0 the lando#ner to
the e=propriator. Other#ise stated, the RepublicUs acCuisition of o#nership is conditioned upon the full
pa%0ent of 9ust co0pensation #ithin a reasonable ti0e.
Si'ni$cantl%, in Municipalit% of "iIan v. &arciaK
7-
L this !ourt ruled that the e=propriation of lands consists of
t#o sta'es, to #it2
8= = = The $rst is concerned #ith the deter0ination of the authorit% of the plaintiE to e=ercise the po#er of
e0inent do0ain and the propriet% of its e=ercise in the conte=t of the facts involved in the suit. It ends
#ith an order, if not of dis0issal of the action, 8of conde0nation declarin' that the plaintiE has a la#ful
ri'ht to ta1e the propert% sou'ht to be conde0ned, for the public use or purpose described in the
co0plaint, upon the pa%0ent of 9ust co0pensation to be deter0ined as of the date of the $lin' of the
co0plaint8 = = =.
The second phase of the e0inent do0ain action is concerned #ith the deter0ination b% the court of 8the
9ust co0pensation for the propert% sou'ht to be ta1en.8 This is done b% the court #ith the assistance of not
0ore than three 4.5 co00issioners. = = =.
It is onl% upon the co0pletion of these t#o sta'es that e=propriation is said to have been co0pleted. In
Republic v. Sale0 Invest0ent !orporationK
7.
L , #e ruled that, 8the process is not co0pleted until pa%0ent
of 9ust co0pensation.8 Thus, here, the failure of the Republic to pa% respondent and his predecessors,in,
interest for a period of 6G %ears rendered the e=propriation process inco0plete.
@i0 serves fair #arnin' to the &overn0ent and its a'encies #ho consistentl% refuse to pa% 9ust
co0pensation due to the private propert% o#ner #hose propert% had been e=propriated. )t the
sa0e ti0e, @i0 e0phasi;es the fra'ilit% of the ri'hts of the &overn0ent as possessor pendin' the
$nal pa%0ent of 9ust co0pensation, #ithout di0inishin' the potenc% of such ri'hts. Indeed, the
public polic%, enshrined fore0ost in the !onstitution, 0andates that the &overn0ent 0ust pa% for
the private propert% it e=propriates. !onseCuentl%, the proper 9udicial attitude is to 'uarantee
co0pliance #ith this pri0ordial ri'ht to 9ust co0pensation.
Dinal Deter0ination of 3ust !o0pensation Aithin 7< Da%s
The issuance of the #rit of possession does not #rite $nis to the e=propriation proceedin's. )s
earlier pointed out, e=propriation is not co0pleted until pa%0ent to the propert% o#ner of 9ust
co0pensation. The proEered value stands as 0erel% a provisional deter0ination of the a0ount of
9ust co0pensation, the pa%0ent of #hich is suFcient to transfer possession of the propert% to the
&overn0ent. Ho#ever, to eEectuate the transfer of o#nership, it is necessar% for the &overn0ent
to pa% the propert% o#ner the $nal 9ust co0pensation.
In @i0, the !ourt #ent as far as to countenance, 'iven the e=ceptional circu0stances of that case,
the reversion of the validl% e=propriated propert% to private o#nership due to the failure of the
&overn0ent to pa% 9ust co0pensation in that case.
7*
It #as noted in that case that the &overn0ent
deliberatel% refused to pa% 9ust co0pensation. The !ourt #ent on to rule that 8in cases #here the
'overn0ent failed to pa% 9ust co0pensation #ithin $ve 465 %ears fro0 the $nalit% of the 9ud'0ent in
the e=propriation proceedin's, the o#ners concerned shall have the ri'ht to recover possession of
their propert%.8
76
Rep. )ct No. /+G* 0andates a speed% 0ethod b% #hich the $nal deter0ination of 9ust co0pensation 0a%
be had. Section * provides2
In the event that the o#ner of the propert% contests the i0ple0entin' a'enc%Us proEered value, the court
shall deter0ine the 9ust co0pensation to be paid the o#ner #ithin si=t% 47<5 da%s fro0 the date of $lin' of
the e=propriation case. Ahen the decision of the court beco0es $nal and e=ecutor%, the i0ple0entin'
a'enc% shall pa% the o#ner the diEerence bet#een the a0ount alread% paid and the 9ust co0pensation as
deter0ined b% the court.
Ae hold that this provision should appl% in this case. The si=t% 47<5,da% period prescribed in Rep. )ct No.
/+G* 'ives teeth to the la#Us avo#ed polic% 8to ensure that o#ners of real propert% acCuired for national
'overn0ent infrastructure pro9ects are pro0ptl% paid 9ust co0pensation.8
77
In this case, there alread% has
been irreversible dela% in the pro0pt pa%0ent of PI)T!O of 9ust co0pensation, and it is no lon'er possible
for the RT! to deter0ine the 9ust co0pensation due PI)T!O #ithin si=t% 47<5 da%s fro0 the $lin' of the
co0plaint last -( Dece0ber -<<*, as conte0plated b% the la#. Still, it is feasible to eEectuate the spirit of
the la# b% reCuirin' the trial court to 0a1e such deter0ination #ithin si=t% 47<5 da%s fro0 $nalit% of this
decision, in accordance #ith the 'uidelines laid do#n in Rep. )ct No. /+G* and its I0ple0entin' Rules.
Of course, once the a0ount of 9ust co0pensation has been $nall% deter0ined, the &overn0ent is obli'ed
to pa% PI)T!O the said a0ount. )s sho#n in @i0 and other li1e,0inded cases, the &overn0entUs refusal to
0a1e such pa%0ent is indubitabl% actionable in court.
)ppoint0ent of !o00issioners
The ne=t ar'u0ent for consideration is the clai0 of the &overn0ent that the RT! erred in
appointin' the three co00issioners in its G 3anuar% -<<6 Order #ithout prior consultation #ith
either the &overn0ent or PI)T!O, or #ithout aEordin' the &overn0ent the opportunit% to ob9ect to
the appoint0ent of these co00issioners. Ae can dispose of this ar'u0ent #ithout co0plication.
It 0ust be noted that Rep. )ct No. /+G* is silent on the appoint0ent of co00issioners tas1ed #ith
the ascertain0ent of 9ust co0pensation.
7G
This protocol thou'h is sanctioned under Rule 7G. Ae rule
that the appoint0ent of co00issioners under Rule 7G 0a% be resorted to, even in e=propriation
proceedin's under Rep. )ct No. /+G*, since the application of the provisions of Rule 7G in that
re'ard do not conTict #ith the statute. )s earlier stated, Section (* of the I0ple0entin' Rules does
allo# such other incidents aEectin' the co0plaint to be resolved under the provisions on
e=propriation of Rule 7G of the Rules of !ourt. ven #ithout Rule 7G, reference durin' trial to a
co00issioner of the e=a0ination of an issue of fact is sanctioned under Rule .- of the Rules of
!ourt.
"ut #hile the appoint0ent of co00issioners under the ae'is of Rule 7G 0a% be sanctioned in
e=propriation proceedin's under Rep. )ct No. /+G*, the standards to be observed for the
deter0ination of 9ust co0pensation are provided not in Rule 7G but in the statute. In particular, the
'overnin' standards for the deter0ination of 9ust co0pensation for the N)I) . facilities are found in
Section (< of the I0ple0entin' Rules for Rep. )ct No. /+G*, #hich provides for the replace0ent
cost 0ethod in the valuation of i0prove0ents and structures.
7/
Nothin' in Rule 7G or Rep. )ct No. /+G* reCuires that the RT! consult #ith the parties in the
e=propriation case on #ho should be appointed as co00issioners. Neither does the !ourt feel that
such a reCuire0ent should be i0posed in this case. Ae did rule in Municipalit% of Talisa% v.
Ra0ire;
7+
that 8there is nothin' to prevent Kthe trial courtL fro0 see1in' the reco00endations of
the parties on KtheL 0atter Kof appoint0ent of co00issionersL, the better to ensure their fair
representation.8
G<
)t the sa0e ti0e, such solicitation of reco00endations is not obli'ator% on the
part of the court, hence #e cannot i0pute error on the part of the RT! in its e=ercise of solitar%
discretion in the appoint0ent of the co00issioners.
Ahat Rule 7G does allo# thou'h is for the parties to protest the appoint0ent of an% of these
co00issioners, as provided under Section 6 of the Rule. These ob9ections thou'h 0ust be 0ade
$led #ithin ten 4(<5 da%s fro0 service of the order of appoint0ent of the co00issioners.
G(
In this
case, the proper recourse of the &overn0ent to challen'e the choice of the co00issioners is to $le
an ob9ection #ith the trial court, confor0abl% #ith Section 6, Rule 7G, and not as it has done, assail
the sa0e throu'h a special civil action for certiorari. !onsiderin' that the e=propriation proceedin's
in this case #ere eEectivel% halted seven 4G5 da%s after the Order appointin' the co00issioners,
G-
it
is per0issible to allo# the parties to $le their ob9ections #ith the RT! #ithin $ve 465 da%s fro0
$nalit% of this decision.
InsuFcient &round for Inhibition of Respondent 3ud'e
The $nal ar'u0ent for disposition is the clai0 of the &overn0ent is that Hon. &in'o%on has
pre9ud'ed the e=propriation case a'ainst the &overn0entUs cause and, thus, should be reCuired to
inhibit hi0self. This 'rave char'e is predicated on facts #hich the &overn0ent characteri;es as
8undeniable.8 In particular, the &overn0ent notes that the * 3anuar% -<<6 Order #as issued 0otu
proprio, #ithout an% precedin' 0otion, notice or hearin'. Durther, such order, #hich directed the
pa%0ent of BS^7- Million to PI)T!O, #as attended #ith error in the co0putation of 9ust
co0pensation. The &overn0ent also notes that the said Order #as issued even before su00ons
had been served on PI)T!O.
The disCuali$cation of a 9ud'e is a deprivation of hisMher 9udicial po#er
G.
and should not be allo#ed
on the basis of 0ere speculations and sur0ises. It certainl% cannot be predicated on the adverse
nature of the 9ud'eUs rulin's to#ards the 0ovant for inhibition, especiall% if these rulin's are in
accord #ith la#. Neither could inhibition be 9usti$ed 0erel% on the erroneous nature of the rulin's of
the 9ud'e. Ae e0phasi;ed in Aebb v. People2
G*
To prove bias and pre9udice on the part of respondent 9ud'e, petitioners harp on the alle'ed adverse and
erroneous rulin's of respondent 9ud'e on their various 0otions. "% the0selves, ho#ever, the% do not
suFcientl% prove bias and pre9udice to disCualif% respondent 9ud'e. To be disCualif%in', the bias and
pre9udice 0ust be sho#n to have ste00ed fro0 an e=tra9udicial source and result in an opinion on the
0erits on so0e basis other than #hat the 9ud'e learned fro0 his participation in the case. Opinions for0ed
in the course of 9udicial proceedin's, althou'h erroneous, as lon' as the% are based on the evidence
presented and conduct observed b% the 9ud'e, do not prove personal bias or pre9udice on the part of the
9ud'e. )s a 'eneral rule, repeated rulin's a'ainst a liti'ant, no 0atter ho# erroneous and vi'orousl% and
consistentl% e=pressed, are not a basis for disCuali$cation of a 9ud'e on 'rounds of bias and pre9udice.
=trinsic evidence is reCuired to establish bias, bad faith, 0alice or corrupt purpose, in addition to the
palpable error #hich 0a% be inferred fro0 the decision or order itself. )lthou'h the decision 0a% see0 so
erroneous as to raise doubts concernin' a 9ud'eUs inte'rit%, absent e=trinsic evidence, the decision itself
#ould be insuFcient to establish a case a'ainst the 9ud'e. The onl% e=ception to the rule is #hen the error
is so 'ross and patent as to produce an ineluctable inference of bad faith or 0alice.
G6
The &overn0entUs contentions a'ainst Hon. &in'o%on are severel% undercut b% the fact that the -(
Dece0ber -<<* Order, #hich the * 3anuar% -<<6 Order sou'ht to rectif%, #as indeed severel%
Ta#ed as it erroneousl% applied the provisions of Rule 7G of the Rules of !ourt, instead of Rep. )ct
No. /+G*, in ascertainin' co0pliance #ith the reCuisites for the issuance of the #rit of possession.
The * 3anuar% -<<6 Order, #hich accordin' to the &overn0ent establishes Hon. &in'o%onUs bias,
#as pro0ul'ated precisel% to correct the previous error b% appl%in' the correct provisions of la#. It
#ould not spea1 #ell of the !ourt if it sanctions a 9ud'e for #antin' or even atte0ptin' to correct a
previous erroneous order #hich precisel% is the ri'ht 0ove to ta1e.
Neither are #e convinced that the 0otu proprio issuance of the * 3anuar% -<<6 Order, #ithout the
bene$t of notice or hearin', suFcientl% evinces bias on the part of Hon. &in'o%on. The 0otu proprio
a0end0ent b% a court of an erroneous order previousl% issued 0a% be sanctioned dependin' on
the circu0stances, in line #ith the lon',reco'ni;ed principle that ever% court has inherent po#er to
do all thin's reasonabl% necessar% for the ad0inistration of 9ustice #ithin the scope of its
9urisdiction.
G7
Section 64'5, Rule (.6 of the Rules of !ourt further reco'ni;es the inherent po#er of
courts 8to a0end and control its process and orders so as to 0a1e the0 confor0able to la# and
9ustice,8
GG
a po#er #hich Hon. &in'o%on noted in his (< 3anuar% -<<6 O0nibus Order.
G/
This
inherent po#er includes the ri'ht of the court to reverse itself, especiall% #hen in its honest opinion
it has co00itted an error or 0ista1e in 9ud'0ent, and that to adhere to its decision #ill cause
in9ustice to a part% liti'ant.
G+
!ertainl%, the * 3anuar% -<<6 Order #as desi'ned to 0a1e the RT!Us previous order confor0able to
la# and 9ustice, particularl% to appl% the correct la# of the case. Of course, as earlier established,
this eEort proved inco0plete, as the * 3anuar% -<<6 Order did not correctl% appl% Rep. )ct No. /+G*
in several respects. Still, at least, the * 3anuar% -<<6 Order correctl% refor0ed the 0ost basic
pre0ise of the case that Rep. )ct No. /+G* 'overns the e=propriation proceedin's.
Nonetheless, the &overn0ent belittles Hon. &in'o%onUs invocation of Section 64'5, Rule (.6 as
8patentl% #ithout 0erit8. !ertainl% 0erit can be seen b% the fact that the * 3anuar% -<<6 Order
reoriented the e=propriation proceedin's to#ards the correct 'overnin' la#. Still, the &overn0ent
clai0s that the unilateral act of the RT! did not confor0 to la# or 9ustice, as it #as not aEorded the
ri'ht to be heard.
The !ourt #ould be 0ore charitabl% disposed to#ards this ar'u0ent if not for the fact that the earlier order
#ith the * 3anuar% -<<6 Order sou'ht to correct #as itself issued #ithout the bene$t of an% hearin'. In
fact, nothin' either in Rule 7G or Rep. )ct No. /+G6 reCuires the conduct of a hearin' prior to the issuance
of the #rit of possession, #hich b% desi'n is available i00ediatel% upon the $lin' of the co0plaint
provided that the reCuisites attachin' thereto are present. Indeed, this e=pedited process for the obtention
of a #rit of possession in e=propriation cases co0es at the e=pense of the ri'hts of the propert% o#ner to
be heard or to be deprived of possession. !onsiderin' these predicates, it #ould be hi'hl% a#r% to de0and
that an order 0odif%in' the earlier issuance of a #rit of possession in an e=propriation case be barred until
the sta'in' of a hearin', #hen the issuance of the #rit of possession itself is not sub9ect to hearin'.
Perhaps the conduct of a hearin' under these circu0stances #ould be prudent. Ho#ever, hearin' is not
0andator%, and the failure to conduct one does not establish the 0anifest bias reCuired for the inhibition
of the 9ud'e.
The &overn0ent li1e#ise faults Hon. &in'o%on for usin' the a0ount of BS^.6< Million as the basis
for the (<<Y deposit under Rep. )ct No. /+G*. The !ourt has noted that this state0ent #as
predicated on the erroneous belief that the "IR ;onal valuation applies as a standard for
deter0ination of 9ust co0pensation in this case. ?et this is 0anifest not of bias, but 0erel% of error
on the part of the 9ud'e. Indeed, the &overn0ent #as not the onl% victi0 of the errors of the RT! in
the assailed orders. PI)T!O itself #as in9ured b% the issuance b% the RT! of the #rit of possession,
even thou'h the for0er had %et to be paid an% a0ount of 9ust co0pensation. )t the sa0e ti0e, the
&overn0ent #as also pre9udiced b% the erroneous rulin' of the RT! that the a0ount of BS^7-..
Million, and not P. "illion, should be released to PI)T!O.
The !ourt has not been re0iss in pointin' out the 0ultiple errors co00itted b% the RT! in its assailed
orders, to the pre9udice of both parties. This attitude of error to#ards all does not ipso facto ne'ate the
char'e of bias. Still, 'reat care should be had in reCuirin' the inhibition of 9ud'es si0pl% because the
0a'istrate did err. Inco0petence 0a% be a 'round for ad0inistrative sanction, but not for inhibition, #hich
reCuires lac1 of ob9ectivit% or i0partialit% to sit on a case.
The !ourt should necessaril% 'uard a'ainst adoptin' a standard that a 9ud'e should be inhibited fro0
hearin' the case if one liti'ant loses trust in the 9ud'e. Such loss of trust on the part of the &overn0ent
0a% be palpable, %et inhibition cannot be 'rounded 0erel% on the feelin's of the part%,liti'ants. Indeed,
ever% losin' liti'ant in an% case can resort to clai0in' that the 9ud'e #as biased, and heMshe #ill 'ain a
s%0pathetic ear fro0 friends, fa0il%, and people #ho do not understand the 9udicial process. The test in
believin' such a proposition should not be the vehe0ence of the liti'antUs clai0 of bias, but the !ourtUs
9udicious esti0ation, as people #ho 1no# better than to believe an% old cr% of 8#olf_8, #hether such bias
has been irrefutabl% e=hibited.
The !ourt ac1no#led'es that it had been previousl% held that 8at the ver% $rst si'n of lac1 of faith and
trust in his actions, #hether #ell,'rounded or not, the 9ud'e has no other alternative but to inhibit hi0self
fro0 the case.8
/<
"ut this doctrine is Cuali$ed b% the entrenched rule that 8a 9ud'e 0a% not be le'all%
prohibited fro0 sittin' in a liti'ation, but #hen circu0stances appear that #ill induce doubt to his honest
actuations and probit% in favor of either part%, or incite such state of 0ind, he should conduct a careful
self, e=a0ination. He should e=ercise his discretion in a #a% that the peopleUs faith in the !ourts of 3ustice
is not i0paired.8
/(
)nd a self,assess0ent b% the 9ud'e that heMshe is not i0paired to hear the case #ill be
respected b% the !ourt absent an% evidence to the contrar%. )s held in !hin v. !ourt of )ppeals2
)n alle'ation of pre9ud'0ent, #ithout 0ore, constitutes 0ere con9ecture and is not one of the 89ust and
valid reasons8 conte0plated in the second para'raph of Rule (.G of the Rules of !ourt for #hich a 9ud'e
0a% inhibit hi0self fro0 hearin' the case. Ae have repeatedl% held that 0ere suspicion that a 9ud'e is
partial to a part% is not enou'h. "are alle'ations of partialit% and pre9ud'0ent #ill not suFce in the
absence of clear and convincin' evidence to overco0e the presu0ption that the 9ud'e #ill underta1e his
noble role to dispense 9ustice accordin' to la# and evidence and #ithout fear or favor. There should be
adeCuate evidence to prove the alle'ations, and there 0ust be sho#in' that the 9ud'e had an interest,
personal or other#ise, in the prosecution of the case. To be a disCualif%in' circu0stance, the bias and
pre9udice 0ust be sho#n to have ste00ed fro0 an e=tra9udicial source and result in an opinion on the
0erits on so0e basis other than #hat the 9ud'e learned fro0 his participation in the case.
/-
The 0ere vehe0ence of the &overn0entUs clai0 of bias does not translate to clear and convincin'
evidence of i0pairin' bias. There is no suFcient 'round to direct the inhibition of Hon. &in'o%on fro0
hearin' the e=propriation case.
In conclusion, the !ourt su00ari;es its rulin's as follo#s2
4(5 The -<<* Resolution in )'an sets the base reCuire0ent that has to be observed before the
&overn0ent 0a% ta1e over the N)I) ., that there 0ust be pa%0ent to PI)T!O of 9ust co0pensation
in accordance #ith la# and eCuit%. )n% rulin' in the present e=propriation case 0ust be
confor0able to the dictates of the !ourt as pronounced in the )'an cases.
4-5 Rep. )ct No. /+G* applies in this case, particularl% insofar as it reCuires the i00ediate pa%0ent
b% the &overn0ent of at least the proEered value of the N)I) . facilities to PI)T!O and provides
certain valuation standards or 0ethods for the deter0ination of 9ust co0pensation.
4.5 )ppl%in' Rep. )ct No. /+G*, the i0ple0entation of Arit of Possession in favor of the &overn0ent
over N)I) . is held in abe%ance until PI)T!O is directl% paid the a0ount of P. "illion, representin'
the proEered value of N)I) . under Section *4c5 of the la#.
4*5 )ppl%in' Rep. )ct No. /+G*, the &overn0ent is authori;ed to start the i0ple0entation of the
N)I) . )irport ter0inal pro9ect b% perfor0in' the acts that are essential to the operation of the
N)I) . as an international airport ter0inal upon the eEectivit% of the Arit of Possession, sub9ect to
the conditions above,stated. )s prescribed b% the !ourt, such authorit% enco0passes 8the repair,
reconditionin' and i0prove0ent of the co0ple=, 0aintenance of the e=istin' facilities and
eCuip0ent, installation of ne# facilities and eCuip0ent, provision of services and facilities
pertainin' to the facilitation of air traFc and transport, and other services that are inte'ral to a
0odern,da% international airport.8
/.
465 The RT! is 0andated to co0plete its deter0ination of the 9ust co0pensation #ithin si=t% 47<5
da%s fro0 $nalit% of this Decision. In doin' so, the RT! is obli'ed to co0pl% #ith 8la# and eCuit%8 as
ordained in )'ain and the standard set under I0ple0entin' Rules of Rep. )ct No. /+G* #hich is the
8replace0ent cost 0ethod8 as the standard of valuation of structures and i0prove0ents.
475 There #as no 'rave abuse of discretion attendin' the RT! Order appointin' the co00issioners
for the purpose of deter0inin' 9ust co0pensation. The provisions on co00issioners under Rule 7G
shall appl% insofar as the% are not inconsistent #ith Rep. )ct No. /+G*, its I0ple0entin' Rules, or
the rulin's of the !ourt in )'an.
4G5 The &overn0ent shall pa% the 9ust co0pensation $=ed in the decision of the trial court to PI)T!O
i00ediatel% upon the $nalit% of the said decision.
4/5 There is no basis for the !ourt to direct the inhibition of Hon. &in'o%on.
)ll told, the !ourt $nds no 'rave abuse of discretion on the part of the RT! to #arrant the nulli$cation of
the Cuestioned orders. Nonetheless, portions of these orders should be 0odi$ed to confor0 #ith la# and
the pronounce0ents 0ade b% the !ourt herein.
AHRDOR, the Petition is &R)NTD in P)RT #ith respect to the orders dated * 3anuar% -<<6 and (<
3anuar% -<<6 of the lo#er court. Said orders are )DDIRMD #ith the follo#in' MODIDI!)TIONS2
(5 The i0ple0entation of the Arit of Possession dated -( Dece0ber -<<6 is H@D IN )"?)N!,
pendin' pa%0ent b% petitioners to PI)T!O of the a0ount of Three "illion T#o Million One Hundred
T#ent% Dive Thousand Pesos 4P.,<<-,(-6,<<<.<<5, representin' the proEered value of the N)I) .
facilities>
-5 Petitioners, upon the eEectivit% of the Arit of Possession, are authori;ed start the i0ple0entation
of the Nino% )Cuino International )irport Pasen'er Ter0inal III pro9ect b% perfor0in' the acts that
are essential to the operation of the said International )irport Passen'er Ter0inal pro9ect>
.5 RT! "ranch ((G is hereb% directed, #ithin si=t% 47<5 da%s fro0 $nalit% of this Decision, to
deter0ine the 9ust co0pensation to be paid to PI)T!O b% the &overn0ent.
The Order dated G 3anuar% -<<6 is )DDIRMD in all respects sub9ect to the Cuali$cation that the parties are
'iven ten 4(<5 da%s fro0 $nalit% of this Decision to $le, if the% so choose, ob9ections to the appoint0ent of
the co00issioners decreed therein.
The Te0porar% Restrainin' Order dated (* 3anuar% -<<6 is hereb% @IDTD.
No pronounce0ent as to costs.
SO ORDRD.
D$NTE O. T#NG$
)ssociate 3ustice
A !ON!BR2
H#L$R#O G. D$%#DE, JR.
!hief 3ustice
RE3N$TO S. PUNO
)ssociate 3ustice
$RTEM#O %. P$NG$N#-$N
)ssociate 3ustice
LEON$RDO $. EU#SUM-#NG
)ssociate 3ustice
CONSUELO 3N$RES&S$NT#$GO
)ssociate 3ustice
$NGEL#N$ S$NDO%$L&GUT#ERRE'
)ssociate 3ustice
$NTON#O T. C$RP#O
)ssociate 3ustice
M$. $L#C#$ $USTR#$&M$RT#NE'
)ssociate 3ustice
REN$TO C. CORON$
)ssociate 3ustice
CONCH#T$ C$RP#O&MOR$LES
)ssociate 3ustice
ROMEO J. C$LLEJO, SR.
)ssociate 3ustice
$DOL)O S. $'CUN$
)ssociate 3ustice
M#N#T$ %. CH#CO&N$'$R#O
)ssociate 3ustice
C$NC#O C. G$RC#$
)ssociate 3ustice
! R T I D I ! ) T I O N
Pursuant to )rticle VIII, Section (. of the !onstitution, it is hereb% certi$ed that the
conclusions in the above Decision #ere reached in consultation before the case #as
assi'ned to the #riter of the opinion of the !ourt.
H#L$R#O G. D$%#DE, JR.
"hief ,stice
)oono"*
(
*6< Phil. G** 4-<<.5. The Motions for Reconsideration #ere denied in a Resolution dated -(
3anuar% -<<*, see *-< S!R) 6G6.
-
Ibid.
.
8In su0, this !ourt rules that in vie# of the absence of the reCuisite $nancial capacit% of the
Paircar'o !onsortiu0, predecessor of respondent PI)T!O, the a#ard b% the P")! of the contract for
the construction, operation and 0aintenance of the N)I) IPT III is null and void. Durther, considerin'
that the (++G !oncession )'ree0ent contains 0aterial and substantial a0end0ents, #hich
a0end0ents had the eEect of convertin' the (++G !oncession )'ree0ent into an entirel% diEerent
a'ree0ent fro0 the contract bidded upon, the (++G !oncession )'ree0ent is si0ilarl% null and
void for bein' contrar% to public polic%. The provisions under Sections *.<*4b5 and 4c5 in relation to
Section (.<7 of the (++G !oncession )'ree0ent and Section *.<*4c5 in relation to Section (.<7 of
the )R!), #hich constitute a direct 'overn0ent 'uarantee e=pressl% prohibited b%, a0on' others,
the "OT @a# and its I0ple0entin' Rules and Re'ulations are also null and void. The Supple0ents,
bein' accessor% contracts to the )R!), are li1e#ise null and void.8 Id. at /*<.
*
Id. at /+/. Per Separate Opinion, 3. Pan'aniban.
6
Ibid at /++. Per Separate Opinion, 3. Pan'aniban. 0phasis supplied.
7
&.R. Nos. (66<<(, (666*G V (6667(, -( 3anuar% -<<*, *-< S!R) 6G6.
G
Id. at 7<.. 0phasis supplied.
/
Rollo, pp. -G,-/.
+
Id. at 7<,7(.
(<
Ibid.
((
Particularl% the Republic of the Philippines, represented b% =ecutive Secretar% duardo r0ita,
the Depart0ent of Transportation and !o00uncations, represented b% its Secretar% @eandro
Mendo;a, and the Manila International )irport )uthorit%, represented b% its &eneral Mana'er
)lfonso !usi. See rollo, pp. //,+<.
(-
Rollo, p. +..
(.
Dor brevit%Us sa1e, all further references to this a0ount #ill be to this rounded oE $'ure
deno0inated in Philippine Pesos.
(*
"ased on the resolution b% the "oard of Directors of the Manila International )irport )uthorit% to
use the a0ount of P(7,*6<.<< per sCuare 0eter as the assessed value of the N)I) . Ter0inal. See
rollo, p. (<..
(6
Doc1eted as !ivil !ase No. <*,</G7,+.
(7
Rollo, pp. (</,(<+.
(G
!ited as &.R. No. (*-.<*, 3une -<, -<<(. See rollo, p. (<+.
(/
Rollo, p. -66. )ccordin' to PI)T!O, on -( Dece0ber -<<*, the sa0e date of the $lin' of the
co0plaint for e=propriation and the issuance of the #rit of possession, 8hundreds of PNP full% ar0ed
4sic5 SA)T tea0s Tan1ed Kthe N)I) . facilitiesL8, even thou'h it had not %et been served su00ons.
(+
Id. at G7,GG.
-<
Id. at /G.
-(
Id. at -*<,-*(.
--
Id. at .*,.6.
-.
Id. at 7<.. 0phasis supplied.
-*
See rollo, p. -+G,-+/. 8Petitioners a'ree #ith this Honorable !ourtUs state0ent that UfLor the
'overn0ent to ta1e over the said facilit%, it has to co0pensate respondent PI)T!O as builder of the
said structures.U Ho#ever, petitioners #ould li1e to stress the Cuali$cation enunciated b% this
Honorable !ourt that the Uco0pensation 0ust be 9ust and in accordance #ith la# and eCuit%.U8
-6
The N)I) . facilit% stands on a parcel of land o#ned b% the "ases !onversion Develop0ent
)uthorit%. See rollo, p. -G.
-7
See )rticle *(64(5, !ivil !ode.
-G
Rollo, infra.
-/
See Section (, Rep. )ct No. /+G*.
-+
)s prescribed b% Section (< of the I0ple0entin' Rules to Rep. )ct No. /+G*, in relation to
Sections *4a5 and G, Rep. )ct No. /+G*.
.<
See Section -, Rule 7G, Rules of !ourt.
.(
Private RespondentUs Me0orandu0, pp. -7,-G. 0phasis not ours. See rollo, infra.
.-
See Section (*, I0ple0entin' Rules.
..
See )'an (, supra note ( at 7.(,7.-.
.*
See Section -4a5, Rep. )ct No. 7+6G, as a0ended.
.6
See Section -4b5, Rep. )ct No. 7+6G, as a0ended.
.7
&.R. No. ((*---, 7 )pril (++6, -*. S!R) *.7.
.G
Ibid.
./
See )rticle *(64(5, !ivil !ode.
.+
Rollo, p. *-.
*<
"lac1Us @a# Dictionar%, 7th ed., p. (./G.
*(
See Section (, Rep. )ct No. /+G*.
*-
See Section (<, I0ple0entin' Rules to Rep. )ct No. /+G*. The replace0ent cost 0ethod is
'enerall% de$ned as 8the a0ount necessar% to replace the i0prove0entsMstructures, based on the
current 0ar1et prices for 0aterials, eCuip0ent, labor, contractorUs pro$t and overhead, and all
other attendant costs associated #ith the acCuisition and installation in place of the aEected
i0prove0entsMstructures.8
*.
The replace0ent cost 0ethod is 'enerall% de$ned as 8the a0ount necessar% to replace the
i0prove0entsMstructures, based on the current 0ar1et prices for 0aterials, eCuip0ent, labor,
contractorUs pro$t and overhead, and all other attendant costs associated #ith the acCuisition and
installation in place of the aEected i0prove0entsMstructures.8 Ibid.
**
See Section *4c5, Rep. )ct No. /+G*.
*6
See Section 6, id.
*7
8In the event that the o#ner of the propert% contests the i0ple0entin' a'enc%Us proEered value,
the court shall deter0ine the 9ust co0pensation to be paid the o#ner #ithin si=t% 47<5 da%s fro0
the date of $lin' of the e=propriation case.8 See Section *, id.
*G
Rollo, p. /*.
*/
)nne= 8Q,(8 to Petition. See rollo, infra.
*+
Rollo, p. .+G.
6<
!o0plaint dated -( Dece0ber -<<*. See rollo, infra.
6(
Rollo, p. .+*.
6-
Id. at .+..
6.
The assessed 0ar1et value under Rule 7G of the Rules of !ourt, and (6Y of the fair 0ar1et value
under the @ocal &overn0ent !ode.
6*
See Section -, Rule 7G, Rules of !ourt.
66
See Section (+, @ocal &overn0ent !ode.
67
Ibid.
6G
!ited as -++ S!R) 6*+ 4(++/5. Rollo, p. *(..
6/
8In e=ercisin' this po#er, petitioner intended to acCuire not onl% ph%sical possession but also the
le'al ri'ht to possess and ulti0atel% to o#n the sub9ect propert%. Hence, its 0ere ph%sical entr% and
occupation of the propert% fall short of the ta1in' of title, #hich includes all the ri'hts that 0a% be
e=ercised b% an o#ner over the sub9ect propert%.8 Republic v. Ta'le, .6+ Phil. /+-, +<- 4(++/5.
6+
Republic v. Ta'le, id. at +<..
7<
&.R. No. (7(767, -+ 3une -<<6.
7(
&.R. No. G/G*-, 3ul% (*, (+/+, (G6 S!R) .*..
7-
&.R. No. 7+-7<, Dece0ber --, (+/+, (/< S!R) 6G7, 6/.,6/*.
7.
&.R. No. (.G67+, 3une -., -<<<, ..* S!R) .-<, .-+.
7*
The !ourt in Republic v. @i0 ho#ever reco'ni;ed the e=ceptional circu0stances in that case,
#herein the 'overn0ent had not paid 9ust co0pensation in the 6G %ears that had passed since the
e=propriation proceedin's #ere ter0inated. The 'eneral rule, as stated in Republic, re0ained that
8non,pa%0ent of 9ust co0pensation 4in e=propriation proceedin's5 does not entitle the private
lando#ners to recover possession of the e=propriated lots.8 Id.
76
Republic v. @i0, supra note 7<. The 6 %ear period set in @i0 #as based on Section 7, Rule .+ of
the Rules of !ourt, #hich sets a 6 %ear period #ithin #hich a $nal and e=ecutor% 9ud'0ent or order
0a% be e=ecuted on 0otion. Id.
77
See Section (, Rep. )ct No. /+G*.
7G
Section (( of the I0ple0entin' Rules does allo# the i0ple0entin' 'overn0ent a'enc% to
en'a'e the services of 'overn0ent $nancin' institutions or private appraisers dul% accredited b%
those institutions to underta1e the appraisal of the propert%, includin' the land andMor
i0prove0ents and structures. ?et the en'a'e0ent of these appraisers at the election of the
&overn0ent is clearl% diEerent fro0 the appoint0ent b% the trial court of co00issioners. The
diEerences e=tend be%ond 0erel% the selectin' authorit%. The en'a'e0ent of appraisers under
Section (( pri0aril% occurs before the $lin' of the e=propriation co0plaint, #hen the &overn0ent is
obli'ed to deter0ine the current relevant ;onal valuation of the land to be e=propriated, the
valuation of the structures and i0prove0ents usin' the replace0ent cost 0ethod, or the proEered
value of the propert% for e=propriation, all for the purpose of 0a1in' the initial pa%0ent necessar%
for the #rit of possession under Section * of Rep. )ct No. /+G*. This initial deter0ination of the
a0ount is 'enerall% 0ade b% the &overn0ent, and not b% the courts, and the en'a'e0ent of
appraisers is attuned for such purpose. Ho#ever, if the &overn0ent en'a'es these appraisers after
the initial pa%0ent has been 0ade to the propert% o#ner, for the e=press purpose of 0a1in' the
$nal deter0ination of 9ust co0pensation, there is no rule that binds the trial court to the $ndin's of
these appraisers. Neither are these appraisers obli'ed to receive evidence sub0itted b% the parties,
unli1e the co00issioners, #ho are e=pressl% authori;ed to do so under Section 7, Rule 7G.
7/
Supra note *-.
7+
&.R. No. GG<G(, -- March (++<, (/. S!R) 6-/.
G<
Id. at 6.-.
G(
See Section 6, Rule 7G, Rules of !ourt.
G-
"% virtue of the issuance of the Te0porar% Restrainin' Order dated (* 3anuar% -<<6.
G.
See strada v. Desierto, &.R. Nos. (*7G(<,(6, (*7G./, . )pril -<<(, .67 S!R) (</.
G*
.*- Phil. -<7 4(++G5.
G6
Id. at -(7,-(G. See also )leria v. Vele;, &.R. No. (-G*<<, (7 Nove0ber (++/> People v. !ourt of
)ppeals, &.R. No. (-+(-<, - 3ul% (+++> Seveses v. !ourt of )ppeals, &.R. No. (<-7G6, (. October
(+++> Soriano v. )n'eles, &.R. No. (<++-<, .( )u'ust -<<<> People v. &a1o, &.R. No. (.6<*6, (6
Dece0ber -<<<> &ochan v. &ochan, &.R. No. (*.</+, -G Debruar% -<<..
G7
Shio9i v. Harve%, *. Phil. ..., .** 4(+--5.
GG
Section 6, Rule (.6, Rules of !ourt.
G/
See rollo, p. /-.
G+
Tocao v. !ourt of )ppeals, &.R. No. (-G*<6, -< Septe0ber -<<(, *7. S!R) .76. See also
)straCuillo v. 3avier, @,-<<.*, 3anuar% -7, (+76, (. S!R) (-6.
/<
See e.'., &aca%an v. Pa0intuan, ).M. No. RT3,++,(*/., (G Septe0ber (+++, .(* S!R) 7/-.
/(
See e.'., Pi0entel vs. Salan'a, -( S!R) (7<.
/-
&.R. No. (**7(/, (6 )u'ust -<<., -<7 S!R) *<+.
/.
Infra.