G.R. No.

L-17427

July 31, 1962

RODRIGO ACOSTA, petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.
Rodrigo Acosta for and in his own behalf as petitioner.
Office of the Solicitor General for respondent.
CONCEPCION, J.:
Appeal by certiorari, taken by Rodrigo Acosta, from a decision of the Court of Appeals remanding this case to the court of
origin for retrial and the rendition of judgment in accordance with the evidence that the parties may then present.
It appears that on January 2, 1951, an information for malversation of public funds thru reckless negligence was filed,
with the Court of First Instance of Bukidnon, against petitioner Rodrigo Acosta, for having allegedly made, as Provincial
Treasurer of Bukidnon, "irregular and excessive purchases of supplies, materials, equipment and printed forms from
private dealers for the use of the province", and against Leonardo Avila, for having, as Provincial Auditor of the same
province, "passed in audit the corresponding vouchers covering the payments for such purchases." Subsequently, the
information was amended to include as defendants three (3) private dealers, namely, C. Silvestre, E. M. Haravata and
Victoriano C. Arias, who had allegedly been able to collect payment upon said purchases. Still later, however, the
prosecution filed a second amended information excluding said dealers from the charge.
The trial under this second amended information, in connection with which Acosta and Avila had entered a plea of not
guilty, began on June 19, 1952 and ended on July 28, of the same year. However, the trial Judge, Hon. Jose P. Veluz, retired
from the service without having decided the case. His successor in office, Hon. Vicente Abad Santos, Judge, "found the
transcript of 482 pages prepared by stenographer Celestino Suarez" replete with "omissions and also inaccuracies which
had been indicated by means of marginal notes on the pages mentioned in" an "order of September 25, 1957." Judge Abad
Santos directed, therefore, said stenographer "to re-transcribe his notes and to submit the "new transcript as well as the
first transcript" not later than forty days after receipt of a copy of said order". But, "instead of re-transcribing his notes . . .,
Mr. Suarez merely made corrections in handwriting and inserted some supplemental transcripts in the original
transcripts". Upon reading those supplemental typed transcripts, particularly the portion covering the cross-examination
of witness Pedro Palafox by defense counsel Cipriano Asada, Judge Abad Santos noticed, however, that it was still "full of
inaccuracies". Accordingly, he ordered the stenographer to read his notes in his (Judge Abad Santos) chamber, in order
that the necessary corrections could be made on the transcript. Upon going over said notes, it appeared that said portion
"consisted of eleven pages although the transcript thereof was spread to eight pages only". Hence, Suarez was ordered to
further transcribe what had thus been omitted. What is more, in order that he could decide the case with a "clear
conscience", Judge Abad Santos bade Suarez to stay in his (Judge Abad Santos') office in order to read his (Suarez) notes
from the beginning, with stenographer Montes checking the transcript already made. Although he did not immediately
reveal his objection thereto, Suarez later refused to work in said office stating that "it made him dizzy to come up and"
that "besides he was going to resign or retire" and then asked to be allowed to do his work in the first floor of the court
house. Instead of granting his request, Judge Abad Santos recommended to the Department of Justice, in order to avoid
further delay in the disposition of the case, (a) that any application for retirement or resignation that may be submitted by
Suarez be denied; and (b) that payment of his salary be suspended until otherwise recommended, after compliance with
the order that he should work in the office of the Judge, provided that the result of his work is satisfactory. Eventually, the
transcript of the stenographic notes, certified to be "true and correct", consisted of 658 pages as compared to only 482
pages found by Judge Abad Santos on September 9, 1957.
Meanwhile, Judge Abad Santos had resigned leaving the case undecided. He was succeeded in office by Hon. Abudio
Arrieta, Judge, who, on October 27, 1958, rendered a decision convicting the defendants as charged and sentencing each
to an indeterminate penalty ranging from eleven (11) years, six (6) months and twenty (20) days of prision mayor to
sixteen (16) years, five (5) months and eleven (11) days of reclusion temporal, to pay a fine of P28,808.86, representing
one-half of the total sum allegedly misappropriated, as well as to jointly and severally indemnify the province of Bukidnon
in the sum of P62,955.06, without subsidiary imprisonment in case of insolvency, to perpetual disqualification and to pay
the costs.
Both defendants appealed from this decision to the Court of Appeals and urged the same to acquit them upon the ground,
among others, that said decision was based on incomplete and tampered transcript, upon which a conviction beyond

reasonable doubt could not be predicated. Acosta, moreover, claimed that his constitutional right to a speedy trial had
been violated. On July 2, 1960, the Court of Appeals rendered its decision, from which we quote:
. . . on the basis of available transcript, (which originally contains 482 pages and when retranscribed and
corrected it consists of 658 pages), indicating that irregularities in taking the notes and in transcription thereof
were committed, we can not see our way clear to pronounce either were conviction or acquittal in this case.
Indeed, the evidence in this case is not quite accurate or reliable for the reasons already underscored earlier.
Since the crime with which the accused were charged carries a stiff penalty and that it is one that should be fully
prosecuted for being highly undesirable, if not immoral, we prefer to subordinate acquittal or conviction to time.
Stated otherwise, we are of the opinion that the ends of justice, both to the government and to the accused,
would be better served if further proceedings will take place in order that this case could be decided
satisfactorily once and for all.
From the "corrected" transcript, we gathered that counsel for accused Leonardo Avila in the court below
incurred certain inconsistencies, to wit:
(1) Your Honor please, without renouncing or waiving our rights to present evidence for the defense of the
accused Leonardo Avila, . . . we move for the dismissal of this case on two grounds:
xxx

xxx

xxx

(2) As regards the accused Avila, Your Honor, we waive our right to present evidence on his defense and we
submit the case for decision with the evidence presented by the Fiscal, and we beg to allow us to withdraw
insofar as the accused Avila is concerned we beg to leave the courtroom.
(3) We do not ask for a separate trial, Your Honor, in order to obviate duplicity of questions, but now we will ask
for a separate defense.
(4) And that is within the lookout of the defense, Your Honor, and we reiterate our motion to leave this
Honorable Court to allow us to leave the courtroom, and consider our case closed. (t.s.n., pp. 545, 554, & 558.)
On appeal, counsel for appellant Leonardo Avila filed a motion for new trial, because of the aforequoted
statements and of the erroneous and incomplete transcript of the trial stenographer. The motion was, however,
denied (Rec. 3rd Div., Feb. 12, 1959). Appellate Courts have that broad power to order new trial without
specifying the grounds thereof in order to avoid a miscarriage of justice. The grounds upon which courts of first
instance may grant a new trial are limited (Pls. see Sec. 5, Rule 117, Rules of Court), but appellate courts, under
Section 14, Rule 120 are authorized to remand a case to a court of first instance for new trial or retrial, without
specifying, and, hence, without limiting, the grounds upon which the action may be predicated. And pursuant to
Section 11, Rule 120, of the Rules of Court, an appellate court may . . . remand a case to a court of first instance
for new trial or retrial . . . .
WHEREFORE, the record of this case is ordered remanded to the court of origin for retrial and another judgment
be rendered in accordance with the evidence that the parties concerned may desire to present.
Acosta sought a reconsideration of this decision, which was denied. Hence, his present appeal by certiorari.
Petitioner maintains that the Court of Appeals erred in ordering a retrial, instead of acquitting him, not only because he
had been deprived of the constitutional right to a speedy trial, but, also, because a retrial would be impractical, oppressive
and expensive, apart from amounting to a denial of justice, for a principal witness for the defense, one Justiniano B.
Castillo, had allegedly died on December 24, 1957, and his other witnesses may no longer be available.
It should be noted that the original information in this case was filed on January 2, 1951 and that the trial of the reception
of the evidence for both parties commenced on June 19, 1952 and was finished on July 18 of the same year. Petitioner
does not contend that there has been any undue delay in this part of the proceedings. His alleged deprivation of the right
to a speedy trial is anchored on the fact that the decision of the lower court was rendered over six (6) years later. In this
connection, the Court of Appeals aptly observed:

. . . True enough that judgment was pronounced after almost six years. But "the constitutional right to a public
and speedy trial does not extend to the act of pronouncement of sentenced" (Reed vs. State, 147 Ind., N. E., 135,
136). It has been said that "trial and judgment are two different stages of a judicial proceeding: the former is
provided for in Rule 115, and the latter is covered by Rule 116, of the Rule of Court. (Talabon v. Iloilo Prov.
Warden, 78 Phil., 600). And "the period of the trial terminates when the judgment begins" (Felismino vs. Gloria,
47 Phil., 967). Therefore, and since the accused did not avail themselves of the writ of mandamus to compel the
trial judge or his successor to pronounce the corresponding judgement, it may be said in the light of the ruling
laid down in the case of Talabon vs. Iloilo Prov. Warden, infra, that they had waived their right to a speedy trial.
Indeed:
No general principle fixes the exact time within which a trial must be had to satisfy the requirement of a speedy
trial. The right to a speedy trial is necessarily relative; it is consistent with delays, and whether such a trial is
afforded must be determined in the light of the circumstances of each particular case as a matter of judicial
discretion. It is generally said that a speedy trial is one had as soon after indictment as the prosecution can with
reasonable diligence prepare for it, regard being had to the terms of court, a trial conducted according to fixed
rules, regulations and proceedings of law, free from vexations, capricious, and oppressive delays. One accused of
crime is not entitled to a trial immediately on his arrest or accusation, he must wait a regular term of the court
until an indictment is found and presented if the case is one wherein the trial is on indictment, and until the
prosecution has had reasonable time to prepare for the trial. (22 C.J.S., 715-716.)
Under constitutional provision securing to accused "the right to a public trial", or a "speedy trial", is has been
held that the formal declaration of sentence is no part of the trial. (24 C.J.S., 16.)
Moreover, the delay in the rendition of the decision of the court of first instance was due to circumstances beyond the
control of the judges who presided the same. Judge Veluz, who received the evidence, was automatically retired owing to
his age. Judge Abad Santos, who succeeded him, could not decide the case because he found the transcript to be inaccurate
and he had to make disciplinary measures in order to compel stenographer Suarez to retranscribe his notes. By the time
this was done, Judge Abad Santos was no longer in the service. Hence, his successor Judge Arrieta was the one who
rendered the decision of the lower court.
Upon the other hand, we cannot, in the exercise of our jurisdiction on appeal by certiorari, absolve the petitioner of the
crime charged against him, for there are no findings of fact in the decision of the Court of Appeals upon which this Court
could base a judgement of acquittal. Moreover, the opinion of the Court of Appeals to the effect that the transcript of the
stenographic notes taken during the trial of this case in the court of first instance does not reflect faithfully what
transpired during said trial is, apart from being shared by petitioner herein, conclusive upon us. Under these
circumstances, we should not interfere in the exercise of discretion by the Court of Appeals. In the language of Corpus
Juris:
Under a statute which provides that a person restrained of his liberty is entitled to certiorari to inquire into the
cause of his imprisonment, certiorari does not lie to review a determination in a criminal case where relator was
discharged from custody under a bail bond. The reason for such a rule is that the relator, therefore, was not
restrained of his liberty. The imprisonment or restraint in his liberty within the meaning of this section, is an
actual physical restraint by which the liberty of the individuals is in some way interferred with. A person cannot
be said to be restrained in his liberty when he can do what and go where he pleases. The mere fact his bail has
authority to surrender him to custody at any time is not a restrained in his liberty. . . . If the relation should be
surrendered by his bail, and thus be actually in custody, he would be entitled to have the cause of his detention
reviewed; but until there is an actual restraint of his liberty, he is not entitled to either of these writs
(certiorari or habeas corpus) . . . . (17 Corpus Juris, pp. 18-19.)
We are not unaware of the possible disadvantages to which petitioner might be placed in the event of a retrial, but we are
not in a position now to determine the facts of such disadvantages. In fact, the very petitioner has not particularized the
evidence which not be available to him at a retrial, aside from the circumstances that the prosecution may then be
similarly handicapped. In any event, when the retrial takes place, petitioner may point out what evidence he can no longer
present and why, and the Court should then considered the effect thereof upon the question of guilt or innocence of
petitioner herein.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed, and the case remanded to the Court of First
Instance of Bukidnon for further proceedings in compliance therewith. It is so ordered.

CHURCHILLE V. MARI and the PEOPLE OF THE

PHILIPPINES,
Petitioners,
- versus HON. ROLANDO L. GONZALES, Presiding Judge,
Regional Trial Court, Branch 39, Sogod, Southern
Leyte, and PO1 RUDYARD PALOMA y TORRES,
Respondents.

G.R. No. 187728

Present:
VELASCO, JR., J., Chairperson,
PERALTA,
ABAD,
MENDOZA, and
SERENO,* JJ.
Promulgated:

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

September 12, 2011

DECISION
PERALTA, J.:

This resolves the Petition for Certiorari under Rule 65 of the Rules of Court, praying that the Order[1] of the Regional
Trial Court of Sogod, Southern Leyte (RTC), dated January 16, 2009, dismissing the criminal case for rape against PO1
Rudyard Paloma y Torres (private respondent), and the Resolution[2] dated March 16, 2009, denying petitioners' motion
for reconsideration, be annulled and set aside.

The records reveal the following antecedent facts.

On October 25, 2004, petitioner AAA, private complainant below, executed a sworn statement before an Investigator
of the 8th Regional Office, Philippine National Police-Criminal Investigation and Detection Group (PNP-CIDG) in Tacloban
City, where she stated that she was raped by herein private respondent on October 10, 2004 at her boarding house at
Sogod, Southern Leyte. A preliminary investigation of the case was commenced on November 4, 2004 before the
Presiding Judge of the Municipal Circuit Trial Court (MCTC) of Sogod. A warrant of arrest was issued against private
respondent, so he voluntarily surrendered to the Chief of Police of Sogod on November 18, 2004 and was then
incarcerated at the Sogod Municipal Jail.

On November 20, 2004, private respondent filed a Motion for Bail. Hearings on the motion commenced on December
7, 2004, but petitioner failed to appear. Only private respondent presented evidence. Thus, on March 16, 2005, the MCTC

of Sogod issued an Order allowing private respondent to post bail set at P200,000.00. After posting a surety bond, private
respondent was released from confinement.

Pursuant to the issuance of A.M. No. 05-8-26, divesting first-level courts of authority to conduct preliminary
investigation of criminal complaints cognizable by Regional Trial Courts, records of the subject case were transmitted to
the Provincial Prosecutor's Office of Southern Leyte.[3] The Prosecutor's Office issued a Resolution dated May 26, 2008,
finding probable cause against private respondent and, accordingly, an Information for Rape was filed on June 11,
2008. A warrant of arrest was immediately issued against private respondent.

On June 27, 2008, private respondent was committed to detention [4] and, on June 30, 2008, the RTC issued an
Order[5] stating that accused had voluntarily surrendered to the Office of the Clerk of Court and arraignment was set for
July 31, 2008. In the meantime, on July 3, 2008, private respondent filed a Motion to Admit Cash Bond in Lieu of Surety
Bond; thus, in an Order dated July 10, 2008, the RTC cancelled the July 31, 2008 schedule for arraignment and reset the
arraignment and hearing on said motion for August 20, 2008. At said scheduled date for arraignment and hearing on the
motion, nobody appeared for the prosecution. Hence, the RTC issued the Order[6] dated August 20, 2008 resetting the
arraignment for October 31, 2008 and stating that:
x x x this Court hereby orders the public prosecutor x x x and/or his assistant
prosecutor x x x to appear and prosecute this case on the next scheduled hearing from arraignment
up to the termination of the trial of this case otherwise this Court will order the dismissal of this case
for failure to prosecute or nolle prosequi.[7]

On October 28, 2008, petitioner AAA, private complainant below, filed through her private counsel, a Motion for
Cancellation of Hearing,[8] manifesting that Atty. Pedro Felicen, Jr. had been granted the authority to prosecute by the
Provincial Prosecutor and praying that the scheduled arraignment on October 31, 2008 be cancelled due to the pendency
of private complainant's petition for transfer of venue before this Court. The authorized private prosecutor did not
appear on said hearing date. The hearing on October 31, 2008 proceeded as the RTC ruled, in its Order[9] issued on the
same day, that unless restrained by a higher court, the mere pendency of a petition for transfer of venue is not sufficient
reason to suspend the proceedings. Moreover, counsel for accused invoked the accused's right to a speedy trial and, thus,
private respondent was arraigned in the presence of the Provincial Prosecutor who was designated by the RTC to
represent the prosecution for the purpose of arraignment. Pre-trial was set for November 13, 2008. Nevertheless, said
schedule for pre-trial was cancelled (per Order[10] dated November 4, 2008) as the Presiding Judge of the RTC had to
attend a PHILJA Seminar, and pre-trial was reset to November 24, 2008. On November 24, 2008, the day of the pre-trial
itself, the private prosecutor again filed a Motion for Cancellation of Hearing, again using as justification the pendency of
the petition for transfer of venue. The RTC issued an Order on even date, reading as follows:

During the scheduled pre-trial conference of this case, the public prosecutors of Leyte, the private
prosecutor and the private complainant failed to appear despite proper notices sent [to] them. A
motion for cancellation of hearing was filed by the authorized private prosecutor, Pedro Felicen, Jr. for
reasons stated therein to which this Court finds to be not meritorious, hence, the same is
denied. x x x the public prosecutor as well as the counsel for the accused were directed to make
their oral comments on the first endorsement of the Hon. Deputy Court Administrator, regarding the
motion to transfer venue of this case to any of the RTC, at Tacloban City, x x x.
x x x Thereafter, the pre trial proceeded by discussing matters concerning the amicable settlement,
plea bargaining agreement, stipulation of facts, pre-marking of documentary exhibits, number of
witnesses, trial dates and nature of the defense. There being no other matters to discuss on pre-trial in
order to expedite the early disposition of this case, the pre-trial proper is now deemed terminated.[11]

The said Order also scheduled the initial hearing for trial on the merits for December 12, 2008. On December 12,
2008, no one appeared for the prosecution, prompting counsel for accused private respondent to move for dismissal of
the case on the ground of failure to prosecute. Private respondent's motion to dismiss was denied per Order [12]dated
December 12, 2008, and hearing was reset to January 16, 2009.

Again, on the very day of the January 16, 2009 hearing, the private prosecutor filed an Urgent Motion for Cancellation
of Hearing, stating that it

was only on January 14, 2009 that he was furnished a copy of the notice of the January 16, 2009 hearing and he had to
attend a previously scheduled hearing for another case he was handling, set for the very same date. Thus, in the Order
dated January 16, 2009, the RTC disposed, thus:
x x x Again notably absent are the private prosecutor, the two public prosecutors designated by the
Department of Justice to prosecute this case as well as the private complainant herself.
A last minute urgent motion to reset was filed by the private prosecutor, but the same is denied
being in violation of the three (3) day rule in filing written postponements. After hearing the
arguments coming from both the public prosecutor assigned to this Court and counsel for the defense,
the Court deems it proper to act on the urgency of the matter prayed for by the said
counsel. Considering that the accused has been languishing in jail since June, 2008 up to the present
and to allow him to stay in jail for a single minute, it is quite unreasonable and would violate his right
to speedy trial.
WHEREFORE, finding the motion of the counsel for the accused to be based on grounds that are
meritorious, this Court pursuant to x x x the rule on speedy trial (RA 8433) [should be 8493] hereby
orders this case dismissed for failure of the prosecution to prosecute or nolle prosequi.[13]

Petitioners filed a motion for reconsideration, but the RTC denied the same per Resolution dated March 16, 2009.

Hence, the present petition for certiorari, alleging that public respondent acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in rashly and precipitately dismissing the rape case against private
respondent. Respondents counter that there was no grave abuse committed by the trial court and setting aside the
dismissal of the rape case would put private respondent in double jeopardy.

The Court finds the petition bereft of merit.

Firstly, petitioners failed to observe the doctrine on hierarchy of courts. In Garcia v. Miro,[14] the Court,
quoting Vergara, Sr. v. Suelto,[15] ruled thus:
The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily
perform the functions assigned to it by the fundamental charter and immemorial tradition. It
cannot and should not be burdened with the task of dealing with causes in the first instance. Its
original jurisdiction to issue the so-called extraordinary writs should be exercised only where
absolutely necessary or where serious and important reasons exist therefor. Hence, that
jurisdiction should generally be exercised relative to actions or proceedings before the Court of
Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or
another are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ
is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of
these courts that the specific action for the writ's procurement must be presented. This is, and
should continue, to be the policy in this regard, a policy that courts and lawyers must strictly
observe.[16] (Emphasis supplied.)

On this point alone, the petition is already dismissible. However, on several occasions, this Court found compelling
reasons to relax the rule on observance on hierarchy of courts. In Pacoy v. Cajigal,[17] the Court opted not to strictly apply
said doctrine, since the issue involved is double jeopardy, considered to be one of the most fundamental constitutional
rights of an accused. Hence, the Court also finds sufficient reason to relax the rule in this case as it also involves the issue
of double jeopardy, necessitating a look into the merits of the petition.

Petitioners insist that the RTC dismissed the criminal case against private respondent too hurriedly, despite the
provision in Section 10 of the Speedy Trial Act of 1998 (Republic Act No. 8493), now incorporated in Section 3, Rule 119
of the Rules of Court, to wit:
SEC. 3. Exclusions. - The following periods of delay shall be excluded in computing the time
within which trial must commence:
(a) Any period of delay resulting from other proceedings concerning
the accused, including but not limited to the following:
xxxx
(5)
Delay resulting from orders of inhibition, or proceedings relating to change of
venue of cases or transfer from other courts;
x x x x[18]

A careful reading of the above rule would show that the only delays that may be excluded from the time limit within
which trial must commence are those resulting fromproceedings concerning the accused. The time involved in the
proceedings in a petition for transfer of venue can only be excluded from said time limit if it was the accused who

instituted the same. Hence, in this case, the time during which the petition for transfer of venue filed by the private
complainant is pending, cannot be excluded from the time limit of thirty (30) days from receipt of the pre-trial order
imposed in Section 1, Rule 119 of the Rules of Court.

The records reveal that the 30-day time limit set by Section 1, Rule 119 of the Rules of Court had, in fact, already been
breached. The private prosecutor received the Pre-trial Order[19] dated November 24, 2008 on December 3, 2008, while
the Provincial Prosecutor received the same on December 2, 2008. [20] This means that at the latest, trial should have
commenced by January 2, 2009, or if said date was a Sunday or holiday, then on the very next business day. Yet, because
of the prosecution's failure to appear at the December 12, 2008 hearing for the initial presentation of the prosecution's
evidence, the RTC was constrained to reset the hearing to January 16, 2009, which is already beyond the 30-day time
limit. Nevertheless, the prosecution again failed to appear at the January 16, 2009 hearing. Indeed, as aptly observed by
the RTC, petitioners showed recalcitrant behavior by obstinately refusing to comply with the RTC's directives to
commence presentation of their evidence. Petitioners did not even show proper courtesy to the court, by filing motions
for cancellation of the hearings on the very day of the hearing and not even bothering to appear on the date they set for
hearing on their motion. As set forth in the narration of facts above, the prosecution appeared to be intentionally delaying
and trifling with court processes.

Petitioners are likewise mistaken in their notion that mere pendency of their petition for transfer of venue should
interrupt proceedings before the trial court. Such situation is akin to having a pending petition for certiorari with the
higher courts. In People v. Hernandez,[21] the Court held that delay resulting from extraordinary remedies against
interlocutory orders must be read in harmony with Section 7, Rule 65 of the Rules of Court which provides that the
[p]etition [under Rule 65] shall not interrupt the course of the principal case unless a temporary restraining order or
a writ of preliminary injunction has been issued against the public respondent from further proceeding in the
case.[22] The trial court was then correct and acting well within its discretion when it refused to grant petitioners'
motions for postponement mainly because of the pendency of their petition for transfer of venue.

The trial court cannot be faulted for refusing to countenance delays in the prosecution of the case. The Court's ruling
in Tan v. People[23] is quite instructive, to wit:
An accused's right to "have a speedy, impartial, and public trial" is guaranteed in criminal
cases by Section 14 (2) of Article III of the Constitution. This right to a speedy trial may be defined as
one free from vexatious, capricious and oppressive delays, its "salutary objective" being to assure that
an innocent person may be free from the anxiety and expense of a court litigation or, if otherwise, of
having his guilt determined within the shortest possible time compatible with the presentation and
consideration of whatsoever legitimate defense he may interpose. Intimating historical perspective on
the evolution of the right to speedy trial, we reiterate the old legal maxim, "justice delayed is justice
denied." This oft-repeated adage requires the expeditious resolution of disputes, much more so in
criminal cases where an accused is constitutionally guaranteed the right to a speedy trial.
Following the policies incorporated under the 1987 Constitution, Republic Act No. 8493,

otherwise known as "The Speedy Trial Act of 1998," was enacted, with Section 6 of said act limiting the
trial period to 180 days from the first day of trial. Aware of problems resulting in the clogging of court
dockets, the Court implemented the law by issuing Supreme Court Circular No. 38-98, which has been
incorporated in the 2000 Rules of Criminal Procedure, Section 2 of Rule 119.
In Corpuz v. Sandiganbayan, the Court had occasion to state The right of the accused to a speedy trial and to a speedy disposition of the
case against him was designed to prevent the oppression of the citizen by holding
criminal prosecution suspended over him for an indefinite time, and to prevent
delays in the administration of justice by mandating the courts to proceed with
reasonable dispatch in the trial of criminal cases. Such right to a speedy trial and a
speedy disposition of a case is violated only when the proceeding is attended by
vexatious, capricious and oppressive delays. The inquiry as to whether or not an
accused has been denied such right is not susceptible by precise qualification. The
concept of a speedy disposition is a relative term and must necessarily be a flexible
concept.
While justice is administered with dispatch, the essential ingredient is orderly,
expeditious and not mere speed. It cannot be definitely said how long is too long in a
system where justice is supposed to be swift, but deliberate. It is consistent with
delays and depends upon circumstances. It secures rights to the accused, but it does
not preclude the rights of public justice. Also, it must be borne in mind that the
rights given to the accused by the Constitution and the Rules of Court are shields,
not weapons; hence, courts are to give meaning to that intent.
The Court emphasized in the same case that:
A balancing test of applying societal interests and the rights of the accused
necessarily compels the court to approach speedy trial cases on an ad hoc basis.
In determining whether the accused has been deprived of his right to a speedy
disposition of the case and to a speedy trial, four factors must be considered: (a)
length of delay; (b) the reason for the delay; (c) the defendant's assertion of his
right;
and
(d)
prejudice
to
the
defendant.
x
x
x.
Closely related to the length of delay is the reason or justification of the State for
such delay. Different weights
should be assigned to different reasons or justifications invoked by the State. x x x.
Exhaustively explained in Corpuz v. Sandiganbayan, an accused's right to speedy trial is deemed
violated only when the proceeding is attended by vexatious, capricious, and oppressive delays. In
determining whether petitioner was deprived of this right, the factors to consider and balance
are the following: (a) duration of the delay; (b) reason therefor; (c) assertion of the right or
failure to assert it; and (d) prejudice caused by such delay.
xxxx
We emphasize that in determining the right of an accused to speedy trial, courts are
required to do more than a mathematical computation of the number of postponements of the
scheduled hearings of the case. A mere mathematical reckoning of the time involved is clearly
insufficient, and particular regard must be given to the facts and circumstances peculiar to each
case.[24]

Here, it must be emphasized that private respondent had already been deprived of his liberty on two occasions. First,
during the preliminary investigation before the MCTC, when he was incarcerated from November 18, 2004 to March 16,

2005, or a period of almost four months; then again, when an Information had already been issued and since rape is a
non-bailable offense, he was imprisoned beginning June 27, 2008 until the case was dismissed on January 16, 2009, or a
period of over 6 months. Verily, there can be no cavil that deprivation of liberty for any duration of time is quite
oppressive. Because of private respondent's continued incarceration, any delay in trying the case would cause him great
prejudice. Thus, it was absolutely vexatious and oppressive to delay the trial in the subject criminal case to await the
outcome of petitioners' petition for transfer of venue, especially in this case where there is no temporary restraining
order or writ of preliminary injunction issued by a higher court against herein public respondent from further proceeding
in the case.

Hence, the Court does not find any grave abuse of discretion committed by the trial court in dismissing the case
against private respondent for violation of his constitutional right to speedy trial.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.
REPUBLIC OF THE PHILIPPINES, petitioner,
BALBANERO, respondents.

vs. SANDIGANBAYAN

and

BRIG.

GEN.

PEDRO

R.

DECISION
BELLOSILLO, J.:
This case emphasizes with great force the awesome responsibility of counsel to represent a clients cause with due
diligence and zeal which necessarily excludes improvident and unreasonable requests for postponement of hearings that
only serve to impede the speedy and inexpensive administration of justice.
The Republic of the Philippines, in this special civil action for certiorari, mandamus and prohibition, assails the
Order of the Sandiganbayan, First Division, dated 19 October 1995, in Republic of the Philippines v. Brig. Gen. Pedro
Balbanero, Civil Case No. 0053, denying petitioners oral motion for postponement of the 19 and 20 October 1995
hearings and requiring it instead to submit a written offer of evidence, as well as the Resolution of 3 January 1996
denying consideration thereof. Petitioner therefore prays that it be allowed to present documentary and testimonial
evidence in a formal trial and that public respondent be prevented from conducting further proceedings pursuant to its
questioned Orders.
Civil Case No. 0053 is an action for forfeiture under RA No. 1379 [1] instituted on 14 October 1988 by the Republic of
the Philippines against retired Brig. Gen. Pedro R. Balbanero alleging that the latter acquired funds, real properties and
other assets amounting to P10.5 million manifestly out of proportion to his total salary and emoluments as an Army
Officer and as income from business and other legitimately acquired properties.
On 22 March 1989 private respondent filed his answer with counterclaim to which the Republic filed a reply with
motion to dismiss counterclaim. After the submission by private respondent of documentary evidence and in view of the
manifestation of Solicitor Felipe Magat, Colonel Ernesto Punzalan and Captain Samuel Padilla of the AFP Anti-Graft Board
representing the Government that P8.4 million of the alleged over P10 million unexplained wealth had been clarified, the
Sandiganbayan in its order dated 19 February 1990 required private respondent to prove the legal source of the
remaining P1.3 million. The parties were required to meet to resolve the matter before trial. On the basis of a
Complete Report dated 2 August 1990 submitted by Capt. Padilla, at the amount of respondents wealth deemed to be

still unexplained dwindled to P165,043.00. Thus the OSG in behalf of petitioner asked that a decision be rendered
forfeiting the amount in its favor.
To prove the legal source of the remaining P165,043.00, private respondent submitted a document titled Real
Estate Mortgage Loan purporting to show that the amount was the purchase price he received for real estate sold to Ms.
Iluminada S. Salvador et al. when he failed to pay his mortgage indebtedness. In his Manifestation and Motion dated 7
December 1990 private respondent moved that the complaint against him be dismissed on the ground that he had
explained to the governments satisfaction the legal source of all his alleged unexplained wealth.
In its answer to the foregoing Manifestation and Motion the Presidential Commission on Good Government (PCGG)
denied that private respondent had satisfactorily explained the legitimate source of his wealth and added that the
Complete Report submitted by the AFP Anti-Graft Board was without its approval, hence, it did not bind the Republic.
On 28 June 1991, without resolving private respondents Manifestation and Motion of 7 December 1990, public
respondent Sandiganbayan allowed the Republic to present oral and documentary evidence to support its complaint for
forfeiture.
On 7 June 1994 private respondent moved that petitioner be bound by the Solicitor Generals previous admission
that only P165,043.00 had not been satisfactorily explained, hence, the remaining issue to be resolved by the
Sandiganbayan should be limited to the amount. But Sandiganbayan denied the motion. Hence, on 3 May 1995 private
respondent elevated the matter to this Court by way of a petition forcertiorari, prohibition and mandamus in Pedro R.
Balbanero v. the Hon. Sandiganbayan and the Republic of the Philippines, docketed as G.R. No. 119633.
In view of the pendency of his petition, private respondent moved that the hearings on 18, 19, and 20 October 1995
be canceled and that no further schedule be set. Public respondent denied the cancellation unless a restraining order was
issued by this Court in G.R. No. 119633, citing petitioners readiness to present on the scheduled hearings Major Samuel
Padilla (earlier referred to as Captain Padilla) who purportedly conducted the audit examination of the accounts of
private respondent.
Upon urgent motion dated 5 October 1995 the Sandiganbayan granted private respondents request for cancellation
of the 18 October 1995 hearing on the allegation that his counsel was scheduled to attend an election case before the RTC
of Gapan, Nueva Ecija, but stressing that the cancellation was without prejudice to the settings on 19 and 20 October
1995.[2]
On 19 October 1995 Associate Solicitor Rodolfo Tagapan, Jr., and Assistant Solicitor General Cesario del Rosario
manifested during the hearing that they had been relieved from the case and that ASG Romeo C. de la Cruz and Solicitor
Karl B. Miranda had been designated in their stead. However, since the latter two were in the United Arab Emirates
attending to the case of convicted Filipina overseas contract worker Sarah Balabagan, Associate Solicitor Tagapan asked
that the hearing be reset, to which the Sandiganbayan reacted adversely with its now assailed Order of 19 October 1995
which we quote hereunder for a better appreciation of the factual milieu
When this case was called for hearing x x x respondent appeared x x x while the petitioner Republic appeared through
Associate Solicitor Rodolfo Tagapan together with Atty. Cresencio Jaso of the PCGG. Associate Solicitor Tagapan informed
the Court that he had been relieved x x x from this case and in his stead Solicitor Karl B. Miranda had been designated x x x
but that Solicitor Miranda was x x x in Abu Dhabi on official mission, while Atty. Jaso x x x informed this Court that this
was his first appearance x x x and was, therefore, not ready to be of assistance. Additionally, no witness had appeared
allegedly upon advice of Associate Solicitor Tagapan precisely because of this (sic) re-assignments relying on the
postponement to be granted by this Court.
x x x Solicitor Rodolfo Reodica had been appearing until suddenly at the hearing on May 10, 1995 Associate Solicitor
Tagapan appeared and had expressed his unreadiness to proceed at that time. The petition for postponement was
granted x x x over the objection of the respondent, notwithstanding the pendency of a petition for certiorari, prohibition
and mandamus already filed by the respondent to dispute a prior denial of his motion to dismiss by reason of x x x the
petitioners earlier repeated failure to proceed x x x said petition x x x now docketed as G.R. No. 119633. On September
22, 1995 x x x Associate Solicitor Tagapan informed the court that he would be ready to present Major Samuel Padilla on
October 18, 19 and 20, 1995. Today, the Court is faced with the situation as above stated.
This case had been pending not only for a very long time but despite many false starts from the petitioner. While indeed
the court has reacted negatively to the difficult situations created by the assignment of young Solicitors such as Solicitor
Reodica now Solicitor Tagapan on short notice, the Court can not accept a rotation of young and inexperienced Solicitors
who are uninformed of the details of this case by reason of their assignment on short notice as reasons for postponing this

case on top of their informal complaints of lack of cooperation from or coordination with the PCGG much less can the
Court accept the last minute substitutions of Solicitors with others who are not in this country.
In view hereof, the petitioner is given ten (10) days from today within which to formally offer whatever evidence exist
(sic) on record with the respondent being given a like period to comment thereon and to state his disposition on this
matter with respect to the presentation of his own evidence.
The setting for tomorrow is necessarily cancelled under the circumstances.
Petitioner moved that this Order be reconsidered and that it be allowed to present evidence in a formal trial. The
motion was denied by public respondent in its assailed Resolution of 3 January 1996 thus
The MOTION FOR RECONSIDERATION dated 7 December 1995 of the Plaintiff is Denied.
It is true that this Court expressed its impatience and disapproval over the practice of the Office of the Solicitor General of
passing on, actually dumping of a certain cases such as these to a succession of young inexperienced lawyers on short
notice. This, however, is not cured by transferring a long standing case to probably experienced lawyers who are not
available and on short notice.
The point of this Courts impatience on the transferring of cases to inexperienced lawyers on short notice is that cases are
unduly delayed and, perhaps, prejudiced by the inexperienced; in fact, more than anything, the practice has demonstrated
an apparent low regard of Solicitors and Assistant Solicitors General for many PCGG cases.
Assigning this case, which has suffered long and innumerable postponements attributable to plaintiff, to lawyers of the
Office of the Solicitor General who are not even in the country at the time of the setting neither responds to the problem
nor demonstrates appropriate concern for the case.
The petitioner is given fifteen (15) days to submit its written offer of evidence after which the case of the plaintiff will be
deemed submitted, with or without the offer.
Hence, this special civil action for certiorari, prohibition and mandamus.
The OSG contends that the Sandiganbayan gravely abused its discretion when it deprived the Republic of its right to
present evidence in a full-blown hearing amounting to a violation of its right to due process. Counsel contends that the
reason given for the requested resettings of the 19 and 20 October 1995 hearings were meritorious grounds which were
not intended to delay the case nor violate private respondents right to a speedy trial. The OSG further contends that
public respondent should not have taken against the Republic the fact that Major Samuel Padilla was indisposed on the
day of the hearing as it was a circumstance beyond its control while the re-assignment of the case to Solicitor Miranda and
Atty. Jaso was effected only in response to public respondents plaintive about the assignment of the case to young and
untrained solicitors.
On 17 April 1996 we required respondents to file their respective comments on the petition without granting the
TRO sought by the petitioner. Private respondents Comment and petitioners Replythereto were noted on 8 July 1996 and
4 February 1998, respectively. On 6 July 1998 we considered this case submitted for decision without public
respondents comment when it failed to file the required pleading for more than two (2) years from the time it was first
required to do so and despite our Resolution of 4 February 1998 reiterating our Resolution of 17 April 1996.
Plainly stated, the issue before us is whether public respondent Sandiganbayan committed grave abuse of
discretion in denying the Republics oral motion for postponement of the 19 and 20 October 1995 hearings and in
requiring it to just formally offer its evidence within fifteen (15) days from notice.
It is well-settled that motions for continuance or deferment of hearings are granted only upon meritorious
grounds[3] and that the grant or denial thereof is addressed to the sound discretion of the court[4]the exercise of which will
not be disturbed except on a showing of a patent and grave abuse of discretion.
Petitioner failed to show such patent and grave abuse of discretion on the part of public respondent in denying its
oral motion for postponement. Records show that the 18, 19 and 20 October hearings were scheduled some five (5)
months earlier, or on 10 May 1995, for several reasons among which was to give Associate Solicitor Tagapan of the OSG,
who appeared for the first time vice Solicitor Reodica, an opportunity to study the case.[5] In addition, on 13 October 1995

when public respondent Sandiganbayan canceled the 18 October hearing, it cautioned the parties that such cancellation
was without prejudice to the settings on 19 and 20 October 1995.[6]
However, on 19 October 1995, Solicitor Tagapan appeared only to manifest that he had just been relieved from the
case and that other solicitors were assigned to take over but unfortunately they were not then available. The OSG
explains that the re-assignment was effected in response to public respondents complaint about the assignment of many
PCGG cases to young and inexperienced solicitors. But a careful reading of the questioned Order of 19 October 1995
shows that public respondent objected not so much on the assignment of the case to young and inexperienced solicitors
but that such re-assignment was done on short notice and very close to the date of scheduled hearings. The excuse given
by the OSG completely failed to justify why the re-assignment had to be done so near to the scheduled hearing of 19
October 1995 and, worse, to solicitors who were not even present.
Furthermore, it has not been shown that some other urgent circumstance prompted the re-assignment to justify the
OSGs non-compliance with the requisites of motions in general set out in Rule 15[7] of the Rules of Court[8] Sec. 2 of which
provides that [a]ll motions shall be in writing except motions for continuance made in the presence of the adverse party,
or those made in the course of a hearing or trial. A motion for postponement should not be filed at the last hour [9] and
that judges are cautioned against granting improvident postponements.[10] Thus when the reason adduced in support of a
motion for postponement was not unavoidable or could have been foreseen but was presented only on the day of the trial
although there was no apparent reason why it could not have been presented earlier, thus, avoiding inconvenience to the
adverse party, it is proper for the court to deny postponement.[11]
What exacerbates the case for the OSG is the fact that it appeared in the 19 October 1995 hearing without its
promised witness, apparently expecting that public respondent would just benevolently grant its precipitate oral motion
for postponement. While the OSG now claims that Major Padilla was indisposed for which reason he was not presented,
public respondents factual conclusion to which this court is bound in a certiorari proceeding is that no witness appeared
allegedly upon advice of Associate Solicitor Tagapan relying on the postponement to be granted by public respondent
precisely because of the reassignment of solicitors.[12]
The rule that a party asking for postponement has absolutely no right to assume that its motion would be granted,
especially on less than three (3) days notice, and must be in court prepared on the day of the hearing[13] applies with
greater force in this case where the OSG had in fact more reason not to presume a grant of its motion for postponement
considering that Major (formerly Captain) Samuel Padilla had already been previously warned by public respondent thus

Capt. Samuel Padilla is given five (5) days from receipt hereof to show why he should not be held disciplinary
accountable for his failure to appear x x x when he knew as a matter of fact that this case wherein he appears to be
the principal government witness has been pending since 1988 and that his testimony was suspended as far back as
February 15, 1990, precisely by reason of the unorganized state of evidence of the petitioner at the time so that all of the
proceedings thereafter had been precisely to clarify and organize whatever evidence the parties might have thereon. It is
a cause of great wonder to the Court what urgent meeting could have befallen Capt. Padilla resulting to his failure to
appear in Court today.[14]
Under the circumstances, it cannot rightly be said that the OSG was not guilty of inexcusable carelessness,
presumptiousness, indifference to and neglect of duty in assuming that public respondent would grant its oral motion for
postponement, coming to court unprepared and without a witness. Hence public respondent was well within its authority
to deny the Republics oral motion for postponement of the hearings set on 19 and 20 October 1995 and require it,
instead, to just formally offer its evidence within fifteen (15) days from notice. Petitioner is not guilty of abuse of
discretion, much less grave, nor can it be charged by petitioner with denial of due process.[15]
WHEREFORE, the instant petition for certiorari, prohibition and mandamus is DENIED. The questioned Order of
public respondent Sandiganbayan dated 19 October 1995 denying the oral motion of petitioner Republic of the
Philippines for the postponement of the 19 and 20 October 1995 hearings as well as the Resolution dated 3 January 1996
denying petitioners motion for reconsideration, is AFFIRMED.
SO ORDERED.

A.M. No. MTJ-07-1688

February 10, 2009
(Formerly OCA I.P.I. No. 05-1763-MTJ)

DANILO DAVID S. MARIANO, Complainant,

vs.
JUDGE JOSE P. NACIONAL, Respondent.
RESOLUTION
CORONA, J.:
This concerns an administrative complaint stemming from an action for ejectment 1 docketed as Civil Case No. 12334.2 In
the course of the ejectment proceedings, respondent Judge Jose P. Nacional issued a pre-trial order dated September 3,
2004 requiring the parties to file their respective position papers and affidavits of witnesses on September 30, 2004. The
parties complied with the September 3, 2004 order.
Subsequently, respondent issued an order dated December 28, 20043 requiring the parties to submit their respective
"memorand[a] in the form of a court decision." The parties likewise complied with this order. The case was eventually
decided by respondent on February 14, 2005.
Complainant avers that the issuance of the December 28, 2004 order violated the prohibition on memoranda by the
Revised Rules on Summary Procedure (RRSP). Complainant likewise posits that respondent violated the Rules when he
decided the case only on February 14, 2005 or 136 days from the date required by law.4
In view of respondents acts, complainant filed this administrative complaint for gross inefficiency, gross ignorance of the
law, dereliction of duty and violation of judicial conduct.
In his comment, respondent admitted that he had exceeded the maximum period allowed under the RRSP. He offered the
following excuses: (1) the quality of his decision had priority over compliance with the reglementary period; (2) his
caseload was heavy and (3) the documents of the case were voluminous. He also justified his December 28, 2004 order by
stating that the case was "not an ordinary one."5
Respondent added that this administrative complaint was filed only because the judgment was against complainant.
In its evaluation, the Office of the Court Administrator (OCA) found that respondent violated basic procedure and the code
of judicial conduct.6 It also found that respondent had been previously admonished for gross ignorance of the law,
dereliction of duty, partiality, oppression and incompetence in Prado v. Judge Nacional.7
The OCA recommended that respondent be held liable for violation of judicial conduct and gross ignorance of the law or
procedure. It proposed that respondent be fined P20,000 with a stern warning that a repetition of the same or similar act
would be dealt with more severely.
The findings of the OCA are well-taken but we do not agree with the recommended penalty.
Without doubt, Civil Case No. 12334 was a case of unlawful detainer covered by the RRSP. 8 Section 5 of the RRSP explicitly
provides that only complaints, compulsory counterclaims and cross-claims pleaded in the answer, as well as the answers
to these pleadings, are allowed. The RRSP also expressly prohibits the filing of a memorandum. 9 The same prohibition is
contained in Section 13, Rule 70 of the Rules of Court (ROC).
The urgency of restoring social order is the paramount consideration in settling unlawful detainer and forcible entry
cases. To aid the judiciary in proceeding with these cases, the RRSP was promulgated with the following rationale: 10
[T]he adoption of the Rule on Summary Procedure is part of the commitment of the judiciary to enforce the constitutional
right of litigants to a speedy disposition of their cases. It was promulgated [to] achiev[e] "an expeditious and inexpensive
determination of cases." Any member of the judiciary who causes the delay sought to be prevented by the Rule is
sanctionable.

The necessity of promptly resolving unlawful detainer and forcible entry cases is made more imperative by the express
legal provisions on periods of rendition of judgments. Specifically, Section 11, Rule 70 of the ROC provides that the court
shall render judgment within 30 days after receipt of the
affidavits and position papers, or expiration of the period for filing the same. The RRSP provides for the same period.
Corollarily, Rule 3.05, Canon 3 of the Code of Judicial Conduct11 admonishes all judges to dispose of the courts business
promptly and decide cases12 within the period specified in Section 15 (1) and (2), Article VIII of the Constitution. 13 This is
supplemented by Section 5, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary14 requiring judges to
perform all judicial duties efficiently, fairly and with reasonable promptness.
We cannot accept the justifications advanced by respondent. Doing so will undermine the wisdom behind procedural
rules and diminish respect for the law. We reiterate that a judge (by himself) cannot choose to prolong the period for
deciding cases beyond that authorized by law.15 If a judge needs more time to decide a case, he should formally request
this Court for an extension of the deadline.
The rules of procedure are clear and unambiguous, leaving no room for interpretation.1avvphi1.zw+ We have held in
numerous cases that the failure to apply elementary rules of procedure constitutes gross ignorance of the law and
procedure.16 Neither good faith nor lack of malice will exonerate respondent because, as previously noted, the rules
violated were basic procedural rules. All that was needed for respondent to do was to apply them.17Unfortunately, he
chose not to.
It is settled that one who accepts the exalted position of a judge owes the public and the court the ability to be proficient
in the law and the duty to maintain professional competence at all times.18 Competence and diligence are prerequisites to
the due performance of judicial office.19
We note that aside from Prado v. Judge Nacional20 for which respondent was admonished in 2001, he was also indicted for
conduct unbecoming of a judge in Abesa v. Judge Nacional.21
Respondent argues that his 24 years in the judiciary should be considered in his favor. We disagree. Length of service, as a
factor in determining the imposable penalty in administrative cases, is a double-edged sword. While it can sometimes
help mitigate the penalty, it can also justify a more serious sanction.22 Whatever it is, a judges long years of service on the
bench are no excuse for ignorance of procedural rules.23
As to the penalty that should be properly meted out to respondent, A.M. No. 01-8-10-SC governs.24 Gross ignorance of the
law and procedure is classified as a serious charge.25 And for his violation of the Code of Judicial Conduct, the evidence
shows that he only committed simple misconduct, a less serious charge.26
Pursuant to A.M. No. 02-9-02-SC,27 this administrative case against respondent is also considered a disciplinary
proceeding against him as a member of the bar.28 Violation of the basic tenets of judicial conduct embodied in the New
Code of Judicial Conduct for the Philippine Judiciary and the Code of Judicial Conduct constitutes a breach of Canons
129 and 1230 as well as Rules 1.0331 and 12.0432 of the Code of Professional Responsibility (CPR). Respondent also
transgressed Rule 10.0333 of the CPR when he violated the provisions of the RRSP and the ROC.
WHEREFORE, respondent Judge Jose P. Nacional is hereby found GUILTY of gross ignorance of the law and procedure for
which he is FINED P40,000. He is also found GUILTY of violation of Rule 3.05, Canon 3 of the Code of Judicial Conduct and
Section 5, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary for which he is FINED P20,000.
Respondent is furthermore found GUILTY of violation of Canons 1 and 12 as well as Rules 1.03, 10.03 and 12.04 of the
Code of Professional Responsibility for which he is FINED P10,000.
He is hereby ordered to remit payment of the fines within ten (10) days from receipt of this resolution.
Respondent is STERNLY WARNED that a repetition of the same or similar offense shall warrant an even more severe
penalty.
Let a copy of this resolution be attached to the personal records of respondent in the Office of Administrative Services,
Office of the Court Administrator and the Office of the Bar Confidant.

SO ORDERED.
G.R. No. 99431 August 11, 1992
GOLDLOOP PROPERTIES, INC., petitioner,
vs.
COURT APPEALS, ROBERTO S. ROBLES and ALICIA G. ROBLES, respondents.
Benjamin Dacanay for petitioners.
Antonio R. Sta. Ana for private respondents.

BELLOSILLO, J.:
This is a petition for review on certiorari of the Decision of the Court of Appeals of 27 November 1990 1 annulling and
setting aside the order of dismissal issued by the Regional Trial Court of Pasig, Branch 158, in Civil Case No. 58027, as well
as the Resolution of 14 May 1991 denying the motion for reconsideration.
The present recourse proceeds from the Order of 25 October 1989 of the Regional Trial Court of Pasig, Branch 158,
which motu proprio dismissed for failure to prosecute the complaint for reformation of instrument filed by private
respondent-spouses Roberto S. Robles and Alicia G. Robles against petitioner Goldloop Properties, Inc. The order of
dismissal reads:
By virtue of this Court's Order dated 10 August 1989, the parties are given fifteen (15) days upon
receipt of the name to file a Compromise Agreement. To date, nothing has been filed, nor have plaintiffs
done anything to further prosecute this case.
WHEREFORE, for failure to prosecute, this case is dismissed. 2
Upon its elevation to the Court of Appeals, said Order was nullified in its Decision of 27 November 1990. Petitioner now
assails the validity of the decision in this instant petition for review on certiorari and seeks the reinstatement of the order
of dismissal issued by the trial court.
The records show that on 27 March 1989, the Robles spouses instituted a complaint for reformation of instrument with
damages maintaining that the contract they entered into with Goldloop Properties, Inc., on 17 June 1988 was a mortgage
and not an absolute sale. They prayed for a writ of preliminary injunction to stop petitioner from making any
encumbrance or disposition of the property which is a prime commercial parcel of land consisting of 618 square meters
located at San Juan, Metro Manila.
On 2 August 1989, while the application for preliminary injunction was being heard, the parties manifested the possibility
of an amicable settlement; whereupon, the hearing was deferred to 10 August 1989, on which date the parties were
granted fifteen (15) days within which to submit a compromise agreement. However, no such agreement was presented.
On 25 October 1989, the trial court dismissed the complaint "for failure to prosecute."
On 8 November 1989, respondent-spouses received the order of dismissal. Fourteen (14) days later, they filed their
Motion for Reconsideration wherein they intimated that negotiations for a compromise were still ongoing.
Unfortunately, respondent-spouses failed to include a notice of hearing in their motion, so that on 6 February 1990, the
trial court denied the motion. On 14 February 1990, respondent-spouses received the order of denial. Thereafter, on 16
February 1990, they filed a Notice of Appeal.
Initially, the trial court gave due course to the appeal and elevated the records to the Court of Appeals. On 26 March 1990,
on motion of petitioner, the trial court recalled its prior order giving due course to the appeal.

On 23 April 1990, respondent-spouses filed a motion for reconsideration. On 2 May 1990, the trial court denied the
motion on the ground that the dismissal had become final and executory.
Subsequently, said respondents sued for extension of time to file a petition for review with the Court of Appeals, docketed
as CA-G.R. SP No. 20778. However, for their failure to allege the date of receipt of the Order of 25 October 1989 and the
filing of the corresponding motion for reconsideration, their motion was denied by the appellate court, and on 27 July
1990 entry of judgment was made.
On 25 September 1990, respondent-spouses instituted a petition for mandamus in the Court of Appeals, docketed as CAG.R. SP No. 22893, to set aside the order of dismissal and compel the trial court to set the case immediately for
continuation of hearing on the preliminary injunction.
On 27 November 1990, treating the petition for mandamus as one also for certiorari, the appellate court annulled and set
aside the assailed order of dismissal and directed the lower court to set the case for continuation of hearing on the
preliminary injunction. Moreover, as respondent court observed
. . . there are equities of the case that should not be overlooked. The petitioners are trying to recover
their property from the respondent Corporation. A parcel of land with 618 square meters located in
San Juan, Metro Manila, in a commercial district on which an 8-door apartment stands, it is alleged to
have a fair market value of P4,000,000.00. It is claimed that the petitioners were forced by the
circumstance that they were hard pressed to execute a deed of sale of their property for P650,000.00
only, which was not the true agreement. The petitioners, therefore, should have been afforded a chance
to negotiate with the respondent Corporation for the repurchase of their property. Dismissal of the
action is precipitate. 3
Petitioner moved for reconsideration but the same was denied. Hence, this petition.
Goldloop Properties, Inc., contends that respondent Court of Appeals erred in not holding that the disputed order of
dismissal was final and executory and, consequently, respondent-spouses could no longer avail of the special civil action
of certiorari in lieu of their took appeal
In their Comment, respondent-spouses maintain that the order of dismissal of the trial court in void ab
initioCorrespondingly, there is no judgment at all that could acquire finality. Respondent-spouses also invoke the cardinal
rule that "remedial laws should be construed liberally in order . . . that a possible denial of substantial justice, due to legal
technicalities, can be avoided." 4
Admittedly, the filing of respondent-spouses' motion for reconsideration did not stop the running of the period of appeal
because of the absence of a notice of hearing required in Secs. 3, 4 and 5, Rule 15, of the Rules of Court. An we have
repeatedly held, a motion that does not contain a notice of hearing is a mere scrap of paper; it presents no question which
merits the attention of the court. Being a mere scrap of paper, the trial court had no alternative but to disregard it. 5 Such
being the case, it was as if no motion for reconsideration was filed and, therefore, the reglementary period within which
respondent-spouses should have filed an appeal expired on 23 November 1989. 6
But, where a rigid application of that rule will result in a manifest failure or miscarriage of justice, then the rule may be
relaxed, 7 especially if a party successfully shows that the alleged defect in the questioned final and executory judgment is
not apparent on its face or from recitals contained therein. 8 Technicalities may thus be the disregarded in order to
resolve the case. After all, no party can ever claim a vested right in technicalities. Litigations should, as much as possible,
be decided on the merits and not on technicalities. 9
Hence, this Court should not easily allow a party to lose title and ownership over a property worth P4,000,000.00 for a
measly P650,000.00 without affording him ample opportunity to prove his claim that the transaction entered into was not
in fact an absolute sale but one of mortgage. Such grave injustice must not be permitted to prevail on the anvil of
technicalities.
Under authority of Sec. 9, par. (2), of B.P. 129, a party may petition the Court of Appeals to annul and set aside judgments
of Regional Trial Courts. 10 Thus, "[t]he Intermediate Appellate Court (now Court of Appeals) shall exercise: . . . (2)
Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts . . ." However, certain

requisites must first be established before a final and executory judgment can be the subject of an action for annulment. It
must either be void for want of jurisdiction or for lack of due process of law, or it has been obtained by fraud. 11 A close
examination of the questioned order reveals that it is void for lack of jurisdiction, emanating as it does from the nonobservance, if not utter disregard, of procedural due process.
As regards the dismissal of actions motu propio, Sec. 3, Rule 17, of the Revised Rule of Court provides
Sec. 3. Failure to prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his
action for an unreasonable length of time, or to comply with these rules or any order of the court, the
action may be dismissed upon motion of the defendant or upon the court's own motion. This dismissal
shall have the effect of an adjudication upon the merits, unless otherwise provided by court.
The aforequoted Rule contemplates of three (3) instances whereby a trial court may dismiss an action on its own volition
for failure to prosecute, namely: (1) where the plaintiff fails to appear at the time of the trial; (2) where he fails to
prosecute his action for an unreasonable length of time; and, (3) when he fails to comply with these rules or any order of
the court.
In the disputed order, the trial court obviously relied on the last two (2) grounds in dismissing the complaint. Notably,
that respondent-spouses, as plaintiffs in the trial court, failed to submit their compromise agreement within fifteen (15)
days, and that they failed to take further steps to prosecute their action for an unreasonable length of time.
Anent the first ground, it should be stressed that the Order of 10 August 1989 only states that "[t]he parties are given a
period of fifteen (15) days from today within which to submit a Compromise Agreement." The Order did not even require
the submission of a compromise agreement; nor did it warn the parties that should they fail to submit the same within the
period therein given their case would be dismissed. As We view the Order, it only meant that should they fail in their
negotiations the proceedings would continue from where they left off. For sure, there was never any agreement that
should the parties fail to settle their differences in fifteen (15) days their case would be dismissed. Nor did the parties
ever expect that in the event of their failure to submit the contemplated compromise agreement their case would be
dismissed. Since there is nothing in the Rules that imposes the sanction of dismissal for failing to submit a compromise
agreement, then it in obvious that the dismissal of the complaint on the basis thereof amounts no less to a gross
procedural infirmity assailable by certiorari. For such submission could at most be directory and could not result in
throwing out the case for failure to effect a compromise. While a compromise is encouraged, very strongly in fact, failure
to consummate one does not warrant any procedural sanction, much less an authority to jettison a civil complaint worth
P4,000,000.00.
It may be worth repeating that the Order of 10 August 1989 does not carry any sanction for failure to submit a
compromise agreement. Neither does it contain a forewarning that failure to amicably settle would result in the dismissal
of the suit. Plainly, submission of a compromise agreement is never mandatory, nor is it required by any rule. Upon
manifestation of the parties of their willingness to discuss a compromise, the trial court should have ordered the
suspension of the proceedings to allow them reasonable time to discuss and conclude an amicable settlement, pursuant to
Sec. 1, Rule 21, which states:
Sec. 1. Grounds for suspension. Any party to an action may, at any time before the date set for pretrial, file a petition with the court for the suspension of the proceedings with a view of securing a
possible compromise if (1) it appears that any one or both of the parties have expressed at any time
willingness to discuss a possible compromise, or (2) it is alleged under oath that one of the parties,
before commencement of the action or proceeding, offered to discuss a possible compromise but the
other party refused the offer.
If despite all efforts exerted by the trial court and the parties the settlement conference still fails, then the action should
have continued as if no suspension had taken place. This is laid down in Sec. 4, Rule 21, which reads
Sec. 4. Period of suspension. No suspension for a period longer than sixty (60) days from notice of the
order of suspension shall be allowed except upon justifiable grounds. If no compromise is arrived at
within the period provided, the case shall continue as if no suspension of the proceeding had taken place.
(emphasis ours).

Although the Rule allows the trial court to suspend the proceedings up to sixty (60) days, in the instant case, the trial
court only gave the parties fifteen (15) days to come up with an amicable settlement. Indeed, it should not have dismissed
the action on its own motion because the parties, specifically respondent-spouses, were anxious to pursue their case as
manifested in their motion for reconsideration. Their inadvertent omission in setting their motion for reconsideration for
hearing under Rule 15 of the Rules of Court should not deprive them of their judicial recourse. At the very least, such
motion should have been treated by the trial court as a manifestation that the negotiation was still ongoing on the
settlement of their case. Even assuming arguendo that a dismissal was warranted, still it should have been without
prejudice considering its extinctive effect on the spouses' cause of action.
While We can perceive of a dismissal motu propio by the court for a litigant's inaction, yet there must be sufficient basis
on which to anchor a dismissal with prejudice. Unfortunately, We perceive none in the instant case. In fact, there is every
reason to hold that it dismissal should be decreed, it be without prejudice considering the worth of the claim, the earnest
efforts of the respondent-spouses to settle, and their manifestation of interest in pursuing their claim as may be gleaned
from their motion for reconsideration. Where it operates as an adjudication on the merits, as in the case at bar, dismissal
of an action for failure to submit a compromise agreement, which is not even required by any rule, is definitely a harsh
action. Dismissal of suits should be resorted to only in circumstances were the actions of the party show deliberate and
contumacious disregard of the trial court's authority, or in instances where a party has been duly forewarned of the
drastic consequences should there be failure to comply. There must be, in all cases, a scrupulous regard for the rights of
the parties to the action.
No such unmindfulness, much less deliberate disregard of the court's authority, can be inferred from the actuations of
respondent-spouses. On the contrary, the fact that negotiations for a compromise agreement persisted even up to the
time of the dismissal of the case strongly demonstrates their earnest efforts to abide by the trial court's order to settle
their dispute amicably.
Indeed, to uphold the questioned order to submit a compromise agreement within fifteen (15) days and, sans any
warning, dismissing an action on account of the failure of the parties to compromise, would be to render nugatory the
pronounced policy of the law to encourage compromises, and thus open the floodgates to parties refusing to agree upon
an amicable settlement by simply railroading their opposing parties' position, or even defeating the latter's claim by the
expedient of an outright dismissal.
On the issue of whether there was indeed failure to prosecute for an unreasonable length of time, it is well settled that
what constitutes "unreasonable length of time" is properly left to the discretion of the trial. In Montejo v. Urotia, 12 We
ruled:
As to what constitutes an "unreasonable length of time, within the purview of the quoted provision, it
has been ruled that it 'depends upon the circumstances of each particular case; that "the sound
discretion of the court" in the determination of said question "will not be disturbed, in the absence of
patent abuse;" and that "the burden of showing abuse of judicial discretion is upon appellant since
every presumption is in favor of the correctness of the court's action." Thus, this Court refused to
disturb orders of dismissal for failure to prosecute for a period of four(4) years, about three (3) years,
over a year, less than a year, and even less than three (3) months . . . .
But in the instances above contemplated when the Court considered "less than a year" and "even less than three months"
as "unreasonable length of time" to justify dismissal of a complaint, there was repeated failure of plaintiffs to appear and
prosecute their complaint, or to resist a motion to dismiss by defendant. None of the circumstances therein contemplated
are present in the case before Us.
More importantly, the power of the trial court to dismiss an action on the ground of non-prosequitur is not unbounded.
The real test for the exercise of such power is whether, under the facts and circumstances, the plaintiff is chargeable with
want of due diligence in failing to proceed with reasonable promptitude. 13 With the manifestation of respondent-spouses
that they were still in the process of negotiating, it is indubitable that their failure to submit their compromise agreement
with reasonable dispatch was not brought about by their want of due diligence. Prudence would have dictated the trial
court to have determined first the cause of the delay or require the parties to comment whether they were still interested
in the case, particularly respondent-spouses who stand to lose their real property worth no less than P4,000,000.00.
Amicable settlements have been encouraged to avoid lawsuits or put an end to those already commenced. This is the
reason why courts endeavor to persuade litigants in civil suits to agree upon some fair compromise. An action should

never be dismissed on a non-suit for want of prosecution when the delay was caused by the parties looking towards a
settlement. 14 This finds more meaning in the instant case considering that the action had not yet reacted even the pretrial stage. As a matter of fact, the trial court was still in the midst of evaluating the propriety of the issuance of a writ of
preliminary injunction. Dismissing the action without even allowing the parties to present evidence in their behalf and
after ordering them to compromise would, therefore, be tantamount to deprivation of due process. As appropriately
characterized by respondent Court of Appeals, the dismissal was indeed "precipitate."
In fine, We hold that the Court of Appeals in its questioned Decision of 27 November 1990 did not err in annulling the
Order of 25 October 1989 of the Regional Trial Court in Civil Case No. 58027 for having been issued with grave abuse of
discretion amounting to lack or want of jurisdiction and in derogation of the fundamental right of respondent-spouses to
due process.
WHEREFORE, for lack of merit, the Petition for Review on Certiorari is DENIED. Costs against petitioner.
SO ORDERED.

G.R. Nos. 175277 & 175285

September 11, 2013

UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J. MARTINEZ, Petitioners,

vs.
RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASIG CITY, BRANCH
168, Respondents.
x-----------------------x
G.R. No. 192073
RAFAEL JOSE CONSING, JR., Petitioner,
vs.
HON. MARISSA MACARAIG-GUILLEN, in her capacity as the Presiding Judge of the Regional Trial Court of Makati
City, Branch 60 and UNICAPITAL, INC., Respondents.
DECISION
PERLAS-BERNABE, J.:
Before the Court are consolidated petitions for review on certiorari 1 assailing separate issuances of the Court of Appeals
(CA) as follows:
(a) The petitions in G.R. Nos. 175277 and 175285 filed by Unicapital, Inc., (Unicapital), Unicapital Realty, Inc.
(URI), and Unicapital Director and Treasurer Jaime J. Martirez (Martirez)assail the CAs Joint Decision2dated
October 20, 2005 and Resolution3 dated October 25, 2006 in CA-G.R. SP Nos. 64019and 64451 which affirmed
the Resolution4 dated September 14,1999 and Order5 dated February 15, 2001 of the Regional Trial Court (RTC)
of Pasig City, Branch 68 (RTC-Pasig City) in SCA No. 1759, upholding the denial of their motion to dismiss; and
(b) The petition in G.R. No. 192073 filed by Rafael Jose Consing, Jr. (Consing, Jr.) assails the CAs Decision6 dated
September 30, 2009 and Resolution7 dated April 28, 2010 inCA-G.R. SP No. 101355 which affirmed the Orders
dated July16, 20078 and September 4, 20079 of the RTC of Makati City, Branch 60 (RTC-Makati City) in Civil Case
No. 99-1418,upholding the denial of his motion for consolidation.
The Facts
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela Cruz (Dela Cruz), obtained anP18,000,000.00
loan from Unicapital,P12,000,000.00 of which was acquired on July 24, 1997 and the remainingP6,000,000.00 on August

1, 1997. The said loan was secured by Promissory Notes10 and a Real Estate Mortgage11 over a 42,443 square meterparcel of land located at Imus, Cavite, registered in the name of Dela Cruz as per Transfer Certificate of Title (TCT) No. T687599 (subject property).12 Prior to these transactions, Plus Builders, Inc. (PBI), a real estate company, was already
interested to develop the subject property into a residential subdivision.13 In this regard, PBI entered into a joint venture
agreement with Unicapital, through its real estate development arm, URI. In view of the foregoing, the loan and mortgage
over the subject property was later on modified into an Option to Buy Real Property14 and, after further negotiations, Dela
Cruz decided to sell the same to Unicapital and PBI. For this purpose, Dela Cruz appointed Consing, Jr. as her attorney-infact.15
Eventually, Unicapital, through URI, purchased one-half of the subject property for a consideration ofP21,221,500.00
(against which Dela Cruzs outstanding loan obligations were first offset), while PBI bought the remaining half for the
price of P21,047,000.00.16 In this relation, Dela Cruz caused TCT No. T-687599 to be divided into three separate titles as
follows: (a) TCT No. T-851861 for URI;17 (b) TCT No. T-851862 for PBI;18and (c)TCT No. T-51863 which was designated
as a road lot.19 However, even before URI and PBI were able to have the titles transferred to their names, Juanito Tan Teng
(Teng) and Po Willie Yu (Yu) informed Unicapital that they are the lawful owners of the subject property as evidenced by
TCT No.T-114708;20 that they did not sell the subject property; and that Dela Cruzs title, i.e., TCT No. T-687599, thereto
was a mere forgery.21 Prompted by Teng and Yus assertions, PBI conducted further investigations on the subject
property which later revealed that Dela Cruz's title was actually of dubious origin. Based on this finding, PBI and
Unicapital sent separate demand letters22 to Dela Cruz and Consing, Jr., seeking the return of the purchase price they had
paid for the subject property.
From the above-stated incidents stemmed the present controversies as detailed hereunder.
The Proceedings Antecedent to G.R. Nos. 175277 & 175285
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex Action for Declaratory Relief23 and later
amended to Complex Action for Injunctive Relief24 (Consing, Jr.s complaint) before the RTC-Pasig City against Unicapital,
URI, PBI, Martirez, PBI General Manager Mariano Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA No.
1759. In his complaint, Consing, Jr. claimed that the incessant demands/recovery efforts made upon him by Unicapital
and PBI to return to them the purchase price they had paid for the subject property constituted harassment and
oppression which severely affected his personal and professional life.25 He also averred that he was coerced to commit a
violation of Batas Pambansa Blg. 2226 as Unicapital and PBI, over threats of filing acase against him, kept on forcing him to
issue a post-dated check in the amount sought to be recovered, notwithstanding their knowledge that he had no funds for
the same.27 He further alleged that Unicapital and URI required him to sign blank deeds of sale and transfers without
cancelling the old one sin violation of the laws on land registration and real estate development.28 Likewise, Consing, Jr.
added that Unicapital and PBIs representatives were" speaking of him in a manner that was inappropriate and
libelous,"29and that some John Does "deliberately engaged in a fraudulent scheme to compromise Consing, Jr.s honor,
integrity and fortune x x x consisting of falsifying or causing to be falsified, or attempting to present as falsified certain
transfers of Land Titles and Deeds for profit,"30 classifying the foregoing as ultra vires acts which should warrant
sanctions under the corporation law, Revised Securities Act and related laws.31 Accordingly, Consing, Jr. prayed that: (a)
he be declared as a mere agent of Dela Cruz, and as such, devoid of any obligation to Unicapital, URI, and PBI for the
transactions entered into concerning the subject property; (b) Unicapital, URI, and PBI be enjoined from harassing or
coercing him, and from speaking about him in a derogatory fashion; and (c) Unicapital, URI, and PBI pay him actual and
consequential damages in the amount of P2,000,000.00, moral damages of at least P1,000,000.00, exemplary damages
of P1,000,000.00, all per month, reckoned from May 1, 1999 and until the controversy is resolved, and attorney's fees and
costs of suit.32
For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate Motions to Dismiss 33 Consing, Jr.s complaint
(Unicapital, et al.s motion to dismiss) on the ground of failure to state a cause of action, considering that: (a) no document
was attached against which Consing, Jr. supposedly derived his right and against which his rights may be as certained; (b)
the demands to pay against Consing, Jr. and for him to tender post-dated checks to cover the amount due were well within
the rights of Unicapital as an unpaid creditor, as Consing, Jr. had already admitted his dealings with them; (c) the
utterances purportedly constituting libel were not set out in the complaint; and (d) the laws supposedly violated were not
properly identified. Moreover, Unicapital, et al. posited that the RTC-PasigCity did not acquire jurisdiction over the case
given that Consing, Jr. failed to pay the proper amount of docket fees. In the same vein, they maintained that the RTC-Pasig
City had no jurisdiction over their supposed violations of the Corporation Code and Revised Securities Act, which,
discounting its merits, should have been supposedly lodged with the Securities and Exchange Commission. Finally, they
pointed out that Consing, Jr.s complaint suffers from a defective verification and, thus, dismissible.34

Similar to Unicapital et al.s course of action, PBI and its General Manager, Martinez (Unicapital and PBI, et al.), sought the
dismissal of Consing, Jr.s complaint on the ground that it does not state a cause of action. They also denied having singled
out Consing, Jr. because their collection efforts were directed at both Consing, Jr. and Dela Cruz, which should be deemed
as valid and, therefore, should not be restrained.35
On September 14, 1999, the RTC-Pasig City issued a Resolution36 denying the above mentioned motions to dismiss,
holding that Consing, Jr.s complaint sufficiently stated a cause of action for tort and damages pursuant to Article 19 of the
Civil Code. It ruled that where there is abusive behavior, a complainant, like Consing, Jr., has the right to seek refuge from
the courts. It also noted that the elements of libel in a criminal case are not the same as those for a civil action founded on
the provisions of the Civil Code, and therefore, necessitates a different treatment. It equally refused to dismiss the action
on the ground of non-payment of docket fees, despite Consing, Jr.s escalated claims for damages therein, as jurisdiction
was already vested in it upon the filing of the original complaint. Moreover, it resolved to apply the liberal construction
rule as regards the subject complaints verification and certification, despite its improper wording, considering further
that such defect was not raised at the first opportunity. Consequently, it ordered Unicapital and PBI, et al. to file their
Answer and, in addition, to submit" any Comment or Reaction within five (5) days from receipt hereof on the allegations
of Consing, Jr. in his rejoinder of September 9, 1999regarding the supposed filing of an identical case in Makati City," 37 i.e.,
Civil Case No. 99-1418. Unperturbed, Unicapital and PBI, et al. moved for reconsideration therefrom which was, however,
denied by the RTC-Pasig City in an Order38 dated February 15, 2001 for lack of merit. Aggrieved, they elevated the denial
of their motions to dismiss before the CA via a petition for certiorari and prohibition, 39 docketed as CA-G.R. SP Nos. 64019
and 64451.
On October 20, 2005, the CA rendered a Joint Decision40 holding that no grave abuse of discretion was committed by the
RTC-Pasig City in refusing to dismiss Consing, Jr.'s complaint.1wphi1 At the outset, it ruled that while the payment of the
prescribed docket fee is a jurisdictional requirement, its non-payment will not automatically cause the dismissal of the
case. In this regard, it considered that should there be any deficiency in the payment of such fees, the same shall constitute
a lien on the judgment award.41 It also refused to dismiss the complaint for lack of proper verification upon a finding that
the copy of the amended complaint submitted to the RTC-Pasig City was properly notarized.42 Moreover, it upheld the
order of the RTC-Pasig City for Unicapital and PBI, et al. to submit their comment due to the alleged existence of a similar
case filed before the RTC-Makati City.43
Anent the substantive issues of the case, the CA concurred with the RTC-Pasig City that Consing Jr.'s complaint states a
cause of action. It found that Unicapital and PBI, et al.s purportedly abusive manner in enforcing their claims against
Consing, Jr. was properly constitutive of a cause of action as the same, if sufficiently proven, would have subjected him to
"defamation of his name in business circles, the threats and coercion against him to reimburse the purchase price, fraud
and falsification and breach of fiduciary obligation." It also found that the fact that Consing Jr.'s complaint contains
"nebulous" allegations will not warrant its dismissal as any vagueness therein can be clarified through a motion for a bill
of particulars."44 Furthermore, it noted that Consing, Jr. does not seek to recover his claims against any particular
provision of the corporation code or the securities act but against the actions of Unicapital and PBI, et al.; hence, Consing,
Jr.s complaint was principally one for damages over which the RTC has jurisdiction, and, in turn, there lies no misjoinder
of causes of action.45
Dissatisfied, only Unicapital, et al. sought reconsideration therefrom but the same was denied by the CA in a
Resolution46 dated October 25,2006. Hence, the present petitions for review on certiorari in G.R. Nos.175277 and 175285.
The Proceedings Antecedent to G.R. No. 192073
On the other hand, on August 4, 1999, Unicapital filed a complaint47 for sum of money with damages against Consing, Jr.
and Dela Cruz before the RTC-Makati City, docketed as Civil Case No. 99-1418, seeking to recover (a) the amount
of P42,195,397.16, representing the value of their indebtedness based on the Promissory Notes (subject promissory
notes) plus interests; (b) P5,000,000.00 as exemplary damages; (c) attorney's fees; and (d) costs of suit.48
PBI also filed a complaint for damages and attachment against Consing, Jr. and Dela Cruz before the RTC of Manila, Branch
12, docketed as Civil Case No. 99-95381, also predicated on the same set of facts as above narrated.49 In its complaint, PBI
prayed that it be allowed to recover the following: (a) P13,369,641.79, representing the total amount of installment
payments made as actual damages plus interests; (b) P200,000.00 as exemplary damages; (c) P200,000.00 as moral
damages; (d) attorney's fees; and (e) costs of suit.50 Civil Case No. 99-95381 was subsequently consolidated with SCA No.
1759 pending before the RTC-Pasig City.51

For his part, Consing, Jr. filed a Motion to Dismiss Civil Case No. 99-1418 which was, however, denied by the RTC-Makati
City in an Order52 dated November 16, 1999. Thereafter, he filed a Motion for Consolidation53(motion for consolidation)
of Civil Case No. 99-1418 with his own initiated SCA No. 1759 pending before the RTC-Pasig City.
In an Order54 dated July 16, 2007, the RTC-Makati City dismissed Consing, Jr.s motion for consolidation and, in so doing,
ruled that the cases sought to be consolidated had no identity of rights or causes of action and the reliefs sought for by
Consing, Jr. from the RTC-Pasig City will not bar Unicapital from pursuing its money claims against him. Moreover, the
RTC-Makati City noted that Consing, Jr. filed his motion only as an after thought as it was made after the mediation
proceedings between him and Unicapital failed. Consing, Jr.'s motion for reconsideration therefrom was denied in an
Order55 dated September 4, 2007. Hence, he filed a petition for certiorari before the CA, docketed as CA-G.R. SP No.
101355, ascribing grave abuse of discretion on the part of the RTC-Makati City in refusing to consolidate Civil Case No. 991418 with SCA No. 1759 in Pasig City.
On September 30, 2009, the CA rendered a Decision56 sustaining the Orders dated July 16, 2007 and September 4, 2007 of
the RTC-Makati City which denied Consing, Jr.s motion for consolidation. It held that consolidation is a matter of sound
discretion on the part of the trial court which could be gleaned from the use of the word "may" in Section 1, Rule38 of the
Rules of Court. Considering that preliminary steps (such as mediation) have already been undertaken by the parties in
Civil Case No.99-1418 pending before the RTC-Makati City, its consolidation with SCA No. 1759 pending before the RTCPasig City "would merely result in complications in the work of the latter court or squander the resources or remedies
already utilized in the Makati case."57 Moreover, it noted that the records of the consolidated Pasig and Manila cases, i.e.,
SCA No. 1759 and Civil Case No. 99-95381, respectively, had already been elevated to the Court, that joint proceedings
have been conducted in those cases and that the pre-trial therein had been terminated as early as October 23,
2007.Therefore, due to these reasons, the consolidation prayed for would be impracticable and would only cause a
procedural faux pas. Undaunted, Consing, Jr. filed a motion for reconsideration therefrom but was denied by the CA in a
Resolution58dated April 28, 2010. Hence, the present petition for review on certiorari in G.R. No. 192073.
The Proceedings Before the Court
After the filing of the foregoing cases, the parties were required to file their respective comments and replies. Further,
considering that G.R. No.192073 (Makati case) involves the same parties and set of facts with those in G.R. Nos. 175277 &
175285 (Pasig case), these cases were ordered consolidated per the Court's Resolution59dated November 17, 2010. On
March 9, 2011, the Court resolved to give due course to the instant petitions and required the parties to submit their
respective memoranda.60
The Issues Before the Court
The essential issues in these cases are as follows: (a) in G.R. Nos.175277 and 175285, whether or not the CA erred in
upholding the RTC-Pasig Citys denial of Unicapital, et al.s motion to dismiss; and (b) in G.R. No. 192073, whether or not
the CA erred in upholding the RTC-Makati Citys denial of Consing, Jr.s motion for consolidation.
The Courts Ruling
A. Propriety of the denial of
Unicapital, et al.s motion to
dismiss and ancillary issues.
A cause of action is defined as the act or omission by which a party violates a right of another. 61 It is well-settled that the
existence of a cause of action is determined by the allegations in the complaint. 62 In this relation, a complaint is said to
sufficiently assert a cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be
entitled to the relief prayed for.63 Thus, if the allegations furnish adequate basis by which the complaint can be
maintained, then the same should not be dismissed, regardless of the defenses that may be averred by the
defendants.64 As edified in the case of Pioneer Concrete Philippines, Inc. v. Todaro,65 citing Hongkong and Shanghai
Banking Corporation, Limited. v. Catalan66 (HSBC):
The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify
the relief demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein? The inquiry
is into the sufficiency, not the veracity of the material allegations. If the allegations in the complaint furnish sufficient

basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented by the
defendants.67 (Emphasis supplied)
Stated otherwise, the resolution on this matter should stem from an analysis on whether or not the complaint is able to
convey a cause of action; and not that the complainant has no cause of action. Lest it be misunderstood, failure to state a
cause of action is properly a ground for a motion to dismiss under Section 1(g), Rule 16 68 of the Rules of Court(Rules),
while the latter is not a ground for dismissal under the same rule.
In this case, the Court finds that Consing, Jr.s complaint in SCA No.1759 properly states a cause of action since the
allegations there insufficiently bear out a case for damages under Articles 19 and 26 of the Civil Code.
Records disclose that Consing, Jr.s complaint contains allegations which aim to demonstrate the abusive manner in which
Unicapital and PBI, et al. enforced their demands against him. Among others, the complaint states that Consing, Jr. "has
constantly been harassed and bothered by Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x has had
constant meetings with them variously, and on a continuing basis, such that he is unable to attend to his work as an
investment banker."69 In the same pleading, he also alleged that Unicapital and PBI, et al.s act of "demanding a postdated
check knowing fully well that he does not have the necessary funds to cover the same, nor is he expecting to have them is
equivalent to asking him to commit a crime under unlawful coercive force."70 Accordingly, these specific allegations, if
hypothetically admitted, may result into the recovery of damages pursuant to Article 19 of the Civil Code which states that
"every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith." As explained in the HSBC case:
When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must beheld responsible. But a right,
though by itself legal because it is recognized or granted by law as such, may nevertheless become the source of some
illegality. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with
prudence and in good faith; but not when he acts with negligence or abuse. There is an abuse of right when it is exercised
for the only purpose of prejudicing or injuring another. The exercise of a right must be in accordance with the purpose for
which it was established, and must not be excessive or unduly harsh; there must be no intention to injure
another.71 (Emphasis supplied)
Likewise, Consing, Jr.s complaint states a cause of action for damages under Article 26 of the Civil Code which provides
that:
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other
persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action
for damages, prevention and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical
defect, or other personal condition.
The rationale therefor was explained in the case of Manaloto v. Veloso III, 72 citing Concepcion v. CA,73 to wit:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission stressed
in no uncertain terms that the human personality must be exalted. The sacredness of human personality is a concomitant
consideration of every plan for human amelioration. The touchstone of every system of law, of the culture and civilization
of every country, is how far it dignifies man. If the statutes insufficiently protect a person from being unjustly humiliated,
in short, if human personality is not exalted - then the laws are indeed defective. Thus, under this article, the rights of
persons are amply protected, and damages are provided for violations of a person's dignity, personality, privacy and
peace of mind.74

To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral damages under Article
2219(10)75 of the Civil Code.
Records reveal that Consing, Jr., in his complaint, alleged that "he has come to discover that Unicapital and PBI, et al. are
speaking of him in a manner that is inappropriate and libelous; and that they have spread their virulent version of events
in the business and financial community such that he has suffered and continues to suffer injury upon his good name and
reputation which, after all, is the most sacred and valuable wealth he possesses - especially considering that he is an
investment banker."76 In similar regard, the hypothetical admission of these allegations may result into the recovery of
damages pursuant to Article 26, and even Article2219(10), of the Civil Code.
Corollary thereto, Unicapital, et al.s contention77 that the case should be dismissed on the ground that it failed to set out
the actual libelous statements complained about cannot be given credence. These incidents, as well as the specific
circumstances surrounding the manner in which Unicapital and PBI, et al. pursued their claims against Consing, Jr. may be
better ventilated during trial. It is a standing rule that issues that require the contravention of the allegations of the
complaint, as well as the full ventilation, in effect, of the main merits of the case, should not be within the province of a
mere motion to dismiss,78 as in this case. Hence, as what is only required is that the allegations furnish adequate basis by
which the complaint can be maintained, the Court in view of the above-stated reasons finds that the RTC-Pasig Citys
denial of Unicapital, et al.s motion to dismiss on the ground of failure to state a cause of action was not tainted with grave
abuse of discretion which would necessitate the reversal of the CAs ruling. Verily, for grave abuse of discretion to exist,
the abuse of discretion must be patent and gross so as to amount to an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law.79 This the Court does not perceive in the case at
bar.
Further, so as to obviate any confusion on the matter, the Court equally finds that the causes of action in SCA No. 1759
were not as Unicapital, et al. claim misjoined even if Consing, Jr. averred that Unicapital and PBI, et al. violated certain
provisions of the Corporation Law and the Revised Securities Act.80
The rule is that a partys failure to observe the following conditions under Section 5, Rule 2 of the Rules results in a
misjoinder of causes of action:81
SEC. 5. Joinder of causes of action . - A party may in one pleading assert, in the alternative or otherwise, as many causes of
action as he may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the
joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction. (Emphasis supplied)
A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold Unicapital and PBI, et al. liable for any
specific violation of the Corporation Code or the Revised Securities Act. Rather, he merely sought damages for Unicapital
and PBI, et al.s alleged acts of making him sign numerous documents and their use of the same against him. In this
respect, Consing, Jr. actually advances an injunction and damages case82 which properly falls under the jurisdiction of the
RTC-Pasig City.83 Therefore, there was no violation of Section 5, Rule 2 of the Rules, particularly, paragraph (c) thereof.
Besides, even on the assumption that there was a misjoinder of causes of action, still, such defect should not result in the
dismissal of Consing, Jr.s complaint. Section 6, Rule 2 of the Rules explicitly states that a "misjoinder of causes of action is
not a ground for dismissal of an action" and that "a misjoined cause of action may, on motion of a party or on the initiative
of the court, be severed and proceeded with separately."
Neither should Consing, Jr.s failure to pay the required docket fees lead to the dismissal of his complaint.1wphi1 It has
long been settled that while the court acquires jurisdiction over any case only upon the payment of the prescribed docket
fees, its non-payment at the time of the filing of the complaint does not automatically cause the dismissal of the complaint

provided that the fees are paid within a reasonable period.84 Consequently, Unicapital, et al.s insistence that the stringent
rule on non-payment of docket fees enunciated in the case of Manchester Development Corporation v. CA 85 should be
applied in this case cannot be sustained in the absence of proof that Consing, Jr. intended to defraud the government by
his failure to pay the correct amount of filing fees. As pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor:86
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its
non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within
the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide
by the rules prescribing such payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply.87 (Emphasis and italics in the original)
Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing, Jr.'s "metered" claim for damages to
the tune of around P2,000,000.00 per month88 may balloon to a rather huge amount by the time that this case is finally
disposed of, still, any amount that may by then fall due shall be subject to assessment and any additional fees determined
shall constitute as a lien against the judgment as explicitly provided under Section 2, 89Rule 141 of the Rules.
Finally, on the question of whether or not Consing, Jr.'s complaint was properly verified, suffice it to state that since the
copy submitted to the trial court was duly notarized by one Atty. Allan B. Gepty and that it was only Unicapital, et al.s
copy which lacks the notarization, then there was sufficient compliance with the requirements of the rules on pleadings.90
In fine, the Court finds no reversible error on the part of the CA in sustaining the RTC-Pasig Citys denial of Unicapital et
al.s motion to dismiss. As such, the petitions in G.R. Nos. 175277 and 175285 must be denied.
B. Propriety of the denial of
Consing, Jr.s motion for
consolidation.
The crux of G.R. No. 192073 is the propriety of the RTC-Makati Citys denial of Consing, Jr.s motion for the consolidation
of the Pasig case, i.e., SCA No. 1759, and the Makati case, i.e., Civil Case No. 99-1418.Records show that the CA upheld the
RTC-Makati Citys denial of the foregoing motion, finding that the consolidation of these cases was merely discretionary
on the part of the trial court. It added that it was "impracticable and would cause a procedural faux pas
"if it were to "allow the RTC-Pasig City to preside over the Makati case."91
The CAs ruling is proper.
It is hornbook principle that when or two or more cases involve the same parties and affect closely related subject
matters, the same must be consolidated and jointly tried, in order to serve the best interest of the parties and to settle the
issues between them promptly, thus, resulting in a speedy and inexpensive determination of cases. In addition,
consolidation serves the purpose of avoiding the possibility of conflicting decisions rendered by the courts in two or more
cases, which otherwise could be disposed of in a single suit.92 The governing rule is Section 1, Rule 31 of the Rules which
provides:
SEC. 1. Consolidation. - When actions involving a common question of law or fact are pending before the court, it may
order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and
it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
In the present case, the Court observes that the subject cases, i.e., SCA No. 1759 and Civil Case No. 99-1418, although
involving the same parties and proceeding from a similar factual milieu, should remain unconsolidated since they proceed
from different sources of obligations and, hence, would not yield conflicting dispositions. SCA No. 1759 is an injunction
and damages case based on the Civil Code provisions on abuse of right and defamation, while Civil Case No. 99-1418 is a
collection and damages suit based on actionable documents, i.e., the subject promissory notes. In particular, SCA No. 1759
deals with whether or not Unicapital and BPI, et al, abused the manner in which they demanded payment from Consing,
Jr., while Civil Case No. 99-1418 deals with whether or not Unicapital may demand payment from Consing, Jr. based on the

subject promissory notes. Clearly, a resolution in one case would have no practical effect as the core issues and reliefs
sought in each case are separate and distinct from the other.
Likewise, as the CA correctly pointed out, the RTC-Makati City could not have been failured in retaining Civil Case No. 991418 in its dockets since pre-trial procedures have already been undertaken therein and, thus, its consolidation with SCA
No. 1759 pending before the RTC-Pasig City would merely result in complications on the part of the latter court or
squander the resources or remedies already utilized in Civil Case No. 99-1418.93 In this light, aside from the perceived
improbability of having conflicting decisions, the consolidation of SCA No. 1759 and Civil Case No. 99-1418 would,
contrary to its objective, only delay the proceedings and entail unnecessary costs.
All told, the Court finds the consolidation of SCA No. 1759 and Civil Case No. 99-1418 to be improper, impelling the
affirmance of the CAs ruling. Consequently, the petition in G.R. No. 192073 must also be denied.
WHEREFORE, the petitions in G.R. Nos. 175277, 175285 and 192073 are DENIED. Accordingly, the Court of Appeals Joint
Decision dated October 20, 2005 and Resolution dated October 25, 2006 in CA-G.R. SP Nos. 64019 and 64451 and the
Decision dated September 30, 2009 and Resolution dated April 28, 2010 in CA-G.R. No. 101355 are hereby AFFIRMED.
PHILIPPINE SAVINGS BANK, petitioner, vs. SPS. RODOLFO C. MAALAC, JR. and ROSITA P. MAALAC, respondents.
DECISION
YNARES-SANTIAGO, J.:
This appeal by certiorari[1] assails the decision of the Court of Appeals dated October 12, 2000 in CA-G.R. CV No.
50292[2] which affirmed with modifications the decision of the Regional Trial Court of Pasig, Branch 161 [3] dated April 27,
1993 in Civil Case No. 53967 which ordered the annulment of the Certificate of Sale involving TCT Nos. N-1347, N-1348
and N-3267 issued in favor of petitioner Philippine Savings Bank (PSBank) and dismissing Land Registration Case No. R3951.
The facts as culled from the records are as follows:
On October 8, 1976, respondent-spouses Rodolfo and Rosita Maalac (Maalac) obtained a P1,300,000.00 loan from
PSBank covered by promissory note L.C. No. 76-269. As security for the loan, Maalac executed a Real Estate Mortgage in
favor of the bank over 8 parcels of land covered by TCT Nos. 417012, N-1348, N-1347, N-3267, N-8552, N-6162, 469843
and 343593.
In view of Maalacs inability to pay the loan installments as they fell due, their loan obligation was restructured on
October 13, 1977. Accordingly, Maalac signed another promissory note denominated as LC No. 77-232 for P1,550,000.00
payable to the order of PSBank with interest rate of 19% annum.[4] To secure the payment of the restructured loan,
Maalac executed a Real Estate Mortgage dated October 13, 1977 in favor of PSBank over the same aforementioned 8 real
properties.
On March 5, 1979, Maalac and spouses Igmidio and Dolores Galicia, with the prior consent of PSBank, [5] entered
into a Deed of Sale with Assumption of Mortgage involving 3 of the mortgaged properties covered by TCT Nos. N-6162
(now N-36192), N-8552 (now TCT No. N-36193), and 469843 (now TCT No. N-36194). The Deed of Sale with Assumption
of Mortgage contained the following stipulations:
1.
The VENDEES shall assume as they hereby assume as part of the purchase price, the amount of P550,000.00,
representing the portion of the mortgaged obligation of the VENDORS in favor of the Philippine Savings Bank, which is
secured by that Real Estate Mortgage contract mentioned in the Second Whereas Clause hereof covering among others
the above-described parcels of land under the same terms and conditions as originally constituted.
2.
The VENDORS hereby warrant valid title to, and peaceful possession of the property herein sold subject to the
encumbrance hereinbefore mentioned.
3.

This instrument shall be subject to the Consent of the Philippine Savings Bank.

4.
All expenses relative to this instrument including documentary stamps, registration fees, transfer taxes and other
charges shall be for the account of the VENDEES.[6]

Thereafter, the 3 parcels of land purchased by the Galicias, together with another property, were in turn mortgaged
by them to secure a P2,600,000.00 loan which they obtained from PSBank. Specifically, the mortgaged properties include
TCT Nos. N-36192, N-36193, N-36194, (formerly TCT Nos. N-6162, N-8552 and 469843, respectively) and 75584.[7] This
loan is evidenced by Promissory Note LC-79-36.[8]
On March 12, 1979, Maalac paid PSBank P919,698.11 which corresponds to the value of the parcels of land
covered by TCT Nos. N-36192, N-36193, and N-36194, now registered in the name of the spouses Galicia. Accordingly,
PSBank executed a partial release of the real estate mortgage covered by the aforesaid properties. [9]
On August 25, 1981, the spouses Galicia obtained a second loan from PSBank in the amount of P3,250,000.00 for
which they executed Promissory Note LC No. 81-108. They also executed a Real Estate Mortgage in favor of the bank
covering TCT Nos. N-36192, N-36193, N-36194, 75584 and 87690.[10]
Since Maalac defaulted again in the payment of their loan installments and despite repeated demands still failed to
pay their past due obligation which now amounted to P1,804,241.76, PSBank filed with the Office of the Provincial Sheriff
of Rizal a petition for extrajudicial foreclosure of their 5 remaining mortgaged properties, specifically those covered by
TCT Nos. 417012, N-1347, N-1348, N-3267, and 343593.
Despite several postponements of the public auction sale, Maalac still failed to pay their mortgage obligation. Thus,
on May 3, 1982, the foreclosure sale of the subject real properties proceeded with PSBank as the highest bidder in the
amount of P2,185,225.76.[11] On the same date, the Certificate of Sale was issued by the Acting Ex-Oficio Provincial Sheriff
for Rizal province.[12]
Maalac failed to redeem the properties hence titles thereto were consolidated in the name of PSBank and new
certificates of title were issued in favor of the bank, namely, TCT No. N-79995 in lieu of TCT No. 343593; TCT No. 79996 in
lieu of TCT No. 417012; TCT No. 79997 in lieu of TCT No. N-3267; TCT No. N-79998 in lieu of TCT No. N-1347; and TCT
No. N-79999 in lieu of TCT No. N-1348.
On December 16, 1983, Maalac wrote the Chairman of the Board of PSBank asking information on their request for
the partial release of the mortgage covered by TCT Nos. N-36192, N-36193, N-36194, and 417012 (now TCT No.
79996). TCT Nos. 36192, 36193, and 36194 were registered in the name of the Galicias, and mortgaged to partially
secure their outstanding loan from the bank. Enclosed in the same letter is a Cashiers Check for P1,200,000.00 with a
notation which reads:
Re: Payment to effect release of TCT Nos. N-36192, 36193, and 36194 under loan account of Spouses Igmedio and Dolores
Galicia; and TCT No. 417012 under Loan Account of Spouses Rodolfo and Rosita Maalac.
Upon receipt of the check, PSBanks Acting Manager Lino L. Macasaet issued a typewritten receipt with the
inscription:[13]
Received from Sps. Rodolfo and Rosita Maalac and Sps. Igmidio and Dolores Galicia PCIB Check No. 002133 in the
amount of One Million Two Hundred Thousand Pesos Only (P1,200,000.00).
It is understood however, that receipt of said check is not a commitment on the part of the Bank to release the Four (4)
TCTs requested to be released on your letter dated 19 December 1983.
On December 19, 1983, the bank applied P1,000,000.00 of the P1,200,000.00 to the loan account of the Galicias as
payment for the arrearages in interest and the remaining P200,000.00 thereof was applied to the expenses relative to the
account of Maalac.[14]
On May 23, 1985, the bank sold the property covered by TCT No. 79996 (previously TCT No. 343593) to Ester
Villanueva who thereafter sold it to Maalac. On October 30, 1985, the land covered by TCT No. 79995 was sold by the
bank to Teresita Jalbuena.
Thereafter, or on October 20, 1986, Maalac instituted an action for damages, docketed as Civil Case No. 53967,
before the Regional Trial Court of Pasig, Branch 161, against PSBank and its officers namely Cezar Valenzuela, Alfredo
Barretto and Antonio Viray, and spouses Alejandro and Teresita Jalbuena.
The bank also filed a petition, docketed as LRC Case No. R-3951, before the Regional Trial Court of Pasig, Branch
159, for the issuance of a writ of possession against the properties covered by TCT Nos. N-79997, N-79998, and N-79999
(formerly TCT Nos. N-3267, N-1347, and N-1348) and the ejectment of the respondents.

In an order dated January 2, 1989, the trial court consolidated LRC Case No. R-3951 with Civil Case No. 53967. On
April 27, 1993, a judgment was rendered the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering:
For Civil Case No. 53967
1.
The annulment of the Certificate of Sale issued by the acting Ex-Oficio Provincial Sheriff of Rizal on May 3, 1982
involving Transfer Certificate of Title Nos. N-1347-Rizal, N-1348-Rizal and N-3267-Rizal and the Contract to Sell executed
by defendant PSB in favor of defendants spouses Alejandro Jalbuena and Teresita Jalbuena involving the real property
covered by Transfer Certificate of Title No. N-79995; and,
2.

The dismissal of counterclaims for lack of merit.

For Land Registration Case No. R-3951

3.

The dismissal of the petition for lack of merit.

No costs.
SO ORDERED.[15]
The Court of Appeals affirmed with modification the decision of the trial court, the decretal portion of which reads:
WHEREFORE, the decision appealed from is AFFIRMED with the modification that the defendant-appellant Philippine
Savings Bank is directed to indemnify the plaintiffs-appellants in the amount of Two Hundred Thousand Pesos
(200,000.00) each as moral damages. Costs against the defendant-appellant bank.
SO ORDERED.[16]
Hence the instant petition which raises the following issues:
THE APPELLATE COURT HAS DECIDED QUESTIONS OF SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW
AND WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT:
a.] HELD THAT THE GENERAL RULE WITH RESPECT TO THE ISSUANCE OF WRITS OF POSSESSION SHOULD NOT BE
APPLIED IN THIS CASE, AND WHAT SHOULD INSTEAD BE APPLIED IS THE EXCEPTION ENUNCIATED IN VACA VS. COURT
OF APPEALS, 234 SCRA 146;
b.] UPHELD THE CONSOLIDATION OF CIVIL CASE NO. 53967 WITH LRC CASE NO. 3951 WHEN PROCEDURALLY
THOSE TWO PROCEEDINGS COULD SCARCELY BE CONSOLIDATED;
c.] HELD THAT SUPPOSEDLY THERE WAS A NOVATION OF THE PREVIOUS MORTGAGE OF THE PROPERTIES WHEN
IN TRUTH AND IN FACT THE MORTGAGE HAD ALREADY CEASED TO EXIST, THAT IS, THE MORTGAGE HAD BECOME
NULL AND VOID AS THE SAME HAD BEEN FORECLOSED BY PETITIONER;
d.]

AWARDED MORAL DAMAGES IN FAVOR OF RESPONDENTS.[17]

Petitioner claims that the Court of Appeals erred in sustaining the trial courts order consolidating Civil Case No.
53967 with LRC Case No. R-3951, arguing that consolidation is proper only when it involves actions, which means an
ordinary suit in a court of justice by which one party prosecutes another for the enforcement or protection of a right, or a
prevention of a wrong. Citing A.G. Development Corp. v. Court of Appeals,[18] petitioner posits that LRC Case No. R-3951,
being summary in nature and not being an action within the contemplation of the Rules of Court, should not have been
consolidated with Civil Case No. 53967.

We do not agree. In Active Wood Products Co., Inc. v. Court of Appeals,[19] this Court also deemed it proper to
consolidate Civil Case No. 6518-M, which was an ordinary civil action, with LRC Case No. P-39-84, which was a petition for
the issuance of a writ of possession. The Court held that while a petition for a writ of possession is an ex parte proceeding,
being made on a presumed right of ownership, when such presumed right of ownership is contested and is made the basis
of another action, then the proceedings for writ of possession would also become groundless. The entire case must be
litigated and if need be must be consolidated with a related case so as to thresh out thoroughly all related issues.
In the same case, the Court likewise rejected the contention that under the Rules of Court only actions can be
consolidated. The Court held that the technical difference between an action and a proceeding, which involve the same
parties and subject matter, becomes insignificant and consolidation becomes a logical conclusion in order to avoid
confusion and unnecessary expenses with the multiplicity of suits.
In the instant case, the consolidation of Civil Case No. 53967 with LRC Case No. R-3951 is more in consonance with
the rationale behind the consolidation of cases which is to promote a more expeditious and less expensive resolution of
the controversy than if they were heard independently by separate branches of the trial court. Hence, the technical
difference between Civil Case No. 53967 and LRC Case No. R-3951 must be disregarded in order to promote the ends of
justice.
Petitioner also contends that the Court of Appeals committed reversible error in applying the doctrine laid down
in Barican v. Intermediate Appellate Court.[20] It insists on the application of the general rule that it is ministerial upon the
court to issue a writ of possession on the part of the purchaser in a foreclosure sale. It argues that the Barican doctrine is
inapplicable because the sale with assumption of mortgage in the present case involves properties different from those
which are the subject of the writ of possession while in Barican, the assumption of mortgage refers to the same property
subject of the writ of possession. We recall that the Court of Appeals applied the Barican doctrine based on the following
factual similarities between the two cases, thus:[21]
In Civil Case No. C-11232, the petitioner-spouses claim ownership of the foreclosed property against the respondent
bank and Nicanor Reyes to whom the former sold the property by negotiated sale; the complaint alleged that the DBP
knew the assumption of mortgage between the mortgagors and the petitioner-spouses and the latter have paid to the
respondent bank certain amounts to update the loan balances of the mortgagors and transfer and restructuring fees
which payments are duly receipted; the petitioner-spouses were already in possession of the property since September
28, 1979 and long before the respondent bank sold the same property to respondent Nicanor Reyes on October 28, 1984;
and the respondent bank never took physical possession of the property. In a similar manner, the following facts were
duly established in the case at bench: 1. The petition for issuance of the writ of possession was only filed sometime in May
1988 although the right of redemption lapsed as early as May 7, 1983; 2. Appellant bank neither obtained physical
possession of the properties nor did they file any action for ejectment against the plaintiffs-appellants; 3. On December
16, 1983, the plaintiffs-appellants issued a check in favor of the appellant bank to effect the release of TCT Nos. 36192,
36193, 36194 and 417012 which was applied by appellant bank to the plaintiffs-appellants account and that of the
Galicias and; 4. Appellant bank executed a Deed of Absolute Sale over TCT No. 79996 (formerly TCT No. 417012) on May
23, 1985 in favor of a certain Elsa Calusa Villanueva who thereafter sold it back to the plaintiffs-appellants. Hence, the
same ruling in the Barican case should be applied, that is, the obligation of a court to issue a writ of possession in favor of
the purchaser in a foreclosure of mortgage case ceases to be ministerial.
We agree with the petitioner. While indeed the two cases demonstrate palpable similarities, the Court of Appeals
overlooked essential differences that would render the Barican doctrine inapplicable to the instant case. In Barican, the
issuance of the writ of possession was deferred because a pending action for the declaration of ownership over the
foreclosed property was made by an adverse claimant who was in possession of the subject property. Clearly, the rights of
the third parties, who are plaintiffs in the pending civil case, would be adversely affected with the implementation of the
writ.
In the instant case, the petitioner bank became the absolute owner of the properties subject of the writ of
possession, after they were foreclosed, and titles thereto were consolidated in the name of the bank. It sufficiently
established its ownership over the parcels of land subject of the writ of possession, by presenting in evidence the
Certificate of Sale,[22] Affidavit of Consolidation of Ownership,[23] and copies of new TCTs of the foreclosed properties in
the name of the petitioner.[24] Unlike in Barican, the ownership of the foreclosed properties are not open to question the
ownership thereof being established by competent evidence.
Moreover, as earlier pointed out by the petitioner, the parcels of land subject of the writ of possession are different
from those sold by the petitioner bank to Jalbuena and Villanueva. Hence, unlike in the Barican case, the implementation
of the writ will not affect the rights of innocent third persons.

On the issue of novation, the Court of Appeals held that novation occurred when PSBank applied P1,000,000.00 of
the P1,200,000.00 PCIB Check No. 002133 tendered by Maalac to the loan account of the Galicias and the remaining
P200,000.00 thereof to Maalacs account. It held that when the bank applied the amount of the check in accordance with
the instructions contained therein, there was novation of the previous mortgage of the properties. It further observed
that the bank was fully aware that the issuance of the check was conditional hence, when it made the application thereof,
it agreed to be bound by the conditions imposed by Maalac.[25]
Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one
which extinguishes or modifies the first, either by changing the object or principal conditions, or, by substituting another
in place of the debtor, or by subrogating a third person in the rights of the creditor. In order for novation to take place, the
concurrence of the following requisites is indispensable:
1.
2.
3.
4.

There must be a previous valid obligation,

There must be an agreement of the parties concerned to a new contract,
There must be the extinguishment of the old contract, and
There must be the validity of the new contract.[26]

The elements of novation are patently lacking in the instant case. Maalac tendered a check for P1,200,000.00 to
PSBank for the release of 4 parcels of land covered by TCT Nos. N-36192, 36193, and 36194, under the loan account of the
Galicias and 417012 (now TCT No. 79996) under the loan account of Maalac. However, while the bank applied the
tendered amount to the accounts as specified by Maalac, it nevertheless refused to release the subject
properties. Instead, it issued a receipt with a notation that the acceptance of the check is not a commitment on the part of
the bank to release the 4 TCTs as requested by Maalac.
From the foregoing, it is obvious that there was no agreement to form a new contract by novating the mortgage
contracts of the Maalacs and the Galicias. In accepting the check, the bank only acceded to Maalacs instruction on
whose loan accounts the proceeds shall be applied but rejected the other condition that the 4 parcels of land be released
from mortgage. Clearly, there is no mutual consent to replace the old mortgage contract with a new obligation. The
conflicting intention and acts of the parties underscore the absence of any express disclosure or circumstances with
which to deduce a clear and unequivocal intent by the parties to novate the old agreement.
Novation is never presumed, and the animus novandi, whether totally or partially, must appear by express
agreement of the parties, or by their acts that are too clear and unmistakable. The extinguishment of the old obligation by
the new one is a necessary element of novation, which may be effected either expressly or impliedly. The term "expressly"
means that the contracting parties incontrovertibly disclose that their object in executing the new contract is to
extinguish the old one. Upon the other hand, no specific form is required for an implied novation, and all that is prescribed
by law would be an incompatibility between the two contracts. While there is really no hard and fast rule to determine
what might constitute to be a sufficient change that can bring about novation, the touchstone for contrariety, however,
would be an irreconcilable incompatibility between the old and the new obligations.[27]
A fortiori, 3 of the 4 properties sought to be released from mortgage, namely, TCT Nos. N-36192, N-36193, and N36194, have already been sold by Maalac to Galicia and are now registered in the name of the latter who thereafter
mortgaged the same as security to a separate loan they obtained from the bank. Thus, without the consent of PSBank as
the mortgagee bank, Maalac, not being a party to the mortgage contract between the Galicias and the bank, cannot
demand much less impose upon the bank the release of the subject properties. Unless there is a stipulation to the
contrary, the release of the mortgaged property can only be made upon the full satisfaction of the loan obligation upon
which the mortgage attaches. Unfortunately, Maalac has not shown that the P1,000,000.00 was sufficient to cover not
only the accrued interests but also the entire indebtedness of the Galicias to the bank.
Neither can Maalac be deemed substitute debtor within the contemplation of Article 1293 of the Civil Code, which
states that:
Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made without the
knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives
him the rights mentioned in articles 1236 and 1237.[28]
In order to change the person of the debtor, the old one must be expressly released from the obligation, and the
third person or new debtor must assume the formers place in the relation. Novation is never presumed. Consequently,
that which arises from a purported change in the person of the debtor must be clear and express. It is thus incumbent on
Maalac to show clearly and unequivocally that novation has indeed taken place. [29] In Magdalena Estates Inc. v.
Rodriguez,[30] we held that the mere fact that the creditor receives a guaranty or accepts payments from a third person

who has agreed to assume the obligation, when there is no agreement that the first debtor shall be released from
responsibility, does not constitute a novation, and the creditor can still enforce the obligation against the original debtor.
Maalac has not shown by competent evidence that they were expressly taking the place of Galicia as debtor, or that
the latter were being released from their solidary obligation. Nor was it shown that the obligation of the Galicias was
being extinguished and replaced by a new one. The existence of novation must be shown in clear and unmistakable
terms.
Likewise, we hold that Maalac cannot demand to repurchase the foreclosed piece of land covered by TCT No.
417012 (now TCT No. 79996) from the bank. Its foreclosure and the consolidation of ownership in favor of the bank and
the resultant cancellation of mortgage effectively cancelled the mortgage contract between Maalac and the bank. Insofar
as TCT No. 417012 is concerned, there is no more existing mortgage to speak of. As the absolute owner of the foreclosed
property, the petitioner has the discretion to reject or accept any offer to repurchase.
Granting arguendo that a new obligation was established with the acceptance by the bank of the PCIB Check and its
application to the loan account of Maalac on the condition that TCT No. 417012 would be released, this new obligation
however could not supplant the October 13, 1977 real estate mortgage executed by Maalac, which, by all intents and
purposes, is now a defunct and non-existent contract. As mentioned earlier, novation cannot be presumed.
We however sustain the award of moral damages. While the bank had the legal basis to withhold the release of the
mortgaged properties, nevertheless, it was not forthright and was lacking in candor in dealing with Maalac. In accepting
the PCIB Check, the bank knew fully well that the payment was conditioned on its commitment to release the specified
properties. At the first instance, the bank should not have accepted the check or returned the same had it intended
beforehand not to honor the request of Maalac. In accepting the check and applying the proceeds thereof to the loan
accounts of Maalac and Galicia, the former were led to believe that the bank was favorably acting on their request. In
justifying the award of moral damages, the Court of Appeals correctly observed that there is the unjustified refusal of the
appellant bank to make a definite commitment while profiting from the proceeds of the check by applying it to the
principal and the interest of the Galicias and plaintiff-appellants.[31]
Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused.
Although incapable of pecuniary estimation, the amount must somehow be proportional to and in approximation of the
suffering inflicted. Moral damages are not punitive in nature and were never intended to enrich the claimant at the
expense of the defendant. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of
moral damages, since each case must be governed by its own peculiar facts. Trial courts are given discretion in
determining the amount, with the limitation that it should not be palpably and scandalously excessive. Indeed, it must
be commensurate to the loss or injury suffered.[32]
Respondent Rosita Maalac has adequately established the factual basis for the award of moral damages when she
testified that she suffered mental anguish and social humiliation as a result of the failure of the bank to release the subject
properties or its failure to return the check despite its refusal to make a definite commitment to comply with the clearlystated object of the payment.
Respondent Rodolfo Maalac however is not similarly entitled to moral damages. The award of moral damages must
be anchored on a clear showing that he actually experienced mental anguish, besmirched reputation, sleepless nights,
wounded feelings or similar injury. There was no better witness to this experience than respondent himself. Since
respondent Rodolfo Maalac failed to testify on the witness stand, the trial court did not have any factual basis to award
moral damages to him.[33] Indeed, respondent Rodolfo Maalac should have taken the witness stand and should have
testified on the mental anguish, serious anxiety, wounded feelings and other emotional and mental suffering he
purportedly suffered to sustain his claim for moral damages. Mere allegations do not suffice; they must be substantiated
by clear and convincing proof.
Nevertheless, we find the award of P200,000.00 excessive and unconscionable. As we said, moral damages are not
intended to enrich the complainant at the expense of the defendant. Rather, these are awarded only to enable the injured
party to obtain means, diversions or amusements that will serve to alleviate the moral suffering that resulted by reason
of the defendants culpable action. The purpose of such damages is essentially indemnity or reparation, not punishment or
correction. In other words, the award thereof is aimed at a restoration within the limits of the possible, of the
spiritual status quo ante; therefore, it must always reasonably approximate the extent of injury and be proportional to the
wrong committed.[34] The award of P50,000.00 as moral damages is reasonable under the circumstances. [35]
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated October 12, 2000 in CA-G.R. CV
No. 50292 is REVERSED and SET ASIDE. The petitioner Philippine Savings Bank is DIRECTED to indemnify respondent
Rosita P. Maalac in the amount of P50,000.00 as moral damages. The Regional Trial Court of the City of Pasig, Branch 161
is ORDERED to issue a writ of possession in favor of Philippine Savings Bank. No costs.

SO ORDERED.

SECOND DIVISION

SPOUSES ROQUE YU, SR. andASUNCION YU

and LEYTELUMBER YARD & HARDWARE CO., INC.,
Petitioners,

G.R. Nos. 138701-02

Present:

PUNO, J., Chairperson,

- versus -

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and

BASILIO
G.
MAGNO
CONSTRUCTION
DEVELOPMENT ENTERPRISES, INC. and
ESTATE OF BASILIO G. MAGNO,
Respondents.

AND
THE

GARCIA, JJ.

Promulgated:

October 17, 2006

x------------------------------------------------------------------------------------x

DECISION

GARCIA, J.:

In this petition for review under Rule 45 of the Rules of Court, the spouses Roque Yu, Sr. and Asuncion Yu, with
co-petitioner Leyte Lumber Yard & Hardware, Co., Inc., (Leyte Lumber) assail and seek to set aside the consolidated
Decision[1] dated October 20, 1998 of the Court of Appeals (CA) in CA-G.R. CV Nos. 43714 and 43715, as reiterated in its
Resolution[2] of May 11, 1999, denying the petitioners motion for reconsideration. CA-G.R. CV No. 43714 is an appeal by
the spouses Roque Yu, Sr. and Asuncion Yu from the decision of the Regional Trial Court (RTC) of Tacloban City in its Civil
Case No. 5823, while CA-G.R. CV No. 43715 is an appeal taken by Leyte Lumber Yard from the decision of the same RTC in
its Civil Case No. 5822.

The assailed CA decision holds petitioner Leyte Lumber liable to the herein respondents in Civil Case No. 5822
for the amount of P631,235.61 with interest, and, on the same breath, holds the respondents liable to petitioner spouses
Roque Yu, Sr. and Asuncion Yu in Civil Case No. 5823 in the amount of P625,000.00 with interest, andP50,000.00 as and
by way of attorney's fees.

The facts:

The spouses Roque Yu, Sr. and Asuncion Yu are the controlling stockholders of Leyte Lumber, a business
enterprise engaged in the sale of lumber, building and electrical supplies and other construction materials. During his
lifetime, Engr. Basilio G. Magno (Magno) entered into a verbal agreement with Leyte Lumber through Roque Yu, Sr.,
whereby the latter agreed to supply Magno with building materials he may need in his construction business. The success
of Magno's business gave birth to the Basilio G. Magno Construction and Development Enterprises, Inc. (BG Magno).

Owing to this fruitful relationship, the two (Roque Yu, Sr. and Magno) entered into a joint venture, the Great
Pacific Construction Company (GREPAC), with Yu as President and Magno as Vice President.[3]

Magno, for what he obtained from Leyte Lumber, paid either in cash or by check. The relationship between Yu
and Magno began in 1975 and continued until Magno's death on August 21, 1978.[4]
By the time the business relationship between Yu and Magno was coming to an end, the respondents allege that
the parties have dealt with each other to the amount of at least P7,068,000.00.[5]

On January 30, 1979, in the RTC of Tacloban City, the petitioners instituted two (2) separate complaints for
sums of money with damages and preliminary attachment against the respondents. One was Civil Case No. 5822,[6] raffled
to Branch 8 of the court, instituted by Leyte Lumber against BG Magno and the Estate of Basilio Magno, to collect on the
principal amount of P1,270,134.87 for construction materials claimed to have been obtained on credit by BG Magno, and

the other was Civil Case No. 5823,[7]raffled to Branch 6, filed by the Yu spouses against BG Magno and the Estate of Basilio
Magno, to collect upon loans and advances (P3,575,000.00) allegedly made by the spouses to BG Magno.

As defendants in Civil Case No. 5823, the respondents moved to dismiss the case on the ground that the claims
must be pursued against the estate of the deceased Magno. The motion was denied, and eventually the estate of Magno
was dropped as party-defendant.

On the other hand, in Civil Case No. 5822, during the pretrial conference, the petitioners, as plaintiffs in that case,
proposed that a commissioner be appointed. The respondents as defendants in the case interposed no objections, and so
Atty. Romulo Tiu was appointed and tasked with the duty to examine and make a detailed report on the documents and
books of account of the parties to determine the nature and extent of their respective claims and liabilities.[8] Atty. Tiu
was later replaced by Mr. Uldarico Quintana, and finally by Mr. Ernesto C. Silvano, who is a lawyer and an accountant[9] by
profession.

The commissioner prepared a summary of account receivables [10] and submitted three reports: the first,
dated November 1, 1980; the second, dated February 19, 1981; and the third, dated March 29, 1982.[11] To these reports
the parties submitted their respective comments and objections.

During trial, the petitioners presented in Civil Case No. 5822 before Branch 8 three witnesses, namely: petitioner
Roque Yu, Sr., himself, Atty. Ernesto C. Silvano (the commissioner) and Yao Ping Chan, cashier of Consolidated Bank and
Trust Co., who testified merely on the circumstances surrounding specific checks that were issued during the course of
the transactions between the parties. For their part, the respondents offered two witnesses: the widow Perpetua Magno
and commissioner Silvano.

As regards Civil Case No. 5823 before Branch 6, the petitioners presented three witnesses: Roque Yu, Sr., Roque
Yu, Jr., and senior bookkeeper Eduardo de Veyra of the Tacloban Branch of the United Coconut Planters Bank. For their
part, the respondents did not present a single witness, but adopted their evidence presented in Civil Case No. 5822. They
did not, however, make a formal offer of their evidence in both cases.

On June 17, 1993, Branch 8 of the court rendered its decision[12] in Civil Case No. 5822, the decretal portion of
which reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant and against the
plaintiff:
1.
2.
3.

Dismissing the complaint;

Declaring that defendant had made overpayment to the plaintiff in
the sum of P620,239.61;
Ordering the plaintiff to return to the defendant the amount of
P620,239.61 with interest of 12% per annum from the date hereof
until fully paid;

4.

Ordering the plaintiff to pay defendant the sum of P200,000.00 for

exemplary damages;

5.

Ordering the plaintiff to pay defendant the sum of P50,000.00 for

attorney's fees and litigation expenses; and

6.

Ordering plaintiff to pay the costs of this suit.

SO ORDERED.

Also, on the same date - June 17, 1993 - Branch 6 rendered its decision[13] in Civil Case No. 5823, the fallo of
which reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant and against the
plaintiffs:
1.

Dismissing the plaintiffs' complaint;

2.

Declaring that defendant had made overpayments to the plaintiffs

in the sum of P1,602,625.52;

3.

Ordering plaintiffs to return to defendant the sum of P1,602,625.52

with 12% interest per annum from the date hereof until fully paid;

4.

The Writ of Attachment is hereby ordered immediately dissolved;

5.

Ordering the plaintiffs to pay defendant the sum of P200,000.00

moral and exemplary damages;

6.

Ordering the plaintiffs to pay defendant P100,000.00 attorney's

fees and litigation expenses;

7.

Ordering plaintiffs to pay the costs of this suit.

SO ORDERED.

The two separate decisions of even date were penned by Judge Getulio M. Francisco, the presiding judge of
Branch 6 to which only Civil Case No. 5823 was raffled. In other words, Judge Francisco of Branch 6 rendered the decision
in Civil Case No. 5822 earlier raffled to and heard by Branch 8 of which he was not the presiding judge. The parties did not
move for a reconsideration of the two decisions nor did they call the attention of Judge Francisco on the absence of an
order for consolidation of the two cases. Instead, they directly interposed their respective appeals to the CA.

In the CA, the two cases on appeal, docketed as CA-G.R. CV Nos. 43714 (for Civil Case No. 5823) and 43715[14] (for
Civil Case No. 5822), were consolidated.

On October 20, 1998, the CA rendered its questioned consolidated decision[15] dispositively reading, thus:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

In Civil Case No. 5822, the appealed decision is MODIFIED by declaring that defendant B.G.
Magno Construction and Development Enterprises, Inc., made an overpayment in the amount of
P631,235.61, instead of P620,239.61 as found by the court a quo, and ordering plaintiff to return said
amount to defendant, with interest of 12% per annum from promulgation hereof until fully paid, and
by DELETING the award of exemplary damages in the sum of P200,000.00 in favor of defendant. Thus
modified, the judgment below is AFFIRMED in all other respects.
In Civil Case No. 5823, the appealed decision is REVERSED and SET ASIDE. Accordingly,
defendant B.G. Magno Construction and Development Enterprises, Inc. is ordered to pay plaintiffs the
sum of P625,000.00, with 12% interest per annum from promulgation hereof until fully paid, and the
further sum of P50,000.00 by way of attorney's fees, plus costs of suit.
SO ORDERED.

With their motion for reconsideration having been denied by the CA through its Resolution of May 11, 1999, the
petitioners are now with this Court via the present recourse, submitting the following arguments for our consideration:

A. Re: C.A.-G.R. CV No. 43714: (Civil Case No. 5823)

1. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN REFUSING TO EXCLUDE
EVIDENCE OFFERED TO RTC BRANCH 8, BUT NOT TO BRANCH 6, OF WHICH
EVIDENCE RTC BRANCH 6 IMPROPERLY TOOK JUDICIAL NOTICE.
2. ASSUMING FOR THE SAKE OF ARGUMENT THAT RTC BRANCH 6 COULD TAKE
JUDICIAL NOTICE OF EVIDENCE NOT OFFERED TO IT, NONETHELESS, SUCH

EVIDENCE SHOW THAT RESPONDENT B.G. MAGNO IS LIABLE TO PETITIONERS

FOR P3,675,000.00.
B. Re: C.A.-G.R. CV No. 43715: (Civil Case No. 5822)

1. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN AFFIRMING THE

DECISION OF RTC BRANCH 6 BECAUSE THE LATTER HAD NO JURISDICTION
OVER CIVIL CASE NO. 5822 WHICH WAS TRIED IN ITS ENTIRETY BY RTC
BRANCH 8.
2. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN AFFIRMING THE
DECISION OF RTC BRANCH 6 BECAUSE BASED ON EVIDENCE PRESENTED TO
RTC BRANCH 8, NO COURT COULD HAVE DECIDED IN FAVOR OF
RESPONDENTS.

In sum, the petitioners question, first, the propriety of the presiding judge of Branch 6 rendering a decision in a
case filed and heard in Branch 8. They claim that Branch 6 had no jurisdiction to decide Civil Case No. 5822 pending in
Branch 8 in the absence of a motion or order of consolidation of the two cases; second, Branch 6 erred in considering the
evidence presented in Branch 8; and third, the preponderance of evidence in both cases warrants a resolution of the cases
in their favor.

The respondents, on the other hand, hold steadfast to the CAs finding of overpayment on their part, and that
Branch 6 had jurisdiction to render a decision in Civil Case No. 5822 of Branch 8 since the circumstance that the judge
who penned the decision in both cases did not hear the other case in its entirety is not a compelling reason to jettison his
findings and conclusions.[16]

On the issue of Branch 6 taking judicial notice of the evidence presented in Branch 8, the respondents argue that
there was a previous agreement of the parties with respect to the same.

On the question of the propriety of Judge Francisco of Branch 6 formulating the decision in Civil Case No. 5822
which was pending and tried in Branch 8, we declare that there was nothing irregular in the procedure taken. The records
show that there appears to have been a previous agreement to either transfer or consolidate the two cases for decision by
the presiding judge of Branch 6. As found by the CA:

although Civil Case No. 5822 was raffled to and tried in Branch 8, the court a quo issued
joint orders dated February 16, 1993 and September 10, 1993 in Civil Case Nos. 5822 and

5823Recognizing the apparent transfer of Civil Case No. 5822 to the court a quo, appellants
[petitioners] counsel filed his formal appearance dated October 20, 1993

with Branch 6There is therefore no basis to appellants contention that the court a quo is devoid of
authority to decide Civil Case No. 5822.[17]

Indeed, when the respondents filed a Motion to Lift, Dissolve and Quash the Writs of Attachment with Branch 6
on January 20, 1993, the caption thereof indicated the docket numbers of both cases.[18] Likewise, on October 29, 1993,
when the petitioners' new counsel entered his Formal Appearance, in the caption thereof was also written the docket
numbers of both cases.[19] Petitioners' previous counsel of longstanding (whose representation dates back to the filing of
the two complaints in 1979) filed his Motion to Withdraw as Counsel on October 30, 1993, and the caption thereof
similarly indicated the docket numbers of both cases.[20] Subsequent orders of the court which emanated from Branch 6
also bear, in the caption thereof, the titles and docket numbers of both cases.[21] In other words, as early as six months
prior to the promulgation of Judge Franciscos decisions in the two (2) cases, there appears to have been a transfer or
consolidation of said cases in Branch 6 and the parties knew of it, albeit the actual date when the two cases were
consolidated or transferred does not appear on record. Nonetheless, the fact remains that no opposition or objection in
any manner was registered by either of the parties to the same, thereby evincing their consent thereto. It is, therefore,
already too late in the day for the petitioners to question the competence of Judge Francisco to render the separate
decisions in the two cases. To reecho what this Court has said before:

Petitioners may not now question the transfer or consolidation of the two cases on appeal, for
they knew of it and did not question the same in the court below. They may not now make a total turnaround and adopt a contrary stance; more so when the judgment issued is adverse to their cause.[22]
The next logical questions are: Is the consolidation of the two cases (Civil Case Nos. 5822 and
5823) a procedural step which the court a quo could have properly taken? Is it a remedy available within the context of
the surrounding circumstances?

We answer both questions in the affirmative. The two cases were filed just a few months apart; [23] they involve
simple cases of collection of sums of money between identical parties and no other; the respondents (as defendants
therein) claim, in both cases, essentially the same defense, which is overpayment; they cover the same period of
transacting continuous business that spans four years; they relate to simple issues of fact that are intimately related to
each other; they entailed the presentation of practically identical evidence and witnesses; in fact, a broad part of the
evidence and testimonies in one case was totally adopted or reproduced in the other by either or both parties. And the
trial court, being multi-sala courts, its Branches 6 and 8 possessed jurisdiction to try either or both cases on their own.

A court may order several actions pending before it to be tried together where they arise
from the same act, event or transaction, involve the same or like issues, and depend largely or
substantially on the same evidence, provided that the court has jurisdiction over the case to be
consolidated and that a joint trial will not give one party an undue advantage or prejudice the
substantial rights of any of the parties (citing 1 CJS, 1347). Consolidation of actions is expressly
authorized under Section 1, Rule 31 of the Rules of Court:
Section 1.
Consolidation. When actions involving a common question of law
or fact are pending before the court, it may order a joint hearing or trial of any or
all the matters in issue in the actions; it may order all the actions consolidated; and
it may make such orders concerning proceedings therein as may tend to avoid
unnecessary costs or delay.

The obvious purpose of the above rule is to avoid multiplicity of suits, to guard against
oppression and abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial
court; in short the attainment of justice with the least expense and vexation to the parties litigants
(citing 1 CJS 1342-1343).
Consolidation of actions is addressed to the sound discretion of the court, and its action in
consolidating will not be disturbed in the absence of manifest abuse of discretion. In the instant case,
respondent judge did not abuse his discretion in ordering the joint trial of the two cases. There is no
showing that such joint trial would prejudice any substantial right of petitioner. Neither does the latter
question the court's jurisdiction to try and decide the two cases.[24]

Likewise, it became apparent that, after the commissioner filed his reports in court and the parties their
comments thereto, but before trial could commence, the claims and defenses of the parties in Civil Case No. 5823 are
covered by and may be threshed out by a consideration of the evidence presented in Civil Case No. 5822 as well, which
consisted mainly of the reports of the commissioner. Based on the commissioners reports in the case pending in Branch 8
(Civil Case No. 5822), the petitioners claims, including those in Branch 6, appear to have been paid; indeed, this is in
essence the defense of the respondents as set forth in their Answers to the two complaints. Yet, despite all these, neither
of the lawyers for the parties sought a consolidation of the two cases, which would otherwise have been mandatory.

When two or more cases involve the same parties and affect closely related subject matters,
they must be consolidated and jointly tried, in order to serve the best interests of the parties and to
settle expeditiously the issues involved. Consolidation, when appropriate, also contributes to the
declogging of court dockets

Inasmuch as the binding force of the Dealership Agreement was put in question, it would be
more practical and convenient to submit to the Iloilo court all the incidents and their consequences.
The issues in both civil cases pertain to the respective obligations of the same parties under the
Dealership Agreement. Thus, every transaction as well as liability arising from it must be resolved in
the judicial forum where it is put in issue. The consolidation of the two cases then becomes
imperative to a complete, comprehensive and consistent determination of all these related issues.

Two cases involving the same parties and affecting closely related subject matters must be
ordered consolidated and jointly tried in court, where the earlier case was filed. The consolidation
of cases is proper when they involve the resolution of common questions of law or facts.
Indeed, upon the consolidation of the cases, the interests of both parties in the two civil cases
will best be served and the issues involved therein expeditiously settled. After all, there is no question
on the propriety of the venue in the Iloilo case.[25] (Emphasis supplied)

Consolidation of cases, when proper, results in the simplification of proceedings, which saves time, the
resources of the parties and the courts, and a possible major abbreviation of trial. It is a desirable end to be achieved,
within the context of the present state of affairs where court dockets are full and individual and state finances are limited.
It contributes to the swift dispensation of justice, and is in accord with the aim of affording the parties a just, speedy, and
inexpensive determination of their cases before the courts. Another compelling argument that weighs heavily in favor of
consolidation is the avoidance of the possibility of conflicting decisions being rendered by the courts in two or more cases
which would otherwise require a single judgment.[26]

In fine, we declare the consolidation of the two cases to have been made with regularity. To quote what the
Court has said in an earlier case:

The ordered consolidation of cases, to our mind, crystallizes into reality the thinking of our
predecessors that:

". . . The whole purpose and object of procedure is to make the powers of
the court fully and completely available for justice. The most perfect procedure
that can be devised is that which gives opportunity for the most complete and
perfect exercise of the powers of the court within the limitations set by natural
justice. It is that one which, in other words, gives the most perfect opportunity for
the powers of the court to transmute themselves into concrete acts of justice
between the parties before it. The purpose of such a procedure is not to restrict
the jurisdiction of the court over the subject matter, but to give it effective facility
in righteous action. It may be said in passing that the most salient objection which
can be urged against procedure today is that it so restricts the exercise of the
court's powers by technicalities that part of its authority effective for justice
between the parties is many times an inconsiderable portion of the whole. The
purpose of procedure is not to thwart justice. Its proper aim is to facilitate the
application of justice to the rival claims of contending parties. It was created not to
hinder and delay but to facilitate and promote the administration of justice. It does
not constitute the thing itself which courts are always striving to secure to
litigants. It is designed as the means best adapted to obtain that thing. In other
words, it is a means to an end. It is the means by which the powers of the court are
made effective in just judgments. When it loses the character of the one and takes
on that of the other the administration of justice becomes incomplete and
unsatisfactory and lays itself open to grave criticism." [27]

Having given their assent to the consolidation of Civil Case Nos. 5822 and 5823, petitioners other assignment of
errors must fail. The evidence in each case effectively became the evidence for both, and there ceased to exist any need for
the deciding judge to take judicial notice of the evidence presented in each case.

On the issue relative to the pecuniary liabilities of the parties in respect of their corresponding claims and
defenses, suffice it to state that this Court is not a trier of facts. The findings of fact of the CA, supported as they are by the
evidence on record, bind this Court.

Prefatorily, we restate the time-honored principle that in petitions for review under Rule 45
of the Rules of Court, only questions of law may be raised. It is not our function to analyze or weigh all
over again evidence already considered in the proceedings below, our jurisdiction being limited to
reviewing only errors of law that may have been committed by the lower court. The resolution of
factual issues is the function of lower courts, whose findings on these matters are received with
respect. A question of law which we may pass upon must not involve an examination of the probative
value of the evidence presented by the litigants.[28]

We disagree, however, with the CA in holding the petitioners liable to the respondents in the amount
of P142,817.27 representing the unpaid account of GREPAC for filling materials delivered to it by BG Magno. As it is,
GREPAC possesses a distinct corporate personality separate from Leyte Lumber whom BG Magno sought to be liable
therefor. GREPACs own liabilities may not be made chargeable against petitioner Leyte Lumber as the CA ruled after
piercing the corporate veil of GREPAC. To our mind, the situation does not call for a piercing of GREPACs corporate veil
since there is no clear and convincing evidence showing fraud and illegality in the formation and operation of
GREPAC. Quite the contrary, what has been proved suggests that GREPAC was a product of the close business and
personal ties that bound Roque Yu, Sr., and Magno during better times. It was a bona fide joint venture between the two.

We cannot help but discern how the respondents were put to expense by the petitioners mishandling of the
cases in the trial courts. First of all is the petitioners filing of two (2) separate actions of simple collection cases which
were ultimately found to revolve essentially around the same factual milieu. And, as soon as it became apparent that the
two cases were inexorably linked, it became the duty of the petitioners to seek a consolidation of the cases a quo. Yet they
did not; instead, they took advantage of every perceived technicality, all the way to this Court, in order to defeat the
respondents case. They vigorously opposed the adoption by the respondents of the latters evidence in the other branch
of the court, thereby advancing misleading arguments for consolidation that had already occurred with their visible
consent. They attribute error to the trial courts taking judicial notice of the respondents evidence in the other court,

when it no longer was a proper argument in view of the resultant consolidation. We do not approve of the practice of
counsel

employing

subtlety,

advancing

gratuitous

arguments that tend only to muddle the issues, and seizing upon every
opportunity to win the case for his client, when in the first
place the confusion in the proceedings was precipitated by

his

failure

to act accordingly, as counsel for the plaintiffs, in seeking the proper consolidation of the two cases. The result is a
simple collection case that has remained pending for twenty-seven years now.

Likewise, what the petitioners did in filing the two cases in different branches of the court may be held to be
tantamount to forum shopping which not only put the respondents to additional unnecessary expense, but wasted the
precious time of the courts as well.

Forum-shopping is a deplorable practice of litigants in resorting to two different fora for the
purpose of obtaining the same relief, to increase his or her chances of obtaining a favorable judgment.
What is pivotal to consider in determining whether forum shopping exists or not is the vexation caused
to courts and the parties-litigants by a person who asks appellate courts and/or administrative entities
to rule on the same related causes and/or to grant the same or substantially the same relief, in the
process creating the possibility of conflicting decisions by the different courts or fora upon the same
issues.[29]

Finally, we admonish RTC Branches 6 and 8 for the manner in which the case before each sala was handled and
conducted. We note the lack of an order of consolidation in the records of the cases. As to Judge Franciscos two separate
decisions, we do not perceive any advantage or benefit derived from promulgating two separate decisions on the same
day in the two cases that have already been consolidated into one. Although we recognize no ill intent or attribute no
deliberate irregularity to the same, such demeanor can only breed suspicion and promote distrust for our judicial
institutions. A judge should avoid every situation where the propriety of his conduct would be placed in question. His
official acts must at all times be above reproach,[30] and they must be consistent with the proceedings taken in his court.

WHEREFORE,

judgment

is

hereby

rendered MODIFYING the

assailed

CA

decision

by SETTING

ASIDE and DELETING the award of the respondents counterclaim in the amount of P142,817.27 in Civil Case No.
5822; REITERATING the P50,000.00 award of attorneys fees and litigation expenses in favor of the respondents in Civil
Case No. 5822; and DELETING the award of attorneys fees to the petitioners in Civil Case No. 5823. In all other respects,
the assailed decision is AFFIRMED.

Costs against the petitioners.

SO ORDERED.

HEIRS OF MARGARITO PABAUS, namely,

FELICIANA P. MASACOTE, MERLINDA P.
CAILING, MAGUINDA P. ARCLETA, ADELAIDA
PABAUS, RAUL MORGADO AND LEOPOLDO
MORGADO,
Petitioners,
- versus -

G.R. No. 164356

Present:
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

HEIRS OF AMANDA YUTIAMCO, namely, JOSEFINA

Promulgated:
TAN, AND MOISES, VIRGINIA, ROGELIO, ERLINDA,
ANA AND ERNESTO, all surnamed YUTIAMCO,
July 27, 2011
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

VILLARAMA, JR., J.:

By way of petition[1] for review on certiorari, petitioners Heirs of Margarito Pabaus challenge the June 10, 2004
Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 65854. The CA affirmed the October 8, 1999 Judgment[3] of the
Regional Trial Court (RTC) of Butuan City, Branch 1 in Civil Case No. 4489 declaring void petitioners title and ordering
them and all those claiming any right under them to vacate the land covered by said title and deliver possession thereof to
the respondents.

Subject of this controversy are three adjoining parcels of land located in Barangay Cabayawa, Municipality of Tubay,
Agusan Del Norte. Lot 1, Plan Psu-213148 with an area of 58,292 square meters, and Lot 2, Plan Psu-213148, consisting
of 1,641 square meters, are registered in the name of Amanda L. Yutiamco under Original Certificate of Title (OCT) No. O104[4] and Transfer Certificate of Title (TCT) No. T-1428,[5] respectively. Lot 2994, Pls-736, with an area of 35,077 square
meters, is owned by Margarito Pabaus and covered by OCT No. P-8649.[6]

OCT No. O-104 was issued pursuant to Judicial Decree No. R-130700 dated July 9, 1970 which covered Lots 1 and 2.
A separate title, TCT No. T-1428, was subsequently issued to Amanda Yutiamco for Lot 2, thus partially canceling OCT No.

O-104. Meanwhile, OCT No. P-8649 was issued to Margarito Pabaus on March 12, 1974 pursuant to Free Patent No. (X2)102.

On December 26, 1996, respondents Josefina Tan, and Moises, Virginia, Rogelio, Erlinda, Ana and Ernesto, all
surnamed Yutiamco, representing themselves as the heirs of Amanda L. Yutiamco, filed a Complaint [7] for Cancellation of
OCT No. P-8649, Recovery of Possession and Damages against the heirs of Margarito Pabaus, namely,
petitioners Feliciana P. Masacote, Merlinda P. Cailing, Maguinda P. Arcleta, Adelaida Pabaus, Raul Morgado and Leopoldo
Morgado. The case was docketed as Civil Case No. 4489 in the RTC of Butuan City, Branch 1.

Respondents alleged that petitioners illegally entered upon their lands, harvested coconuts therein and built a house
on the premises, thus encroaching a substantial portion of respondents property. Despite repeated demands and
objection by Moises Yutiamco, petitioners continued to occupy the encroached portion and harvest the coconuts;
petitioners even filed a criminal complaint against the respondents before the Office of the Provincial
Prosecutor. Respondents averred that OCT No P-8649 issued to Margarito Pabaus is invalid as it substantially includes a
land already covered by Decree No. N-130700 and OCT No. O-104 issued on July 9, 1970 in the name of Amanda
Yutiamco. When Moises Yutiamco caused a resurvey of the land, the relocation plan confirmed that the free patent title of
Margarito Pabaus overlapped substantially the lot covered by OCT No. O-104.

In their Answer with Counterclaim,[8] petitioners admitted having gathered coconuts and cut trees on the contested
properties, but asserted that they did so in the exercise of their rights of dominion as holders of OCT No. P-8649. They
also contended that it was respondents who unlawfully entered their property and harvested coconuts therein. Citing a
sketch plan prepared by Engr. Rosalinda V. De Casa, petitioners claimed it was the respondents who encroached Lot 1708,
Cad-905 which is within and part of OCT No. P-8649. It was pointed out that with the claim of respondents of an alleged
encroachment, respondents land area would have increased by 5,517.50 square meters (or a total of 65,447.5) while that
of petitioners would be decreased to only 29,546 square meters. Petitioners likewise averred that the complaint states no
cause of action since the case was not referred for barangay conciliation and respondents cause of action was, in any
event, already barred by prescription, if not laches.

In the pre-trial conference held on March 12, 1997, the RTC issued an Order [9] which directed the conduct of a
relocation survey to determine if the land covered by petitioners title overlaps those in defendants titles. The three
commissioners who conducted the said survey were Engr. Romulo Estaca, a private surveyor and the court-appointed
commissioner, Antonio Libarios, Jr., the representative of respondents, and Engr. Regino Lomarda, Jr., petitioners
representative.[10] It was agreed that the relocation survey shall be done by having the commissioners examine the titles
in question and then survey the land to determine if there was indeed an overlapping of titles and who has better right to
the contested lands.[11]

During the same pre-trial conference, petitioners manifested their intention to file an amended answer. The RTC
gave them five days within which to seek leave of court to file the amended answer but they failed to comply. Thus, the
court considered petitioners to have waived the filing of said pleading.

At the continuation of the pre-trial conference on June 23, 1997, the trial court informed the parties of the following
findings in the Relocation Survey Report[12] dated May 27, 1997:
xxxx
That, Lot 2, Psu-213148 covered by TCT#T-1428 issued in favor of Amanda L. [Yutiamco] is
inside the lot covered by OCT#[P]-8649, issued in favor of Margarito Pabaus;
That, Portion of Lot 1, Psu-213148 covered by OCT#O-104, issued in favor of Amanda L.
[Yutiamco] containing an area of 15,675 Sq. M. is inside the lot covered by OCT#P-8649, issued in favor
of Margarito Pabaus;
That, there is actually an overlapping in the issuance of title[s] on the above-mentioned two
(2) parcels of land, please refer to accompanying relocation plan and can be identified through color
legend;
That, the Technical Description of Lot 1, Psu-213148 of OCT#O-104 has been properly
verified and checked against approved plan of Psu-213148, approved in the name of Amanda L.
[Yutiamco];
Finally, that during the relocation survey nobody objected and oppose[d] the findings
conducted by the undersigned.
x x x x[13]

The Report was accompanied by a Relocation Plan[14] which was certified by Engr. Estaca as accurately indicating
the boundaries of the subject properties. Engr. Libarios, Jr. and Engr. Lomarda, Jr. also signed the Relocation Plan,
expressing their conformity thereto.

In the pre-trial conference held on July 17, 1997, petitioners counsel sought leave of court to file an amended
answer. In their Amended Answer with Counterclaim,[15]petitioners reiterated that in Engr. De Casas sketch plan which
was plotted in accordance with the description in the cadastral survey, it was respondents who encroached and claimed
Lot 1708, Cad-905 within and part of OCT P-8649. They further alleged
xxxx
10. That plaintiffs[] title to the property in [question], known as O.C.T. No. 104 and TCT No.
1428 both registered in the name of Amanda Yutiamco were both secured thru fraud, if not the said
properties are situated away, for a distance as adjoining of defendants property, under the following
circumstances:
10.a. The subject property was surveyed by a private surveyor Antonio A.
Libarios, Jr. on November 3 and 5, 1960, nonetheless, his license as Geodetic
Engineer was issued only on November 11, [1965];

10.b. Base[d] on this fact, the survey plan or relocation survey was
approved by the Director of Land[s], Nicanor G. Jorge on June 9, 1965;
10.c. Perspicacious examination of the technical description of plaintiffs[]
title under OCT No. 104 and TCT No. 1428, the BLLM is marked as No. 4, which the
tie line of PSU No. 213148, as compared [to] defendants[] title under OCT No. P8649, the BLLM is marked as No. 1, which the tie line of PLS 736;
11. Actually, based on the foregoing observation, the properties of plaintiffs are away
situated with the property of defendants; should plaintiffs insisted (sic) based on the relocation survey
conducted by the commissioner appointed by this Honorable Court, which defendants believed that
there was a maneuver to hoax and hoodwink themselves, into believing that plaintiffs properties are
situated in the heart of defendants property, then their titles, covering their properties were secured
thru fraud, which annulment of the same is proper and within the bounds of the law.
x x x x[16]

At the trial, plaintiffs presented as witnesses Moises Yutiamco (adopted son of Amanda Yutiamco), Figuracion
Regala, Sr. (former barangay captain of Tubay), Antonio Payapaya (tenant of Moises Yutiamco) and court-appointed
commissioner Engr. Estaca, while the defendants presented Raul P. Morgado (one of the heirs of Margarito Pabaus),
Francisco Baylen (retired Land Management Officer/Deputy Land Inspector of the Bureau of Lands, Butuan City), Engr.
Rosalinda V. De Casa (Geodetic Engineer I, DENR) and Ambrocio P. Alba (retired Land Management Officer-Chief of Lands
Management Services, CENRO-Cabadbaran, Agusan del Norte).

On October 8, 1999, the RTC rendered judgment in favor of the respondents and against the petitioners. Said court
gave credence to the finding in the Relocation Survey Report that petitioners lot overlap respondents lands. It held that
since the land in dispute was already under the private ownership of the respondents and no longer part of the public
domain, the same could not have been the subject of a free patent. As to the presumption of regularity in the performance
of official duty invoked by the petitioners as far as the issuance of the free patent and title, the trial court pointed out that
this cannot be appreciated in view of the testimony of Engr. De Casa that in conducting the cadastral survey, she was not
able to secure a copy of the title of the landholdings of Amanda Yutiamco from the Register of Deeds, which is a vital
document in the scheme of operations. The trial court thus applied the rule that in case of two certificates of title issued to
different persons over the same land, the earlier in date must prevail. Hence, respondents OCT No. O-104 is superior to
petitioners OCT No. P-8649 which is a total nullity.

The fallo of the RTC decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and
against the defendants, as follows:
1.

Declaring as null and void ab initio [Original] Certificate of Title No. [P]-8649 and ordering
defendants and all those claiming any right under them to vacate the land covered by said title and
deliver possession thereof to the plaintiffs and/or otherwise refrain and desist perpetually from
exercising any act of dispossession and encroachment over the subject premises;

2.

Declaring the plaintiffs as the true and legal owner of the property subject of this case;

3.

Ordering defendants to render an accounting to the plaintiffs with respect to the income of the
coconuts in the area in conflict starting from December 26, 1996 up to the timereconveyance as
herein directed is made, and to deliver or pay to the plaintiffs the income with legal interest
thereon from the date of filing of the complaint in this case[,] which is December 26, 1996, until
the same is paid or delivered; and

4.

Ordering defendants to pay the plaintiffs, jointly and severally, the amount of P13,175.00 by way
of actual damages, P50,000.00 by way of moral damages, the sum of P30,000.00 by way of
attorney's fees and the cost of litigation in the amount of P720.00.

SO ORDERED.[17]

On appeal, the CA affirmed the RTC ruling and emphasized that petitioners are bound by the findings contained
in the Relocation Survey Report and the Relocation Plan because not only did they agree to the appointment of the three
commissioners but the commissioner representing them also manifested his conformity to the findings. It noted that
neither party posed any objection while the survey was ongoing and that petitioners disputed the findings only after it
turned out adverse to them. Since the settled rule is that a free patent issued over a private land is null and void and
produces no legal effects whatsoever, and with the trial courts finding that the properties of respondents and petitioners
overlapped as to certain areas, the CA held that the trial court correctly declared as void the title of the
petitioners. Moreover, the CA cited previous rulings stating that a certificate of title over a land issued pursuant to the
Public Land Law, when in conflict with one obtained on the same date through judicial proceedings, must give way to the
latter, and that a certificate of title issued pursuant to a decree of registration and a certificate of title issued in
conformity therewith are on a higher level than a certificate of title based upon a patent issued by the Director of
Lands.[18]

Aggrieved, petitioners filed the instant petition arguing that -I

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE LOWER COURT
DECISION THAT PETITIONERS LOT NO. 2994, COVERED BY OCT NO. P-8649[,] REGISTERED IN THE
NAME OF MARGARITO PABAUS OVERLAPPED RESPONDENTS[] LOT 2 AND LOT 1, [RESPECTIVELY]
COVERED [BY] TCT NO. T-1428 AND OCT NO. O-104...BOTH REGISTERED IN THE NAME OF AMANDA
YUTIAMCO.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RELYING [ON] THE FINDING OF
PRIVATE SURVEYOR OR GEODETIC [ENGR.] ROMULO S. ESTACA APPOINTED BY THE COURT WHO
DISTURBED THE CADASTRAL SURVEY CONDUCTED BY THE GOVERNMENT THRU THE DEPARTMENT
OF ENVIRONMENT AND NATURAL RESOURCES.[19]

Petitioners contend that the original technical description of Lot 2994, as per the 1961 public land survey [20], clearly
showed that respondents property lies south of the land applied for by Margarito Pabaus. The matter of encroachment
was likewise refuted by Engr. De Casa who conducted the cadastral survey CAD 905 in Tubay and plotted the subject lots
on the cadastral map.[21] They likewise assailed the relocation survey undertaken solely by the court-appointed

commissioner, Engr. Estaca while the other two surveyors did not perform their respective tasks or confirm the ground
verification conducted by Engr. Estaca. With the admission by Engr. Estaca that there were five missing corners, there
was no precise and accurate ground verification made on the alleged overlapping. Petitioners cite the testimony of Engr.
De Casa which was based on the cadastral map she herself prepared showing the respective locations of the subject
lots. They assert that the three government witnesses testified that the property of Margarito Pabaus was surveyed based
on existing official records, and that the presumption of regularity in the performance of official duty should be upheld.

Respondents, for their part, assert that petitioners assignment of errors delve on factual matters which are not
proper subjects of an appeal before this Court. They echo the trial courts conclusion that petitioners title is void since it
covers private land.

As a general rule, in petitions for review, the jurisdiction of this Court in cases brought before it from the CA is
limited to reviewing questions of law which involves no examination of the probative value of the evidence presented by
the litigants or any of them. The Supreme Court is not a trier of facts; it is not its function to analyze or weigh evidence all
over again.[22] Accordingly, findings of fact of the appellate court affirming those of the trial court are generally conclusive
on this Court.

Nonetheless, jurisprudence has recognized certain exceptions to the general rule that findings of the fact by the
Court of Appeals are not reviewable by the Supreme Court. One such exception is when such findings are not sustained by
the evidence.[23] Another is when the judgment of the CA is based on misapprehension of facts or overlooked certain
relevant facts not disputed by the parties which, if properly considered, would justify a different conclusion.[24]

The case of overlapping of titles necessitates the assistance of experts in the field of geodetic engineering. The
very reason why commissioners were appointed by the trial court, upon agreement of the parties, was precisely to make
an evaluation and analysis of the titles in conflict with each other. Given their background, expertise and experience,
these commissioners are in a better position to determine which of the titles is valid. Thus, the trial court may rely on
their findings and conclusions.[25]

However, in overlapping of titles disputes, it has always been the practice for the court to appoint a surveyor
from the government land agencies the Land Registration Authority or the DENR to act as commissioner.[26] In this
case, the trial court appointed a private surveyor in the person of Engr. Estaca who actually conducted the relocation
survey while the two other surveyors chosen by the parties expressed their conformity with the finding of encroachment
or overlapping indicated in the Relocation Plan[27]submitted to the court by Engr. Estaca. Said plan showed that the area
in conflict is on the northeastern portion wherein petitioners OCT No. P-8649 overlapped with respondents title (OCT
No. O-104) by 15,675 square meters.

Were the respondents able to prove their claim of overlapping?

We rule in the negative.

Survey is the process by which a parcel of land is measured and its boundaries and contents ascertained; also a
map, plat or statement of the result of such survey, with the courses and distances and the quantity of the land. [28] A case
of overlapping of boundaries or encroachment depends on a reliable, if not accurate, verification survey.[29] To settle the
present dispute, the parties agreed to the conduct of a relocation survey. The Manual for Land Surveys in the Philippines
(MLSP)[30] provides for the following rules in conducting relocation surveys:
Section 593 - The relocation of corners or re-establishment of boundary lines shall be made
using the bearings, distances and areas approved by the Director of Lands or written in the lease
or Torrens title.
Section 594 - The data used in monumenting or relocating corners of approved surveys shall
be submitted to the Bureau of Lands for verification and approval. New corner marks set on the ground
shall be accurately described in the field notes and indicated on the original plans on file in the Bureau
of Lands. (Italics supplied.)

In his Report, Engr. Estaca stated that he was able to relocate some missing corners of the subject lots:
xxxx
By April 26, 1997, the whole survey team together with Mr. E. Concon and representatives
from the Plaintiffs and De[f]endants returned to the area in question to relocate missing corners of Lot
1, Psu-213148 of OCT#O-104; Lot 2, Psu-213148 of TCT#T-1428; and OCT#P-8649. We were able to
relocate the following corners of: Cors. 2 & 4 of Lot 1, Psu-213148 of OCT#O-104; cors. 7 & 8 of Lot 1,
Psu-213148 of OCT#[O]-104 which are identical to cors. 15 & 16 of OCT#P-8649, respectively. We laid
out missing cors. 3 & 2 of Lot 2, Psu-213148 of TCT#T-1428 and missing cors. 1 & 3 of Lot 1, Psu213148 of OCT#O-104. All missing corners which were relocated were not yet planted with cylindrical
concrete monuments pending court decision of the case.
x x x x[31]

On cross-examination, Engr. Estaca testified as follows:

xxxx
Q

In your report, you stated that there missing corners: 3 and 2 of Lot 2; and missing corners 1 and
3 of Lot 1. Which of these three documents, Exhibit S which is OCT No. O-104 or Exhibit T
which is TCT No. T-1428 or OCT No. P-8649 in which there are missing corners?

TCT No. T-1428 has 3 missing corners; and OCT No. O-104 has 2 missing corners.

When you say missing corners, what do you mean by that?

Well, based on the technical description, we were not able to locate the corners because it might
have been moved or lost.

And when you say corners, you are referring to cylindrical concrete monuments?

Yes, sir.

Do you agree with me Mr. Witness that in order to locate the missing corners to proceed with the
relocation survey, you have to make a point of reference?

Yes.

And that point of reference is found in the title itself?

Yes, sir.

Do you agree with me that the point of reference is BLLM?

No, that is a point of tie line. But the point of reference can be any of the corners within the
property. If you have say ten corners, you can base from the existing corners. In other words,
localize your location. Unless the whole property is lost, meaning all missing corners are not
reliable then you have to tie from known BLLM (Bureau of Lands Location Monument) That
is established by a geographic position.

Do you agree with me that in order to have an accurate relocation survey, to determine and to
locate the missing corners, you have to base the relocation survey on the tie line?

It depends. There are tie lines which are located 40 kilometers from that point. The big error
is there. So we will not adopt all monuments. Anyway, they interrelated to each other. You
can determine it by doing relocation survey. You can check it out by their positions. So the
allowable for that is only 30 centimeters.
x x x x

Finally, in your resurvey report which is Exhibit Q, you mentioned that there were missing
corners which were relocated and you said certain basis for the relocation if there are missing
corners and you said that the river is not a reliable point or basis. What did you base on your
relocation survey considering that there are missing corners?

Based on other existing monuments, sir.

What for example?

Based on my report, I stated from a known corners identified as cors. 10 and 9 of Lot 1, PSU
213148 of OCT #O-104 which are identical to corners 1 and 17 of OCT #P-8649.

Is this already covered in your report?

Yes, and it is found on par. 2 of my report.

x x x x[32]

The MLSP laid down specific rules regarding tie lines, point of reference and overlapping of adjoining titled
lands. In this case, records failed to disclose that the basis for relocating the missing corners was submitted to the Bureau
of Lands (now Land Management Bureau) for verification and approval as required by Section 594. This is crucial
considering that the court-appointed commissioner is a private surveyor and not a government surveyor from the LRA or
LMB-DENR. It bears stressing that in every land dispute, the aim of the courts is to protect the integrity of and maintain

inviolate the Torrens system of land registration, as well as to uphold the law; a resolution of the parties dispute is
merely a necessary consequence.[33]

On the part of petitioners, their only evidence to support their opposition to the claim of encroachment by the
respondents is the cadastral map which indicated the boundary of respondents property at the south of petitioners
lot. But as admitted by Engr. De Casa, during the cadastral survey they conducted from 1986 to 1996, they did not send a
written notice to the landowner Amanda Yutiamco and that she plotted the boundaries of her property based merely on a
tax declaration because the cadastral survey team failed to obtain copies of OCT No. O-104 and TCT No. T-1428 from the
Registry of Deeds.[34] The MLSP specifically required that relocation of boundary lines is to be made using the bearings,
distances and areas approved by the Director of Lands or indicated in the Torrens titles. Hence, said cadastral map is not
competent proof of the actual location and boundaries of respondents Lots 1 and 2, Psu-213148.

Indeed, we have ruled that if the land covered by free patent was a private land, the Director of Lands has no
jurisdiction over it. Such free patent and the subsequent certificate of title issued pursuant thereto are a nullity. [35] The
aggrieved party may initiate an action for cancellation of such title. In the recent case of De Guzman v. Agbagala,[36] the
Court reiterated:
The settled rule is that a free patent issued over a private land is null and void, and produces
no legal effects whatsoever. Private ownership of land - as when there is a prima facie proof of
ownership like a duly registered possessory information or a clear showing of open, continuous,
exclusive, and notorious possession, by present or previous occupants - is not affected by the issuance
of a free patent over the same land, because the Public Land [L]aw applies only to lands of the public
domain. The Director of Lands has no authority to grant free patent to lands that have ceased to be
public in character and have passed to private ownership. Consequently, a certificate of title issued
pursuant to a homestead patent partakes of the nature of a certificate issued in a judicial proceeding
only if the land covered by it is really a part of the disposable land of the public domain. [37]

Considering, however, that the claim of overlapping has not been clearly established, it is premature to declare the
free patent issued to Margarito Pabaus null and void. Instead, the Court deems it more appropriate to remand the case to
the trial court for the conduct of a verification/relocation survey under the direction and supervision of the LMB-DENR. In
the event that respondents claim of encroachment of 15,675 square meters is found to be correct, the corresponding
adjustment in the metes and bounds of petitioners property should be reflected in OCT No. P-8649 which title will then
have to be partially, not totally, voided and the corresponding amendment as to the precise area and technical description
of Lot 2994, PLS 736 be entered by the Registry of Deeds.

WHEREFORE, the Decision dated June 10, 2004 of the Court of Appeals in CA-G.R. CV No. 65854 and Judgment dated
October 8, 1999 of the Regional Trial Court of Butuan City, Branch 1 in Civil Case No. 4489 are SET ASIDE. The case
is REMANDED to the said RTC which is hereby directed to order the Land Management Bureau of the DENR to conduct
verification/relocation survey to determine overlapping of titles over Lots 1 and 2, Psu-213148 and Lot 2994, PLS 736

covered by OCT No. O-104, TCT No. T-1428 and OCT No. P-8649, respectively, all of the Registry of Deeds for the Province
of Agusan del Norte.
SO ORDERED.