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1.

Neypes vs. CA 469 SCRA 633 (GR 141524)

Neypes vs. CA 469 SCRA 633 (GR 141524)


Facts:

Petitioners filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion
with preliminary injunction before the RTC of Roxas, Oriental Mindoro, against the Bureau of Forest
Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del Mundo, namely, Fe,
Corazon, Josefa, Salvador and Carmen.

In the course of the proceedings, the parties filed various motions with the trial court. Among these were:
(1) the motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau
of Forest Development in default and
(2) the motions to dismiss filed by the respondent heirs and the Land Bank of the Philippines,
respectively.

The trial court resolved the foregoing motions as follows:


(1) the petitioners motion to declare respondents Bureau of Lands and Bureau of Forest Development
in default was granted for their failure to file an answer, but denied as against the respondent heirs of del
Mundo because the substituted service of summons on them was improper;
(2) the Land Banks motion to dismiss for lack of cause of action was denied because there were
hypothetical admissions and matters that could be determined only after trial, and
(3) the motion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also
denied because there were factual matters that could be determined only after trial.

The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on the
ground that the trial court could very well resolve the issue of prescription from the bare allegations of the
complaint itself without waiting for the trial proper.

In an order dated Feb. 12, 1998, the trial court dismissed petitioners complaint on the ground that the action
had already prescribed.

Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15 th day thereafter
or on March 18, 1998, filed a motion for reconsideration.

On July 1, 1998, the trial court issued another order dismissing the motion for reconsideration which petitioners
received on July 22, 1998.

Five days later, on July 27, 1998, petitioners filed a notice of appeal and paid the appeal fees on August 3,
1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late. This
was received by petitioners on July 31, 1998.

Petitioners filed a motion for reconsideration but this too was denied in an order dated September 3, 1998.

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners
assailed the dismissal of the notice of appeal before the Court of Appeals.
They argued that the 15-day reglementary period to appeal started to run only on July 22, 1998 since this was the day
they received the final order of the trial court denying their motion for reconsideration. When they filed their notice of
appeal on July 27, 1998, only five days had elapsed and they were well within the reglementary period for appeal.

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day period to
appeal should have been reckoned from March 3, 1998 or the day they received the February 12, 1998 order
dismissing their complaint. It held further:
Perforce the petitioners tardy appeal was correctly dismissed for the (P)erfection of an appeal within the reglementary
period and in the manner prescribed by law is jurisdictional and non-compliance with such legal requirement is fatal
and effectively renders the judgment final and executory.

Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by the Court of
Appeals on January 6, 2000.

Hence, this petition.


Issue:

WON THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS FINAL ORDER IN
SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF
RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND
FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS THROUGH COUNSEL ON
JULY 22, 1998.
Ruling:

The issues essentially revolve around the period within which petitioners should have filed their notice of
appeal.

The right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and
may be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to
avail of the right to appeal must comply with the requirements of the Rules. Failure to do so often leads to the
loss of the right to appeal.

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from the notice of the
judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of
appeal and a record on appeal within thirty (30) days from the notice of judgment or final order.

A final judgment or order is one that finally disposes of a case, leaving nothing more for the court to do with
respect to it. It is an adjudication on the merits which, considering the evidence presented at the trial, declares
categorically what the rights and obligations of the parties are; or it may be an order or judgment that
dismisses an action

Petitioners argue that the order of July 1, 1998 denying their motion for reconsideration should be construed as
the final order, not the February 12, 1998 order which dismissed their complaint. Since they received their
copy of the denial of their motion for reconsideration only on July 22, 1998, the 15-day reglementary period to
appeal had not yet lapsed when they filed their notice of appeal on July 27, 1998.

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final order to appeal the decision
of the trial court. On the 15 th day of the original appeal period (March 18, 1998), petitioners did not file a notice
of appeal but instead opted to file a motion for reconsideration. According to the trial court, the MR only
interrupted the running of the 15-day appeal period.

It ruled that petitioners, having filed their MR on the last day of the 15-day reglementary period to appeal, had
only one (1) day left to file the notice of appeal upon receipt of the notice of denial of their MR. Petitioners,
however, argue that they were entitled under the Rules to a fresh period of 15 days from receipt of the
final order or the order dismissing their motion for reconsideration.

In situations where technicalities were dispensed with, our decisions were not meant to undermine the force
and effectivity of the periods set by law. But we hasten to add that in those rare cases where procedural rules
were not stringently applied, there always existed a clear need to prevent the commission of a grave injustice.
Our judicial system and the courts have always tried to maintain a healthy balance between the strict
enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just
and proper disposition of his cause.

The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to
amend, repeal or even establish new rules for a more simplified and inexpensive process, and the
speedy disposition of cases. In the rules governing appeals to it and to the Court of Appeals,
particularly Rules 42,43and 45the Court allows extensions of time, based on justifiable and
compelling reasons, for parties to file their appeals. These extensions may consist of 15 days or
more.

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their
cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in
the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for
reconsideration.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of Appeals REVERSED
and SET ASIDE. Accordingly, let the records of this case be remanded to the Court of Appeals for further
proceedings.

2.

Pinga vs. Heirs of Santiago 494 SCRA 393 (GR 170354)

The constitutional faculty of the Court to promulgate rules of practice and procedure 1 necessarily carries the power to
overturn judicial precedents on points of remedial law through the amendment of the Rules of Court. One of the
notable changes introduced in the 1997 Rules of Civil Procedure is the explicit proviso that if a complaint is dismissed
due to fault of the plaintiff, such dismissal is "without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action."2 The innovation was instituted in spite of previous jurisprudence
holding that the fact of the dismissal of the complaint was sufficient to justify the dismissal as well of the compulsory
counterclaim.3
In granting this petition, the Court recognizes that the former jurisprudential rule can no longer stand in light of Section
3, Rule 17 of the 1997 Rules of Civil Procedure.
The relevant facts are simple enough. Petitioner Eduardo Pinga was named as one of two defendants in a complaint for
injunction4 filed with Branch 29 of the Regional Trial Court (RTC) 5 of San Miguel, Zamboanga del Sur, by respondent
Heirs of German Santiago, represented by Fernando Santiago. The Complaint 6 dated 28 May 1998 alleged in essence
that petitioner and co-defendant Vicente Saavedra had been unlawfully entering the coco lands of the respondent,
cutting wood and bamboos and harvesting the fruits of the coconut trees therein. Respondents prayed that petitioner
and Saavedra be enjoined from committing "acts of depredation" on their properties, and ordered to pay damages.
In their Amended Answer with Counterclaim,7 petitioner and his co-defendant disputed respondents ownership of the
properties in question, asserting that petitioners father, Edmundo Pinga, from whom defendants derived their interest
in the properties, had been in possession thereof since the 1930s. 8 They alleged that as far back as 1968, respondents

had already been ordered ejected from the properties after a complaint for forcible entry was filed by the heirs of
Edmundo Pinga. It was further claimed that respondents application for free patent over the properties was rejected
by the Office of the President in 1971. Defendants in turn prayed that owing to respondents forcible re-entry in the
properties and the irresponsible and reckless filing of the case, they be awarded various types of damages instead in
amounts totaling P2,100,000 plus costs of suit.9
By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs, had failed to
present their evidence. It appears that on 25 October 2004, the RTC already ordered the dismissal of the complaint
after respondents counsel had sought the postponement of the hearing scheduled then. 10 However, the order of
dismissal was subsequently reconsidered by the RTC in an Order dated 9 June 2005, which took into account the
assurance of respondents counsel that he would give priority to that case. 11
At the hearing of 27 July 2005, plaintiffs counsel on record failed to appear, sending in his stead a representative who
sought the postponement of the hearing. Counsel for defendants (who include herein petitioner) opposed the move for
postponement and moved instead for the dismissal of the case. The RTC noted that it was obvious that respondents
had failed to prosecute the case for an unreasonable length of time, in fact not having presented their evidence yet.
On that ground, the complaint was dismissed. At the same time, the RTC allowed defendants "to present their
evidence ex-parte."12
Respondents filed a Motion for Reconsideration 13 of the order issued in open court on 27 July 2005, opting however not
to seek that their complaint be reinstated, but praying instead that the entire action be dismissed and petitioner be
disallowed from presenting evidence ex-parte. Respondents claimed that the order of the RTC allowing petitioner to
present evidence ex-parte was not in accord with established jurisprudence. They cited cases, particularly City of
Manila v. Ruymann14 and Domingo v. Santos,15 which noted those instances in which a counterclaim could not remain
pending for independent adjudication.
On 9 August 2005, the RTC promulgated an order granting respondents Motion for Reconsideration and dismissing the
counterclaim, citing as the only ground therefor that "there is no opposition to the Motion for Reconsideration of the
[respondents]."16 Petitioner filed a Motion for Reconsideration, but the same was denied by the RTC in an Order dated
10 October 2005.17 Notably, respondents filed an Opposition to Defendants Urgent Motion for Reconsideration,
wherein they argued that the prevailing jurisprudential rule 18 is that "compulsory counterclaims cannot be adjudicated
independently of plaintiffs cause of action," and "a conversu, the dismissal of the complaint carries with it the
dismissal of the compulsory counterclaims."19
The matter was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure question of law,
the most relevant being whether the dismissal of the complaint necessarily carries the dismissal of the compulsory
counterclaim.
We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the
fault of plaintiff does not necessarily carry with it the dismissal of the counterclaim, compulsory or otherwise. In fact,
the dismissal of the complaint is without prejudice to the right of defendants to prosecute the counterclaim.
On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt respondents argument that the
dismissal of their complaint extended as well to the counterclaim. Instead, the RTC justified the dismissal of the
counterclaim on the ground that "there is no opposition to [plaintiffs] Motion for Reconsideration [seeking the
dismissal of the counterclaim]."20 This explanation is hollow, considering that there is no mandatory rule requiring that
an opposition be filed to a motion for reconsideration without need for a court order to that effect; and, as posited by
petitioner, the "failure to file an opposition to the Plaintiffs Motion for Reconsideration is definitely not one among the
established grounds for dismissal [of the counterclaim]." 21 Still, the dismissal of the counterclaim by the RTC betrays at
very least a tacit recognition of respondents argument that the counterclaim did not survive the dismissal of the
complaint. At most, the dismissal of the counterclaim over the objection of the defendant (herein petitioner) on
grounds other than the merits of the counterclaim, despite the provisions under Rule 17 of the 1997 Rules of Civil
Procedure, constitutes a debatable question of law, presently meriting justiciability through the instant action. Indeed,
in reviewing the assailed orders of the RTC, it is inevitable that the Court consider whether the dismissal of the
complaint, upon motion of the defendant, on the ground of the failure to prosecute on plaintiffs part precipitates or
carries with it the dismissal of the pending counterclaims.
Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil Procedure, which states:

SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or
to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of defendant or
upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.
The express qualification in the provision that the dismissal of the complaint due to the plaintiffs fault, as in the case
for failure to prosecute, is without prejudice to the right of the defendant to prosecute his counterclaim in the same or
separate action. This stands in marked contrast to the provisions under Rule 17 of the 1964 Rules of Court which were
superseded by the 1997 amendments. In the 1964 Rules, dismissals due to failure to prosecute were governed by
Section 3, Rule 17, to wit:
SEC. 3. Failure to prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his action for an
unreasonable length of time, or to comply with these rules or any order of the court, the action may be dismissed upon
motion of the defendant or upon the courts own motion. This dismissal shall have the effect of an adjudication upon
the merits, unless otherwise provided by court.
Evidently, the old rule was silent on the effect of such dismissal due to failure to prosecute on the pending
counterclaims. As a result, there arose what one authority on remedial law characterized as "the nagging question of
whether or not the dismissal of the complaint carries with it the dismissal of the counterclaim." 22 Jurisprudence
construing the previous Rules was hardly silent on the matter.
In their arguments before the RTC on the dismissal of the counterclaim, respondents cited in support City of Manila v.
Ruymann,23 Domingo v. Santos,24 Belleza v. Huntington,25 and Froilan v. Pan Oriental Shipping Co.,26 all of which were
decided more than five decades ago. Notably though, none of the complaints in these four cases were dismissed either
due to the fault of the plaintiff or upon the instance of the defendant. 27
The distinction is relevant, for under the previous and current incarnations of the Rules of Civil Procedure, it is Section
3, Rule 17 that governs the dismissals due to the failure of the plaintiff to prosecute the complaint, as had happened in
the case at bar. Otherwise, it is Section 2, Rule 17, which then, and still is now, covered dismissals ordered by the trial
court upon the instance of the plaintiff. 28 Yet, as will be seen in the foregoing discussion, a discussion of Section 2
cannot be avoided as the postulate behind that provision was eventually extended as well in cases that should have
properly been governed by Section 3.
Even though the cases cited by respondents involved different factual antecedents, there exists more appropriate
precedents which they could have cited in support of their claim that the counterclaim should have been dismissed
even if the dismissal of the complaint was upon the defendants motion and was predicated on the plaintiffs fault. BA
Finance Corp. v. Co29 particularly stands out in that regard, although that ruling is itself grounded on other precedents
as well. Elucidation of these cases is in order.
On the general effect of the dismissal of a complaint, regardless of cause, on the pending counterclaims, previous
jurisprudence laid emphasis on whether the counterclaim was compulsory or permissive in character. The necessity of
such distinction was provided in the 1964 Rules itself, particularly Section 2, Rule 17, which stated that in instances
wherein the plaintiff seeks the dismissal of the complaint, "if a counterclaim has been pleaded by a defendant prior to
the service upon him of the plaintiffs motion to dismiss, the action shall not be dismissed against the defendants
objection unless the counterclaim can remain pending for independent adjudication by the court." 30 The
vaunted commentaries of Chief Justice Moran, remarking on Section 2, Rule 17, noted that "[t]here are instances in
which a counterclaim cannot remain pending for independent adjudication, as, where it arises out of, or is necessarily
connected with, the transaction or occurrence which is the subject matter of the opposing partys claim." 31
This view expressed in Morans Commentaries was adopted by the Court in cases where the application of Section 2,
Rule 17 of the 1964 Rules of Court was called for, such as in Lim Tanhu v. Ramolete,32 and Dalman v. City Court of
Dipolog City.33 The latter case warrants brief elaboration. Therein, the plaintiff in a civil case for damages moved for
the withdrawal of her own case on the ground that the dispute had not been referred to the barangay council as
required by law. Over the objection of the defendant, who feared that her own counterclaim would be prejudiced by the

dismissal, plaintiffs motion was granted, the complaint and the counterclaim accordingly dismissed by the trial court.
The Court refused to reinstate the counterclaim, opining without elaboration, "[i]f the civil case is dismissed, so also is
the counterclaim filed therein."34 The broad nature of that statement gave rise to the notion that the mandatory
dismissal of the counterclaim upon dismissal of the complaint applied regardless of the cause of the complaints
dismissal.35
Notably, the qualification concerning compulsory counterclaims was provided in Section 2, Rule 17 of the 1964 Rules,
the provision governing dismissals by order of the court, and not Section 3, Rule 17. As stated earlier, Section 3, which
covered dismissals for failure to prosecute upon motion of the defendant or upon motu proprioaction of the trial court,
was silent on the effect on the counterclaim of dismissals of such nature.
Spouses Sta. Maria, Jr. v. Court of Appeals,36 decided in 1972, ostensibly supplied the gap on the effect on the
counterclaim of complaints dismissed under Section 3. The defendants therein successfully moved before the trial
court for the dismissal of the complaint without prejudice and their declaration in default on the counterclaim after
plaintiffs therein failed to attend the pre-trial. After favorable judgment was rendered on the counterclaim, plaintiffs
interposed an appeal, citing among other grounds, that the counterclaim could no longer have been heard after the
dismissal of the complaint. While the Court noted that the adjudication of the counterclaim in question "does not
depend upon the adjudication of the claims made in the complaint since they were virtually abandoned by the nonappearance of the plaintiffs themselves," it was also added that "[t]he doctrine invoked is not available to plaintiffs like
the petitioners, who prevent or delay the hearing of their own claims and allegations." 37 The Court, through Justice JBL
Reyes, noted:
The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently
adjudicated is not available to, and was not intended for the benefit of, a plaintiff who prevents or delays
the prosecution of his own complaint. Otherwise, the trial of counterclaims would be made to depend upon the
maneuvers of the plaintiff, and the rule would offer a premium to vexing or delaying tactics to the prejudice of the
counterclaimants. It is in the same spirit that we have ruled that a complaint may not be withdrawn over the
opposition of the defendant where the counterclaim is one that arises from, or is necessarily connected with, the
plaintiffs action and cannot remain pending for independent adjudication. 38
There is no doubt that under the 1964 Rules, the dismissal of a complaint due to the failure of the plaintiff to appear
during pre-trial, as what had happened in Sta. Maria, fell within the coverage of Section 3, Rule 17. On the other hand,
Section 2 was clearly limited in scope to those dismissals sustained at the instance of the plaintiff. 39Nonetheless, by
the early 1990s, jurisprudence was settling on a rule that compulsory counterclaims were necessarily terminated upon
the dismissal of the complaint not only if such dismissal was upon motion of the plaintiff, but at the instance of the
defendant as well. Two decisions from that period stand out in this regard,Metals Engineering Resources Corp. v. Court
of Appeals40 and International Container Terminal Services v. Court of Appeals.41
In Metals, the complaint was expunged from the record after the defendant had filed a motion for reconsideration of a
trial court order allowing the filing of an amended complaint that corrected a jurisdictional error in the original
complaint pertaining to the specification of the amount of damages sought. When the defendant was nonetheless
allowed to present evidence on the counterclaim, the plaintiff assailed such allowance on the ground that the
counterclaim was compulsory and could no longer remain pending for independent adjudication. The Court, in finding
for the plaintiff, noted that the counterclaim was indeed compulsory in nature, and as such, was auxiliary to the
proceeding in the original suit and derived its jurisdictional support therefrom. 42 It was further explained that the
doctrine was in consonance with the primary objective of a counterclaim, which was to avoid and prevent circuitry of
action by allowing the entire controversy between the parties to be litigated and finally determined in one action, and
to discourage multiplicity of suits.43 Also, the Court noted that since the complaint was dismissed for lack of
jurisdiction, it was as if no claim was filed against the defendant, and there was thus no more leg for the complaint to
stand on.44
In International Container, the defendant filed a motion to dismiss which was granted by the trial court. The
defendants counterclaim was dismissed as well. The Court summarized the key question as "what is the effect of the
dismissal of a complaint ordered at the instance of the defendant upon a compulsory counterclaim duly raised in its
answer."45 Then it ruled that the counterclaim did not survive such dismissal. After classifying the counterclaim therein
as compulsory, the Court noted that "[i]t is obvious from the very nature of the counterclaim that it could not remain

pending for independent adjudication, that is, without adjudication by the court of the complaint itself on which the
counterclaim was based."46
Then in 1993, a divided Court ruled in BA Finance that the dismissal of the complaint for nonappearance of plaintiff at
the pre-trial, upon motion of the defendants, carried with it the dismissal of their compulsory counterclaim. 47 The Court
reiterated the rule that "a compulsory counterclaim cannot remain pending for independent adjudication by the
court as it is auxiliary to the proceeding in the original suit and merely derives its jurisdictional support
therefrom."48 Express reliance was made on Metals, International Container, and evenDalman in support of the
majoritys thesis. BA Finance likewise advised that the proper remedy for defendants desirous that their counterclaims
not be dismissed along with the main complaint was for them to move to declare the plaintiffs to be "non-suited" on
their complaint and "as in default" on their compulsory counterclaim, instead of moving for the dismissal of the
complaint.49
Justice Regalado, joined by Chief Justice Narvasa, registered a strong objection to the theory of the majority. They
agreed that the trial court could no longer hear the counterclaim, but only on the ground that defendants motion to be
allowed to present evidence on the counterclaim was filed after the order dismissing the complaint had already
become final. They disagreed however that the compulsory counterclaim was necessarily dismissed along with the
main complaint, pointing out that a situation wherein the dismissal of the complaint was occasioned by plaintiffs
failure to appear during pre-trial was governed under Section 3, Rule 17, and not Section 2 of the same rule. Justice
Regalado, who ironically penned the decision in Metals cited by the majority, explained:
Turning back to Rule 17, it is readily apparent that Sections 2 and 3 thereof envisage different factual and adjective
situations. The dismissal of the complaint under Section 2 is at the instance of plaintiff, for whatever reason he is
minded to move for such dismissal, and, as a matter of procedure, is without prejudice unless otherwise stated in the
order of the court or, for that matter, in plaintiff's motion to dismiss his own complaint. By reason thereof, to curb any
dubious or frivolous strategy of plaintiff for his benefit or to obviate possible prejudice to defendant, the former may
not dismiss his complaint over the defendant's objection if the latter has a compulsory counterclaim since said
counterclaim would necessarily be divested of juridical basis and defendant would be deprived of possible recovery
thereon in that same judicial proceeding.
Section 3, on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by causes imputable to
him and which, in the present case, was petitioner's failure to appear at the pre-trial. This situation is also covered by
Section 3, as extended by judicial interpretation, and is ordered upon motion of defendant or motu proprio by the
court. Here, the issue of whether defendant has a pending counterclaim, permissive or compulsory, is not of
determinative significance. The dismissal of plaintiff's complaint is evidently a confirmation of the failure of evidence to
prove his cause of action outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication
on the merits. This does not, however, mean that there is likewise such absence of evidence to prove defendant's
counterclaim although the same arises out of the subject matter of the complaint which was merely terminated for
lack of proof. To hold otherwise would not only work injustice to defendant but would be reading a further provision into
Section 3 and wresting a meaning therefrom although neither exists even by mere implication. Thus understood, the
complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of course to defendant on
his counterclaim as alleged and proved, with or without any reservation therefor on his part, unless from his conduct,
express or implied, he has virtually consented to the concomitant dismissal of his counterclaim. 50
Justice Regalado also adverted to Sta. Maria and noted that the objections raised and rejected by the Court therein
were the same as those now relied upon by the plaintiff. He pointed out that Dalman and International Container, both
relied upon by the majority, involved the application of Section 2, Rule 17 and not Section 3, which he insisted as the
applicable provision in the case at bar.51
The partial dissent of Justice Regalado in BA Finance proved opportune, as he happened then to be a member of the
Rules of Court Revision Committee tasked with the revision of the 1964 Rules of Court. Just a few months after BA
Finance was decided, Justice Regalado proposed before the Committee an amendment to Section 3, Rule 17 that would
explicitly provide that the dismissal of the complaint due to the fault of the plaintiff shall be "without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in a separate action." The amendment, which was
approved by the Committee, is reflected in the minutes of the meeting of the Committee held on 12 October 1993:
[Justice Regalado] then proposed that after the words "upon the courts own motion" in the 6th line of the draft in Sec.
3 of Rule 17, the following provision be inserted: "without prejudice to the right of the defendant to prosecute

his counterclaim in the same or in a separate action." The Committee agreed with the proposed
amendment of Justice Regalado.
Justice Herrera observed that under Secs. 1 to 3 of Rule 17, it is not the action that is dismissed but the complaint. He
asked whether there is any distinction between "complaint" and "action." Justice Regalado opined that the action of
the plaintiff is initiated by his complaint.
Justice Feria then suggested that the dismissal be limited to the complaint[.] Thus, in the 1st line of Sec.
1, the words "An action" will be changed to "a complaint"; in the 2nd line of Sec. 2, the words "an action"
will be changed to "a complaint" and in Sec. 3, the word "action" on the 5th line of the draft will be
changed to "complaint." The Committee agreed with Justice Ferias suggested amendments.
CA Pao believed that there is a need to clarify the counterclaim that the defendant will prosecute,
whether it is permissive or compulsory or all kinds of counterclaims.
Justice Regalado opined that there is no need of making a clarification because it is already understood
that it covers both counterclaims.52
It is apparent from these minutes that the survival of the counterclaim despite the dismissal of the complaint under
Section 3 stood irrespective of whether the counterclaim was permissive or compulsory. Moreover, when the Court
itself approved the revisions now contained in the 1997 Rules of Civil Procedure, not only did Justice Regalados
amendment to Section 3, Rule 17 remain intact, but the final version likewise eliminated the qualification formerly
offered under Section 2 on "counterclaims that can remain pending for independent adjudication by the court." 53 At
present, even Section 2, concerning dismissals on motion of the plaintiff, now recognizes the right of the defendant to
prosecute the counterclaim either in the same or separate action notwithstanding the dismissal of the complaint, and
without regard as to the permissive or compulsory nature of the counterclaim.
In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of the
amendments to Section 2 and 3 of Rule 17:
2. Under this revised section [2], where the plaintif moves for the dismissal of his complaint to which a counterclaim
has been interposed, the dismissal shall be limited to the complaint. Such dismissal shall be without prejudice to the
right of the defendant to either prosecute his counterclaim in a separate action or to have the same resolved in the
same action. Should he opt for the first alternative, the court should render the corresponding order granting and
reserving his right to prosecute his claim in a separate complaint. Should he choose to have his counterclaim disposed
of in the same action wherein the complaint had been dismissed, he must manifest such preference to the trial court
within 15 days from notice to him of plaintiffs motion to dismiss.These alternative remedies of the defendant
are available to him regardless of whether his counterclaim is compulsory or permissive. A similar
alternative procedure, with the same underlying reason therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of this Rule,
wherein the complaint is dismissed on the motion of thedefendant or, in the latter instance, also by the court motu
proprio.
xxxx
2. The second substantial amendment to [Section 3] is with respect to the disposition of the defendants counterclaim
in the event the plaintiffs complaint is dismissed. As already observed, he is here granted the choice to prosecute that
counterclaim in either the same or a separate action. x x x x
3. With the aforestated amendments in Secs. 2 and 3 laying down specific rules on the disposition of
counterclaims involved in the dismissal actions, the controversial doctrine in BA Finance Corporation vs.
Co, et al., (G.R. No. 105751, June 30, 1993) has been abandoned, together with the apparent confusion
on the proper application of said Secs. 2 and 3. Said sections were distinguished and discussed in the authors
separate opinion in that case, even before they were clarified by the present amendments x x x. 54
Similarly, Justice Feria notes that "the present rule reaffirms the right of the defendant to move for the dismissal of the
complaint and to prosecute his counterclaim, as stated in the separate opinion [of Justice Regalado in BA
Finance.]"55 Retired Court of Appeals Justice Herrera pronounces that the amendment to Section 3, Rule 17 settles that
"nagging question" whether the dismissal of the complaint carries with it the dismissal of the counterclaim, and opines

that by reason of the amendments, the rulings in Metals Engineering, International Container, and BA Finance "may be
deemed abandoned."56 On the effect of amendment to Section 3, Rule 17, the commentators are in general
agreement,57 although there is less unanimity of views insofar as Section 2, Rule 17 is concerned. 58
To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule 17, those
previous jural doctrines that were inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure
were implicitly abandoned insofar as incidents arising after the effectivity of the new procedural rules on 1 July
1997. BA Finance, or even the doctrine that a counterclaim may be necessarily dismissed along with the complaint,
clearly conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA Finance as doctrine extends as far
back as 1997, when the Court adopted the new Rules of Civil Procedure. If, since then, such abandonment has not
been affirmed in jurisprudence, it is only because no proper case has arisen that would warrant express confirmation of
the new rule. That opportunity is here and now, and we thus rule that the dismissal of a complaint due to fault of the
plaintiff is without prejudice to the right of the defendant to prosecute any pending counterclaims of whatever nature
in the same or separate action. We confirm that BA Finance and all previous rulings of the Court that are inconsistent
with this present holding are now abandoned.
Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17
mandates that the dismissal of the complaint is without prejudice to the right of the defendant to prosecute the
counterclaim in the same or separate action. If the RTC were to dismiss the counterclaim, it should be on the merits of
such counterclaim. Reversal of the RTC is in order, and a remand is necessary for trial on the merits of the
counterclaim.
It would be perfectly satisfactory for the Court to leave this matter at that. Still, an explanation of the reason behind
the new rule is called for, considering that the rationale behind the previous rule was frequently elaborated upon.
Under Act No. 190, or the Code of Procedure in Civil Actions promulgated in 1901, it was recognized in Section 127(1)
that the plaintiff had the right to seek the dismissal of the complaint at any time before trial, "provided a counterclaim
has not been made, or affirmative relief sought by the cross-complaint or answer of the defendant." 59 Note that no
qualification was made then as to the nature of the counterclaim, whether it be compulsory or permissive. The
protection of the defendants right to prosecute the counterclaim was indeed unqualified. In City of Manila, decided in
1918, the Court explained:
By paragraph 1 [of Section 127], it will be seen that, where the defendant has interposed a counterclaim, or is seeking
affirmative relief by a cross-complaint, that then, and in that case, the plaintiff cannot dismiss the action so as to affect
the right of the defendant in his counterclaim or prayer for affirmative relief. The reason for that exception is
clear. When the answer sets up an independent action against the plaintiff, it then becomes an action by
the defendant against the plaintiff, and, of course, the plaintiff has no right to ask for a dismissal of
the defendants action.60
Nonetheless, a new rule was introduced when Act No. 190 was replaced by the 1940 Rules of Court. Section 2, Rule 30
of the 1940 Rules specified that if a counterclaim is pleaded by a defendant prior to the service of the plaintiffs motion
to dismiss, the action shall not be dismissed against the defendants objection unless the counterclaim can remain
pending for independent adjudication by the court. This qualification remained intact when the 1964 Rules of Court
was introduced.61 The rule referred only to compulsory counterclaims, or counterclaims which arise out of or are
necessarily connected with the transaction or occurrence that is the subject matter of the plaintiffs claim, since the
rights of the parties arising out of the same transaction should be settled at the same time. 62 As was evident
in Metals, International Container and BA Finance, the rule was eventually extended to instances wherein it was the
defendant with the pending counterclaim, and not the plaintiff, that moved for the dismissal of the complaint.
We should not ignore the theoretical bases of the rule distinguishing compulsory counterclaims from permissive
counterclaims insofar as the dismissal of the action is concerned. There is a particular school of thought that informs
the broad proposition in Dalman that "if the civil case is dismissed, so also is the counterclaim filed therein," 63 or the
more nuanced discussions offered in Metals, International Container, and BA Finance. The most potent statement of
the theory may be found in Metals,64 which proceeds from the following fundamental premisesa compulsory
counterclaim must be set up in the same proceeding or would otherwise be abated or barred in a separate or
subsequent litigation on the ground of auter action pendant, litis pendentia or res judicata; a compulsory counterclaim
is auxiliary to the main suit and derives its jurisdictional support therefrom as it arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of the complaint; 65and that if the court

dismisses the complaint on the ground of lack of jurisdiction, the compulsory counterclaim must also be dismissed as it
is merely ancilliary to the main action and no jurisdiction remained for any grant of relief under the counterclaim.
The first point is derived from Section 4, Rule 9, of the 1964 Rules of Court, while the two latter points are sourced
from American jurisprudence. There is no disputing the theoretical viability of these three points. In fact, the
requirement that the compulsory counterclaim must be set up in the same proceeding remains extant under the 1997
Rules of Civil Procedure.66 At the same time, other considerations rooted in actual practice provide a counterbalance to
the above-cited rationales.
Whatever the nature of the counterclaim, it bears the same integral characteristics as a complaint; namely a cause (or
causes) of action constituting an act or omission by which a party violates the right of another. The main difference lies
in that the cause of action in the counterclaim is maintained by the defendant against the plaintiff, while the converse
holds true with the complaint. Yet, as with a complaint, a counterclaim without a cause of action cannot survive.
It would then seemingly follow that if the dismissal of the complaint somehow eliminates the cause(s) of the
counterclaim, then the counterclaim cannot survive. Yet that hardly is the case, especially as a general rule. More
often than not, the allegations that form the counterclaim are rooted in an act or omission of the plaintiff
other than the plaintiffs very act of filing the complaint. Moreover, such acts or omissions imputed to the
plaintiff are often claimed to have occurred prior to the filing of the complaint itself. The only apparent
exception to this circumstance is if it is alleged in the counterclaim that the very act of the plaintiff in
filing the complaint precisely causes the violation of the defendants rights. Yet even in such an instance,
it remains debatable whether the dismissal or withdrawal of the complaint is sufficient to obviate the
pending cause of action maintained by the defendant against the plaintiff. 67
These considerations persist whether the counterclaim in question is permissive or compulsory. A compulsory
counterclaim arises out of or is connected with the transaction or occurrence constituting the subject matter of the
opposing partys claim, does not require for its adjudication the presence of third parties, and stands within the
jurisdiction of the court both as to the amount involved and the nature of the claim. 68 The fact that the culpable acts on
which the counterclaim is based are founded within the same transaction or occurrence as the complaint, is insufficient
causation to negate the counterclaim together with the complaint. The dismissal or withdrawal of the complaint does
not traverse the boundaries of time to undo the act or omission of the plaintiff against the defendant, or vice versa.
While such dismissal or withdrawal precludes the pursuit of litigation
by the plaintiff, either through his/her own initiative or fault, it would be iniquitous to similarly encumber the defendant
who maintained no such initiative or fault. If the defendant similarly moves for the dismissal of the counterclaim or
neglects to timely pursue such action, let the dismissal of the counterclaim be premised on those grounds imputable to
the defendant, and not on the actuations of the plaintiff.
The other considerations supplied in Metals are anchored on the premise that the jurisdictional foundation of the
counterclaim is the complaint itself. The theory is correct, but there are other facets to this subject that should be
taken into account as well. On the established premise that a counterclaim involves separate causes of action than the
complaint even if derived from the same transaction or series of transactions, the counterclaim could have very well
been lodged as a complaint had the defendant filed the action ahead of the complainant. 69 The terms "ancillary" or
"auxiliary" may mislead in signifying that a complaint innately possesses more credence than a counterclaim, yet there
are many instances wherein the complaint is trivial but the counterclaim is meritorious. In truth, the notion that a
counterclaim is, or better still, appears to be merely "ancillary" or "auxiliary" is chiefly the offshoot of an accident of
chronology, more than anything else.
The formalistic distinction between a complaint and a counterclaim does not detract from the fact that both of them
embody causes of action that have in their end the vindication of rights. While the distinction is necessary as a means
to facilitate order and clarity in the rules of procedure, it should be remembered that the primordial purpose of
procedural rules is to provide the means for the vindication of rights. A party with a valid cause of action against
another party cannot be denied the right to relief simply because the opposing side had the good fortune of filing the
case first. Yet this in effect was what had happened under the previous procedural rule and correspondent doctrine,
which under their final permutation, prescribed the automatic dismissal of the compulsory counterclaim upon the
dismissal of the complaint, whether upon the initiative of the plaintiff or of the defendant.

Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the
counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the
survival of the main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws
which stand independent of the complaint, the trial court is not precluded from dismissing it under the amended rules,
provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if the
counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal
by reason of the dismissal of the complaint.
WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005 and 10 October 2005 of Branch 29, Regional
Trial Court of San Miguel, Zamboanga del Sur in Civil Case No. 98-012 are SET ASIDE. Petitioners counterclaim as
defendant in Civil Case. No. 98-012 is REINSTATED. The Regional Trial Court is ORDERED to hear and decide the
counterclaim with deliberate dispatch.
3.

Apo Fruits Corp. vs. Land Bank of the Phil. 632 SCRA 727 (GR 164195)

APO
FRUITS
CORPORATION
and
HIJO
PLANTATION,
vs.
THE HON. COURT OF APPEALS and LAND BANK OF THE PHILIPPINES, Respondents.

INC., Petitioners,

CHICO-NAZARIO, J.:
FACTS:

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) are the registered owners of five parcels of
agricultural lands located in San Isidro, Tagum, Davao Province

AFC and HPI voluntarily offered to sell the above parcels of land to the government. After the initial processing
at the Department of Agrarian Reform (DAR) of the Voluntary Offer to Sell (VOS)application of AFC and HPI, it
was referred to the Land Bank of the Philippines (LBP) for initial valuation. AFC and HPI received separately
from the DARs Provincial Agrarian Reform Officer (PARO) of Davao province a notice of land acquisition and
valuation, informing AFC that the value of the properties has been placed at P86,900,925.88 or P165,484.47
per hectare while HPIs properties were valued at P164,478,178.14.Both AFC and HPI considered the valuations
unreasonably low and inadequate as just compensation for the properties.

AFCrejected the valuationfor both TCTs No. T-113366 and No.113359. AFC applied for the shifting of the mode
of acquisition for TCT No. 113359 from VOS to Voluntary Land Transfer/Direct Payment Scheme. HPI also
rejected the valuation of its three parcels of land covered by TCTs No. T-10361, No. T-10362 and No. T-10363.

Owing to the rejection by both AFC and HPI of LBPs valuation, the DAR requested LBP to deposit the amounts
equivalent to their valuations in the names and for the accounts of AFC and HPI. AFC thereafter withdrew the
amount of P26,409,549.86, while HPI withdrew the amount of P45,481,706.76, both in cash from LBP. The DAR
PARO then directed the Register of Deeds of Davao to cancel the TCTs of AFC and HPI to the said properties
and to issue a new one in the name of the Republic of the Philippines.

After the issuance of the certificate of title in the name of the Republic of the Philippines, the Register of Deeds
of Davao, upon the request of the DAR, issued TCTs and Certificates of Land Ownership Award to qualified
farmer-beneficiaries.

RTC BR. 2 TAGUM CITY

AFC and HPI filed separate complaints for determination of just compensation with the DAR Adjudication Board
(DARAB). Despite the lapse of more than three years from the filing of the complaints, the DARAB failed and
refused to render a decision on the valuation of the land. Hence, two complaints for determination and

payment of just compensation were filed by AFC and HPI before Branch 2 of the Regional Trial Court (RTC) of
Tagum City (acting as a Special Agrarian Court), which were subsequently consolidated.

Summons was served to defendants DAR and LBP. The trial court appointed as Commissionerspersons it
considered competent, qualified and disinterested to determine the proper valuation of the properties.

DAR and LBP submitted their Answer

The pre-trial order issued by the trial court reads:This Court will determine the all-embracing concept of Just
Compensation, and whether the plaintiff is entitled to damages, and also whether the value of the land and
improvements as determined by the Land Valuation of Land Bank for the determination of just compensation,
and whether the plaintiff has violated Section 13 of DARAB new rules and procedure.

The commissioners conducted an ocular inspection

The court-appointed commissioners submitted their appraisal report.

The case was considered submitted for decision.

After hearing, the trial court rendered a decision fixing the just compensation for the 1,388.6027 hectares of
lands and its improvements owned by the plaintiffs AFC and HPI as follows:
1.

Ordering P1,383,179,000.00) to be paid jointly and severally to Plaintiffs (AFC and HPI) by the Defendants
(DAR and LBP);

2.

Ordering Defendants to pay Plaintiffsinterests on the above-fixed amount from the date of the taking until
fully paid, deducting the amount of the previous payment which plaintiffs received as/and from the initial
valuation;

3.

Ordering Defendantsto pay jointly and severally the Commissioners fees herein taxed as part of the costs
pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two
and One-Half (2 ) percent of the determined and fixed amount;

4.

Ordering Defendants to pay jointly and severally the attorneys fees to plaintiffs equivalent to, and
computed at ten (10%) Percent of the determined and fixed amount plus interest from date of taking until
the full amount is fully paid;

5.

Ordering Defendants to deduct from the total amount fixed the initial payment paid to the plaintiffs;

6.

Ordering Defendants to pay the costs of the suit; and

7.

Ordering Defendants to pay all the aforementioned amounts thru The Clerk of Court of this Court.

LBP filed a Motion for Reconsideration mainly on the ground that the trial court based its valuation on the
value of residential and industrial lands in the area forgetting that the lands involved are agricultural. LBP also
sought a reconsideration of the award of attorneys fees, the interest on the compensation over the lands and
the order of the trial court regarding the payment of commissioners fees.

In an Order, the trial court modified its decision as follows:


2.

Ordering Defendants to pay plaintiffs, interest at the rate of Twelve (12%) Percent per annum on the
above-fixed amount of fair, reasonable and just compensation computed from the time the complaint was
filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE
(12%) PERCENT per annum shall be additionally imposed on the total obligation until payment thereof is
satisfied, deducting the amounts of the previous payments by Defendant-LBP received as initial valuation;

3.

Ordering Defendants to pay jointly and severally the Commissioners fees herein taxed as part of the costs
pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two
and One-Half (2 ) percent of the determined and fixed amount;

4.

Ordering Defendants to pay jointly and severally the attorneys fees to plaintiffs equivalent to, and
computed at ten (10%) Percent of the determined and fixed amount.

Except for the above-stated modifications, the consolidated decision stands and shall remain in full force and
effect in all other respects thereof.

From this Order, LBP filed a Notice of Appeal which was granted.

Subsequently, the trial court, citing this Courts ruling in the case of "Land Bank of the Philippines v. De
Leon,"that a petition for review, not an ordinary appeal, is the proper mode of appeal from a decision on the
determination of just compensation rendered by a special agrarian court, issued an Orderrecalling its Order
and directed LBP to file a Petition for Review within the reglementary period. LBP filed a Motion for
Reconsideration claiming that the case of Land Bank of the Philippines v. De Leon was not yet final at that
time; hence, it is not certain whether the decision in that case would have a retroactive effect and that appeal
is the appropriate remedy. This was denied by the trial court in its Order.

COURT OF APPEALS

LBP filed a Petition for Certiorari (CA-G.R. SP NO. 76222)before the Court of Appeals assailing the orders of
the trial court.

The Court of Appeals found the petition of LBP meritorious. In a decision, the Court of Appeals granted the
petition and the assailed orderswere NULLIFIED and, accordingly, SET ASIDE.

AFC and HPI filed a joint Motion for Reconsideration which the Court of Appeals denied in its Resolution.

Earlier, DAR filed its own separate petition before the Court of Appeals by way of a Petition for Review(CAG.R. SP NO. 74879). In a Resolution , the Court of Appeals dismissed the petition for failure to state the
material dates under Rule 42, Section 2, of the Rules of Court.
a.

The appellate court held:The importance of stating the material dates cannot be overemphasized. It is
only through a statement thereof in the petition can it be determined whether or not the petition was
filed on time. For its failure to state the material dates, the petition can and should be outrightly
dismissed.
x xxx

b.

The petition is also defective in that it failed to attach material portions of the record as would support the
allegations in the petition. More specifically, copies of the alleged motion for reconsideration filed by the
DAR, the order denying it, and the notice of appeal were not attached to the petition.

The Decision became final and executory and entry of judgment was issued by the appellate court.

SUPREME COURT

On the other hand, from the decision of the Court of Appeals in the Petition filed by LBP, AFC and HPI filed the
Petition for Review on Certiorari

ISSUES:
1.

Whether or not the filing by LBP of the Petition for Certiorari is already barred by res judicata

2.

Whether or not the ruling of the SC in the Arlene De Leon Case, giving only prospective effect to its earlier
resolution as to the proper mode of appeal from decisions of Special Agrarian Courts, is applicable in the
instant case

RULING:

AFC and HPI pray that the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76222 be reversed
and set aside and that the Decision of the RTC in Agrarian Cases be declared as final and executory.

WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. While the Decision, dated 12
February 2004, and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R. SP No. 76222, giving
due course to LBPs appeal, are hereby AFFIRMED, this Court, nonetheless, RESOLVES, in consideration of
public interest, the speedy administration of justice, and the peculiar circumstances of the case, to give DUE
COURSE to the present Petition and decide the same on its merits. Thus, the Decision, dated 25 September
2001, as modified by the Decision, dated 5 December 2001, of the Regional Trial Court of Tagum City, Branch
2, in Agrarian Cases No. 54-2000 and No. 55-2000 is AFFIRMED. No costs.
SO ORDERED.
MINITA
Associate Justice

V.

CHICO-NAZARIO

1. NO.

a.

The following are the elements of res judicata:


The former judgment must be final;

b.
The court which rendered judgment must have jurisdiction over the parties and the subject
matter;
c.It must be a judgment on the merits; and
d.
There must be between the first and second actions identity of parties, subject matter, and cause
of action.

In this case, the third element of res judicata, i.e., that the former judgment must be on the merits, is
not present. It must be remembered that the dismissal of CA-G.R. SP No. 74879 was based on technicality,
that is, for failure on the part of the DAR to state material dates required by the rules . Having been
dismissed based on a technicality and not on the merits, the principle of res judicata does not
apply. Res judicata applies only where judgment on the merits is finally rendered on the first.

2.

NO.

In the case of Land Bank of the Philippines v. De Leon, decided on 10 September 2002,

4.

respondents are the registered owners of a parcel of land. They voluntarily offered the subject property for
sale to the government. Unable to agree on the valuation offered by the DAR, respondents filed a petition
with the RTC to fix the just compensation. In due time, the RTC rendered judgment fixing the compensation
of the property.

Before the Court of Appeals, the DAR and LBP filed separate petitions. The DAR filed a Petition for Review
of the decision of the RTC. LBP raised the case on appeal to the Court of Appeals by way of ordinary
appeal.

The petition of the DAR was given due course. On the other hand, the Court of Appeals dismissed LBPs
ordinary appeal on the ground that the same was erroneous.

LBP filed a petition for review before this Court. In Land Bank, we explained:A petition for review, not an
ordinary appeal, is the proper procedure in effecting an appeal from decisions of the Regional
Trial Courts acting as Special Agrarian Courts in cases involving the determination of just
compensation to the landowners concerned. Section 60 of RA 6657 clearly and categorically states
that the said mode of appeal should be adopted. There is no room for a contrary interpretation.
Where the law is clear and categorical, there is no room for construction, but only application.

LBP filed a Motion for Reconsideration. In a Resolution of this Court dated 20 March 2003, this Court
emphasized the prospective application of the Decision dated 10 September 2002, that a petition for
review is the correct mode of appeal from decisions of Special Agrarian Courts shall apply only
to cases appealed after the finality of this Resolution.

Essentially therefore, the rule is that a decision of the RTC acting as a Special Agrarian Court
should be brought to the Court of Appeals via a Petition for Review. The Court of Appeals will no
longer entertain ordinary appeals thereon. However, this rule applies only after the finality of the
Resolution of this Court in Land Bank of the Philippines v. De Leon dated 20 March 2003.

In this case, the Court of Appeals correctly ruled when it gave due course to the appeal of LBP. LBPs Notice of
Appeal was filed on 27 December 2001. This was given due course by the RTC in an Order dated 15 May 2002.
LBPs appeal was, thus, perfected before this Courts Resolution in the aforementioned Land Bank of the
Philippines v. De Leon case. Hence, the Court of Appeals could give due course to LBPs petition.

Herce vs. Mun. of Cabuyao 512 SCRA 332, 336 (GR 166645)

HERCE VS. MUN OF CABUYAO GR 166645


This petition for review on certiorari under Rule 45 of the Rules of Court assails the August 16, 2004
Decision[1] of the Court of Appeals in CA-G.R. SP No. 79559 which affirmed the August 21, 1998 Order [2] of the Regional
Trial Court of Bian, Laguna, Branch 24, to reopen the decree of registration issued by the Land Registration Authority
(LRA) in favor of petitioner; and its January 13, 2005 Resolution [3] denying the motion for reconsideration.

Sometime in the years 1956 and 1957, Juanita Carpena and company applied for the judicial
registration of forty-four (44) parcels of land all situated in Cabuyao, Laguna, docketed as LRC Case No.
N-438, LRC Record No. N-10514 with the then Court of First Instance of Laguna.

After trial on the merits, the trial court granted the application and directed the issuance of a
decree of registration for the aforesaid forty-four parcels.

However, out of these forty-four parcels, only forty-two were issued decrees of registration.
One of these two parcels for which no decree of registration was issued was made the subject
of cadastral proceedings instituted by the Republic of the Philippines in 1976 docketed as
Cadastral Case No. N-B-1-LRC, Cadastral No. N-651 with the Court of First Instance of Laguna,
Branch 1.

The property is designated as Lot 3484 in Cadastral Case No. N-B-1 but previously, in the 1957
case filed by Juanita Carpena, the property was identified as Lot 1, Plan II-2719-A.

Petitioner Vicente D. Herce filed an opposition to the proceedings, informing the court that he
had acquired ownership over the subject property, having purchased the same from a certain
Jose Carpena in August of 1975. He alleged that Jose Carpena is one of the heirs of Juanita
Carpena who filed LRC Case No. N-438 in 1956-57.

After trial, the court rendered decision on May 30, 1980 awarding the subject property in favor
of petitioner Vicente Herce. However, in spite of the favorable decision, a decree of registration
could not be immediately issued considering that the subject property was included in the
1956-57 case filed by Juanita Carpena.

Thus in June 1995, petitioner filed a Motion to Modify Decision explaining that since no decree
was issued yet in LRC Case No. N-438, the decision therein could still be modified by excluding
the subject property in order to facilitate the issuance of the decree to him.

After hearing,
directing the
registration in
filed a motion
December 27,

Aggrieved by the above-described orders of the trial court, the Municipality of Cabuyao filed,
on May 15, 1996, a petition for the reconstitution of its alleged title over the disputed property
docketed as LRC Case No. B-2118 before the RTC of Laguna, Branch 25, arguing among others
that it was issued a decree of registration over the said property as early as 1911.

The petition was dismissed in an order dated February 5, 1996. In the meantime, the LRA
issued a decree of registration in favor of petitioner on January 28, 1997 followed by the
issuance of Original Certificate of Title No. 0-2099 in his name.

On January 27, 1998, the Municipality of Cabuyao filed a petition for the reopening of the
decree of registration issued in favor of petitioner. This led to the issuance of the questioned
August 21, 1998 Order directing the reopening and review of the decree of registration. The
said order likewise set aside the order dated May 29, 1957 in LRC Case No. N-438 as well as
the order dated May 3, 1996. RTC reopened the decree of registration.

Petitioner sought reconsideration of the above-quoted Order but this was similarly
denied by the respondent court in an Order dated August 15, 2003. [4]

Herce filed a petition for certiorari with the Court of Appeals. CA dismissed the petition and affirmed

the trial court issued an order dated May 3, 1996 granting the motion and
Land Registration Authority (hereinafter LRA) to finally issue a decree of
the name of petitioner Vicente Herce. The respondent Municipality of Cabuyao
for reconsideration of the trial courts order but this was denied by the court on
1996.

the decision of the RTCAugust 16, 2004.


ISSUE:
Whether or not the Court of Appeals erred in affirming the trial courts order to reopen the decree
of registration.
HELD:

WHEREFORE, the petition is DENIED. The validity of Decree No. 4244 issued on March 3, 1911 in favor of
respondent Municipality of Cabuyo, Laguna is AFFIRMED, whereas Decree No. N-216115 and Original Certificate of
Title No. 0-2099, issued in the name of petitioner Herce, are declared NULL and VOID.
We explained in the case of City of Manila v. Lack,[7] that the purpose of the legislature in creating the Court of
Land Registration was to bring the land titles of the Philippine under one comprehensive and harmonious system, the
cardinal features of which are indefeasibility of title and the intervention of the State as a prerequisite to the creation
and transfer of titles and interest, with the resultant increase in the use of land as a business asset by reason of the
greater certainty and security of title. The Court of Land Registration does not create or vest a title. It
simply confirms a title already created and already vested, rendering it forever indefeasible.
The Land Registration Act (Act No. 496, now P.D. No. 1529) as well as the Cadastral Act protects only the
holders of a title in good faith and cannot be used as a shield for frauds [8] or that one should enrich himself at the
expense of another. One cannot conceal under the cloak of its provisions to perpetrate fraud and obtain a better title
than what he really and lawfully owns. Thus, if he secures a certificate of title by mistake or obtain more land than
what he really owns, the certificate of title should be cancelled or corrected.
In other words, indefeasibility and imprescriptibility are the cornerstones of land registration proceedings.
Barring any mistake or use of fraud in the procurement of the title, owners may rest secure on their ownership and
possession once their title is registered under the protective mantle of the Torrens system. Thus, once a decree of
registration is made under the Torrens system, and the reglementary period has passed within which the decree may
be questioned, the title is perfected and cannot be collaterally questioned later on. [9]
Applying these legal precepts to the case at bar, it is clear that Decree No. 4244 issued in favor of the respondent
municipality in 1911 has become indefeasible; as such, petitioner is now barred from claiming the subject land.
Although the municipalitys claim of ownership is based on the entry in the Ordinary Decree Book, LRC (CLR) Rec. No.
6763, showing that Decree No. 4244 was issued on March 3, 1911 and that Lot 1 Plan II-2719 was one of the six
parcels of land previously applied for registration by the Municipality of Cabuyao in LRC (GLRO) Record No. 6763, being
a public document, the Ordinary Decree Book is prima facie proof of the entries appearing therein
Under the Regalian Doctrine, which is enshrined in the 1935, 1973, and 1987 Constitution, all lands of the
public domain belong to the State. Petitioner, as a private claimant, bears the burden of overcoming the presumption
that the land sought to be registered forms part of the public domain. He failed to discharge this burden. There is
paucity of proof that the subject property was segregated from the bulk of the public domain and declared by
competent authority to be alienable and disposable. The necessity of such proof becomes more significant in the light
of clear indications that the property under litigation was intended for public use. The Cabuyao Cadastral Map of the
Bureau of Lands approved on December 8, 1975 shows that Lot 1 Plan II-2719 was intended as a school site for Banaybanay, Cabuyao, Laguna. The municipal council of Cabuyao, in a resolution dated February 17, 1995, resolved to
inform all concerned that the land in question is intended as a school site. [14]
But then again, what militates against the grant of the instant petition is petitioners lack of legal standing to
raise a legal question. Legal standing denotes a personal and substantial interest in the case such that the party has
sustained or will sustain direct injury as a result of the act that is being challenged. The term interest means material
interest as distinguished from a mere incidental interest. [15]
Petitioners

claim

of

ownership

of

the

litigated

property

is

based

on

the

Deed

of

Sale

with

Mortgage[16] dated August 25, 1975 executed between him and Jose B. Carpena, one of the heirs of Juanita Carpena.

Yet extant evidence indicate that petitioner divested himself of any interest over the disputed property and with it, his
legal standing to institute the instant petition, when he agreed in September 1978 to apply the payments already
made for the sale of the subject property as payment for the property covered by Tax Declaration No. 5367. This was
confirmed by Carpena in his May 15, 1996 affidavit whereby the affiant declared that no consideration has ever been
given to him (Jose Carpena) for the purchase of said Lot 3484 since petitioner withdrew the amount of P54,495.00 and
applied the same to another lot covered by Tax Declaration No. 5367. [17] The evidentiary weight of the September 1978
agreement cannot be overturned by the uncorroborated assertion by the petitioner that the sale of the subject
property did in fact push through in accordance with the August 25, 1975 agreement.
The declarations of Carpena are consistent with the August 25, 1975 Deed of Sale with Mortgage whereby it was
stipulated that the buyer (herein petitioner) may exercise the option to ask for reimbursement in the event an adverse
claim is instituted by a third party. It is simply preposterous for petitioner to now impugn the Carpena affidavit since he
himself tacitly recognized, in his own affidavit ofAugust 26, 1975, the statements found therein.
A land already decreed and registered in an ordinary registration proceedings cannot again be the subject of
adjudication. Decree No. 4244 has long become final and incontrovertible. Accordingly, the lower courts should have
upheld the dominical rights of the respondent municipality, being the prior registrant, over Lot No. 3484 by affirming
the validity of Decree No. 4244 and nullifying Decree No. N-216115 as well as Original Certificate of Title No. 0-2099
issued in the name of petitioner Herce.
5.

Samala vs. CA 363 SCRA 535, 540-541 (GR 128628)

Samala vs. CA 363 SCRA 535, 540-541 (GR 128628)


FACTS:

On October 19, 1990, at about 8:00 p.m., Super Saint Bus with plate number NKJ 468 and body number 975
sideswiped a Yamaha motorcycle with plate number MCGB 5256, along Panamitan Highway, Kawit,
Cavite. Romulo Ocampo was riding at the back of the motorcycle driver.

As a result of the impact, Ocampo was thrown several meters away and landed on a concrete highway causing
serious physical injuries on his neck and left leg. He was confined at the Perpetual Help Hospital for three days
and had several months of treatment.

After hitting the motorcycle, the bus sped away. The driver, Benjamin Babista, did not even lend assistance to
the victim and left the victim on the highway.

On December 20, 1990, Romulo Ocampo filed with the Regional Trial Court, Cavite, Branch 15, Naic, a
complaint[2] for damages against driver Benjamin Babista and the owner of the Super Saint Bus, Ildefonso
Samala.

After due trial, on May 15, 1995, the trial court rendered a decision in favor of respondent Ocampo.Wherefore,
the Court finds judgment in favor of plaintiff as against defendants jointly and solidarily and Orders the
defendants to pay plaintiff . ENRIQUE M. ALMARIO

On October 16, 1995, petitioners filed with the trial court a notice of appeal.

On October 17, 1995, the trial court denied the appeal.

On November 24, 1995, petitioners filed with the trial court a petition for relief from order denying their
appeal. Petitioners argued that the reason for the failure to file the notice of appeal within fifteen (15) days
was the fact that the notice was entrusted to Jose Samala, Jr. but he suffered from diarrhea on October 11 to
12, 1995. He could not leave the house and nobody could attend to the filing of the notice. Thus, he filed it
only on Monday, October 16, 1995, thinking that the period had not lapsed.

On February 21, 1996, the trial court denied the petition for relief for not having adduced any reason
compelling enough to warrant reconsideration of the order. [5]

On March 7, 1996 petitioners filed with the trial court their notice of appeal. [6] Petitioners appealed the orders
of October 17, 1995 and February 21, 1996, denying the petition for relief to the Court of Appeals.

Meanwhile, on March 20, 1996, the trial court granted respondent Ocampos motion for writ of execution. [7]

On April 8, 1996, petitioners filed with the trial court a motion for reconsideration [8] of the order dated March
20, 1996. In their motion, petitioners prayed for denial of the writ of execution and for the records of the case
to be elevated to the Court of Appeals for review.

On July 1, 1996, the trial court denied the motion for reconsideration. [9]

On July 17, 1996, petitioners filed with the Court of Appeals [10] a petition for certiorari and prohibition assailing
the trial courts denial of the petition for relief from order.

On September 17, 1996 the Court of Appeals promulgated its decision denying the petition. [11]

On October 2, 1996, petitioners filed a motion for reconsideration of the denial. [12]

On March 7, 1997, the Court of Appeals denied the motion. [13]

ISSUE:
Whether or not the failure of petitioners to file the notice of appeal on time (one day late) would fall under excusable
negligence.

RULING:

When compelling reasons so warrant or when the purpose of justice requires it = discretionary upon courts.

Reasons that would warrant the suspension:


1) the existence of special or compelling circumstances;
2) merits of the case;
3) cause not entirely attributable to the fault or negligence of the party favored by the suspension of rules
4) a lack of showing that the review sought is merely frivolous and dilatory;
5) the other party will not be unjustly prejudiced thereby.

We said that the general aim of procedural law is to facilitate the application of justice to the rival claims of
contending parties, bearing in mind that procedural rules are created not to hinder or delay but to facilitate
and promote the administration of justice.

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.

In this case, the last day for filing the notice of appeal fell on a Friday, October 13, 1995. Petitioners entrusted
the filing of the notice of appeal to Jose Samala on October 11, 1995. However, he suffered from stomach
pains which lasted until the following days. Jose Samala filed the notice immediately on the next business day,
Monday, October 16, 1995. Considering the facts of the case, this was excusable negligence.

The real purpose behind the limitation of the period of appeal is to forestall or avoid an unreasonable delay in
the administration of justice and to put an end to controversies. [23] Where no element of intent to delay the
administration of justice could be attributed to petitioners, a one-day delay does not justify their appeals
denial.

We are inclined to give the same consideration in this case in light of the rules on justice, equity and fair
play. After all, the petition embodied circumstances that warrant heeding the petitioners' plea for justice. The
law abhors technicalities that impede the cause of justice. [24]

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G. R. SP No. 41281 is hereby
REVERSED. The trial court is ordered to elevate the records of Civil Case No. NC-346 to the Court of Appeals for review
in due course of appeal.

6.

Torres vs. Rural Bank of San Juan Ins. 693 SCRA 357, March 12, 2013 (GR 184520)

Torres vs. Rural Bank of San Juan Ins. 693 SCRA 357, March 12, 2013 (GR 184520)
Facts:

This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks to reverse and set aside the
Decision dated February 21, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 94690 dismissing the
complaint for illegal dismissal filed by petitioner Rolando OS. Torres (petitioner) against respondent Rural Bank
of San Juan, Inc. (RBSJT) and its officers. Likewise assailed is the decision of the CA which denied the
reconsideration.
The petitioner was initially hired by RBSJI as Personnel and Marketing Manager in 1991. After a six-month
probationary period and finding his performance to be satisfactory, RBSJI renewed his employment for the
same post to a permanent/regular status. In June 1996, the petitioner was offered the position of VicePresident for RBSJIs newly created department, Allied Business Ventures. He accepted the offer and
concomitantly relinquished his post. The vacancy created was filled by respondent Jobel who temporarily held
the position concurrently as a Corporate Planning and Human Resources Development Head.
On September 24, 1996, the petitioner was temporarily assigned as the manager of RBSJIs N. Domingo branch
in view of the resignation of Jacinto Figueroa (Jacinto).
On September 27, 1996, Jacinto requested the petitioner to sign astandard employment clearance pertaining
to his accountabilities withRBSJI. When the petitioner declined his request, Jacinto threw a fit andshouted foul
invectives. To pacify him, the petitioner bargained to issue aclearance but only for Jacintos paid cash advances
and salary loan.
About seven months later or on April 17, 1997, respondent Jesus issued a memorandum to the petitioner
requiring him to explain why no administrative action should be imposed on him for his unauthorized issuance
of a clearance to Jacinto whose accountabilities were yet to be audited. Jacinto was later found to have
unliquidated cash advances and was responsible for a questionable transaction involving P11 million for which
RBSJI is being sued by a certain Actives Builders ManufacturingCorporation. The memorandum stressed that
the clearance petitioner issued effectively barred RBSJI from running after Jacinto.
The petitioner submitted his explanation on the same day clarifying that the clearance was limited only to
Jacintos paid cash advances and salary loan based on the receipts presented by Lily Aguilar (Lily), thecashier
of N. Domingo branch. He emphasized that he had no foreknowledge nor was he forewarned of Jacintos
unliquidated cash advances and questionable transactions and that the clearance did not extend to those
matters.
After conducting an investigation, RBSJIs Human Resources Department recommended the petitioners
termination from employment
Subsequently, the Board of Directors adopted the said recommendation thus terminating the petitioner from
employment.
Feeling aggrieved, the petitioner filed the herein complaint for illegal dismissal, illegal deduction,
non- payment of service incentive, leave pay and retirement benefits.The petitioner averred that
the supposed loss of trustand confidence on him was a sham as it is in fact the calculated result of
therespondents dubious plot to conveniently oust him from RBSJI.
The petitioner further alleged that he was cunningly assigned at N. Domingo branch so he can be implicated in
the anomalous transaction perpetrated by Jacinto.
He recounted that the next day he was assigned back at the Tarlacextension office and thereafter repeatedly
harassed and forced to resign. He tolerated such treatment and pleaded that he be allowed to at least reach
his retirement age.The petitioner requested for his transfer to the operations or marketing department. His
request was, however, not acted upon.
For their part, the respondents maintained that the petitioner was validly dismissed for loss of trust and
confidence precipitated by his unauthorized issuance of a financial accountability clearance sans audit to a
resigned employee. They averred that a copy of the clearance mysteriously disappeared from RBSJIs records
hence, the petitioners claim that it pertained only to Jacintos paid cash advances and salary loan cannot
stand for being uncorroborated.
Attempts at an amicable settlement were made but the same proved futile hence, the Labor
Arbiter (LA) proceeded to rule on the complaint.
In its Decision dated November 27, 1998, the LA sustained the claims of the petitioner as against the factually
unsubstantiated allegation of loss of trust and confidence propounded by the respondents. The LA observed
that the petitioners selfless dedication to his job and efforts to achieve RBSJIs stability, which the respondents
failed to dispute, negate any finding of bad faith on his part when he issued a clearance of accountabilities in

favor of Jacinto. As such,the said act cannot serve as a valid and justifiable ground for the respondents to lose
trust and confidence in him.
However, the NLRC disagreed with the LAs conclusion and opined that it was anchored on irrelevant matters
such as the petitioners performance and the preferential treatment given to relatives of RBSJIs stockholders.
The NLRC held that the legality of the petitioners dismissal must be based on an appreciation of the facts and
the proof directly related to the offense charged, which NLRC found to have weighed heavily in favor of the
respondents.The NLRC remarked that the petitioner was indisputably notauthorized to issue the clearance.
Also, the tantrums and furious attitudeexhibited by Jacinto are not valid reasons to submit to his demands.
The petitioner thus sought reconsideration which was granted hence the NLRC reversed its decision and
reinstated LAs decision. Respondent filed Motion for Reconsideration but it was denied.
The respondents sought recourse with CA, which in its decision reversed and set aside the decision of the
NLRC. The petitioner moved for reconsideration but it was denied. Hence, the present appeal.

Issue:
Whether or not the SC has the authority to review the CAs findings of the facts when supported by substantial
evidence.
Ruling:

The petition is impressed with merit.


Settled is the rule that when supported by substantial evidence, the findings of fact of the CA are conclusive
and binding on the parties and are not reviewable by this Court As such, only errors of law are reviewed by the
Court in petitions for review of CA decisions. By way of exception,however, the Court will exercise its equity
jurisdiction and re-evaluate, review and re-examine the factual findings of the CA when, as in this case, the
same are contradicting with the findings of the labor tribunals.
The respondents failed to provethat the petitioner was dismissedfor a just cause.
WHEREFORE, the petition is GRANTED. The Decision dated February 21, 2008 and Resolution dated June 3,
2008 of the Court of Appeals in CA-G.R. SP No. 94690 are REVERSED and SET ASIDE. The Decision of the Labor
Arbiter dated November 27, 1998 is REINSTATEDwith the following MODIFICATIONS/CLARIFICATIONS: Petitioner
Rolando DS. Torres is entitled to the payment of: (a) back wages reckoned from May 30, 1997 up to the finality
of this Decision, with interest at six percent (6%) per annum, and 12% legal interest thereafter until fully paid;
and (b) in lieu of reinstatement, separation pay equivalent to one (1) month salary for every year of service,
with a fraction of at least six (6) months to be considered as one (1) whole year, to be computed from the date
of his employment up to the finality of this decision.

7.

Reyes vs. Lim 408 SCRA 560, 566 (GR 134241)

REYES VS LIM
G.R. No. 134241
FACTS:

On 23 March 1995, petitioner David Reyes ("Reyes") filed before the trial court a complaint for annulment of
contract and damages against respondents Jose Lim ("Lim"), Chuy Cheng Keng ("Keng") and Harrison Lumber,
Inc. ("Harrison Lumber")

The complaint alleged that on 7 November 1994, Reyes as seller and Lim as buyer entered into a contract to
sell ("Contract to Sell") a parcel of land ("Property") located along F.B. Harrison Street, Pasay City. Harrison
Lumber occupied the Property as lessee with a monthly rental of P35,000

The complaint claimed that Reyes had informed Harrison Lumber to vacate the Property before the end of
January 1995. Reyes also informed Keng and Harrison Lumber that if they failed to vacate by 8 March 1995, he
would hold them liable for the penalty of P400,000 a month as provided in the Contract to Sell

The complaint further alleged that Lim connived with Harrison Lumber not to vacate the Property until the
P400,000 monthly penalty would have accumulated and equaled the unpaid purchase price of P18,000,000

On 3 May 1995, Keng and Harrison Lumber filed their Answer denying they connived with Lim to defraud
Reyes. Keng and Harrison Lumber alleged that Reyes approved their request for an extension of time to vacate
the Property due to their difficulty in finding a new location for their business

On 31 May 1995, Lim filed his Answer stating that he was ready and willing to pay the balance of the purchase
price on or before 8 March 1995. Lim requested a meeting with Reyes through the latters daughter on the
signing of the Deed of Absolute Sale and the payment of the balance but Reyes kept postponing their meeting.
On 9 March 1995, Reyes offered to return the P10 million down payment to Lim because Reyes was having
problems in removing the lessee from the Property. Lim rejected Reyes offer and proceeded to verify the
status of Reyes title to the Property. Lim learned that Reyes had already sold the Property to Line One Foods
Corporation ("Line One") on 1 March 1995 for P16,782,840

On 2 November 1995, Reyes filed a Motion for Leave to File Amended Complaint due to supervening facts.
These included the filing by Lim of a complaint for estafa against Reyes as well as an action for specific
performance and nullification of sale and title plus damages before another trial court. The trial court granted
the motion in an Order dated 23 November 1995

In his Amended Answer dated 18 January 1996, Lim prayed for the cancellation of the Contract to Sell and for
the issuance of a writ of preliminary attachment against Reyes. The trial court denied the prayer for a writ of
preliminary attachment in an Order dated 7 October 1996

On 6 March 1997, Lim requested in open court that Reyes be ordered to deposit the P10 million down payment
with the cashier of the Regional Trial Court of Paraaque. The trial court granted this motion

On 25 March 1997, Reyes filed a Motion to Set Aside the Order dated 6 March 1997 on the ground the Order
practically granted the reliefs Lim prayed for in his Amended Answer. The trial court denied Reyes motion in
an Order dated 3 July 1997. Citing Article 1385 of the Civil Code, the trial court ruled that an action for
rescission could prosper only if the party demanding rescission can return whatever he may be obliged to
restore should the court grant the rescission

The trial court denied Reyes Motion for Reconsideration in its Order dated 3 October 1997. In the same order,
the trial court directed Reyes to deposit the P10 million down payment with the Clerk of Court on or before 30
October 1997

On 8 December 1997, Reyes filed a Petition for Certiorari with the Court of Appeals. Reyes prayed that the
Orders of the trial court dated 6 March 1997, 3 July 1997 and 3 October 1997 be set aside for having been
issued with grave abuse of discretion amounting to lack of jurisdiction. On 12 May 1998, the Court of Appeals
dismissed the petition for lack of merit

ISSUES:

1. Whether the Court of Appeals erred in holding the trial court could issue the questioned Orders dated March 6,
1997, July 3, 1997 and October 3, 1997, requiring petitioner David Reyes to deposit the amount of Ten Million Pesos
(P10,000,000.00) during the pendency of the action, when deposit is not among the provisional remedies enumerated
in Rule 57 to 61 of the 1997 Rules on Civil Procedure.

2. Whether the Court of Appeals erred in finding the trial court could issue the questioned Orders on grounds of equity
when there is an applicable law on the matter, that is, Rules 57 to 61 of the 1997 Rules on Civil Procedure.

HELD:

Reyes contentions are without merit. SC AFFIRM the Decision of the Court of Appeals

Reyes points out that deposit is not among the provisional remedies enumerated in the 1997 Rules of Civil
Procedure. Reyes stresses the enumeration in the Rules is exclusive. Not one of the provisional remedies in
Rules 57 to 61 applies to this case. Reyes argues that a court cannot apply equity and require deposit if the
law already prescribes the specific provisional remedies which do not include deposit. Reyes invokes the
principle that equity is "applied only in the absence of, and never against, statutory law or x x x judicial rules
of procedure." Reyes adds the fact that the provisional remedies do not include deposit is a matter of dura lex
sed lex

The instant case, however, is precisely one where there is a hiatus in the law and in the Rules of Court. If left
alone, the hiatus will result in unjust enrichment to Reyes at the expense of Lim. The hiatus may also imperil
restitution, which is a precondition to the rescission of the Contract to Sell that Reyes himself seeks. This is not
a case of equity overruling a positive provision of law or judicial rule for there is none that governs this
particular case. This is a case of silence or insufficiency of the law and the Rules of Court. In this case, Article 9
of the Civil Code expressly mandates the courts to make a ruling despite the "silence, obscurity or insufficiency
of the laws." This calls for the application of equity, which "fills the open spaces in the law."

Thus, the trial court in the exercise of its equity jurisdiction may validly order the deposit of the P10 million
down payment in court. The purpose of the exercise of equity jurisdiction in this case is to prevent unjust
enrichment and to ensure restitution. Equity jurisdiction aims to do complete justice in cases where a court of
law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its
statutory or legal jurisdiction. Equity is the principle by which substantial justice may be attained in cases
where the prescribed or customary forms of ordinary law are inadequate

8. Hiyas vs. Acuna G.R. No. 154132, August 31, 2006.


HIYAS SAVINGS and LOAN BANK, INC. vs HON. EDMUNDO T. ACUA
G.R. NO. 154132
August 31, 2006
Facts:
On November 24, 2000, Alberto Moreno (private respondent) filed with the RTC of Caloocan City a complaint
against Hiyas Savings and Loan Bank, Inc. (petitioner), his wife Remedios, the spouses Felipe and Maria Owe and the
Register of Deeds of Caloocan City for cancellation of mortgage contending that he did not secure any loan from
petitioner, nor did he sign or execute any contract of mortgage in its favor; that his wife, acting in conspiracy
with Hiyas and the spouses Owe, who were the ones that benefited from the loan, made it appear that he signed the
contract of mortgage; that he could not have executed the said contract because he was then working abroad.
On May 17, 2001, petitioner filed a Motion to Dismiss on the ground that private respondent failed to comply with
Article 151 of the Family Code wherein it is provided that no suit between members of the same family shall prosper
unless it should appear from the verified complaint or petition that earnest efforts toward a compromise have been
made, but that the same have failed. Petitioner contends that since the complaint does not contain any fact or
averment that earnest efforts toward a compromise had been made prior to its institution, then the complaint should
be dismissed for lack of cause of action.
On November 8, 2001, the RTC issued the first of its assailed Orders denying the Motion to Dismiss. In the present
case, petitioner failed to advance a satisfactory explanation as to its failure to comply with the principle of judicial
hierarchy. There is no reason why the instant petition could not have been brought before the CA. On this basis, the
instant petition should be dismissed.
Issue:
Whether or not public respondent committed grave abuse of discretion amounting to lack or in excess of jurisdiction
when he ruled that lack of earnest efforts toward a compromise is not a ground for a motion to dismiss in suits
between husband and wife when other parties who are strangers to the family are involved in the suit.

Held:
The Court is not persuaded. Article 151 of the Family Code provides that No suit between members of the same family
shall prosper unless it should appear from the verified complaint or petition that earnest efforts toward a compromise
have been made, but that the same have failed. If it is shown that no such efforts were in fact made, the case must be
dismissed. This rule shall not apply to cases which may not be the subject of compromise under the Civil Code.
Petitioner also contends that the trial court committed grave abuse of discretion when it ruled that petitioner, not
being a member of the same family as respondent, may not invoke the provisions of Article 151 of the Family Code.
Petition DISMISSED for lack of merit.

9. Republic vs. Caguioa 691 SCRA 306 February 20, 2013.


Republic vs. Caguioa 691 SCRA 306 February 20, 2013
Facts:

On March 14, 2005, Indigo Distribution Corporation and thirteen other petitioners (collectively referred to as
lower court petitioners) (Importers and traders duly licensed to operate inside the Subic Special Economic and
Freeport Zone (SSEFZ) filed before the respondent judge a petition for declaratory relief with prayer for
temporary restraining order and preliminary mandatory injunction against the Honorable Secretary of Finance,
et al.

The petition sought to nullify the implementation of Section 6 of Republic Act (R.A.) No. 9334,
otherwise known as AN ACT INCREASING THE EXCISE TAX RATES IMPOSED ON ALCOHOL AND TOBACCO
PRODUCTS, AMENDING FOR THE PURPOSE SECTIONS 131, 141, 142, 143, 144, 145 AND 288 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED, as unconstitutional. Section 6 of R.A. No. 9334.

By way of background, in 1992, Congress enacted Republic Act No. 7227 also known as the Bases Conversion
and Development Act of 1992 which created the Subic Special Economic and Freeport Zone (SBF) and the
Subic Bay Metropolitan Authority (SBMA)
Pursuant to the law, several private respondents applied for and were granted Certificates of
Registration and Tax Exemption by the SBMA. Their respective certificates states that:
The Company shall be entitled to tax and duty-free importation of raw materials, capital equipment, and household
and personal items for use solely on the Subic Bay Freeport Zone.

Congress subsequently passed RA 9334 effective Jan. 1, 2005 which states that all importations of cigars,
cigarettes, distilled spirits, fermented liquors and wines into the SBF, including those intended to be
transhipped to other free ports in the Philippines, shall be treated as ordinary importations subject to all
applicable taxes, duties and charges, including excise taxes. (Sec. 6)

The memorandum prompted the lower court petitioners to bring before the RTC their petition for declaratory
relief.

The petition included a prayer for the issuance of a writ of preliminary injunction and/or a TRO to enjoin the
Republic (acting through the SBMA) from enforcing the challenged memorandum.

On May 4, 2005, the respondent judge granted the lower court petitioners application for preliminary
injunction despite the Republics opposition, and on May 11, 2005, he issued the preliminary injunction.

The Republic filed before this Court a petition for certiorari and prohibition to annul the respondent judges
order and the writ issued pursuant to this order.

The petition asked for the issuance of a TRO and/or a writ of preliminary injunction. By motion dated July 21,
2005 filed before the lower court, the Republic asked the respondent judge to suspend the proceedings
pending the resolution of G.R. No. 168584

On August 5, 2005, the private respondents (in the present petition now before us) filed before the respondent
judge motions for leave to intervene and to admit complaints-in-intervention. They also asked in these motions
that the respondent judge extend to them the effects and benefits of his May 4, 2005 order, in the lower court
petitioners favor, and the subsequently issued May 11, 2005 writ ofpreliminary mandatory injunction.

Without acting on the Republics motion to suspend the proceedings, the respondent judge granted on August
11, 2005 the private respondents motions and complaints-in-intervention.

The Republic moved to reconsider the respondent judges August 11, 2005 order, arguing that it had been
denied due process because it never received copies of the private respondents motions and complaints-inintervention.

On July 5, 2006, the respondent judge denied the Republics motion for reconsideration and the previously filed
motion to suspend the proceedings. The respondent judge held that all of the parties in the case had been duly
notified per the records.
Issue/s:

WON the respondent judge acted with manifest partiality and with grave abuse of discretion when he issued
his August 11, 2005 and July 5, 2006 orders.

WON the respondent judge violated its right to due process when he peremptorily allowed the private
respondents motions and complaints-in-intervention and proceeded with their hearing
ex parte despite the absence of any prior notice to it.

The Respondents Position

The private respondents point to the procedural


defects in the petition:
A. the petition was filed out of time, arguing that the Republic only had 53 remaining days to file the petition from
notice of the denial of its motion for reconsideration, maintaining that the 60-day period within which to file the
petition is counted from the notice of the denial of the August 11, 2005 order;
B. the petition did not comply with the rules on proof of filing and service;
C. the Republic failed to properly serve their counsel of record a copy of the petition; and
D. the Republic did not observe the hierarchy of courts in filing the instant petition
Ruling:

PARTIALLY GRANT the petitiOn. We GRANT the writ of certiorari and accordingly SET ASIDE the orders dated
August 11, 2005 and July 5, 2006 of respondent Judge Ramon S. Caguioa for being NULL and VOID.

We DISMISS the prayer for writ of prohibition on the ground of mootncss.


Relaxation of procedural rules for compelling reasons . We disagree with the private respondents procedural
objections.

A.
We find that the present petition was filed within the reglementary period. Contrary to the private respondents
position, the 60-day period within which to file the petition for certiorari is counted from the Republics receipt
of the July 5, 2006 order denying the latters motion for reconsideration.
Section 4, Rule 65 of the Rules of Court is clear on this point In case a motion for reconsideration or new trial
is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of
the denial of said motion.
We find too that the present petition complied with the rules on proof of filing and service of the petition.
Attached to the petition incompliance with Sections 12 and 13, Rule 13 of the Rules of Court are the registry
receipts and the affidavit of the person who filed and served the petition by registered mail.
B.
While the principle of hierarchy of courts does indeed require that recourses should be made to the lower
courts before they are made to the higher courts, this principle is not an absolute rule and admits of
exceptions under well-defined circumstances. When dictated by public welfare and the advancement of public
policy; when demanded by the broader interest of justice; when the challenged orders were patent nullities; or
when analogous exceptional and compelling circumstances called for and justified our immediate and direct
handling of the case.
The Republic claims that the respondent judge violated and continues to violate its right to due process by
allowing the private respondents and several others to intervene in the case sans notice to the Republic; by
extending to them the benefit of the original injunction without the requisite injunction bond applicable to
them as separate injunction applicants; and by continuing to suspend the Republics right to collect excise
taxes from the private respondents and from the lower court petitioners, thus adversely affecting the
governments revenues. To our mind, the demonstrated extent of the respondent judges actions and their
effects constitute special and compelling circumstances calling for our direct and immediate attention.
C.
The Republic has consistently and repeatedly maintained that it never received a copy of the motions and
complaints-in-intervention, as evidenced by the certification of the Docket Division of the Office of the Solicitor
General (OSG); it learned of the private respondents presence in this case only after it received copies of the
assailed orders, and it even had to inquire from the lower court for the private respondents addresses.
Although their counsels did not formally receive any copy of the petition, the private respondents themselves
admitted that they received their copy of the present petition. The records show that the Republic
subsequently complied with the rules on service when, after the private respondents comment, the Republic
served copies of its reply and memorandum to the respondents
counsel of record.
On November 9, 2006, the Republic filed an administrative case against the respondent judge for gross
ignorance of the law, manifest partiality and conduct prejudicial to the best interest of the service.
This Court found the respondent judge guilty of gross ignorance of the law and conduct prejudicial to the best
interest of the service. The Court accordingly dismissed the respondent judge from the service.
Partly granted. Costs against Metatrans Trading International Corporation
and Hundred Young Subic International.

10. A.M. RTJ -10-2225, Cabili vs. Balindong, September 6, 2011

The Facts and the Case


Complainant Atty. Tomas Ong Cabili (Atty. Cabili) was counsel of the Heirs of Jesus Ledesma in the latters action for
damages against the Mindanao State University (MSU) and others arising from the death of the late Jesus Ledesma in
Civil Case 06-254 of the Regional Trial Court (RTC) of Iligan City, Branch 6. [1] The RTC rendered judgment [2] against the
defendants, including MSU, ordering them to pay damages to the Heirs. On appeal,[3] the Court of Appeals (CA)
affirmed the RTC decision[4] which became final and executory.[5]
Eventually, on motion of the Heirs, on March 6, 2009 the RTC Branch 6 caused the issuance of a writ of execution
against the defendants. The Office of the Solicitor General (OSG) belatedly filed an opposition to the issuance of the
writ, resulting in its denial on the ground of mootness of the motion. [6] Meantime, the Sheriff of Branch 6, Sheriff Gerard
Peter Gaje, served a notice of garnishment on MSUs funds with the Land Bank of the PhilippinesMarawi City Branch by
reason of MSUs failure to obey the writ.
On April 1, 2009, to prevent seizure of its Land Bank deposits that it needed for operations, MSU filed a special civil
action of prohibition and mandamus with application for the issuance of a temporary restraining order (TRO) and,
subsequently, a preliminary injunction before the RTC Branch 8, presided over by respondent acting presiding judge,
Judge Rasad G. Balindong, against Land Bank and Sheriff Gaje. [7]
In its petition, MSU averred that it is a state university, funded by appropriations law enacted by Congress; that
despite OSG opposition to the issuance of a writ of execution against it, such writ was issued and Sheriff Gaje
garnished upon MSUs deposits with Land Bank, who in turn gave notice to MSU that it was putting on hold the sum
of P2,726,189.90 on its deposit in Account 2002-0000-35; that, this money being government funds, Sheriff Gaje was
executing on the same in violation of Commission on Audit (COA) Circular 2001-002 dated July 31, 2001 and SC
Administrative Circular 10-2000; and that unless restrained, the garnishment of government fund would disrupt MSUs
operations.
After due hearing, Judge Balindong issued a TRO, enjoining Land Bank and Sheriff Gaje from proceeding with the
garnishment of the MSU deposit with Land Bank. [8] To determine whether the issuance of a writ of preliminary
injunction was warranted, Judge Balindong heard the parties and required them to submit memoranda. Instead of
submitting a memorandum, Sheriff Gaje filed a motion to dismiss on the ground that RTC Branch 8 had no jurisdiction
to issue an injunction order against another court of equal rank. Finding merit, on April 28, 2009 Judge Balindong
issued an Order, dismissing the petition.
For having initially taken cognizance of the case and issuing a TRO, Atty. Cabili filed the present administrative action
Judge Balindong for gross ignorance of the law, grave abuse of authority, abuse of discretion and/or grave misconduct
prejudicial to the interest of the judicial service. The Office of the Court Administrator (OCA) found ground to hold
Judge Balindong guilty of gross ignorance of the law for interfering with the judgment of a co-equal court. It
recommended the imposition of a fine of P40,000.00 on Judge Balindong with a stern warning against a future offense.
[9]

The majority would want to adopt the recommendation.


The Issue Presented
The issue in this case is whether or not Judge Balindong of RTC Branch 8 acted with gross ignorance of the law when
he issued the TRO, pending hearing on the application for preliminary injunction that enjoined Sheriff Gaje from
garnishing MSUs Congress-appropriated operating funds for the satisfaction of the judgment of RTC Branch 6.
The Dissent
With all due respect, I dissent from my colleagues. The majority concludes that Judge Balindong exceeded his authority
when he temporarily restrained the writ of execution issued by a co-equal court, RTC Branch 6. Judge Balindongs act,
said the majority, betrayed his gross ignorance of the policy of peaceful co-existence among courts of the same
judicial plane and the elementary rule of non-interference with the proceedings of a court of co-equal jurisdiction.
But there is quite a huge difference between a) issuing a TRO that enjoins the sheriff from enforcing the writ of
execution of a co-equal court against specific assets that are exempt from execution and b) issuing one that altogether
enjoins a co-equal court from enforcing its judgment.
Here, MSUs action before Branch 8, presided over by Judge Balindong, was not directed against the final
decision of Branch 6 of the Court or its enforceability against MSU but against Sheriff Gajes authority to look for the
judgment debtors assets, not exempt from execution, upon which he could satisfy the judgment. Clearly, Judge

Balindongs TRO was addressed to the sheriff, enjoining him from enforcing the writ of execution, a writ directed in
general against all assets of MSU and the other defendants that were not exempt from execution.
Indeed, Judge Balindongs TRO did not enjoin the enforcement of the judgment of a co-equal branch. It merely
restricted Sheriff Gajes discretion in determining what assets of MSU he can validly execute upon. From the
circumstances above, it is clear that Sheriff Gaje actually exceeded his authority in serving the notice of garnishment
against the Congress-appropriated funds of MSU that were deposited with Land Bank.
While funds of government instrumentalities that have separate and distinct personalities from the national
government are not exempt from execution or garnishment, [10] the enforcement of a writ of execution against these
funds are not ministerial compared to the execution of funds belonging to private individuals. An additional
requirement, the filing of claim for payment with the COA, is necessary before execution can prosper. [11] This additional
requirement is pursuant to Commonwealth Act 327, as amended by Section 26 of Presidential Decree 1445, which
vests in the COA the primary jurisdiction to examine, audit, and settle all debts and claims of any sort due from or
owing the Government or any of its subdivisions,agencies and instrumentalities, including government-owned and
controlled corporations and their subsidiaries.
As properly alleged in its petition, MSU is a government instrumentality, [12] being a creation of Republic Act
1387, as amended. As an instrumentality of the government, its funds cannot be simply garnished through the mere
service of Sheriff Gaje of a notice of garnishment without proof of approval from the COA.
Consequently, it cannot be said that Judge Balindong acted with blatant gross ignorance of the law. His TRO
did not enjoin the enforcement of the final judgment of Branch 8. He issued a temporary restraining order based on
the legally plausible proposition that there was a need to protect Congress-appropriated funds that MSU, a government
instrumentality for providing higher education for the Muslim minority in Mindanao, needed for its operations. And it
was but a TRO of limited life, sufficient to enable him to hear the parties and decide what appropriate action to take in
the case. After hearing the parties on the need to issue a writ of preliminary injunction and finding merit on the motion
questioning Branch 8s jurisdiction over the action, Judge Balindong eventually dismissed the petition filed in his
sala. He acted prudently and correctly in the case. He did not act with outrageous ignorance of the principle of noninterference with the proceedings of a court of co-equal jurisdiction.
Actually the issuance by one court of a TRO or writ of preliminary injunction against the sheriff of another court
who attempts to enforce a judgment against properties that do not belong to the judgment debtor is common place, is
authorized by the rules, and is not regarded as interference with the authority of a co-equal body. [13] The party
prejudiced by the execution has an option to raise the matter before the court that rendered the judgment or before
some other appropriate court. MSU relied on this authorized course of action. The only problem is that the OSG had
already filed an opposition to the issuance of the writ of execution against MSU before Branch 6 and the latter court
denied such opposition. Consequently, the proper remedy was a special civil action with the Court of Appeals assailing
such denial.
Still Judge Balindong cannot be regarded as incorrigibly incompetent. At best he initially incurred an error of
judgment. Still, after appropriate hearing, he declined to issue a writ of preliminary injunction in the case and instead
dismissed the action for lack of jurisdiction. He, therefore, acted reasonably, prudently, and appropriately. He certainly
does not deserve either the finding that he was guilty of gross ignorance of the law or the harsh penalty that the
majority prescribes for him.[14]
Parenthetically, complainant Atty. Cabili himself openly declares that Judge Balindong is a good judge [15] and
that the Court should consider in his favor his lack of bad faith in issuing the TRO in question.
I therefore vote to reduce the penalty imposed on Judge Rasad G. Balindong to P20,000.00.
11. Lapu-Lapu Dev. Corp. vs. Group Management 388 SCRA 493, 508
LAPULAPU DEVELOPMENT AND HOUSING
CORPORATION, respondent.

CORPORATION, petitioner,

vs.

,nGROUP

MANAGEMENT

PANGANIBAN, J.:

Having the same power and prerogatives, courts of coequal and coordinate jurisdiction cannot
interfere with each others orders and judgments.
The ultimate test to determine the existence of forum shopping is the vexation caused the courts and the
litigants by the repeated invocation of substantially the same facts, issues and reliefs, thereby unnecessarily
clogging court dockets and creating the possibility of conflicting rulings and decisions.

CASE:

Petition for Review on Certiorari under Rule 45, seeking the annulment of the April 30, 1999 Decision and
the December 29, 1999 Resolution of the Court of Appeals (CA)

FACTS:

LLDHCwas the registered owner of seventy-eight (78) lots located at Barrio Marigondon, Lapu-lapu City.
LLDHC entered into a Project and Loan Agreement with GSIS. To secure payment of the loan, LLDHC executed a
real estate mortgage over its 78 lots at Marigondon, Lapulapu City in favor of GSIS.
LLDHC having failed to develop the property and defaulted in the payment of its loan, GSIS foreclosed the
mortgage. After the lapse of the redemption period, GSIS consolidated its ownership over the mortgaged lots
and the corresponding transfer certificates of title were issued in its name.

GSISexecuted a Deed of Conditional Sale covering its Marigondon lots in favor of GMC.

RTC BR. 38 MANILA

LLDHC filed a complaint for Annulment of Foreclosure with Writ of Mandatory Injunction against GSIS.
RTC BR. 27 LAPU-LAPU CITY

GMC filed a complaint for Specific Performance with Damages against GSIS. The complaint seeks to compel
GSIS to execute a Final Deed of Sale in favor of GMC covering the Marigondon lots, the purchase price thereof
having been paid in full by GMC to GSIS.

Allowed to intervene, LLDHC filed a Motion to Dismiss the complaint for specific performance. Said motion
having been denied, LLDHC filed its Answer in Intervention and thereafter participated in the proceedings
as intervenor.

After a full-blown trial, a decision was rendered:


1. GSIS to execute the final deed of absolute sale and deliver the certificates of title of land to GMC;
2. GSIS to pay GMC damages;
3. Dismissed the intervenors complaint-in-intervention for lack of evidence of legal standing and legal
interest in the suit, as well as failure to substantiate any cause of action against either plaintiff or
defendant.
RTC BR. 27 LAPU-LAPU CITY (APPEAL)

LLDHC, as intervenor, and GSIS as defendant, filed their respective Notices of Appeals. Their appeals were
dismissed.

RTC BR. 38 MANILA

Decision was rendered:


1. Annulled the foreclosure by GSIS of the mortgage over the
2. Cancelled the consolidated certificates of titles issued in
Deeds (RD) of Lapu-Lapu City to issue new certificates of
the LLDHC;
3. Ordered LLDHC to pay the GSIS; and
4. Ordered GSIS to execute a properly registrable release of
after full payment by LLDHC.

land;
the name of GSIS and directed the Register of
titles over those parcels of land in the name of
discharge of mortgage over the parcels of land

COURT OF APPEALS

LLDHC filed a Complaint, seeking the annulment of the RTC Br. 27 Lapu-Lapudecision.

In a decision, this Court dismissed the complaint for annulment of judgment, on the following ground that
there is no showing from the allegations of the petition that the respondent court is without jurisdiction over
the subject matter and of the parties. petitioner has no cause of action for the annulment of judgment. The
complaint must allege ultimate facts for the annulment of the decision (Avendana v. Bautista, 142
SCRA 39). There is none in this case.

No appeal having been taken by LLHDC, the decision of this Court became final and executory, and entry of
judgment was made.

SUPREME COURT

LLDHC filed a petition for certiorari. Like the complaint in CA, the petition also seeks the annulment of the
RTC Br. 27 Lapu-Lapu Citydecision.

In its Resolution, the Supreme Court dismissed LLDHCs petition:


The instant petition is actually another Petition for Annulment of Judgment of the Decision of the RTC Br. 27
Lapu-Lapu City.

Under Section 9(2) of Batas PambansaBlg. 129, otherwise known as The Judiciary Reorganization Actof 1980, it
is the Court of Appeals (then the Intermediate Appellate Court), and not this Court, which has jurisdiction
to annul judgments of Regional Trial Courts, viz:
SEC. 9. Jurisdiction -- The Intermediate Appellate Court shall exercise:
x
xx xxx xxx
(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and
x xx xxx xxx

LLDHC should have filed a timely Petition for Review under Rule 45 of the Revised Rules of Court of the
decision of the Court of Appeals. But, this is all academic now. The appellate courts decision had become final
and executory.

It has been settled that a judgment can be annulled only on two (2) grounds:
a.that the judgment is void for want of jurisdiction or lack of due process of law; or
b.thatit has been obtained by fraud.
Neither of these grounds obtain in the case at bench. x xx.

LLDHC had ample participation in RTC Br. 27 Lapu-Lapu City case as intervenor

It cannot be assailed on the ground of fraud. In order for fraud to serve as a basis for the annulment of
judgment, it must be extrinsic or collateral in character, otherwise there would be no end to
litigations. Extrinsic fraud refers to any fraudulent act of the prevailing party which is committed
outside of the trial of the case, whereby the defeated party [petitioner herein] has been
prevented from exhibiting fully his side of the case, by fraud or deception practiced on him by his
opponent. This type of fraud is decidedly absent in the case at bench.

LLDHC sought a reconsideration of the above resolution but its motion was denied with finality by the
Supreme Court.
RTC BR. 27 LAPU-LAPU CITY

Judge Risos issued an order directing the execution of the judgment in the case, pursuant to which the
corresponding writ of execution was issued.

LLDHC and GSIS filed their respective motions to stay execution, both of which were denied.

On motion of GMC, Judge Risos issued an Order, directing the Register of Deeds of Lapu-lapu City to cancel
the Transfer Certificate of Titles of the properties involved in this case and to issue new ones in the name of
GMC and to deliver the same to the latter within ten (10) days after such Order shall have become final.
RTC BR. 38 MANILA

Judge Barias issued a writ of execution in the case filed by LLDHC

RTC Manila SheriffRuefasent a letter to the RD of Lapu-Lapu City, ordering him to cancel the consolidated
certificate of title issued in the name of GSIS and to issue new certificates of title over subject lots in the name
of LLDHC.

Awrit of possession was issued commanding Sheriff Ruefa to cause GSIS and all persons claiming rights
under it to vacate the lots in question and to place LLDHC in peaceful possession thereof.
RTC BR. 27 LAPU-LAPU CITY

Judge Risosissued an Order reiterating the order and writ of execution, as well as the order directing the RD of
Lapu-Lapu City to effect the transfer of the titles to subject lots in favor of GMC, declaring any and all acts
done by the RD of Lapu-Lapu City null and void starting with surreptitious issuance of new titles in the name of
LLDHC, and, in the interim, enjoining the RD of Lapu-Lapu City from recording and/or registering any transfer,
disposition, or transaction regarding said lots, which may be executed by LLDHC and/or GSIS.
Judge Risos held in abeyance all contempt proceedings against the RD of Lapu-Lapu City to allow him to forge
(sic) himself of the contemptuous act charged by the plaintiff.

RTC BR. 38 MANILA

Judge Barias issued an order, giving GMC ten (10) days from notice thereof within which to remove all its
structures erected therein, equipment, machineries and other materials from the properties while all security
guards assigned therein and persons associated with them were directed to vacate the premises also within
ten (10) days from notice thereof.

RTC BR. 27 LAPU-LAPU CITY

Acting on GMCs Omnibus Motion and the Manifestation/Explanationof RD, Judge Risos issued an Order:
a.Ordering LLDHC to show cause in writing within ten (10) days from receipt thereof why it should not be
declared in contempt
b.Issuing a writ of preliminary prohibitory injunction to restrain immediately all persons acting on orders or
by authority of intervenor LLDHC from carrying out any and all acts in defiance of such Courts final and
executory judgment, orders and writ of execution aforesaid and the removal of GMCs machinery, equipment
and supplies thereon, as well as the ouster therefrom of plaintiffs duly authorized representatives, personnel
and security guards;
c. Issuing a writ of preliminary mandatory injunction to direct the ouster of intervenor LLDHC;
d.Declaring in contemptRD of Lapu-Lapu City and directing his immediate detention and confinement at the City
Jail of Lapu-lapu City as long as he persists in his interference, disobedience and obstruction of justice by not
complying with the directives of such Court
e.Directing the Office of the City Sheriff to implement compliance with paragraphs (b), (c) and (d) above,
particularly the detention and confinement of Atty. Dioscoro Y. Sanchez, Jr., RD, Lapu-lapu City, if he continues
to refuse to transfer the titles of the land in dispute after ten (10) days from receipt of this order, authorizing
him for these purposes to secure the assistance of the Office of the Chief of Police of Lapu-lapu City, who is
likewise directed to provide a sufficient number of his men in the service to fully and faithfully carry out these
orders, including the detention and confinement aforesaid, until further orders from this Court.

The corresponding writ of preliminary prohibitory injunction was issued.


SUPREME COURT

LLDHC came to this Court on a petition for certiorari with preliminary injunction praying that
respondents (GMC and Judge Risos) cease and desist from proceeding with the execution of the decision on the
theory that the decision of the RTC Br. 38 Manila is a supervening event which makes it mandatory for
Respondent Judge Risos to stop execution of the judgment in RTC Br. 27 Lapu-Lapu City case.

In denying due course to said petition, this Court ratiocinated that the instant petition is petitioners latest
attempt to resist the implementation or execution of that decision using as a shield a decision of the RTC Br. 27
Manila. We are not prepared to allow it. The applicable rule and jurisprudence are clear. The prevailing party
is entitled as a matter of right to a writ of execution, and the issuance thereof is a ministerial duty
compellable by mandamus. We do not believe that there exists in this instance a supervening event which
would justify a deviation from this rule.
RTC BR. 27 LAPU-LAPU CITY

Respondent RD and intervenor LLDHC, through separate motions, sought a reconsideration of Judge Risos
orders.

Respondent Judge Fernandez, who succeeded Judge Risos, issued an Ordergrantingthe two instant motions.

GMC sought a reconsideration of said order. Its motion for reconsideration was, however, denied.
COURT OF APPEALS

The CA affirmed the Orders of the RTC Br. 27Lapulapu City freeing the RD from indirect contempt of court. It
also declared without force and effect the Decision of the RTC Br. 38 Manila, as well as the Orders and Writs
issued for the execution and enforcement of that Decision. The CA enjoined LLDHC, its agents and
representatives, the RTC of Manila and the RD of Lapulapu City from obstructing or interfering with the
implementation of the Order issued by the Lapu-lapu RTC.

Hence, this Petition.


ISSUES:
1.
2.
3.

Whether or not the decision of the Manila RTC could be declared ineffectual by the judgment of the Lapu-Lapu
City RTC
Whether or notLLDHC is guilty of forum shopping
Whether or not the refusal of Justices Verzola and Tuquero to voluntarily inhibit or disqualify themselves from
acting on the present case is proper and justifiable

RULING:
1. NO. Courts of coequal and coordinate jurisdiction may not interfere with or pass upon each others orders or
processes, since they have the same power and jurisdiction. As correctly stated by the CA, the Decision

2.

3.

rendered by the Manila RTC -- while final and executory -- cannot bind herein private respondent, which was
not a party to the case before the said RTC. A personal judgment is binding only upon the parties, their agents,
representatives and successors in interest.
In its Memorandum, LLDHC argues that the Decision of the Manila RTC is superior to that of the Lapulapu RTC
and must therefore prevail.
We do not agree. The records of the case clearly show that the Lapulapu Decision has become final and
executory and is thus valid and binding upon the parties. Obviously, LLDHC is again trying another backdoor
attempt to annul the final and executory Decision of the Lapulapu RTC:
a. It was LLDHC that filed a Notice of Appeal contesting the Lapulapu RTC Judgment which was rejected by
the said RTC for being frivolous and dilatory. Since petitioner had done nothing thereafter, the Decision
clearly became final and executory.However, upon receipt of the Manila RTC Decision, petitioner found a
new tool to evade the already final Lapulapu Decision by seeking the annulment of the latter in a Petition
with the CA. However, the appellate court dismissed the action, because petitioner had been unable to
prove any of the grounds for annulment; namely lack of jurisdiction or extrinsic fraud.Because no appeal
had been taken by LLDHC, the ruling of the CA also became final and executory.
b. The Supreme Court likewise recognized the finality of the CA Decision when it threw out LLDHCs Petition
for Certiorari. Jurisprudence mandates that when a decision becomes final and executory, it
becomes valid and binding upon the parties and their successors in interest. Such decision or
order can no longer be disturbed or reopened no matter how erroneous it may have been.The
perfection of an appeal in the manner and within the period prescribed by law is
mandatory. Therefore, since the Lapulapu Decision has become final and executory, its
execution has become mandatory and ministerial on the part of the judge.The CA correctly ruled
that the Lapulapu Judgment is binding upon LLDHC which, by its own motion, participated as an intervenor.
Petitioner likewise claims that Private Respondent GMC cannot escape the adverse effects of the final and
executory judgment of the Manila RTC.
Again, we do not agree. A trial court has no power to stop an act that has been authorized by
another trial court of equal rank. As correctly stated by the CA, the Decision rendered by the Manila
RTC -- while final and executory -- cannot bind herein private respondent, which was not a party to the case
before the said RTC. A personal judgment is binding only upon the parties, their agents, representatives
and successors in interest.
c. LLDHC grievously errs in insisting that the judgment of the Manila RTC nullified that of the Lapu-lapu RTC.
As already adverted to earlier, courts of coequal and coordinate jurisdiction may not interfere with or pass
upon each others orders or processes, since they have the same power and jurisdiction. Except in
extreme situations authorized by law, they are proscribed from doing so.
YES. There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) from another.
Petitioner contends that its Complaint for the annulment of the mortgage foreclosure had been filed in the
Manila RTC almost ten years prior to GMCs Complaint for specific performance and damages in the Lapulapu
RTC. Thus, petitioner asserts that it cannot be liable for forum shopping.
In the present case, after the Lapulapu RTC had rendered its Decision in favor of private respondent, petitioner
filed several petitions before this Court and the CA essentially seeking the annulment thereof.
First Philippine International Bank v. CA [17] stresses that what is truly important to consider in determining
whether forum shopping exists is the vexation caused the courts and the parties-litigants by one who asks
different courts and/or administrative agencies to rule on the same or related facts and causes and/or to grant
the same or substantially the same relief, in the process creating the possibility of conflicting rulings and
decisions.
Because of LLDHCs actions, the execution of the Lapulapu Decision has been needlessly delayed and several
courts vexed.
YES.
Petitioner claims that Justices Artemio G. Tuquero and Eubolo G. Verzola gravely abused their discretion in
refusing to voluntarily inhibit or disqualify themselves from acting on the case at bar while it was pending in
the CA. They allegedly participated in the Judgment rejecting its Petition for Certiorari assailing the Execution
Order issued by the Lapulapu RTC.
Again, petitioner is clutching at straws. As a general rule, judges are mandated to hear and decide
cases, unless legally disqualified. However, they may voluntarily recuse themselves on the ground
of bias or prejudice, expression of opinions that may show partiality, personal knowledge of the
case, or distant affinity or former association with one of the parties or the latters counsel.
Justices Tuquero and Verzola acted within the bounds of duty when they took part in the deliberation of the
assailed Decision. By alleging that the appellate magistrates should disqualify themselves because of their
past participation in past case, petitioner merely calls attention to the repetitive nature of its pleadings and
petitions. If indeed the assailed Decision involves a totally different matter from that disposed of in that same
case, then petitioner should have no reason to worry about the impartiality of the said justices.

Without the written consent of all parties in interest, the law bars justices from reviewing rulings
or decisions rendered by them as lower court judges. This situation does not exist in the case at bar.

12. RP vs. G. Holdings Inc. 475 SCRA 608


This petition for review on certiorari under Rule 45 of the Rules of Court assails the December 21, 1999
resolution[1] of the Court of Appeals (CA) dismissing the petition for annulment of judgment in CA-G.R. SP No. 53517.
FACTS:
o

On May 21, 1992, the Committee on Privatization approved the proposal of the Asset Privatization Trust
(APT) for the negotiated sale of 90% of the shares of stock of the government-owned Maricalum Mining
Corporation (MMC). Learning of the governments intention to sell MMC, the respondent G Holdings, Inc.
signified its interest to purchase MMC and submitted the best bid.

The series of negotiations between the petitioner Republic of the Philippines, through the APT as its
trustee,[2] and G Holdings culminated in the execution of a purchase and sale agreement on October 2,
1992. Under the agreement, the Republic undertook to sell and deliver 90% of the entire issued and
outstanding shares of MMC, as well as its company notes, to G Holdings in consideration of the
purchase price of P673,161,280. It also provided for a down payment of P98,704,000 with the balance
divided into four tranches payable in installment over a period of ten years.
Subsequently, a disagreement on the matter of when the installment payments should commence
arose between the parties. The Republic claimed that it should be on the seventh month from the
signing of the agreement while G Holdings insisted that it should begin seven months after the
fulfillment of the closing conditions.

Unable to settle the issue, G Holdings filed a complaint for specific performance and damages with the
Regional Trial Court of Manila, Branch 49, against the Republic to compel it to close the sale in
accordance with the purchase and sale agreement. The complaint was docketed as Civil Case No. 9576132.

During the pre-trial, the respective counsels of the parties manifested that the issue involved in the
case was one of law and submitted the case for decision. On June 11, 1996, the trial court rendered its
decision. It ruled in favor of G Holdings.

The Solicitor General filed a notice of appeal on behalf of the Republic on June 28, 1996. Contrary to
the rules of procedure, however, the notice of appeal was filed with the Court of Appeals (CA), not with
the trial court which rendered the judgment appealed from.

No other judicial remedy was resorted to until July 2, 1999 when the Republic, through the APT, filed a
petition for annulment of judgment with the CA. It claimed that the decision should be annulled on the
ground of abuse of discretion amounting to lack of jurisdiction on the part of the trial court. It
characterized the fashion by which the trial court handled the case as highly aberrant and peculiar
because the court a quo promulgated its decision prior to the submission of the Republics formal offer
of evidence and without ruling on the admissibility of the evidence offered by G Holdings. The Republic
also asserted that the failure of the Solicitor General to file the notice of appeal with the proper forum
amounted to extrinsic fraud which prevented it from appealing the case.

Finding that the grounds necessary for the annulment of judgment were inexistent, the appellate court
dismissed the petition. It ruled that there was no extrinsic fraud because G Holdings had no
participation in the failure of the Solicitor General to properly appeal the decision of the trial court.
Neither was there any connivance between G Holdings and the Republics counsels in the commission
of the error.

The appellate court also held that the trial court had jurisdiction over the subject matter of the case, as
well as over the person of the parties. Hence, whatever error the trial court committed in the exercise
of its jurisdiction was merely an error of judgment, not an error of jurisdiction. As an error of judgment,
it was correctable by appeal. Unfortunately, appeal could no longer be availed of by the Republic.

The appellate court further declared that there was no grave abuse of discretion on the part of the
court a quo when it decided the case before its receipt of the Republics formal offer of evidence. The
evidence of both parties was already in the possession of the court and painstakingly considered
before the decision was arrived at. Thus, if at all, the trial court perpetrated an irregularity which
should have been the subject of an appeal. But no appeal was perfected and the decision of the trial
court thus attained finality.

ISSUE:
1) WHETHER OR NOT CA ERRED IN NOT HOLDING THAT THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION WHICH RESULTED IN THE NULLITY OF THE TRIAL COURT DECSION. (
2) WHETHER OR NOT THE THE FAILURE OF THE [SOLICITOR GENERAL] TO FILE THE NOTICE OF APPEAL WITH THE
PROPER FORUM AMOUNTED TO EXTRINSIC FRAUD WHICH PREVENTED THE PETITIONER FROM APPEALING THE CASE
WITH THE COURT OF APPEALS
HELD :
The petition is hereby DENIED. The December 21, 1999 resolution of the Court of Appeals in CA-G.R. SP No.
53517 is AFFIRMED. COSTS AGAINST PETITIONER.
Before anything else, we note that the instant petition suffers from a basic infirmity for lack of the requisite
imprimatur from the Office of the Solicitor General, hence, it is dismissible on that ground. [5] The general rule is that
only the Solicitor General can bring or defend actions on behalf of the Republic of the Philippines and that actions filed
in the name of the Republic, or its agencies and instrumentalities for that matter, if not initiated by the Solicitor
General, should be summarily dismissed.
Here, the petition was signed and filed on behalf of the Republic by Atty. Raul B. Villanueva, the executive
officer of the legal department of the APT, and Atty. Rhoel Z. Mabazza. [8] However, they did not present any proof that
they had been duly deputized by the Solicitor General to initiate and litigate this action. Thus, this petition can be
dismissed on that ground.
(NUMBER 1 ISSUE)
Lack of jurisdiction as a ground for annulment of judgment refers to either lack of jurisdiction over
the person of the defending party or over the subject matter of the claim. [14] Where the court has
jurisdiction over the defendant and over the subject matter of the case, its decision will not be voided on
the ground of absence of jurisdiction.
The Republic does not deny that the trial court had jurisdiction over it as well as over the subject
matter of the case. What the Republic questions is the grave abuse of discretion allegedly committed by
the court a quo in rendering the decision.
We cannot agree with the Republic.
In a petition for annulment of judgment based on lack of jurisdiction, the petitioner must show not
merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction. [15] Thus, the concept of
lack of jurisdiction as a ground to annul a judgment does not embrace abuse of discretion.
Second, by claiming grave abuse of discretion on the part of the trial court, the Republic actually
concedes and presupposes the jurisdiction of the court to take cognizance of the case. Hence, the
Republic effectively admits that the two grounds for which lack of jurisdiction may be validly invoked to
seek the annulment of a judgment want of jurisdiction over the parties and want of jurisdiction over the
subject matter do not exist. It only assails the manner in which the trial court formulated its judgment in
the exercise of its jurisdiction.
(NUMBER 2 ISSUE )
In the matter of extrinsic fraud, the circumstances of this case do not establish its existence.
Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside
of the trial of the case, whereby the unsuccessful party is prevented from fully proving his case, by fraud or deception
practiced on him by his opponent. [21] Fraud is regarded as extrinsic where it prevents a party from having a trial or from
presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to

the manner in which it is procured. [22]The overriding consideration when extrinsic fraud is alleged is that the fraudulent
scheme of the prevailing litigant prevented a party from having his day in court. [23]
The judgment has already attained finality as a result of the fault and inaction of the Solicitor General. This
was aggravated by the fact that this petition was filed by those who had no authority to do so.
Litigation should end and terminate sometime and somewhere. [27] It is essential to an effective and efficient
administration of justice that, once a judgment has become final, the winning party should not be deprived of the fruits
of the verdict.[28] Courts must therefore guard against any scheme calculated to bring about that undesirable result.
[29]
Thus, it is only proper for this Court to now write finis to this decade-old controversy.

13. Suntay vs. Gocolay 470 SCRA 627 ERROR OF JURISDICTION vs ERROR OF JUDGEMENT
Facts:

Petitioners and private respondent were buyers of condominium units from Bayfront Development Corporation
(Bayfront). Petitioners paid in advance the full amount for their units. Bayfront, however, failed to deliver them
despite the due date stated in their contract to sell. Failing to get a reimbursement from Bayfront, petitioners
filed an action against it in the Housing and Land Use Regulatory Board (HLURB) [5] for violation of PD 957 and
PD 1344, rescission of contract, sum of money and damages.

The case was decided in favor of petitioners.


Bayfronts titled properties, including the subject condominium Unit G and two parking were levied on by the
sheriffs of the Regional Trial Court of Manila.

At the subsequent public auction of Bayfronts properties, petitioners were the highest bidders.

The corresponding certificate of sale was issued on March 1, 1995 and was annotated at the back of CCT No.
15802.

The sheriffs final deed of sale was executed on April 16, 1996. CCT No. 34250-A was thereafter issued in favor
of petitioners.

On the other hand, private respondent Eugenia Gocolay, chairperson and president of Keyser Mercantile Co.,
Inc. (Keyser), claims that she entered into a contract to sell with Bayfront for the purchase on installment basis
of the same Unit G.

She completed her payments in 1991 but Bayfront executed the deed of absolute sale and delivered CCT No.
15802 only on November 9, 1995. (This was the same CCT No. 15802 on which were annotated the notice of
levy and certificate of sale in favor of petitioners. It was in fact already cancelled and replaced by CCT No.
34250-A in the name of petitioners).

Gocolay was about to transfer CCT No. 15802 to Keyser when she discovered the annotations of notice of levy
and certificate of sale at the back of the said title. She was nevertheless issued CCT No. 26474 in the name of
Keyser on March 12, 1996 with the annotations in favor of petitioners being carried over.

Gocolay filed before the Expanded National Capital Regional Field Office of the HLURB a complaint for
annulment of auction sale and cancellation of notice of levy from her title.

On November 18, 1996, HLURB arbiter Abraham Vermudez disposed of the case as follows:
1.

Declaring the sale by public auction over the [Gocolays] property null and void, and in the event
that the said property has already been transferred in the name of [the Suntays], said transfer is
likewise hereby declared null and void;

2.

Ordering the Register of Deeds of Manila to cancel the notice of levy annotated in CCT No. 15802
and in CCT No. 15813 and transfer the same in the name of [Gocolay];

3.

Permanently enjoining the [Suntays] and the public respondents from transferring the property in
question to [the Suntays];

4.

Ordering the [Suntays] to pay [Gocolay] moral damages in the amount of P100,000.00 and actual
damages in the form of unearned rental income computed at the rate of P94,064.25 a month
which starts from February 1, 1996 until the same is fully paid and to pay [Gocolay] the amount of
P50,000.00 by way of attorneys fees.

On June 11, 1999, public respondent, HLURB arbiter Dunstan San Vicente, ordered the issuance of a writ of
execution pursuant to the decision in HLRB Case No. REM-032196-9152.

When the case reached the appellate court on certiorari, the CA dismissed the Suntays petition for lack of
merit. It likewise denied their MR dated July 17, 2000.

ISSUE:
WoN HLURB, a quasi-judicial agency, have jurisdiction over an action seeking the annulment of an auction
sale, cancellation of notice of levy and damages with prayer for the issuance of a preliminary injunction
and/or temporary restraining order?
HELD:

First. The HLURB had no jurisdiction over the spouses Suntay.


Petitioners were condominium buyers, not project/condominium owners, developers, dealers, brokers or
salesmen against whom a case cognizable by the HLURB could be brought. Obviously the cause of action
(unsound business practice) could not have referred to them since they were mere buyers of a condominium
unit, but only to Bayfront as developer of the project. It was therefore error for Gocolay to include petitioners in
HLRB Case No. REM-032196-9152 and for the HLURB to take cognizance of the complaint.

Second. The HLURB had no jurisdiction over the issue of ownership, possession or interest in the disputed
condominium unit. BP 129 vests jurisdiction over these matters on the RTC which exercises exclusive original
jurisdiction:
(1) in all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
(2) in all civil actions which involve the titles to, or possession of, real property, or any interest therein
except actions for forcible entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts;
xxx xxx xxx
(6) in all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising
jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions.

The decision in HLRB Case No. REM-032196-9152 was in effect a determination of the ownership of the
condominium unit because it directed the annulment of the execution sale in HLRB Case No. REM-1021935625 on which petitioners title was based. This was clearly incorrect.

For her part, Gocolay, who was not a party to HLRB Case No. REM-102192-5625, should have resorted to
judicial action to protect her interest in the contested properties. Instead, she proceeded against the Suntays
before a quasi-judicial body with no jurisdiction over their person or the cause of action.

Any decision rendered without jurisdiction is a total nullity and may be struck down at any time,
even on appeal before this Court; the only exception is when the party raising the issue is barred by
estoppel which is not so in this case.

WHEREFORE, the petition is hereby GRANTED. The orders in HLRB Case No. REM-032196-9152 are hereby
set aside.

14. Villagracia vs. Mala Shariah Court G.R. No. 188832, April 23, 2014 HOW JURISDICTION IS
CONFERRED AND DETERMINED
Facts:

Shari' a District Courts have no jurisdiction over real actions where one of the parties is not a Muslim.
This is a petition for certiorari with application for issuance of temporary restraining order and/or preliminary
injunction to set aside the Fifth (5th) Shari'a District Court's decision dated June 11, 2008 and order dated May
29, 2009 in SDC Special Proceedings Case No. 07-200.
Sometime in February 1996, Roldan E. Mala purchased a 300-square-meter parcel of land located in Poblacion,
Parang, Maguindanao, now ShariffKabunsuan, from one Ceres Caete. On March 3, 1996, a Transfer Certificate
of Title covering the parcel of land was issued in Roldans name.At the time of the purchase, Vivencio B.
Villagracia occupied the parcel of land.
By 2002, Vivencio secured a Katibayan ngOrihinalnaTituloBlg. which was issued by the Land Registration
Authority allegedly covering the same parcel of land.
On October 30, 2006, Roldan had the parcel of land surveyed. In a report, Geodetic Engineer Dennis P. Dacup
found that Vivencio occupied the parcel of land covered by Roldans certificate of title.
To settle his conflicting claim with Vivencio, Roldan initiated barangay conciliation proceedings before the
Office of the Barangay Chairman of Poblacion II, Parang, ShariffKabunsuan. Failing to settle with Vivencio at the
barangay level, Roldan filed an action to recover the possession of the parcel of land with respondent Fifth
Sharia District Court.
In his petition, Roldan alleged that he is a Filipino Muslim; that he is the registered owner of the lot covered by
Transfer Certificate of Title No. 15633; and that Vivencio occupied his property, depriving him of the right to
use, possess, and enjoy it. He prayed that respondent Fifth Sharia District Court order Vivencio to vacate his
property.
Respondent court took cognizance of the case and caused service of summons on Vivencio. However, despite
service of summons, Vivencio failed to file his answer. Thus, Roldan moved that he be allowed to present
evidence ex parte, which motion respondent Fifth Sharia District Court granted in its order dated January 30,
2008.
In its decision dated June 11, 2008, respondent Fifth Sharia District Court ruled that Roldan, as registered
owner, had the better right to possess the parcel of land. It ordered Vivencio to vacate the property, turn it
over to Roldan, and pay P10,000.00 as moderate damages and P5,000.00 as attorneys fees.
On December 15, 2008, respondent Fifth ShariaDistict Court issued the notice of writ of execution to Vivencio,
giving him 30 days from receipt of the notice to comply with the decision. He received a copy of the notice on
December 16, 2008.
On January 13, 2009, Vivencio filed a petition for relief from judgment with prayer for issuance of
writ of preliminary injunction. In his petition for relief from judgment, Vivencio cited Article 155,
paragraph (2) of the Code of Muslim Personal Laws of the Philippines and argued that Sharia
District Courts may only hear civil actions and proceedings if both parties are Muslims.
Considering that he is a Christian, Vivencio argued that respondent Fifth Sharia District Court had
no jurisdiction to take cognizance of Roldans action for recovery of possession of a parcel of land.
He prayed that respondent Fifth Sharia District Court set aside the decision dated June 11, 2008
on the ground of mistake.
According to respondent Fifth Sharia District Court, Vivencio cited the wrong provision of law. Article 155,
paragraph (2) of the Code of Muslim Personal Laws of the Philippines refers to the jurisdiction of Sharia Circuit
Courts, not of Sharia District Courts. It ruled that it had jurisdiction over Roldans action for recovery of
possession. Regardless of Vivencio being a non-Muslim, his rights were not prejudiced since respondent Fifth
Sharia District Court decided the case applying the provisions of the Civil Code of the Philippines.

Thus, in its order, respondent Fifth Sharia District Court denied Vivencios petition for relief from judgment for
lack of merit. It reiterated its order directing the issuance of a writ of execution of the decision.
Subsequently,Vivencio filed the petition for certiorari with prayer for issuance of temporary restraining order
with the SC.
In his petition for certiorari, Vivencio argued that respondent Fifth Sharia District Court acted without
jurisdiction in rendering its decision. Under Article 143, paragraph (2)(b) of the Code of Muslim Personal Laws
of the Philippines,Sharia District Courts may only take cognizance of real actions where the parties involved
are Muslims. Reiterating that he is not a Muslim, Vivencio argued that respondent Fifth Sharia District Court
had no jurisdiction over the subject matter of Roldans action. Thus, all the proceedings before respondent Fifth
Sharia District Court, including the decision dated June 11, 2008, are void.
In the resolution, this court ordered Roldan to comment on Vivencios petition for certiorari. This court
subsequently issued a temporary restraining order enjoining the implementation of the writ of execution
against Vivencio.
Thus, Roldan filed his comment on the petition for certiorari. He allegedly filed the action for recovery of
possession with the Sharia District Court where "a more speedy disposition of the case would be obtained"
1. That the Shariah District Court is not a court exclusively for muslim litigants. No provision in the Code on
Muslim Personal Laws which expressly prohibits non-muslim to participate in the proceedings in the Shariah
Courts, especially in actions which applies the civil code and not the Code on Muslim Personal Laws
2. The Shariah District Courts has jurisdiction over action for quieting of title filed by a muslim litigant since the
nature of the action involved mere removal of cloud of doubt upon ones Certificate of Title. The laws applied in
this case is the Civil Code and other related laws, and not the Code on Muslim Personal Laws
3. That the Shariah District Court is not a court exclusively for muslim litigants. No provision in the Code on
Muslim Personal Laws which expressly prohibits non-muslim to participate in the proceedings in the Shariah
Courts, especially in actions which applies the civil code and not the Code on Muslim Personal Laws
4. That the main issue in the instant action for certiorari is whether or not herein petitioner (respondent below)
has effectively waived his right to participate in the proceedings below and had lost his right to appeal via
Certiorari; and the issue on whether or not the Fifth (5th) Shariah District Court has jurisdiction over an action
where one of the parties is a non-muslim
5. That the Fifth (5th) Shariah District Court, Cotabato City acquired jurisdiction over the case and that the
same Court had correctly ruled that herein petitioner (respondent) intentionally waived his right to defend
himself including his right to appeal via certiorari;
6. That it is humbly submitted that when the Shariah District Court took cognizance of an action under its
concurrent jurisdiction with the Regional Trial Court, the law rules applied is not the Code on Muslim Personal
Laws but the Civil Code of the Philippines and the Revised Rules of Procedure, hence the same would not
prejudice the right of herein petitioner
In the resolution dated November 21, 2011, this court ordered Vivencio to reply to Roldans comment. On
February 3, 2012, Vivencio filed his manifestation, stating that he would no longer file a reply to the comment
as he had "exhaustively discussed the issue presented for resolution in [his petition for certiorari]."

Issue:
Whether or not whether a Sharia District Court has jurisdiction over a real action where one of the parties is not a
Muslim.
Ruling:

We rule for petitioner Vivencio.

Jurisdiction over the subject matter is "the power to hear and determine cases of the general class to which
the proceedings in question belong." This power is conferred by law,which may either be the Constitution or a
statute. Since subject matter jurisdiction is a matter of law, parties cannot choose, consent to, or agree as to
what court or tribunal should decide their disputes. If a court hears, tries, and decides an action in which it has
no jurisdiction, all its proceedings, including the judgment rendered, are void.

To determine whether a court has jurisdiction over the subject matter of the action, the material allegations of
the complaint and the character of the relief sought are examined.

The law conferring the jurisdiction of Sharia District Courts is the Code of the Muslim Personal Laws of the
Philippines. Under Article 143 of the Muslim Code, Sharia District Courts have concurrent original jurisdiction
with "existing civil courts" over real actions not arising from customary contracts wherein the parties involved
are Muslims:

When ownership is acquired over a particular property, the owner has the right to possess and enjoy it. If the
owner is dispossessed of his or her property, he or she has a right of action to recover its possession from the
dispossessor. When the property involved is real, such as land, the action to recover it is a real action;
otherwise, the action is a personal action. In such actions, the parties involved must be Muslims for Sharia
District Courts to validly take cognizance of them.

In this case, the allegations in Roldans petition for recovery of possession did not state that Vivencio is a
Muslim. When Vivencio stated in his petition for relief from judgment that he is not a Muslim, Roldan did not
dispute this claim.
When it became apparent that Vivencio is not a Muslim, respondent Fifth Sharia District Court should have
motuproprio dismissed the case. Under Rule 9, Section 1 of the Rules of Court, if it appears that the court has
no jurisdiction over the subject matter of the action based on the pleadings or the evidence on record, the
court shall dismiss the claim
Respondent Fifth Sharia District Court had no authority under the law to decide Roldans action
because not all of the parties involved in the action are Muslims. Thus, it had no jurisdiction over
Roldans action for recovery of possession. All its proceedings in SDC Special Proceedings Case
No. 07-200 are void.
Roldan chose to file his action with the Sharia District Court, instead of filing the action with the regular courts,
to obtain "a more speedy disposition of the case." This would have been a valid argument had all the parties
involved in this case been Muslims. Under Article 143 of the Muslim Code, the jurisdiction of Sharia District
Courts over real actions not arising from customary contracts is concurrent with that of existing civil courts.
However, this concurrent jurisdiction over real actions "is applicable solely when both parties are Muslims" as
this court ruled in Tomawis v. Hon. Balindong. When one of the parties is not a Muslim, the action must be filed
before the regular courts.
The application of the provisions of the Civil Code of the Philippines by respondent Fifth Sharia
District Court does not validate the proceedings before the court. Under Article 175 of the Muslim
Code, customary contracts are construed in accordance with Muslim law. Hence, Sharia District
Courts apply Muslim law when resolving real actions arising from customary contracts.
In real actions not arising from contracts customary to Muslims, there is no reason for Sharia District Courts to
apply Muslim law. In such real actions, Sharia District Courts will necessarily apply the laws of general
application, which in this case is the Civil Code of the Philippines, regardless of the court taking cognizance of
the action. This is the reason why the original jurisdiction of Sharia District Courts over real actions not arising
from customary contracts is concurrent with that of regular courts.
However, as discussed, this concurrent jurisdiction arises only if the parties involved are Muslims. Considering
that Vivencio is not a Muslim, respondent Fifth Sharia District Court had no jurisdiction over Roldans action for
recovery of possession of real property. The proceedings before it are void, regardless of the fact that it applied
the provisions of the Civil Code of the Philippines in resolving the action.
True, no provision in the Code of Muslim Personal Laws of the Philippines expressly prohibits non-Muslims from
participating in Sharia court proceedings. In fact, there are instances when provisions in the Muslim Code
apply to non-Muslims. Under Article 13 of the Muslim Code, provisions of the Code on marriage and divorce
apply to the female party in a marriage solemnized according to Muslim law, even if the female is non-Muslim.
Under Article 93, paragraph (c) of the Muslim Code, a person of a different religion is disqualified from
inheriting from a Muslim decedent. However, by operation of law and regardless of Muslim law to the contrary,
the decedents parent or spouse who is a non-Muslim "shall be entitled to one-third of what he or she would
have received without such disqualification." In these instances, non-Muslims may participate in Sharia court
proceedings.
Nonetheless, this case does not involve any of the previously cited instances. This case involves an action for
recovery of possession of real property. As a matter of law, Sharia District Courts may only take cognizance of
a real action "wherein the parties involved are Muslims." Considering that one of the parties involved in this
case is not a Muslim, respondent Fifth Sharia District Court had no jurisdiction to hear, try, and decide the
action for recovery of possession of real property. The judgment against Vivencio is void for respondent Fifth
Sharia District Courts lack of jurisdiction over the subject matter of the action.
That Vivencio raised the issue of lack of jurisdiction over the subject matter only after respondent Fifth Sharia
District Court had rendered judgment is immaterial. A party may assail the jurisdiction of a court or tribunal
over a subject matter at any stage of the proceedings, even on appeal. The reason is that "jurisdiction is
conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render
judgment on the action."
WHEREFORE, the petition for certiorari is GRANTED. Respondent Fifth Sharia District Courts decision dated
June 11, 2008 and order dated May 29, 2009 in SDC Special Proceedings Case No. 07-200 are SET ASIDE
without prejudice to the filing of respondent Roldan E. Mala of an action with the proper court.

15 BF HOMES VS MERALCO
G.R. No. 171624 HOW JURISDICTION IS CONFERRED AND DETERMINED
FACTS:

MERALCO is a corporation duly organized and existing under Philippine laws engaged in the distribution and
sale of electric power in Metro Manila. On the other hand, BF Homes and PWCC are owners and operators of
waterworks systems delivering water to over 12,000 households and commercial buildings in BF Homes
subdivisions in Paraaque City, Las Pias City, Caloocan City, and Quezon City. The water distributed in the
waterworks systems owned and operated by BF Homes and PWCC is drawn from deep wells using pumps run
by electricity supplied by MERALCO

On June 23, 2003, BF Homes and PWCC filed a Petition [With Prayer for the Issuance of Writ of Preliminary
Injunction and for the Immediate Issuance of Restraining Order] against MERALCO before the RTC, docketed as
Civil Case No. 03-0151. In their Petition before the RTC, BF Homes and PWCC invoked their right to refund
based on the ruling of this Court in Republic v. Manila Electric Company in the amount of P11,834,570.91

BF Homes and PWCC then alleged in their RTC Petition that on May 20, 2003, without giving any notice
whatsoever, MERALCO disconnected electric supply to BF Homes and PWCCs sixteen (16) water pumps located
in BF Homes in Paraaque, Caloocan, and Quezon City, which thus disrupted water supply in those areas

On June 4, 2003, BF Homes and PWCC received by facsimile transmission a letter from MERALCO, in which
MERALCO demanded to BF Homes and PWCC the payment of electric bills amounting to P4,717,768.15.
MERALCO replied in a letter dated June 11, 2003, requesting MERALCO to apply the P4,717,768.15 electric bill
against the P11,834,570.91 that MERALCO was ordered to refund to BF Homes and PWCC pursuant to the
MERALCO Refund cases. Displaying the arrogance that has become its distinction, MERALCO, in its letter dated
June 16, 2003, denied BF Homes and PWCCs request alleging that it has not yet come up with the schedule for
the refund of large amounts, such as those of BF Homes and PWCC.

Even while MERALCO was serving its reply-letter to BF Homes and PWCC, MERALCO, again, without giving any
notice, cut off power supply to BF Homes and PWCCs five (5) water pumps located in BF Homes Paraaque and
BF Resort Village, in Pamplona, Las Pias City. In its letter dated June 4, 2003, MERALCO threatened to cut off
electric power connections to all of BF Homes and PWCCs water pumps if BF Homes and PWCC failed to pay
their bills demanded by MERALCO by June 20, 2003.

BF Homes and PWCC additionally prayed that the RTC issue a writ of preliminary injunction and restraining
order considering that as indicated in its letter dated June 4, 2003, unless seasonably restrained, MERALCO will
cut off electric power connections to all of BF Homes and PWCCs water pumps on June 20, 2003. Part of the
reliefs herein prayed for is to restrain MERALCO from cutting off electric power connections to BF Homes and
PWCCs water pumps

On August 15, 2003, MERALCO filed before the RTC its Answer with Counterclaims and Opposition to the
Application for Writ of Preliminary Injunction of BF Homes and PWCC. According to MERALCO, they reserve
the right to discontinue service in case the customer is in arrears in the payment of bills or for
failure to pay the adjusted bills in those cases where the meter stopped or failed to register the correct
amount of energy consumed, or for failure to comply with any of these terms and conditions, or in case of or to
prevent fraud upon the Company. This contractual right of MERALCO to discontinue electric service for default
in the payment of its regular bills is sanctioned and approved by the rules and regulations of ERB (now the
ERC)

MERALCO further contend that instead of paying their unpaid electric bills and before MERALCO could effect its
legal and contractual right to disconnect BF Homes and PWCCs electric services, BF Homes and PWCC filed the
instant petition to avoid payment of MERALCOs valid and legal claim for regular monthly electric bills. BF
Homes and PWCC knew that MERALCO is already in the process of implementing the decision of the Supreme
Court as to the refund case. But this refund has to be implemented in accordance with the guidelines and
schedule to be approved by the ERC. Thus BF Homes and PWCCs filing of the instant petition is merely to
evade payment of their unpaid electric bills to MERALCO

Hence, MERALCO sought the dismissal of the RTC Petition of BF Homes and PWCC on the following grounds:

I.

The Honorable Court has no jurisdiction to award the relief prayed for by BF Homes and PWCC
because:
a)

The petition is in effect preempting or defeating the power of the ERC to implement the
decision of the Supreme Court.

b)

MERALCO is a utility company whose business activity is wholly regulated by the


ERC. The latter, being the regulatory agency of the government having the authority over
the respondent, is the one tasked to approve the guidelines, schedules and details of the
refund.

c)

II.

The decision of the Supreme Court, dated November 15, 2002, clearly states that
respondent is directed to make the refund to its customers in accordance with the decision
of the ERC (formerly ERB) dated February 16, 1998. Hence, MERALCO has to wait for the
schedule and details of the refund to be approved by the ERC before it can comply with the
Supreme Court decision.

MERALCO has the right to disconnect the electric service to BF Homes and PWCC in that:
a) The service contracts between MERALCO and BF Homes and PWCC expressly authorize the
former to discontinue and disconnect electric services of the latter for their failure to pay
the regular electric bills rendered.
b)

It is MERALCOs legal duty as a public utility to furnish its service to the general public
without arbitrary discrimination and, consequently, MERALCO is obligated to discontinue
and disconnect electric services to BF Homes and PWCC for their refusal or failure to pay
the electric energy actually used by them

For its compulsory counterclaims, MERALCO prayed that the RTC orders BF Homes and PWCC to pay
MERALCO P6,551,969.55 as actual damages (representing the unpaid electric bills of BF Homes and PWCC for
May and June 2003), P1,500,000.00 as exemplary damages, P1,500,000.00 as moral damages,
and P1,000,000.00 as attorneys fees

Lastly, MERALCO opposed the application for writ of preliminary injunction of BF Homes and PWCC because a.)
MERALCO has the legal and contractual right to demand payment of the electric bills and, in case of nonpayment, to discontinue the electric services of BF Homes and PWCC; and b.) BF Homes and PWCC have no
clear right which warrants protection by injunctive process

After hearing, the RTC issued an Order on November 21, 2003 granting the application of BF Homes and PWCC
for the issuance of a writ of preliminary injunction. The RTC found that the records showed that all requisites
for the issuance of said writ were sufficiently satisfied by BF Homes and PWCC

The Motion for Reconsideration of MERALCO of the aforementioned Order was denied by the RTC in another
Order issued on January 9, 2004. The RTC reiterated its earlier finding that all the requisites for the proper
issuance of an injunction had been fully complied with by BF Homes and PWCC

The RTC resolved the issue on jurisdiction raised by MERALCO, ruling that the Court has jurisdiction to delve
into the case. This Court gave both parties the opportunity to be heard as they introduced evidence on the
propriety of the issuance of the injunctive writ. It is well-settled that no grave abuse of discretion could be
attributed to its issuance where a party was not deprived of its day in court as it was heard and had
exhaustively presented all its arguments and defenses

Aggrieved, MERALCO filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 82826. MERALCO sought the reversal of the RTC Orders dated November 21,
2003 and January 9, 2004 granting a writ of preliminary injunction in favor of BF Homes and PWCC. MERALCO
asserted that the RTC had no jurisdiction over the application of BF Homes and PWCC for issuance of such a
writ

In its Decision dated October 27, 2005, the Court of Appeals agreed with MERALCO that the RTC had no
jurisdiction to issue a writ of preliminary injunction in Civil Case No. 03-0151, as said trial court had no
jurisdiction over the subject matter of the case to begin with. The Court of Appeals ruled that Section 43(u) of
Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act, (RA 9136), states that the
ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties
imposed by the ERC in the exercise of its powers, functions and responsibilities and over all cases involving
disputes between and among participants or players in the energy sector. For another, the respondent judge,
instead of presiding over the case, should have dismissed the same and yielded jurisdiction to the ERC
pursuant to the doctrine of primary jurisdiction. It is plain error on the part of the respondent judge to
determine, preliminary or otherwise, a controversy involving a question which is within the jurisdiction of an
administrative tribunal, especially so where the question demands the exercise of sound administrative
discretion

In a Resolution dated February 7, 2006, the Court of Appeals denied the Motion for Reconsideration of BF
Homes and PWCC for failing to raise new and persuasive and meritorious arguments

Now, BF Homes and PWCC come before this Court via the instant Petition, raising the following assignment of
errors:

1.

The Court of Appeals ERRED in saying that the respondent judge committed grave abuse of
discretion by issuing the disputed writ of injunction pending the merits of the case including
the issue of subject matter jurisdiction.

2.

The Court of Appeals ERRED in saying that the ERC under the doctrine of primary jurisdiction
has the original and EXCLUSIVE jurisdiction to take cognizance of a petition for injunction to
prevent electrical disconnection to a customer entitled to a refund.

3.

The Court of Appeals ERRED in NOT SAYING that the ERC as a quasi-judicial body under RA
9136 has no power to issue any injunctive relief or remedy to prevent disconnection.

4. The Court of Appeals ERRED in not resolving the issue as to the violation of MERALCO of a
standing injunction order while the case remains undecided.
ISSUE:
Whether jurisdiction over the subject matter of Civil Case No. 03-0151 lies with the RTC or the Energy
Regulatory Commission (ERC)
HELD:

WHEREFORE, the instant Petition for Review is DENIED. The Decision dated October 27, 2005 of the Court of
Appeals in CA-G.R. SP No. 82826 is AFFIRMED with the MODIFICATION that the Regional Trial Court, Branch
202 of Las Pias City, is ORDERED to dismiss the Petition [With Prayer for the Issuance of Writ of Preliminary
Injunction and for the Immediate Issuance of Restraining Order] of BF Homes, Inc. and Philippine Waterworks
and Construction Corporation in Civil Case No. 03-0151. Costs against BF Homes, Inc. and Philippine
Waterworks and Construction Corporation

BF Homes and PWCC argued that due to the threat of MERALCO to disconnect electric services, BF Homes and
PWCC had no other recourse but to seek an injunctive remedy from the RTC under its general jurisdiction. The
merits of Civil Case No. 03-0151 was not yet in issue, only the propriety of issuing a writ of preliminary
injunction to prevent an irreparable injury. Even granting that the RTC has no jurisdiction over the subject
matter of Civil Case No. 03-0151, the ERC by enabling law has no injunctive power to prevent the
disconnection by MERALCO of electric services to BF Homes and PWCC. The Petition has no merit.

Settled is the rule that jurisdiction is conferred only by the Constitution or the law. Republic v. Court of Appeals
also enunciated that only a statute can confer jurisdiction on courts and administrative agencies

Related to the foregoing and equally well-settled is the rule that the nature of an action and the subject matter
thereof, as well as which court or agency of the government has jurisdiction over the same, are determined by
the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed
for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs. A prayer or demand for
relief is not part of the petition of the cause of action; nor does it enlarge the cause of action stated or change
the legal effect of what is alleged. In determining which body has jurisdiction over a case, the better policy is
to consider not only the status or relationship of the parties but also the nature of the action that is the subject
of their controversy

A careful review of the material allegations of BF Homes and PWCC in their Petition before the RTC reveals that
the very subject matter thereof is the off-setting of the amount of refund they are supposed to receive from
MERALCO against the electric bills they are to pay to the same company. This is squarely within the primary
jurisdiction of the ERC

The right of BF Homes and PWCC to refund, on which their claim for off-setting depends, originated from the
MERALCO Refund cases. It bears to stress that in the MERALCO Refund cases, this Court only affirmed the
February 16, 1998 Decision of the ERB (predecessor of the ERC) fixing the just and reasonable rate for the
electric services of MERALCO and granting refund to MERALCO consumers of the amount they overpaid. Said
Decision was rendered by the ERB in the exercise of its jurisdiction to determine and fix the just and
reasonable rate of power utilities such as MERALCO

Presently, the ERC has original and exclusive jurisdiction under Rule 43(u) of the EPIRA over all cases
contesting rates, fees, fines, and penalties imposed by the ERC in the exercise of its powers, functions and
responsibilities, and over all cases involving disputes between and among participants or players in the energy
sector. Section 4(o) of the EPIRA Implementing Rules and Regulation provides that the ERC shall also be
empowered to issue such other rules that are essential in the discharge of its functions as in independent
quasi-judicial body.

Indubitably, the ERC is the regulatory agency of the government having the authority and supervision over
MERALCO. Thus, the task to approve the guidelines, schedules, and details of the refund by MERALCO to its
consumers, to implement the judgment of this Court in the MERALCO Refund cases, also falls upon the ERC. By
filing their Petition before the RTC, BF Homes and PWCC intend to collect their refund without submitting to the
approved schedule of the ERC, and in effect, enjoy preferential right over the other equally situated MERALCO
consumers.

Administrative agencies, like the ERC, are tribunals of limited jurisdiction and, as such, could wield only such as
are specifically granted to them by the enabling statutes. In relation thereto is the doctrine of primary
jurisdiction involving matters that demand the special competence of administrative agencies even if the
question involved is also judicial in nature. Courts cannot and will not resolve a controversy involving a
question within the jurisdiction of an administrative tribunal, especially when the question demands the sound
exercise of administrative discretion requiring special knowledge, experience and services of the
administrative tribunal to determine technical and intricate matters of fact. The court cannot arrogate into
itself the authority to resolve a controversy, the jurisdiction of which is initially lodged with the administrative
body of special competence.

Since the RTC had no jurisdiction over the Petition of BF Homes and PWCC in Civil Case No. 03-0151, then it
was also devoid of any authority to act on the application of BF Homes and PWCC for the issuance of a writ of
preliminary injunction contained in the same Petition. The ancillary and provisional remedy of preliminary
injunction cannot exist except only as an incident of an independent action or proceeding

Incidentally, BF Homes and PWCC seemed to have lost sight of Section 8 of Executive Order No. 172 which
explicitly vested on the ERB, as an incident of its principal function, the authority to grant provisional relief.
Such provision is still applicable to the ERC as it succeeded the ERB, by virtue of Section 80 of the EPIRA. A writ
of preliminary injunction is one such provisional relief which a party in a case before the ERC may move for

Lastly, the Court herein already declared that the RTC not only lacked the jurisdiction to issue the writ of
preliminary injunction against MERALCO, but that the RTC actually had no jurisdiction at all over the subject
matter of the Petition of BF Homes and PWCC in Civil Case No. 03-0151. Therefore, in addition to the
dissolution of the writ of preliminary injunction issued by the RTC, the Court also deems it appropriate to
already order the dismissal of the Petition of BF Homes and PWCC in Civil Case No. 03-0151 for lack of
jurisdiction of the RTC over the subject matter of the same. Although only the matter of the writ of preliminary
injunction was brought before this Court in the instant Petition, the Court is already taking cognizance of the
issue on the jurisdiction of the RTC over the subject matter of the Petition

The Court may motu proprio consider the issue of jurisdiction. The Court has discretion to determine whether
the RTC validly acquired jurisdiction over Civil Case No. 03-0151 since, to reiterate, jurisdiction over the subject
matter is conferred only by law

Jurisdiction over the subject matter cannot be acquired through, or waived by, any act or omission of the
parties. Neither would the active participation of the parties nor estoppel operate to confer jurisdiction on the
RTC where the latter has none over a cause of action. Indeed, when a court has no jurisdiction over the subject
matter, the only power it has is to dismiss the action

16 G.R. No. 170478

May 22, 2008

SPS. TERESITO Y. VILLACASTIN and LOURDES FUA VILLACASTIN, petitioners,


vs.
PAUL PELAEZ, respondent. HOW JURISDICTION IS CONFERRED AND DETERMINED
FACTS:

On June 29, 1976, respondent Paul Pelaez and his wife mortgaged their agricultural lands situated in Barrio
Kodia, Madridejos, Cebu, to the Development Bank of the Philippines (DBP) Bogo Branch, Cebu.
For failure of the Pelaez spouses to pay their mortgage obligation, the properties were foreclosed and
subsequently sold at public auction.
The purported tenants of the property, Anastacio Alob, Francisco Alob, Jesus Cordova, Manuel Sanchez, Elia
Giltendez, Flora dela Pea, Eliseo Rayco, Benjamin Santillan, Pascual Gilbuena, Jesus Alob, Renaldo Grande,
and Julieto Manzueto, filed an action to annul the mortgage, foreclosure and sale of the properties, claiming
that they are the owners thereof under Presidential Decree No. 27.
In the meantime, on May 10, 1988, petitioners filed a Complaint for Forcible Entry with Prayer for a Writ of
Preliminary Mandatory Injunction with the First Municipal Circuit Trial Court (MCTC) of Bantayan, Cebu, against
respondent and a certain Elesio Monteseven.

The complaint averred that plaintiffs (petitioners herein) are the owners and actual possessors of the subject
landholding and that defendants, having entered the property through stealth and strategy, unlawfully
deprived plaintiffs of possession thereof.
Respondent countered that he is the owner of the subject property, which was foreclosed by the DBP and later
purchased by petitioners at an auction sale.
Petitioners, however, were allegedly never in possession of the subject property as they failed to apply for a
writ of possession therefor.
Respondent further claimed that he had redeemed the property on March 3, 1988 and accordingly reacquired
possession thereof.
Meanwhile, the Provincial Agrarian Reform Adjudicator in Cebu rendered a decision in Reg. Case No. VII-76-C90 dated February 15, 1993, in favor of the tenants, the dispositive portion of which states:
WHEREFORE, in the light of the foregoing view, DECISION is hereby rendered as follows:
1. Declaring complainants herein with the exception of Silbino Arranquez[,] Jr. and Claro Gilbuela who earlier
withdraw from this case as bonafide tenant farmers of the parcels in question covered by P.D. [No.] 27;
2. Declaring the mortgage executed by Sps. Paul and Elnora Pelaez to respondent DBP and the subsequent
foreclosure and eventual sale thereof to Sps. Teresito and Lourdes Villacastin as null and void ab initio as it is
contrary to law, public order and public policy;
3. Declaring complainants herein to properly account their deposited shares/lease rentals before the DAR office
of Bantayan[,] Cebu and deliver the said deposited [share/lease] rentals including the forthcoming harvest
thereon to respondent landowners Sps. Paul and Elnora Pelaez with the assistance of the MARO of Bantayan,
Madridejos, Cebu.
4. No pronouncement as to cost.4

This decision was affirmed by the DARAB in a Decision 5 dated February 22, 2000.
On January 6, 2000, the MCTC rendered judgment in Civil Case No. 79 in favor of petitioners and disposed as
follows:
WHEREFORE, premises considered, defendant is hereby ordered:
a) To return to plaintiffs possession of the parcel of land above-described and vacate the premises;
b) To pay the costs of litigation;
c) Moral and exemplary damages not recoverable in ejectment suit is denied;
d) Expenses claimed not duly proven are disallowed;
e) To release in favor of the plaintiffs the cash bond the sum of P5,000.00 deposited pursuant to the issuance
of a Writ of Preliminary Mandatory Injunction.6

In a Decision7 dated March 10, 2004, the Regional Trial Court (RTC) of Dakit, Bogo, Cebu, Branch 61, affirmed
the MCTC decision.
The Court of Appeals, however, ruled that regular courts should respect the primary jurisdiction vested upon
the DARAB in cases involving agricultural lands such as the property subject of this case. Accordingly, it set
aside the decision rendered by the RTC and the MCTC, and dismissed the complaint for forcible entry filed by
petitioners in this case.
The appellate court denied reconsideration in its Resolution 8 dated November 11, 2005.
Petitioners contend that Civil Case No. 79 did not involve any agrarian matter and thus, the MCTC correctly
exercised jurisdiction over the case.
In his Comment9 dated March 21, 2006, respondent underscores the fact that the parcels of land subject of this
case are tenanted agricultural lands. Before judgment was rendered in the forcible entry case, the tenants of
the property already filed a suit with the DARAB for the annulment of the real estate mortgage executed by
respondent over the same in favor of DBP and the subsequent foreclosure and auction sale in favor of
petitioners. The DARAB's decision declaring the mortgage, foreclosure and auction sale null and void became
final as regards petitioners who did not appeal from the decision. Respondent asserts that the complaint for
forcible entry filed by petitioners had lost its legal basis after the DARAB declared that the foreclosure and
auction sale of the subject property were null and void.

Petitioners filed a Reply10 dated July 28, 2006, insisting that the tenant-farmers involved in the DARAB case
were not parties to the forcible entry case, the only defendant therein being respondent in this case.
Respondent, in turn, raised the defense of ownership, thereby joining the issues regarding possession and
ownership.
Petitioners further note their argument in their Motion for Reconsideration 11 of the Decision of the Court of
Appeals that the subject property had been declared as wilderness area and the same had been classified as
alienable and disposable on December 22, 1987. In support of this contention, they submitted a Department of
Agrarian Reform Order12 dated September 12, 1997 to the effect that the subject property falls within the
administrative authority or competence of the Department of Environment and Natural Resources (DENR). The
order directed the PARO of Cebu and the MARO of Bantayan, Cebu to cease and desist from further activities
affecting the subject property under Operation Land Transfer, and to refer the matter to the DENR.

ISSUE:
Whether or not DARAB or lower courts has Jurisdiction over the subject matter?
RULING:

Jurisdiction over the subject matter is determined by the allegations of the complaint. 13 In ascertaining, for
instance, whether an action is one for forcible entry falling within the exclusive jurisdiction of the inferior
courts, the averments of the complaint and the character of the relief sought are to be examined. 14
A review of the complaint reveals that the pertinent allegations thereof sufficiently vest jurisdiction over the
action on the MCTC.
It has not escaped our notice that no landowner-tenant vinculum juris or juridical tie was alleged between
petitioners and respondent, let alone that which would characterize the relationship as an agrarian
dispute.16 Rule II of the DARAB Rules17 provides that the DARAB "shall have primary jurisdiction, both original
and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian Reform Program .
Petitioners' action is clearly for the recovery of physical or material possession of the subject property only, a
question which both the MCTC and the RTC ruled petitioners are entitled to. It does not involve the adjudication
of an agrarian reform matter, nor an agrarian dispute falling within the jurisdiction of the DARAB.
Courts have jurisdiction over possessory actions involving public or private agricultural lands to determine the
issue of physical possession as this issue is independent of the question of disposition and alienation of such
lands which should be threshed out in the DAR.18 Thus, jurisdiction was rightfully exercised by the MCTC and
the RTC.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP. No. 83873 dated
February 7, 2005, and its Resolution dated November 11, 2005, are REVERSED and SET ASIDE. The Decision of
the Regional Trial Court of Dakit, Bogo, Cebu, Branch 61, dated March 10, 2004, affirming the decision of the
Municipal Circuit Trial Court of Bantayan, Cebu, dated June 6, 2000, is REINSTATED. No pronouncement as to
costs.

17 NESTLE v. UNIWIDE SALES, INC.,G.R. No. 174674 DOCTRINE OF PRIMARY JURISDICTION

This is a petition for review of the Court of Appeals. The 10 January 2006 Decision denied for lack of merit the
petition for review filed by petitioners.
The petitioners in this case are Nestle Philippines, Inc. and Nestle Waters Philippines, Inc., formerly Hidden
Springs & Perrier Inc.
The respondents are Uniwide Sales, Inc., Uniwide Holdings, Inc., Naic Resources and Development Corporation,
Uniwide Sales Realty and Resources Club, Inc., First Paragon Corporation, and Uniwide Sales Warehouse Club,
Inc.
Respondents filed in the Securities and Exchange Commission (SEC) a petition for declaration of suspension of
payment, formation and appointment of rehabilitation receiver, and approval of rehabilitation plan.
The SEC approved the petition.
The newly appointed Interim Receivership Committee filed a rehabilitation plan in the SEC.
The plan was anchored on return to core business of retailing; debt reduction via cash settlement and dacion
en pago; loan restructuring; waiver of penalties and charges; freezing of interest payments; and restructuring
of credit of suppliers, contractors, and private lenders.
The Interim Receivership Committee filed in the SEC an Amended Rehabilitation Plan (ARP). The ARP took into
account the planned entry of Casino Guichard Perrachon, envisioned to infuse P3.57 billion in fresh capital. On
11 April 2001, the SEC approved the ARP.
The Interim Receivership Committee filed in the SEC a Second Amendment to the Rehabilitation Plan (SARP) in
view of Casino Guichard Perrachon's withdrawal. The SEC approved the SARP.

Petitioners, as unsecured creditors of respondents, appealed to the SEC praying that the 23 December 2002
Order approving the SARP be set aside and a new one be issued directing the Interim Receivership Committee,
in consultation with all the unsecured creditors, to improve the terms and conditions of the SARP.

The Ruling of the SEC


The SEC denied petitioners' appeal for lack of merit. Petitioners then filed in the Court of Appeals a petition for
review of the 13 January 2004 Order of the SEC.

The Ruling of the Court of Appeals

The Court of Appeals denied for lack of merit the petition for review filed by petitioners, thus:
In reviewing administrative decisions, the findings of fact made therein must be respected as
long as they are supported by substantial evidence, even if not overwhelming or preponderant; that
it is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the
witnesses, or otherwise substitute its own judgment for that of the administrative agency on the
sufficiency of the evidence; that the administrative decision in matters within the executive
jurisdiction can only be set aside on proof of grave abuse of discretion, fraud, or error of law.

WHEREFORE, the petition for review is DENIED for lack of merit.


Petitioners moved for reconsideration.
They also filed a supplemental motion for reconsideration alleging that they received a letter on 25 January
2006, from the president of the Uniwide Sales Group of Companies, informing them of the decision to transfer,
by way of full concession, the operation of respondents' supermarkets to Suy Sing Commercial Corporation
starting 1 March 2006.
The Court of Appeals denied for lack of merit petitioners' motion for reconsideration and referred to the SEC
petitioners' supplemental motion for reconsideration.
Dissatisfied, petitioners filed in this Court on 3 November 2006 the present petition for review.

Issue:
Whether or not petitioners the SARP should be revoked and the rehabilitation proceedings terminated.

Ruling:
The petition lacks merit.
Petitioners contend that the transfer of respondents' supermarket operations to Suy Sing Commercial
Corporation has made the SARP incapable of implementation.
Petitioners point out that since the SARP may no longer be implemented, the rehabilitation case should be
terminated pursuant to Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate Recovery.
Petitioners claim that the terms and conditions of the SARP are unreasonable, biased in favor of respondents,
prejudicial to the interests of petitioners, and incapable of a determination of feasibility.
Respondents maintain that the SARP is feasible and that the SEC Hearing Panel did not violate any rule or law
in approving it. Respondents stress that the lack of majority objection to the SARP bolsters the SEC's findings
that the SARP is feasible. Respondents insist that the terms and conditions of the SARP are in accord with the
Constitution and the law.
The Court takes judicial notice of the fact that from the time of the filing in this Court of the instant petition,
supervening events have unfolded substantially changing the factual backdrop of this rehabilitation case.
As found by the SEC, several factors prevented the realization of the desired goals of the SARP, to wit:
(1) unexpected refusal of some creditors to comply with all the terms of the SARP;
(2) unexpected closure of Uniwide EDSA due to the renovation of EDSA Central Mall;
(3) closure of Uniwide Cabuyao and Uniwide Baclaran;
(4) lack of supplier support for supermarket operations; and
(5) increased expenses.
On 11 July 2007, the rehabilitation receiver filed in the SEC a Third Amendment to the Rehabilitation Plan
(TARP).
Before the SEC could act on the TARP, the rehabilitation receiver filed on 29 September 2008 a Revised Third
Amendment to the Rehabilitation Plan (revised TARP).
In its 17 September 2009 Order, the Hearing Panel directed respondents to show cause why the rehabilitation
case should not be terminated considering that the rehabilitation plan had undergone several revisions.
The Hearing Panel also directed the creditors to manifest whether they still wanted the rehabilitation
proceedings to continue.
Respondents moved for reconsideration of the 30 July 2009 and the 17 September 2009 Orders.
The Hearing Panel, in its 6 November 2009 Order, denied the motion for reconsideration for being a prohibited
pleading.
On 13 January 2010 Resolution, the Hearing Panel disapproved the revised TARP and terminated the
rehabilitation case as a consequence. The dispositive portion of the Resolution reads:

WHEREFORE, premises considered:


1. Petitioners' Motion to Approve Revised Third Amendment to the Group Rehabilitation Plan
(Revised TARP) is DENIED.
2. The motions to declare petitioners' rehabilitation plan not feasible are GRANTED. Consequently,
the instant rehabilitation case is TERMINATED and the stay order is lifted and dissolved. This case is
deemed finally disposed of pursuant to Section 5.2 of Republic Act No. 8799. [
On 22 January 2010, respondents filed another petition appealing the Hearing Panel's 13 January 2010
Resolution.
The petition was docketed as SEC En Banc Case No. 01-10-193. In order to preserve the parties' rights during
the pendency of the appeal, the SEC en banc in its Order dated 18 March 2010 directed the parties to observe
the status quo prevailing before the issuance of the 13 January 2010 Resolution of the Hearing Panel.
Finally, in its 30 September 2010 Order, the SEC consolidated SEC En Banc Case No. 01-10-193 with SEC En
Banc Case No. 12-09-183, the parties being identical and the issues in both petitions being in reference to the
same rehabilitation case.

In light of supervening events that have emerged from the time the SEC approved the SARP on 23 December
2002 and from the time the present petition was filed on 3 November 2006, any determination by this Court as
to whether the SARP should be revoked and the rehabilitation proceedings terminated, would be premature.

Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the
competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no
longer capable of implementation and whether the rehabilitation case should be terminated as a consequence.

Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for
resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services
of the administrative tribunal to determine technical and intricate matters of fact.[10]

In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an
administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if the
matter may well be within the latter's proper jurisdiction.[11]

The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from
exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some
question arising in the proceeding before the court.[12]

It is not for this Court to intrude, at this stage of the rehabilitation proceedings, into the primary administrative jurisdiction of
the SEC on a matter requiring its technical expertise. Pending a decision of the SEC on SEC En BancCase No. 12-09-183 and
SEC En Banc Case No. 01-10-193, which both seek to resolve the issue of whether the rehabilitation proceedings in this case
should be terminated, we are constrained to dismiss this petition for prematurity.

WHEREFORE, we DISMISS the instant petition for having been rendered premature pending a decision of the
Securities and Exchange Commission (SEC) in SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 0110-193.

18 PROVINCE OF AKLAN VS JODY KING CONSTRUCTION CORPORATION


JURISDICTION
Facts:

DOCTRINE OF PRIMARY

-The Province of Aklan and Jody King Construction entered into a contract for the design and construction of the
Caticlan Port and terminal (phase 1).
-In the course of construction, Petitioner Aklan issued a change orders for additional works and again entered into a
negotiated contract with respondent for the construction of Passenger Terminal Building (Phase 2).
-After the construction of Phase 1 and change orders were agreed, respondent allegedly failed to settle. Then,
respondent sued petitioner to RTC for collection a sum of money.
-The trial court issued a writ of preliminary attachment, Petitioner denied any unpaid balance. RTC rendered decision in
favour of respondent, issued a writ execution and garnished petitioners funds deposited in different banks.
-Petitioner filed petition in the CA, but it was denied for its failure to file a timely motion for reconsideration and is
stopped from invoking the doctrine of primary jurisdiction as it stopped from making the doctrine or primary
jurisdiction as it only raised after its notice of appeal was denied. Hence, this petition.
Issue:
Whether or not the petitioner is stopped from questioning the jurisdiction of the RTC and the applicability of the
doctrine of primary jurisdiction.
Ruling:
-Petition GRANTED. COA has primary jurisdiction over money claim and petitioner is not stopped from not raising the
issue of jurisdiction.
-. The doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not
inflexible rules.
-There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the
doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where
there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount
involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely
legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) when
its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when
the issue of non-exhaustion of administrative remedies has been rendered moot; (j) when there is no other plain,
speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings.
-All the proceedings and decisions of the court in violation of the doctrine rendered null and void.

19 G.R. No. 176702

November 13, 2013

OFFICE OF THE OMBUDSMAN, Petitioner,


vs.
MARCELINO A. DECHAVEZ, Respondent. DOCTRINE OF ADHERANCE OF JURISDICTION
FACTS:

Dechavez was the president of the Negros State College of Agriculture (NSCA) from 2001 until his retirement
on April 9, 2006.

On May 5, 2002, a Sunday, Dechavez and his wife, Amelia M. Dechavez (Mrs. Dechavez), used the college
service Suzuki Vitara to go to Pontevedra, Negros Occidental. Dechavez drove the vehicle himself. On their way
back to the NSCA, they figured in a vehicular accident in Himamaylan City, resulting in minor injuries to the
occupants and damage to the vehicle.

To support his claim for insurance, Dechavez executed an affidavit5 before the Government Service Insurance
System (GSIS). The GSIS subsequently granted Dechavez's claims amounting to P308,000.00, while the NSCA

shouldered P71,000.00 as its share in the vehicle's depreciation expense. The GSIS released P6,000.00 for Mrs.
Dechavez's third-party liability claim for bodily injuries.

On November 11 2002, twenty (20) faculty and staff members of the NSCA (complainants) asked the
Commission on Audit (COA) to conduct an audit investigation of NSCAs expenditures in the May 5, 2002
vehicular accident. The COA dismissed the complaint for lack of merit.

The complainants then sought recourse with the Ombudsman, Visayas, through a verified complaint 7 charging
Dechavez with Dishonesty under Section 46(b)(l), Chapter 6, Tile I of the Administrative Code of 1987. 8

The Ombudsman dismissed Dechavez from the service with all accessory penalties after finding him
guilty.9 The Ombudsman ruled that the complainants sufficiently established their allegations, while
Dechavez's defenses had been successfully rebutted. The motion for reconsideration that Dechavez filed was
subsequently denied.

The CA examined the same pieces of evidence that the Ombudsman considered and reversed the Ombudsman
s findings.

In complete contrast with the Ombudsman's rulings, the CA found that the complainants failed to sufficiently
show that Dechavez had deliberately lied in his May 10, 2002 affidavit. Dechavez sufficiently proved that he
went on an official trip, based on the reasons outlined below and its reading of the evidence:
First, there was nothing wrong if Dechavez worked on a Sunday; he must, in fact, be commended for his
dedication.
Second, the Ombudsman should have accorded greater belief on the NSCA drivers positive assertion that they
were not available to drive for Mr. and Mrs. Dechavez (as they had serviced other faculty members at that
time), as against the NSCA security guards allegation that these drivers were available then (because they
allegedly saw the drivers within the college premises on that Sunday); speculations on the nature of the trip
should not arise simply because Dechavez personally drove the vehicle.
Third, the certifications of Mr. Larry Parroco (Pontevedra Sanggunian Bayan Member) and Mr. Cornelio Geanga
(Chair of the Education Committee and Head Teacher of the M.H. Del Pilar Elementary School) should have
persuaded the Ombudsman that the affiants are public officials who would not lightly issue a certification or
falsely execute affidavits as they know the implications and consequences of any falsity.
Fourth, and lastly the two lists of teaching instructors had been prepared by the same person, and if the
second list had indeed been questionable, Mr. Pablito Cuizon (NSCA s Chairman for Instructions) would have
not attached the second list to his affidavit.

On February 7, 2007, the CA denied the motion for reconsideration filed by the Ombudsman.

ISSUE:
WoN retirement from service of a Public Official during the pendency of an administrative case against would render
the case moot and academic?
HELD:

The Court finds the petition meritorious.

The rule that the Court will not disturb the CA' s findings of fact is not an absolute rule that admits of no
exceptions. 13 A notable exception is the presence of conflict of findings of fact between or among the
tribunals' rulings on questions of fact. The case before us squarely falls under this exception as the tribunals
below made two critical conflicting factual findings. We are thus compelled to undertake our own factual
examination of the evidence presented.

Our own examination of the records tells us that the Ombudsman's findings and appreciation of the presented
evidence are more in accord with reason and common experience so that it successfully proved, by the
required quantum of evidence, Dechavez's dishonesty, at the same time that we find the respondent's reading
of the evidence to be stretched to the point of breaking.

We start with our agreement with the CA's view that the Ombudsman's finding that Dechavez was not on
official business on May 5, 2002 because it was a Sunday (a non-working day) -by itself, is not sufficient basis
for the conclusion that Dechavez's business on that day.

Early as 1975, we have upheld the rule that the jurisdiction that was Ours at the time of the filing of the
administrative complaint was not lost by the mere fact that the respondent public official had ceased to be in
office during the pendency of his case. The Court retains its jurisdiction either to pronounce the respondent
official innocent of the charges or declare him guilty thereof. A contrary rule would be fraught with injustices
and pregnant with dreadful and dangerous implications."

To recall, we have held in the past that a public official's resignation does not render moot an administrative
case that was filed prior to the official's resignation. In Pagano v. Nazarro, Jr., we held that:

In Office of the Court Administrator v. Juan [A.M. No. P-03-1726, 22 July 2004, 434 SCRA 654, 658], this Court
categorically ruled that the precipitate resignation of a government employee charged with an offense punishable by
dismissal from the service does not render moot the administrative case against him. Resignation is not a way out to
evade administrative liability when facing administrative sanction. The resignation of a public servant does not
preclude the finding of any administrative liability to which he or she shall still be answerable-[Baquerfo v. Sanchez
A.M. No. P-05-1974, 6 April 2005, 455 SCRA 13, 19-20]. [Italics supplied, citation omitted]

Likewise, in Baquerfo v. Sanchez22 we held:

Cessation from office of respondent by resignation or retirement neither warrants the dismissal of the administrative
complaint filed against him while he was still in the service nor does it render said administrative case moot and
academic. The jurisdiction that was this Court's at the time of the filing of the administrative complaint was not lost by
the mere fact that the respondent public official had ceased in office during the pendency of his case. Respondent's
resignation does not preclude the finding of any administrative liability to which he shall still be answerable.
Thus, from the strictly legal point of view and as we have held in a long line of cases, jurisdiction,
once it attaches, cannot be defeated by the acts of the respondent save only where death
intervenes and the action does not survive.
WHEREFORE, under these premises we hereby GRANT the petition for review on certiorari Accordingly we REVERSE
AND SET ASIDE the decision dated March 31, 2006 and the resolution dated February 7, 2007 of the Court of Appeals
in CA-G.R. SP. No. 00673 and REINSTATE the decision dated October 29 2004 and the order dated April 6 2005 of the
Office of the Ombudsman.

20 GONZAGA VS CA GR 144025 DEC 27 2003 OBJECTIONS TO JURISDICTION OVER THE SUBJECT MATTER

Before this Court is a petition for review on certiorari seeking the reversal of the decision [1] of the Court of Appeals
dated December 29, 1999 and its resolution dated June 1, 2000 in CA-G.R. SP No. 54587.
FACTS:

The records disclose that, sometime in 1970, petitioner-spouses purchased a parcel of land from private
respondent Lucky Homes, Inc., situated in Iloilo and containing an area of 240 square meters. Said lot was
specifically denominated as Lot No. 19 under Transfer Certificate of Title (TCT) No. 28254 and was
mortgaged to the Social Security System (SSS) as security for their housing loan. Petitioners then started
the construction of their house, not on Lot No. 19 but on Lot No. 18, as private respondent mistakenly
identified Lot No. 18 as Lot No. 19. Upon realizing its error, private respondent, through its general
manager, informed petitioners of such mistake but the latter offered to buy Lot No. 18 in order to widen
their premises. Thus, petitioners continued with the construction of their house. However, petitioners
defaulted in the payment of their housing loan from SSS. Consequently, Lot No. 19 was foreclosed by SSS
and petitioners certificate of title was cancelled and a new one was issued in the name of SSS. After Lot
No. 19 was foreclosed, petitioners offered to swap Lot Nos. 18 and 19 and demanded from private
respondent that their contract of sale be reformed and another deed of sale be executed with respect to
Lot No. 18, considering that their house was built therein. However, private respondent refused. This
prompted petitioners to file, on June 13, 1996, an action for reformation of contract and damages with the
Regional Trial Court of Iloilo City, Branch 36, which was docketed as Civil Case No. 17115.

On January 15, 1998, the trial court [2] rendered its decision dismissing the complaint for lack of merit and
ordering herein petitioners to pay private respondent the amount of P10,000 as moral damages and
anotherP10,000 as attorneys fees.
On June 22, 1998, a writ of execution was issued by the trial court. Thus, on September 17, 1998,
petitioners filed an urgent motion to recall writ of execution, alleging that the court a quo had no
jurisdiction to try the case as it was vested in the Housing and Land Use Regulatory Board (HLURB)
pursuant to PD 957 (The Subdivision and Condominium Buyers Protective Decree). Conformably,
petitioners filed a new complaint against private respondent with the HLURB. Likewise, on June 30, 1999,
petitioner-spouses filed before the Court of Appeals a petition for annulment of judgment, premised on the
ground that the trial court had no jurisdiction to try and decide Civil Case No. 17115.
In a decision rendered on December 29, 1999, the Court of Appeals denied the petition for annulment of
judgment, relying mainly on the jurisprudential doctrine of estoppel as laid down in the case of Tijam vs.
Sibonghanoy.[4]
Their subsequent motion for reconsideration having been denied, petitioners filed this instant petition,
contending that the Court of Appeals erred in dismissing the petition by applying the principle of estoppel,
even if the Regional Trial Court, Branch 36 of Iloilo City had no jurisdiction to decide Civil Case No. 17115.

ISSUE : WHETHER OR NIT CA ERRED IN DISMISSING THE PETITION BY APPLYING THE PRINCIPLE OF ESTOPPEL,
EVEN IF THE REGIONAL TRIAL COURT, BRANCH 36 OF ILOILO CITY HAD NO JURISDICTION TO DECIDE CIVIL CASE NO.
17115.

HELD : PETITION DENIED

At the outset, it should be stressed that petitioners are seeking from us the annulment of a trial court judgment
based on lack of jurisdiction. Because it is not an appeal, the correctness of the judgment is not in issue
here. Accordingly, there is no need to delve into the propriety of the decision rendered by the trial court.
Petitioners claim that the recent decisions of this Court have already abandoned the doctrine laid down in Tijam
vs. Sibonghanoy.[5] We do not agree. In countless decisions, this Court has consistently held that, while an order or
decision rendered without jurisdiction is a total nullity and may be assailed at any stage, active participation in the
proceedings in the court which rendered the order or decision will bar such party from attacking its jurisdiction. As we
held in the leading case of Tijam vs. Sibonghanoy:[6]
A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak
of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.
It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent
and, after obtaining or failing to obtain such relief, repudiate, or question that same jurisdiction x x x x [T]he question
whether the court had jurisdiction either of the subject matter of the action or of the parties was not important in such
cases because the party is barred from such conduct not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice can not be tolerated obviously for reasons of
public policy.
Tijam has been reiterated in many succeeding cases. Thus, in Orosa vs. Court of Appeals;[7] Ang Ping vs. Court of
Appeals;[8] Salva vs. Court of Appeals;[9] National Steel Corporation vs. Court of Appeals;[10] Province of Bulacan vs.
Court of Appeals;[11] PNOC Shipping and Transport Corporation vs. Court of Appeals,[12] this Court affirmed the rule that
a partys active participation in all stages of the case before the trial court, which includes invoking the courts authority
to grant affirmative relief, effectively estops such party from later challenging that same courts jurisdiction.
In the case at bar, it was petitioners themselves who invoked the jurisdiction of the court a quo by instituting an
action for reformation of contract against private respondents. It appears that, in the proceedings before the trial
court, petitioners vigorously asserted their cause from start to finish. Not even once did petitioners ever raise the issue
of the courts jurisdiction during the entire proceedings which lasted for two years. It was only after the trial court
rendered its decision and issued a writ of execution against them in 1998 did petitioners first raise the issue of
jurisdiction and it was only because said decision was unfavorable to them. Petitioners thus effectively waived their
right to question the courts jurisdiction over the case they themselves filed.

Petitioners should bear the consequence of their act. They cannot be allowed to profit from their omission to the
damage and prejudice of the private respondent. This Court frowns upon the undesirable practice of a party submitting
his case for decision and then accepting the judgment but only if favorable, and attacking it for lack of jurisdiction if
not.[13]

21 Figueroa vs. People 147406, July 14,, 2008 EFFECT OF ESTOPPEL ON OBJECTIONS TO JURISDICTIONS
NACHURA, J.:
When is a litigant estopped by laches from assailing the jurisdiction of a tribunal? This is the paramount issue
raised in this petition for review of the February 28, 2001 Decision[2] of the Court of Appeals (CA) in CA-G.R. CR No.
22697.
FACTS:

On July 8, 1994, an information[3] for reckless imprudence resulting in homicide was filed against the petitioner
before the Regional Trial Court (RTC) of Bulacan, Branch 18.
Trial on the merits ensued and on August 19, 1998, the trial court convicted the petitioner as charged.
In his appeal before the CA, the petitioner questioned, among others, for the first time, the trial courts
jurisdiction.
The appellate court, however, in the challenged decision, considered the petitioner to have actively
participated in the trial and to have belatedly attacked the jurisdiction of the RTC; thus, he was already
estopped by laches from asserting the trial courts lack of jurisdiction.
Finding no other ground to reverse the trial courts decision, the CA affirmed the petitioners conviction but
modified the penalty imposed and the damages awarded.
Dissatisfied, the petitioner filed the instant petition for review on certiorari raising the following issues for our
resolution:
a. Does the fact that the petitioner failed to raise the issue of jurisdiction during the trial of this
case, which was initiated and filed by the public prosecutor before the wrong court, constitute laches in
relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said issue was
immediately raised in petitioners appeal to the Honorable Court of Appeals? Conversely, does the
active participation of the petitioner in the trial of his case, which is initiated and filed not by him but
by the public prosecutor, amount to estoppel?
b. Does the admission of the petitioner that it is difficult to immediately stop a bus while it is
running at 40 kilometers per hour for the purpose of avoiding a person who unexpectedly
crossed the road, constitute enough incriminating evidence to warrant his conviction for the crime
charged?
c. Is the Honorable Court of Appeals justified in considering the place of accident as falling
within Item 4 of Section 35 (b) of the Land Transportation and Traffic Code, and subsequently ruling
that the speed limit thereto is only 20 kilometers per hour, when no evidence whatsoever to that effect
was ever presented by the prosecution during the trial of this case?
d. Is the Honorable Court of Appeals justified in convicting the petitioner for homicide through
reckless imprudence (the legally correct designation is reckless imprudence resulting to
homicide) with violation of the Land Transportation and Traffic Code when the prosecution did
not prove this during the trial and, more importantly, the information filed against the petitioner does
not contain an allegation to that effect?
e. Does the uncontroverted testimony of the defense witness Leonardo Hernal that the victim
unexpectedly crossed the road resulting in him getting hit by the bus driven by the petitioner not
enough evidence to acquit him of the crime charged? [9]

As the imposable penalty for the crime charged herein is prision correccional in its medium and maximum
periods or imprisonment for 2 years, 4 months and 1 day to 6 years, [13] jurisdiction to hear and try the same is
conferred on the Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not have jurisdiction
over Criminal Case No. 2235-M-94.

While both the appellate court and the Solicitor General acknowledge this fact, they nevertheless are of the
position that the principle of estoppel by laches has already precluded the petitioner from questioning the

jurisdiction of the RTC the trial went on for 4 years with the petitioner actively participating therein and without
him ever raising the jurisdictional infirmity.

The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter may be
raised at any time even for the first time on appeal. As undue delay is further absent herein, the principle of
laches will not be applicable.

ISSUE:
Whether or not a litigant estopped by laches from assailing the jurisdiction of a tribunal?
HELD:

The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was
tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal,
from assailing such jurisdiction, for the same must exist as a matter of law, and may not be
conferred by consent of the parties or by estoppel (5 C.J.S., 861-863). However, if the lower
court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the
court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on appeal, to
assume an inconsistent position that the lower court had jurisdiction. Here, the principle of estoppel applies.
The rule that jurisdiction is conferred by law, and does not depend upon the will of the parties, has no bearing
thereon.

For quite a time since we made this pronouncement in Sibonghanoy, courts and tribunals, in resolving issues
that involve the belated invocation of lack of jurisdiction, have applied the principle of estoppel by laches.
Thus, in Calimlim v. Ramirez,[23]we pointed out that Sibonghanoy was developing into a general rule rather
than the exception:
A rule that had been settled by unquestioned acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a matter of
law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a
court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified
by recent pronouncements which stemmed principally from the ruling in the cited case
of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to
situations which were obviously not contemplated therein. The exceptional circumstance involved
in Sibonghanoy which justified the departure from the accepted concept of non-waivability
of objection to jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception,
but rather the general rule, virtually overthrowing altogether the time-honored principle
that the issue of jurisdiction is not lost by waiver or by estoppel.

Indeed, the general rule remains: a courts lack of jurisdiction may be raised at any stage of the
proceedings, even on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects
the very authority of the court to take cognizance of and to render judgment on the action. Moreover,
jurisdiction is determined by the averments of the complaint, not by the defenses contained in the
answer.[30]

Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the
defendant or respondent in his answer or motion to dismiss. Jurisdiction should be determined by
considering not only the status or the relationship of the parties but also the nature of the issues or
questions that is the subject of the controversy. x x x x The proceedings before a court or tribunal
without jurisdiction, including its decision, are null and void, hence, susceptible to direct
and collateral attacks.[43]

WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. Criminal Case No. 2235M-94 is hereby DISMISSED without prejudice.

22. BANCO ESPANOL FILIPINO VS PALANCA JURISDICTION OVER THE RES PAGE 103

JURISDICTION, HOW ACQUIRED: Jurisdiction over the property which is the subject of the litigation may result
either from a seizure of the property under legal process, whereby it is brought into the actual custody of the
law, or it may result from the institution of legal proceedings wherein, under special provisions of law, the
power of the court over the property is recognized and made effective.

The action to foreclose a mortgage is said to be a proceeding quasi in rem, by which is expressed the idea that
while it is not strictly speaking an action in rem yet it partakes of that nature and is substantially such.
DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property is always assumed to be in the possession of its
owner, in person or by agent; and he may be safely held, under certain conditions, to be affected with
knowledge that proceedings have been instituted for its condemnation and sale.

Facts:

EngracioPalancaTanquinyeng y Limquingco mortgaged various parcels of real property in Manila to El Banco


Espanol-Filipino.
Afterwards, Engracio returned to China and there he died on January 29, 1810 without returning again to the
Philippines. The mortgagor then instituted foreclosure proceeding but since defendant is a non-resident, it was
necessary to give notice by publication.
The Clerk of Court was also directed to send copy of the summons to the defendants last known address,
which is in Amoy, China. It is not shown whether the Clerk complied with this requirement.
Nevertheless, after publication in a newspaper of the City of Manila, the cause proceeded and judgment by
default was rendered.
The decision was likewise published and afterwards sale by public auction was held with the bank as the
highest bidder. On August 7, 1908, this sale was confirmed by the court.
However, about seven years after the confirmation of this sale, a motion was made by Vicente Palanca, as
administrator of the estate of the original defendant, wherein the applicant requested the court to set aside
the order of default and the judgment, and to vacate all the proceedings subsequent thereto.
The basis of this application was that the order of default and the judgment rendered thereon were void
because the court had never acquired jurisdiction over the defendant or over the subject of the action.

ISSUE:
1. Whether or not the lower court acquired jurisdiction over the defendant and the subject matter of the action
2. Whether or not due process of law was observed

Ruling:
On Jurisdiction

The word jurisdiction is used in several different, though related, senses since it may have reference (1) to
the authority of the court to entertain a particular kind of action or to administer a particular kind of relief, or it
may refer to the power of the court over the parties, or (2) over the property which is the subject to the
litigation.
The sovereign authority which organizes a court determines the nature and extent of its powers in general and
thus fixes its competency or jurisdiction with reference to the actions which it may entertain and the relief it
may grant.

How Jurisdiction is Acquired

Jurisdiction over the person is acquired by the voluntary appearance of a party in court and his submission to
its authority, or it is acquired by the coercive power of legal process exerted over the person.
Jurisdiction over the property which is the subject of the litigation may result either from a seizure of the
property under legal process, whereby it is brought into the actual custody of the law, or it may result from the
institution of legal proceedings wherein, under special provisions of law, the power of the court over the
property is recognized and made effective. In the latter case the property, though at all times within the
potential power of the court, may never be taken into actual custody at all. An illustration of the jurisdiction
acquired by actual seizure is found in attachment proceedings, where the property is seized at the beginning
of the action, or some subsequent stage of its progress, and held to abide the final event of the litigation. An
illustration of what we term potential jurisdiction over the res, is found in the proceeding to register the title of
land under our system for the registration of land. Here the court, without taking actual physical control over
the property assumes, at the instance of some person claiming to be owner, to exercise a jurisdiction in rem
over the property and to adjudicate the title in favor of the petitioner against all the world.

In the terminology of American law the action to foreclose a mortgage is said to be a proceeding quasi in rem,
by which is expressed the idea that while it is not strictly speaking an action in rem yet it partakes of that
nature and is substantially such. The expression "action in rem" is, in its narrow application, used only with
reference to certain proceedings in courts of admiralty wherein the property alone is treated as responsible for
the claim or obligation upon which the proceedings are based. The action quasi rem differs from the true
action in rem in the circumstance that in the former an individual is named as defendant, and the purpose of
the proceeding is to subject his interest therein to the obligation or lien burdening the property. All proceedings
having for their sole object the sale or other disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered
in these proceedings is conclusive only between the parties.

It is true that in proceedings of this character, if the defendant for whom publication is made appears, the
action becomes as to him a personal action and is conducted as such. This, however, does not affect the
proposition that where the defendant fails to appear the action is quasi in rem; and it should therefore be
considered with reference to the principles governing actions in rem.

The conclusions stated in this opinion indicate that the judgment appealed from is without error, and the same
is accordingly affirmed, with costs. So ordered.

Separate Opinion:
MALCOLM, J., dissenting:
I dissent. It will not make me long to state my reasons. An immutable attribute the fundamental idea of due
process of law is that no man shall be condemned in his person or property without notice and an opportunity of being
heard in his defense. Protection of the parties demands a strict and an exact compliance with this constitutional
provision in our organic law and of the statutory provisions in amplification. Literally hundreds of precedents could be
cited in support of these axiomatic principles. Where as in the instant case the defendant received no notice and had
no opportunity to be heard, certainly we cannot say that there is due process of law. Resultantly, "A judgment which is
void upon its face, and which requires only an inspection of the judgment roll to demonstrate its want of vitality is a
dead limb upon the judicial tree, which should be lopped off, if the power so to do exists. It can bear no fruit to the
plaintiff, but is a constant menace to the defendant."
23 NATIONAL BANK EMPLOYEES VS PHILNABANK EMPLOYEES ASSOC. THE SUPRE COURT IS NOT A TRIER
OF FACT
G.R. No.174287
FACTS:

Respondent Philippine National Bank (PNB) used to be a government-owned and controlled banking institution
established under Public Act 2612, as amended by Executive Order No. 80 dated December 3, 1986 (otherwise
known as The 1986 Revised Charter of the Philippine National Bank). Its rank-and-file employees, being
government personnel, were represented for collective negotiation by the Philnabank Employees Association
(PEMA), a public sector union.

In 1996, the Securities and Exchange Commission approved PNBs new Articles of Incorporation and By-laws
and its changed status as a private corporation. PEMA affiliated with petitioner National Union of Bank
Employees (NUBE), which is a labor federation composed of unions in the banking industry, adopting the name
NUBE-PNB Employees Chapter (NUBE-PEC)

Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees.
A collective bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the
period of January 1, 1997 to December 31, 2001.

Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the monthly membership
and other assessments imposed by the union from the salary of each union member, and agency
(equivalent to the monthly membership dues) from the salary of the rank- and-file employees within
bargaining unit who are not union members. Moreover, during the effectivity of the CBA, NUBE, being

fee
fee
the
the

Federation union, agreed that PNB shall remit P15.00 of the P65.00 union dues per month collected by PNB
from every employee, and that PNB shall directly credit the amount to NUBEs current account with PNB.

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2,
2002 a petition for certification election among the rank-and-file employees of PNB. The petition sought the
conduct of a certification election to be participated in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events transpired the
independent union registration of NUBE- PEC and its disaffiliation with NUBE.

With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under the leadership of
Mariano Soria, decided to apply for a separate registration with the Department of Labor and Employment
(DOLE). On March 25, 2002, it was registered as an independent labor organization under Registration
Certificate No. NCR-UR-3-3790-2002

Thereafter, on June 20, 2003, the Board of Directors of NUBE-PEC adopted a Resolution disaffiliating itself from
NUBE. Cited as reasons were as follows:
a.) In the long period of time that the Union has been affiliated with NUBE, the latter has miserably failed
to extend and provide satisfactory services and support to the former in the form of legal services,
training assistance, educational seminars, and the like;
b.) The failure by NUBE to provide adequate essential services and support to union members have
caused the latter to be resentful to NUBE and to demand for the Unions disaffiliation from the former;
c.) NUBE displayed its lack of regard for the interests and aspirations of the union members by blocking
the latters desire for the early commencement of CBA negotiations with the PNB management;
d.) The strained relationship between NUBE and the Union is no longer conducive to a fruitful partnership
between them and could even threaten industrial peace between the Union and the management of
PNB

On June 25, 2003, NUBE-PEC filed a Manifestation and Motion before the Med-Arbitration Unit of DOLE, praying
that, in view of its independent registration as a labor union and disaffiliation from NUBE, its name as
appearing in the official ballots of the certification election be changed to "Philnabank Employees Association
(PEMA)" or, in the alternative, both parties be allowed to use the name "PEMA" but with PEMA-FFW and NUBEPEC be denominated as "PEMA-Bustria Group" and "PEMA-Serrana Group," respectively. On the same date,
PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and requesting to stop,
effective immediately, the check-off of the P15.00 due for NUBE

Acting thereon, on July 4, 2003, PNB informed NUBE of PEMAs letter and its decision to continue the deduction
of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the
amounts collected would be held in a trust account pending the resolution of the issue on PEMAs disaffiliation

On July 11, 2003, NUBE replied that: it remains as the exclusive bargaining representative of the PNB rank-andfile employees; by signing the Resolution (on disaffiliation), the chapter officers have abandoned NUBE-PEC
and joined another union; in abandoning NUBE-PEC, the chapter officers have abdicated their respective
positions and resigned as such; in joining another union, the chapter officers committed an act of disloyalty to
NUBE-PEC and the general membership; the circumstances clearly show that there is an emergency in NUBEPEC necessitating its placement under temporary trusteeship; and that PNB should cease and desist from
dealing with Serrana, Roma, Latorre, Garcia, Medrano, and Magtibay, who are expelled from NUBE-PEC

With regard to the issue of non-remittance of the union dues, NUBE enjoined PNB to comply with the union
check-off provision of the CBA; otherwise, it would elevate the matter to the grievance machinery in
accordance with the CBA

Despite NUBEs response, PNB stood firm on its decision. Alleging unfair labor practice (ULP) for nonimplementation of the grievance machinery and procedure, NUBE brought the matter to the National
Conciliation and Mediation Board (NCMB) for preventive mediation

In time, PNB and NUBE agreed to refer the case to the Office of the DOLE Secretary for voluntary arbitration.
They executed a Submission Agreement on October 28, 2003. Meantime, the DOLE denied PEMAs motion to
change its name in the official ballots

On April 28, 2004, PEMA filed before the voluntary arbitrator an Urgent Motion for Intervention, alleging that it
stands to be substantially affected by whatever judgment that may be issued, because one of the issues for
resolution is the validity of its disaffiliation from NUBE. It further claimed that its presence is necessary so that
a complete relief may be accorded to the parties. Only NUBE opposed the motion, arguing that PEMA has no
legal personality to intervene, as it is not a party to the existing CBA; and that NUBE is the exclusive
bargaining representative of the PNB rank-and-file employees and, in dealing with a union other than NUBE,
PNB is violating the duty to bargain collectively, which is another form of ULP

Barely a month after, DOLE Acting Secretary Manuel G. Imson denied PEMAs motion for intervention and
ordered PNB to release all union dues withheld and to continue remitting the same to NUBE. A cursory reading
of the motion reveals a denial thereof is not prejudicial to the individual rights of its members. They are
protected by law. No effective disaffiliation took place

ISSUE:
Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in turn, inevitably affects the latters right
to collect the union dues held in trust by PNB
HELD:

We deny the petition

Whether there was a valid disaffiliation is a factual issue. It is elementary that a question of fact is not
appropriate for a petition for review on certiorari under Rule 45 of the Rules of Court. The parties may raise
only questions of law because the Supreme Court is not a trier of facts

As a general rule, We are not duty-bound to analyze again and weigh the evidence introduced in and
considered by the tribunals below. When supported by substantial evidence, the findings of fact of the CA are
conclusive and binding on the parties and are not reviewable by this Court, except: (1) When the conclusion is
a finding grounded entirely on speculation, surmises and conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the
judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the
CA, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of
both parties; (7) When the findings are contrary to those of the trial court; (8) When the findings of fact are
conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the
petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) When
the findings of fact of the CA are premised on the supposed absence of evidence and contradicted by the
evidence on record. The Court finds no cogent reason to apply these recognized exceptions

Even a second look at the records reveals that the arguments raised in the petition are bereft of merit

The right of the local union to exercise the right to disaffiliate from its mother union is well settled in this
jurisdiction

25 PANTRANCO NORTH EXPRESS, INC., and ALEXANDER BUNCAN, petitioners, vs. STANDARD INSURANCE
COMPANY, INC., and MARTINA GICALE,respondents. [G.R. No. 140746. March 16, 2005]

Before us is a petition for review on certiorari assailing the Decision[1] dated July 23 1999 and Resolution [2] dated
November 4, 1999 of the Court of Appeals in CA-G.R. CV No. 38453, entitled Standard Insurance Company, Inc., and
Martina Gicale vs. PANTRANCO North Express, Inc., and Alexander Buncan.

FACTS:

On October 28, 1984, Crispin Gicale was driving the passenger jeepney owned by his mother Martina
Gicale, respondent herein. It was then raining.

While driving north bound along the National Highway in Talavera, Nueva Ecija, a passenger bus, owned
by Pantranco North Express, Inc., petitioner, driven by Alexander Buncan, also a petitioner, was trailing
behind.

When the two vehicles were negotiating a curve along the highway, the passenger bus overtook the
jeepney. In so doing, the passenger bus hit the left rear side of the jeepney and sped away.

Crispin reported the incident to the Talavera Police Station and respondent Standard Insurance Co., Inc.
(Standard), insurer of the jeepney. The total cost of the repair was P21,415.00, but respondent Standard
paid only P8,000.00. Martina Gicale shouldered the balance of P13,415.00.

respondents, demanded reimbursement from petitioners Pantranco and its driver Alexander Buncan, but
they refused. This prompted respondents to file with the Regional Trial Court (RTC), Branch 94, Manila, a
complaint for sum of money.

On June 5, 1992, the trial court rendered a Decision [3] in favor of respondents Standard and Martina, thus:

WHEREFORE, and in view of the foregoing considerations, judgment is hereby rendered in favor of the
plaintiffs, Standard Insurance Company and Martina Gicale, and against defendants Pantranco Bus Company
and Alexander Buncan, ordering the latter to pay as follows:
(1) to pay plaintiff Standard Insurance the amount of P8,000.00 with interest due thereon from November 27, 1984
until fully paid;
(2) to pay plaintiff Martina Gicale the amount of P13,415.00 with interest due thereon from October 22, 1984 until fully
paid;
(3) to pay the sum of P10,000.00 for attorneys fees;
(4) to pay the expenses of litigation and the cost of suit.
SO ORDERED.

On appeal, the Court of Appeals, on July 23, 1999, affirmed the trial courts ruling, holding that:

The appellants argue that appellee Gicales claim of P13,415.00 and appellee insurance companys claim
of P8,000.00 individually fell under the exclusive original jurisdiction of the municipal trial court. This is not
correct because under the Totality Rule provided for under Sec. 19, Batas Pambansa Bilang 129, it is the sum
of the two claims that determines the jurisdictional amount.

In the case at bench, the total of the two claims is definitely more than P20,000.00 which at the time of the
incident in question was the jurisdictional amount of the Regional Trial Court.

Appellants contend that there was a misjoinder of parties. Assuming that there was, under the Rules of Court
(Sec. 11, Rule 7) as well as under the Rules of Civil Procedure (ditto), the same does not affect the jurisdiction
of the court nor is it a ground to dismiss the complaint.

Appellants submit that they were denied their day in court because the case was deemed submitted for
decision without even declaring defendants in default or to have waived the presentation of evidence.

This is incorrect. Of course, the court did not declare defendants in default because that is done only when
the defendant fails to tender an answer within the reglementary period.

When the lower court ordered that the case is deemed submitted for decision that meant that the
defendants were deemed to have waived their right to present evidence. If they failed to adduce
their evidence, they should blame nobody but themselves.

Finally, contrary to the assertion of the defendant-appellants, the evidence preponderantly established their
liability for quasi-delict under Article 2176 of the Civil Code.

Petitioners filed a motion for reconsideration but was denied by the Appellate Court in a Resolution dated
November 4, 1999.
Hence, this petition for review on certiorari raising the following assignments of error:
Issue:
WHETHER OR NOT THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT and
WHETHER OR NOT THEY WERE DENIED OF DUE PROCESS.

Ruling:

As previously stated, respondents cause of action against petitioners arose out of the same transaction.
Thus, the amount of the demand shall be the totality of the claims.

Respondent Standards claim is P8,000.00, while that of respondent Martina Gicale is P13,415.00, or a total
of P21,415.00. Section 19 of B.P. Blg. 129 provides that the RTC has exclusive original jurisdiction over all
other cases, in which the demand, exclusive of interest and cost or the value of the property in
controversy, amounts to more than twenty thousand pesos (P20,000.00). Clearly, it is the RTC that has
jurisdiction over the instant case. It bears emphasis that when the complaint was filed, R.A. 7691
expanding the jurisdiction of the Metropolitan, Municipal and Municipal Circuit Trial Courts had not yet
taken effect. It became effective on April 15, 1994.

There is no merit in petitioners contention that they were denied due process.

Records show that during the hearing, petitioner Pantrancos counsel filed two motions for resetting of
trial which were granted by the trial court. Subsequently, said counsel filed a notice to withdraw.

After respondents had presented their evidence, the trial court, upon petitioners motion, reset the hearing
to another date. On this date, Pantranco failed to appear.

Thus, the trial court warned Pantranco that should it fail to appear during the next hearing, the case will
be submitted for resolution on the basis of the evidence presented.

Subsequently, Pantrancos new counsel manifested that his client is willing to settle the case amicably
and moved for another postponement.

The trial court granted the motion. On the date of the hearing, the new counsel manifested that
Pantrancos employees are on strike and moved for another postponement.

On the next hearing, said counsel still failed to appear. Hence, the trial court considered the case
submitted for decision.

WHEREFORE, the petition is DENIED. The assailed Decision dated July 23 1999 and Resolution dated
November 4, 1999 of the Court of Appeals in CA-G.R. CV No. 38453 are hereby AFFIRMED. Costs against
petitioners. SO ORDERED.

26 SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON, petitioners, vs. THE COURT OF APPEALS,
GLICERIO MA. ELAYDA II, FEDERICO ELAYDA and DANILO ELAYDA, respondents. [G.R. No. 104796. March
6, 1998]

The question for decision is whether in assessing the docket fees to be paid for the filing of an action for
annulment or rescission of a contract of sale, the value of the real property, subject matter of the contract, should be
used as basis, or whether the action should be considered as one which is not capable of pecuniary estimation and
therefore the fee charged should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1) of the Rules of Court. The
trial court held the fees should be based on the value of the property, but the Court of Appeals reversed and held that
the flat rate should be charged. Hence this petition for review on certiorari.

FACTS:

On August 8, 1991, private respondents filed in the Regional Trial Court of Quezon City a complaint for
annulment or rescission of a contract of sale of two (2) parcels of land against petitioners, praying for the
following reliefs:

1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for having
violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil Code and/or
violation of the terms and conditions of the said contract.
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorneys fees in the amount
of P100,000.00.

Upon the filing of the complaint, the clerk of court required private respondents to pay docket and legal fees in
the total amount of P610.00, broken down as follows:

P450.00 - Docket fee for the Judicial Development Fund under Official Receipt No. 1877773
150.00 - Docket fee for the General Fund under Official Receipt No. 6834215
10.00 - for the Legal Research Fund under Official Receipt No. 6834450. [2]

On September 26, 1991, petitioners moved for the dismissal of the complaint on the ground that the trial court
did not acquire jurisdiction over the case by reason of private respondents non-payment of the correct amount
of docket fees.

Petitioners contended that in addition to the fees already paid based on the claim for P100,000.00 for
attorneys fees, private respondents should have paid docket fees in the amount of P21,640.00, based on the
alleged value of the two (2) parcels of land subject matter of the contract of sale sought to be annulled. [3]

On September 30, 1991, private respondents filed opposition to the motion to dismiss, arguing that outright
dismissal of their complaint was not warranted on the basis of the alleged non-payment of the correct amount
of docket fees, considering that the amount paid by them was that assessed by the clerk of court.[4]

On October 21, 1991, the trial court [5] denied petitioners motion to dismiss but required private respondents to
pay the amount of docket fees based on the estimated value of the parcels of land in litigation as stated in the
complaint.

Private respondents filed a motion for reconsideration but their motion was denied by the trial court. They
therefore, brought the matter to the Court of Appeals.

on February 26, 1992, CA rendered a decision[6] annulling the orders of the trial court.

The appellate court held that an action for rescission or annulment of contract is not susceptible of pecuniary
estimation and, therefore, the docket fees should not be based on the value of the real property, subject
matter of the contract sought to be annulled or rescinded.

Petitioners moved for reconsideration, but their motion was denied in a resolution dated March 25, 1992 of the
appellate court.

Hence, this petition for review on certiorari.

Rule 141 of the Rules of Court provides:

SEC. 7. Clerks of Regional Trial Courts. - (a) For filing an action or a permissive counter-claim or money claim against
an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a
complaint in intervention, and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or the
stated value of the property in litigation, is:
1. Not more than P20,000.00 .............P120.00
2. More than P20,000.00 but less than
P40,000.00 ......................... 150.00
3. P40,000.00 or more but less than
P60,000.00 ......................... 200.00
4. P60,000.00 or more but less than
P80,000.00 ... ...................... 250.00
5. P80,000.00 or more but less than

P100,000.00 ........................... 400.00


6. P100,000.00 or more but less than
P150,000.00 ........................... 600.00
7. For each P1,000.00 in excess of
P150,000.00 ............................. 5.00
(b) For filing:
1. Actions where the value of the subject
matter cannot be estimated ............. P400.00
2. Special civil actions except judicial
foreclosure of mortgage which shall be
governed by paragraph (a) above .... 400.00
3. All other actions not involving
property........................... 400.00
In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by
the claimant and shall be the basis in computing the fees. (emphasis added)
Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action
and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the
assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint,
pursuant to the last paragraph of 7(b) of Rule 141, as amended by the Resolution of the Court dated
September 12, 1990.

Since private respondents alleged that the land, in which they claimed an interest as heirs, had been sold
for P4,378,000.00 to petitioners, this amount should be considered the estimated value of the lan d for the
purpose of determining the docket fees.

On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale
of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount
of P400.00 in Rule 141, 7(b)(1).

In support of their argument, they cite the cases of Lapitan v. Scandia, Inc.[7] and Bautista v. Lim.
[8]
In Lapitan this Court, in an opinion by Justice J.B.L. Reyes, held:
A review of the jurisprudence of this Court indicates that in determining whether an action is one the
subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of
money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal
courts or in the courts of first instance would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money, or where the money claim is purely
incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his
part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to
foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may
not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of

the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into
other factors which the law has deemed to be more within the competence of courts of first instance, which
were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating
jurisdiction (Act 136 of the Philippine Commission of June 11, 1901).
Actions for specific performance of contracts have been expressly pronounced to be exclusively
cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturers
Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogent reason appears, and none is here
advanced by the parties, why an action for rescission (or resolution) should be differently treated, a rescission
being a counterpart, so to speak, of specific performance. In both cases, the court would certainly have to
undertake an investigation into facts that would justify one act or the other. No award for damages may be had
in an action for rescission without first conducting an inquiry into matters which would justify the setting aside
of a contract, in the same manner that courts of first instance would have to make findings of fact and law in
actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like those
raised in Arroz v. Alojado, et al., L-22153, March 31, 1967 (the legality or illegality of the conveyance sought for
and the determination of the validity of the money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950
(validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of a mortgage); Baito v.
Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created by the relation,
etc., in actions for support); De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of
documents upon which claims are predicated). Issues of the same nature may be raised by a party against
whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a
prayer for damages in an action for rescission should be taken as the basis for concluding such action as one
capable of pecuniary estimation a prayer which must be included in the main action if plaintiff is to be
compensated for what he may have suffered as a result of the breach committed by defendant, and not later
on precluded from recovering damages by the rule against splitting a cause of action and discouraging
multiplicity of suits.
RULING:

Conformably with this discussion of actions where the value of the case cannot be estimated, the Court
in Bautista v. Lim, held that an action for rescission of contract is one which cannot be estimated and
therefore the docket fee for its filing should be the flat amount of P200.00 as then fixed in the former Rule
141, 5(10). Said this Court:

Thus, although eventually the result may be the recovery of land, it is the nature of the action as one for
rescission of contract which is controlling. The Court of Appeals correctly applied these cases to the
present one. As it said:

We would like to add the observations that since the action of petitioners [private respondents] against
private respondents [petitioners] is solely for annulment or rescission which is not susceptible of
pecuniary estimation, the action should not be confused and equated with the value of the property
subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the
complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or
compensatory damages, the assessment and collection of the legal fees should not be intertwined with
the merits of the case and/or what may be its end result; and that to sustain private respondents
[petitioners] position on what the respondent court may decide after all, then the assessment should be
deferred and finally assessed only after the court had finally decided the case, which cannot be done
because the rules require that filing fees should be based on what is alleged and prayed for in the face of
the complaint and paid upon the filing of the complaint.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED. SO ORDERED.

27 Ruby Shelter vs. HON. PABLO C. FORMARAN III,

Petitioner obtained a loan[3] in the total amount of P95,700,620.00 from respondents Romeo Y. Tan (Tan) and
Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land, all located in Triangulo,

Naga City, covered by Transfer Certificates of Title (TCTs) No. 38376, [4] No. 29918,[5] No. 38374,[6] No. 39232,
[7]
and No. 39225,[8] issued by the Registry of Deeds for Naga City, in the name of petitioner

When petitioner was unable to pay the loan when it became due and demandable, respondents Tan and
Obiedo agreed to an extension of the same.

In a Memorandum of Agreement[9] dated 17 March 2005, respondents Tan and Obiedo granted petitioner until
31 December 2005 to settle its indebtedness, and condoned the interests, penalties and surcharges accruing
thereon from 1 October 2004 to 31 December 2005 which amounted to P74,678,647.00.

The Memorandum of Agreement required, in turn, that petitioner execute simultaneously with the said
Memorandum, by way of dacionenpago, Deeds of Absolute Sale in favor of respondents Tan and Obiedo,
covering the same parcels of land subject of the mortgages.

The Memorandum of Agreement further provided that should petitioner contest, judicially or otherwise, any
act, transaction, or event related to or necessarily connected with the said Memorandum and the Deeds of
Absolute Sale involving the five parcels of land, it would pay respondents Tan and Obiedo P10,000,000.00 as
liquidated damages inclusive of costs and attorneys fees.

Petitioner would likewise pay respondents Tan and Obiedo the condoned interests, surcharges and penalties.
[10] Finally, should a contest arise from the Memorandum of Agreement, Mr. Ruben Sia (Sia), President of
petitioner corporation, personally assumes, jointly and severally with petitioner, the latters monetary
obligation to respondent Tan and Obiedo

Without payment having been made by petitioner on 31 December 2005, respondents Tan and Obiedo
presented the Deeds of Absolute Sale dated 3 January 2006 before the Register of Deeds of Naga City on 8
March 2006, as a result of which, they were able to secure TCTs over the five parcels of land in their names.

On 16 March 2006, petitioner filed before the RTC a Complaint[12] against respondents Tan, Obiedo, and Atty.
Reyes, for declaration of nullity of deeds of sales and damages, with prayer for the issuance of a writ of
preliminary injunction and/or temporary restraining order (TRO). The Complaint was docketed as Civil Case No.
2006-0030.

Asserting that the Deeds of Absolute Sale over the five parcels of land were executed merely as security for
the payment of its loan to respondents Tan and Obiedo; that the Deeds of Absolute Sale, executed in
accordance with the Memorandum of Agreement, constituted pactumcommisorium and as such, were null and
void; and that the acknowledgment in the Deeds of Absolute Sale were falsified

Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the sum of P13,644.25 for docket and
other legal fees, as assessed by the Office of the Clerk of Court.The Clerk of Court initially considered Civil
Case No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other legal
fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.

Only respondent Tan filed an Answer[15] to the Complaint of petitioner.

Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as securities for the
loan of petitioner.

The Deeds of Absolute Sale over the five parcels of land were the consideration for the payment of the total
indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the 15-month interest which
already accrued on the loan, while providing petitioner with the golden opportunity to still redeem all or even
portions of the properties covered by said Deeds.

Unfortunately, petitioner failed to exercise its right to redeem any of the said properties.

Moreover, by the execution of the Deeds of Absolute Sale, the properties subject thereof were, ipso jure,
delivered to respondents Tan and Obiedo. The demolition of the existing structures on the properties was
nothing but an exercise of dominion by respondents Tan and Obiedo

Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended Case involved real
properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1),
of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August
2004. Since petitioner did not pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did not
acquire jurisdiction over the said case.

Hence, respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct and accurate
docket fees

and should petitioner fail to do so, to deny and dismiss the prayer of petitioner for the annulment of the Deeds
of Absolute Sale for having been executed in contravention of the law or of the Memorandum of Agreement
as pactumcommisorium.

On 24 March 2006, the RTC issued an Order [17] granting respondent Tans Omnibus Motion. In holding that both
petitioner and respondent Tan must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of
Court, as amended, the RTC reasoned

Consequently, the RTC decreed on the matter of docket/filing fees:

WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to pay additional filing fee and the
[herein respondent], Romeo Tan is also ordered to pay docket and filing fees on his counterclaim, both
computed based on Section 7(a) of the Supreme Court Amended Administrative Circular No. 35-2004 within
fifteen (15) days from receipt of this Order to the Clerk of Court, Regional Trial Court, Naga City and for the
latter to compute and to collect the said fees accordingly.

Petitioner moved[20] for the partial reconsideration of the 24 March 2006 Order of the RTC, arguing that Civil
Case No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale and, as such, incapable of
pecuniary estimation.

RTC denied the reconsideration

petitioner must still pay the amount of P720,392.60 as docket fees.

Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the Court of Appeals

According to petitioner, the RTC[24] acted with grave abuse of discretion, amounting to lack or excess of
jurisdiction, when it issued its Orders dated 24 March 2006 and 29 March 2006 mandating that the
docket/filing fees for Civil Case No. 2006-0030, an action for annulment of deeds of sale, be assessed under
Section 7(a), Rule 141 of the Rules of Court, as amended. If the Orders would not be revoked, corrected, or
rectified, petitioner would suffer grave injustice and irreparable damage.

CA denied the Petition for Certiorari, there is no grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the court a quo.

By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, and mere abuse of discretion is not enough it must be grave.

The abuse must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and
despotically.

In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct
amount of docket fees for Civil Case No. 2006-0030.According to both the trial and appellate courts, petitioner
should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended.

Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint
in Civil Case No. 2006-0030, granted petitioner time to pay the additional docket fees.

Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed
against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of
the Rules of Court, as amended.

ISSUE:

Whether or not the Court of Appeals committed a grave and serious reversible error in affirming the assailed
Orders of the Regional Trial Court which are clearly contrary to the pronouncement of this Honorable Court in
the case of Spouses De Leon v. Court of Appeals, G.R. No. 104796, March 6, 1998

RULING:

the Court explicitly pronounced that [t]he court acquires jurisdiction over any case only upon the payment of
the prescribed docket fee. Hence, the payment of docket fees is not only mandatory, but also jurisdictional.

The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value
of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)
(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation

A real action indisputably involves real property.

The docket fees for a real action would still be determined in accordance with the value of the real property
involved therein; the only difference is in what constitutes the acceptable value.

the Court finds that the true nature of the action instituted by petitioner against respondents is the recovery of
title to and possession of real property. It is a real action necessarily involving real property, the docket fees
for which must be computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as amended. The
Court of Appeals, therefore, did not commit any error in affirming the RTC Orders requiring petitioner to pay
additional docket fees for its Complaint in Civil Case No. 2006-0030.

The Court does not give much credence to the allegation of petitioner that if the judgment of the Court of
Appeals is allowed to stand and not rectified, it would result in grave injustice and irreparable injury to
petitioner in view of the prohibitive amount assessed against it.

It is a sweeping assertion which lacks evidentiary support. Undeniably, before the Court can conclude that the
amount of docket fees is indeed prohibitive for a party, it would have to look into the financial capacity of said

party.
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED

28 Geonzon de Barrera vs. Heirs of Vicente Legaspi 565 SCRA 192.


CARPIO MORALES, J.:
Under review before this Court is the July 31, 2006 Decision of the Court of Appeals, [1] which affirmed that of
the Regional Trial Court, Branch 16, of Tangub City in Civil Case No. TC-97-001, ordering the defendants-petitioners
herein, Fernanda Geonzon vda. de Barrera and Johnny Oco. Jr. to return possession of the subject property to the
plaintiffs-herein respondents, Heirs of Vicente Legaspi.
On October 1, 1996, petitioner Johnny Oco Jr. (Oco), said to be a peace officer connected with the PNP,
accompanied by unidentified CAFGU members, forced his way into respondents 0.9504-hectare irrigated farmland
located at Liloan, Bonifacio, Misamis Occidental. After dispossessing respondents of the property, Oco and company
used a tractor to destroy the planted crops, took possession of the land, and had since tended it. [2]
Respondents
thus
filed
on February
7,
1997 a
complaint
before
the Regional Trial Court of Tangub City for Reconveyance of Possession with Preliminary Mandatory Injunction and
Damages[3] against petitioners.
In their Answer, petitioners claimed that the subject land forms part of a three-hectare property described in
OCT No. P-447 issued on February 10, 1956 in the name of Andrea Lacson who sold a 2-hectare portion thereof to
Eleuterio Geonzon who, in turn, sold 1.1148 thereof to his sister petitioner Fernanda Geonzon vda. de Barrera
(Fernanda).[4]
Respondents, on the other hand, asserted that the land was occupied, possessed and cultivated by their
predecessor-in-interest Vicente Legaspi and his wife Lorenza since 1935; [5] after a subdivision survey was conducted in
November 30, 1976, it was found out that the land formed part of the titled property of Andrea Lacson; [6] and despite
this discovery, they never filed any action to recover ownership thereof since they were left undisturbed in their
possession,[7] until October 1, 1996 when petitioners forced their way into it.
Petitioners raised the issue of ownership as a special affirmative defense. [8] In their Memorandum, however,
they questioned the jurisdiction of the RTC over the subject matter of the complaint, the assessed value of the land
being only P11,160,[9] as reflected in Tax Declaration No. 7565. [10]
By Decision of November 27, 1998, the trial court found for respondents, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs [herein respondents] and
against the defendants [-herein petitioners]:
1. Ordering the latter to return the possession of the land in question to the plaintiffs and
2. Ordering the latter to desist from further depriving and disturbing plaintiffs peaceful
possession thereof, unless there be another court judgment to the contrary.
SO ORDERED.
On the issue of jurisdiction over the subject matter, the trial court, maintaining that it had, held:

The Court is not persuaded by [the defendants] arguments. What determines the nature of the
action as well as the jurisdiction of the [c]ourt are the facts alleged in the complaint and not those
alleged in the answer of the defendants.
xxxx
In [p]ar. 2 of plaintiffs complaint, the land in question was described as a riceland situated at
Liloan, Bonifacio, Misamis Occ. and declared under [T]ax [D]eclaration No. 7564 in the name of Vicente
Legaspi and bounded on the north by a creek, on the east Sec. 12, on the south Lot No. 007 and on the
west also by Lot No. 007 which tax declaration cancels former [T]ax [D]eclaration No. 12933 under the
name of Lorenza Bacul Legaspi which likewise cancels [T]ax [D]eclaration No. 5454 covering the bigger
portion of the land under which the land described under [T]ax [D]eclaration No. 7565 is part and
parcel thereof [sic]; the present estimated value being P50,000.[11] (Emphasis and underscoring
supplied)
Petitioners thereupon appealed to the Court of Appeals which affirmed the trial courts disposition of the issue
of jurisdiction over the subject matter.
On the merits, the appellate court affirmed too the trial courts decision, finding that both testimonial and
documentary evidence on record established that appellees, through their predecessors-in-interest, have been in
peaceful, continuous, public and actual possession of the property in dispute even before the year 1930. [12]
The appellate court emphasized that in an accion publiciana, the only issue involved is the determination of
possession de jure.[13]
Hence, the present petition for review which raises the following issues:
I. . . . WHETHER OWNERSHIP AND TITLE CANNOT BE AN ISSUE TO DETERMINE WHO HAS A
BETTER RIGHT [TO] THE PORTION LITIGATED; AND
II. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE JURISDICTION OF THE COURT
DEPEND ON THE FACTS AS ALLEGED IN THE COMPLAINT.[14]
For obvious reasons, the issue of lack of jurisdiction over the subject matter shall be first considered.
Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act of 1980), as amended by Republic
Act No. 7691 provides for the jurisdiction of metropolitan trial courts, municipal trial courts and municipal circuit trial
courts, to wit:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and
costs: Provided, That in cases of land not declared for taxation purposes, the value of such property
shall be determined by the assessed value of the adjacent lots. (Emphasis, italics and underscoring
supplied)
Before the amendments introduced by Republic Act No. 7691, the plenary action of accion publiciana was to be
brought before the regional trial court. [15] With the modifications introduced by R.A. No. 7691 in 1994, the jurisdiction of
the first level courts has been expanded to include jurisdiction over other real actions where the assessed value does
not exceed P20,000, P50,000 where the action is filed in Metro Manila. The first level courts thus have exclusive
original jurisdiction overaccion publiciana and accion reivindicatoria where the assessed value of the real property
does not exceed the aforestated amounts. Accordingly, the jurisdictional element is the assessed value of the property.
Assessed value is understood to be the worth or value of property established by taxing authorities on the
basis of which the tax rate is applied. Commonly, however, it does not represent the true or market value of the
property.[16]
The subject land has an assessed value of P11,160 as reflected in Tax Declaration No. 7565, a common exhibit
of the parties. The bare claim of respondents that it has a value of P50,000 thus fails. The case, therefore, falls within
the exclusive original jurisdiction of the municipal trial court.

It was error then for the RTC to take cognizance of the complaint based on the allegation that the present
estimated value [of the land is] P50,000, which allegation is, oddly, handwritten on the printed pleading. The
estimated value, commonly referred to as fair market value, [17] is entirely different from the assessed value of the
property.
Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any
time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if they were
not raised in the answer or in a motion to dismiss. [18] That the issue of lack of jurisdiction was raised by petitioners
only in their Memorandum filed before the trial court did not thus render them in estoppel.
En passant, the Court notes that respondents cause of action accion publiciana is a wrong mode. The
dispossession took place on October 1, 1996 and the complaint was filed four months thereafter or on February 7,
1997. Respondents exclusion from the property had thus not lasted for more than one year to call for the remedy
of accion publiciana.
In fine, since the RTC has no jurisdiction over the complaint filed by respondents, all the proceedings therein as
well as the Decision of November 27, 1998, are null and void. The complaint should perforce be dismissed. This leaves
it unnecessary to still dwell on the first issue.

WHEREFORE, the petition is hereby GRANTED. The challenged July 31, 2006 Decision of the Court of Appeals
is SET ASIDE. The decision of Branch 16 of the Regional Trial Court of Tangub City in Civil Case No. TC-97-001 is
declared NULL and VOID for lack of jurisdiction.

29 Medical Plaza vs. Cullen GR 181416


FACTS:
- Respondent Robert H. Cullen purchased from MLHI condominium Unit of the Medical Plaza Makati covered by
Condominium Certificate of Title No. 45808 of the Register of Deeds of Makati.
- Said title was later cancelled and Condominium Certificate of Title No. 64218 was issued in the name of respondent.
- On September 19, 2002, petitioner, through its corporate secretary, Dr. Jose Giovanni E. Dimayuga, demanded from
respondent payment for alleged unpaid association dues and assessments amounting to P145,567.42.
- Respondent disputed this demand claiming that he had been religiously paying his dues.
- Petitioner, on the other hand, claimed that respondents obligation was a carry-over of that of MLHI. Consequently,
respondent was prevented from exercising his right to vote and be voted for during the 2002 election of petitioners
Board of Directors.
- MLHI allegedly claimed that the same had already been settled.
- Petitioner failed to make such explanation on why respondent was considered a delinquent payer despite the
settlement of the obligation.
- A complaint for damages was filed by respondent against petitioner and MLHI
- Petitioner and MLHI filed their separate motions to dismiss the complaint on the ground of lack of jurisdiction.
- MLHI claims that it is the Housing and Land Use Regulatory Board (HLURB) which is vested with the exclusive
jurisdiction to hear and decide the case.
- Petitioner, on the other hand, raises the following specific grounds for the dismissal of the complaint: (1) estoppel as
respondent himself approved the assessment when he was the president; (2) lack of jurisdiction as the case involves
an intra-corporate controversy; (3) prematurity for failure of respondent to exhaust all intra-corporate remedies; and
(4) the case is already moot and academic, the obligation having been settled between petitioner and MLHI.
- On September 9, 2005, the RTC rendered a Decision granting petitioners and MLHIs motions to dismiss and,
consequently, dismissing respondents complaint.
- The trial court agreed with MLHI that the action for specific performance filed by respondent clearly falls within the
exclusive jurisdiction of the HLURB. The court held that the complaint states no cause of action, considering that
respondents obligation had already been settled by MLHI. It, likewise, ruled that the issues raised are intra-corporate

between the corporation and member.


- On appeal, the CA reversed and set aside the trial courts decision and remanded the case to the RTC for further
proceedings. The CA held that the controversy is an ordinary civil action for damages which falls within the jurisdiction
of regular courts.
- Petitioners and MLHIs motions for reconsideration had also been denied.
ISSUE:
W/n the controversy involve intra-corporate issues as would fall within the jurisdiction of the RTC as a special
commercial court or an ordinary action for damages within the jurisdiction of regular courts?
HELD:
- In determining whether a dispute constitutes an intra-corporate controversy, the Court uses two tests, namely, the
relationship test and the nature of the controversy test.
- An intra-corporate controversy is one which pertains to any of the following relationships: (1) between the
corporation, partnership or association and the public; (2) between the corporation, partnership or association and the
State insofar as its franchise, permit or license to operate is concerned; (3) between the corporation, partnership or
association and its stockholders, partners, members or officers; and (4) among the stockholders, partners or
associates themselves. Thus, under the relationship test, the existence of any of the above intra-corporate relations
makes the case intra-corporate
- Under the nature of the controversy test, "the controversy must not only be rooted in the existence of an intracorporate relationship, but must as well pertain to the enforcement of the parties correlative rights and obligations
under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation.
- Applying the two tests, we find and so hold that the case involves intra-corporate controversy. It obviously arose from
the intra-corporate relations between the parties, and the questions involved pertain to their rights and obligations
under the Corporation Code and matters relating to the regulation of the corporation.
- Petitioner is a condominium corporation duly organized and existing under Philippine laws, charged with the
management of the Medical Plaza Makati. Respondent, on the other hand, is the registered owner of Unit No. 1201 and
is thus a stockholder/member of the condominium corporation. Clearly, there is an intra-corporate relationship
between the corporation and a stockholder/member.
- The nature of the action is determined by the body rather than the title of the complaint.
- Republic Act (RA) No. 9904, or the Magna Carta for Homeowners and Homeowners Associations, approved on
January 7, 2010 and became effective on July 10, 2010, empowers the HLURB to hear and decide inter-association
and/or intra-association controversies or conflicts concerning homeowners associations. However, we cannot apply
the same in the present case as it involves a controversy between a condominium unit owner and a condominium
corporation.
- The term association as defined in the law covers homeowners associations of other residential real property which
is broad enough to cover a condominium corporation, it does not seem to be the legislative intent. A thorough review
of the deliberations of the bicameral conference committee would show that the lawmakers did not intend to extend
the coverage of the law to such kind of association.
- Condominium corporations are not covered by the amendment. Thus, the intra-corporate dispute between petitioner
and respondent is still within the jurisdiction of the RTC sitting as a special commercial court and not the HLURB. The
doctrine laid down by the Court in Chateau de Baie Condominium Corporation v. Moreno which in turn cited Wack Wack
Condominium Corporation, et al v. CA is still a good law.
- WHEREFORE, we hereby GRANT the petition and REVERSE the Court of Appeals Decision dated July 10, 2007 and
Resolution dated January 25, 2008 in CA-G.R. CV No. 86614. The Complaint before the Regional Trial Court of Makati
City, Branch 58, which is not a special commercial court, docketed as Civil Case No. 03-1018 is ordered DISMISSED for
lack of jurisdiction. Let the case be REMANDED to the Executive Judge of the Regional Trial Court of Makati City for reraffle purposes among the designated special commercial courts.

30 Russel vs. Vestil 304 SCRA 738


FACTS:
- On September 28, 1994, petitioners filed a complaint against private respondents, denominated "DECLARATION OF
NULLITY AND PARTITION," with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil Case No. MAN
2275
- The complaint, in substance, alleged that petitioners are co-owners of that parcel of land, Lot 6149 situated in Liloan,
Cebu and containing an area of 56,977.40 square meters, more or less.
- The land was previously owned by the spouses Casimero Tautho and Cesaria Tautho.
- Upon the death of said spouses, the property was inherited by their legal heirs, herein petitioners and private
respondents.

- The lot had remained undivided until petitioners discovered a public document denominated "DECLARATION OF
HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION," executed on June 6, 1990.
- By virtue of this deed, private respondents divided the property among themselves to the exclusion of petitioners
who are also entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho.
- Petitioners claimed that the document was false and perjurious as the private respondents were not the only heirs
and that no oral partition of the property whatsoever had been made between the heirs.
- The complaint prayed that the document be declared null and void and an order be issued to partition the land
among all the heirs.
- On November 24, 1994, private respondents filed a Motion to Dismiss the complaint on the ground of lack of
jurisdiction over the nature of the case as the total assessed value of the subject land is P5,000.00 which under section
33 (3) of Batas Pambansa Blg. 129, as amended by R.A. No. 7691, falls within the exclusive jurisdiction of the Municipal
Circuit Trial Court of Liloan, Compostela.
- Petitioners filed an Opposition to the Motion to Dismiss saying that the Regional Trial Court has jurisdiction over the
case since the action is one which is incapable of pecuniary estimation within the contemplation of Section 19(l) of B.P.
129, as amended.
- On January 12, 1995, the respondent judge issued an Order granting the Motion to Dismiss.
- A Motion for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging that the same is
contrary to law because their action is not one for recovery of title to or possession of the land but an action to annul a
document or declare it null and void, hence, one incapable of pecuniary estimation failing within the jurisdiction of the
Regional Trial Court. Private respondents did not oppose the motion for reconsideration.
- On February 13, 1995, the respondent judge issued another Order denying the motion for reconsideration.
ISSUE:
W/n the Regional Trial Court has jurisdiction to entertain Civil Case No. MAN-2275.
HELD:
- The complaint filed before the Regional Trial Court is doubtless one incapable of pecuniary estimation and therefore
within the jurisdiction of said court.
- In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court
has adopted the criterion of first ascertaining the nature of the principal action or remedy sought.
- If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the
claim.
- However, where the basic issue is something other than the right to recover a sum of money, where the money claim
is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of
first instance (now Regional Trial Courts).
- It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the
allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all
or some of the claims asserted therein.
- WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil Case No. MAN-2275,
as well as the Order denying the motion for reconsideration of said Order, is SET ASIDE.