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THIRD DIVISION

ROLANDO SASAN, SR., LEONILO DAYDAY, MODESTO


AGUIRRE, ALEJANDRO ARDIMER, ELEUTERIO SACIL,
WILFREDO JUEGOS, PETRONILO CARCEDO and CESAR
PACIENCIA,
Petitioners,
- versus NATIONAL LABOR RELATIONS COMMISSION 4TH
DIVISION, EQUITABLE-PCI BANK and HELPMATE, INC.,
Respondents.

O 23 July 2001, petitioners filed with the Arbitration Branch of


the NLRC in Cebu City separate complaints[14] against E-PCIBank and HI
for illegal dismissal, with claims for separation pay, service incentive leave
pay, allowances, damages, attorneys fees and costs. Their complaints
G.R. No. 176240
were docketed as NLRC RAB-VII Case No. 07-1381-2001 and raffled to
Labor Arbiter Jose G. Gutierrez (Labor Arbiter Gutierrez) for their proper
Present:
disposition. Subsequently, on 22 August 2001, the petitioners[15]
amended their complaints to include a claim for 13 th month-pay.
YNARES-SANTIAGO,
Chairperson,
Several conciliation hearings were scheduled by Labor Arbiter
AUSTRIA-MARTINEZ,
Gutierrez but the parties still failed to arrive at a mutually beneficial
AZCUNA, settlement; hence, Labor Arbiter Gutierrez ordered that they submit their
CHICO-NAZARIO,
and position papers.
respective
NACHURA,

In their position papers, petitioners claimed that they had


become regular employees of E-PCIBank with respect to the activities for
which they were employed, having continuously rendered janitorial and
Promulgated:
messengerial services to the bank for more than one year; that E-PCIBank
had direct control and supervision over the means and methods by which
they were to perform their jobs; and that their dismissal by HI was null and
October 17,void
2008because the latter had no power to do so since they had become
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
regular employees of E-PCIBank.
DECISION
CHICO-NAZARIO, J.:
Assailed in this Petition for Review under Rule 45 of the Rules of
Court are the Decision[1] dated 24 April 2006 of the Court of Appeals in
CA-G.R. SP No. 79912, which affirmed the Decision dated 22 January 2003
of the National Labor Relations Commission (NLRC) in NLRC Case No. V000241-2002 finding that Helpmate, Inc. (HI) is a legitimate independent
job contractor and that the petitioners were not illegally dismissed from
work; and the Resolution[2] dated 31 October 2006 of the same court
denying the Motion for Reconsideration filed by the petitioners.
Respondent Equitable-PCI Bank (E-PCIBank),[3] a banking entity
duly organized and existing under and by virtue of Philippine laws, entered
into a Contract for Services[4] with HI, a domestic corporation primarily
engaged in the business of providing janitorial and messengerial services.
Pursuant to their contract, HI shall hire and assign workers to E-PCIBank to
perform janitorial/messengerial and maintenance services. The contract
was impliedly renewed year after year. Petitioners Rolando Sasan, Sr.,[5]
Leonilo Dayday,[6] Modesto Aguirre,[7] Alejandro Ardimer,[8] Eleuterio
Sacil,[9] Wilfredo Juegos,[10] Petronilo Carcedo,[11] and Cesar
Peciencia[12] were among those employed and assigned to E-PCIBank at
its branch along Gorordo Avenue, Lahug, Cebu City, as well as to its other
branches in the Visayas.[13]

For its part, E-PCIBank averred that it entered into a Contract for
Services with HI, an independent job contractor which hired and assigned
petitioners to the bank to perform janitorial and messengerial services
thereat. It was HI that paid petitioners wages, monitored petitioners daily
time records (DTR) and uniforms, and exercised direct control and
supervision over the petitioners and that therefore HI has every right to
terminate their services legally. E-PCIBank could not be held liable for
whatever misdeed HI had committed against its employees.
HI, on the other hand, asserted that it was an independent job
contractor engaged in the business of providing janitorial and related
services to business establishments, and E-PCIBank was one of its clients.
Petitioners were its employees, part of its pool of janitors/messengers
assigned to E-PCIBank. The Contract for Services between HI and EPCIBank expired on 15 July 2000. E-PCIBank no longer renewed said
contract with HI and, instead, bidded out its janitorial requirements to two
other job contractors, Able Services and Puritan. HI designated petitioners
to new work assignments, but the latter refused to comply with the same.
Petitioners were not dismissed by HI, whether actually or constructively,
thus, petitioners complaints before the NLRC were without basis.
Labor Arbiter Gutierrez focused on the following issues: (a)
whether petitioners were regular employees of HI; (b) whether petitioners
were illegally dismissed from their employment; and (c) whether
petitioners were entitled to their money claims.
On 7 January 2002, on the basis of the parties position papers
and documentary evidence, Labor Arbiter Gutierrez rendered a Decision

finding that HI was not a legitimate job contractor on the ground that it did
not possess the required substantial capital or investment to actually
perform the job, work, or service under its own account and responsibility
as required under the Labor Code.[16] HI is therefore a labor-only
contractor and the real employer of petitioners is E-PCIBank which is held
liable to petitioners. According to Labor Arbiter Gutierrez:
[T]he undisputed facts show that the [herein
petitioners] were made to perform not only as janitors
but also as messengers, drivers and one of them even
worked as an electrician. For us, these jobs are not
only directly related to the main business of the
principal but are, likewise deemed necessary in the
conduct of respondent Equitable-PCI Banks principal
business. Thus, based on the above, we so declare
that the [petitioners] are employees of respondent
Equitable-PCI Bank.
And having worked with
respondent Equitable-PCI Bank for more than one (1)
year, they are deemed regular employees. They
cannot, therefore, be removed from employment
without cause and without due process, which is
wanting in this case. Hence, the severance of their
employment in the guise of termination of contract is
illegal.[17]

a) Backwages
July 15, 2001 to January 15, 2002
same as Paciencia

b) Separation Pay
Feb. 2, 1999 to July 15, 2001
= P190.00 x 26 days x 2.5 years / 2
Total

=
=

III Roland Mosquera (did not file Amended Complaint)


a) Backwages
(same as Paciencia)

=
b) Separation Pay
March 8, 1998 to July 15, 2001
= P190.00 x 26 days x 3 yrs. / 2
Total

=
=

IV Petronillo Carcedo
In the dispositive portion of his 7 January 2002 Decision, Labor
Arbiter Gutierrez awarded to petitioners the following amounts:

a) Backwages
(same as Paciencia)

I. CESAR PACIENCIA

b) Separation Pay
Sept. 16, 1984 to July 15, 2001
= P190.00 x 26 days x 17 yrs. / 2

a) Backwages
July 15, 2001 to January 8, 2002
= P190.00 per day
= 5 months and 6 days
= 136 days x P190.00

c) 13th Month Pay


= P190.00 x 26 days
Total

=
=

b) Separation Pay
June 10, 1996 to July 15, 2001
= 5 years
=P190.00 x 26 days x 5 years / 2

V Rolando Sasan, Sr.


a) Backwages
(same as Paciencia)

c) 13th Month Pay


= P190.00 x 26 days

b) Separation Pay
October 1989 to July 15, 2001
= P190.00 x 26 days x 12 yrs. / 2

Total

II Dominador Suico, Jr. (did not file Amended


Complaint)

c) 13th Month Pay


= P190.00 x 26 days
Total

=
=

July 23, 1990 to July 15, 2001


= P190.00 x 26 days x 11 yrs. / 2

VI Leonilo Dayday

c) 13th Month Pay


= P190.00 x 26 days

a) Backwages
(same as Paciencia)

=
=

Total

b) Separation Pay
Feb. 8, 1983 to July 15, 2001
= P190.00 x 26 days x 18 yrs. / 2

X Modesto Aguirre

c) 13th Month Pay


= P190.00 x 26 days

a) Backwages
(same as Paciencia)

b) Separation Pay
= Jan. 5, 1992 to July 15, 2001
= P190.00 x 26 days x 9.5 yrs. / 2

Total

VII Eleuterio Sacil

c) 13th Month Pay


= P190.00 x 26 days

a) Backwages
(same as Paciencia)

=
=

Total

b) Separation Pay
June 2, 1992 to July 15, 2001
= P190.00 x 26 days x 9 yrs. / 2

XI Alejandro Ardimer

c) 13th Month Pay


= P190.00 x 26 days

a) Backwages
(same as Paciencia)

b) Separation Pay
= Jan. 20, 1990 to July 15, 2001
= P190.00 x 26 days x 11.5 yrs. / 2

Total

VIII Mario Juntilla

c) 13th Month Pay


= P190.00 x 26 days

a) Backwages
(same as Pacencia)
b) Separation Pay
October 7, 1987 to July 15, 2001
= P190.00 x 26 days x 14 yrs. / 2

xxxx

c) 13th Month Pay


= P190.00 x 26 days
Total

IX Wilfredo Juegos
a) Backwages
(same as Pacencia)
b) Separation Pay

=
=

Total

WHEREFORE, the foregoing premises


considered, judgment is hereby rendered directing
the respondents Equitable PCI Bank and Helpmate,
Inc. to pay jointly and solidarily the complainants as
follows:
1.
P43,130.00
2.
32,015.00
3.
33,250.00
4.

Cesar Paciencia

Dominador Suico, Jr.

Roland Mosquera

Petronilo Carceda

72,770.00
5.

Roland Sasan, Sr.

6.

Leonilo Dayday

7.

Eleuterio Sacil

8.

Mario Juntilla

9.

Wilfredo Juegos

10.

Modesto Aguirre

11.

Alejandro Ardimer

Cebu City with market value of P2,515,170.00.


[19]

60,420.00
75,240.00

The NLRC promulgated its Decision on 22 January 2003


modifying the ruling of Labor Arbiter Gutierrez. The NLRC took into
consideration the documentary evidence presented by HI for the first time
on appeal and, on the basis thereof, declared HI as a highly capitalized
venture with sufficient capitalization, which cannot be considered engaged
in labor-only contracting.

53,010.00
65,360.00
57,950.00

On the charge of illegal dismissal, the NLRC ruled that:

54,245.00
59,185.00
TOTAL

P606,575.00[18]
Aggrieved by the decision of Labor Arbiter Gutierrez,
respondents E-PCIBank and HI appealed the same to the NLRC, 4 th Division,
stationed in Cebu City. Their appeals were docketed as NLRC Case No. V000241-2002. In support of its allegation that it was a legitimate job
contractor, HI submitted before the NLRC several documents which it did
not present before Labor Arbiter Gutierrez. These are:
1. Certificate of Filing of Certificate of Increase of
Capital Stock, Certificate of Filing Amended
Articles
of
Incorporation,
and
General
Information Sheet Stock Corporation of HI
showing therein that it increased its authorized
capital
stock
from
P1,500,000.00
to
P20,000,000.00 on 12 March 1999 with the
Securities and Exchange Commission;
2. Audited Financial Statement of HI showing therein
that it has Total Assets of P20,939,935.72 as of
31 December 2000;
3. Transfer Certificate of Title No. 110173 and Tax
Declaration No. GR2K-09-063-00582 registered
under the name of HI showing that it has a
parcel
of
land
with
Market
Value
of
P1,168,860.00 located along Rizal Avenue (now
Bacalso Avenue), Cebu City, and

The charge of illegal dismissal was


prematurely filed. The record shows that barely eight
(8) days from 15 July 2001 when the complainants
were placed on a temporary off-detail, they filed
their complaints on 23 July 2001 and amended their
complaints on 22 August 2001 against the
respondents on the presumption that their services
were already terminated. Temporary off-detail is
not equivalent to dismissal. x x x.[20]
The NLRC deleted Labor Arbiter Gutierrezs award of backwages
and separation pay, but affirmed his award for 13 th month pay and
attorneys fees equivalent to ten percent (10%) of the 13 th month pay, to
the petitioners.[21] Thus, the NLRC decreed in its 22 January 2003
Decision, the payment of the following reduced amounts to petitioners:
WHEREFORE, premises considered, the
decision of Labor Arbiter Jose G. Gutierrez dated 7
January 2002 is MODIFIED, to wit:
Ordering respondents Helpmate, Inc. and
Equitable PCI Bank to jointly and severally[22] pay
the complainants of their 13th month pay and
attorneys fees in the aggregate amount of FortyThree Thousand Four Hundred Seventy-Two and
00/100 (P43,472.00), broken down as follows:
1.

Aguirre, Modesto

2.

Ardimer, Alejandro

3.

Carcedo, Petronilo

4.

Dayday, Leonilo

5.

Juegos, Wilfredo

P5,434.00
5,434.00
5,434.00

4.

Tax
Declaration
No.
GR2K-09-063-00583
registered under the name of HI showing that it
has a commercial building constructed on the
preceding lot located along Bacalso Avenue,

5,434.00
5,434.00

6.

Juntilla, Mario

7.

Paciencia, Cesar

5,434.00
5,434.00
8.

Sacil, Eleuterio -

5,434.00
TOTAL

P43,472.00[23]

WHETHER OR NOT THE HONORABLE COURT OF


APPEALS ACTED IN EXCESS OF THEIR JURISDICTION
AND/OR COMMITTED GRAVE ABUSE OF DISCRETION
IN UPHOLDING THE NLRC 4TH DIVISIONS DECISION
AND GRAVELY ERRED IN:

Petitioners Motion for Reconsideration was denied by the NLRC in its


Resolution dated 1 July 2003.[24]

I.
ACCEPTING AND APPRECIATING THE
PIECES OF EVIDENCE SUBMITTED BY RESPONDENTS
DURING APPEAL, ALL EXISTING DURING THE TIME THE
NLRC RAB 7S TRIAL, CONTRARY TO THIS HONORABLE
COURTS PREVIOUS ESTABLISHED DECISIONS.

Distressed by the decision of the NLRC, petitioners sought recourse


with the Court of Appeals by filing a Petition for Certiorari[25] under Rule
65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 79912.

II.
REVERSING, WITHOUT ANY LEGAL
BASIS, THE FACTUAL FINDING OF NLRC RAB 7 THAT
THE RESPONDENT HI WAS LABOR ONLY CONTRACTOR.

In its Decision dated 24 April 2006, the Court of Appeals affirmed the
findings of the NLRC that HI was a legitimate job contractor and that it did
not illegally dismiss petitioners:

III.
RULING, WITHOUT ANY LEGAL BASIS,
THAT THE ILLEGAL DISMISSAL COMPLAINTS WERE
PREMATURELY FILED.[28]

As to the question of whether or not, as a


legitimate independent job contractor, respondent HI
illegally dismissed the petitioners. We rule in the
negative.

Before proceeding to the substantive issues, we first address the


procedural issues raised by petitioners.

It is undisputed that the contract between


respondent HI and its client E-PCIBank expired on July
15, 2000. The record shows that after said expiration,
respondent HI offered the petitioners new work
assignments to various establishments which are HIs
clients. The petitioners, therefore, were not even
placed on floating status. They simply refused,
without justifiable reason, to assume their new work
assignments which refusal was tantamount to
abandonment. There being no illegal dismissal,
petitioners are not entitled to backwages or
separation pay.[26]
The fallo of the 24 April 2006 Decision of the appellate court reads:
WHEREFORE, in view of the foregoing premises,
judgment is hereby rendered by us DENYING the
petition filed in this case and AFFIRMING the decision
of the NLRC, Fourth Division, in NLRC Case No. V000145-2003 promulgated on June 22, 2003.[27]

Petitioners object to the acceptance and consideration by the


NLRC of the evidence presented by HI for the first time on appeal. This is
not a novel procedural issue, however, and our jurisprudence is already
replete with cases[29] allowing the NLRC to admit evidence, not presented
before the Labor Arbiter, and submitted to the NLRC for the first time on
appeal. Technical rules of evidence are not binding in labor cases. Labor
officials should use every reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or
procedure, all in the interest of due process.[30]
The submission of additional evidence before the NLRC is not
prohibited by its New Rules of Procedure. After all, rules of evidence
prevailing in courts of law or equity are not controlling in labor cases. The
NLRC and labor arbiters are directed to use every and all reasonable
means to ascertain the facts in each case speedily and objectively, without
regard to technicalities of law and procedure all in the interest of
substantial justice. In keeping with this directive, it has been held that the
NLRC may consider evidence, such as documents and affidavits, submitted
by the parties for the first time on appeal. The submission of additional
evidence on appeal does not prejudice the other party for the latter could
submit counter-evidence.[31]
In Clarion Printing House, Inc. v. National Labor Relations
Commission,[32] we again emphasized that:

Petitioners now come before us via the instant Petition raising


the following issues:

[T]he NLRC is not precluded from receiving evidence,


even for the first time on appeal, because technical

rules of procedure are not binding in labor cases.


The settled rule is that the NLRC is not
precluded from receiving evidence on appeal as
technical rules of evidence are not binding in labor
cases. In fact, labor officials are mandated by the
Labor Code to use every and all reasonable means to
ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or
procedure, all in the interest of due process. Thus, in
Lawin Security Services v. NLRC, and Bristol
Laboratories Employees Association-DFA v. NLRC, we
held that even if the evidence was not submitted to
the labor arbiter, the fact that it was duly introduced
on appeal to the NLRC is enough basis for the latter to
be more judicious in admitting the same, instead of
falling back on the mere technicality that said
evidence can no longer be considered on appeal.
Certainly, the first course of action would be more
consistent with equity and the basic notions of
fairness.
For the same reasons, we cannot find merit in petitioners
protestations against the documentary evidence submitted by HI because
they were mere photocopies. Evidently, petitioners are invoking the best
evidence rule, espoused in Section 3, Rule130 of the Rules of Court. It
provides that:
Section 3. Original document must be
produced; exceptions. When the subject of inquiry is
the contents of a document, no evidence shall be
admissible other than the original document itself x x
x.
The above provision explicitly mandates that when the subject
of inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself. Notably, certified true copies of
these documents, acceptable under the Rules of Court[33] were furnished
to the petitioners. Even assuming that petitioners were given mere
photocopies, again, we stress that proceedings before the NLRC are not
covered by the technical rules of evidence and procedure as observed in
the regular courts. Technical rules of evidence do not apply if the decision
to grant the petition proceeds from an examination of its sufficiency as well
as a careful look into the arguments contained in position papers and other
documents.[34]
Petitioners had more than adequate opportunity when they filed
their motion for reconsideration before the NLRC, their Petition to the Court
of Appeals and even to this Court, to refute or present their counterevidence to the documentary evidence presented by HI. Having failed in

this respect, petitioners cannot now be heard to complain about these


documentary evidences presented by HI upon which the NLRC and the
Court of Appeals based its finding that HI is a legitimate job contractor.
The essence of due process is simply an opportunity to be
heard, or as applied to administrative proceedings, a fair and reasonable
opportunity to explain one's side. It is also an opportunity to seek a
reconsideration of the action or ruling complained of. It is not the denial of
the right to be heard but denial of the opportunity to be heard that
constitutes violation of due process of law. Petitioners herein were
afforded every opportunity to be heard and to seek reconsideration of the
adverse judgment against them. They had every opportunity to
strengthen their positions by presenting their own substantial evidence to
controvert those submitted by E-PCIBank and HI before the NLRC, and even
before the Court of Appeals. It cannot win its case by merely raising
unsubstantiated doubt or relying on the weakness of the adverse parties
evidence.
We now proceed to the resolution of the substantive issues
submitted by petitioners for our consideration, particularly, whether HI is a
labor-only contactor and E-PCIBank should be deemed petitioners principal
employer; and whether petitioners were illegally dismissed from their
employment.
Permissible job contracting or subcontracting refers to an
arrangement whereby a principal agrees to put out or farm out to a
contractor or subcontractor the performance or completion of a specific
job, work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within
or outside the premises of the principal.[35] A person is considered
engaged in legitimate job contracting or subcontracting if the following
conditions concur:
(a) The contractor or subcontractor carries on
a distinct and independent business and undertakes
to perform the job, work or service on its own account
and under its own responsibility according to its own
manner and method, and free from the control and
direction of the principal in all matters connected with
the performance of the work except as to the results
thereof;
(b) The contractor or subcontractor has
substantial capital or investment; and
(c) The agreement between the principal and
contractor or subcontractor assures the contractual
employees entitlement to all labor and occupational
safety and health standards, free exercise of the right
to self-organization, security of tenure, and social and
welfare benefits.[36]

In contrast, labor-only contracting, a prohibited act, is an


arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or service for a principal.
[37] In labor-only contracting, the following elements are present:
(a) The contractor or subcontractor does
not have substantial capital or investment to actually
perform the job, work or service under its own
account and responsibility; and
(b) The employees recruited, supplied or
placed by such contractor or subcontractor are
performing activities which are directly related to the
main business of the principal.[38]
In distinguishing between permissible job contracting and
prohibited labor-only contracting,[39] we elucidated in Vinoya v. National
Labor Relations Commission,[40] that it is not enough to show substantial
capitalization or investment in the form of tools, equipment, etc. Other
facts that may be considered include the following: whether or not the
contractor is carrying on an independent business; the nature and extent
of the work; the skill required; the term and duration of the relationship;
the right to assign the performance of specified pieces of work; the control
and supervision of the work to another; the employers power with respect
to the hiring, firing and payment of the contractors workers; the control of
the premises; the duty to supply premises, tools, appliances, materials and
labor; and the mode and manner or terms of payment.[41] Simply put, the
totality of the facts and the surrounding circumstances of the case are to
be considered.[42] Each case must be determined by its own facts and all
the features of the relationship are to be considered.[43]
In the case at bar, we find substantial evidence to support the
finding of the NLRC, affirmed by the Court of Appeals, that HI is a
legitimate job contractor.
We take note that HI has been issued by the Department of
Labor and Employment (DOLE) Certificate of Registration[44] Numbered
VII-859-1297-048. The said certificate states among other things:
CERTIFICATE OF REGISTRATION
Numbered VII-859-1297-048
is issued to
HELPMATE, INCORPORATED
330 N. Bacalso Avenue, Cebu City
for

having

complied

with

the

requirements

as

provided for under the Labor Code, as amended, and


its Implementing Rules and having paid the
registration fee in the amount of ONE HUNDRED
PESOS (P100.00) per Official Receipt Number
9042769, dated October 16, 1997.
In witness whereof, and by authority vested in
me by the Labor Code, as amended, and its
Implementing Rules specifically Department Order
No. 10 series of 1997, I have hereunto set my hand
and affixed the Official on this 23rd day of December
1997.[45]
Having been issued by a public officer, this certification carries
with it the presumption that it was issued in the regular performance of
official duty.[46] In the absence of proof, petitioners bare assertion cannot
prevail over this presumption. Moreover, the DOLE being the agency
primarily responsible for regulating the business of independent job
contractors, we can presume in the absence of evidence to the contrary
that it thoroughly evaluated the requirements submitted by HI as a
precondition to the issuance of the Cerificate of Registration.
The evidence on record also shows that HI is carrying on a
distinct and independent business from E-PCIBank. The employees of HI
are assigned to clients to perform janitorial and messengerial services,
clearly distinguishable from the banking services in which E-PCIBank is
engaged.
Despite the afore-mentioned compliance by HI with the
requisites for permissible job contracting, Labor Arbiter Gutierrez still
declared that HI was engaged in prohibited labor-only contracting because
it did not possess substantial capital or investment to actually perform the
job, work or service under its own account or responsibility. Both the NLRC
and the Court of Appeals ruled to the contrary, and we agree.
Substantial capital or investment refers to capital stocks and
subscribed capitalization in the case of corporations, tools, equipments,
implements, machineries and work premises, actually and directly used by
the contractor or subcontractor in the performance or completion of the
job, work or service contracted out.[47] An independent contractor must
have either substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others. The law does not
require both substantial capital and investment in the form of tools,
equipment, machineries, etc.[48] It is enough that it has substantial
capital. In the case of HI, it has proven both.
We have expostulated that once it is established that an entity
such as in this case, HI has substantial capital, it was no longer necessary
to adduce further evidence to prove that it does not fall within the purview
of labor-only contracting.[49] There is even no need for HI to refute the

contention of petitioners that some of the activities they performed such


as those of messengerial services are directly related to the principal
business of E- PCIBank.
In any event, we have earlier declared that while these services
rendered by the petitioners as janitors, messengers and drivers are
considered directly related to the principal business of a bank, in this case
E-PCIBank, nevertheless, they are not necessary in the conduct of its (EPCIBANKs) principal business.[50]
HI has substantial capital in the amount of P20,939,935.72. It
has its own building where it holds office and it has been engaged in
business for more than a decade now.[51] As observed by the Court of
Appeals, surely, such a well-established business entity cannot be
considered a labor-only contractor.
Etched in an unending stream of cases are four standards in
determining the existence of an employer-employee relationship, namely:
(a) the manner of selection and engagement of the putative employee; (b)
the mode of payment of wages; (c) the presence or absence of power of
dismissal; and, (d) the presence or absence of control of the putative
employees conduct. Most determinative among these factors is the socalled control test.[52]
The presence of the first requisite for the existence of an
employer-employee relationship to wit, the selection and engagement of
the employee is shown by the fact that it was HI which selected and
engaged the services of petitioners as its employees. This is fortified by
the provision in the contract of services between HI and E-PCIBank which
states:
Selection, Engagement, Discharge. [HI]
shall have exclusive discretion in the selection,
engagement, investigation, discipline and discharge
of its employees.[53]
On the second requisite regarding the payment of wages, it was
HI who paid petitioners their wages and who provided their daily time
records and uniforms and other materials necessary for the work they
performed. Therefore, it is HI who is responsible for petitioners claims for
wages and other employees benefits. Precisely, the contract of services
between HI and E-PCIBank reveals the following:
Indemnity for Salaries and Benefits, etc.
[HI] shall be responsible for the salaries, allowances,
overtime and holiday pay, and other benefits of its
personnel including withholding taxes.[54]
As to the third requisite on the power to control the employees

conduct, and the fourth requisite regarding the power of dismissal, again EPCIBank did not have the power to control petitioners with respect to the
means and methods by which their work was to be accomplished. It
likewise had no power of dismissal over the petitioners. All that E-PCIBank
could do was to report to HI any untoward act, negligence, misconduct or
malfeasance of any employee assigned to the premises. The contract of
services between E-PCIBank and HI is noteworthy. It states:
[HI] shall have the entire charge, control
and supervision over all its employees who may be
fielded to [E-PCIBank]. For this purpose, [HI] shall
assign a regular supervisor of its employees who may
be fielded to the Bank and which regular supervisor
shall exclusively supervise and control the activities
and functions defined in Section 1 hereof. x x x.[55]
All these circumstances establish that HI undertook said
contract on its account, under its own responsibility, according to its own
manner and method, and free from the control and direction of E-PCIBank.
Where the control of the principal is limited only to the result of the work,
independent job contracting exists. The janitorial service agreement
between E-PCIBank and HI is definitely a case of permissible job
contracting.
Considering the foregoing, plus taking judicial notice of the
general practice in private, as well as in government institutions and
industries, of hiring an independent contractor to perform special services,
[56] ranging from janitorial, security and even technical services, we can
only conclude that HI is a legitimate job contractor. As such legitimate job
contractor, the law creates an employer-employee relationship between HI
and petitioners[57] which renders HI liable for the latters claims.
In view of the preceding conclusions, petitioners will never
become regular employees of E-PCIBank regardless of how long they were
working for the latter.[58]
We further rule that petitioners were not illegally dismissed by
HI. Upon the termination of the Contract of Service between HI and EPCIBank, petitioners cannot insist to continue to work for the latter. Their
pull-out from E-PCIBank did not constitute illegal dismissal since, first,
petitioners were not employees of E-PCIBank; and second, they were
pulled out from said assignment due to the non-renewal of the Contract of
Service between HI and E-PCIBank. At the time they filed their complaints
with the Labor Arbiter, petitioners were not even dismissed by HI; they
were only off-detail pending their re-assignment by HI to another client.
And when they were actually given new assignments by HI with other
clients,[59] petitioners even refused the same. As the NLRC pronounced,
petitioners complaint for illegal dismissal is apparently premature.
WHEREFORE, premises considered, the Petition is DENIED for lack

of merit. The Decision dated 24 April 2006 and Resolution dated 31


October 2006 of the Court of Appeals are AFFIRMED. Costs against
petitioners.
SO ORDERED.

FIRST DIVISION
G.R. No. 170232

December 5, 2006

VETTE INDUSTRIAL SALES CO., INC., KENNETH TAN, ESTRELLA


CHENG, LUISITO RAMOS, YVETTE TAN, KESSENTH CHENG, VEVETTE
CHENG and FELESAVETTE CHENG, petitioners, vs.SUI SOAN S. CHENG
a.k.a. CHENG SUI SOAN, respondent.
x ---------------------------------------------------- x
G.R. No. 170301

December 5, 2006

SUI SOAN S. CHENG a.k.a. CHENG SUI SOAN, petitioner, vs.VETTE


INDUSTRIAL SALES CO., INC., KENNETH TAN, ESTRELLA CHENG,
LUISITO RAMOS, YVETTE TAN, KESSENTH CHENG, VEVETTE CHENG
and FELESAVETTE CHENG, respondents.

DECISION

YNARES-SANTIAGO, J.:
These consolidated Petitions for Review on Certiorari 1 assail the Decision 2
dated September 22, 2005 of the Court of Appeals in CA-G.R. SP No. 88863
entitled, "Vette Industrial Sales, Company, Inc., Kenneth Tan, Estrella
Cheng, Luisito Ramos, Yvette Tan, Kessenth Cheng, Vevette Cheng, and
Felesavette Cheng, Petitioners versus Hon. Regional Trial Court of Manila,
Branch 173, and Sui Soan S. Cheng a.k.a. Cheng Sui Soan, Respondents."
Also assailed is the Resolution 3 dated October 27, 2005 denying
petitioners motion for partial reconsideration and respondent Suis motion
for reconsideration.
In his Complaint4 for specific performance and damages filed against Vette
Industrial Sales Company, Inc., Kenneth Tan, Estrella Cheng, Luisito Ramos,
Yvette Tan, Kessenth Cheng, Vevette Cheng, and Felesavette Cheng
(petitioners) and docketed as Civil Case No. 03-105691, Sui Soan S. Cheng
a.k.a. Cheng Sui Soan (Sui) alleged that on October 24, 2001, he executed
a Deed of Assignment,5 where he transferred his 40,000 shares in the
company in favor of Kenneth Tan, Vevette Cheng, Felesavette Cheng, and
Yvette Tan (Petitioners-Assignees). To implement the Deed of Assignment,
the company acknowledged in a Memorandum of Agreement (MOA), 6 that
it owed him P6.8 million pesos, plus insurance proceeds amounting to
P760,000.00 and a signing bonus of P300,000.00. Thereafter, he was
issued 48 postdated checks but after the 11th check, the remaining checks
were dishonored by the bank. Sui also claimed that petitioners did not
remit to him the insurance proceeds, thus breaching their obligation under
the MOA which entitled him to moral and exemplary damages, and
attorneys fees.
In their Answer With Compulsory Counterclaim, 7 petitioners alleged that
Sui sold his shares for only P1.00 per share which they already paid; that
the MOA was unenforceable because it was executed without authorization
from the board of directors; that the MOA was void for want of
consideration; and that petitioner Kenneth Tan executed the MOA after Sui
issued threats and refused to sign the waiver and quitclaim.

allowed Sui to present evidence ex-parte, while the second Order 11 revoked
the first order after the trial court noted that "what was set for
consideration on December 16, 2003 was merely a motion to set pre-trial."
Thus, the trial court reset the pre-trial on January 15, 2004 but it was
postponed and moved to May 21, 2004. On said date, Sui and his counsel,
Atty. Pedro M. Ferrer (Atty. Ferrer), failed to appear. Consequently, the trial
court ordered the dismissal of the case without prejudice on the part of
petitioners to present and prove their counterclaim and set the hearing for
reception of evidence on June 22, 2004.12
Atty. Ferrer filed a Manifestation and Motion for Reconsideration 13 of the
order of dismissal, explaining that he arrived late for the hearing because
he had to drop by his office to get the case folder because he had just
arrived from South Cotabato where he served as Chief Counsel in the
Provincial Board of Canvassers for Governor Datu Pax Mangudadatu and
Congressman Suharto Mangudadatu.
The trial court required petitioners to file their Comment on the
Manifestation and Motion for Reconsideration. In their Opposition, 14
petitioners asserted that the motion for reconsideration be denied outright
because (1) Sui did not comply with the three-day notice rule which is
mandatory under Section 4, Rule 15 of the Rules of Court considering that
petitioners received the manifestation and motion for reconsideration only
one day prior to the date of hearing of the motion for resolution, thus the
same must be treated as a mere scrap of paper; (2) the trial court did not
comply with Section 6 of Rule 15 of the Rules 15 when it acted on the
manifestation and motion of Sui despite the latters failure to submit proof
of receipt by petitioners of the manifestation and motion; (3) the
negligence of counsel binds the client, thus, when Atty. Ferrer arrived late
for the hearing, the trial court correctly dismissed the complaint; and (4)
the explanation of Atty. Ferrer is unacceptable because traffic gridlocks are
daily events in the metropolis, thus, Atty. Ferrer should have left his place
early.
In his Reply,16 Sui averred that the motion complied with Section 5 of Rule
15 of the Rules 17 and that the setting of the hearing of the motion on May
28, 2004 was within the three day period for it was filed on May 25, 2004.
He added that the same was not heard because the trial court allowed
petitioners to file a comment on the manifestation and motion for
reconsideration, which was received by the latter prior to the said setting.

After the issues were joined, pre-trial was set on July 3, 2003. 8 However,
the case was first submitted for mediation but it was referred back to the
court for continuation of the proceedings when no settlement was arrived
at during mediation.

In an Order dated December 16, 2004, 18 the trial court granted Suis
motion for reconsideration and set aside the dismissal of the complaint,
the dispositive portion of which provides:

Sui thereafter filed a Motion to Set Pre-trial 9 on December 16, 2003.


Petitioners received the motion but they did not attend because there was
no notice from the Court setting the pre-trial date. On December 29, 2003,
petitioners received two orders from the trial court. The first Order 10

WHEREFORE, prescinding with such ruling and in the interest of substantial


justice, plaintiffs motion is GRANTED and the order dated May 21, 2004 is
hereby lifted and set aside with the warning that any delay in this
proceedings will not be countenanced by the Court.

Set pre-trial anew on February 15, 2005.

I.

Notify the parties.

THE COURT OF APPEALS ERRED IN NOT DISMISSING THE COMPLAINT OF


RESPONDENT CHENG IN CIVIL CASE NO. 03-105691 WITH PREJUDICE.

SO ORDERED.19
II.
The trial court cited Ace Navigation Co., Inc. v. Court of Appeals, which
held that since rules of procedure are mere tools designed to facilitate the
attainment of justice, their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial justice
must always be avoided the dismissal of an appeal on purely technical
ground is frowned upon especially if it will result to unfairness.
20

The Motion for Reconsideration 21 filed by petitioners was denied by the trial
court22 hence they filed a Petition for Certiorari 23 with the Court of Appeals
which granted the petition, thus:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the writ applied for is
partly GRANTED. The assailed orders must be, as they hereby are,
VACATED and SET ASIDE, and another hereby issued dismissing the instant
complaint, but "without prejudice." This means that the complaint can be
REINSTATED. On the other hand, petitioners are hereby given leave to
present before the Trial Court evidence of their counterclaim. Without costs
in this instance.
SO ORDERED.24
The Court of Appeals noted that both Atty. Ferrer and Sui were not in
attendance at the pre-trial conference; that Section 5 of Rule 18 mentions
only the effect of the failure to appear on the part of "the plaintiff" but is
silent on the effect of failure of the partys counsel to appear at the pretrial; that the Manifestation and Motion for Reconsideration 25 mentioned
only the reasons why Atty. Ferrer was absent without stating that he was
fully authorized in writing to enter into an amicable settlement, or to
submit to alternative modes of dispute resolution, or to enter into
stipulations or admissions of facts and of documents; and that there was
no explanation for Suis nonappearance. Thus, based on these
circumstances, the Court of Appeals held that dismissal of the case is
proper but without prejudice to the filing of a new action. 26
Both parties moved for reconsideration but the same were jointly denied in
a Resolution dated October 27, 2005.

THE COURT OF APPEALS ERRED IN CONCLUDING THAT RESPONDENTS


COUNSEL FAILED TO APPRECIATE THE BASIC RULES ON PRE-TRIAL.
III.
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE MISTAKE OR
NEGLIGENCE OF RESPONDENTS COUNSEL AS BINDING ON THE
RESPONDENT HIMSELF.
IV.
THE COURT OF APPEALS ERRED IN APPLYING THE RULINGS OF THE
HONORABLE COURT IN THE DE LOS REYES VS. CAPULE (102 PHIL. 464) AND
SUAREZ VS. COURT OF APPEALS (220 SCRA 274) CASES.
V.
THE COURT OF APPEALS ERRED IN NOT CONSIDERING RESPONDENTS
MANIFESTATION AND MOTION FOR RECONSIDERATION DATED MAY 21,
2004 FILED BEFORE THE TRIAL COURT AS A MERE SCRAP, AND A USELESS
PIECE, OF PAPER AND IN NOT CONSIDERING THE ORDER DATED MAY 21,
2004 OF THE TRIAL COURT AS ALREADY FINAL IN VIEW OF THE
PROCEDURAL INVALIDITY/DEFECTIVENESS (I.E. IT FAILED TO COMPLY WITH
SECTIONS 4 AND 6 OF THE RULES) OF RESPONDENTS MANIFESTATION
AND MOTION FOR RECONSIDERATION DATED MAY 21, 2004.
In G.R. No. 170301, Sui raises the following issues, thus:
I. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE NONAPPEARANCE OF PETITIONER IN THE PRE-TRIAL MAY BE EXCUSED FOR A
VALID CAUSE.
II. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE CASE OF ACE
NAVIGATION CO. INC. VS. COURT OF APPEALS IS SQUARELY APPLICABLE TO
THE INSTANT CASE.

Hence, these consolidated Petitions.


In G.R. No. 170232, petitioners raise the following errors:

The core issue for resolution is whether the Court of Appeals erred in
dismissing without prejudice Civil Case No. 03-105691 and in ruling that
the trial court committed grave abuse of discretion when it granted Suis
motion for reconsideration to set aside the order of dismissal of the

complaint.
The judge has the discretion whether or not to declare a party non-suited. 27
It is, likewise, settled that the determination of whether or not an order of
dismissal issued under such conditions should be maintained or
reconsidered rests upon the sound discretion of the trial judge. 28 The next
question to be resolved is whether there was grave abuse of discretion of
the trial judge. We hold that there was none.
The case of Estate of Salud Jimenez v. Philippine Export Processing Zone 29
discussed the propriety of filing a Petition for Certiorari under Section 1 of
Rule 65 of the Rules of Court, thus:
A petition for certiorari is the proper remedy when any tribunal, board, or
officer exercising judicial or quasi-judicial functions has acted without or in
excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction and there is no appeal, nor any plain, speedy,
and adequate remedy at law. Grave abuse of discretion is defined as the
capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. An error of judgment committed in the exercise of its
legitimate jurisdiction is not the same as "grave abuse of discretion." An
abuse of discretion is not sufficient by itself to justify the issuance of a writ
of certiorari. The abuse must be grave and patent, and it must be shown
that the discretion was exercised arbitrarily and despotically.
As a general rule, a petition for certiorari will not lie if an appeal is the
proper remedy thereto such as when an error of judgment as well as of
procedure are involved. As long as a court acts within its jurisdiction and
does not gravely abuse its discretion in the exercise thereof, any supposed
error committed by it will amount to nothing more than an error of
judgment reviewable by a timely appeal and not assailable by a special
civil action of certiorari. However, in certain exceptional cases, where the
rigid application of such rule will result in a manifest failure or miscarriage
of justice, the provisions of the Rules of Court which are technical rules
may be relaxed. Certiorari has been deemed to be justified, for instance, in
order to prevent irreparable damage and injury to a party where the trial
judge has capriciously and whimsically exercised his judgment, or where
there may be danger of clear failure of justice, or where an ordinary appeal
would simply be inadequate to relieve a party from the injurious effects of
the judgment complained of.30 (Emphasis supplied)
Lack of jurisdiction and excess of jurisdiction are distinguished thus: the
respondent acts without jurisdiction if he does not have the legal power to
determine the case; where the respondent, being clothed with the power
to determine the case, oversteps his authority as determined by law, he is
performing a function in excess of his jurisdiction. 31 Thus, we now discuss
whether the trial court granted the motion for reconsideration of Sui and
reinstated the complaint without basis in law. Citing the case of Ace
Navigation Co., Inc. v. Court of Appeals, 32 the trial court held that rules of

procedures are mere tools designed to facilitate the attainment of justice


and must be relaxed if its strict and rigid application would frustrate rather
than promote substantial justice. Thus, it lifted and set aside its order of
dismissal in the interest of substantial justice, which is the legal basis for
the trial court to grant the motion for reconsideration of Sui.
We have repeatedly warned against the injudicious and often impetuous
issuance of default orders. 33 While it is desirable that the Rules of Court be
faithfully observed, courts should not be so strict about procedural lapses
that do not really impair the proper administration of justice. If the rules
are intended to ensure the proper and orderly conduct of litigation, it is
because of the higher objective they seek which is the attainment of
justice and the protection of substantive rights of the parties. Thus, the
relaxation of procedural rules, or saving a particular case from the
operation of technicalities when substantial justice requires it, as in the
instant case, should no longer be subject to cavil. 34
When the Court of Appeals held that the case is dismissible because Sui
did not attend the pre-trial conference, it failed to consider the explanation
of Atty. Ferrer that Sui executed a "Special Power of Attorney" in his behalf
and that he was not absent on the scheduled pre-trial but was only late.
Under Section 4 of Rule 18 of the Rules, 35 the non-appearance of a party at
the pre-trial may be excused when there is a valid cause shown or when a
representative shall appear in his behalf, and is fully authorized in writing
to enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts and
of documents. Although Sui was absent during the pre-trial, Atty. Ferrer
alleged that he was fully authorized to represent Sui. Moreover, it is not
entirely accurate to state that Atty. Ferrer was absent during the pre-trial
because he was only late, the reasons for which he explained in his
Manifestation and Motion for Reconsideration. The circumstances
attendant in the instant case compel this Court to relax the rules of
procedure in the interest of substantial justice.
Petitioners claim that the motion for reconsideration of Sui was
procedurally defective because it was not served three days before the
date of the hearing and no proof of service was given to the court, in
violation of Sections 4 and 6 of Rule 15. Petitioners also aver that they
received the Manifestation and Motion for Reconsideration of Sui on May
27, 2004 but the hearing was scheduled on May 28, 2004. Thus, it is
nothing but a scrap of paper because it violated the three-day notice rule.
We are not persuaded.
In the instant case, we find that the purpose of a notice of hearing had
been served. In Vlason Enterprises Corporation v. Court of Appeals, 36 we
enumerated the exceptions to the rule on notice of hearing, to wit:

The Court has consistently held that a motion which does not meet the
requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is
considered a worthless piece of paper, which the clerk of court has no right
to receive and the trial court has no authority to act upon. Service of a
copy of a motion containing a notice of the time and the place of hearing
of that motion is a mandatory requirement, and the failure of movants to
comply with these requirements renders their motions fatally defective.
However, there are exceptions to the strict application of this rule. These
exceptions are as follows:
"x x x Liberal construction of this rule has been allowed by this Court in
cases (1) where a rigid application will result in a manifest failure or
miscarriage of justice; 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 the recitals contained therein; (2) where the
interest of substantial justice will be served; (3) where the resolution of the
motion is addressed solely to the sound and judicious discretion of the
court; and (4) where the injustice to the adverse party is not
commensurate [to] the degree of his thoughtlessness in not complying
with the procedure prescribed."
The present case falls under the first exception. Petitioner was not
informed of any cause of action or claim against it. All of a sudden, the
vessels which petitioner used in its salvaging business were levied upon
and sold in execution to satisfy a supposed judgment against it. To allow
this to happen simply because of a lapse in fulfilling the notice requirement
which, as already said, was satisfactorily explained would be a manifest
failure or miscarriage of justice.
A notice of hearing is conceptualized as an integral component of
procedural due process intended to afford the adverse parties a chance to
be heard before a motion is resolved by the court. Through such notice, the
adverse party is permitted time to study and answer the arguments in the
motion.
Circumstances in the case at bar show that private respondent was not
denied procedural due process, and that the very purpose of a notice of
hearing had been served. On the day of the hearing, Atty. Desierto did not
object to the said Motion for lack of notice to him; in fact, he was furnished
in open court with a copy of the motion and was granted by the trial court
thirty days to file his opposition to it. These circumstances clearly justify a
departure from the literal application of the notice of hearing rule. In other
cases, after the trial court learns that a motion lacks such notice, the
prompt resetting of the hearing with due notice to all the parties is held to
have cured the defect.
Verily, the notice requirement is not a ritual to be followed blindly.
Procedural due process is not based solely on a mechanistic and literal
application that renders any deviation inexorably fatal. Instead, procedural

rules are liberally construed to promote their objective and to assist in


obtaining a just, speedy and inexpensive determination of any action and
proceeding. For the foregoing reasons, we believe that Respondent Court
committed reversible error in holding that the Motion for Reconsideration
was a mere scrap of paper.37 (Emphasis supplied)
When the trial court received Suis Manifestation and Motion for
Reconsideration, it did not immediately resolve the motion. Instead, it
allowed petitioners to file their comment and also leave to file a rejoinder if
Sui files a reply.38 These circumstances justify a departure from the literal
application of the rule because petitioners were given the opportunity to
study and answer the arguments in the motion.
Petitioners claim that Sui failed to attach proof of service in violation of
Section 6, Rule 15 of the Rule, must fail. In Republic of the Philippines v.
Court of Appeals,39 we held, thus:
Nonetheless, considering the question raised in the appeal of the
government and the amount involved in this case, we think the Court of
Appeals should have considered the subsequent service of the motion for
reconsideration to be a substantial compliance with the requirement in
Rule 15, 6. In De Rapisura v. Nicolas, the movant also failed to attach to
his motion for reconsideration proof of service of a copy thereof to the
other party. Nonetheless, this Court held the failure not fatal as the adverse
party had actually received a copy of the motion and was in fact present in
court when the motion was heard. It was held that the demands of
substantial justice were satisfied by the actual receipt of said motion under
those conditions.40
Petitioners admitted that they received a copy of Suis Manifestation and
Motion for Reconsideration. In fact, they had the opportunity to oppose the
same. Under these circumstances, we find that the demands of substantial
justice and due process were satisfied.
It is the policy of the Court to afford party-litigants the amplest opportunity
to enable them to have their cases justly determined, free from the
constraints of technicalities. 41 It should be remembered that rules of
procedure are but tools designed to facilitate the attainment of justice,
such that when rigid application of the rules tend to frustrate rather than
promote substantial justice, this Court is empowered to suspend their
operation.42
WHEREFORE, in view of the foregoing, the Decision dated September 22,
2005 and the Resolution dated October 27, 2005 of the Court of Appeals in
CA-G.R. SP No. 88863 is REVERSED and SET ASIDE. The Order of the
Regional Trial Court in Civil Case No. 03-105691, lifting its previous order of
dismissal is REINSTATED and AFFIRMED.
SO ORDERED.

Panganiban, C.J. (Chairperson), Austria-Martinez, Callejo, Sr., and ChicoNazario, JJ., concur.

FIRST DIVISION

HEIRS OF RODOLFO CRISOSTOMO (EUPROCINIA, ROYCE


and IRISH CRISOSTOMO),
Petitioners,

- versus -

G.R. No. 1
Present:

CORONA
Chai
LEONAR
BERSAM
DEL CAS
VILLARA

RUDEX INTERNATIONAL DEVELOPMENT CORPORATION,


Respondent.

Promulgat

August 24
x--------------------------------------------------x
DECISION
LEONARDO-DE CASTRO, J.:
This Petition for Review on Certiorari[1] seeks to reverse
and set aside the October 6, 2006[2] and January 5, 2007[3] Resolutions
of the Court of Appeals in CA-G.R. SP No. 95920, which dismissed
outright the petitioners Petition for Review dated September 13, 2006 for
being filed one day beyond the 15-day extended period granted by the

Court of Appeals.
Petitioners Euprocinia, Royce, and Irish, are the wife and
children, respectively, of the late complainant, Rodolfo Crisostomo, who
died during the pendency of the case. [4]
The respondent, Rudex International Development Corporation,
is a domestic corporation engaged in the real estate business.[5]
On December 17, 2001, the Crisostomo spouses were offered a
house and lot at Patricia South Villa, a subdivision developed by the
respondent in Anabu II-F, Imus, Cavite. After seeing the model house on
Block 8, Lot 3, the Crisostomos decided to buy the property priced at
833,000.00 on installment basis. On the same day, they paid 10,000.00
as down payment and signed a Reservation Agreement. On December 21,
2001, the couple paid an additional 50,000.00, executed a promissory
note, and issued 36 postdated checks to cover the monthly amortizations
on the property. The Crisostomos were then given a Key Acceptance, Walk
Through, and Final Turnover Certificate.[6]
On February 10, 2002, the Crisostomo family moved in to their
new house; however, they started to notice several construction defects on
the house and inadequate facilities in the subdivision. Thus, on March 22,
2002, the late Rodolfo asked his wife Euprocinia to discontinue paying their
monthly amortizations and to ask for a rescission of the contract. On May
17, 2002, Rodolfo personally delivered a letter of complaint to the
respondent, wherein he rescinded their Contract to Sell, demanded the
refund of all the payments he had made, and reiterated that he would no
longer pay the monthly amortizations.[7]
On May 27, 2002, Rodolfo filed a Complaint[8] for violation of
Presidential Decree Nos. 1344 and 957, and Board Resolution No. 579 of
1995, before the Housing and Land Use Regulatory Board (HLURB).
In view of respondents failure to answer the Complaint, it was
declared in default on November 26, 2003.[9]
The HLURB conducted an ocular inspection in Patricia South Villa
on March 12, 2003 and found Rodolfos allegations to be supported by its
findings. The HLURB held that under Section 20 of Presidential Decree No.
957, its findings justified the right of Rodolfo to demand rescission of his
contract with the respondent. Thus, on July 7, 2003, the HLURB issued its
Judgment by Default,[10] the dispositive portion of which reads:
WHEREFORE,
premises
considered,
judgment is hereby rendered declaring the rescission
of the contract to sell as valid and ordering the
respondent to refund the total payments in the
amount of P71,650.00 with interest at 12% per
annum from the filing of the complaint until full
payment.

After full payment, complainant is directed


to peacefully surrender the subject property in favor
of the respondent.
Further, respondent is directed to pay
complainant P5,000.00 as attorneys fees and to pay
this Board P10,000.00 by way of administrative fine
for violation of Section 20 in relation to Section 38 of
P.D. 957.[11]
On August 26, 2003, the respondent asked the HLURB to review[12]
its July 7, 2003 Decision. It alleged that Rodolfos allegations were
concocted to get out of their contract because he could no longer pay his
monthly amortizations on the property. On August 17, 2004, the HLURB
rendered a Decision[13] on respondents Petition for Review, to wit:
Wherefore, the decision of the office below is
hereby modified to read as follows:
Wherefore premises considered, judgment
is hereby rescinding the reservation agreement of
parties and subject to legal compensation or
offsetting, ordering respondent to refund the total
payments in the amount of P71,650.00 with interest
at legal interest from the time of the filing of the
complaint; ordering complainant to turn over
possession of the unit to the respondent and ordering
complainant
to
pay
respondent
reasonable
compensation for the use of the unit in the amount of
P4,000.00 per month until possession of the unit is
turned over to the respondent.
Further, respondent is directed to pay
complainant P5,000.00 as attorneys fees and to pay
this board P10,000.00 by way of administrative fine
for violation of section 20 in relation to section 38 of
P.D. 957.[14]
This was appealed[15] by the petitioners, who substituted
Rodolfo upon his death, to the Office of the President. On November 18,
2005, the Office of the President decided[16] in their favor, as follows:
WHEREFORE, premises considered, the
Decision of the HLURB Board of Commissioners dated
August 23, 2004 is hereby reversed and set aside.
Judgment is hereby rendered:
a.

Declaring the contract of sale


entered into between the parties as

b.
c.

d.

e.
f.

rescinded;
Appellants are hereby ordered to turn
over possession of the property to the
Appellee;
Appellee is hereby ordered of refund
to the appellants the latters total
payment in the amount of P71,650.00
with interest at 12% per annum from
June 10, 2002 (time of the filing of the
complaint);
Appellee is likewise ordered to pay
appellants P25,000.00 as moral
damages
and
P25,000.00
as
exemplary damages;
Appellee is ordered to pay appellants
P5,000.00 as attorneys fees; and
Appellee
is
ordered
to
pay
administrative fine in the amount of
P10,000.00.[17]

The respondent asked for a reconsideration[18] of this decision


and on May 9, 2006, the Office of the President granted respondents
motion and reinstated the August 17, 2004 decision of the HLURB.
[19]
The Office of the President, in resolving the issue of whether it
properly deleted the previous award of rentals by the HLURB, held that
P.D. [No.] 957 does not authorize oppression of perceived unscrupulous
subdivision developers, each time a home buyer cries foul or alleges any
infirmity on the former.[20] Agreeing with the respondent that the
deletion of the award of rentals would result in unduly enriching the
petitioners, the Office of the President held:
By staying at the questioned premises for
free and without compensation, to the prejudice of
[respondent], it is clear that [petitioners] unduly
enriched themselves at the expense of another.
Rental payments are legally supported by
virtue of the doctrine of unjust enrichment.
Eventhough the same is not prayed for by herein
appellee, it could still be recognized and awarded by
our Office considering that said issue, or award
thereof, is inextricably linked to the issues involved as
well as the facts proven in the case, and it is
necessary for a just and equitable determination of
the case.[21]
The petitioners sought for a reconsideration[22] of this Order,

[23] but this was denied by the Office of the President on August 2, 2006.
On September 15, 2006, the petitioners filed their Petition for
Review before the Court of Appeals. However, this was dismissed outright
in a Resolution[24] for being filed out of time, the deadline being
September 14, 2006. The Court of Appeals said that the petitioners were
already granted a 15-day extension and yet no justification or reason was
given to explain why they still filed beyond the extended period. The Court
of Appeals held:
We have no more jurisdiction to entertain the Petition
much less to alter the judgment which has become
final and executory. We only have the power to
dismiss the appeal in the absence of exceptional
circumstances to warrant such delay.[25]
The petitioners sought reconsideration of this dismissal but the Court
of Appeals found their motion to be bereft of merit.[26]
The petitioners are now before us, seeking not only that we give
their petition due consideration, but also that we declare the HLURB
August 17, 2004 Decision as null and void. They submit the following
issues for our resolution:
5.1.
AN APPEAL IS AN ESSENTIAL PART OF
OUR JUDICIAL SYSTEM AND THE COURTS SHOULD
PROCEED WITH CAUTION, SO AS NOT TO DEPRIVE
THE PETITIONERS OF THE RIGHT TO APPEAL,
PARTICULARLY, IF THE APPEAL IS MERITORIOUS.
5.2.
THE HLURB APPEAL BOARD HAS NO
JURISDICTION MODIFYING THE JUDGMENT OF HLURB
PROPER GRANTING RELIEF WHICH WAS NOT PRAYED
FOR ALLEGED IN THE PLEADINGS, AND NO EVIDENCE
WAS PRESENTED.
5.3.
THE HLURB APPEAL BOARD HAS NO
JURISDICTION WHEN IT MODIFIED THE JUDGMENT BY
DEFAULT OF HLURB PROPER, AND THE OFFICE OF THE
PRESIDENT, LIKEWISE HAS ACTED, IN EXCESS OF
JURISDICTION WHEN IT AFFIRMED EN TOTO THE
DECISION OF THE HLURB APPEAL BOARD.[27]
Discussion
We shall limit our discussion to the core issue of whether or not
the Court of Appeals erred in dismissing the petition for review filed by
petitioners before it, on the ground that the petition was filed late.
The petitioners are claiming that their one-day delay in filing

their petition before the Court of Appeals constitutes excusable negligence


in the absence of an intent to delay the administration of justice. The
petitioners explained that their petition was ready as early as September
13, 2006, with only the annexes to be attached. Their counsel assigned
her secretary to arrange and attach these annexes but without their
counsels knowledge, the secretary did this in a vacant room outside their
office. The following day, the secretary, a single mother of two small
children, failed to report for work because she had to take her kids to a
doctor as they had been sick since she found them home, abandoned by
their nanny, the night before. It was only late in the afternoon that the
secretary remembered that she forgot to leave instructions about the
petition in their office.[28]
The petitioners are asking that this Court exercise its equity
jurisdiction since their delay was neither intended nor prejudicial to
respondent.[29]
Ruling of this Court
We grant the petition.
This Court has explained that the purpose in limiting the period
of appeal is to forestall or avoid an unreasonable delay in the
administration of justice and to put an end to controversies. Where no
element of intent to delay the administration of justice could be attributed
to petitioners, a one-day delay does not justify their petitions dismissal.
[30]
In Department of Justice Secretary Raul M. Gonzales v. Pennisi,[31]
this Court elucidated on the rules on reglementary periods, to wit:
The general rule is that the perfection of an
appeal in the manner and within the period
prescribed by law is, not only mandatory, but
jurisdictional, and failure to conform to the rules will
render the judgment sought to be reviewed final and
unappealable. By way of exception, unintended
lapses are disregarded so as to give due course to
appeals filed beyond the reglementary period on the
basis of strong and compelling reasons, such as
serving the ends of justice and preventing a grave
miscarriage thereof.
The purpose behind the
limitation of the period of appeal is to avoid an
unreasonable delay in the administration of justice
and to put an end to controversies.[32]
In Samala v. Court of Appeals,[33] we said:
The rules of procedure are mere tools
designed to facilitate the attainment of justice. Their

strict and rigid application especially on technical


matters, which tends to frustrate rather than promote
substantial justice, must be avoided. Even the
Revised Rules of Court envision this liberality.
Technicality, when it deserts its proper office as an aid
to justice and becomes its great hindrance and chief
enemy, deserves scant consideration from the courts.
[34]
In this case, the last day for filing the petition for review was on
September 13, 2006. The petitioners entrusted the drafting of their
petition with their counsel, who in turn entrusted the attaching of the
required annexes to the petition with her secretary. The secretary resigned
from her job sometime later to avoid giving her employer problems for
unexpected absences in the future.[35] Aside from this, the petitioners
also submitted an Affidavit[36] from the secretary, who narrated her ordeal
that day and why she was not able to inform her employer of the
whereabouts of the petition. A certification from the doctor of one of the
secretarys children was also submitted to prove that the secretary indeed
brought her children to the doctor on September 14, 2006, the deadline for
filing the petition for review with the Court of Appeals.
In light of the foregoing, we are inclined to give the same
consideration in this case pursuant to the rules on justice, equity, and fair
play.
WHEREFORE, the petition is GRANTED. The October 6, 2006
and January 5, 2007 Resolutions of the Court of Appeals in CA-G.R. SP No.
95920 are hereby REVERSED and SET ASIDE. CA-G.R. SP No. 95920 is
ordered REINSTATED and REMANDED to the Court of Appeals for further
proceedings.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO


Associate Justice

G.R. NO. 142628

February 6, 2007

SPRINGFIELD DEVELOPMENT CORPORATION, INC. and HEIRS OF


PETRA CAPISTRANO PIIT, Petitioners, vs.HONORABLE PRESIDING
JUDGE OF REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, BRANCH
40, CAGAYAN DE ORO CITY, DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD (DARAB), DAR REGION X DIRECTOR,
ROSALIO GAMULO, FORTUNATO TELEN, EMERITA OLANGO,
THERESA MONTUERTO, DOMINGO H. CLAPERO, JOEL U. LIM,
JENEMAIR U. POLLEY, FIDELA U. POLLEY, JESUS BATUTAY, NICANOR
UCAB, EMERIA U. LIM, EMILITO CLAPERO, ANTONINA RIAS,
AURILLIO ROMULO, ERWIN P. CLAPERO, EVELITO CULANGO,
VILMA/CRUISINE ALONG, EFREN EMATA, GREGORIO CABARIBAN,
and SABINA CANTORANA, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court. The principal issue presented for resolution is whether the
Regional Trial Court (RTC) has jurisdiction to annul final judgment of the
Department of Agrarian Reform Adjudication Board (DARAB).
The antecedent facts:
Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de
Oro City which measured 123,408 square meters under Transfer Certificate
of Title No. T-62623. Springfield Development Corporation, Inc. (Springfield)
bought Lot No. 2291-C with an area of 68,732 square meters, and Lot No.
2291-D with an area of 49,778 square meters. 1 Springfield developed these
properties into a subdivision project called Mega Heights Subdivision. 2
On May 4, 1990, the Department of Agrarian Reform (DAR), through its
Municipal Agrarian Reform Officer, issued a Notice of Coverage, 3 placing
the property under the coverage of Republic Act (R.A.) No. 6657 or the
Comprehensive Agrarian Reform Law of 1988. There being an opposition
from the heirs of Petra Piit, the case was docketed as DARAB Case No. X305. On August 27, 1991, DARAB Provincial Adjudicator Abeto A. Salcedo,

Jr. rendered a decision declaring the nature of the property as residential


and not suitable for agriculture. 4 The Regional Director filed a notice of
appeal, which the Provincial Adjudicator disallowed for being pro forma and
frivolous.5 The decision became final and executory6 and Springfield
proceeded to develop the property.7
The DAR Regional Director then filed a petition for relief from judgment of
the DARAB Decision, docketed as DARAB Case No. 0555. In its Decision
dated October 5, 1995, the DARAB granted the petition and gave due
course to the Notice of Coverage. It also directed the Municipal Agrarian
Reform Office to proceed with the documentation, acquisition, and
distribution of the property to the true and lawful beneficiaries. 8
The DARAB also issued an Order dated May 22, 1997, ordering the heirs of
Piit and Springfield to pay the farmer-beneficiaries the amount of Twelve
Million, Three Hundred Forty Thousand, Eight Hundred Pesos
(P12,340,800.00), corresponding to the value of the property since the
property has already been developed into a subdivision.
On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with
the RTC of Cagayan de Oro City, Branch 40, a petition for annulment of the
DARAB Decision dated October 5, 1995 and all its subsequent proceedings.
Petitioners contend that the DARAB decision was rendered without
affording petitioners any notice and hearing.9
On motion filed by the farmer-beneficiaries, the RTC issued an Order dated
June 25, 1997, dismissing the case for lack of jurisdiction. 10
On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special
civil action for certiorari, mandamus, and prohibition with prayer for the
issuance of writ of preliminary injunction and/or temporary restraining
order, docketed as CA-G.R. SP No. 44563. 11 Petitioners alleged that the RTC
committed grave abuse of discretion when it ruled that the annulment of
judgment filed before it is actually an action for certiorari in a different
color. According to petitioners, what it sought before the RTC is an
annulment of the DARAB Decision and not certiorari, as the DARAB
Decision is void ab initio for having been rendered without due process of
law.12
In the assailed Decision13 dated July 16, 1998, the CA dismissed the
petition for lack of merit, ruling that the RTC does not have jurisdiction to
annul the DARAB Decision because it is a co-equal body. 14
However, on January 12, 1999, the CA ordered the elevation of the DARAB
records before it, declaring that it "overlooked the fact that petitioners
likewise applied for a writ of prohibition against the enforcement of the
DARAB decision which they claim to be patently void." 15 Forwarded to the
CA were the records of the original case filed with the DARAB-Region X, and
it appearing that the petition for relief from judgment and its pertinent

records were forwarded to the DARAB Central Office, the CA issued another
Resolution on December 20, 1999,16 requiring the DARAB Central Office to
forward the records of the case. But after receipt of the records, the CA
simply denied petitioners' motion for reconsideration per Resolution 17
dated February 23, 2000 without specifically resolving the issues raised
concerning the prayer for a writ of prohibition.
Hence, the present petition on the following grounds:
I
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING
THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS CONCLUSION
DIVESTING THE REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY
LAW OVER CASES WHERE THE EXCLUSIVE JURISDICTION WAS NOT
EXPRESSLY GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN
EFFECT, MODIFYING THE APPLICABLE LAW ON THE MATTER.
II
THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION
FOR RECONSIDERATION AFTER IT HAD RESOLVED TO ENTERTAIN
PETITIONERS' PETITION FOR PROHIBITION AND TO REVIEW THE DARAB
PROCEEDINGS, THEREBY DEPARTING FROM THE USUAL COURSE OF
JUDICIAL PROCEEDINGS.
III
THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF
RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE OF JUSTICE AND NEEDLESS
DELAYS, IS MOST RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE
PETITION FILED IN CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS
CONCURRENT JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED
BEFORE IT.18
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no
provision that vests with the CA jurisdiction over actions for annulment of
DARAB judgments. Petitioners, however, contend that the RTC may take
cognizance of the annulment case since Section 19 of B.P. Blg. 129 vests
the RTC with general jurisdiction and an action for annulment is covered
under such general jurisdiction. According to petitioners, "this is but a
logical consequence of the fact that no other courts were expressly given
the jurisdiction over such actions."19 Petitioners further argue that the CA
was in error when it summarily ignored their application for a writ of
prohibition, as it was necessary to restrain the DARAB from enforcing its
void decision; and even if the DARAB decision was valid, the writ of
prohibition could have enjoined the execution of the DARAB decision since
there have been changes which will make the execution unjust and

inequitable.

enabling acts, are specifically appealable to the CA.

In their Joint-Comments, the farmer-beneficiaries and the DARAB


(respondents) refute petitioners' allegation that they were not afforded due
process in the DARAB proceedings, stating that petitioners were impleaded
as a party thereto, and in fact, they attended some of the hearings
although their counsel was absent. Respondents also adopt the CA's ruling
that the RTC is not vested with any jurisdiction to annul the DARAB
decision.

Significantly, B.P. Blg. 129 does not specifically provide for any power of
the RTC to annul judgments of quasi-judicial bodies. However, in BF
Northwest Homeowners Association, Inc. v. Intermediate Appellate Court, 25
the Court ruled that the RTCs have jurisdiction over actions for annulment
of the decisions of the National Water Resources Council, which is a quasijudicial body ranked with inferior courts, pursuant to its original jurisdiction
to issue writs of certiorari, prohibition, and mandamus, under Sec. 21(1) of
B.P. Blg. 129, in relation to acts or omissions of an inferior court. This led to
the conclusion that despite the absence of any provision in B.P. Blg. 129,
the RTC had the power to entertain petitions for annulment of judgments of
inferior courts and administrative or quasi-judicial bodies of equal
ranking. This is also in harmony with the "pre-B.P. Blg. 129" rulings of the
Court recognizing the power of a trial court (court of first instance) to annul
final judgments.26 Hence, while it is true, as petitioners contend, that the
RTC had the authority to annul final judgments, such authority pertained
only to final judgments rendered by inferior courts and quasi-judicial
bodies of equal ranking with such inferior courts.

As stated at the outset, the main issue in this case is whether the RTC has
jurisdiction to annul a final judgment of the DARAB.
Note must be made that the petition for annulment of the DARAB decision
was filed with the RTC on June 13, 1997, before the advent of the 1997
Rules of Civil Procedure, which took effect on July 1, 1997. Thus, the
applicable law is B.P. Blg. 129 or the Judiciary Reorganization Act of 1980,
enacted on August 10, 1981.
It is also worthy of note that before the effectivity of B.P. Blg. 129, a court
of first instance has the authority to annul a final and executory judgment
rendered by another court of first instance or by another branch of the
same court. This was the Court's ruling in Dulap v. Court of Appeals. 20 Yet,
in subsequent cases,21 the Court held that the better policy, as a matter of
comity or courteous interaction between courts of first instance and the
branches thereof, is for the annulment cases to be tried by the same court
or branch which heard the main action.
The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo, 22 where
the Court expressed that pursuant to the policy of judicial stability, the
doctrine of non-interference between concurrent and coordinate courts
should be regarded as highly important in the administration of justice
whereby the judgment of a court of competent jurisdiction may not be
opened, modified or vacated by any court of concurrent jurisdiction.
With the introduction of B.P. Blg. 129, 23 the rule on annulment of judgments
was specifically provided in Section 9(2), which vested in the then
Intermediate Appellate Court (now the CA) the exclusive original
jurisdiction over actions for annulment of judgments of RTCs. Sec. 9(3) of
B.P. Blg. 129 also vested the CA with "exclusive appellate jurisdiction over
all final judgments, decisions, resolutions, orders, or awards of Regional
Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of this
Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of the Judiciary Act of 1948." As
provided in paragraph 16 of the Interim Rules and Guidelines implementing
B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively
appealable to the CA are those, which under the law, R.A. No. 5434, 24 or its

The foregoing statements beg the next question, i.e., whether the DARAB
is a quasi-judicial body with the rank of an inferior court such that the
RTC may take cognizance of an action for the annulments of its judgments.
The answer is no.
The DARAB is a quasi-judicial body created by Executive Order Nos. 229
and 129-A. R.A. No. 6657 delineated its adjudicatory powers and functions.
The DARAB Revised Rules of Procedure adopted on December 26, 1988 27
specifically provides for the manner of judicial review of its decisions,
orders, rulings, or awards. Rule XIV, Section 1 states:
SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or
ruling by the Board or its Adjudicators on any agrarian dispute or on any
matter pertaining to the application, implementation, enforcement or
interpretation of agrarian reform laws or rules and regulations promulgated
thereunder, may be brought within fifteen (15) days from receipt of a copy
thereof, to the Court of Appeals by certiorari, except as provided in the
next succeeding section. Notwithstanding an appeal to the Court of
Appeals the decision of the Board or Adjudicator appealed from, shall be
immediately executory.
Further, the prevailing 1997 Rules of Civil Procedure, as amended,
expressly provides for an appeal from the DARAB decisions to the CA. 28
The rule is that where legislation provides for an appeal from decisions of
certain administrative bodies to the CA, it means that such bodies are coequal with the RTC, in terms of rank and stature, and logically, beyond the
control of the latter.29

Given that DARAB decisions are appealable to the CA, the inevitable
conclusion is that the DARAB is a co-equal body with the RTC and its
decisions are beyond the RTC's control. The CA was therefore correct
in sustaining the RTC's dismissal of the petition for annulment of the
DARAB Decision dated October 5, 1995, as the RTC does not have any
jurisdiction to entertain the same.
This brings to fore the issue of whether the petition for annulment of the
DARAB judgment could be brought to the CA. As previously noted, Section
9(2) of B.P. Blg. 129 vested in the CA the exclusive original jurisdiction over
actions for annulment of judgments, but only those rendered by the RTCs.
It does not expressly give the CA the power to annul judgments of quasijudicial bodies. Thus, in Elcee Farms, Inc. v. Semillano, 30 the Court affirmed
the ruling of the CA that it has no jurisdiction to entertain a petition for
annulment of a final and executory judgment of the NLRC, citing Section 9
of B.P. Blg. 129, as amended, which only vests in the CA "exclusive
jurisdiction over actions for annulment of judgments of Regional Trial
Courts." This was reiterated in Galang v. Court of Appeals, 31 where the
Court ruled that that the CA is without jurisdiction to entertain a petition
for annulment of judgment of a final decision of the Securities and
Exchange Commission.
Recent rulings on similar cases involving annulments of judgments of
quasi-judicial bodies are also quite instructive on this matter.
In Cole v. Court of Appeals,32 involving an annulment of the judgment of
the HLURB Arbiter and the Office of the President (OP), filed with the CA,
the Court stated that, "(U)nder Rule 47 of the Rules of Court, the remedy of
annulment of judgment is confined to decisions of the Regional Trial Court
on the ground of extrinsic fraud and lack of jurisdiction x x x." The Court
further ruled, viz.:
Although the grounds set forth in the petition for annulment of judgment
are fraud and lack of jurisdiction, said petition cannot prosper for the
simple reason that the decision sought to be annulled was not
rendered by the Regional Trial Court but by an administrative
agency (HLU Arbiter and Office of the President), hence, not within
the jurisdiction of the Court of Appeals. There is no such remedy
as annulment of judgment of the HLURB or the Office of the
President. Assuming arguendo that the annulment petition can be treated
as a petition for review under Rule 43 of the 1997 Rules of Civil Procedure,
the same should have been dismissed by the Court of Appeals, because no
error of judgment was imputed to the HLURB and the Office of the
President. Fraud and lack of jurisdiction are beyond the province of
petitions under Rule 43 of the Rules of Court, as it covers only errors of
judgment. A petition for annulment of judgment is an initiatory remedy,
hence no error of judgment can be the subject thereof. Besides, the Arbiter
and the Office of the President indisputably have jurisdiction over the cases
brought before them in line with our ruling in Francisco Sycip, Jr. vs. Court
of Appeals, promulgated on March 17, 2000, where the aggrieved

townhouse buyers may seek protection from the HLURB under Presidential
Decree No. 957, otherwise known as "Subdivision and Condominium
Buyers' Protective Decree."33 (Emphasis supplied)
In Macalalag v. Ombudsman, 34 the Court ruled that Rule 47 of the 1997
Rules of Civil Procedure on annulment of judgments or final orders and
resolutions covers "annulment by the Court of Appeals of judgments or
final orders and resolutions in civil actions of Regional Trial Courts for which
the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies could no longer be availed of through no fault of the
petitioner." Thus, the Court concluded that judgments or final orders and
resolutions of the Ombudsman in administrative cases cannot be annulled
by the CA, more so, since The Ombudsman Act specifically deals with the
remedy of an aggrieved party from orders, directives and decisions of the
Ombudsman in administrative disciplinary cases only, and the right to
appeal is not to be considered granted to parties aggrieved by orders and
decisions of the Ombudsman in criminal or non-administrative cases.
While these cases involve annulments of judgments under the 1997 Rules
of Civil Procedure, as amended, still, they still find application in the
present case, as the provisions of B.P. Blg. 129 and the 1997 Rules of Civil
Procedure, as amended, on annulment of judgments are identical.
Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to
annul judgments or final orders and resolutions of quasi-judicial bodies like
the DARAB indicates its lack of such authority.
Further, petitioners are also asking the Court to take cognizance of their
prayer for the issuance of a writ of prohibition, which they claim was not
acted upon by the CA, citing the Court's action in Fortich v. Corona 35 where
the Court took cognizance of the petition previously filed with the CA due
to compelling reasons. The Court is not persuaded to do so.
Fortich involved a 144-hectare land located at San Vicente, Sumilao,
Bukidnon, owned by the Norberto Quisumbing, Sr. Management and
Development Corporation (NQSRMDC), which was leased as a pineapple
plantation to Del Monte Philippines, Inc. for a period of 10 years. During the
existence of the lease, the DAR placed the entire 144-hectare property
under compulsory acquisition and assessed the land value at P2.38 million.
When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development
Association) filed an application for conversion due to the passage of
Resolution No. 6 by the Provincial Development Council of Bukidnon and
Ordinance No. 24 by the Sangguniang Bayan of Sumilao, Bukidnon,
reclassifying the area from agricultural to industrial/institutional, the same
was disapproved by the DAR Secretary and instead, the property was
placed under the compulsory coverage of Comprehensive Agrarian Reform
Program for distribution to all qualified beneficiaries. This prompted
Governor Carlos O. Fortich of Bukidnon to file an appeal with the OP, while
NQSRMDC filed with the CA a petition for certiorari, and prohibition with

preliminary injunction.
The OP then issued a Decision dated March 29, 1996 reversing the DAR
Secretary's decision and approving the application for conversion.
Executive Secretary Ruben D. Torres denied the DAR's motion for
reconsideration for having been filed beyond the reglementary period of 15
days, and it was also declared that the OP Decision dated March 29, 1996
had already become final and executory.
Because of this, the farmer-beneficiaries staged a hunger strike on October
9, 1997, protesting the OP's decision. In order to resolve the strike, the OP
issued a so-called "Win/Win" resolution on November 7, 1997, modifying
the decision in that NQSRMDC's application for conversion is approved only
with respect to the approximately 44-hectare portion of the land adjacent
to the highway, as recommended by the Department of Agriculture, while
the remaining approximately 100 hectares traversed by an irrigation canal
and found to be suitable for agriculture shall be distributed to qualified
farmer-beneficiaries.1awphi1.net
A petition for certiorari and prohibition under Rule 65 of the Revised Rules
of Court36 was then filed with the Court, which was contested by the Office
of the Solicitor General on the ground that the proper remedy should have
been to file a petition for review directly with the CA in accordance with
Rule 43 of the Revised Rules of Court.
In resolving the issue, the Court recognized the rule that the Supreme
Court, CA and RTC have original concurrent jurisdiction to issue a writ of
certiorari, prohibition, and mandamus. However, due to compelling reasons
and in the interest of speedy justice, the Court resolved to take primary
jurisdiction over the petition in the interest of speedy justice, after which
the Court nullified the act of the OP in re-opening the case and
substantially modifying its March 29, 1996 Decision which had already
become final and executory, as it was in gross disregard of the rules and
basic legal precept that accord finality to administrative determinations.
It must be stressed at this point that the Court, as a rule, will not entertain
direct resort to it unless the redress desired cannot be obtained in the
appropriate courts, and exceptional and compelling circumstances, such as
cases of national interest and of serious implications, justify the availment
of the extraordinary remedy of writ of certiorari, prohibition, or mandamus
calling for the exercise of its primary jurisdiction. 37 The Court finds no
compelling circumstances in this case to warrant a relaxation of the
foregoing rule. The Fortich case is not analogous with the present case
such that the Court is not bound to abandon all rules, take primary
jurisdiction, and resolve the merits of petitioners' application for a writ of
prohibition.
In the present case, the assailed DARAB Decision dated October 5, 1995
granting the petition for relief from judgment and giving due course to the

Notice of Coverage was made pursuant to a petition for relief from


judgment filed by the DAR, albeit petitioners are contesting the validity of
the proceedings held thereon. On the other hand, in Fortich, the OP's
"Win/Win" resolution dated November 7, 1997 was made motu proprio, as
a result of the hunger strike staged by the farmer-beneficiaries.
Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the
Fortich case is a patently void judgment since it was evident that there was
already an existing final and executory OP Decision dated March 29, 1996.
In this case, the assailed DARAB Decision dated October 5, 1995 appears
to be regular on its face, and for its alleged nullity to be resolved, the Court
must delve into the records of the case in order to determine the validity of
petitioners' argument of lack of due process, absent notice and hearing.
Moreover, the principle of hierarchy of courts applies generally to cases
involving factual questions. As it is not a trier of facts, the Court cannot
entertain cases involving factual issues. 38 The question of whether the
DARAB Decision dated October 5, 1995 is null and void and enforceable
against petitioners for having been rendered without affording petitioners
due process is a factual question which requires a review of the records of
this case for it to be judiciously resolved.
The Court notes that the CA, indeed, failed to resolve petitioners' prayer for
the issuance of the writ of prohibition, which, significantly, focuses on the
alleged nullity of the DARAB Decision dated October 5, 1995. On this score,
the CA found that the application for the issuance of the writ of prohibition
was actually a collateral attack on the validity of the DARAB decision. But,
a final and executory judgment may be set aside in three ways; 39 and a
collateral attack, whereby in an action to obtain a different relief, an attack
on the judgment is nevertheless made as an incident thereof, 40 is one of
these. This tenet is based upon a court's inherent authority to expunge
void acts from its records. 41 Despite recognizing the need to resolve
petitioners' application for the writ of prohibition in its Resolution dated
January 12, 1999, the CA nonetheless summarily denied petitioners'
motion for reconsideration in its Resolution dated February 23, 2000, 42
leaving the matter hanging and unresolved.
At first, the Court considered resolving the merits of petitioners' motion for
reconsideration concerning their application for a writ of prohibition against
enforcing the DARAB Decision dated October 5, 1995. Thus, in a Resolution
dated June 5, 2006, the Court directed the CA to transmit the records of
DARAB Case No. 0555, which was previously required by the CA to be
forwarded to it per Resolution dated December 20, 1999. 43 However, as of
even date, the CA has not complied with the Court's Resolution. Withal,
upon re-examination of the issues involved in this case, the Court deems it
more judicious to remand this case to the CA for immediate resolution of
petitioners' motion for reconsideration, re: their application for the writ of
prohibition.

Moreover, the radical conflict in the findings of the Provincial Adjudicator


and the DARAB as regards the nature of the subject property necessitates
a review of the present case. In this regard, the CA is in a better position to
fully adjudicate the case for it can delve into the records to determine the
probative value of the evidence supporting the findings of the Provincial
Adjudicator and of the DARAB. In addition, the CA is empowered by its
internal rules to require parties to submit additional documents, as it may
find necessary to promote the ends of substantial justice, and further order
the transmittal of the proper records for it to fully adjudicate the case. After
all, it is an avowed policy of the courts that cases should be determined on
the merits, after full opportunity to all parties for ventilation of their causes
and defenses, rather than on technicality or some procedural
imperfections. In that way, the ends of justice would be served better. 44
WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED
to the Court of Appeals which is DIRECTED to resolve petitioners' prayer
for the issuance of the writ of prohibition in their Motion for
Reconsideration.
Upon finality of this Decision, let the records be remanded forthwith to the
Court of Appeals.
No pronouncement as to costs.

FIRST DIVISION
FERDINAND A. CRUZ,

G.R. No. 1
Petitioner,
Present:

- versus -

Acting

BERSAMIN
JUDGE HENRICK F. GINGOYON,

DEL CASTI

[Deceased],

PEREZ, an

JUDGE JESUS B. MUPAS, Acting

MENDOZA

Presiding Judge, Regional Trial Court


Branch 117, Pasay City,

SO ORDERED.

LEONARDO

Promulgat

Respondent.
Septembe
x------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
While there are remedies available to a party adjudged in contempt of
court, same may only be availed of when the procedures laid down for its availment
are satisfied.
By this Petition for Certiorari,[1] petitioner Ferdinand A. Cruz (petitioner)
assails the Order[2] dated November 25, 2005 issued by the now deceased Judge
Henrick F. Gingoyon (Judge Gingoyon) of Branch 117, Regional Trial Court (RTC) of
Pasay City (respondent court) citing him in direct contempt of court, the dispositive
portion of which states:
WHEREFORE, Ferdinand Cruz is hereby found
GUILTY beyond reasonable doubt of DIRECT CONTEMPT OF
COURT.
Accordingly, he is hereby sentenced to suffer
TWO (2) DAYS of imprisonment and to pay a fine of
P2,000.00.

SO ORDERED.[3]
Essentially, petitioner prays for this Court to declare the assailed Order
void and that Judge Gingoyon abused his discretion in citing him in contempt, as well
as in denying his motion to fix the amount of bond.
Antecedent Facts
This case stemmed from a Civil Complaint[4] filed by petitioner against
his neighbor, Benjamin Mina, Jr. (Mina), docketed as Civil Case No. 01-0401 in the RTC
of Pasay City for abatement of nuisance. In the said case, petitioner sought redress
from the court to declare as a nuisance the basketball goal which was permanently
attached to the second floor of Minas residence but protrudes to the alley which
serves as the publics only right of way.

fastidious and delicate and they cannot be faulted for such a


desirable trait. But they can only do so within their own
abode. Once they step outside the doors of their home, as it
were, they cannot foist their delicacy and fastidiousness
upon their neighbors. They must accept their alleys as the
jungle of people and the site of myriad of activities that it is.
They must also learn to accept the people in their place as
they are; they must live and let live. Unless they choose to
live in a less blighted human settlement or better still move
to an upscale residential area, their only remaining choice is
for them to live in perpetual conflict with their neighbors all
the days of their lives.[7]
Petitioner sought reconsideration of the Decision. In his Motion for
Reconsideration,[8] he took exception to the advice given by Judge Gingoyon thus:

Mina was declared in default[5] hence petitioner presented his evidence


ex-parte.
After trial, Judge Gingoyon, in his Decision[6] dated October 21, 2005,
declared the basketball goal as a public nuisance but dismissed the case on the
ground that petitioner lacked locus standi. Citing Article 701 of the Civil Code,
Judge Gingoyon ruled that the action for abatement of nuisance should be
commenced by the city or municipal mayor and not by a private individual like the
petitioner.
In the same Decision, Judge Gingoyon also opined that:
Plaintiffs must learn to accept the sad reality of the kind of
place they live in. x x x Their place is bursting with people
most of whom live in cramped tenements with no place to
spare for recreation, to laze around or doing their daily
household chores.
Thus, residents are forced by circumstance to
invade the alleys. The alleys become the grounds where
children run around and play, the venue where adults do all
sorts of things to entertain them or pass the time, their wash
area or even a place to cook food in. Take in a few ambulant
vendors who display their wares in their choice spots in the
alley and their customers that mill around them, and one can
only behold chaos if not madness in these alleys. But for the
residents of the places of this kind, they still find order in this
madness and get out of this kind of life unscathed. Its
because they all simply live and let live. Walking through the
alleys daily, the residents of the area have become adept at
[weaving] away from the playthings that children at play
throw every which way, sidestepping from the path of
children chasing each other, dodging and [ducking]from
awnings or canopies or clotheslines full of dripping clothes
that encroach [on] the alleys. Plaintiffs appear to be

The 12th and 13th paragraphs of the assailed


decision, though only an advice of the court, are off-tangent
and even spouses illegality;
Since when is living in cramped tenements
become a license for people to invade the alleys and use the
said alley for doing all sorts of things, i.e., as wash area or
cooking food? In effect, this court is making his own
legislations and providing for exceptions in law when there
are none, as far as nuisance is concerned;
The court might not be aware that in so doing, he
is giving a wrong signal to the defendants and to the public
at large that land grabbing, squatting, illegal occupation of
property is all right and justified when violators are those
people who live in cramped tenements or the
underprivileged poor, as the court in a sweeping statement
proclaimed that residents are forced by circumstance to
invade the alleys;
For the enlightenment of the court, and as was
proven during the ex-parte presentation of evidence by the
plaintiff, Edang estate comprises properties which are
subdivided and titled (plaintiffs and defendants have their
own titled properties and even the right of way or alley has a
separate title) and not the kind the court wrongfully
perceives the place to be;
Moreover, the court has no right to impose upon
the herein plaintiffs to accept their alleys as a jungle of
people and the site of myriad of activities that it is. For the
information of the court, plaintiffs have holdings in upscale
residential areas and it is a misconception for the court to
consider the Pasay City residence of the plaintiffs as a

blighted human settlement. Apparently the court is very


much misinformed and has no basis in his litany of eye sore
descriptions;
Undersigned is at quandary what will this court
do should he be similarly situated with the plaintiffs? Will the
court abandon his residence, giving way to illegality in the
name of live and let live principle?
Nonetheless, what remains bugling [sic] is the
fact that the court in his unsolicited advice knows exactly the
description of the alley where the complained nuisance is
located and the specific activities that the defendants do in
relation to the alley. The court should be reminded that the
undersigned plaintiff presented his evidence ex-parte and
where else can the court gather these information about the
alleys aside from the logical conclusion that the court has
been communicating with the defendant, off the record,
given that the latter has already been in default.[9]
(Emphasis supplied.)
Petitioner requested the respondent court to hear his motion for
reconsideration on November 18, 2005.[10]
In an Order[11] dated November 11, 2005, Judge Gingoyon set the
motion for hearing on November 18, 2005, a date chosen by petitioner,[12] and
directed him to substantiate his serious charge or show cause on even date why he
should not be punished for contempt.[13] Judge Gingoyon also opined that:
This court, more specifically this Presiding Judge, has not
seen the faintest of shadow of the defendant or heard even
an echo of his voice up to the present. Plaintiff Ferdinand
Cruz is therefore directed to substantiate his serious charge
that he has been communicating with the defendant off the
record, given that the latter has already been declared in
default. He is therefore ordered to show cause on
November 18, 2005, why he should not be punished for
contempt of court for committing improper conduct tending
directly or indirectly to degrade the administration of justice.
[14]

earmarked for criminal cases only. Moreover, long before


plaintiff filed his motion for reconsideration, this court no
longer scheduled hearings for November 18, 2005 because
there will be no Prosecutors on this date as they will be
holding their National Convention. Nevertheless, since it is
the specific prayer of the plaintiff that he will be submitting
his motion for resolution and approval by the court on said
date, the court yielded to his wish and set his motion for
hearing on his preferred date.
When this case was called for hearing today,
plaintiff did not appear. The court waited until 9:45 A.M. but
still no appearance was entered by the plaintiff or any person
who might represent himself as an authorized representative
of the plaintiff. Instead it was the defendant and his counsel
who appealed and who earlier filed an Opposition to Motion
for Reconsideration.
xxxx
In view of the failure of the plaintiff to appear in
todays hearing, the court considers the motion for
reconsideration submitted for resolution. As for the Order of
this court for the plaintiff to show cause why he should not be
punished for contempt of court, the court [motu proprio]
grants plaintiff last ten (10) days to show cause why he
should not be punished for contempt of court. After the lapse
of the said period, the court will resolve the issue of whether
or not he should be cited for contempt. x x x[16]
In his Compliance[17] to the Show Cause Order, petitioner maintained
that the alleged contumacious remarks he made have a leg to stand on for the same
were based on the circumstances of the instant case. He even reiterated his
insinuation that Judge Gingoyon communicated with Mina by posing the query:
where then did this court gather an exact description of the alley and the myriad of
[sic] activities that the inhabitants of interior Edang do in relation to the alley, when
the defendant was held in default and absent plaintiffs evidence so exacting as the
description made by this court in paragraphs 12 and 13 of his Decision dated
October 21, 2005.[18]
On November 25, 2005, Judge Gingoyon issued an Order[19] finding
petitioner guilty of direct contempt of court. The Order reads:

On November 18, 2005, petitioner, however, did not appear. Judge


Gingoyon then motu proprio issued an Order[15] in open court to give petitioner
another 10 days to show cause. The Order reads:
In his Motion for Reconsideration, plaintiff
Ferdinand Cruz specifically prayed that he is submitting his
Motion for Resolution and Approval of this court today, Friday,
November 18, 2005, at 8:30 A.M. Fridays have always been

Ferdinand Cruz was ordered to substantiate with


facts his serious charge that the Judge has been
communicating with the defendant off the record. But
instead of presenting proof of facts or stating facts, Cruz
simply shot back with a query: Where then did this court
gather an exact description of the alley and the myriad
activities that the inhabitants of interior Edang do in relation

to the alley, when the defendant was held in default and


absent plaintiffs evidence so exacting as the description
made by this court By this token, Cruz adamantly stood
pat on his accusation, which now appears to be wholly based
on suspicion, that the Judge has been communicating with
the defendant off the record.
The suspicion of Ferdinand Cruz may be
paraphrased thus: The only way for the Judge [to] know the
blight in his place in Pasay City is for the Judge to
communicate with the defendant. It is only by
communicating with the defendant and by no other means
may the Judge know such blight.
Blinded by his suspicion, Cruz did not consider
that as State Prosecutor, the Judge was detailed in Pasay City
in 1991 and that he has been a judge in Pasay City since
1997. The nuisance that Cruz complained of, or the blight of
his place, is not a unique feature of that particular place. It is
replicated in many other places of the city. Indeed, it is but a
microcosm of what is prevalent not only within the urban
areas within Metro Manila but also in many other highly
urbanized areas in the country. Judges are no hermits that
they would fail to witness this blight. Cruz did not care to
make this allowance for the benefit of preserving the dignity
of the court.

On December 1, 2005, at 10:00 A.M., petitioner filed an Urgent Ex-Parte


Motion to Post Bond and Quash Warrant of Arrest (Ex-Parte Motion)[22] with the
respondent court. In said Ex-Parte Motion, petitioner averred that:
xxxx
2. To date, undersigned has already filed a
Petition for Certiorari before the Supreme Court;
xxxx
The respondent court denied the Ex-Parte Motion in its Order[23] dated
December 1, 2005 based on petitioners failure to attach the alleged duly filed
Petition for Certiorari with the Supreme Court. The respondent court held that unless
petitioner has shown proof of filing said petition for certiorari, he cannot avail of the
remedy provided in Section 2, Rule 71 of the Rules of Court.
Meanwhile, Judge Gingoyon was slain on December 31, 2005. In a
Resolution[24] dated February 1, 2006, this Court directed the incumbent Judge of
Branch 117, RTC of Pasay City, Judge Jesus B. Mupas, to submit a comment on the
petition inasmuch as direct or indirect contempt pertains to the misbehavior or
disrespect committed towards the court and not to judges in their personal
capacities.[25]
Issues

Cruzs open accusation without factual basis that


the judge is communicating with the defendant is an act that
brings the court into disrepute or disrespect; or offends its
dignity, affront its majesty, or challenge its authority. It
constitutes contempt of court. (People vs. De Leon, L-10236,
January 31, 1958). x x x By alleging that the judge
communicated with the defendant, Cruz is in effect charging
the judge of partiality. Since there is not an iota of proof that
the judge did the act complained of, the charge of partiality is
uncalled for and constitutes direct contempt (Salcedo vs.
Hernandez, 61 Phil. 724; Lualhati vs. Albert, 57 Phil.86;
Malolos vs. Reyes, 111 Phil. 1113).
WHEREFORE, Ferdinand Cruz is hereby found
GUILTY beyond reasonable doubt of DIRECT CONTEMPT OF
COURT.
Accordingly, he is hereby sentenced to suffer
TWO (2) DAYS of imprisonment and to pay a fine of
P2,000.00.

Petitioner raises the following issues:


A.
WHETHER X X X PETITIONER [IS] GUILTY OF CONTEMPT OF
COURT.
B.
WHETHER RESPONDENT COURT HAS ENOUGH FACTUAL
BASIS FOR CITING PETITIONER IN CONTEMPT.
C.
WHETHER THE RESPONDENT COURT ABUSED ITS
DISCRETION IN DENYING PETITIONERS MOTION TO FIX
BOND.[26]
The issues may be summed up as follows: whether the respondent court
properly adjudged petitioner in direct contempt of court and whether abuse of
discretion was committed by respondent court in denying the Ex-Parte Motion.

SO ORDERED.[20]
An Order of Arrest[21] was issued against the petitioner on even date.

Petitioner contends that the alleged contumacious remark is merely a fair


observation or comment and a logical conclusion made based on the detailed
description given by the respondent court of what has been happening in the alley

subject of the civil case. Petitioner avers that no other conclusion can be had except
that Judge Gingoyon was communicating with the defendant off the record, since the
exact description of what was happening in the alley was not adduced in evidence
during trial. Further, petitioner contends that fair and logical conclusion founded on
circumstances of the case cannot be considered contemptuous.
Petitioner likewise insists that the respondent court abused its discretion
when it denied his motion to fix bond, therefore violating due process.
Our Ruling
We find the petition unmeritorious.
A pleading
containing
derogatory,
offensive or
malicious
statements
submitted to
the court or
judge
wherein
proceedings
are pending
is considered
direct
contempt.
[C]ontemptuous statements made in pleadings filed with the court
constitute direct contempt.[27] [A] pleading x x x containing derogatory, offensive
or malicious statements submitted to the court or judge in which the proceedings are
pending x x x has been held to be equivalent to misbehavior committed in the
presence of or so near a court or judge as to interrupt the proceedings before the
same within the meaning of Rule 71, 1 of the Rules of Court and, therefore,
constitutes direct contempt.[28]
Based on the abovementioned facts and consistent with the foregoing
principles set forth, we agree with the finding of respondent court that petitioner is
guilty of direct contempt of court.
The Motion for Reconsideration filed by petitioner with the respondent
court contained a serious allegation that Judge Gingoyon has been communicating
with the defendant off the record, which is considered as a grave offense. This
allegation is unsubstantiated and totally bereft of factual basis. In fact, when asked
to adduce proof of the allegation, petitioner was not able to give any, but repeatedly
argued that it is his fair observation or conclusion.[29]
Petitioner vehemently stood by his suspicion and repeated the allegation
in the Compliance to the show-cause Order dated November 11, 2005 which he filed
with the respondent court. The allegation was repeated despite Judge Gingoyons

outright denial of communicating with the defendant and explanation in the


Order[30] dated November 25, 2005 that Judge Gingoyon was familiar with the area
as he was detailed in Pasay City since 1991 as State Prosecutor, and thereafter, as
judge since 1997.
Instead of showing proof of the alleged communication between Judge
Gingoyon and the defendant off the record, petitioner stubbornly insisted that there is
nothing contumacious about his allegation against the Judge as he was just giving his
fair and logical observation. Clearly, petitioner openly accused Judge Gingoyon of
wrongdoing without factual basis. Suffice it to say that this accusation is a dangerous
one as it exposes Judge Gingoyon to severe reprimand and even removal from office.
On the other hand, a careful perusal of the description as provided by
Judge Gingoyon in the Decision shows but a general description of what is normally
seen and what normally happens in places such as Edang Street, to wit: x x x place
is bursting with people most of whom live in cramped tenements with no place to
spare for recreation, to laze around or [do] their daily household chores x x x. The
alleys become the grounds where children run around and play, the venue where
adults do all sorts of things to entertain [themselves] or pass the time, their wash
area or even a place to cook food in x x x. Ambulant vendors who display their
wares in the alley and their customers that mill around them; x x x children chasing
each other, dodging and [ducking] from awnings or canopies; x x x
clotheslines full of dripping clothes that encroach [on] the alleys x x x.[31]
The act of petitioner in openly accusing Judge Gingoyon of
communicating with the defendant off the record, without factual basis, brings the
court into disrepute. The accusation in the Motion for Reconsideration and the
Compliance submitted by the petitioner to the respondent court is derogatory,
offensive and malicious. The accusation taints the credibility and the dignity of the
court and questions its impartiality. It is a direct affront to the integrity and authority
of the court, subjecting it to loss of public respect and confidence, which ultimately
affects the administration of justice.
Furthermore, assuming that the conclusion of petitioner is justified by the
facts, it is still not a valid defense in cases of contempt. Where the matter is abusive
or insulting, evidence that the language used was justified by the facts is not
admissible as a defense. Respect for the judicial office should always be observed
and enforced.[32]
Moreover, the charge of partiality is uncalled for, and there being no
scintilla of proof that Judge Gingoyon did the act complained of, petitioners act
amounts to direct contempt of court.[33]
Denial of the
Ex-Parte
Motion
to
Post
Bond
and Quash
Warrant of
Arrest
is
proper;

there is no
abuse
of
discretion on
the part of
respondent
court.
Petitioner avers that the respondent court abused its discretion in
denying his Ex-Parte Motion. Petitioner insists that the respondent court should have
granted his Ex-Parte Motion since he already filed a Petition for Certiorari before this
Court pursuant to Rule 71 of the Rules of Court. He further avers that respondent
court violated his right to due process by fixing the bond only on December 5, 2005
or 10 days after the Orders of contempt and arrest were issued.
Petitioners contention lacks merit.
The respondent court was well within the bounds of its authority
when it
denied petitioners Ex-Parte Motion.
A person may be adjudged in direct contempt of court pursuant to
Section 1, Rule 71 of the Rules of Court[34] without need of a hearing but may
thereafter avail of the remedies of certiorari or prohibition.[35]
Section 2, Rule 71 of the Rules of Court provides:
Section 2. Remedy therefrom. The person
adjudged in direct contempt by any court may not appeal
therefrom, but may avail himself of the remedies of certiorari
or prohibition. The execution of the judgment shall be
suspended pending resolution of such petition, provided
such person files a bond fixed by the court which rendered
the judgment and conditioned that he will abide by and
perform the judgment should the petition be decided against
him. (Emphasis supplied.)
In this case, we find that the respondent court properly denied
petitioners Ex-Parte Motion there being no proof that he already filed a petition for
certiorari. Notably, the Ex-Parte Motion was filed with the respondent court on
December 1, 2005 at 10:00 A.M.[36] and therein petitioner stated that he already
filed a Petition for Certiorari with this Court. However, perusal of the records would
show that the Petition for Certiorari was filed with the Supreme Court on the same
day but at 1:06 P.M.[37] Clearly, when the motion was filed with the respondent
court, it cannot be accurately said that a petition for certiorari was already duly filed
with this Court. Significantly, the records show that respondent court was furnished a
copy of the Petition for Certiorari by registered mail and which was received only on
December 5, 2005.[38] It is therefore clear that at the time that petitioner filed the
Ex-Parte Motion with the respondent court, he has not yet availed of the remedy of
certiorari. In fact, it was only after filing the Ex- Parte Motion with respondent court

that petitioner filed the Petition for Certiorari with the Supreme Court. This explained
why no proof of such filing was presented by petitioner to the respondent court thus
prompting it to declare that unless petitioner has shown proof of filing said petition for
certiorari, he cannot avail of the remedy provided in Section 2, Rule 71 of the Rules of
Court.[39] Petitioner thus cannot attribute abuse of discretion on the part of
respondent court in denying the Ex-Parte Motion. To reiterate, at the time the said
Ex-Parte Motion was filed and acted upon by the respondent court, petitioner was not
yet entitled to the remedy prayed for. Clearly, the respondent court did not commit
error, nor did it overstep its authority in denying petitioners Ex-Parte Motion.
All told, we take a similar stand as Judge Gingoyon and affirm the Order
adjudging petitioner guilty of direct contempt. However, as to the penalty imposed
upon petitioner, we find the fine of P2,000.00 commensurate with the acts
committed.
We also find the necessity to emphasize strict observance of the
hierarchy of courts. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first level
(inferior) courts should be filed with the [RTC], and those against the latter, with the
Court of Appeals (CA). A direct invocation of the Supreme Courts original jurisdiction
to issue extraordinary writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition.[40] For
the guidance of the petitioner, [t]his Courts original jurisdiction to issue writs of
certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and
injunction) is not exclusive.[41] Its jurisdiction is concurrent with the CA, and with
the RTC in proper cases.[42] However, this concurrence of jurisdiction does not
grant upon a party seeking any of the extraordinary writs the absolute freedom to file
his petition with the court of his choice. This Court is a court of last resort, and must
so remain if it is to satisfactorily perform the functions assigned to it by the
Constitution and immemorial tradition.[43] Unwarranted demands upon this
Courts attention must be prevented to allow time and devotion for pressing matters
within its exclusive jurisdiction.
Adhering to the policy on judicial hierarchy of courts, [w]here the
issuance of an extraordinary writ is also within the competence of the [CA] or a [RTC],
it is in either of these courts that the specific action for the writs procurement must
be presented.[44] In consequence, the instant petition should have been filed with
the CA as there is no allegation of any special or compelling reason to warrant direct
recourse to this Court. However, to avoid further delay, we deem it practical to
resolve the controversy.
Finally, it must be pointed out that on April 28, 2010, we directed
petitioner to cause the entry of appearance of his counsel[45] within 15 days from
notice. Petitioner failed to comply hence we directed him to show cause why he
should not be disciplinarily dealt with in our Resolution dated September 6, 2010.
[46] Still, petitioner failed to comply hence he was fined P1,000.00 in our Resolution
dated January 17, 2011[47] which was increased to P3,000.00 in our Resolution of
June 29, 2011. Consequently, petitioner is hereby directed to pay said fine of
P3,000.00 otherwise he would be dealt with more severely.
WHEREFORE, the Petition for Certiorari is DISMISSED. The Order

dated November 25, 2005 of Branch 117 of the Regional Trial Court of Pasay City
finding petitioner Ferdinand A. Cruz guilty of direct contempt is AFFIRMED with
MODIFICATION. Petitioner is hereby sentenced to pay a fine of P2,000.00. In
addition, petitioner is ordered to PAY a fine of P3,000.00 for his repeated failure to
heed the directives of this Court. Petitioner is STERNLY WARNED that a repetition
of the same or similar act shall be dealt with more severely.
G.R. No. 123050. January 20, 1999]
SO ORDERED.

SUICO

INDUSTRIAL
CORPORATION,
SPS.
ESMERALDO
and
ELIZABETH SUICO, petitioners, vs. COURT OF APPEALS
and PDCP DEVELOPMENT BANK, INC., respondents.
DECISION

MARTINEZ, J.:
On January 19, 1987, petitioner Suico Industrial Corporation,
represented by Esmeraldo Suico, its President, secured a loan of
P2,500,000.00 payable in five (5) years, from respondent Private
Development Corporation of the Philippines (now PDCP Bank). As security
thereof, petitioner spouses mortgaged their two (2) real estate properties
situated at Mandaue City, Cebu covered by Transfer Certificate of Title
(TCT) Nos. 18324 and 23116. Sometime in 1991, petitioners obtained a
second loan of P2,000,000.00 payable in five (5) years, and secured it with
the same real properties, which was granted by respondent PDCP Bank.
For failure to pay the balance of the loan amounting to
P3,900,000.00 as of 1993, respondent PDCP Bank caused the extrajudicial
foreclosure of the real estate mortgage. It was adjudge as the highest
bidder and a Certificate of Sale dated February 29, 1993 was duly issued
by the Sheriff of Mandaue in its favor. Petitioner failed to redeem the said
properties. After expiration of the one (1)-year redemption period,
ownership over the properties were consolidated and TCT Nos. 34988 and
34987 were correspondingly issued in the name of respondent PDCP Bank.
On November 16, 1994, respondent PDCP Bank filed with the
Regional Trial Court (RTC of Mandaue City, Branch 28 an Ex parte Motion
for the Issuance of Writ of Possession[1] which was granted in an Order
dated December 8, 1994.[2] On December 15, 1994, a writ of
possession[3] was thereafter issued. However, the writ could not be
enforced because on December 9, 1994, petitioners filed a Complaint for
Specific Performance, Injunction and Damages (with Prayer for Restraining
Order)[4] before the RTC of Mandaue City, Branch 56 seeking to enjoin
respondent PDCP Bank from selling the mortgaged properties and from
taking physical possession over the same during the pendency of the case.
On January 17, 1995, RTC Branch 56 issued an Order[5] granting the

injunction sought for by petitioners (therein plaintiffs). It likewise deferred


resolution of the motion to dismiss petitioners complaint filed by
respondent PDCP Bank (therein defendant). Pertinent portions of the order
state that:
During the hearing on Plaintiffs application for preliminary injunction,
Plaintiffs presented Esmeraldo Suico who testified that per arrangement
with a certain Mae Siy and Fajardo , former officers of Defendant bank,
Plaintiffs were supposed to intentionally default in their payments and
eventually consolidate title in Defendant. In exchange Defendant was
supposed to allow a repurchase of the property by Plaintiffs or their
recommendee at Five Million Pesos (P5,000,000.00).
Also presented was Raul Perez, Asset Clerk of the Assessors Office of
Mandaue City, who testified that it was indeed herein Plaintiffs-spouses
who facilitated the transfer of the lots to Defendant whose two
representatives, even showed up to inquire if Plaintiffs had been at Perez
office.
After careful consideration of the evidence so far submitted, this Court
convinced that there indeed was an arrangement between herein Plaintiffs
and Defendant as adverted to by Plaintiffs. This conviction by the Court
however will naturally be influenced by whatever evidence the parties will
present in the course of the trial of this case.

SO ORDERED.[6]
On January 18, 1995, RTC Branch 56 issued the Writ of Preliminary
Injunction, providing therein:
Whereas, on December 13, 1994, the Regional Trial Court, Branch 28 of
Mandaue City, issued a Restraining Order in the above-entitled case,
enjoining the defendant PDCP Bank, its attorneys, agents or its duly
authorized officer or persons acting for and in their behalf from selling the
mortgaged properties described in the complaint to persons not
recommended by plaintiffs and from taking physical possession over the
same pending resolution of the prayer for issuance of permanent
injunction.
"Whereas, after hearing, this Court on January 17, 1995, issued an Order
expanding the restraining order dated December 13, 1994, issued by RTC
Branch 28 into an order for the issuance of a writ of preliminary injunction,
upon plaintiffs posting of a bond in the amount of P50,000.00 conditioned
for the payment of damages which the defendant may suffer by reason of
the issuance of the injunction.
Whereas, the bond as required was duly filed and approved by the Court
on January 18, 1995.

The Court also realizes that a denial of the prayer for preliminary
injunction will result in irreparable damage to Plaintiffs as a consequence of
the dislocation of their family and business and possible loss of the
properties under litigation should Defendant decide to dispose of the same.

Whereas, you Private Development Corporation of the Philippines now


known as PDCP Bank, your representatives and assigns are hereby ordered
not to dispose of the properties covered by transfer Certificate of Title Nos.
18324 and 23116 including improvements found therein or to take physical
possession of the same until further orders from this Court.[7]

On the other hand, maintenance of status quo thru injunction will hardly
prejudice the Defendant bank in whose name the properties have been
already titled. Furthermore, Defendants interest will be amply protected
not only by the injunction bond which the Court will issue but also because
the passage of time will certainly enhance the value of the properties.

The Motion for Reconsideration (of the Order dated January 17,
1995) and the Motion to Dismiss (petitioners complaint) both filed by
respondent PDCP Bank were denied by RTC Branch 56 in an Order dated
June 21, 1995.[8]

Foregoing considered, the Court in the interest of justice and equity,


hereby GRANTS the injunction prayed for and accordingly orders the
Defendant, its representatives and assigns (enjoined) from disposing of the
properties covered by Transfer Certificate of Title Nos. 18324 and 23116
including improvements found therein or taking physical possession of the
same until further orders from this Court.
Bond is hereby fixed at Fifty Thousand Pesos (P50,000.00).
Resolution of Defendants Motion to Dismiss is deferred pending further
reception of evidence.

In its petition for certiorari and mandamus with prayer for a writ of
preliminary prohibitory injunction filed with the Court of Appeals on June
26, 1995, respondent PDCP Bank prayed that the Order dated January 17,
1995 granting the writ of preliminary injunction be set aside, declared void
and without any further force and effect. It likewise prayed that the sheriff
of Mandaue City be ordered to implement the writ of possession.
On August 28, 1995, respondent Court of Appeals rendered the
challenged decision[9] which ruled that RTC Branch 56 exceeded its
jurisdiction when it issued the writ of injunction against the enforcement of
the writ of possession granted by RTC Branch 28. It ratiocinated in this
wise:
In a Petition for Certiorari, the court must confine itself to the issue of

whether or not the respondent court lacked or exceeded its jurisdiction or


committed grave abuse of discretion (San Pedro vs. Court of Appeals, 235
SCRA 145). Here, the respondent Regional Trial Court exceeded its
jurisdiction when it issued the writ of injunction complained of.
Well-settled is the rule that no court has the power to interfere by
injunction with the judgments or orders of another court of concurrent
jurisdiction having the power to grant the relief sought by injunction. x x x
(Rafael Aquino, Sr., et al v. Judge Julito B. Valenciano, et al., A.M. No. Mtj93-746, December 27, 1994, 239 SCRA 428; Prudential Bank v. Gapultos,
No. L-41835, 19 January 1990, 181 SCRA 159; Darwin v. Tokonaga, G.R. No.
54177, 27 May 1991, 197 SCRA 442; Santos v. Bayhon, G.R. No. 88643, 23
July 1991, 199 SCRA 525).
Here, the respondent court issued an injunction against the enforcement of
the writ of possession granted by the Regional Trial Court, Branch 28. This
cannot be done. It was the ministerial duty of the trial court to grant such
writ of possession.
Said the Supreme Court:
x x x With more reason, a purchaser can demand a writ of possession after
the expiration of the redemption period. Thus, in F. David Enterprises vs.
Insular Bank of Asia & America, we held:
It is settled the buyer in a foreclosure sale becomes the absolute owner of
the property purchased if it is not redeemed during the period of one year
after the registration of sale. As such, he is entitled to the possession of
the property and can demand it at any time following the consolidation of
ownership in his name and the issuance to him of a new transfer certificate
of title. The buyer can in fact demand possession of the land even during
the redemption period except that he has to post a bond in accordance
with Section 7 of Act 3135 as amended. No such bond is required after the
redemption period if the property is not redeemed. Possession of the land
then becoming an absolute right of the purchaser as confirmed owner.
Upon proper application and proof of title, the issuance of the writ of
possession becomes a ministerial duty of the court. (Aurora Gonzales
Vda. de Zaballero, et al, v. Hon. Court of Appeals, et al., G.R. No. 106958,
February 9, 1994, 229 SCRA 810; F. David Enterprises vs. Insular Bank of
Asia & America, 184 SCRA 294)
Much as We sympathize with private respondents, it was clearly
petitioners right to ask for the writ and to acquire possession of subject
properties and it is improper for the respondent court to stay
implementation of said writ.
As to the other reasons advanced by petitioner, as stressed by private

respondents, the same are questions of fact better left for respondent
courts determination, at this stage of the litigation below.
WHEREFORE, the petition is hereby GRANTED; and the questioned Order
of January 17, 1995 is SET ASIDE. Costs against private respondents.
SO ORDERED.[10]
The motion for reconsideration having been denied in a Resolution
dated December 12, 1995[11] petitioners filed this instant certiorari
petition praying that the writ of preliminary injunction issued by RTC
Branch 56 be upheld so that a trial on the merits of the case may ensue.
The focal point of inquiry is whether or not RTC Branch 56 can enjoin
the enforcement of the writ of possession issued by RTC Branch 28.
Petitioners alleged in their complaint for specific performance,
injunction and damages filed before RTC Branch 56 that they had agreed
on a plan with respondent PDCP Bank to intentionally default in their
payments so that a foreclosure of mortgage can be effected and title to the
parcels of land would eventually be consolidated in the name of
respondent PDCP Bank. Thereafter, respondent PDCP Bank was supposed
to allow them to purchase the properties for P5,000,000.00 thru the latters
recommended buyer. The recommendees of petitioners were rejected by
respondent PDCP Bank. The selling price thereof was increased thereby
preventing petitioners from redeeming the properties. In this regard,
petitioners sought to enjoin the respondents PDCP Bank from selling the
said mortgaged properties to persons not recommended by petitioners and
from taking physical possession thereof during the pendency of the case.
Thus, petitioners now seek to uphold the propriety of the writ of
injunction issued by the RTC Branch 56 enjoining the enforcement of the
writ of possession granted by RTC Branch 28.
The petition does not deserve merit.
First. RTC Branch 56 acted with grave abuse of discretion for having
issued the writ of injunction which prevented the implementation of the
writ of possession issued by RTC Branch 28. The issuance of the writ of
injunction was not proper in the absence of any legal right on the part of
petitioners to enjoin the enforcement of the writ of possession in favor of
respondent PDCP Bank.
We espoused in Arcega v. Court of Appeals[12] that:
For the issuance of the writ of preliminary injunction to be proper, it must
be shown that the invasion of the right sought to be protected is material
and substantial, that the right of complainant is clear and unmistakable
and there is an urgent and paramount necessity for the writ to prevent
serious damage.[13]

"In the absence of a clear legal right, the issuance of the injunctive writ
constitute grave abuse of discretion.[14] Injunction is not designed to
protect contingent or future rights, Where the complainants right or title is
doubtful or disputed, injunction is not proper.[15] The possibility of
irreparable damage without proof of actual existing right is no ground for
an injunction.[16]
When petitioners failed to pay the balance of the loan and thereafter
failed to redeem the properties, title to the property had already been
transferred to respondent PDCP Bank. Respondent PDCP Banks right to
possess the property is clear and is based on its right of ownership as a
purchaser of the properties in the foreclosure sale to whom title has been
conveyed.[17] Under Section 7 of Act No. 3135 and Section 35 of Rule 39,
the purchaser in a foreclosure sale is entitled to possession of the property.
[18] Respondent PDCP Bank has a better right to possess the subject
property because of its title over the same.[19]
Furthermore, petitioners undertook a procedural misstep when it
filed a suit for specific performance, injunction and damages before the
RTC Branch 56 instead of a petition to set aside the sale and cancellation of
the writ of possession as provided under Section 8 of Act 3135:
"Sec. 8. The debtor may, in the proceedings in which possession was
requested, but not later than thirty days after the purchaser was given
possession, petition that the sale be set aside and the writ of possession
cancelled, specifying the damages suffered by him, because the mortgage
was not violated or the sale was not made in accordance with the
provisions hereof, and the court shall take cognizance of this petition in
accordance with the summary procedure provided for in section one
hundred and twelve of Act Number Four Hundred and ninety six; and if it
finds the complaint of the debtor justified, it shall dispose in his favor of all
or part of the bond furnished by the person who obtained possession.
Either of the parties may appeal from the order of the judge in accordance
with section fourteen of Act Numbered Four hundred and ninety-six; but
the order of possession shall continue in effect during the pendency of the
appeal.[20]
Second. Indeed, it is the ministerial duty of the trial court to grant
such writ of possession.
In Sulit v. Court of Appeals,[21] the rule was applied in this manner:
No discretion appears to be left to the Court. Any question regarding the
regularity and validity of the sale, as well as the consequent cancellation of
the writ is to be determined in a subsequent proceeding as outlined in
Section 8, and it cannot be raised as a justification for opposing the
issuance of the writ of possession since, under the Act, the proceeding for
this is ex parte.[22] Such recourse is available of the mortgagee, who
effects the extrajudicial foreclosure of the mortgage, even before the
expiration of the period of redemption provided by law and the Rules of

Court.[23]
This is stated also in A.G. Development Corporation v. Court of
Appeals:[24]
A writ of possession is generally understood to be an order whereby the
sheriff is commanded to place a person in possession of a real or personal
property,[25] such as when a property is extrajudicially foreclosed.[26] In
this regard, the issuance of a writ of possession to a purchaser in an
extrajudicial foreclosure is merely a ministerial function.[27] As such, the
Court neither exercises its official discretion nor judgment.[28]
Third. The statute books are replete with jurisprudence to the effect
that trial courts have no power to interfere by injunction with the orders or
judgments issued by another court of concurrent or coordinate jurisdiction.
[29] In this regard, RTC Branch 56 therefore has no power nor authority to
nullify or enjoin the enforcement of the writ of possession issued by RTC
Branch 28.
WHEREFORE, the petition is DENIED. The Decision dated August
28, 1995 and the Resolution dated December 12, 1995 of respondent Court
of Appeals are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Pardo, JJ., concur.