Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 82789 November 21, 1991
NARCISO KHO, petitioner,
vs.
MANUEL CAMACHO, SHERIFF OF QUEZON CITY, and HONORABLE OSCAR LEVISTE,
Regional Trial Court of Quezon City, Branch 97, respondents.
Emilio P. Ramos for petitioner.
Camacho and Associates for respondents.

FERNAN, C.J.:p
The issue in this petition for certiorari is whether respondent Judge Oscar L. Leviste of the Regional
Trial Court of Quezon City, Branch 97, grossly abused his discretion when he issued the questioned
order of March 29, 1988 which cancelled the previous order approving a notice of appeal.
The facts are as follows:
In payment of attorney's fees resolved against him, petitioner Narciso Kho, a businessman, issued in
favor of private respondent Atty. Manuel Camacho six (6) postdated Manila Bank checks in the total
sum of P57,349.00. One of the checks, in the amount of P10,000.00, was lost by Atty. Camacho
who promptly notified petitioner. When the other five (5) checks were negotiated by Camacho with
the Philippine Amanah Bank, the same were returned uncleared because Manila Bank had been
ordered closed by the Central Bank.
Because of petitioner's refusal to replace the Manila Bank checks or pay his obligation, Camacho
instituted an action for a sum of money against petitioner before respondent trial court. 1
In his answer, petitioner alleged that he was under no obligation to replace the lost check for
P10,000.00, arguing that Camacho should have executed a sworn statement that he lost the check
issued to him and furnished both the drawer and the bank with said statement so that the bank could
place on the check "under alarmed," instead of merely informing petitioner.
Petitioner also refused to issue new checks maintaining that the closure of Manila Bank (in which he
had an outstanding deposit of P581,571.84 which was more than enough to cover the cost of the
five checks) was beyond his control and therefore he was in no financial position to pay Camacho
unless and until his money in that beleaguered bank was released.
Contending that petitioner's answer failed to tender a genuine issue, Camacho moved for a
judgment on the pleadings which respondent Judge Leviste granted in his order of February 12,

1988. In said order, respondent Judge directed petitioner to pay Camacho P57,349.00 "minus the
P10,000.00 pertaining to the lost check, or a total of P47,349.00 with interest at the legal rate of 6%
from June 2, 1987, until fully paid, with costs or attorney's fees." 2
On February 25, 1988, petitioner seasonably filed a notice of appeal stating that he was appealing
the February 12, 1988 order to the Court of Appeals. Respondent Judge duly approved said notice
in his order of February 29, 1988.
On the other hand, despite the reduced money judgment, Camacho made no move to contest the
award. Instead, he filed a motion/manifestation praying that petitioner's notice of appeal be stricken
off the record as a mere scrap of paper.
Acting on the aforesaid motion, respondent Judge issued the assailed order of March 29, 1988
setting aside the previously approved notice of appeal and adopting Camacho's view that the proper
remedy from a judgment on the pleadings was a petition for certiorari to the Supreme Court. Said
order reads:
In view of the Motion/Manifestation dated March 1, 1988, which this Court finds with
merit, . . ., this Court believing that only questions of law are involved, hence the
proper remedy should be a petition for certiorari, there being no question of fact
presented by the pleadings and the order in Summary Judgment, the order of this
Court approving the notice of appeal is hereby cancelled and a new order is hereby
made that said notice of appeal is disapproved. 3
Hence this petition for certiorari.
The Court has readily observed two very glaring errors committed by respondent Judge Leviste.
First, he listened to Camacho who could not even distinguish between a petition for certiorari and a
petition for review on certiorari. Secondly, he pre-empted a prerogative that legally pertains to the
Court of Appeals when he disapproved petitioner's notice of appeal "believing that only questions of
law are involved."
In E Razon, Inc. vs. Judge Moya, No. L-31693, February 24, 1981, 103 SCRA 41, the Court, through
Justice Melencio-Herrera, held:
Concededly, issues that involve pure questions of law are within the exclusive
jurisdiction of this Court. However, Rule 41 of the Rules of Court does not authorize
the Trial Court to disallow an appeal on the ground that there is no question of fact,
but only a question of law, involved. 4
The Court was no less explicit and emphatic when it declared in the subsequent case of PNB
vs. Romillo, Jr., G.R. No. 70681, October 16, 1985, 139 SCRA 320, 325-326, that:
We hold the view that whether an appeal involves only question of law or both
questions of fact and law, this question should be left for the determination of an
appellate court and not by the court which rendered the subject decision appealed
from. . . . Respondent Judge erred in dismissing said appeal on his misconception
that the same involves only a question of law and based on this reasoning,
disallowed petitioner's appeal because it was not made to the Supreme Court. . . .

By dismissing the appeal on the ground that it was misdirected because the case
was resolved by it on a pure question of law, the trial court committed a grave error.
Respondent Judge should have allowed the Intermediate Appellate Court to decide
whether or not the petitioner's appeal involves only a question of law and not
arrogate unto himself the determination of this question. His error in dismissing
petitioner bank's appeal becomes even more obvious considering the provisions of
Section 3 of Rule 50 of the Rules of Court, wherein it is specifically provided that
"where the appealed case has been erroneously brought to the Court of Appeals, it
shall not dismiss the appeal but shall certify the case to the proper court, with a
specific and clear statement of the grounds therefor."
Thus, following the above pronouncements, what respondent Judge should have done under the
circumstances was to sustain his approval of the notice of appeal and leave it to the Court of
Appeals to certify the case to the proper tribunal if warranted. Indeed, Judge Leviste had absolutely
no authority to disapprove the notice of appeal. Under the present rules, his role is to approve or
disapprove the record on appeal (when required) and the appeal bond, but not a notice of appeal. A
notice of appeal does not require the approval of the trial court. 5
Nonetheless, although a procedural error was committed by respondent Judge in disapproving
petitioner's notice of appeal, to require him to give due course to the appeal and then elevate the
records of Civil Case No. Q-52014 to the Appellate Court will serve no useful purpose and will only
delay the resolution of an otherwise open-and-shut case. The records before us are sufficient to
enable us to rule on the propriety of the judgment on the pleadings and to terminate this case once
and for all.
The obligation to pay P57,349.00 in attorney's fees is admitted. The appropriate checks in payment
therefor have been issued. However, one check was misplaced through the creditor's fault while the
other five were dishonored because the drawee bank has ceased to operate.
A perusal of petitioner's answer convinces us that the judgment on the pleadings was proper. In that
pleading, petitioner disavowed any obligation to replace the useless checks and gratuitously
advanced the reason that the bank where he had deposited his lifetime savings had been closed
through no fault of his. In effect, what petitioner was saying was that Camacho should wait until he
(petitioner) was in a position to pay. This is not a sufficient controversion of the material allegations
in the complaint.
Finding no reversible error in the judgment on the pleadings rendered by respondent Judge Leviste,
the Court considers the same as the final adjudication on the respective rights of the parties.
WHEREFORE, in view of the foregoing, certiorari is hereby DENIED. No costs.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.

# Footnotes
1 Civil Case No. Q-52014.

2 Annex E, Rollo, p. 23.

3 Annex J, Rollo, p. 33; Emphasis supplied.
4 Emphasis supplied.
5 Aquino vs. Judge Santiago, G.R. No. 56362, May 28, 1988, 161 SCRA 570.

Republic of the Philippines

SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 139371

April 4, 2001

INDIANA AEROSPACE UNIVERSITY, petitioner,

vs.
COMMISSION ON HIGHER EDUCATION (CHED), respondent.
PANGANIBAN, J.:
When the delayed filing of an answer causes no prejudice to the plaintiff, default orders should be
avoided. Inasmuch as herein respondent was improvidently declared in default, its Petition for
Certiorari to annul its default may be given due course. The act of the Commission on Higher
Education enjoining petitioner from using the word "university" in its corporate name and ordering it
to revert to its authorized name does not violate its proprietary rights or constitute irreparable
damage to the school. Indeed, petitioner has no vested right to misrepresent itself to the public. An
injunction is a remedy in equity and should not be used to perpetuate a falsehood.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the
July 21, 1999 Decision1 of the Court of Appeals (CA) in CA-GR SP No. 51346. The appellate court
directed the Regional Trial Court (RTC) of Makati City, Branch 136, to cease and desist from
proceeding with Civil Case No. 98-811 and to dismiss the Complaint for Damages filed by the
"Indiana Aerospace University" against the Commission on Higher Education (CHED). The
dispositive portion of the CA Decision reads as follows:
"WHEREFORE, in the light of the foregoing consideration, and pursuant to pertinent existing
laws and jurisprudence on the matter, [the trial court] is hereby DIRECTED to cease and
desist from proceeding with Civil Case No. 98-811 and to order the dismissal of [petitioner's]
Petition dated March 31, 1999 in Civil Case No. 98-911 for lack of merit and valid cause of
action."2
The Facts
The facts of this case are summarized by the CA, as follows:
"Sometime in October 1996, Dr. Reynaldo B. Vera, Chairman, Technical Panel for
Engineering, Architecture, and Maritime Education (TPRAM) of [CHED], received a letter
dated October 18, 1998 (Annex 'C') from Douglas R. Macias, Chairman, Board of
Aeronautical Engineering, Professional Regulat[ory] Commission (PRC) and Chairman,
Technical Committee for Aeronautical Engineering (TPRAME) inquiring whether [petitioner]
had already acquired [u]niversity status in view of the latter's advertisement in [the] Manila
Bulletin.
"In a letter dated October 24, 1996, Dr. Vera formally referred the aforesaid letter to
Chairman Alcala with a request that the concerned Regional Office of [CHED] be directed to

conduct appropriate investigation on the alleged misrepresentation by [petitioner].

Thereafter, [CHED] referred the matter to its Regional Director in Cebu City, requesting said
office to conduct an investigation and submit its report. The [R]eport submitted in January
1997, stated in substance:
'x x x

xxx

xxx

'To recall it was in the month of May 1996, [that] Director Ma. Lilia Gaduyon met the
school [p]resident in the regional office and verbally talked [with] and advised them
not to use University when it first came out in an advertisement column of a local
daily newspaper in Cebu City. It was explained that there was a violation [committed
by] his institution [when it used] the term university unless the school ha[d] complied
[with] the basic requirement of being a university as prescribed in CHED
Memorandum Order No. 48, s. 1996.'
xxx

xxx

x x x.'

"As a consequence of said Report, [respondent's] Legal Affairs Service was requested to
take legal action against [petitioner]. Subsequently, on February 3, 1997, [respondent]
directed [petitioner] to desist from using the term University, including the use of the same in
any of its alleged branches. In the course of its investigation, [respondent] was able to verify
from the Securities and Exchange Commission (SEC) that [petitioner had] filed a proposal to
amend its corporate name from Indiana School of Aeronautics to Indiana Aerospace
University, which was supposedly favorably recommended by the Department of Education,
Culture and Sports (DECS) per its Indorsement dated 17 July 1995, and on [that] basis, SEC
issued to [petitioner] Certificate of Registration No. AS-083-002689 dated August 7, 1995.
Surprisingly, however, it ought to be noted, that SEC Chairman Perfecto R. Yasay, Jr. wrote
the following letter to the [c]hairman of [respondent]:
'Hon. Angel C. Alcala
Chairman
Commission on Higher Education
DAP Bldg., San Miguel Avenue
Ortigas Center, Pasig City
Dear Chairman Alcala:
This refers to your letter dated September 18, 1997 requesting this Commission to
make appropriate changes in the Articles of Incorporation of Indiana School of
Aeronautics, Inc. due to its unauthorized use of the term 'University' in its corporate
name.
Relative thereto, please be informed that our records show that the above-mentioned
corporation has not filed any amended articles of incorporation that changed its
corporate name to include the term 'University.'
In case the corporation submit[s] an application for change of name, your Cease and
Desist Order shall be considered accordingly.
Very Truly yours,

(SGD.) PERFECTO R. YASAY, JR.

Chairman'
"In reaction to [respondent's] order for [petitioner] to desist from using the word 'University',
Jovenal Toring, [c]hairman and [f]ounder of [petitioner] wrote a letter dated February 24,
1997 (Annex 'G') appealing for reconsideration of [respondent's] Order, with a promise to
follow the provisions of CMO No. 48, pertinent portions of which have been quoted in the
Petition, to wit:
'On 07 August 1995, in line with the call of the government to go for global
competitiveness and our vision to help in the development of aerospace technology,
the Board of Directors applied with the SEC for the amendment of Article I of the
Articles of Incorporation to read as 'Indiana Aerospace University' instead of 'Indiana
School of Aeronautics, Inc.'
xxx

xxx

xxx

'In view thereof, we would like to appeal to you Fr. Delagoza to please reconsider
your order of February 3, 1997, otherwise the school will encounter financial
difficulties and suffer damages which will eventually result in the mass dislocation of
x x x thousand[s] of students. The undersigned, being the [c]hairman and [f]ounder,
will try our very best to follow the provisions of CHED MEMO No. 48, series of 1996
that took effect last June 18, 1996.
xxx

xxx

xxx

Thank you very much for giving me a copy of said CHED MEMO Order No. 48. More
power and God Bless You.
xxx

xxx

xxx

"The appeal of [petitioner] was however rejected by [respondent] in its decision dated July
30, 1998 and [the latter] ordered the former to cease and desist from using the word
'University.' However, prior to said date, on April 2, 1998, [petitioner] filed a Complaint for
Damages with prayer for Writ of Preliminary and Mandatory Injunction and Temporary
Restraining Order against [respondent], docketed as Civil Case No. 98-811 before public
respondent judge.
"On April 7, 1998, [respondent] filed a Special Appearance with Motion to Dismiss, based on
1) improper venue; 2) lack of authority of the person instituting the action; and 3) lack of
cause of action. On April 17, 1998, [petitioner] filed its Opposition to the Motion to Dismiss
[on] grounds stated therein, to which [respondent] filed a Reply on April 21, 1998, reiterating
the same arguments in its Motion to Dismiss. After due hearing, [petitioner] formally offered
its evidence on July 23, 1998 while [respondent] made a formal offer of evidence on July 28,
1998 to which [petitioner] filed its Comments/Objections and finally, [respondent] submitted
its Memorandum relative thereto on October 1, 1998.
"Public respondent judge, in an Order dated August 14, 1998, denied [respondent's] Motion
to Dismiss and at the same time, issued a Writ of Preliminary Injunction in favor of
[petitioner]. [Respondent], in the same Order, was directed to file its Answer within fifteen
(15) days from receipt of said Order, which was August 15, 1998.

xxx

xxx

xxx

'WHEREFORE, and in consideration of all the foregoing, [respondent's] Motion to

Dismiss is hereby denied, and the [respondent] is directed to file its [A]nswer to the
[C]omplaint within fifteen (15) days from receipt of this order.
In the meantime, [respondent], its officials, employees and all parties acting under its
authority are hereby enjoined to observe the following during the pendency of this
case:
1. Not to publish or circulate any announcement in the newspaper, radio or television
regarding its Cease and Desist Order against x x x [petitioner];
2. Not to enforce the Cease and Desist Order issued against x x x [petitioner];
3. To maintain the status quo by not withholding the issuance of yearly school
permits and special order to all graduates.
Let a Writ of Preliminary Injunction to that effect issue upon posting by [petitioner] of
an injunction bond in the amount of One Hundred Thousand Pesos (P100,000.00),
and subject to the approval of the Court.
SO ORDERED.'
"On September 22, 1998, [petitioner] filed before public respondent a Motion To Declare
[Respondent] in [D]efault pursuant to Section 3, Rule 9 in relation to Section 4, Rule 16 of the
Rules of Court, as amended, and at the same time praying [for] the Motion to [S]et for
[H]earing on October 30, 1998 at 8:30 a.m. On the same date, [respondent] filed a Motion
For Extension of Time to File its Answer, x x x until November 18, 1998. On November 17,
1998, [respondent] filed its [A]nswer.
"[Petitioner], on November 11, 1998 filed its Opposition to the Motion for Extension of Time
to File [Respondent's] Answer and on November 9, 1998, a Motion to Expunge
[Respondent's] Answer and at the same time praying that its [M]otion be heard on November
27, 1998 at 9:00 a.m. On even date, public respondent judge issued an Order directing the
Office of the Solicitor General to file within a period of ten (10) days from date its written
Opposition to the Motion to Expunge [Respondent's] Answer and within the same period to
file a written [N]otice of [A]ppearance in the case. Unable to file their written Opposition to the
Motion to Expunge within the period given by public respondent, the OSG filed a Motion to
Admit Written Opposition stating the reasons for the same, attaching thereto the Opposition
with [F]ormal [E]ntry of [A]ppearance.
"In an Order dated December 9, 1998, (Annex 'A'), public respondent judge ruled on
[Petitioner's] Motion to Declare [Respondent in Default], to wit:
"WHEREFORE, and in view of all the foregoing, the present motion is granted.
[Petitioner] is hereby directed to present its evidence ex-parte before the [b]ranch
[c]lerk of [c]ourt, who is designated as [c]ommissioner for the purpose, within ten (10)
days from receipt of this [O]rder, and for the latter to submit his report within twenty
(20) days from the date the case is submitted for decision."

SO ORDERED.'"3
On February 23, 1999, respondent filed with the CA a Petition for Certiorari, arguing that the RTC
had committed grave abuse of discretion (a) in denying the former's Motion to Dismiss, (b) in issuing
a Writ of Preliminary Injunction, and (c) in declaring respondent in default despite its filing an
Answer.
Ruling of the Court of Appeals
The CA ruled that petitioner had no cause of action against respondent. Petitioner failed to show any
evidence that it had been granted university status by respondent as required under existing law and
CHED rules and regulations. A certificate of incorporation under an unauthorized name does not
confer upon petitioner the right to use the word "university" in its name. The evidence submitted by
respondent showed that the Securities and Exchange Commission (SEC) had denied that petitioner
had ever amended its Articles of Incorporation to include "university" in its corporate name. For its
part, the Department of Education, Culture and Sports (DECS) denied having issued the alleged
Certification dated May 18, 1998, indorsing the change in petitioner's corporate name. Besides,
neither the Corporation Code nor the SEC Charter vests the latter with the authority to confer
university status on a corporation that it regulates.
For the same reason, the appellate court also ruled that the Writ of Preliminary Injunction had
improvidently been issued. The doubtful right claimed by petitioner is subordinate to the public
interest to protect unsuspecting students and their parents from the unauthorized operation and
misrepresentation of an educational institution.
Respondent should not have been declared in default, because its Answer had been filed long
before the RTC ruled upon petitioner's Motion to declare respondent in default. Thus, respondent
had not obstinately refused to file an Answer; on the contrary, its failure to do so on time was due to
excusable negligence. Declaring it in default did not serve the ends of justice, but only prevented it
from pursuing the merits of its case.
1w phi 1.nt

Hence, this Petition.4

Issues
Petitioner alleges that the appellate court committed the following reversible errors:
"A. In giving due course to respondent CHED's Petition for Certiorari filed way beyond the
60-day reglementary period prescribed by Section 4, Rule 65 of the Rules of Court;
B. In not requiring Respondent CHED to first file a Motion to Set Aside the Order of Default
dated December 9, 1998; and
C. In ordering the dismissal of Civil Case No. 98-811."5
In its Memorandum, petitioner adds that the CA erred in dissolving the Writ of Preliminary Injunction
issued by the RTC. We shall take up these issues in the following order: (1) timeliness of the
certiorari petition, (2) validity of the default order, 93) validity of the preliminary injunction, and (4)
dismissal of the Complaint.
This Court's Ruling

The Petition is partly meritorious.

First Issue:
Timeliness of Certiorari
Petitioner claims that the Petition for Certiorari of respondent should have been dismissed by the
CA, because it was filed out of time and was not preceded by a motion for reconsideration in the
RTC. The copy of the Order of August 14, 1998 had been served at respondent's office on August
15, 1998, but its Answer was filed only after 180 days which, according to petitioner, could not be
considered a reasonable period. On the other hand, the Office of the Solicitor General (OSG) argues
that the Order is null and void and, hence, may be assailed at any time.
We hold that respondent's Petition for Certiorari was seasonably filed. In computing its timeliness,
what should have been considered was not the Order of august 14, 1998, but the date when
respondent received the December 9, 1998 Order declaring it in default. Since it received this Order
only on January 13, 1999, and filed its Petition for Certiorari on February 23, 1999, it obviously
complied with the sixty-day reglementary period stated in Section 4, Rule 65 of the 1997 Rules of
Court. Moreover, the August 14, 1998 Order was not a proper subject of certiorari or appeal, since it
was merely an interlocutory order.
Exhaustion of Available Remedies
Petitioner also contends that certiorari cannot prosper in this case, because respondent did not file a
motion for reconsideration before filing its Petition for Certiorari with the CA. Respondent counters
that reconsideration should be dispensed with, because the December 9, 1998 Order is a patent
nullity.
The general rule is that, in order to give the lower court the opportunity to correct itself, a motion for
reconsideration is a prerequisite to certiorari. It is also basic that a petitioner must exhaust all other
available remedies before resorting to certiorari. This rule, however, is subject to certain exceptions
such as any of the following: (1) the issues raised are purely legal in nature, (2) public interest is
involved, (3) extreme urgency is obvious or (4) special circumstances warrant immediate or more
direct action.6 It is patently clear that the regulation or administration of educational institutions,
especially on the tertiary level, is invested with public interest. Hence, the haste with which the
solicitor general raised these issues before the appellate court is understandable. For the reason
mentioned, we rule that respondent's Petition for Certiorari did not require prior resort to a motion for
reconsideration.
Second Issue:
Validity of the Default Order
Petitioner avers that the RTC was justified in declaring respondent in default, because the August
14, 1998 Order directing the filing of an answer had been served on August 25, 1998. And as late as
October 30, 1998, respondent could only file a Motion for Extension of Time, which the trial court
denied because of the expiry of the fifteen-day period. Petitioner adds that respondent's proper
remedy would have been a Motion to Set Aside the Order of Default, pursuant to Section 3(b), Rule
9 of the Rules of Court.
Respondent, in turn, avers that certiorari was the only plain, speedy and adequate remedy in the
ordinary course of law, because the default Order had improvidently been issued.

We agree with respondent. Lina v. Court of Appeals7 discussed the remedies available to a
defendant declared in default, as follows: (1) a motion to set aside the order of default under Section
3(b), Rule 9 of the Rules of Court, if the default was discovered before judgment could be rendered;
(2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered after judgment
but while appeal is still available; (3) a petition for relief under Rule 38, if judgment has become final
and executory; and (4) an appeal from the judgment under Section 1, Rule 41, even if no petition to
set aside the order of default has been resorted to.
These remedies, however, are available only to a defendant who has been validly declared in
default. Such defendant irreparably loses the right to participate in the trial. On the other hand, a
defendant improvidently declared in default may retain and exercise such right after the order of
default and the subsequent judgment by default are annulled, and the case remander to the court of
origin. The former is limited to the remedy set forth in Section 2, paragraph 3 of Rule 41 of the pre
997 Rules of Court, and can therefore contest only the judgment by default on the designated
ground that it is contrary to evidence or law. The latter, however, has the following options: to resort
to this same remedy; to interpose a petition for certiorari seeking the nullification of the order of
default, even before the promulgation of a judgment by default; or in the event that judgment has
been rendered, to have such order and judgment declared void.
In prohibiting appeals from interlocutory orders, the law does not intend to accord executory force to
such writs, particularly when the effect would be to cause irreparable damage. If, in the course of
trial, a judge proceeds without or in excess of jurisdiction, this rule prohibiting an appeal does not
leave the aggrieved party without any remedy.8 In a case like this, a special civil action of certiorari is
the plain, speedy and adequate remedy.
Herein respondent controverts the judgment by default, not on the ground that it is unsubstantiated
by evidence or that it is contrary to law, but on the ground that it is intrinsically void for having been
rendered pursuant to a patently invalid order of default.9
Grave Abuse of Discretion
Petitioner claims that in issuing the default Order, the RTC did not act with grave abuse of discretion,
because respondent had failed to file its answer within fifteen days after receiving the August 14,
1998 Order.
We disagree. Quite the contrary, the trial court gravely abused its discretion when it declared
respondent in default despite the latter's filing of an Answer.10 Placing respondent in default
thereafter served no practical purpose.
Petitioner was lax in calling the attention of the Court to the fifteen-day period for filing an Answer. It
moved to declare respondent in default only on September 20, 1998, when the filing period had
expired on August 30, 1998. The only conclusion in this case is that petitioner has not been
prejudiced by the delay. The same leniency can also be accorded to the RTC, which declared
respondent in default only on December 9, 1998, or twenty-two days after the latter had filed its
Answer on November 17, 1998. Defendant's Answer should be admitted, because it had been filed
before it was declared in default, and no prejudice was caused to plaintiff. The hornbook rule is that
default judgments are generally disfavored.11
While there are instances when a party may be properly declared in default, these cases should be
deemed exceptions to the rule and should be resorted to only in clear cases of obstinate refusal or
inordinate neglect in complying with the orders of the court.12 In the present case, however, no such
refusal or neglect can be attributed to respondent.

It appears that respondent failed to file its Answer because of excusable negligence. Atty. Joel
Voltaire Mayo, director of the Legal Affairs Services of CHED, had to relinquish his position in
accordance with the Memorandum dated July 7, 1998, requiring all non-CESO eligibles holding noncareer positions to vacate their respective offices. It was only on September 25, 1998, after CHED
Special Order No. 63 had been issued, when he resumed his former position. Respondent also
presented a meritorious defense in its Answer that it was duty-bound to pursue the state policy of
protecting, fostering and promoting the right of all citizens to affordable quality education at all levels.
In stark contrast, petitioner neither qualified for nor was ever conferred university status by
respondent.
Judges, as a rule, should avoid issuing default orders that deny litigants the chance to be heard.
Instead, the former should give the latter every opportunity to present their conflicting claims on the
merits of the controversy, as much as possible avoiding any resort to procedural technicalities.13
Third Issue:
Preliminary Injunction
Petitioner contends that the RTC validly issued the Writ of Preliminary Injunction. According to the
trial court, respondent's actions adversely affected petitioner's interests, faculty and students. In fact,
the very existence of petitioner as a business concern would have been jeopardized had its
proprietary rights not been protected.
We disagree. We concur with the CA that the trial court acted with grave abuse of discretion in
issuing the Writ of Preliminary Injunction against respondent. Petitioner failed to establish a clear
right to continue representing itself to the public as a university. Indeed, it has no vested right to
misrepresent itself. Before an injunction can be issued, it is essential that (1) there must be a right in
esse to be protected, and (2) the act against which the injunction is to be directed must have violated
such right.14 The establishment and the operation of schools are subject to prior authorization from
the government. No school may claim to be a university unless it has first complied with the
prerequisites provided in Section 34 of the Manual of Regulations for Private Schools. Section 3,
Rule 58 of the Rules of Court, limits the grant of preliminary injunction to cases in which the plaintiff
is clearly entitled to the relief prayed for.
We also agree with the finding of the CA that the act sought to be enjoined by petitioner is not
violative of the latter's rights. Respondent's Cease and Desist Order of July 30, 1997 merely
restrained petitioner from using the term "university" in its name. It was not ordered to close, but
merely to revert to its authorized name; hence, its proprietary rights were not violated.
Fourth Issue:
Dismissal of the Complaint
Petitioner claims that the CA went beyond its limited jurisdiction under Rule 65 when it reversed the
trial court and dismissed the Complaint on the ground that petitioner had failed to state a cause of
action. The RTC had yet to conduct trial, but the CA already determined the factual issue regarding
petitioner's acquisition of university status, a determination that is not permitted in certiorari
proceedings.
The CA ruled that the trial court gravely abused its discretion in denying respondent's Motion to
Dismiss on the ground of lack of cause of action because of petitioner's lack of legal authority or right
to use the word "university." Said the appellate court:

"x x x. No matter how we interpret the Corporation Code and the law granting the Securities
and Exchange Commission its powers and duties, there is nothing there which grants it the
power or authority to confer University Status to an educational institution. Fundamental is
the rule that when there is no power granted, none exist[s], not even implied ones for there is
none from where to infer. The mere fact of securing an alleged Certificate of Incorporation
under an unauthorized name does not confer the right to use such name.
"But what makes the conclusion of [the trial court] even anomalous, to say the least, is that
no less than the Chairman of the SEC in his letter to the [respondent] (Exh. "J") expressly
said that [petitioner] never filed any Amended Articles of Incorporation so as to have a
change of corporate name to include the term "University". Worse, the records officer of
DECS issued a Certification dated May 18, 1998 (Annex "AA") to the effect that there was no
Indorsement made by that office addressed to the SEC or the Proposed Amended Article of
Incorporation of Indiana Aeronautics. x x x.
"Under such clear pattern of deceitful maneuvering to circumvent the requirement for
acquiring University Status, it is [a] patently reversible error for [the trial court] to hold that
[petitioner] has a right to use the word "University" which must be protected. Dismissal of
[petitioner's] Complaint for lack of a valid cause of action should have been the proper action
taken by [the trial court] judge."15
An order denying a motion to dismiss is interlocutory, and so the proper remedy in such a case is to
appeal after a decision has been rendered. A writ of certiorari is not intended to correct every
controversial interlocutory ruling; it is resorted to only to correct a grave abuse of discretion or a
whimsical exercise of judgment equivalent to lack of jurisdiction. Its function is limited to keeping an
inferior court within its jurisdiction and to relieve persons from arbitrary acts acts which courts or
judges have no power or authority in law to perform. It is not designed to correct erroneous findings
and conclusions made by the court.16
In the case at bar, we find no grave abuse of discretion in the RTC's denial of the Motion to Dismiss,
as contained in the August 14, 1998 Order. The CA erred in ruling otherwise. The trial court stated in
its Decision that petitioner was an educational institution, originally registered with the Securities and
Exchange Commission as the "Indiana School of Aeronautics, Inc." That name was subsequently
changed to "Indiana Aerospace University" after the Department of Education, Culture and Sports
had interposed no objection to such change.17
Respondent issued a formal Cease and Desist Order directing petitioner to stop using the word
"university" in its corporate name. The former also published an announcement in the March 21,
1998 issue of Freeman, a local newspaper in Cebu City, that there was no institution of learning by
that name. The counsel of respondent was quoted as saying in the March 28, 1998 issue of the
newspaper Today that petitioner had been ordered closed by the respondent for illegal
advertisement, fraud and misrepresentation of itself as a university. Such acts, according to the RTC
undermined the public's confidence in petitioner as an educational institution.18 This was a clear
statement of a sufficient cause of action.
When a motion to dismiss is grounded on the failure to state a cause of action, a ruling thereon
should be based only on the facts alleged in the complaint.19 The court must pass upon this issue
based solely on such allegations, assuming them to be true. For it to do otherwise would be a
procedural error and a denial of plaintiff's right to due process.20
WHEREFORE, the Petition is hereby GRANTED IN PART, and the assailed
Decision MODIFIED. The trial court isDIRECTED to SET ASIDE the Order of Default of December

9, 1998; to ADMIT the Answer dated November 5, 1998; to LIFT the preliminary injunction; and
to CONTINUE, with all deliberate speed, the proceedings in Civil Case NO. 98-811.
1wphi1.nt

SO ORDERED.
Melo, Vitug, Gonzaga-Reyes, Sandoval-Gutierrez, JJ., concur.

Footnote
1

Penned by Justice Jose L. Sabio Jr. with the concurrence of Justices Hector L. Hofilea,
Division chairman, and Omar U. Amin, member. Rollo, pp. 19-23.
2

Rollo, p. 31.

CA Decision, pp. 1-6; rollo, pp. 19-24.

This case was deemed submitted for decision upon this Court's receipt on November 17,
2000, of respondent's Memorandum signed by Solicitor General Ricardo P. Galvez,
Assistant Solicitor General Magdangal M. De Leon, and Solicitor Danilo D. Leyva.
Petitioner's Memorandum, which was submitted on August 4, 2000, was signed by Atty.
Albert L. Hontanosas.
5

Rollo, p. 7.

Liberty Insurance Corp. v. Court of Appeals, 222 SCRA 37, 47, May 13, 1998; Alindao v.
Joson, 264 SCRA 211, 220, November 14, 1996; Tan v. Court of Appeals, 275 SCRA 568,
574-575, July 17, 1997; andTan Jr. v. Sandiganbayan, 292 SCRA 452, 457-458, July 10,
1998.
7

135 SCRA 637, 642, April 9, 1985, per Relova, J.

Akut v. Court of Appeals, 116 SCRA 213, 219, August 30, 1982.

Matute v. Court of Appeals, 26 SCRA 768, 798-799, January 31, 1969; and Omico Mining
& Industrial Corp. v. Vallejos, 63 SCRA 285, 300-301, March 25, 1975.
10

Cathay Pacific v. Romillo, Jr., 141 SCRA 451, 454-455, March 4, 1986.

11

Trajano v. Cruz, 80 SCRA 712, 716-717, December 29, 1977.

12

Leyte v. Cusi, 152 SCRA 496, 498-499, July 31, 1987; and Tropical Homes, Inc. v. Villaluz,
170 SCRA 577, 582-583, February 24, 1989.
13

Tropical Homes, Inc. v. Villaluz, ibid.; Trajano v. Cruz, supra, p. 718.

14

Saulog v. Court of Appeals, 262 SCRA 51, 59-60, September 18, 1996; Cagayan de Oro
Landless Residents Association, Inc. v. Court of Appeals, 254 SCRA 220, 229, March 4,
1996; and Del Rosario v. Court of Appeals, 255 SCRA 152, 158, March 15, 1996.
15

CA Decision, pp. 10-11; rollo, pp. 28-29.

16

Carandang v. Cabatuando, 53 SCRA 383, 390, October 26, 1973; Philippine Rabbit v.
Galauran, 118 SCRA 664, 667, November 25, 1982; and De Vera v. Pineda, 213 SCRA 434,
442, September 2, 1992.
17

Order August 14, 1998 in Civil Case No. 98-811, p. 4; rollo, p. 67.

18

Ibid., p. 6; id., p. 69.

19

Mindanao Realty Corp. v. Kintanar, 6 SCRA 814, 818-819, November 30, 1962.

20

Ventura v. Bernabe, 38 SCRA 587, 598-599, April 30, 1971; Galeon v. Galeon, 49 SCRA
516, 520-521, February 28, 1973.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 92591 April 30, 1991

CITYTRUST BANKING CORPORATION, petitioner
vs.
THE COURT OF APPEALS, and WILLIAM SAMARA, respondents.
Agcaoili & Associates for petitioner.
Romeo G. Carlos for private respondent.

GUTIERREZ, JR., J.:p

The Court is beset with the issue involving two defendants in a case for recovery of a sum of money
where the trial court adjudged them to be jointly and severally liable as judgment debtors to pay the
plaintiff but who are now required, as a result of a modification on appeal by only one of them, to pay
substantially different amounts while being solidarity liable.
As a prefatory note, this is the second time the petitioner has gone to this Court but the issues raised
at the first instance are distinct from the one at bar.
The case arose from a complaint filed by private respondent William Samara, an American who
does business in the Philippines, against petitioner Citytrust Banking Corporation (hereinafter
referred to as Citytrust) and a foreign bank, Marine Midland Bank, N.A. (hereinafter referred to as
Marine Midland).
The facts as established by the trial court show that plaintiff-private respondent Samara purchased
on December 10, 1980 from defendant petitioner Citytrust Bank Draft Number 23681 for US
$40,000.00, the payee being Thai International Airways and the corresponding bank in the United
States or the drawee, defendant Marine Midland. On December 23, 1980, Samara executed a stoppayment order of the bank draft instructing Citytrust to inform Marine Midland about the order
through telex. Citytrust transmitted the message to Marine Midland the next day and followed it up
with a cable, which the latter bank acknowledged to have received on January 14, 1981 stating in its
receipt that it has noted the stop-payment order and has not paid the bank draft. Citytrust credited
back Samara's account for U.S. $40,000.00 due to the non-payment. After seven months or on July
3, 1981, Citytrust re-debited Samara's account for U.S. $40,000.00 upon discovering that Marine
Midland had already debited Citytrust's own account for the same amount allegedly on December
22, 1980, Despite the alleged discovery, however, there is evidence to show that Marine Midland
informed Citytrust through a letter of the non-payment or non-encashment of the bank draft as of
August 4, 1981. It is also shown that Marine Midland even confirmed in a telex letter dated August
31, 1981 that the bank draft had not been paid as of that date.

Based on the above findings, the trial court brushed aside Marine Midland's contention that it had
already paid the bank draft of Samara on December 22, 1980 or before it received the stop payment
order. The trial court was not convinced regarding the denial of the confirmation made as to the nonpayment of the bank draft since the time it received the stop payment order. Marine Midland was
held bound by its letters admitting knowledge of the stop payment order and compliance with it. The
trial court also overruled the ground relied on by Citytrust in re-debiting Samara's dollar account, i.e.,
the discovery that Marine Midland debited Citytrust's account before the stop payment order was
given by Samara, this being unjustifiable. Hence, a decision was rendered on March 4, 1986, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered:
1. Ordering the defendants, jointly and severally, to pay the plaintiff the sum of US
$40,000.00, plus twelve percent (12%) interest per annum from July 3, 1981, until full
payment is made, and the further interest of twelve percent (12%) per annum on the
accrued interest from December 23, 1980 up to the filing of the complaint on October
4, 1983, inclusive; Exemplary damages in the sum of One Hundred Thousand Pesos
(P100,000.00) and the sum of Fifty Thousand Pesos (P50,000.00) as and for
attorney's fees, and costs;
2. Dismissing the defendant's counter-claims for lack of merit;
3. Ordering defendant Marine Midland to reimburse defendant Citytrust of whatever
amount the latter will be made to pay the plaintiff by reason of this judgment and
costs. (Rollo, pp. 29-30)
Only Marine Midland filed a motion for reconsideration of the decision. It was denied. The petitioner
did not do anything except to move for a reconsideration of an order of execution of the judgment
against it which was granted. The petitioner and Marine Midland filed separate appeals.
The petitioner's appeal was, however, dismissed on December 15, 1987 for having been filed out of
time or fifty-one (51) days after (i.e., May 7, 1986) it received a copy of the trial court decision on
March 17, 1986. A motion to reconsider the dismissal was denied by the Court of Appeals.
On February 26, 1988, the petitioner questioned before the Supreme Court the dismissal of its
appeal. That case was docketed as G.R. No. 82009 where the petitioner raised the following issues:
(1) whether or not the timely appeal of Marine Midland inured to petitioner's benefit; and (2) whether
or not plaintiff-private respondent Samara was entitled to immediate execution even assuming the
petitioner's appeal was indeed filed out of time.
While the petition for certiorari to review the dismissal of the appeal was still pending before this
Court, the Court of Appeals on February 23, 1989 affirmed the trial court decision with modification
consisting of a reduction of the rate of interest and attorney's fees, as well as the exclusion of
exemplary damages. Thus, the dispositive portion of the decision of the appellate court in CA-G.R.
CV No. 14128 reads:
WHEREFORE, judgment is hereby rendered AFFIRMING the Decision appealed
from except paragraph 1 thereof which is hereby modified to read as follows:
1. Ordering the defendants jointly and severally, to pay the plaintiff the sum of US
$40,000.00, plus six percent (6%) interest per annum from July 3, 1981 until full

payment is made, and the sum of Ten Thousand (P10,000.00) Pesos, as and for
attorney's fees. (Rollo, pp. 45-46)
About a month and a half later or on April 10, 1989, this Court, through its First Division, denied the
petition in G.R. No. 82009 for lack of merit. In response to the allegation that the prescriptive period
for filing an appeal was also suspended as to the petitioner when co-defendant Marine Midland filed
a motion for reconsideration, the Court ruled that the rights and liabilities of the two defendants are
not so interwoven as to show similarity in defenses and warrant reversal of the judgment as to both.
This Court stressed specifically the finding of the appellate court that although the petitioner and
Marine Midland were solidarily liable, only the latter was ultimately held responsible for damages
because it was the one ordered to reimburse the petitioner for "whatever amount" the petitioner will
be made to pay the plaintiff by reason of the judgment. (See Citytrust Banking Corp. v. Court of
Appeals, 171 SCRA 758 [1989]). Moreover, in filing a motion for reconsideration, Marine Midland
was in fact acting only for itself. Regarding the second issue, we held that respondent Samara is
entitled to immediate execution when the trial court decision became final and executory as to the
petitioner. In overcoming the petitioner's argument that execution pending appeal of its co-defendant
should not be allowed to prevent an absurd result in case of possible reversal, we held that the law
is clear that a final judgment must be executed against a defeated party. Since both defendants are
jointly and severally liable, it is irrelevant whether or not the co-defendant would be absolved.
Some four months later or on August 7, 1989, the Supreme Court declared the decision in G.R. No.
82009 to be final and executory. The petitioner's motion for reconsideration was denied.
On September 28, 1989, Samara filed a motion for execution which the trial court granted on
October 23, 1989. The petitioner assailed the Order of Execution before the Court of Appeals on
November 6, 1989 in CA-G.R. SP No. 19176. The trial court was upheld and subsequent motion for
reconsideration was denied.
Hence, the instant petition was filed on March 29, 1990 which raises the main issue of whether or
not the respondent appellate court committed reversible error in ruling that the liability of the
petitioner should be based on the original decision of the trial court and not the modified one.
The private respondent contends that the petition is barred by res judicata alleging that the issue in
the case at bar had already been raised, passed upon, and judicially determined by this Court in
G.R. No. 82009.
It is our considered opinion that the issue here is distinct from the ones raised earlier. In the present
petition, the Court is faced with the issue of the propriety of the execution of judgments in favor of
private respondent Samara who is entitled to recover on execution: against the petitioner, the
amount of US $40,000.00 plus 12% compounded interest per annum, exemplary damages of
P100,000.00 attorney's fees of P50,000.00 and costs; and as against Marine Midland, the amount of
US $40,000.00 plus 6% simple interest per annum, and attorney's fees of only P10,000.00.
We are less concerned now with the issues of whether or not a co-defendant's appeal inures to the
benefit of another who failed to appeal on time and on the right of a judgment creditor to immediate
execution of a final and executory judgment since such issues have become moot and academic.
It is worthy to note that the Court was not apprised of the February 23, 1989 decision of the Court of
Appeals until after we had promulgated a decision denying Citytrust's petition for certiorari to review
the dismissal of its own appeal. We were so notified through Citytrust's motion for reconsideration of
our decision n in G.R. No. 82009. It is a sad fact, however, that the motion did not present

sufficiently compelling grounds to convince the Court to rule otherwise on the issues presented in
G.R. No. 82009 which pertain to the validity of the dismissal of the petitioner's appeal.
The present petition was given due course in line with our settled rule that while a decision has
already become final and executory and can no longer be challenged, the manner of its execution
can be reviewed by proper appeal (Abbot v. National Labor Relations Commission, 145 SCRA 206
[1986]). It is not only the difference in the issue raised that makes us allow this petition. It is also
because of a different Court of Appeals decision (this time in CA- G.R. SP No. 19176) that is the
subject of our review. The petitioner now assails the affirmation of the order of execution based on
the trial court judgment in spite of the modified judgment which reduced the liability of co-defendants
to pay private respondent. What bothers the private respondent is the similarity of the arguments
used by the petitioner in all the pleadings filed with this Court in G.R. No. 82009 and in the present
petition.
The Court reiterates what it has held in the Abbot case:
xxx xxx xxx
In the instant case, however, what is sought to be reviewed is not the decision itself
but the manner of its execution. There is a big difference. While it is true that the
decision itself has become final and executory and so can no longer be challenged,
there is no question either that it must be enforced in accordance with its terms and
conditions. Any deviation therefrom can be the subject of a proper appeal. (pp. 209210)
The petitioner alleges that the appellate court decision dated February 23, 1989 has superseded and
renderedfunctus oficio the March 4, 1986 decision of the trial court invoked by the private
respondent and is applicable not only to Marine Midland but also to the petitioner.
The Court does not agree with this allegation which hinges on the petitioner's insistence that it can
benefit from a reversal or modification of a judgment even if it has lost its own appeal. We do not
depart from our earlier analysis in G.R. No. 82009 that the rights and liabilities of the petitioner and
Marine Midland are not so interwoven in such a manner that their defenses are similar as to readily
warrant an operative effect upon a party who failed to appeal.
As found by this Court in G.R. No. 82009:
It must be noted that two defendants, Marine Midland and Citytrust, filed cross claims
against each other in their answer. Citytrust alleged that the proximate cause of the
injury should be attributed to co-defendant Marine Midland when the latter failed to
promptly inform Citytrust that the demand draft Citytrust issued was really paid by
Marine Midland on December 22, 1980. For its part, Marine Midland alleged that
Citytrust did not properly advise it of the actual circumstances relating to the dates of
payment of the draft and of the receipt by the latter of the stop-payment instructions.
The rights and liabilities of both parties concerned are not so interwoven in such a
manner that their defenses are similar and that a reversal of the judgment as to one
should operate as a reversal to the other. Furthermore, a perusal of the decision
appealed from shows that Marine Midland, though jointly and severally liable with
petitioner, is the one ultimately held responsible for the damages incurred by the
private respondent inasmuch as the trial court ordered "defendant Marine Midland to
reimburse defendant Citytrust of whatever amount the latter will be made to pay the

plaintiff by reason of this judgment and costs." (Citytrust Banking Corp. v. Court of
Appeals, supra at page 765)
The Court is of the considered view that it was the trial court judgment that created a joint and
several obligation to pay the private respondent certain sums. No solidary liability as between them
existed from the drawer-drawee relationship in the draft transaction.
The joint and several obligation imposed by the lower court had a three-fold purpose: (1) to declare
the prevailing party to be entitled to recover damages on account of the prejudice which resulted
from the acts of the co-defendants; (2) to give the prevailing party the right to proceed against either
one of them to recover the amounts awarded to him; and (3) to impress upon Marine Midland its
ultimate liability to fully reimburse the petitioner Citytrust consistent with the finding that the
proximate cause of the injury to the private respondent was the wrongful deed of Marine Midland.
The trial court judgment, however, does not alter the fact that the respective defenses of the codefendants are distinct on trial and even on appeal. Citytrust and Marine Midland were not in privity
with each other in a transaction involving payment through a bank draft. A bank draft is a "bill of
exchange drawn by a bank upon its correspondent bank, . . . issued at the solicitation of a stranger
who purchases and pays therefor" (Kohler v. First National Bank, 289 P 47, 49, 157 Wash. 417
[1930]). It is also defined as an "order for payment of money." (Polotsky v. Artisans Savings Bank,
Del. 180 A. 791, 792, 7 WW. Harr 142 [1935]). In the case at bar, Citytrust from which the private
respondent purchased the bank draft, was the drawer of the draft through which it ordered Marine
Midland, the drawee bank, to pay the amount of US $40,000.00 in favor of Thai International
Airways, the payee. The drawee bank acting as a "payor" bank is solely liable for acts not done in
accordance with the instructions of the drawer bank or of the purchaser of the draft. The drawee
bank has the burden of proving that it did not violate. Meanwhile, the drawer, if sued by the
purchaser of the draft is liable for the act of debiting the customer's account despite an instruction to
stop payment. The drawer has the duty to prove that he complied with the order to inform the
drawee.
The fact that the petitioner previously filed a cross-claim against Marine Midland does not make the
former a party in the latter's appeal where all reliefs granted to the plaintiff and/or to the petitioner
who was a co-defendant are up for review. The rights and liabilities of Citytrust as a defensive crossclaimant, which alleged that the proximate cause of the injury to the plaintiff was the wrongful action
of Marine Midland, have already been litigated before the trial court which ordered full
reimbursement in favor of Citytrust. Until petitioner Citytrust appeals for the review of the trial court
decision either in part or in toto, its rights and obligations as pre-determined cannot generally be
affected by an appeal of a co-defendant. The respondent appellate court made this clear in its
decision dated February 23, 1989, when it stated that even assuming that the petitioner may be
considered an appellee, "such a standing was only with respect to the cross-claim against (appellant
Marine Midland) and not with respect to its (petitioner's) liability in favor or private respondent
Samara", the judgment on which had already become final and executory as to the Petitioner. The
petitioner cannot now present a subverted interpretation of what the appellate court meant.
The Court examines the execution of judgment rendered in favor of private respondent Samara from
a perspective which shows a glaring disparity between the amounts which each of the two judgment
debtors are bound to pay despite: (1) their being held jointly and severally liable, and (2) the right of
one of them to be reimbursed for the whole amount of whatever it is obliged to pay.
A judgment may determine the ultimate rights of the parties on the same side as between
themselves such that questions of primary and secondary liability between joint tort-feasors may be
determined. (Montgomery v. Blades, 9 SE 2d 397, 217 NC 654 [1940]). This rule reaffirms that

principles of joint and several liability have survived so that the plaintiff is entitled to recover the
entire judgment from a single defendant even though the responsibility of that defendant for personal
injury is of a lesser extent. (Gorelick v. Department of State Highways, 339 NW 2d. 635,127 Mich.
App. 324 [1983])
A review of the trial court judgment and the appellate court judgment here shows that the only
difference is the amount of damages in paragraph 1 of the dispositive portion of the March 4, 1986
decision as restated and reduced in the February 23, 1989 decision. All other orders of the trial court
were affirmed by the respondent appellate court. The joint and several obligation to pay the private
respondent and the right of the petitioner to be reimbursed are retained. The problem now lies in
interpreting the said modification as likewise reducing the total amount which can be executed
against the petitioner.
If we go by a literal procedure, execution against petitioner Citytrust would be based on the March 4,
1986 decision. However, the Court can not close its eyes to the inexplicable situation where private
respondent Samara would be given a choice of executing his claim for US $40,000.00 plus bigger
interest (compounded), exemplary damages, and attorney's fees from petitioner Citytrust, or US
$40,000.00 plus a smaller sum inclusive of simple interest and reduced attorney's fees from Marine
Midland. Even if it is admitted that Citytrust would anyway be reimbursed for the whole amount
which Citytrust may be ordered to pay, such reimbursement would be a circumvention of the
appellate court's judgment that Marine Midland is liable only for the modified sum.
There are two final judgments arising from one and the same basic claim of Mr. Samara. The
obligations arising from the same stop payment order on the same U.S. $40,000.00 bank draft are
sought to be enforced by the two conflicting final and executory judgments. We cannot enforce one
judgment while allowing a violation of the other. We apply basic principles of justice and equity.
It is clear from the records that "the draft was not paid or cashed before the receipt of the stop
payment order by the appellant (Marine Midland)" but was certainly paid at some other date as
evidenced by a reconciliation entry showing a debit of the corresponding amount in the books of
Marine Midland. (See Rollo, pp. 40 and 42). Furthermore, there was substantial evidence to show
that Marine Midland is the one actually responsible for the personal injury to the private respondent.
The respondent court made the following findings, to wit:
xxx xxx xxx
It must be noted that it was the appellant's certifications and repeated reaffimation of
non-payment of the bank draft that led defendant Citytrust to re-credit appellee's
account. Also, the appellant negligently failed to implement the stop payment order
upon receipt. It tarried in actually executing it until January 13, 1981. Furthermore, it
was the appellant's debiting of the account of the defendant-Citytrust which also led
the defendant Citytrust to again debit the appellee's dollar account despite prior
acknowledgment of the non-payment of the draft. No doubt, it was the appellant's
actuations that triggered the whole mess. Therefore, the lower court correctly
ordered the appellant to reimburse defendant Citytrust of whatever amount the latter
may pay the appellee by virtue of its judgment. (Rollo, p. 44)
Considering the above circumstances, the Court will not allow the absurd situation where a codefendant who is adjudged to be primarily liable for sums of money and for tort would be charged for
an amount lesser than what its co-defendant is bound to pay to the common creditor and allowed to
collect from the first co-defendant. Such a situation runs counter to the principle of solidarity in
obligations as between co-defendants established by a judgment for recovery of sum of money and

damages. Substantial justice shall not allow Marine Midland, which is the source of the injury
afflicted, to be unjustly enriched either by the direct execution against him of the judgment for the
reduced amount or by the indirect execution by way of reimbursement at a later time.
Additionally, the Court notes the modification made by the respondent court which ordered not only
Marine Midland (the appellant therein) but both "defendants jointly and severally" to pay the new
amount. Though, as a matter of procedure, the modification shall be applied only to the appellant,
substantial justice and equity also demand that we re-interpret the decision to refer to petitioner
Citytrust as well. There exists a strong and compelling reason to warrant an exception to the rule
that a judgment creditor is entitled to execution of a final and executory judgment against a party
especially if that party failed to appeal. (Olacao v. National Labor Relations Commission, 177 SCRA
38 [1989]; Quigui v. Boncaros 151 SCRA 416 [1987]; Orata v. Intermediate Appellate Court, 185
SCRA 148 [1990])
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 19176 dated January 18,
1990 as well as the resolution denying reconsideration are hereby REVERSED and SET ASIDE.
The court a quo is ordered to effect execution of its judgment subject to the modifications supplied
by the Court of Appeals in its judgment on February 23, 1989.
SO ORDERED.
Fernan, C.J., Feliciano, Bidin and Davide, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 141008

January 16, 2001

MARAWI MARANTAO GENERA HOSPITAL. INC. and MACAPANTON K. MANGONDATO,

petitioners,
vs.
COURT OF APPEALS and SOCIAL SECURITY SYSTEM, respondents.
GONZAGA-REYES, J.:
This Petition for Review on Certiorari seeks the reversal of the Decision of the Court of Appeals1 CA
G.R. SP No. 54669 entitled "Social Security System vs. Hon. Santos B. Adiong, Presiding Judge,
Branch 8, Regional Trial Court, Marawi City, Marawi Marantao General Hospital, Inc. and Atty.
Macapanton K. Mangondato".
The following are the facts as found by the Court of Appeals:
"On August 12, 1997, the Marawi-Marantao General Hospital, Inc. and Atty. Macapanton K.
Mangondato, hereafter referred to as the Private Respondents, filed a complaint against the
Social security System, hereafter referred to as the Petitioner, with the Regional Trial Court
of Lanao del Sur (Marawi City), for "Specific Performance with Damages". The Private
Respondents alleged, inter alia, in said complaint that: on January 16 1997, Private
Respondent Macapanton Mangondato, as Vendee, and the Petitioner, as Vendor, executed
a "Deed of Conditional Sale" whereby the Petitioner transferred and conveyed, unto the
Private Respondent Mangondato, the property covered by Transfer Certificate of Title No. T379 under the name of the Private Respondent Hospital for the price of P2, 000,000.00 but
that despite Private Respondent Macapanton Mangondato's repurchase thereof having been
consummated, the Petitioner refused to execute the "Deed of Absolute Sale" and transfer the
title to said property to said Private Respondent; worse, per its Resolution No. 224, dated
March 20, 1997, the Petitioner declared the said and transfer the title to said property to said
Private Respondent; worse, per its Resolution No. 224, dated March 20, 1997, the Petitioner
declared the said "Deed of Conditional Sale" a nullity and, despite demands of the Private
Respondents and the intercession of Congressmen Mamintal M. Adiong and Ali Pangalian
M. Balindong, of Lanao del Sur, the Petitioner failed and refused to execute the "Deed of
Absolute Sale" over the property in favor of the Private Respondent. The Private Respondent
thus prayed the Court for judgement as follows:
' WHEREFOR (sic), in the light of the foregoing, it is prayed of this Honorable Court that,
after due notice and hearing, judgement be rendered in favor of the plaintiffs and against the
defendant directing SSS to:
1. Execute an absolute deed of sale in favor of the plaintiffs Hospital and/or Atty.
Macapanton K. Mangondato as stipulated in the aforesaid Deed of Conditional Sale;
2. Pay plaintiffs the sum of P 5,000,000.00 by way of moral and actual damages;

3. Pay plaintiffs the sum of P 1,000,000.00 by way of attorney's fee;

4. Pay plaintiffs exemplary damages to such under the premises;
5. Pay the cost of litigation; and
For such other relief and remedies that are just and proper under the circumstances.' (at page 36-37,
Rollo)
The case was raffled to Branch 8 of the Regional Trial Court presided by Judge Santos B. Adiong,
hereinafter referred to as the Public Respondent.
In its Answer to the complaint, the Petitioner averred that it declared the "Deed of Conditional
Sale' null and void because:
a. There was no full disclosure of facts to the SS Commission;
b. Violation of the standard operating procedure requiring the conduct of bidding in the sale
of an SSS- acquired asset;
c. Non-compliance with Office procedure requiring two signatories in the Deed of Conditional
Sale;
d. Title to the property has not been consolidated in the name of SSS.' (at page 44, Rollo)
The petitioner assigned Atty. Saidali C. Gandamra, one of its lawyers, in its Regional Office in
Cagayan de Oro City, to handle the case and represent the Petitioner before the Public Respondent.
After due proceedings, the Public Respondent promulgated a Decision, dated June 17, 1999, in
favor of the Private Respondents and against the Petitioner directing the ;latter to execute an
"Absulote Deed of Sale" over the property in favor of the Private Respondents and ordering the
Petitioner to pay the Private Respondents the whopping amount of P 12,487,271.00, by way of
actual damages and P100,000.00 by way of attorney's fees, the decretal portion of which reads as
follows:
'WHEREFORE, premises considered judgement is hereby rendered in favor of the plaintiffs
Marawi-Marantao General Hospital Inc., and Atty. Macapanton K. Mangondato and against
defendant Social Security System directing the latter (SSS) to:
1. Execute an Absolute deed of Sale in favor of the plaintiffs Hospital and/or Atty.
Macapanton K. Mangondato as stipulated in the aforesaid Deed of Conditional Sale;
2. Pay plaintiffs the sum of P12,487,271.00 by way of actual damages or unrealized
income;
3. Pay plaintiffs the sum of P500,000.00 by way of moral damages;
4. Pay plaintiffs the sum of P100,000.00 by way of attorney's fees; and
5. Pay the cost of litigation.' (Annex "D", Petition).

On June 18, 1999, or a day after the Public Respondents filed a "Motion for Partial
Execution", set for hearing, on June 25, 1999, at 8:30 o'clock in the morning. Private
Respondents served a copy of said motion on Petitioner, through counsel. During the
hearing, on June 25, 1999, the counsel for the Petitioner failed to appear considering that, as
of said date, he had not as yet been served with a copy of the Decision of the Public
Respondent and a copy of Private respondents' motion. Nevertheless, the Public
Respondent issued an Order, on June 25, 1999, granting Private Respondents' motion upon
their posting of a bond in the amount of P 1,000,000.00. On the same day, the Public
Respondent issued a "Writ of Execution"commanding the Sheriff of Pasay City to cause
execution of his Decision on the Petitioner. On the same day the City Sheriff of Pasay City
served a "Notice of Garnishment" on the Philippine National bank, Roxas Boulevard, pasay
City, garnishing the funds of the Petitioner deposited therein to the extent ofP13,415,616.62.
On June 29, 1999, the Petitioner was served with a copy of the Decision of the Public
Respondent. On the same day, June 29, 1999, the Publicc Respondent issued an Order
directing the President of Vice President of the Philippine National Bank to release to Private
Respondent Macapanton Mangondato, through the Sheriff, the aforesaid amount. On June
29, 1999, the Petitioner filed an "Urgent Motion for Reconsideration and Immediate Stay of
Execution" (Annex "E". Petition). On July 6, 1999, the Public Respondent issued a
Resolution denying Petitioner's motion (Annex "F". Petition).
The Petitioner earlier filed a "petition for Certiorari" , with this Court, entitled and
docketed Social Security System versus Hon. Santos B. Adiong, et al., CA-GR. No. 53502SP for the nullification of the Order and"Writ of execution" issued by the Public Respondent
on June 25, 1999.
On July 9, 1999, the Petitioner filed a "Notice of Appeal" with the Public Respondent (Annex
"G". Petition).However, the petitioner failed to indicate, in said "Notice of Appeal", when it
received a copy of the Decision of the Public Respondent. On July 12, 1999, the Petitioner
filed, with the Public Respondent, an "Amended Notice of Appeal" containing the material
dates when it received a copy if the Decision of the Public Respondent, when it filed
its "Motion for Reconsideration" and when it received the Order of the Public Respondent
denying said "Motion for Reconsideration" However, the Petitioner, in said "Amended Notice
of Appeal" quoted only item No. 1 in the dispositive portion of the Decision of the Public
Respondent and placing "xxx----xxx----xxx" in lieu of Items Nos. 2, 3, 4 and 5 of the
dispositive portion of the Decision appeal from (Annex "H". Petition).
On August 13, 1999, the Private Respondents filed a "Manifestation" with the Public
Respondent to the effect that, under the "Amended Notice of Appeal" of the Petitioner, ONLY
ITEM NO. 1 OF THE DISPOSITIVE PORTION OF THE DECISION OF THE PUBLIC
RESPONDENT was appealed from by the Petitioner and that the petitioner did not appeal
anymore from Items Nos. 2, 3, 4 and 5 of the dispositive portion of the Decision of the Public
Respondent because of the closing marks "xxx xxx xxx" following immediately which
means "nothing follows". Consequently, Items Nos. 2, 3, 4 and 5 of the Decision of the Public
Respondent, quoted, infra, had become final and executory:
2. 'Pay plaintiff the sum of P12,487,271.00 by way of actual damages or unrealized
income;
3. Pay plaintiffs the sum of P500,000.00 by way of moral damages;
4. Pay plaintiff the sum of P100,000.00 by way of attorney's fees;

5. Pay the cost of litigation.' (at pages 77-78. Rollo.)

The Private Respondents thus prayed that entry of judgement may be made declaring, final
and executory, items nos. 2, 3, 4 and 5 of the dispositive portion of the Decision of the Public
Respondent and that execution thereof be ordered (Annex "I". Petition). On August 16, 1999,
the Public Respondent issued an Order granting the "Manifestation" of the Private
Respondents, declared as final and executory that portion of his Decision covering items
Nos. 2. 3 4 and 5 of the Decision of the Public Respondent and ordered execution.
August 16, 1999, the Court of Appeals promulgated a Decision, in CA-G.r. No. 53502SP, nullifying the aforesaid Order and "Writ of Execution" issued by the Public
Respondent (Annex "B", Urgent Motion).
On August 18, 1999, the Private Respondents filed with the Public Respondent a "Motion for
Execution"over items Nos. 2, 3, 4 and 5 of the dispositive portion of the Decision of the
Public Respondent (Annex "I", Petition). During the hearing of Private Respondents' "Motion
for Execution" on August 23, 1999, Atty. Saidali Gandamra, counsel of the Petitioner prayed
for time untill August 31, 1999 within which to comment on said motion. Public Respondent
granted Petitioner's plea and gave it until August 31, 1999, within which to file
its "Comment" on Private Respondents' motion. However, the Petitioner failed to file
any "Comment".
In the meantime, the Petitioner, through the Solicitor General, filed a "Manifestation" with the
Public Respondent to the effect that the Petitioner, having perfected its appeal from the
Decision of the Public Respondent, the latter had no more jurisdiction to grant relief to the
Private Respondent on their "Motion for Execution" and that it was going to file a "Petition for
Certiorari" with this Court (Annex "2", Comment).
On September 1, 1999, the Petitioner filed a "Petition for Certiorari" against the
Respondents, with this Court, for the nullification of the Order of Public Respondent (Annex
"A" of the Petition) on the ground that the Public Respondent issued the same with grave
abuse of his discretion amounting to excess or lack of jurisdiction and, hence, correctable
by cert wit. The Petitioner answer, In its Petition, that it was appealing only from item No. 1 of
the dispositive portion of the Decision of Public Respondent and was no longer appealing
from items nos. 2, 3, 4 and 5 of said Decision. When the Petitioner filed its decision. When
the Petitioner filed its "Amended Notice of Appeal", the Public Respondent was already
divested of jurisdiction to grant relief under Private Respondents "Motion of Execution."
On September 1, 1999, the Public Respondent issued an Order granting Private
Respondents' "Motion for Execution" (Annex "A", Memorandum of Petition). On the same
day, the Public Respondent issued a "writ of execution" (Annex "B", supra. Idem). The
Private Respondents filed with the Public Respondent, an "ex Parte Motion to Release
Amount Subject of Writ of Execution", dated September 1, 1999. On September 2, 1999, the
Sheriff issued a "Notice of Garnishment" notifying the President or Vice President for Legal
Affairs of the Philippine National Bank, Roxas Boulevard, Pasay City, of the levy of the
monies of the Petitioner with said Bank in the amount of P13,415,616.62 (Annex "E", idem,
supra). On September 9, 1999, the Sheriff filed with the Philippine National Bank an "Order
of Delivery of Money" for the amount of P13,415,616.62(Annex "F", idm, supra). On
September 11, 1999, the Public Respondent issued an Order directing the Chief Legal
Counsel of the Philippine national Bank and the Branch Manager of the Diliman Branch of
the said Bank to release the aforesaid amount within forty-eight (48) hours from notice
thereof otherwise they may be cited for contempt of Court (Annex "D". idem, supra).

On September 10, 1999, We promulgated a Resolution granting Petitioner's plea for a

temporary restraining order and directing the Private Respondents to file their "Comment" on
the Petition (at page 109, Rollo). The Private Respondents received a copy of said
Resolution on September 17, 1999, and filed, forthwith their "Comment" on the Petition."2
On November 29, 1999, the Court of Appeals gave due course to the petition filed by the SSS and
nullified and set aside the orders of the RTC; hence this petition where the petitioners raise the
following issues:
1. Whether the filling of a Motion for Reconsideration in the Regional Trial Court is an
indispensable requirement or mere procedural technicality before a Petition for Certiorari
may be submitted to an appellate court?
2. Whether the respondent's appeal before the Court of Appeals involves the entire
judgement of the trial court despite the fact that the Amended Notice Appeal cited only the
first subparagraph of the dispositive portion of the appealed decision and conveniently
omitted the second, third, fourth and fifth subparagraph thereof?
3. Whether the trial court has jurisdiction to order the partial execution of its judgement
insofar as the second, third, fourth, and fifth subparagraphs thereof are concerned?
In support of their petition, the petitioners argue that the respondent SSS should have first filed a
motion for reconsideration of the order of the RTC declaring item numbers 2, 3, 4 and 5 of its
decision final and executory before it filed a petition for certiorari with the Court of Appeals.
Petitioners insist that the filing of a motion for reconsideration is an indispensable requirement before
a petition for certiorari of an order of a regional trial court may be filed with the Court of Appeals.
Considering that the SSS did not file a motion for reconsideration with the RTC before it filed a
petition for certiorari, the Court of Appeals should have dismissed the petition outright.
Moreover, contrary to the ruling of the Court of Appeals, it is the petitioner's position that the
Amended Notice of Appeal filed by the SSS is conclusive to the effect that only the first
subparagraph of the judgement of the RTC was being appealed from by the SSS. The petitioners
claim that the Amended Notice of Appeal limits the part of the RTC's judgement appealed from
considering that it only quoted the first subparagraph thereof. Inasmuch as the SSS only appealed
the first subparagraph of the RTC judgement, the petitioners insist that subparagraph s 2, 3, 4 and 5
thereof have become final and executory and that consequently, RTC committed no reversible error
when it issued the writ of execution with respect to said subparagraphs.
1wphi1.nt

After a careful review of the case, we resolve to deny the petition.

The resolution of the instant petition requires the interpretation of the amended notice of appeal of
the decision of the RTC filed by the SSS, which reads as follows:
"AMENDED NOTICE OF APPEAL"
DEFENDANT, by the undersigned counsel, unto this HONORABLE COURT, most respectfully
manifests that it is appealing the decision in the above-entitled case to the HONORABLE COURT
OR APPEALS, Manila, the dispositive portion of which, in part states:

'WHEREFORE, premises considered, judgement is hereby rendered in favor of the plaintiffs

Marawi-Marantao General Hospital Inc., and Atty. Macapanton K. Mangondato and against
defendant Social Security System directing the latter (SSS_) to:
1. Execute an absolute deed of sale in favor of the plaintiffs General Hospital and/or Atty.
Aforesaid Deed of Condition Sale;
xxx

xxx

xxx

That the defendant received the aforesaid decision on June 29, 1999, and that a Motion for
Reconsideration of aforequoted decision was filed on the same day and was denied by the
Honorable Court in an order dated July 6, 1999;
That a Notice of appeal was filed on July 9, 1999;
CAGAYAN DE ORO CITY, July 10, 1999."3
The amended notice of appeal is clear and specifically states that the SSS is appealing the
entirely of the decision in Civil Case No. 1499-97. It is apparent that the omission of item
numbers two, three, four and five in its quotation of the dispositive portion was not meant to
signify that only the first item was being appealed portion by the SSS. It is evident that the
quotation was made merely to emphasize the dispositive portion of the aforesaid decision as
can be gleaned from the use of the phrase "which, in part states" prior to the quotation.
Moreover, the SSS's use of "xxx" known as ellipsis4 or ellipsis points merely signifies omitted
words, sentences or longer passages inquoted materials5 and does not appear to have been
used to indicate that only particular portions of the questioned decision were being appealed
from. We quote with approval the Court of Appeals' ratiocination on this point as follows:
"It is clear that as day that the Petitioner, under said "Amended Notice" appealed from
the entirely of the Decision of the Public Respondent and not only from item No. 1 of the
dispositive portion of the Decision of the Public Respondent. There can be no equivocation
about this. If it was the intention of the Petitioner to appeal only item No. 1 of the dispositive
portion of the Decision of the Public Respondent and waived the rest of the items under said
dispositive portion of said Decision, the Petitioner should have so declared, under
said "Amended Notice of Appeal", that it ia appealing only from item No. 1 of the dispositive
portion of the Decision in the above-entitled case o the Court of Appeals or that "it is
appealing only that portion of the Decision in the above-entitled case, quoted, herein below:
1. Execute an absolute deed of sale in favor of the plaintiffs Hospital and/or Atty.
Macapanton K. Mangondato as stipulated in the aforesaid Deed of Conditional Sale;
The Petitioner did not. The Petitioner did not use any word precisely restricting the coverage
of its appeal to particular or specific items in the dispositive portion of the Decision of the
Public Respondent.
That the counsel of the Petitioner quoted, in said "Amended Notice of Appeal" , only item No.
1 of the dispositive portion of the Decision of the Public Respondent does not and cannot, by
any means, mean that it was appealing only item No. 1 of the dispositive portion of the
Decision of the public Respondent. Irrefragably, the quotation was merely a declaration of a
part of the dispositive portion of the Decision of the Public Respondent.

We do not agree with the pose of the Private Respondents that the Petitioner, under
its "Amended Notice of Appeal", en effet, waived its right to appeal from Items Nos. 2, 3, 4
and 5 of the dispositive portion of the Decision of the Public Respondent. From the context of
the "Amended Notice of appeal" it cannot thereby be concluded that the Petitioner indeed
waived its right to appeal from Items Nos. 2, 3, 4 and 5 of the dispositive portion of the
Decision of the Public respondent. For, to valid and effective, a waiver must be so couched
in clear and unequivocal terms leaving no doubt as to the intention of the person giving up a
right benefit:
xxx

xxx

xxx

It bears stressing that, in their complaint, the Private respondents prayed for judgement, for
moral and actual damages only in the amount of P500,000.00 and P100,000.00 by way of
attorney's fees. However, under its Decision, the Public Respondent awarded the Private
Respondents the gargantuan amount of P12,487,271.00 by way of actual and unrealized
income and P500,000.00 by way of moral damages. The Public Respondent even awarded
moral damages to the Private Respondent Marawi-Marantao General Hospital, Inc., a private
corporation. We do not believe that the Petitioner pursued, with perspicacity, before this
Court, in CS-G.R. No. 53502-SP, its plea for the nullification of the Order of the Public
Respondent for the execution of its Decision pending appeal, and, even before this Court
came out with its Decision in said case, the Petitioner made a sudden volte face and waive,
in favor of the Private Respondents, and hand over to them, in a silver platter, so to speak,
the gargantuan amount of P13,500,000.00. We do not believe that the Petitioner would, in
one breathe, reprobate and, in the same breathe, approbate the aforesaid awards by the
Public Respondent in favor of the Private Respondents. In the business world, that would be
plain kookery."6
In cases of appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection
of the appeals filed in due time and the expiration of the time to appeal of other parties.7 In such
case, prior to the transmittal of the original record on appeal, the court may only issue orders for the
protection and preservation of the rights of the parties which do not involve any matter litigated by
the appeal, approve compromises, permit appeals of indigent litigants, order execution pending
appeal in accordance with section 2 of Rule 39, and allow withdrawal of the appeal.8 Considering
that the SSS appealed the entirety of the decision to the Court of Appeals and considering further
that the period of appeal of the petitioners had already expired, the RTC already lost jurisdiction over
the subject matter of the case when it issued the Order dated August 16, 1999 declaring item
numbers 2, 3, 4 and 5 of the Civil Case No. 1499-97 final and executory; the Order dated September
1, 1999 granting execution of item numbers 2, 3, 4 and 5; the Order dated September 2, 1999
directing the Philippine National Bank to release the amounts subjects of the writ of execution dated
September 1, 1999; the Order dated September 11, 1999 granting the petitioners a new release
order of the amounts stated in the Order dated September 1, 1999; and the Notice of Garnishment
dated September 3, 1999 which garnished the money of the SSS deposited in the Philippine
National Bank. Having issued said orders without jurisdiction, they are null and void.
1w phi1.nt

Admittedly, the SSS did not file a motion for reconsideration with the RTC before it filed its petition
for certiorari with the Court of Appeals. Generally, the special civil action for certiorari will not lie
unless the aggrieved party has no other plain, speedy, and adequate remedy in the ordinary courser
of law, such as a timely filed motion for reconsideration, as to allow the lower court to correct the
alleged error9. However, there are several exceptions where the special civil action for certiorari will
lie even without the filing of a motion for reconsideration, namely:
a. Where the order is a patent nullity, as where the court a quo has no jurisdiction;

b. Where the questions raised in the certiorari proceeding have been duly raised and passed
upon by the lower court, or are the same as those raised and passed upon in the lower court;
c. Where there is an urgent necessity for the resolution of the question and any further delay
would prejudice the interests of the government or the petitioner or the subject matter of the
action is perishable;
d. Where, under the circumstances, a motion for reconsideration would be useless;
e. Where petitioner was deprived of due process and there is extreme urgency for relief;
f. Where, in a criminal case, relief from an order of arrest is urgent and the granting of such
relief by the trial court is improbable;
g. Where the proceedings in the lower court are a nullity for lack of due process;
h.Where the proceedings was ex parte or in which the petitioner had no opportunity to object;
and
i. Where the issue raised is one purely of law or where public interest is involved.10
In the present case, considering that the RTC no longer had jurisdiction to issue the questioned
orders, we find the first exception clearly applicable. Consequently, we cannot fault the Court of
Appeals for giving due course to the petition for certiorari filed by the SSS despite its failure to file a
motion for reconsideration.
ACCORDINGLY, the Decision of the Court of Appeals is AFFIRMED and the instant petition is
hereby DENIED.
SO ORDERED.
Melo, Vitug, Panganiban, and Sandoval-Gutierrez JJ., concur.

Footnotes:
1 Fourth Division composed of the ponente J. Romeo S. Callejo and the members: J. Quirino D. Abad-Santos, Jr. (Chairman) and J.
Mariano M. Umali concurring.

2 Rollo, 9-14.

3 Rollo, 80.

4 Marks or a mark (aor*** or ---) showing omission of letters, words, or other material; WEBSTER'S THIRD NEW INTERNATIONAL
DICTIONARY, 1986; In the present case, "xxx" was used.

5 Mary A. DeVries, THE ENCYCLOPEDIC DICTIONARY OF STYLE AND USAGE (New York: Berkley Books, 1999), p.144.

6 Rollo, 19-21.

7 Section 9, Rule 41, Rules of Court.

8 Ibid.

9 Tan, Jr. vs. Sandiganbayan, 292 SCRA 452, 457 [1998].

10 Ibid

FIRST DIVISION
BUKIDNON DOCTORS HOSPITAL,
INC.,

G.R. No. 161882

Petitioner,
Present:
DAVIDE, JR., C.J.,
(Chairperson),
QUISUMBING,
SANTIAGO,
CARPIO, and
AZCUNA, JJ.

- versus -

METROPOLITAN BANK & TRUST CO.,

Promulgated:

Respondent.
July 8, 2005

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X

DECISION
DAVIDE, JR., C.J.:
At issue in this petition for review on certiorari is whether a writ of
possession is the proper remedy for evicting a mortgagor who became a lessee
of the mortgaged properties after the mortgagee has consolidated ownership
over the properties and was issued new certificates of title.
The facts are as follows:
Sometime in 1995, petitioner Bukidnon Doctors Hospital, Inc.,
obtained a loan of P25 million from respondent Metropolitan Bank and Trust
Company to be used for the construction of its hospital. To secure this loan,
the petitioner mortgaged six parcels of land located in Valencia, Bukidnon,
covered by TCT Nos. T-52197, T-52198, T-52199, T-52200, T-52201, and T52202 and registered in the name of Dr. Rene Sison and Rory P. Roque,
President and Administrator, respectively, of the petitioner. Upon petitioners
default in the payment of the loan, the mortgage was extrajudicially foreclosed
and the mortgaged lots were sold in a public auction to respondent bank,

being the sole and highest bidder. The petitioner failed to redeem the
properties within the period of redemption. Forthwith, the respondent
consolidated its ownership over the properties and was issued new certificates
of title on 1 October 2001.[1]
Earlier, in a letter received by the respondent on 7 July 2001, the
petitioner expressed its desire to continue staying in the subject premises so
that the operation of the hospital erected thereon would not be disrupted. For
that purpose, the petitioner proposed to pay rent in the amount of P100,000
per month for a period of, but not limited to, three years.[2] On 17 December
2001, the respondent agreed to lease the properties but subject to the
following terms: (1) the monthly rental would be P200,000 with a one month
advance rental and a deposit equivalent to three months rental; (2) the
effectivity of the lease contract would be from June 2001; and (3) the contract
would be subject to review every six months.[3] The terms finally agreed upon
by the parties, as culled from respondents letter to the petitioner of 30 May
2002, were (1) a monthly rental of P150,000, and (2) the effectivity of the
lease contract in November 2001.[4]
In its letter of 16 July 2003, or approximately a year and eight months
after the agreed effectivity date of the lease contract, the respondent asked the
petitioner to vacate the leased premises within fifteen days. The petitioner
refused, invoking the subsisting lease agreement.
On 21 August 2003, the respondent filed with the Regional Trial Court
(RTC) of Malaybalay City, Bukidnon, an Ex Parte Motion for a Writ of
Possession. The case was docketed as Misc. Case No. 735-03 and raffled to
Branch 9 of that court.
On 17 November 2003, the trial court issued an order granting
respondents ex parte motion for a writ of possession. The pertinent portion
of the order reads as follows:
Since all the requirements or requisites for the issuance are present
in this case, the court finds that it has no choice or other alternative but to
issue the same, the duty of the Court being ministerial in character. The
respondent can ventilate all its defenses in a separate case that the
respondent may file for that purpose.
...
After the expiration of the period of redemption, a writ of
possession can be demanded by a purchaser of the foreclosed property as a
matter of right. Even during the period of redemption, possession can be

demanded provided a bond is posted in accordance with Section 7, Act No.

3135 (Vda. De Zaballero vs. CA, 229 SCRA 810).[5]

Its motion for reconsideration having been denied by the trial court in
the Order of 23 January 2004,[6] the petitioner filed on 29 January 2004 (the
day it received the denial order) a Notice of Appeal stating that it was
appealing to the Court of Appeals on both questions of fact and law.[7] Earlier,
or on 27 November 2003, the petitioner filed with the trial court an action for
specific performance, injunction, and damages, docketed as Civil Case No.
3312-03.[8] Also, on 30 January 2004, the petitioner filed a petition for
rehabilitation before the RTC of Cagayan de Oro City, Branch 18, docketed as
Spec. Pro. Case No. 2004-019.
On 11 February 2004, before its Notice of Appeal could be acted upon
by the trial court, the petitioner filed a Manifestation and Motion stating that
due to the nature of the appeal that it intended to file, it was withdrawing the
Notice of Appeal.[9] Two days thereafter, or on 13 February 2004, which was
the last day within which to appeal the 29 January 2004 Order, it filed with us
a motion for extension of thirty days from the expiration of the reglementary
period to file a petition for review on certiorari or until 14 March 2004. We
granted this motion for extension in our Resolution of 3 March 2004. Then,
on 4 March 2004, the petitioner instituted the instant petition for review
on certiorari under Rule 45, in relation to Section 2(c) of Rule 41, of the Rules
of Court, raising a single issue for our consideration, to wit:
WHETHER [OR] NOT THE COURT A QUO CORRECTLY RULED THAT
RESPONDENT, A FORMER MORTGAGEE-BUYER, WAS STILL
ENTITLED TO A WRIT OF POSSESSION AS A MATTER OF RIGHT AS
PROVIDED UNDER ACT 3135, AS AMENDED, DESPITE A LEASE
AGREEMENT BETWEEN ITSELF AND THE FORMER MORTGAGORSELLER EXECUTED AFTER RESPONDENT BECAME THE ABSOLUTE
OWNER OF THE FORECLOSED PROPERTIES.[10]

In its Comment,[11] the respondent asserts that the petitioner is

guilty of forum-shopping for having gone to four different courts for the
same relief. Besides, by filing an ordinary appeal under Rule 41 of the
Rules of Court, the petitioner had already waived its right to file a petition
for review on certiorari under Rule 45, since the two modes of appeal are
mutually exclusive and governed by different rules. Pursuant to the
principle of hierarchy of courts, the petitioner should have first filed the
instant petition with the Court of Appeals, which has concurrent

jurisdiction with the Supreme Court to resolve cases involving only

questions of law. As to the main issue, the respondent argues that as a
purchaser in a valid extrajudicial foreclosure sale under Act No. 3135 and
as the absolute owner of the subject parcels of land, it was entitled as a
matter of right to the issuance of a writ of possession. The subsequent
agreement to stay between the parties did not negate respondents right
to take possession of the subject properties through a writ of
possession. In any event, the agreement to stay on the subject
properties was deemed to be on a month-to-month basis, since the period
therefor was not fixed.
The petitioner rebuts, in its Reply, respondents arguments, contending
that it did not shop for a favorable forum, since the three cases where it is
either a defendant/oppositor or plaintiff/petitioner do not involve the same
subject matter, causes of action, and parties. Contrary to the claim of the
respondent, it immediately withdrew by proper motion its notice of appeal in
the trial court after realizing that the proper remedy was a petition for review
on certiorari under Rule 45 of the Rules of Court, not a petition for review
under Rule 42. Rule 42 is not applicable to the case at bar because it is the
Supreme Court that has jurisdiction over the petition as it involves a pure
question of law pursuant to Section 2(c) of Rule 41 and Section 1 of Rule 45 of
the Rules of Court. Lastly, the trial court clearly erred in granting
respondents ex parte motion for a writ of possession because of the existence
of a lease agreement between the parties, which was executed after the
respondent consolidated its title to the subject properties.
In our Resolution of 2 August 2004, we gave due course to the petition
and resolved to decide the case based on the pleadings already filed.[12]
On 17 December 2004, the respondent filed a Manifestation and Motion
to Dismiss Petition.[13] It brings to our attention petitioners letter dated 3
November 2004 informing it that the petitioner had decided to close its
hospital operations and to turn over the premises to the respondent on 30
November 2004 in view of the expiration of the lease agreement. According to
the respondent, petitioners express and unequivocal recognition of the
expiration of the alleged lease agreement and its act of turning over the
possession of the subject property to the respondent had rendered the instant
petition moot and academic. The petitioner countered that the legal issue of
whether a writ of possession may be issued despite the existence of a lease
agreement must be resolved by this Court, since this issue may again arise as
banks continue to foreclose, seek possession and/or lease out the foreclosed
premises to previous mortgagors.

Indeed, because of petitioners act of surrendering the possession of the

subject properties owing to the expiration of the lease agreement, the instant
petition praying (1) for the reversal of the order for the issuance of a writ of
possession and (2) for full possession by the petitioner of the subject
properties was rendered moot and academic. Nonetheless, for the guidance of
the bench and the bar, we shall proceed to resolve the important issue of
whether a writ of possession will lie to recover the material possession of
previously mortgaged properties that have been leased to the mortgagor after
the mortgagee consolidated its ownership over the properties.
However, we shall first take up the procedural issues raised by the
respondent.
We are not convinced that the petitioner is guilty of forum- shopping.
Forum-shopping is an act of a party against whom an adverse judgment
or order has been rendered in one forum of seeking and possibly getting a
favorable opinion in another forum, other than by appeal or special civil action
for certiorari. It may also be the institution of two or more actions or
proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition. The elements are as follows:
(1) identity of parties, or at least such parties as would represent the same
interest in both actions; (2) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (3) identity of the two preceding
particulars such that any judgment in the other action, regardless of which
party is successful, will amount to res judicata in the action under
consideration.[14]
Before filing on 4 March 2004 the petition in this case, the petitioner
had filed two other cases, namely, (1) an Action for Specific Performance,
Injunction, and Damages with the RTC of Malaybalay City, docketed as Civil
Case No. 3312-03 and (2) a Petition for Corporate Rehabilitation with the RTC
of Cagayan de Oro City, docketed therein as S.P. Case No. 2004019. However, these two cases involve causes of action different from the one
at bar. In Civil Case No. 3312-03, the petitioner sought the enforcement of the
lease contract between it and the respondent, with prayer for damages for the
latters breach of its contractual obligation. In S.P. Case No. 2004-019, the
petitioner prayed for rehabilitation pursuant to the Interim Rules on
Corporation Rehabilitation.

Upon the other hand, in this case, the ex parte motion for a writ of
possession was filed at the instance of the respondent. When the motion was
granted, the petitioner filed a notice of appeal to the Court of Appeals, which it
later withdrew. Thereafter, it appealed to us via Rule 45 of the Rules of Court
questioning the propriety of the issuance of a writ of possession for the
purpose of evicting the petitioner despite the lease agreement subsequently
entered into by the parties after the expiration of the redemption period. As
can be clearly seen, the two cases and the appeal filed by the petitioner
involved different causes of action. Thus, the petitioner cannot be said to have
engaged in forum-shopping.
Neither can the petitioner be deemed to have waived its right to file this
petition. Realizing that the remaining issue was a pure question of law, it
withdrew its Notice of Appeal stating that it was appealing the 28 January
2002 Order on both questions of law and fact. Section 9 of Rule 41 of the
Rules of Court provides that prior to the transmittal of the original record, the
court may allow withdrawal of the appeal.
Nothing in the Rules prevents a party from filing a petition under Rule
45 of the Rules of Court after seasonably withdrawing the Notice of Appeal as
long as it is done within the reglementary period and the issue involved is
purely one of law. In this case it was before the lapse of the reglementary
period to appeal that the petitioner withdrew its Notice of Appeal to the Court
of Appeals and filed with us a motion for extension of time to file a petition
under Rule 45 of the Rules of Court. And the petition was filed within the
extended period we granted, raising only one question of law.
Nor is there a violation of the doctrine of hierarchy of courts. Section
2(c), Rule 41 of the Rules of Court categorically provides that in all cases
where only questions of law are raised, the appeal from a decision or order of
the Regional Trial Court shall be to the Supreme Court by petition for review
on certiorari in accordance with Rule 45. Section 2(c) of Rule 41 of the Rules
of Court reads:
SEC. 2. Modes of appeal.
(a) Ordinary appeal. The appeal to the Court of Appeals in
cases decided by the Regional Trial Court in the exercise of its original
jurisdiction shall be taken by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and serving a copy
thereof upon the adverse party. No record on appeal shall be required
except in special proceedings and other cases of multiple or separate

appeals where the law or these Rules so require. In such cases, the record
on appeal shall be filed and served in like manner.
(b) Petition for review. The appeal to the Court of Appeals in
cases decided by the Regional Trial Court in the exercise of its appellate
jurisdiction shall be by petition for review in accordance with Rule 42.
(c) Appeal by certiorari. In all cases where only questions of law
are raised or involved, the appeal shall be to the Supreme Court by petition
for review on certiorari in accordance with Rule 45.

Section 1 of Rule 45 provides:

SECTION 1. Filing of petition with Supreme Court. A party
desiring to appeal by certiorari from a judgment or final order or
resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial
Court or other courts whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari. The petition
shall raise only questions of law which must be distinctly set forth.

A question of law exists when the doubt or controversy concerns the

correct application of law or jurisprudence to a certain set of facts; or when the
issue does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted. A question of fact
exists when the doubt or difference arises as to the truth or falsehood of facts
or when the query invites calibration of the whole evidence considering mainly
the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other and to the
whole, and the probability of the situation.[15]
As earlier stated, the only issue raised in this petition is whether [or]
not the court a quo correctly ruled that respondent, a former mortgageebuyer, was still entitled to a writ of possession as a matter of right as provided
under act 3135, as amended, despite a lease agreement between itself and the
former mortgagor-seller executed after respondent became the absolute owner
of the foreclosed properties.
This question is undoubtedly one of law. The existence of a lease
agreement between the parties, which is a question of fact, ceased to be an
issue in view of the admission thereof by both the petitioner and the
respondent.[16] Thus, with only a question of law raised in this petition, direct
resort to this Court is proper.

In sum, the petition at bar is not tainted with any of the procedural
errors attributed to it by the respondent.
We shall now consider the issue of the propriety of the issuance of a
writ of possession in favor of the respondent.
The law[17] and jurisprudence[18] are clear that in extrajudicial foreclosure
proceedings, an order for a writ of possession issues as a matter of course,
upon proper motion, after the expiration of the redemption period without the
mortgagor exercising the right of redemption, or even during the redemption
period provided a bond is posted to indemnify the debtor in case the
foreclosure sale is shown to have been conducted without complying with the
requirements of the law or without the debtor violating the mortgage
contract.[19] The rationale for the ministerial issuance of a writ of possession is
to put the foreclosure buyer in possession of the property sold without delay,
since the right to possession is founded on ownership of the property.[20]
However, in the instant case, a writ of possession was not the correct
remedy for the purpose of ousting the petitioner from the subject premises. It
must be noted that possession is the holding of a thing or the enjoyment of a
right.[21] It is acquired by the material occupation of a thing or the exercise of
a right, or by the fact that a thing or right is subject to the action of ones will,
or by the proper acts and legal formalities established for acquiring such
right.[22] By material occupation of a thing, it is not necessary that the person
in possession should be the occupant of the property; the occupancy can be
held by another in his name.[23] Thus Articles 524 and 525 of the Civil Code
provide:
Art. 524. Possession may be exercised in ones own name or in that
of another.
Art. 525. The possession of things or rights may be had in one of
two concepts: either in the concept of owner, or in that of the holder of the
thing or right to keep or enjoy it, the ownership pertaining to another
person.

In other words, an owner of a real estate has possession, either when he

himself is physically occupying the property, or when another person who
recognizes his rights as owner is occupying it.
In the case at bar, it is not disputed that after the foreclosure of the
property in question and the issuance of new certificates of title in favor of the
respondent, the petitioner and the respondent entered into a contract of lease
of the subject properties. This new contractual relation presupposed that the
petitioner recognized that possession of the properties had been legally placed
in the hands of the respondent, and that the latter had taken such possession
but delivered it to the former as lessee of the property. By paying the monthly
rentals, the petitioner also recognized the superior right of the respondent to
the possession of the property as owner thereof. And by accepting the
monthly rentals, the respondent enjoyed the fruits of its possession over the
subject property.[24] Clearly, the respondent is in material possession of the
subject premises. Thus, the trial courts issuance of a writ of possession is not
only superfluous, but improper under the law. Moreover, as a lessee, the
petitioner was a legitimate possessor of the subject properties under Article
525 of the Civil Code. Thus, it could not be deprived of its lawful possession by
a mere ex parte motion for a writ of possession.
Apropos to this case is Banco de Oro Savings and Mortgage Bank v.
Court of Appeals.[25] There, the spouses Nery were not able to redeem the
property they mortgaged to the bank; hence, the latter was able to consolidate
the title to the property in its name. The Nerys requested the bank for more
time to repurchase the subject property, obligating themselves to pay monthly
rentals or reasonable compensation for the continued occupation of the
premises on the ground that they had leased portions of the building to
tenants. Since neither the Nerys nor their tenants vacated the subject
premises nor paid reasonable compensation for the use thereof, the bank
instituted three separate ejectment suits against them before the Metropolitan
Trial Court of Paraaque. The Nerys argued that the proper remedy that
should have been taken by the bank as mortgagee was to obtain a writ of
possession and not an action for ejectment. We rejected Nerys argument and
ruled that it was proper for the bank to sue for ejectment. Thus:
The Nerys forget, however, that they had asked the Bank for a grace
period within which to repurchase the mortgaged property and to be
allowed to pay monthly rentals or reasonable compensation for the use of
the premises. In fact, they did pay rentals for several months. Their
continued stay in the property was thereby converted to one by tolerance
or permission. A person who occupies the land of another at the latters
tolerance or permission, without any contract between them, is necessarily

bound by an implied promise that he will vacate upon demand, failing

which, a summary action for ejectment is proper against him (Dakudao v.
Consolacion, L-54573, 24 June 1983, 112 SCRA 877). The Nerys refused to
vacate upon demand, the last of which was made by letter, dated 25 July
1984, as found by the Trial Court, and not 9 September 1983 as the Nerys
allege. An ejectment suit, therefore, was proper, with the legally prescribed
period to institute the same having been complied with.
Significantly, too, with the consolidation of title in the Bank, it had
become the owner of the subject premises. As such, it could bring an
action for ejectment to obtain possession and occupation. Thus, Section 1,
Rule 70 provides an action for unlawful detainer may be brought by a
landlord, vendor, vendee, or other person against whom the possession
of any land or building is unlawfully withheld after the expiration or
termination of the right to hold possession xxx.
It is indeed, correct that in ordinary extra-judicial foreclosure
cases, the mortgagees remedy is to apply for a Writ of Possession. As
already intimated, however, the stay of the Nerys in the premises had
been converted to one by permission with a corresponding commitment
to pay rentals. An implied lease was thereby treated between the parties.
Where the question relates to the relation between landlord and tenant,
the nature of the lease premises involved, the reasonableness of the
rentals demanded, the right or lack of right of the tenant to continue
occupying the premises against the will of the landlord, the applicability
of the rental law, etc., a case for ejectment is proper. (Commander Realty,
Inc., vs. Court of Appeals, L-77227, 9 May 1988, 161 SCRA 264). Notably,
too, there were other tenants in the premises who were not privy to the
foreclosure proceedings but had to be rejected as well. (emphasis ours)[26]

In a nutshell, where a lease agreement, whether express or implied, is

subsequently entered into by the mortgagor and the mortgagee after the
expiration of the redemption period and the consolidation of title in the name
of the latter, a case for ejectment or unlawful detainer, not a motion for a writ
of possession, is the proper remedy in order to evict from the questioned
premises a mortgagor-turned-lessee. The rationale for this rule is that a new
relationship between the parties has been created. What applies is no longer
the law on extrajudicial foreclosure, but the law on lease. And when an issue
arises, as in the case at bar, regarding the right of the lessee to continue
occupying the leased premises, the rights of the parties must be heard and
resolved in a case for ejectment or unlawful detainer under Rule 70 of the
Rules of Court.

WHEREFORE, the petition is hereby GRANTED. The Orders of

the Regional Trial Court of Malaybalay City, Bukidnon, Branch 9, in Misc.
Case. No. 735-03 dated 17 November 2003 and 23 January 2004, are
hereby REVERSED andSET ASIDE.
No pronouncement as to costs.
SO ORDERED.

HILARIO G. DAVIDE, JR.

Chief Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice

CONSUELO YNARES-SANTIAGO
Associate Justice

ANTONIO T. CARPIO
Associate Justice

ADOLFO S. AZCUNA
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby

certified that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

HILARIO G. DAVIDE, JR.

Chief Justice

Item No. 111

Agenda for 6 July 2005
FIRST DIVISION
FOR CONCURRENCE

BUKIDNON DOCTORS HOSPITAL,

INC.,
Petitioner,

G.R. No. 161882

- versus -

METROPOLITAN

BANK

CO.,

&

TRUST
Respondent.

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
COUNSEL FOR THE PETITIONER:
JARAULA EVANGELISTA & SAN JOSE LAW OFFICES
2/F Jaraula-Brias Building
Serina Street, Carmen
9000 Cagayan de Oro City
COUNSEL FOR THE RESPONDENT:
ATTY. FRANCISCO T. DEL CASTILLO
23 Pabayo-San Agustin Streets
9000 Cagayan de Oro City
X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
RTC of Malaybalay Branch 9

Resolution/Order of 17 November 2003:

Per Judge Rolando S. Vedanes, Sr.

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
(Please return to the Office of Chief Justice HILARIO G. DAVIDE, JR.)

[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]

[19]
[20]

[21]
[22]
[23]

[24]

[25]
[26]

Rollo, 13, 52-57, 170-171.

Id., 72.
Id., 73-74.
Id., 75.
Rollo, 80-81.
Id., 41.
Id., 203.
Id., 205-222.
Id., 308.
Rollo, 18.
Id., 176-177.
Rollo, 312.
Id., 353.
GSIS v. Bengson Commercial Buildings, Inc., 426 Phil. 111 (2002); Santos v. COMELEC, G.R.
No. 155618, 26 March 2003, 399 SCRA 611, 619.
Republic v. Sandiganbayan, G.R. No. 102508, 30 January 2002, 375 SCRA 145.
Rollo, 79-80.
Act No. 3135, as amended by Act. No. 4118, entitled An Act to Regulate the Sale of Property
under Special Powers Inserted in or Annexed to Real Estate Mortgages.
Philippine National Bank v. Adil, 203 Phil. 492(1982); F. David Enterprises v. Insular Bank
of Asia and America, G.R. No. 78714, 21 November 1990, 191 SCRA 516; Vda. de Zaballero v.
Court of Appeals, G.R. No. 106958, 9 February 1994, 229 SCRA 810.
Section 7, Act No. 3135, as amended.
The purchaser of the property sold at public auction is entitled to the aid of the court in effecting
its delivery the reason being that upon the expiration of the redemption period (or confirmation
of sale) the ownership of the property is transferred to him (Barrameda v. Gontang, 125 Phil. 787
[1967]).
Article 523, Civil Code.
Id.
Repide v. Astar, 2 Phil. 757 (1902); Alo v. Rocamora, 6 Phil. 197 (1906); Luna v. Court of
Appeals, G.R. No. 94490, 6 August 1992, 212 SCRA 276; Reyes v. Court of Appeals, 374 Phil. 236
(1999).
The respondent admitted (1) the existence of the lease agreement, arguing only that it was on a
month-to-month basis and not for three years, and (2) the fact that it accepted rental payments
from the petitioner in the amount of P150,000 per month from November 2001, the effectivity
date of the lease contract ( Rollo, 80).
G.R. No. 85448, 21 February 1990, 182 SCRA 464.
Supra, at 469.