1

EVANGELISTA V. SANTIAGO
457 SCRA 744
[G.R. No. 157447. April 29, 2005]
NEMENCIO
C.
EVANGELISTA,
PASCUAL G. QUINTO, LUIS
B. BUENA, EUSEBIA V.
TABLADA,
CANUTO
G.
TISBE, DAVID R. CARULLO,
SOFONIAS E. COLEGADO,
FELIX B. BUENA, TORIBIO
C.
EVANGELISTA,
LEBRADA
A.
NICOLAS,
ALECIA J. RAMOS, MILA G.
DE LOS REYES, SALVADOR
I. DE LA TORRE, MOISES
CRUZ, RUFINO INFANTE,
ALICIA
ASTROLOGO,
TRINIDAD
LUMIQUED,
LUZMINIDA QUINIQUINI, &
TEODORA
C.
TEMERAS, petitioners,
vs. CARMELINO
M.
SANTIAGO, respondent.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review under
Rule 45 of the Rules of Court,
petitioners pray for the reversal of the
Decision of the Court of Appeals in CAG.R. CV No. 64957,[1] affirming the
Order of the Regional Trial Court (RTC)
of San Mateo, Rizal, Branch 77, in Civil
Case
No.
1220,[2] dismissing
petitioners Complaint for declaration
of nullity of Original Certificate of Title
(OCT) No. 670 and all other titles
emanating therefrom.
In their Complaint, petitioners
alleged that they occupied and
possessed parcels of land, located in
Sitio
Panayawan,
Barangay
San
Rafael, Montalban (now Rodriquez),
Province of Rizal (Subject Property), by
virtue of several Deeds of Assignment,
dated 15 April 1994 and 02 June 1994,
executed by a certain Ismael Favila y
Rodriguez.[3]
According to the Deeds of
Assignment, the Subject Property was
part of a vast tract of land called
Hacienda Quibiga, which extended to
Paraaque,
Las
Pias,
Muntinlupa,
Cavite, Batangas, Pasay, Taguig,
Makati, Pasig, Mandaluyong, Quezon
City, Caloocan, Bulacan, and Rizal;

awarded
to
Don
Hermogenes
Rodriguez by the Queen of Spain and
evidenced by a Spanish title. Ismael
Favila claimed to be one of the heirs
and successors-in-interest of Don
Hermogenes Rodriguez. Acting as
Attorney-in-Fact pursuant to a Special
Power of Attorney executed by
his mga kapatid on 25 February 1965,
Ismael
Favila
signed
the
aforementioned Deeds of Assignment,
assigning portions of the Subject
Property to the petitioners, each
portion measuring around 500 to
1,000 square meters, in exchange for
the labor and work done on the
Subject Property by the petitioners
and their predecessors.[4]
Petitioners came by information
that respondent was planning to evict
them from the Subject Property. Two of
the petitioners had actually received
notices to vacate. Their investigations
revealed that the Subject Property
was included in Transfer Certificates of
Titles (TCTs) No. 53028, No. 281660,
No. N-39258 and No. 205270, all
originating from OCT No. 670, and
now in the name of respondent.[5]
OCT No. 670 was issued in the
name of respondents mother, Isabel
Manahan y Francisco, and three other
individuals, pursuant to Decree No.
10248, dated 13 February 1913, in
Case No. 8502 of the Court of Land
Registration of the Philippine Islands.
The whole property covered by OCT
No. 670 was subsequently adjudicated
in favor of Isabel Manahan Santiago
(formerly Isabel Manahan y Francisco).
Consequently, OCT No. 670 was
cancelled and TCT No. T-53028 was
issued exclusively in the name of
Isabel Manahan Santiago. On 28
December 1968, Isabel Manahan
Santiago executed a Deed of Donation
transferring the property to her son,
respondent herein, who subsequently
secured TCTs No. 281660, No. N39258 and No. 205270 in his own
name.[6]
Petitioners filed with the trial
court, on 29 April 1996, an action for
declaration of nullity of respondents
certificates of title on the basis that
OCT No. 670 was fake and spurious.
Among the defects of OCT No. 670
pointed out by petitioners were that:
(1) OCT No. 670 was not signed by a
duly authorized officer; (2) Material

data therein were merely handwritten

and in different penmanships; (3) OCT
No. 670 was not printed on the Official
Form used in 1913, the year it was
issued; (4) It failed to indicate the
Survey Plan which was the basis of
the Technical Description of the
property covered by the title; (5)
Decree No. 10248 referred to in OCT
No. 670 was issued only on 11 April
1913, while OCT No. 670 was issued
earlier, on 13 February 1913; and (6)
Decree No. 10248 was issued over a
property other than the one described
in OCT No. 670, although also located
in the Province of Rizal.[7]
Respondent filed his Answer with
Prayer for Preliminary Hearing on the
Affirmative Defenses on 03 July 1996.
According
to
respondent,
[t]he
allegations in the Complaint would
readily and patently show that the
same are flimsy, fabricated, malicious,
without basis in law and in fact[8]
As
an
affirmative
defense,
respondent
claimed
that
the
petitioners had no legal capacity to
file the Complaint, and thus, the
Complaint stated no cause of action.
Since OCT No. 670 was genuine and
authentic on its face, then OCT No.
670 and all of respondents land titles
derived
therefrom,
are
incontrovertible,
indefeasible
and
conclusive against the petitioners and
the whole world.[9]
Citing the consolidated cases of
Director of Forestry, et al. v. Hon.
Emmanuel M. Muoz, et al. and
Pinagcamaligan
Indo-Agro
Development Corporation v. Hon.
Macario
Peralta,
Jr.,
et
al.,
[10]
respondent
argued
that
the
Spanish title, on which petitioners
based their claim, was neither
indefeasible
nor
imprescriptible.
Moreover, Presidential Decree (P.D.)
No. 892, which took effect on 16
February 1976, required all holders of
Spanish titles or grants to apply for
registration of their lands under
Republic Act No. 496, otherwise
known as the Land Registration Act,
[11]
within six months from effectivity
of the decree. After the given period,
Spanish titles could no longer be used
as evidence of land ownership in any
registration proceedings under the
Torrens System. [12]

2
Respondent also raised the
affirmative defense of prescription. He
pointed out that any action against his
certificates of title already prescribed,
especially with regard to OCT No. 670,
which was issued in 1913 or more
than 83 years prior to the filing of the
Complaint by the petitioners. At the
very least, respondent contended, it
must
be
presumed
that
the
questioned land titles were issued by
the public officials concerned in the
performance of their regular duties
and functions pursuant to the law.[13]
Even
assuming arguendo that
the petitioners entered and occupied
the Subject Property, they did so as
mere intruders, squatters and illegal
occupants, bereft of any right or
interest, since the Subject Property
was already covered by Torrens
certificates of title in the name of
respondent and his predecessors-ininterest.[14]
Lastly,
respondent
denied
knowing the petitioners, much less,
threatening to evict them. In fact,
petitioners were not included as
defendants in Civil Case No. 783
entitled, Carmelino M. Santiago v.
Remigio San Pascual, et al., which
respondent instituted before the same
trial court against squatters occupying
the Subject Property. In its decision,
dated 01 July 1992, the trial court held
that there is no doubt that the plaintiff
(respondent herein) is the owner of
the land involved in this case on which
the defendants have built their houses
and shanties Although the decision in
Civil Case No. 783 was appealed to
the Court of Appeals, it had become
final and executory for failure of the
defendants-appellants therein to file
their appellants brief.[15]
In the instant case, the trial court
held a preliminary hearing on the
affirmative defenses as prayed for by
the respondent. During said hearing,
petitioners
presented
their
lone
witness, Engineer Placido Naval, a
supposed expert on land registration
laws. In response to questions from
Honorable
Judge
Francisco
C.
Rodriguez of the trial court, Engineer
Naval answered that a parcel of land
titled illegally would revert to the
State if the Torrens title was cancelled,
and that it was the State, through the
Office of the Solicitor General, that

should file for the annulment or

cancellation of the title. Respondent,
on the other hand, did not present any
evidence but relied on all the
pleadings and documents he had so
far submitted to the trial court.[16]
After the preliminary hearing, the
trial court issued the questioned
Order, dated 05 February 1999,
dismissing
petitioners
Complaint.
Pertinent portions of the Order of the
trial court read:
After considering the testimonial and
documentary evidence presented, this
Court is inclined not to grant plaintiffs
(sic) prayer. Finding credence and
giving weight to plaintiffs (sic) lone
but expert witness, it is crystal clear
that, to quote:
1. a parcel of land
titled illegally
will revert to
the State
2. it is the State who
must file the
corresponding
case of
annulment of
title through the
Office of the
Solicitor
General, and
3. a land illegally
titled in the
name of private
individual, the
State through
the Office of the
Solicitor
General should
file the
corresponding
case for
cancellation of
title. (TSN
August 26,
1997).
The above quoted testimony is
straight from horse (sic) mouth so to
speak as this was the testimony of the
plaintiffs (sic) expert witness. And
judging from the said testimony alone
aforecited, plaintiffs (sic) cause [of
action] is bound to fail. Plaintiffs (sic)
own testimony wrote finis to their
case. From the record, this case was

initiated and filed by private

individuals, Nemencio Evangelista, et.
al., contradicting their witness (sic)
testimony. To reiterate, this Court finds
credence to the testimony of the
plaintiffs (sic) witness, i.e., is (sic) the
State through the Office of the
Solicitor General who must initiate
and file a case of this nature when
title to a land is being claimed to be
obtained through fraud and allegedly
spurious.
The opinion of this Court anent the
testimony of the witness is not without
basis. Explicit is the pronouncement of
the Supreme Court in the recent case
of Heirs of Marciano Nagano v. Court
of Appeals, to wit:
An action for reversion has to be
instituted by the Solicitor General
pursuant to Section 101,
Commonwealth Act No. 141. (282
SCRA 43).
As to the documentary evidence,
having gone through with the Deed of
Assignment/s purportedly executed by
and between a certain Ismael Favila y
Rodriguez and the plaintiffs, which is
the principal if not the only basis of
plaintiffs claim ownership and
possession of the subject parcel of
land, the same does not hold water in
a manner of speaking, for being selfserving. Assignor Ismael Favila y
Rodriguez claimed in said Deed that
he is the Attorney-in-Fact by virtue of
an alleged Special Power of Attorney
executed in his favor by his mga
kapatid on February 23, 1965, but said
Special Power of Attorney was not
presented before this Court, thus
there arises a doubt as to its existence
and execution not to mention doubt
on the existence of his mga kapatid
who as alleged executed said Special
Power Attorney (sic) in his favor.
Even if this Court granting arguendo
would admit the authenticity of said
Deeds of Assignment/s, that will not
alter the outcome of the pending
incident/s before this Court. Why?
Because the said Deed of
Assignment/s which were based on
Spanish title have lost their
evidentiary value pursuant to the
Presidential Decree No. 892 i.e.
DISCONTINUANCE OF THE SPANISH
MORTGAGE SYSTEM OF REGISTRATION
AND OF THE USE OF SPANISH TITLES

3
AS EVIDENCE IN LAND REGISTRATION
PROCEEDINGS.
There is no need to elaborate on the
above-cited provisions of PD 892 as
they are self-explanatory. Suffice it to
say that there is no showing, that
plaintiffs complied with the said law
i.e. to apply for registration of their
lands under Act No. 496, otherwise
known as the Land Registration Act,
within six (6) months from the
effectivity of this decree (February 16,
1976). Thereafter, Spanish titles
cannot be used as evidence of land
ownership in any registration
proceedings under the Torrens
System.
This being the case and likewise being
clear that plaintiffs were not the lawful
owners of the land subject of this
case, for they did not comply with PD
892, the said plaintiffs do not have the
legal standing to bring before this
Court the instant complaint
Moreover, the principal issue in this
case is for the declaration of nullity of
defendants title, which has nothing to
do with plaintiffs (sic) claim of
ownership and possession even if we
set aside, albeit momentarily, the
truth that plaintiffs (sic) claim were
based on barred Spanish Title/s, and
thus plaintiffs were never the owners
of the parcel of land subject of this
case.
Further, defendants (sic) title
especially so with the mother title OCT
670 was entered and issued in 1913
or more than Eighty Three (83) years
ago, the same not having been
questioned by any party. Only now
that it is being questioned, but sad to
say, plaintiffs who are on the offensive
and relying on their lone expert
witness, instead of bolstering their
case, unwittingly sealed their fate [17]
After the trial court denied
petitioners Motion for Reconsideration
in its Order, dated 20 July 1999,
[18]
petitioners appealed both Orders of
the trial court to the Court of Appeals.
The Court of Appeals, in its
Decision,
dated
29
July
2002,
[19]
affirmed the Order of the trial
court, dated 05 February 1999,
dismissing petitioners Complaint. The

Court of Appeals denied petitioners

Motion for Reconsideration in its
Resolution, dated 14 February 2003.[20]

file the Complaint, and thus, the

Complaint filed before the trial court
stated no cause of action.

Thus,
petitioners
filed
this
Petition for Review [21] under Rule 45 of
the Rules of Court, raising the
following issues and praying for the
reversal
of
the
aforementioned
Decision of the Court of Appeals
affirming the Order of dismissal of the
trial court:

Before anything else, it should

be clarified that the plaintiff has no
legal capacity to sue[23] and the
pleading asserting the claim states no
cause of action[24] are two different
grounds for a motion to dismiss or are
two different affirmative defenses.
Failure to distinguish between the lack
of legal capacity to sue from the lack
of personality to sue is a fairly
common mistake. The difference
between the two is explained by this
Court in Columbia Pictures, Inc. v.
Court of Appeals:[25]

I. Whether the lower courts

dismissal of the petitioners
complaint should be
proscribed by the rules of
evidence it being
based inter alia on Engr.
Navals testimony, which
was indisputably not based
on facts but conclusion of
law.
II. Whether the lower courts
dismissal of petitioners
complaint should be
proscribed by the rules of
evidence it being
done sans ample evidence
except bare allegations of
respondent.
III. Whether the provision of P.D.
892, i.e., Spanish titles
cannot be used as
evidence of land ownership
in any registration
proceedings under the
Torrens system, holds of an
exception.
IV. Whether an action for
quieting of title, specifically
where petitioners are in
possession of subject land,
can be subject of
prescription.
In
his
Comment,[22] the
respondent, for the most part,
reiterated the findings of the trial
court and the Court of Appeals.
The Court believes that the trial
court rightfully dismissed petitioners
Complaint, but for reasons different
from those relied upon by the trial
court and the Court of Appeals.
According to the respondent,
petitioners had no legal capacity to

Among the grounds for a motion to

dismiss under the Rules of Court are
lack of legal capacity to sue and that
the complaint states no cause of
action. Lack of legal capacity to sue
means that the plaintiff is not in the
exercise of his civil rights, or does not
have the necessary qualification to
appear in the case, or does not have
the character or representation he
claims. On the other hand, a case is
dismissible for lack of personality to
sue upon proof that the plaintiff is not
the real party-in-interest, hence
grounded on failure to state a cause of
action. The term "lack of capacity to
sue" should not be confused with the
term "lack of personality to sue."
While the former refers to a plaintiffs
general disability to sue, such as on
account of minority, insanity,
incompetence, lack of juridical
personality or any other general
disqualifications of a party, the latter
refers to the fact that the plaintiff is
not the real party- in-interest.
Correspondingly, the first can be a
ground for a motion to dismiss based
on the ground of lack of legal capacity
to sue; whereas the second can be
used as a ground for a motion to
dismiss based on the fact that the
complaint, on the face thereof,
evidently states no cause of action.
In the present case, this Court
may assume that the respondent is
raising the affirmative defense that
the Complaint filed by the petitioners
before the trial court stated no cause
of action because the petitioners
lacked the personality to sue, not
being the real party-in-interest. It is
the respondents contention that only

4
the State can file an action for
annulment of his certificates of title,
since such an action will result in the
reversion of the ownership of the
Subject Property to the State.
The affirmative defense that the
Complaint stated no cause of action,
similar to a motion to dismiss based
on the same ground, requires
a hypothetical admission of the
facts alleged in the Complaint. In the
case
of Garcon
v.
Redemptorist
Fathers,[26] this Court laid down the
rules as far as this ground for
dismissal of an action or affirmative
defense is concerned:
It is already well-settled by now that,
in a motion to dismiss a complaint
based on lack of cause of action, the
question submitted to the court for
determination is the sufficiency of the
allegations of fact made in the
complaint to constitute a cause of
action, and not on whether these
allegations of fact are true, for said
motion must hypothetically admit the
truth of the facts alleged in the
complaint; that the test of the
sufficiency of the facts alleged in the
complaint is whether or not, admitting
the facts alleged, the court could
render a valid judgment upon the
same in accordance with the prayer of
said complaint. Stated otherwise, the
insufficiency of the cause of action
must appear in the face of the
complaint in order to sustain a
dismissal on this ground, for in the
determination of whether or not a
complaint states a cause of action,
only the facts alleged therein and no
other matter may be considered, and
the court may not inquire into the
truth of the allegations, and find them
to be false before a hearing is had on
the merits of the case; and it is
improper to inject in the allegations of
the complaint facts not alleged or
proved, and use these as basis for
said motion.
In resolving whether or not the
Complaint in the present case stated a
cause of action, the trial court should
have limited itself to examining the
sufficiency of the allegations in the
Complaint. It was proscribed from
inquiring into the truth of the
allegations in the Complaint or the
authenticity of any of the documents
referred or attached to the Complaint,

since these are deemed hypothetically

admitted by the respondent. The trial
court evidently erred in making
findings as to the authenticity of the
Deeds of Assignment executed by
Ismael Favila in favor of petitioners on
15 April 1994 and 02 June 1994; and
questioning
the
existence
and
execution of the Special Power of
Attorney in favor of said Ismael Favila
by his siblings on 25 February 1965.
These matters may only be resolved
after a proper trial on the merits.
Petitioners
alleged
in
their
Complaint,
and
respondent
hypothetically admitted that: (1)
Petitioners predecessors-in-interest, in
the concept of owners, had been in
actual, physical, open, continuous and
adverse possession of the Subject
Property against the whole world since
time immemorial; (2) The Subject
Property was part of the vast tract of
land called Hacienda Quibiga awarded
to Don Hermogenes Rodriguez by the
Queen of Spain by virtue of a Spanish
title; (3) Ismael Favila, an heir and
successor-in-interest
of
Don
Hermogenes Rodriguez, acting as
Attorney-in-Fact pursuant to a Special
Power of Attorney executed by
his mga kapatid on 25 February 1965,
executed
Deeds
of
Assignment
covering the Subject Property in favor
of petitioners; (4) Petitioners still
occupied and possessed the Subject
Property, on which their houses were
erected, when they discovered that
the Subject Property was already
covered by Torrens certificates of title
in the name of respondent; and (5)
That petitioners filed the Complaint to
prevent
their
eviction
by
the
respondent. To determine whether
these allegations are sufficient to
constitute a cause of action, it is
important for this Court to establish
first the nature of petitioners action.
Indeed, petitioners Complaint
filed before the trial court was
captioned as an action for declaration
of nullity of respondents certificates of
title. However, the caption of the
pleading should not be the governing
factor, but rather the allegations
therein should determine the nature of
the action, because even without the
prayer for a specific remedy, the
courts may nevertheless grant the
proper relief as may be warranted by
the facts alleged in the Complaint and
the evidence introduced.[27]

The trial court believed that

petitioners action was ultimately one
for reversion of the Subject Property
to the public domain. Based on the
testimony of Engineer Naval and the
case of Nagao v. Court of Appeals,[28] it
declared that the State, represented
by the Office of the Solicitor General,
is the party-in-interest in an action for
cancellation of a certificate of title
illegally issued in the name of a
private
individual,
because
the
eventual effect of such cancellation is
the reversion of the property to the
State.
The Court disagrees in this
pronouncement of the trial court, and
calls for a far closer review of its
decision in Nagao v. Court of Appeals,
[29]
wherein the Court held that
It is then clear from the allegations in
the complaint that private
respondents claim ownership of the
2,250 square meter portion for having
possessed it in the concept of an
owner, openly, peacefully, publicly,
continuously and adversely since
1920. This claim is an assertion that
the lot is private land, or that even
assuming it was part of the public
domain, private respondents had
already acquired imperfect title
thereto under Section 48(b) of C.A.
No. 141, otherwise known as the
Public Land Act, as amended by R.A.
No. 1942
Under Section 48, a subject lot is, for
all legal intents and purposes,
segregated from the public domain,
because the beneficiary is
conclusively presumed to have
performed all the conditions essential
to a Government grant and shall be
entitled to a certificate of title under
the provisions of this chapter.
Consequently, merely on the basis of
the allegations in the complaint, the
lot in question is apparently beyond
the jurisdiction of the Director of the
Bureau of Lands and could not be the
subject of a Free Patent. Hence,
dismissal of private respondents
complaint was premature and trial on
the merits should have been
conducted to thresh out evidentiary
matters.
It would have been entirely different if
the action were clearly for reversion,

5
in which case, it would have to be
instituted by the Solicitor General
pursuant to Section 101 of C.A. No.
141, which provides:
Sec. 101. All actions for the reversion
to the Government of lands of the
public domain or improvements
thereon shall be instituted by the
Solicitor General or the officer acting
in his stead, in the proper courts, in
the name of the [Republic] of the
Philippines.
In the more recent case of Heirs
of Ambrocio Kionisala v. Heirs of
Honorio
Dacut,[30] the
difference
between an action for declaration of
nullity of land titles from an action for
reversion
was
more
thoroughly
discussed as follows:
An ordinary civil action for declaration
of nullity of free patents and
certificates of title is not the same as
an action for reversion. The difference
between them lies in the allegations
as to the character of ownership of
the realty whose title is sought to be
nullified. In an action for reversion, the
pertinent allegations in the complaint
would admit State ownership of the
disputed land. Hence, in Gabila vs.
Barriga [41 SCRA 131], where the
plaintiff in his complaint admits that
he has no right to demand the
cancellation or amendment of the
defendants title because even if the
title were canceled or amended the
ownership of the land embraced
therein or of the portion affected by
the amendment would revert to the
public domain, we ruled that the
action was for reversion and that the
only person or entity entitled to relief
would be the Director of Lands.
On the other hand, a cause of action
for declaration of nullity of free patent
and certificate of title would require
allegations of the plaintiffs ownership
of the contested lot prior to the
issuance of such free patent and
certificate of title as well as the
defendants fraud or mistake, as the
case may be, in successfully obtaining
these documents of title over the
parcel of land claimed by plaintiff. In
such a case, the nullity arises strictly
not from the fraud or deceit but from
the fact that the land is beyond the
jurisdiction of the Bureau of Lands to
bestow and whatever patent or

certificate of title obtained therefore is

consequently void ab initio. The real
party-in-interest is not the State but
the plaintiff who alleges a pre-existing
right of ownership over the parcel of
land in question even before the grant
of title to the defendant
In their Complaint, petitioners
never alleged that the Subject
Property was part of the public
domain. On the contrary, petitioners
asserted title over the Subject
Property by virtue of their actual,
physical,
open,
continuous
and
adverse possession thereof, in the
concept of owners, by themselves and
through their predecessors-in-interest,
since time immemorial. The Deeds of
Assignment executed in their favor
and attached to their Complaint
referred to a Spanish title granted by
the Queen of Spain
to their
predecessor-in-interest,
Don
Hermogenes
Rodriguez.
Clearly,
petitioners are asserting private title
over the Subject Property, and
consequently, their action could not
be one for reversion.
In
their
instant
Petition,
petitioners further averred that rather
than an action for nullity of
respondents certificates of title, theirs
was more appropriately an action to
remove a cloud on or to quiet their
title over the Subject Property.
Article 476 of the Civil Code, on
removal of a cloud on or quieting of
title, provides that:
Art. 476. Whenever there is a cloud on
title to real property or any interest
therein, by reason of any instrument,
record, claim, encumbrance or
proceeding which is apparently valid
or effective but is in truth and in fact
invalid, ineffective, voidable, or
unenforceable, and may be prejudicial
to said title, an action may be brought
to remove such cloud or to quiet the
title.
An action may also be brought to
prevent a cloud from being cast upon
title to real property or any interest
therein.
Respondents certificates of title
over the Subject Property appeared
valid or effective; but according to the

petitioners, they were fake, spurious

and/or fraudulent, and a cloud on their
title to the same property that needed
to be removed. A cloud on title has
been defined as follows:
Cloud on Title. A cloud on title is an
outstanding instrument, record, claim,
encumbrance or proceeding which is
actually invalid or inoperative, but
which may nevertheless impair or
affect injuriously the title to property.
The matter complained of must have
a prima facie appearance of validity or
legal efficacy. The cloud on title is a
semblance of title which appears in
some legal form but which is in fact
unfounded. The invalidity or
inoperativeness of the instrument is
not apparent on the face of such
instrument, and it has to be proved by
extrinsic evidence[31]
Even as this Court agrees with
the petitioners that their action was
one for removal of a cloud on or
quieting of title, it does arrive at the
same conclusion as the trial court and
the Court of Appeals that petitioners
had no personality to file the said
action, not being the parties-ininterest, and their Complaint should
be dismissed for not stating a cause of
action.
According to Article 477 of the
Civil Code, the plaintiff, in an action to
remove a cloud on or to quiet title,
must have legal or equitable title to,
or interest in, the real property which
is the subject matter of the action.
[32]
Petitioners failed to establish in
their Complaint that they had any
legal or equitable title to, or legitimate
interest in, the Subject Property so as
to justify their right to file an action to
remove a cloud on or to quiet title.
Title to real property refers to
that upon which ownership is based. It
is the evidence of the right of the
owner or the extent of his interest, by
which means he can maintain control
and, as a rule, assert right to exclusive
possession and enjoyment of the
property.[33]
In their Complaint, petitioners
claimed title to the Subject Property
by virtue of their actual and
continuous possession of the same
since time immemorial, by themselves
and through their predecessors-in-

6
interest. Yet, the Deeds of Assignment
executed by Ismael Favila in their
favor, attached to and an integral part
of their Complaint, revealed that
petitioners
predecessors-in-interest
based their right to the Subject
Property on the Spanish title awarded
to Don Hermogenes Rodriguez.
There existed a contradiction
when petitioners based their claim of
title to the Subject Property on their
possession
thereof
since
time
immemorial, and at the same time, on
the Spanish title granted to Don
Hermogenes Rodriguez. Possession
since time immemorial carried the
presumption that the land had never
been part of the public domain or
that it had been private property
even
before
the
Spanish
conquest.[34] If the Subject Property
was already private property before
the Spanish conquest, then it would
have been beyond the power of the
Queen of Spain to award or grant to
anyone.
The title to and possession of the
Subject
Property
by
petitioners
predecessors-in-interest
could
be
traced only as far back as the Spanish
title of Don Hermogenes Rodriguez.
Petitioners, having acquired portions
of
the
Subject
Property
by
assignment, could acquire no better
title to the said portions than their
predecessors-in-interest, and hence,
their title can only be based on the
same Spanish title.
Respondent maintained that P.D.
No. 892 prevents petitioners from
invoking the Spanish title as basis of
their ownership of the Subject
Property. P.D. No. 892 strengthens the
Torrens system by discontinuing the
system of registration under the
Spanish Mortgage Law, and by
categorically
declaring
all
lands
recorded under the latter system, not
yet
covered
by
Torrens
title,
unregistered lands. It further provides
that within six months from its
effectivity, all holders of Spanish titles
or grants should apply for registration
of their land under what is now P.D.
No. 1529, otherwise known as the
Land Registration Decree. Thereafter,
Spanish titles can no longer be used
as evidence of land ownership in any
registration proceedings under the
Torrens system. [35] Indubitably, P.D.

No. 892 divests the Spanish titles of

any legal force and effect in
establishing ownership over real
property.
P.D. No. 892 became effective on
16 February 1976. The successors of
Don Hermogenes Rodriguez had only
until 14 August 1976 to apply for a
Torrens title in their name covering
the Subject Property. In the absence of
an allegation in petitioners Complaint
that
petitioners
predecessors-ininterest complied with P.D. No. 892,
then it could be assumed that they
failed to do so. Since they failed to
comply with P.D. No. 892, then the
successors
of
Don
Hermogenes
Rodriguez were already enjoined from
presenting the Spanish title as proof of
their ownership of the Subject
Property in registration proceedings.
Registration proceedings under
the Torrens system do not create or
vest title, but only confirm and record
title already created and vested.[36] By
virtue of P.D. No. 892, the courts, in
registration proceedings under the
Torrens system, are precluded from
accepting, confirming and recording a
Spanish
title.
Reason
therefore
dictates that courts, likewise, are
prevented
from
accepting
and
indirectly confirming such Spanish title
in some other form of action brought
before them (i.e., removal of cloud on
or quieting of title), only short of
ordering its recording or registration.
To rule otherwise would open the
doors to the circumvention of P.D. No.
892, and give rise to the existence of
land titles, recognized and affirmed by
the courts, but would never be
recorded under the Torrens system of
registration. This would definitely
undermine the Torrens system and
cause confusion and instability in
property ownership that P.D. No. 892
intended to eliminate.
Petitioners argued that the
Spanish title may still be presented as
proof of ownership on the basis of the
exception provided in the fourth
whereas clause of P.D. No. 892, which
reads:
WHEREAS, Spanish titles to lands
which have not yet been brought
under the operation of the Torrens
system, being subject to prescription,
are now ineffective to prove

ownership unless accompanied by

proof of actual possession; . . .
Since Petitioners alleged that they
were in actual possession of the
Subject Property, then they could still
present the Spanish title as evidence
of their ownership of the Subject
Property. [37]
This
Court
cannot
sustain
petitioners argument. Actual proof of
possession only becomes necessary
because, as the same whereas clause
points out, Spanish titles are subject
to prescription. A holder of a Spanish
title may still lose his ownership of the
real property to the occupant who
actually possesses the same for the
required
prescriptive
period.
[38]
Because of this inherent weakness
of a Spanish title, the applicant for
registration of his Spanish title under
the Torrens system must also submit
proof that he is in actual possession of
the real property, so as to discount
the possibility that someone else has
acquired a better title to the same
property by virtue of prescription.
Moreover, legislative intent must
be ascertained from a consideration of
the statute as a whole, and not just a
particular provision alone. A word or
phrase taken in the abstract may
easily convey a meaning quite
different from the one actually
intended and evident when the word
or phrase is considered with those
with which it is associated. An
apparently general provision may
have a limited application if read
together with other provisions of the
statute.[39]
The fourth whereas clause of P.D.
No. 892 should be interpreted and
harmonized with the other provisions
of the whole statute.[40] Note that the
tenor of the whole presidential decree
is to discontinue the use of Spanish
titles and to strip them of any
probative value as evidence of
ownership. It had clearly set a
deadline for the filing of applications
for registration of all Spanish titles
under the Torrens system (i.e., six
months from its effectivity or on 14
August 1976), after which, the
Spanish titles may no longer be
presented to prove ownership.

7
All holders of Spanish titles
should have filed applications for
registration of their title on or before
14 August 1976. In a land registration
proceeding, the applicant should
present to the court his Spanish title
plus proof of actual possession of the
real property. However, if such land
registration proceeding was filed and
initiated after 14 August 1976, the
applicant could no longer present his
Spanish title to the court to evidence
his ownership of the real property,
regardless of whether the real
property was in his actual possession.

1999,
dismissing
petitioners
Complaint for failure to state a cause
of action.

Therefore,
the
fact
that
petitioners were in actual possession
of the Subject Property when they
filed the Complaint with the trial court
on 29 April 1996 does not exclude
them from the application of P.D. No.
892, and their Spanish title remain
inadmissible as evidence of their
ownership of the Subject Property,
whether in a land registration
proceeding or in an action to remove a
cloud on or to quiet title.

G.R. No. 161065. April 15, 2005]

The preceding discussion does

not bar holders of Spanish titles from
claiming ownership of the real
property on some other basis, such as
those provided in either the Land
Registration Decree[41] or the Public
Land Act.[42]Petitioners though failed to
allege any other basis for their titles in
their Complaint aside from possession
of the Subject Property from time
immemorial, which this Court has
already controverted; and the Spanish
title, which is already ineffective to
prove ownership over the Subject
Property.
Therefore, without legal or
equitable title to the Subject Property,
the petitioners lacked the personality
to file an action for removal of a cloud
on, or quieting of, title and their
Complaint was properly dismissed for
failing to state a cause of action. In
view of the dismissal of the case on
this ground, it is already unnecessary
for this Court to address the issue of
prescription of the action.
Wherefore, this Court DENIES the
instant petition and AFFIRMS the
Decision of the Court of Appeals,
dated 29 July 2002, and the Order of
the Regional Trial Court of San Mateo,
Rizal, Branch 77, dated 05 February

SO ORDERED.
Puno,
Martinez,
JJ., concur.

(Chairman),
AustriaCallejo,
Sr., and Tinga,

DOMINGO V. CARAGUE, 456

SCRA 744 (2005)

EUFEMIO C. DOMINGO, CELSO D.

GANGAN,
PACASIO
S.
BANARIA, SOFRONIO B.
URSAL, ALBERTO P. CRUZ,
MARIA L. MATIB, RACHEL
U. PACPACO, ANGELO G.
SANCHEZ, and SHERWIN
A.
SIPAN, petitioners, vs. HON.
GUILLERMO N. CARAGUE,
in
his
capacity
as
Chairman, Commission on
Audit, HON. EMMANUEL
M. DALMAN and HON.
RAUL C. FLORES, in their
capacities
as
Commissioners,
Commission
on
Audit, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Judicial power is the power to
hear and decide cases pending
between parties who have the right to
sue in courts of law and equity.
[1]
Corollary to this dictum is the
principle of locus standi of a litigant.
He who is directly affected and whose
interest is immediate and substantial
has the standing to sue. Thus, a party
must show a personal stake in the
outcome of the case or an injury to
himself that can be redressed by a
favorable decision in order to warrant
an invocation of the courts jurisdiction
and justify the exercise of judicial
power on his behalf.
Assailed
in
this
petition
for certiorari is
the
legality
of
Resolution No. 2002-05 of the

Commission on Audit (COA) providing

for Organizational Restructuring Plan.
The above-named petitioners basically
alleged therein that this Plan is
intrinsically void for want of an
enabling law authorizing COA to
undertake the same and providing for
the necessary standards, conditions,
restrictions, limitations, guidelines,
and parameters. Petitioners further
alleged
that
in
initiating
such
Organizational
Restructuring
Plan
without
legal
authority,
COA
committed grave abuse of discretion
amounting to lack or excess of
jurisdiction.
At this point, it is pertinent to
state that the COA is a quasi-judicial
body and that its decision, order or
ruling may be brought to the Supreme
Court on certiorari by the aggrieved
party.[2]
Petitioners Eufemio C. Domingo,
Celso C. Gangan, Pascasio S. Banaria
are retired Chairmen, while Sofronio B.
Ursal, and Alberto P. Cruz are retired
Commissioners of COA. All claim to
maintain
a deep-seated
abiding
interest in the affairs of COA,
[3]
especially in its Organizational
Restructuring Plan, as concerned
taxpayers.
The
other
petitioners
are
incumbent officers or employees of
COA. Maria L. Matib and Angelo G.
Sanchez are State Auditor III and State
Auditor II, respectively, assigned to
the Cordillera Administrative Region
(CAR). Prior to the implementation of
the questioned COA Organizational
Restructuring Plan, they were Resident
Auditors and later Audit Team Leaders.
Petitioner Rachel U. Pacpaco is a State
Auditor III assigned to CAR and a Team
Supervisor, while petitioner Sherwin A.
Sipi-an is a State Auditor I also
assigned at the CAR. These petitioners
claim that they were unceremoniously
divested of their designations/ranks as
Unit Head, Team Supervisor, and Team
Leader upon implementation of the
COA Organizational Restructuring Plan
without just cause and without due
process, in violation of Civil Service
Law. Moreover, they were deprived of
their respective Representation and
Transportation
Allowances
(RATA),
thus causing them undue financial
prejudice.

8
Petitioners now invoke this
Courts judicial power to strike down
the COA Organizational Restructuring
Plan for being unconstitutional or
illegal.
Initially, for our resolution is the
issue of whether petitioners have the
legal standing to institute the instant
petition.
Petitioners invoke our ruling
in Chavez v. Public Estates Authority,
[4]
Agan, Jr. v. Philippine International
Air
Terminals
Co.,
Inc.,
[5]
and Information
Technology
Foundation of the Philippines v.
Commission on Elections[6]that where
the subject matter of a case is a
matter of public concern and imbued
with public interest, then this fact
alone gives them legal standing to
institute
the
instant
petition.
Petitioners contend that the COA
Organizational Restructuring Plan is
not just a mere reorganization but a
revamp or overhaul of the COA, with a
spillover
effect
upon
its
audit
performance. This will have an impact
upon the rest of the government
bodies subject to its audit supervision,
thus, should be treated as a matter of
transcendental
importance.
Consequently,
petitioners
legal
standing should be recognized and
upheld.
Respondents, through the Office
of the Solicitor General (OSG), counter
that petitioners have no legal standing
to file the present petition since
following our ruling in Kilusang Mayo
Uno Labor Center v. Garcia, Jr.,[7] they
have not shown a personal stake in
the outcome of the case or an actual
or potential injury that can be
redressed by our favorable decision.
Petitioners themselves admitted that
they do not seek any affirmative relief
nor
impute
any
improper
or
improvident act against the said
respondents and are not motivated by
any desire to seek affirmative relief
from COA or from respondents that
would redound to their personal
benefit or gain. It is clear then that
petitioners failed to show any present
substantial interest in the outcome of
this case, citing Kilosbayan v. Morato.
[8]
Nor may petitioners claim that as
taxpayers, they have legal standing
since nowhere in their petition do they
claim that public funds are being

spent in violation of law or that there

is a misapplication of the taxpayers
money, as we ruled in Dumlao v.
Comelec.[9]
Petitioners reliance upon our
rulings
in Chavez,[10] Agan,
Jr.,
[11]
and Information
Technology
Foundation[12] is flawed.
In Chavez, we ruled that the
petitioner has legal standing since he
is a taxpayer and his purpose in filing
the petition is to compel the Public
Estate Authority (PEA) to perform its
constitutional duties with respect to:
(a) the right of the citizens to
information on matters of public
concern; and (b) the application of a
constitutional provision intended to
insure the equitable distribution of
alienable lands of the public domain
among Filipino citizens. The thrust of
the first is to compel PEA to disclose
publicly information on the sale of
Government lands worth billions of
pesos,
as
mandated
by
the
Constitution and statutory law. The
thrust of the second is to prevent PEA
from alienating hundreds of hectares
of alienable lands of the public
domain, thereby compelling it to
comply with a constitutional duty to
the nation. We held that these matters
are
of
transcendental
public
importance.[13]
In Agan, Jr.,
we
held
that
petitioners have legal standing as
they have a direct and substantial
interest
to
protect.
By
the
implementation
of
the
PIATCO
contracts, they stand to lose their
source of livelihood, a property right
zealously
protected
by
the
Constitution. Such financial prejudice
on their part is sufficient to confer
upon them the requisite locus standi.
[14]

In Information
Technology
Foundation, there were two reasons
why
petitioners
standing
was
recognized. First, the nations political
and economic future virtually hangs in
the balance, pending the outcome of
the 2004 elections. Accordingly, the
award for the automation of the
electoral process was a matter of
public concern, imbued with public
interest.
Second,
the
individual
petitioners, as taxpayers, asserted a

material interest in seeing to it that

public funds are properly used.
Here, petitioners have not shown
any direct and personal interest in
the COA Organizational Restructuring
Plan. There is no indication that they
have sustained or are in imminent
danger of sustaining some direct
injury
as
a
result
of
its
implementation. In fact, they admitted
that they do not seek any affirmative
relief nor impute any improper or
improvident
act
against
the
respondents and are not motivated by
any desire to seek affirmative relief
from COA or from respondents that
would redound to their personal
benefit or gain. Clearly, they do not
have any legal standing to file the
instant suit.
We are well aware of the
averments
of
petitioners
Matib,
Pacpaco, Sanchez, and Sipi-An that
they
were
demoted
and
unceremoniously divested of their
previous designations as Unit Head,
Team Supervisor, or Team Leader; that
they were deprived of their RATA; that
they were relegated to being mere
Team Members, entitled to only a
reimbursable
transportation
allowance; and that they were denied
due process.
Such averments lack merit.
Actually, they were not demoted.
Under Section 11, Rule VII of the
Omnibus Rules Implementing Book V
of the Administrative Code of 1987, a
demotion is the movement from one
position to another involving the
issuance of an appointment with
diminution in duties, responsibilities,
status, or rank which may or may not
involve
reduction
in
salary.[15] A
demotion by assigning an employee to
a lower position in the same service
which
has
a
lower
rate
of
compensation
is
tantamount
to
removal, if no cause is shown for it.[16]
Here, there have been no new
appointments
issued
to
Matib,
Pacpaco, Sanchez, and Sipi-An under
the COA Organizational Restructuring
Plan. Thus, their contention that they
have been demoted is baseless.
Moreover, the change in their
status from COA auditors (receiving
monthly RATA) to COA auditors

9
(receiving only reimbursable RATA)
cannot be attributed to the COA
Organizational Restructuring Plan but
to the implementation of the Audit
Team Approach (ATAP), pursuant to
COA Resolution No. 96-305 dated April
16, 1996.
Under the ATAP, an audit team,
not a resident auditor, is deployed to
conduct an audit. An audit team may
be composed of two (2) or more
members under an Audit Team Leader.
Whenever practicable, an Audit Team
Supervisor supervises at least three
(3) audit teams. The composition of an
audit team is not permanent. Hence,
an Audit Team Member may be
designated or assigned as an Audit
Team Leader for one assignment and
subsequently as a Team Member in
another engagement. The designation
depends upon the position or rank of
the one who is designated as an Audit
Team Leader. Thus, a State Auditor III
who may have been assigned as an
Audit Team Leader in one engagement
may find himself relegated to being an
Audit Team Member in another
engagement, if a State Auditor IV or
State Auditor V is designated as the
Audit Team Leader.
Pursuant
to
the
COA
Organizational Restructuring Plan, the
COA issued Memorandum No. 2002034[17] providing for the guidelines
regarding the payment of RATA, thus:
1.

All holders of State

Auditor IV position shall
be entitled to fixed
commutable
RATA
wherever
they
are
assigned.

2. Henceforth, only State

Auditors IV shall be
assigned as new Unit
Heads or Team Leaders.
3.

State Auditors below

State
Auditor
IV
assigned as Unit Heads
or Team Leaders who
have been receiving
fixed
RATA
shall
continue
to
be
designated as such and
to receive the RATA until
relieved
of
the
designation
for
incompetence,

inefficiency,
misconduct.

or

All others who collect RATA on

reimbursable basis, including those
paid on a daily basis under COA
Resolution No. 99-007 dated June 7,
1999, are likewise entitled thereto.
Matib, Pacpaco, Sanchez, and
Sipi-An are not qualified to be Audit
Team Leaders or to receive fixed
monthly RATA since none of them
holds the rank or position of State
Auditor IV. But this does not mean that
they are not entitled to receive
reimbursable RATA if they are
designated as Audit Team Leaders. It
is clear from the text of the said COA
Memorandum that the principle of
non-diminution of benefits has been
upheld.
Thus, in the implementation of
the COA Organizational Restructuring
Plan, we fail to see how petitioners
could have sustained personal injury
as they have not shown to have a
personal stake therein. Accordingly,
they are wanting in legal standing to
institute
the
instant
petition.
Corollarily, we find no reason to delve
into the constitutionality or legality of
the COA Organizational Restructuring
Plan.
WHEREFORE, the petition is
DISMISSED. No pronouncement as to
costs.
SO ORDERED.
Davide,
Jr.,
C.J.,
Puno,
Panganiban,
Quisumbing,
YnaresSantiago, Carpio, Austria-Martinez,
Corona, Carpio-Morales, Callejo, Sr.,
Azcuna,
Tinga,
ChicoNazario, and Garcia, JJ., concur.

DOMINGO V. SCHEER, 421

SCRA 468 (2004)
INDISPENSABLE PARTIES MUST BE
IMPLEADED IN THE ACTION IN ORDER
TO ATTAIN REAL FINALITY
Section 7, Rule 3 of the New Rules of
Court defines indispensable parties as
parties-in-interest without whom there
can be no final determination of an

action and who, for this reason, must

be joined either as plaintiffs or as
defendants.
Jurisprudence further holds that a
party is indispensable, not only if he
has an interest in the subject matter
of the controversy, but also if his
interest is such that a final decree
cannot be made without affecting this
interest or without placing the
controversy in a situation where the
final determination may be wholly
inconsistent with equity and good
conscience. He is a person whose
absence disallows the court from
making an effective, complete, or
equitable determination of the
controversy between or among the
contending parties (See Moldes v.
Villanueva, G.R. No. 161955, August
31, 2005, 468 SCRA 697, 707-708;
Servicewide Specialists, Inc. v. Court
of Appeals, 376 Phil. 602, 612 (1999)
cited in MARMO vs. ANACAY, G.R. No.
182585, November 27, 2009, Second
Division, Brion, J.).
In Domingo v. Scheer, G.R. No.
154745, January 29, 2004, 421 SCRA
468, the High Court explained that the
non-joinder of an indispensable party
is not a ground for the dismissal of an
action. Section 7, Rule 3 of the Rules,
as amended, requires indispensable
parties to be joined as plaintiffs or
defendants. The joinder of
indispensable parties is mandatory.
Without the presence of indispensable
parties to the suit, the judgment of
the court cannot attain real finality.
Strangers to a case are not bound by
the judgment rendered by the court.
The absence of an indispensable party
renders all subsequent actions of the
court null and void. There is lack of
authority to act not only of the absent
party but also as to those present. The
responsibility of impleading all the
indispensable parties rests on the
petitioner or plaintiff.
However, the non-joinder of
indispensable parties is not a ground
for the dismissal of an action. Parties
may be added by order of the court on
motion of the party or on its own
initiative at any stage of the action
and/or such times as are just. If the
petitioner or plaintiff refuses to
implead an indispensable party
despite the order of the court, the
latter may dismiss the complaint or
petition for the petitioner or plaintiffs

10
failure to comply therefor. The remedy
is to implead the non-party claimed to
be indispensable. (NOCOM vs.
CAMERINO, G.R. No. 182984, February
10, 2009, First Division, Azcuna, J.).

Case Proper
G.R. No. 154745. January 29,
2004]
COMMISSIONER
ANDREA
D.
DOMINGO, BUREAU OF
IMMIGRATION, petitioner,
vs.
HERBERT
MARKUS
EMIL
SCHEER, respondent.
This is a petition for review
under Rule 45 of the Rules of Court, as
amended, of the Decision[1] of the
Court of Appeals in CA-G.R. SP No.
71094 granting the respondents
petition for certiorari and prohibition
annulling the order of arrest issued by
the petitioner, and permanently
enjoining her from deporting the
respondent
from
the
Philippines. Through its decision, the
CA virtually reversed the Summary
Deportation Order[2] of the Board of
Commissioners (BOC) and its Omnibus
Resolution[3] denying the respondents
Urgent Motion for Reconsideration of
said
Order,
and
enjoining
the
petitioner
from
deporting
the
respondent.
The facts as culled from the
records are as follows:
Respondent Herbert Markus Emil
Scheer, a native of Ochsenfurt,
Germany, was a frequent visitor of the
Philippines. On July 18, 1986, his
application for permanent resident
status was granted.[4] The Bureau of
Immigration and Deportation (BID)
issued in favor of the respondent Alien
Certificate of Registration No. B396907
dated
September
16,
1987[5] and Immigration Certificate of
Residence No. 256789 dated February
24, 1988.[6] The Commissioner stated
that the granting of the petition would
redound to the benefit of the Filipino
people.[7] During his sojourn in the
Philippines, the respondent married
widowed Edith delos Reyes[8] with
whom he had two daughters. They
had a son, Herbert Scheer, Jr., but he
passed away on November 13, 1995.
[9]
They resided in Puerto Princesa
City, Palawan, where the respondent
established and managed the Bavaria
Restaurant. On May 21, 1991, he was
appointed Confidential Agent by then
NBI Director Alfredo S. Lim.[10]
In a Letter dated June 29, 1995,
Vice Consul Jutta Hippelein informed
the Philippine Ambassador to Bonn,
Germany, that the respondent had

police records and financial liabilities

in Germany.[11]
The Department of Foreign
Affairs received from the German
Embassy in Manila Note Verbale No.
369/95 dated July 26, 1995, informing
it that the respondent was wanted by
the German Federal Police; that a
warrant of arrest had been issued
against him; and that the respondent
will be served with an official
document requesting him to turn over
his German passport to the Embassy
which was invalidated on July 2, 1995.
[12]
The
Embassy
requested
the
Department of Foreign Affairs to
inform the competent Philippine
authorities of the matter. The BOC
thereafter
issued
a
Summary
Deportation Order dated September
27, 1997. The penultimate paragraph
of the Order reads:
WHEREFORE, the foregoing
considered, the Board of
Commissioners hereby orders the
following:
1. Cancellation
of
respondents permanent
residence visa;
2. Respondents
summary
deportation
and
permanent
exclusion
from
the
Philippines; and
3. Inclusion of his name
on
the
Bureaus
Blacklist.
PROVIDED, however that said
summary deportation should be held
in abeyance in case said alien has a
pending final and executory criminal
conviction where the imposed penalty
is imprisonment, in which case, he has
to serve first such imposed penalty,
and/or has a pending criminal, civil or
administrative action and a Hold
Departure Order has been issued or
that his presence in said action is
indispensable. In such instances, the
alien should remain in the custody of
the Bureau until his turnover to the
proper authorities in case he has to
serve imprisonment or in case of
pendency of civil or criminal
administrative action, he shall remain
in the custody of the Bureau until such
time that his pending cases shall have
been decided, terminated or settled,
as the case may be, unless
circumstances demand the immediate
implementation of this summary
deportation.
SO ORDERED.[13]

In issuing the said order, the BOC

relied on the correspondence from the
German Vice Consul on its speculation
that it was unlikely that the German
Embassy will issue a new passport to
the respondent; on the warrant of
arrest issued by the District Court of
Germany against the respondent for
insurance fraud; and on the alleged
illegal activities of the respondent in
Palawan.[14] The BOC concluded that
the respondent was not only an
undocumented but an undesirable
alien as well.
When
the
respondent
was
apprised of the deportation order, he
forthwith aired his side to then BID
Commissioner Leandro T. Verceles.
The
Commissioner
allowed
the
respondent
to
remain
in
the
Philippines, giving the latter time to
secure a clearance and a new
passport from the German Embassy.
[15]
Then
Presidential
Assistant
Teodorico
K.
Imperial
wrote
a
Testimonial dated November 24, 1995,
in behalf of the respondent addressed
to
Commissioner
Verceles. Nonetheless,
the
respondent, through counsel, filed on
December 5, 1995 an Urgent Motion
for Reconsideration of the Summary
Deportation Order of the BOC.[16] In his
motion, the respondent alleged,inter
alia, that:
1. The elementary rules of due
process require notice and opportunity
to be heard before a person can be
lawfully deprived of his right (Ute
Paterok vs. Bureau of Customs, 193
SCRA 132). In the instant case,
although it is acknowledged that the
Honorable Office may conduct
summary deportation proceedings,
respondent was not given notice and
opportunity to be heard before said
Summary Deportation Order was
issued. Respondents right to
procedural due process was therefore
violated. Consequently, the Summary
Deportation Order is invalid.
2. In issuing, the Summary
Deportation Order, this Honorable
Office relied on Note Verbal No.
369/95 issued by the Embassy of the
Federal Republic of Germany, Manila,
notifying the Department of Foreign
Affairs and this Honorable Office about
the warrant of arrest against
respondent for alleged illegal
insurance fraud and illegal activities.
However, a close scrutiny of said note
verbal shows that nowhere therein
does it state that respondent was
involved in insurance fraud or in any
kind of illegal activities in Germany or
anywhere else in the world, such as in
Palawan. Therefore, the main basis of
the Summary Deportation Order is
incompetent as evidence against

11
respondent who is, like every Filipino,
presumed to be innocent until his guilt
is proven beyond reasonable doubt.
3. The power to deport alien is a
police power measure necessary
against undesirable alien whose
presence in the country is injurious to
the public good and domestic
tranquility of the country (Board of
Commissioner Commission on
Immigration vs. De la Rosa, 197 SCRA
853). It is respectfully submitted that
respondent is not an undesirable
alien. He has stayed in the Philippines
for more or less than (10) years. He
has married a Filipina and has three
(3) minor children. He has established
his business in Palawan and he has no
police record whatsoever. Respondent
has considered the Philippines his
second home and he has nowhere
else to go back to in Germany. Under
the circumstances and for
humanitarian considerations,
respondent is not an undesirable alien
whose deportation is
warranted. Likewise, the mere fact
that his passport was not renewed by
the German Embassy does not also
automatically justify the deportation
of respondent.[17]
However, the BOC did not
resolve the respondents motion. The
respondent was neither arrested nor
deported.
Meanwhile, on February 15,
1996, the District Court of Straubing
rendered a Decision dismissing the
criminal case against the respondent
for physical injuries.[18] The German
Embassy in Manila, thereafter, issued
a
temporary
passport
to
the
respondent.
In a Letter dated March 1, 1996,
the
respondent
informed
Commissioner
Verceles
that
his
passport had been renewed following
the dismissal of the said criminal case.
He reiterated his request for the
cancellation
of
the
Summary
Deportation Order dated September
27, 1995 and the restoration of his
permanent
resident
status.
[19]
Subsequently, on March 12, 1996,
the German Embassy issued to the
respondent a regular passport, to
expire on March 11, 2006.
The BOC still failed to resolve the
respondents
Urgent
Motion
for
Reconsideration.
Commissioner
Verceles did not respond to the
respondents March 1, 1996 Letter. The
respondent
remained
in
the
Philippines
and
maintained
his
business in Palawan. On March 20,
1997, the Department of Labor and
Employment approved his application
for Alien Employment Registration

Certificate as manager of the Bavaria

Restaurant in Puerto Princesa City.
In the meantime, petitioner
Immigration Commissioner Andrea T.
Domingo assumed office. She wrote
the German Embassy and inquired if
the respondent was wanted by the
German police. On April 12, 2002, the
German Embassy replied that the
respondent was not so wanted.[20] At
about midnight on June 6, 2002,
Marine operatives and BID agents
apprehended the respondent in his
residence
on
orders
of
the
petitioner. He was whisked to the BID
Manila Office and there held in
custody
while
awaiting
his
deportation. Despite entreaties from
the
respondents
wife[21] and
his
employees, the petitioner refused to
release the respondent.[22]
Shocked at the sudden turn of
events, the respondent promptly
communicated with his lawyer. The
latter filed with the BID a motion for
bail to secure the respondents
temporary liberty. On June 11, 2002,
the respondents counsel filed with the
Court
of
Appeals
a
petition
for certiorari,
prohibition
and mandamus with a prayer for
temporary restraining order and writ
of preliminary injunction, to enjoin the
petitioner from proceeding with the
respondents
deportation.[23] The
respondent
(petitioner
therein)
alleged, inter alia, that his arrest and
detention were premature, unjust,
wrongful, illegal and unconstitutional,
effected without sufficient cause and
without jurisdiction or with grave
abuse of discretion. He asserted that
there was no speedy remedy open to
him in the ordinary course of
law[24] and that his Urgent Motion for
Reconsideration of the Summary
Deportation Order of the BOC had not
yet been resolved despite the lapse of
more than six years. The respondent
averred
that
he
was
a
fully
documented alien, a permanent
resident and a law-abiding citizen. He,
thus, prayed as follows:
PRAYER
WHEREFORE, it is most respectfully
prayed of this Honorable Court that:
1. Upon the filing of this Petition, this
Honorable Court issue a Temporary
Restraining Order to enjoin
respondent Commissioner from
enforcing any order to deport
petitioner;
2. After due hearing, a writ of
preliminary and mandatory injunction
be correspondingly issued to maintain

the status quo pending resolution of

the Petition on the merits.
3. After hearing, judgment be
rendered:
a) Directing and mandating
respondent Commissioner and the
body she heads to resolve the Motion
for Reconsideration filed in 1995, in
his favor, and nullifying or suspending
the implementation of any order, oral
or written, she may have issued or
issue to deport petitioner; and
b) Making the injunction in petitioners
favor permanent.
Petitioner likewise prays for such other
and further relief as may be deemed
just and equitable in the premises,
such as directing respondent, if
Herbert Scheer is deported before the
matter is heard on notice, to authorize
his return.[25]
The
BOC
ruled
that
its
September 27, 1995 Order had
become final and executory after the
lapse of one year, citing our rulings
in Sy vs. Vivo,[26] and Lou vs. Vivo.
[27]
The BOC also held that it was not
competent to reverse the September
27, 1995 Order, citing our ruling
in Immigration
Commissioner
vs.
Fernandez.[28] It declared that the
respondent may seek the waiver of his
exclusion via deportation proceedings
through the exceptions provided by
Commonwealth
Act
No.
613,
[29]
Section 29 (a)(15), but that his
application for the waiver presupposes
his prior removal from the Philippines.
In a parallel development, the
respondent procured a letter from the
National Bureau of Investigation (NBI)
in Puerto Princesa City certifying that
he had no pending criminal record.
[30]
The Puerto Princesa City Philippine
National Police (PNP) also issued a
certification that the respondent had
no pending criminal or derogatory
records in the said office.[31]
Meanwhile, on June 26, 2002, the
Court of Appeals issued a status
quo order restraining the petitioner
from deporting the respondent on a
bond of P100,000.00.[32] On July 18,
2002, the BOC issued an Omnibus
Resolution
dated
June
14,
2002, pendente
lite denying
the
respondents
Urgent
Motion
for
Reconsideration,
Motion
for
Bail/Recognizance, and the Letter
dated June 11, 2002. The decretal
portion of the resolution reads:
Wherefore, in view of the foregoing
circumstances, we deny the prayers of

12
the Urgent Motion for Reconsideration
of 5 December 1995, the Motion for
Bail/Recognizance dated 7 June 2002
and the Letter of 11 June 2002.
Further, we hereby order the
following:
1. Subject to the submission of
appropriate clearances, the summary
deportation order the respondent
Herbert Scheer, German, under BI
Office Memorandum Order No. 34
(series of 1989) and the BOC
Summary Deportation Order of 27
September 1995;
2. Permanent exclusion of Herbert
Scheer from the Philippines under C.A.
No. 613, Section 40 (a)(15).
3. Inclusion of the name of Herbert
Scheer in the Immigration Black List;
and
4. Forfeiture of the bail bond, if any, of
Herbert Scheer under C.A. No. 613,
Section 40 (a)(15).

IT IS SO ORDERED.[33]
During the hearing of the
respondents plea for a writ of
preliminary
mandatory
injunction
before the CA on July 22, 2002, the
Office of the Solicitor General (OSG)
manifested that the State had no
opposition to the respondents re-entry
and stay in the Philippines, provided
that he leave the country first and reapply for admission and residency
status with the assurance that he
would
be
re-admitted.[34] The
respondents counsel manifested to
the appellate court that he had just
been informed by the OSG of the
Omnibus Resolution of the BOC dated
June 14, 2002.
In her Comment on the Petition,
the petitioner (the respondent therein)
alleged, inter alia, the following:
1) that the BOC was an
indispensable party
to the petition;
2) the petitioners failure to
implead the BOC
warranted the denial
of the petition;
3) the allowance by then
Immigration
Commissioner
Leandro Verceles for
the petitioner
therein to renew his

passport and secure

clearances, even if
proved, was not
binding on the BOC;
4) the September 27, 1995
Order of the BOC
was already
executory when the
respondent filed her
petition in the CA;
5) the German Embassys
issuance of a new
passport did not
legalize the
respondents stay in
this country, which
became illegal on
July 2, 1995 when
his passport expired;
6) the respondent therein
did not act with
abuse of discretion
in causing the arrest
and detention of the
respondent based
on the BOCs
Summary
Deportation Order;
and
7) the BOC did not act with
grave abuse of
discretion in issuing
its Summary
Deportation Order
and Omnibus
Resolution and such
order and resolution
were not mooted by
the German
Embassys issuance
of a new passport in
favor of the
respondent.
In
view
of
the
Omnibus
Resolution of the BOC, the respondent
(petitioner
therein)
in
his
Memorandum
prayed
for
the
nullification of the BOCs Order, as well
as its Omnibus Resolution denying his
Urgent Motion for Reconsideration
considering that with the issuance of a
new passport, there was no more
basis for his deportation, thus:

further orders from this Honorable

Court;
2. The Summary Deportation Order of
September 27, 19[9]5, affirmed by
respondent allegedly on June 14, 2002
and made known only yesterday, be
nullified to the extent that it directs
the deportation of petitioner, who has
removed the very basis of said Order
of not having a valid passport, and
that the Resolution of June 14, 2002
be nullified in toto; and,
3. The Temporary Restraining Order of
June 26, 2002 be converted into a
permanent injunction or writ of
prohibition.
Petitioner likewise prays for such other
and further relief as may be deemed
just and equitable in the premises.[35]
Surprisingly, the respondents
counsel received on July 24, 2003 a
Letter from the petitioner dated July
16, 2002 stating that, the BOC was in
the
course
of
reviewing
the
deportation case against Mr. Scheer,
and that its findings would be given in
due time.[36]
On August 20, 2002, the Court of
Appeals rendered a Decision in favor
of the respondent granting his petition
for certiorari and prohibition and
permanently enjoining the petitioner
from deporting the respondent. The
decretal portion of the Decision reads:
WHEREFORE, premises considered,
the petitions for certiorari and
prohibition are hereby GRANTED.
Accordingly, any order, oral or written,
issued by respondent Commissioner
Domingo against petitioner, in relation
to his deportation, is hereby
ANNULLED, and respondent
Commissioner Domingo is hereby
permanently enjoined/prohibited from
deporting petitioner, in so far as this
case is concerned.
It is likewise ordered that petitioner be
released from his
confinement/detention in the Bureau
of Immigration UNLESS there is/are
fresh new grounds/cases that will
warrant his continued detention.

RELIEF
SO ORDERED.[37]
WHEREFORE, it is most respectfully
prayed of this Honorable Court that:
1. Upon the filing of this
Memorandum, this Honorable Court
forthwith direct and authorize the
immediate release of petitioner, even
on undersigneds recognizance, until

The Court of Appeals ruled that

the German Embassys subsequent
issuance
of
passport
to
the
respondent before the BOCs issuance
of its Omnibus Resolution had mooted
the September 27, 1995 Summary
Deportation Order, as well as the
arrest
and
detention
of
the

13
respondent. According to the court, it
made no sense to require the
respondent to leave the country and
thereafter re-apply for admission with
the BOC. Furthermore, since the
grounds cited by the BOC in its
Summary Deportation Order no longer
existed, there was no factual and legal
basis to disqualify the respondent
from staying in the country.
On the issue of whether the
members
of
the
BOC
were
indispensable parties, the CA ruled as
follows:
a) There are quite a number of cases
in relevant jurisprudence wherein only
the Immigration Commissioner was
impleaded to decide whether an alien
may stay or be deported, such as in
the case of Vivo vs. Arca (19 SCRA
878) and Vivo vs. Cloribel (22 SCRA
159).
b) In the case of Caruncho III vs.
COMELEC (315 SCRA 693), it was
pronounced that: Ordinarily, the
nonjoinder of an indispensable party
or the real party interest is not by
itself a ground for the dismissal of the
petition. The court before which the
petition is filed must first require the
joinder of such party. It is the
noncompliance with said order that
would be a ground for the dismissal of
the petition.
thus, c) respondent may be estopped
for not raising such issue earlier.[38]
Aggrieved,
the
respondent
therein, now the petitioner, through
the Office of the Solicitor General,
appealed to us for relief. The
petitioner contends that the Court of
Appeals erred on a question of law in
granting the respondents petition in
CA-G.R. SP No. 71094.[39]
In support of his contention, the
Solicitor General has submitted the
following arguments:
I. THE WRIT OF MANDAMUS DOES NOT
LIE AGAINST THE COMMISSIONER OF
THE BUREAU OF IMMIGRATION TO
RESOLVE RESPONDENTS URGENT
MOTION FOR RECONSIDERATION OF
THE SUMMARY DEPORTATION ORDER,
CONSIDERING THAT IT IS THE BOARD
OF COMMISSIONERS, AND NOT THE
COMMISSIONER ALONE, WHICH HAS
AUTHORITY TO MAKE SAID
RESOLUTION.
II. THE WRIT OF CERTIORARI DOES
NOT LIE AGAINST THE COMMISSIONER
OF THE BUREAU OF IMMIGRATION,
CONSIDERING THAT IT IS THE BOARD
OF COMMISSIONERS, AND NOT THE

COMMISSIONER ALONE, WHICH

ISSUED THE SUMMARY DEPORTATION
ORDER AND THE OMNIBUS
RESOLUTION.

The respondent counters that

the petitioner is already estopped
from raising this issue. He argues that
-

III. THE WRIT OF PROHIBITION DOES

NOT LIE AGAINST THE COMMISSIONER
OF THE BUREAU OF IMMIGRATION,
PROHIBITING THE IMPLEMENTATION
OF THE SUMMARY DEPORTATION
ORDER AND THE OMNIBUS
RESOLUTION, CONSIDERING THAT THE
BOARD OF COMMISSIONERS WAS NOT
IMPLEADED AS PARTY-RESPONDENT IN
THE PETITION IN CA-G.R. SP NO.
71094.

In quite a number of jurisprudence,

only the Immigration Commissioner is
impleaded to decide whether an alien
may stay here or not. The bottom line
is petitioner, head of the Bureau of
Immigration, was more than fully
heard on its institutional position, a
Bureau which speaks with a single
voice in this case. She is in estoppel
for not raising the issue earlier, either
in a timely Comment or during the
oral argument[41]

IV. ASSUMING BUT WITHOUT

ADMITTING THAT THE BOARD OF
COMMISSIONERS WAS PROPERLY
IMPLEADED AS PARTY-RESPONDENT IN
THE PETITION IN CA-G.R. SP NO.
71094, NEVERTHELESS, THE
SUMMARY DEPORTATION ORDER AND
THE OMNIBUS RESOLUTION WERE
NOT ISSUED WITHOUT OR IN EXCESS
OF JURISDICTION OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING
TO LACK OF (SIC) EXCESS OF
JURISDICTION.
V. FURTHER ASSUMING BUT WITHOUT
ADMITTING THAT THE BOARD OF
COMMISSIONERS WAS PROPERLY
IMPLEADED AS PARTY-RESPONDENT IN
THE PETITION IN CA-G.R. SP NO.
71094, THE COMMISSIONER OF THE
BUREAU OF IMMIGRATION DID NOT
ACT WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN
IMPLEMENTING THE SUMMARY
DEPORTATION ORDER AND THE
OMNIBUS RESOLUTION.[40]
Elucidating on his first three
arguments, the petitioner maintains
that
the
respondents
petition
for certiorari,
prohibition
and mandamus before the Court of
Appeals should have been dismissed
because he failed to implead the real
party-in-interest as mandated by Rule
3, Section 7 of the Rules of Court, as
amended; in this case, the BOC.
According to the Solicitor General, this
was a fatal procedural error. The
inclusion of the BOC as respondent in
the case was necessary in order that
its actions could be directly attacked
and for the court to acquire
jurisdiction over it. The fact that
Immigration Commissioner Andrea T.
Domingo was impleaded as the sole
respondent was not enough, as she is
only
one
of
the
four
Commissioners. Furthermore,
the
assailed Orders were issued by the
Board, and not by the Immigration
Commissioner alone.

In Caruncho III v. Comelec, it was held

that[O]rdinarily, the nonjoinder of an
indispensable party or real party in
interest is not by itself a ground for
the dismissal of the petition. The court
before which the petition is filed must
first require the joinder of such party.
It is the noncompliance with said order
that would be a ground for the
dismissal of the petition.
But even as the Court of Appeals did
not require respondent of such joinder
of parties, the respondent, in fact,
begged leave, ad cautelam, in its
Reply Memorandum dated July 31,
2002 to implead the Board which
speaks with a single voice anyway in
this case, and therefore, no claim can
be made that a valid point of view has
not been heard[42]
Moreover, according to the
respondent, the petitioner is clearly
the BIDs chosen instrumentality for
the relevant purpose. What the
respondent ultimately questioned are
the acts or orders of the petitioner for
the arrest and immediate deportation
of the respondent by way of
implementing the BOCs Summary
Deportation Order.
By way of reply, the Office of the
Solicitor General asserted that the
Summary Deportation Order and
Omnibus Resolution were collegial
actions of the BOC and not of the
petitioner
alone.
Although
its
Chairperson, the petitioner, is merely
a member thereof, her decisions and
actions are still subject to the
collective will of the majority.[43]

The Ruling of the Court

The BOC is an
Indispensable

14
Party
We agree with the petitioners
contention that the BOC was an
indispensable
party
to
the
respondents petition for certiorari,
prohibition
and mandamus in
the
Court of Appeals. The respondent was
arrested and detained on the basis of
the Summary Deportation Order of the
BOC. The petitioner caused the arrest
of the respondent in obedience to the
said
Deportation
Order. The
respondent, in his Memorandum,
prayed that the CA annul not only the
Summary Deportation Order of the
BOC but also the latters Omnibus
Resolution, and, thus, order the
respondents immediate release. The
respondent also prayed that the CA
issue a writ of mandamus for the
immediate resolution of his Urgent
Motion for Reconsideration. The said
motion had to be resolved by the BOC
as the order sought to be resolved and
reconsidered was issued by it and not
by the petitioner alone. The powers
and duties of the BOC may not be
exercised by the individual members
of the Commission.[44]
Section 7, Rule 3 of the Rules of
Court,
as
amended,
requires
indispensable parties to be joined as
plaintiffs or defendants. The joinder of
indispensable parties is mandatory.
Without the presence of indispensable
parties to the suit, the judgment of
the court cannot attain real finality.
[45]
Strangers to a case are not bound
by the judgment rendered by the
court.[46] The
absence
of
an
indispensable
party
renders
all
subsequent actions of the court null
and void. Lack of authority to act not
only of the absent party but also as to
those present.[47] The responsibility of
impleading all the indispensable
parties rests on the petitioner/plaintiff.
[48]

However, the non-joinder of

indispensable parties is not a ground
for the dismissal of an action. Parties
may be added by order of the court on
motion of the party or on its own
initiative at any stage of the action
and/or such times as are just.[49] If the
petitioner/plaintiff refuses to implead
an indispensable party despite the
order of the court, the latter may
dismiss the complaint/petition for the
petitioner/plaintiffs failure to comply
therefor.[50] The remedy is to implead
the
non-party
claimed
to
be
indispensable.[51] In this case, the CA
did not require the respondent
(petitioner therein) to implead the
BOC as respondent, but merely relied
on the rulings of the Court in Vivo v.
Arca,[52]and Vivo v. Cloribel.[53] The CAs
reliance on the said rulings is,
however, misplaced. The acts subject
of the petition in the two cases were

those
of
the
Immigration
Commissioner and not those of the
BOC; hence, the BOC was not a
necessary nor even an indispensable
party in the aforecited cases.
The Non-joinder of an
Indispensable Party is not
a Ground for the Dismissal
of the Petition
The Court may be curing the
defect in this case by adding the BOC
as party-petitioner. The petition should
not be dismissed because the second
action would only be a repetition of
the first.[54] In Salvador, et al., v. Court
of Appeals, et al.,[55] we held that this
Court has full powers, apart from that
power and authority which is inherent,
to amend the processes, pleadings,
proceedings
and
decisions
by
substituting as party-plaintiff the real
party-in-interest. The Court has the
power to avoid delay in the disposition
of this case, to order its amendment
as to implead the BOC as partyrespondent. Indeed, it may no longer
be necessary to do so taking into
account the unique backdrop in this
case, involving as it does an issue of
public interest.[56] After all, the Office
of
the
Solicitor
General
has
represented the petitioner in the
instant proceedings, as well as in the
appellate court, and maintained the
validity of the deportation order and
of the BOCs Omnibus Resolution. It
cannot, thus, be claimed by the State
that the BOC was not afforded its day
in court, simply because only the
petitioner, the Chairperson of the
BOC,[57] was the respondent in the CA,
and the petitioner in the instant
recourse. In Alonso v. Villamor,[58] we
had the occasion to state:
There is nothing sacred about
processes or pleadings, their forms or
contents. Their sole purpose is to
facilitate the application of justice to
the rival claims of contending parties.
They were created, not to hinder and
delay, but to facilitate and promote,
the administration of justice. They do
not constitute the thing itself, which
courts are always striving to secure to
litigants. They are designed as the
means best adapted to obtain that
thing. In other words, they are a
means to an end. When they lose the
character of the one and become the
other, the administration of justice is
at fault and courts are correspondingly
remiss in the performance of their
obvious duty.
The CA had Jurisdiction
Over the Petition for
Certiorari, Prohibition
and Mandamus

We do not agree with the

petitioners contention that the issue
before the CA, as to the power of the
President to determine whether an
alien may remain or be deported from
the Philippines,
is
beyond
the
appellate courts competence to delve
into and resolve. The contention of the
petitioner is based on a wrong
premise.
The settled rule is that the
authority to exclude or expel aliens by
a
power
affecting
international
relation is vested in the political
department of the government, and is
to be regulated by treaty or by an act
of Congress, and to be executed by
the executive authority according to
the regulations so established, except
in so far as the judicial department
has been authorized by treaty or by
statute, or is required by the
Constitution
to
intervene.[59] The
judicial department cannot properly
express an opinion upon the wisdom
or the justice of the measures
executed by Congress in the exercise
of the power conferred on it,[60] by
statute or as required by the
Constitution.
Congress
may,
by
statute, allow the decision or order of
the Immigration Commissioner or the
BOC to be reviewed by the President
of the Philippines or by the courts, on
the grounds and in the manner
prescribed by law.
Article VIII, Section 1 of the
Constitution has vested judicial power
in the Supreme Court and the lower
courts such as the Court of Appeals,
as established by law. Although the
courts are without power to directly
decide matters over which full
discretionary authority has been
delegated to the legislative or
executive branch of the government
and are not empowered to execute
absolutely their own judgment from
that of Congress or of the President,
[61]
the Court may look into and resolve
questions of whether or not such
judgment has been made with grave
abuse of discretion, when the act of
the
legislative
or
executive
department violates the law or the
Constitution. In Harvy Bridges v. I.F.
Wixon,[62] the United States Federal
Supreme Court reversed an Order of
Deportation made by the Attorney
General for insufficiency of evidence
and for improper admission of
evidence. In Nging
v.
Nagh,[63] the
United States Court of Appeals
(9th Circuit
Court)
held
that
conclusions of administrative offices
on the issues of facts are invulnerable
in courts unless when they are not
rendered by fair-minded men; hence,
are arbitrary. In Toon v. Stump,[64] the
Court ruled that courts may supervise
the actions of the administrative
offices authorized to deport aliens and

15
reverse their rulings when there is no
evidence to sustain them. When acts
or omissions of a quasi-judicial agency
are involved, a petition for certiorari or
prohibition may be filed in the Court of
Appeals as provided by law or by the
Rules of Court, as amended.[65]
In this case, the respondent
alleges that the petitioner acted
arbitrarily, contrary to law and with
grave abuse of discretion in causing
his arrest and detention at a time
when
his
Urgent
Motion
for
Reconsideration of the BOCs Summary
Deportation Order had yet to be
resolved. There was no factual or legal
basis for his deportation considering
that he was a documented alien and a
law-abiding citizen; the respondent,
thus, prayed for a writ of mandamus
to
compel
the
petitioner,
the
Chairperson of the BOC, to resolve the
said motion. The petition before the
CA did not involve the act or power of
the President of the Philippines to
deport or exclude an alien from the
country. This being so, the petition
necessarily did not call for a
substitution
of
the
Presidents
discretion on the matter of the
deportation of the respondent with
that of the judgment of the CA.
Irrefragably,
the
CA
had
jurisdiction over the petition of the
respondent.
The BOC Committed a Grave
Abuse of Discretion Amounting
To Lack or Excess of Jurisdiction
In Issuing its Summary Deportation
Order and Omnibus Resolution; The
Petitioner Committed a Grave Abuse
Of Her Discretion Amounting to
Lack or Excess of Jurisdiction in
Causing the Arrest and Detention
Of The Private Respondent
On the Solicitor Generals fourth
and fifth arguments, we are convinced
that the BOC committed a grave
abuse of discretion amounting to
excess or lack of jurisdiction in issuing
its Summary Deportation Order and
Omnibus Resolution, and that the
petitioner committed grave abuse of
discretion amounting to excess or lack
of jurisdiction in causing the arrest
and
detention
of
the
private
respondent.
The settled rule is that the entry
or stay of aliens in the Philippines is
merely a privilege and a matter of
grace; such privilege is not absolute
nor permanent and may be revoked.
However, aliens may be expelled or
deported from the Philippines only on
grounds and in the manner provided
for
by
the
Constitution,
the
Immigration Act of 1940, as amended,
and administrative issuances pursuant
thereto. In Mejoff
v.
Director
of
Prisons,[66] we held, thus:

Moreover, by its Constitution (Art. II,

Sec. 3) the Philippines adopts the
generally accepted principles of
international law a part of the law of
Nation. And in a resolution entitled
Universal Declaration of Human Rights
and approved by the General
Assembly of the United Nations of
which the Philippines is a member, at
its plenary meeting on December 10,
1948, the right to life and liberty and
all other fundamental rights as applied
to all human beings were proclaimed.
It was there resolved that All human
beings are born free and equal in
degree and rights (Art. 1); that
Everyone is entitled to all the rights
and freedom set forth in this
Declaration, without distinction of any
kind, such as race, color, sex,
language, religion, political or other
opinion, nationality or social origin,
property, birth, or other status (Art. 2);
that Every one has the right to an
effective remedy by the competent
national tribunals for acts violating the
fundamental rights granted him by
the Constitution or by law (Art. 8); that
No one shall be subjected to arbitrary
arrest, detention or exile (Art. 9); etc.
In this case, the BOC ordered the
private respondents deportation on
September 27, 1995 without even
conducting
summary
deportation
proceedings. The BOC merely relied
on the June 29, 1995 Letter of the
German Vice Consul and of the
German Embassys Note Verbale No.
369/95 dated July 26, 1995. It issued
the Summary Deportation Order on
September 27, 1995 allegedly under
paragraph 3 of Office Memorandum
Order No. 34 dated August 21, 1989
which reads:
3. If a foreign embassy cancels the
passport of the alien or does not
reissue a valid passport to him, the
alien loses the privilege to remain in
the country, under the Immigration
Act, Sections 10 and 15 (Schonemann
vs. Santiago, et al., G.R. No. 81461, 30
May 1989). The automatic loss of the
privilege obviates deportation
proceedings. In such instance, the
Board of Commissioners may issue
summary judgment of deportation
which shall be immediately executory.
However, as gleaned from the
Summary Deportation Order, the
respondent was ordered deported not
only because his passport had already
expired; the BOC speculated that the
respondent
committed
insurance
fraud and illegal activities in the
Philippines and would not, thus, be
issued a new passport. This, in turn,
caused the BOC to conclude that the
respondent was an undesirable alien.

Section 37(c) of Commonwealth Act

No. 613, as amended, provides that:
No alien shall be deported without
being informed of the specific grounds
for deportation or without being given
a hearing under rules of procedure to
be prescribed by the Commissioner of
Immigration.
Under paragraphs 4 and 5 of
Office Memorandum Order No. 34, an
alien cannot be deported unless he is
given a chance to be heard in a full
deportation hearing, with the right to
adduce evidence in his behalf, thus:
4. All other cases shall be tried in full
deportation hearing, with due
observance of the pertinent provisions
of Law Instruction No. 39.
5. In all cases, the right of the alien to
be informed of the charges against
him, to be notified of the time and
place of hearing, when necessary, to
examine the evidence against him,
and to present evidence in his own
behalf, where appropriate, shall be
observed.
The respondent was not afforded
any hearing at all. The BOC simply
concluded
that
the
respondent
committed insurance fraud and illegal
activities in Palawan without any
evidence. The respondent was not
afforded a chance to refute the
charges. He cannot, thus, be arrested
and deported without due process of
law as required by the Bill of Rights of
the Constitution. In Lao Gi v. Court of
Appeals,[67] we held that:
Although a deportation proceeding
does not partake of the nature of a
criminal action, however, considering
that it is a harsh and extraordinary
administrative proceeding affecting
the freedom and liberty of a person,
the constitutional right of such person
to due process should not be denied.
Thus, the provisions of the Rules of
Court of the Philippines particularly on
criminal procedure are applicable to
deportation proceedings.
It must be noted that the
respondent was a permanent resident
before his passport expired on July 2,
1995. In Chew v. Colding,[68] the United
States Federal Supreme Court ruled:
It is well established that if an alien is
a lawful permanent resident of the
United States and remains physically
present there, he is a person within
the protection of the Fifth
Amendment. He may not be deprived
of his life, liberty or property without

16
due process of law. Although it later
may be established, as respondents
contend, that petitioner can be
expelled and deported, yet before his
expulsion, he is entitled to notice of
the nature of the charge and a hearing
at least before an executive or
administrative tribunal. Although
Congress may prescribe conditions for
his expulsion and deportation, not
even Congress may expel him without
allowing him a fair opportunity to be
heard.
As Mr. Justice Murphy said in his
concurring
opinion
in Bridges
v.
Wixon:[69]
The Bill of Rights belongs to them as
well as to all citizens. It protects them
as long as they reside within the
boundaries of our land. It protects
them in the exercise of the great
individual rights necessary to a sound
political and economic democracy.
According to Vattal,[70] an alien
who is a permanent resident in a
country is a member of the new
society, at least as a permanent
inhabitant, and is a kind of citizen of
inferior order from the native citizens;
but is, nevertheless, limited and
subject to the society, without
participating in all its advantages. Sir
Robert Philconse called them de
facto, though not de jure citizens of
the country of their domicile.[71]
Such permanent resident[72] may
be classified as a denizen, a kind of
middle state between alien and a
natural-born subject and partakes of
both. Paraphrasing Justice Brewer in
his
dissenting
opinion
in Fong
Yue Ting v. United States,[73] when the
right to liberty and residence is
involved, some other protection than
the mere discretion of the petitioner
or the BOC is required. We recall the
warning of the United States Supreme
Court in Boyd v. United States:[74]
Illegitimate and unconstitutional
practices get their first footing in that
way, namely, by silent approaches
and slight deviations from legal modes
of procedure. This can only be
obviated by adhering to the rule that
constitutional provisions for the
security of person and property should
be liberally construed. A close and
literal construction deprives them of
half their efficacy, and leads to a
gradual depreciation of the right, as if
it consisted more in sound than in
substance. It is the duty of the courts
to be watchful for the constitutional
rights of the citizen, and against any
stealthy encroachments thereon. Their
motto should be obsta principiis.

In sum, the arrest and detention

of the respondent and his deportation
under the Summary Deportation Order
of the BOC for insurance fraud and
illegal activities in Palawan violated
his constitutional and statutory rights
to due process.
The Respondents Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration
Commissioner
is
mandated
to
implement a legal and valid Summary
Deportation Order within a reasonable
time. But in this case, the arrest of the
respondent in his house, at near
midnight,
and
his
subsequent
detention
was
premature,
unwarranted and arbitrary. Like a
thunderbolt in the sky, the BID agents
and marines arrested the respondent
on June 6, 2002, on orders of the
petitioner based on the September 27,
1995 Summary Deportation Order.
Under the basic rudiments of fair play
and due process, the petitioner was
required
to
first
resolve
the
respondents
Urgent
Motion
for
Reconsideration of the said Order,
which was filed more than six years
before or on December 5, 1995.
It
may
be
argued
that
respondents filing of an Urgent Motion
for Reconsideration did not ipso
facto suspend the efficacy of the BOCs
deportation order. However, such an
argument cannot be sustained in this
case because of the extant and
peculiar factual milieu. It bears
stressing that more than six years had
elapsed, from the time the Summary
Deportation Order was issued, until
the respondent was finally arrested.
Supervening facts and circumstances
rendered the respondents arrest and
detention
unjust,
unreasonable,
barren of factual and legal basis. The
BOC should have set the respondents
motion for hearing to afford him a
chance to be heard and adduce
evidence in support thereon. It was
bad enough that the BOC issued its
Summary Deportation Order without a
hearing; the BOC dealt the respondent
a more severe blow when it refused to
resolve his motion for reconsideration
before causing his arrest on June 6,
2002.
As aforestated, the BOC ordered
the deportation of the respondent
after a summary proceeding without
prior
notice
on
the
following
grounds: (a) the respondents German
passport had expired; (b) there was a
pending criminal case for physical
injuries against him in Germany; (c)
the respondent indulged in illegal
activities in Palawan; (d) that in all
likelihood, the respondents passport
will not be renewed by the German
Embassy as he was wanted for

insurance fraud in Germany; and, (e)

he was an undesirable alien. But then,
in response to the written query of no
less than the petitioner herself, the
German Embassy declared that the
respondent was not wanted by the
German police for any crime, including
insurance fraud. This could only mean
that the warrant of arrest issued by
the German Federal police mentioned
in Note Verbale No. 369/95 had been
lifted, and that the respondent was
not involved in any illegal activities in
Germany. The criminal case against
the respondent for physical injuries,
which
does
not
involve
moral
turpitude, was dismissed by the
German District Court. Furthermore,
there was no evidence of insurance
fraud against the respondent.
The BOC issued its Summary
Deportation Order without affording
the respondent the right to be heard
on his motion and adduce evidence
thereon. It merely concluded that the
respondent was involved in illegal
activities in Palawan. What made
matters worse was that the BOC
indulged in sheer speculation, that the
German Embassy is unlikely to issue a
new passport to the respondent. The
deportation of aliens should not be
based on mere speculation or a mere
product of procrastinations as in this
case. As it turned out, the German
Embassy re-issued the respondents
passport; he was issued a temporary
passport, and, thereafter, a regular
passport, yet to expire on March 12,
2006. The petitioner cannot feign
ignorance of this matter because the
respondent himself, six years before
he was arrested, informed then
Immigration Commissioner Verceles in
a Letter dated March 1, 1996. The
respondents letter forms part of the
records of the BOC. There is no
evidence
on
record
that
the
respondent committed any illegal
activities in Palawan. He was even
designated as special agent of the
NBI, and was, in fact, issued
clearances by the PNP and the NBI no
less. Despite all the foregoing, the
petitioner ordered and caused the
arrest
and
detention
of
the
respondent.
What is most nettlesome is the
apparent antedating of the BOC
Omnibus Resolution. The records show
that the petitioner sought to assuage
the respondents concern on the
belated resolution of his pending
urgent motion for reconsideration in a
Letter to the latters counsel dated July
18, 2002 in which the petitioner
assured the respondent that the BOC
will provide him of its action on the
said motion:

Dear Atty. Sagisag,

17
We respond to your letter of 17
June 2002 by informing you that
the case of Mr. Herbert Scheer is
being evaluated by the Board of
Commissioners (BOC). The BOC
will provide you of the results of
its collegial action in due time.
Very truly yours,
(Sgd.) ANDREA D. DOMINGO
Commissioner[75]
However,
the
Omnibus
Resolution of the BOC was dated June
14, 2002, although on its face it was
filed with the Records Division of the
BID only on July 18, 2002.
The foregoing gave reason for
the CA to suspect that the Omnibus
Resolution of the BOC was antedated.
[76]
The petition of the respondent in
the CA must have jolted the petitioner
and the BOC from its stupor because it
came out with its Omnibus Resolution
on July 18, 2002, which was, however,
dated as early as June 14, 2002. The
respondent had to wait in anxiety for
the BOC to quench his quest for
justice. The BOCs wanton acts
amounted to an abdication of its duty
to act and/or resolve cases/incidents
with reasonable dispatch. To recall our
ruling in Board of Commissioners v.
De la Rosa,[77] citing Sheor v. Bengson,
[78]
thus:
This inaction or oversight on the part
of the immigration officials has
created an anomalous situation which,
for reasons of equity, should be
resolved in favor of the minor herein
involved.
The petitioner and the BOC
should have taken to heart the
following
pronouncement
in Commissioner of Immigration v.
Fernandez:[79]
In the face of the disclosure that
Teban Caoili had been all along
working in the Avenue Electrical
Supply Co. (Avesco), located at No.
653 Rizal Avenue, Manila, until his
arrest, and the documentary evidence
showing that he had been issued a
Philippine Passport; had regularly paid
his Residence Tax Certificates (A & B),
and filed Income Tax Returns, a finding
of fact is necessary whether the
Commissioner really had intended to
notify Teban Caoili of the exclusion
proceedings the Board had conducted
in his absence. While it may be true
that the proceedings is purely
administrative in nature, such a

circumstance did not excuse the

serving of notice. There are cardinal
primary rights which must be
respected even in proceedings of
administrative character, the first of
which is the right of the party
interested or affected to present his
own case and submit evidence in
support thereof.[80]
...
Since the proceedings affected Caoilis
status and liberty, notice should have
been given. And in the light of the
actuations of the new Board of
Commissioners, there is a necessity of
determining whether the findings of
the Board of Special Inquiry and the
old Board of Commissioners are
correct or not. This calls for
an examination of the evidence, and,
the law on the matter.[81]
Apparently, the BOC did not
bother to review its own records in
resolving the respondents Urgent
Motion
for
Reconsideration.
It
anchored its Omnibus Resolution only
on the following: the membership of
the BOC had changed when it issued
its September 27, 1995 Summary
Deportation
Order
and
under
Commonwealth Act No. 613, Section
27(b); the BOC is precluded from
reversing a previous order issued by
it;[82]and, the September 27, 1995
Order of the BOC had become final
and could no longer be reviewed and
reversed by it after the lapse of one
year.[83] However, the rulings cited by
the petitioner are not applicable in the
instant case, as the said cases cited
involve appeals to the BOC from the
decisions of the Board of Special
Inquiry (BSI). In Sy v. Vivo[84] and Lou
v. Vivo,[85] we ruled that under Section
27(b) of Commonwealth Act No. 613,
as amended, the Decision of the BOC
on appeal from the decision of the BSI
becomes final and executory after one
year:
(b) A board of special inquiry shall
have authority (1) to determine
whether an alien seeking to enter or
land in the Philippines shall be allowed
to enter or land or shall be excluded,
and (2) to make its findings and
recommendations in all the cases
provided for in section twenty-nine of
this Act wherein the Commissioner of
Immigration may admit an alien who
is otherwise inadmissible. For this
purpose, the board or any member
thereof, may administer oaths and
take evidence and in case of necessity
may issue subpoenaand/or
subpoena duces tecum. The hearing
of all cases brought before a board of
special inquiry shall be conducted
under rules of procedure to be

prescribed by the Commissioner of

Immigration. The decision of any two
members of the board shall prevail
and shall be final unless reversed on
appeal by the Board of Commissioners
as hereafter stated, or in the absence
of an appeal, unless reversed by the
Board of Commissioners after a review
by it, motu propio, of the entire
proceedings within one year from the
promulgation of the decision.
In Commissioner of Immigration
v. Fernandez,[86] we held that the BOC
composed of new members is
precluded
from
reversing, motu
proprio, the decision of the BOC on
appeal from a BSI decision. But not to
be ignored was our ruling that at any
rate, the issue of authority should be
made
in
accordance
with
the
procedure established by law, with a
view to protecting the rights of
individuals.[87]
In this case, the Summary
Deportation Order was issued by the
BOC in the exercise of its authority
under Office Memorandum Order No.
34, and not in the exercise of its
appellate
jurisdiction
of
BSI
decisions. There is no law nor rule
which provides that a Summary
Deportation Order issued by the BOC
in the exercise of its authority
becomes final after one year from its
issuance,[88] or that the aggrieved
party is barred from filing a motion for
a reconsideration of any order or
decision of the BOC. The Rules of
Court may be applied in a suppletory
manner
to
deportation
proceedings[89] and under Rule 37, a
motion for reconsideration of a
decision or final order may be filed by
the aggrieved party.
Neither is there any law nor rule
providing that the BOC, composed of
new members, cannot revise a
Summary
Deportation
Order
previously issued by a different body
of Commissioners. The BOC that
issued the Summary Deportation
Order and the BOC which resolved the
respondents
Urgent
Motion
for
Reconsideration are one and the same
government entity, with the same
powers and duties regardless of its
membership. Similarly, an RTC judge
who replaces another judge who
presided over a case may review the
judgment or order of his predecessor
as long as the said judgment or order
has not as yet become final or
executory. The act subject of review is
not the act of the judge but the act of
the court.
The petitioners contention that it
failed to resolve the respondents
motion for reconsideration because of
the change of administration in the

18
BOC was branded by the CA as flimsy,
if not bordering on the absurd:
Firstly, it was issued three days (June
14, 2002) after petitioner filed this
instant petition on June 11, 2002 or
almost seven years from the time the
motion for reconsideration was filed;
Secondly, respondents counsels
excuse that it took such time to
resolve it because it was only later
that the motion for reconsideration
was discovered because of change of
administration, is flimsy, if not
bordering on the absurd;[90]
The Issuance of a New and Regular
Passport to the Respondent
Rendered the Summary
Deportation Order Moot and
Academic, and the Omnibus
Resolution of the BOC Lacking
in Legal Basis
We agree with the petitioner that
a foreign embassys cancellation of the
passport it had issued to its citizens,
or its refusal to issue a new one in lieu
of a passport that has expired, will
result in the loss of the aliens privilege
to stay in this country and his
subsequent
deportation
therefrom. But even the BOC asserted
in its Summary Deportation Order that
an embassys issuance of a new
passport to any of its citizens may bar
the latters deportation, citing the
resolution
of
this
Court
in
Schonemann
v.
Commissioner
[91]
Santiago.
Irrefragably,
Commissioner
Verceles was mandated to cause the
arrest of the respondent preparatory
to
his
deportation
from
the
Philippines. However, there was no
fixed period in the Order within which
to comply with the same. The
Commissioner is not mandated to
deport an alien immediately upon
receipt of the BOCs deportation order.
It is enough that the Commissioner
complies with the Order within a
reasonable time, which, in Mejoff v.
Director of Prisons,[92] we held to
connote as follows:
The meaning of reasonable time
depends upon the circumstances,
specially the difficulties of obtaining a
passport, the availability of
transportation, the diplomatic
arrangements with the governments
concerned and the efforts displayed to
send the deportee away; but the Court
warned that under established
precedents, too long a detention may
justify the issuance of a writ of habeas
corpus.

In this case, the BOC had yet to

act on the respondents Urgent Motion
for Reconsideration. The respondent
was also given a chance to secure a
clearance and a new passport with the
German
Embassy. After
all,
the
possibility that the German Embassy
would renew the respondents passport
could not be ruled out. This was
exactly what happened: the German
Embassy issued a new passport to the
respondent on March 12, 1996 after
the German District Court dismissed
the case for physical injuries. Thus,
the respondent was no longer an
undocumented alien; nor was he an
undesirable one for that matter.
The petitioner even admits that
there is no longer a legal or factual
basis to disqualify the respondent
from remaining in the country as a
permanent resident. Yet, the OSG
insists that he has to be deported first
so
that
the
BOCs
Summary
Deportation
Order
could
be
implemented. This contention was
rejected by the CA, thus:
During the hearing of petitioners
prayer for issuance of a writ of
preliminary injunction before Us,
respondents counsel from the Office of
the Solicitor General had the occasion
to manifest in open court that the
State has no opposition to petitioners
stay in the country provided he first
leave and re-enter and re-apply for
residency if only to comply with the
Summary Deportation Order of 1995.
That, to Our mind, seems
preposterous, if not ridiculous. An
individuals human rights and rights to
freedom, liberty and selfdetermination recognize no
boundaries in the democratic, free
and civilized world. Such rights follow
him wherever he may be. If presently,
there is no factual or legal impediment
to disqualify petitioner in his stay in
the country, other than allegedly
those relied upon in the Summary
Deportation Order of 1995 (as
hereinbefore discussed, had ceased to
exist), requiring petitioner to leave the
country and re-enter and re-apply for
residency makes little sense or no
sense at all, more so, in the case of
petitioner who, for many years past,
had lived herein and nurtured a family
that is Filipino.
Thus, opined, We, therefore, believe
and hereby rule, that there is
presently every reason to
enjoin/prohibit the Bureau of
Immigration, respondent
Commissioner Domingo in particular,
from presently deporting petitioner.[93]
We agree with the Court of
Appeals. The Summary Deportation
Order had been rendered moot and

academic upon the German Embassys

issuance of a new passport to the
respondent. The respondent had been
in the Philippines as a permanent
resident since July 18, 1986, and had
married a Filipino citizen, with whom
he has two children. He is not a
burden to the country nor to the
people of Palawan. He put up, and has
been
managing,
the
Bavaria
Restaurant
with
about
30
employees. He
has
no
pending
criminal case; nor does he have any
derogatory record. The respondent
was allowed by then Immigration
Commissioner Verceles to renew his
passport and was given time to secure
a
clearance
from
the
German
Embassy. The respondent was able to
do so. The case against him for
physical injuries was dismissed by the
German District Court. Thus, the
inceptual basis for the respondents
deportation had ceased to exist.
The power to deport is a police
matter against undesirable aliens,
whose presence in the country is
found to be injurious to the public
good. We believe that the deportation
of the respondent late in the day did
not achieve the said purpose. The
petitioner admitted that there is no
longer a factual and legal basis to
disqualify the respondent from staying
in
the
country. He
is
not
an
undesirable alien; nor is his presence
in the country injurious to public
good. He is even an entrepreneur and
a productive member of society.
Arrest, detention and deportation
orders of aliens should not be
enforced blindly and indiscriminately,
without
regard
to
facts
and
circumstances that will render the
[94]
same unjust, unfair or illegal.
To
direct the respondent to leave the
country first before allowing him reentry is downright iniquitous.[95] If the
respondent does leave the country, he
would thereby be accepting the force
and effect of the BOCs Summary
Deportation Order with its attendant
infirmities. He will thereby lose his
permanent resident status and admit
the efficacy of the cancellation of his
permanent resident visa. Moreover,
his entry into the country will be
subject to such conditions as the
petitioner may impose.
The deportation of an alien is not
intended
as
a
punishment
or
penalty. But in a real sense, it
is. In Bridges v. Wixon,[96] Mr. Justice
Murphy declared that the impact of
deportation upon the life of an alien is
often as great if not greater than the
imposition of a criminal sentence. In
dealing with deportation, there is no
justifiable reason for disregarding the
democratic and human tenets of our
legal system and descending to the

19
practices of despotism. As Justice
Brewer opined in Fong Yue Ting v.
United States,[97] deportation is a
punishment because it requires first,
an arrest, a deprivation of liberty and
second, a removal from home, from
family,
from
business,
from
property. To be forcibly taken away
from home, family, business and
property and sent across the ocean to
a distant land is punishment; and that
oftentimes is most severe and cruel. It
would be putting salt on the
respondents woes occasioned by the
BOCs
ineptitude. Considering
the
peculiar backdrop and the equities in
this case, the respondents deportation
and the cancellation of his permanent
resident visa as a precondition to his
re-entry into this country is severe
and cruel; it is a form of punishment.
Our ruling in Vivo v. Cloribel,
has no application in this case,
precisely because the factual milieu
here is entirely different. In that case,
the Commissioner of Immigration
required the respondents to leave the
country on or before September 12,
1962, because their stay in the
country as approved by the Secretary
of Justice had been cancelled. Our
ruling in Bing v. Commission on
Immigration,[99] even buttresses the
case for the respondent since we
ruled therein that an alien entitled to a
permanent stay cannot be deported
without being accorded due notice
and hearing.
[98]

IN
LIGHT
OF
ALL
THE
FOREGOING,
the
petition
is
DENIED. The Decision of the Court of
Appeals is AFFIRMED.

On November 20, 1996, PEA and the

petitioner, a single proprietorship
doing business under the name and
style of Edison Development and
HONORABLE COURT OF APPEALS and the HERITAGE
Construction, executed a Landscaping
PARK MANAGEMENT CORPORATION (HPMC),
and Construction Agreement whereby
the petitioner undertook to do all the
Respondents.
landscaping, including the
construction of a terrasoleum of the
Heritage Park. The Heritage Park
Executive Committee[4] approved the
agreement onMay 29, 1997.[5]
DECISION
QUISUMBING, J.:
This is a Petition for Review seeking to
reverse and set aside the
Decision[1] dated January 31, 2003 of
the Court of Appeals in CA-G.R. SP. No.
69771.

The Heritage Memorial Park is a

flagship project of the Bases
Conversion Development Authority
(BCDA) in Fort Bonifacio. To implement
the project, the BCDA, on September
9, 1994, entered into an agreement
denominated as the Pool Formation
Trust Agreement[2] (PFTA) with the
Philippine National Bank (PNB) and the
Public Estates Authority (PEA). The
BCDA was designated as the Project
Owner; PEA, the Project Manager; and
PNB as the Trustee.

As project owner, the BCDA was

tasked to sell the Heritage Park
SO ORDERED.
Investment Certificates to the public
and buyers become certificate
Puno, (Chairman), Quisumbing,
Austria-Martinez, and Tinga,
holders. The certificate gives the PNB
JJ., concur.
the absolute legal and beneficial title
to Heritage Park in trust for the
certificate holders. The PNB, as
trustee, shall protect the values of the
UY V. CA 494 SCRA 535
assets in the trust, receive and have
(2006)
custody over the proceeds from the
ELPIDIO S. UY, doing business under the namesale
and of the certificates, administer the
various funds, including
style EDISON DEVELOPMENT & CONSTRUCTION
disbursements for project costs and
related expenses, turnover the
Petitioner,
Perpetual Care Fund to the Successor
Trustee, turnover custody over
documents pertaining to the Heritage
Park and the residual funds to BCDA,
and turnover all the documents and
records to the Board of Trustees after
completion of the project.[3]
- versus -

PEA, as project manager, is tasked to

implement and complete the various
engineering works and improvements
of Heritage Park.

Pursuant to Section 11.01[6] of the

PFTA, in April 1999, the certificate
holders of the project organized
themselves into a non-stock, nonprofit corporation, the Heritage Park
Management Corporation (HPMC),
now the private respondent herein.
In October 1999, alleging delay in the
construction of the projects and huge
discrepancy between the
Accomplishment Report and the actual
physical accomplishment of
petitioners construction firm, the
Heritage Park Executive Committee
terminated the two construction
contracts namely, the landscaping
and nursery works, and the
construction of the terrasoleum.
On March 17, 2000, pursuant to the
terms of the PFTA, HPMC assumed all
the functions, duties and
responsibilities of the PEA, including
those under an assailed contract.[7]
On May 31, 2001, petitioner filed a
complaint[8] against the PEA before the
Construction Industry Arbitration
Commission (CIAC) where it sought to
recover payment for its progress
billings on the said projects.
On December 18, 2001, CIAC
promulgated its decision, holding that:
On the basis of the evidence
presented and the findings, judgment
is hereby rendered in favor of the
Claimant Contractor ELPIDIO S. UY
and Award is hereby made on its
monetary claims as follows:

P 2,354,607.40
2,949,767.71
8,197,396.65

20
16,210,108.28

Petitioner before us ascribes the

following as errors on the part of the
appellate court:
I

6,421,398.50
1,045,532.07
2,211,148.26
489,535.02
3,987,949.39
445,665.15

[P 44,313,108.43][9]
Interest at the rate of 6% per annum
on the total amount of
P39,879,493.89 (Attorneys fees and
reimbursement of arbitration fees
exclude) shall be paid from the date
this Decision is promulgated until
finality of this Decision, after which
interest at the rate of 12% per annum
shall be paid on the total amount of
P39,879,493.89 until full payment of
the awarded amount shall have been
made.
SO ORDERED.[10]
On March 14, 2002, an Alias Writ of
Execution[11] was issued by CIAC and
on the following day, a Notice of
Garnishment was served on private
respondent.
Private respondent HPMC then filed a
petition for Injunction/Prohibition
before the Court of Appeals on the
ground that CIAC had no jurisdiction
over the subject matter since HPMC
was not impleadedas a party thereby
depriving it of its right to be heard.
[12]
The appellate court ruled in favor
of respondent, as follows
WHEREFORE, premises considered,
the Petition is GRANTED and the
assailed three (3) rulings of public
respondent in CIAC 21-2001 are
hereby declared VOID AB INITIO and
produces no legal effect insofar as
the HPMCsinterests are concerned. No
costs.
SO ORDERED.[13]

THE COURT OF APPEALS COMMITTED

GROSS REVERSIBLE ERROR AND
DECIDED QUESTIONS OF SUBSTANCE
IN A WAY NOT IN ACCORDANCE WITH
LAW AND THE APPLICABLE DECISIONS
OF THE HONORABLE COURT WHEN IT
DECLARED VOID THE CIAC DECISION
DATED 18 DECEMBER 2001, THE
AMENDED WRIT OF EXECUTION
DATED 25 MARCH 2002, AND THE
AMENDED NOTICE OF GARNISHMENT
DATED 27 MARCH 2002, ON THE SOLE
GROSSLY ERRONEOUS BASIS THAT
RESPONDENT HPMC IS ALLEGEDLY A
REAL PARTY-IN-INTEREST AND AN
INDISPENSABLE PARTY IN CIAC CASE
NO. 21-2001 FOR WHICH REASON IT
SHOULD ALLEGEDLY HAVE BEEN
IMPLEADED IN SAID ARBITRATION
CASE, CONSIDERING THAT:
A.
UNDER THE POOL FORMATION
TRUST AGREEMENT (PFTA) WHICH
PROVIDES FOR THE CREATION OF
RESPONDENT HPMC, THE
TRUSTEESHIP RIGHTS CONFERRED
UPON IT INSOFAR AS THE HERITAGE
FUNDS ARE CONCERNED WERE
EXPRESSLY LIMITED BY THE PFTA
ITSELF WHICH EARMARKED OR
ALLOCATED SAID FUNDS TO ANSWER
FOR LIABILITIES UNDER THE
CONSTRUCTION AGREEMENTS
ENTERED INTO BY THE PEA, THEREBY
CONSTITUTING RESPONDENT HPMC
AS A MERE CUSTODIAN OR ESCROW
AGENT OF SAID FUNDS;
ACCORDINGLY, RESPONDENT HPMC IS
NOT A REAL PARTY-IN-INTEREST OR
INDISPENSABLE PARTY TO CIAC CASE
NO. 21-2001.

II
THE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR AND
DECIDED QUESTIONS OF SUBSTANCE
IN A WAY NOT IN ACCORDANCE WITH
LAW AND THE APPLICABLE DECISIONS
OF THE HONORABLE COURT WHEN IT
RULED THAT RESPONDENT HPMC IS
ALLEGEDLY A REAL PARTY-IN-INTEREST
OR AN INDISPENSABLE PARTY
CONSIDERING THAT THE HONORABLE
COURT HAS ALREADY CONCLUSIVELY
RULED THAT THERE WAS NO VALID
NOVATION OF THE CONSTRUCTION
AGREEMENTS BETWEEN PETITIONER
UY AND PEA. IN FACT, THE COURT OF
APPEALS ALREADY DISMISSED A
SIMILAR PETITION FILED BY
RESPONDENT HPMC INVOKING THE
SAME GROUNDS AS IN ITS PETITION A
QUO.
III
THE COURT OF APPEALS COMMITTED
GROSS REVERSIBLE ERROR IN
GRANTING THE EXTRAORDINARY
REMEDIES OF PROHIBITION AND
INJUNCTION TO ENJOIN THE
EXECUTION OF THE AWARD IN CIAC
CASE NO. 21-2001, CONSIDERING
THAT:
A.
RESPONDENT HPMC DOES NOT
HAVE ANY RIGHT, MUCH LESS A
CLEAR AND UNMISTAKABLE RIGHT,
WHICH WOULD ENTITLE IT TO THE
EXTRAORDINARY REMEDIES OF
PROHIBITION AND INJUNCTION.
B.
RESPONDENT HPMC MISERABLY
FAILED TO ESTABLISH THAT IT WOULD
SUFFER ANY INJURY, MUCH LESS
GRAVE AND IRREPARABLE INJURY, AS
A RESULT OF THE EXECUTION OF THE
SAID AWARD.

B.
BY CLAIMING TO BE THE
TRUSTEE OF THE
CONSTRUCTION/DEVELOPMENT FUND,
RESPONDENT HPMC IS ESTOPPED
FROM ASSERTING ITS ALLEGED
OWNERSHIP OF SAID FUND.

C.
RESPONDENT HPMCS SAID
PETITION FOR
INJUNCTION/PROHIBITION WAS
FATALLY DEFECTIVE IN BOTH FORM
AND SUBSTANCE; AND HENCE,
SHOULD HAVE BEEN DISMISSED.

C.
THE
CONSTRUCTION/DEVELOPMENT FUND
WAS EXPRESSLY EARMARKED TO PAY
FOR THE COSTS OF DEVELOPMENT OF
THE HERITAGE PARK, INCLUDING
ARBITRAL AWARDS; AND THUS, CIAC
ACTED WITHIN ITS DISCRETION WHEN
IT ISSUED A WRIT OF EXECUTION
DIRECTED AGAINST THE SAID FUND.

D.
RESPONDENT HPMC WAS
CLEARLY GUILTY OF FORUM-SHOPPING
WHEN IT FILED ITS PETITION FOR
INJUNCTION/PROHIBITION WITH THE
COURT OF APPEALS DURING THE
PENDENCY OF A SIMILAR PETITION
WITH THE HONORABLE COURT (G.R.
NO. 148133).
IV

21
THE COURT OF APPEALS COMMITTED
GROSS REVERSIBLE ERROR WHEN IT
WENT BEYOND THE ISSUES OF THE
CASE AND THE ALLEGATIONS IN
RESPONDENT HPMCS PETITION BY
DECLARING THE CIAC DECISION
DATED 18 DECEMBER 2001, THE
AMENDED WRIT OF EXECUTION
DATED 25 MARCH 2002, AND THE
AMENDED NOTICE OF GARNISHMENT
DATED 27 MARCH 2002 AS
ALLEGEDLY VOIDAB INITIO.[14]
Simply stated, the issues for our
resolution are: (1) Is HPMC a real
party-in-interest or an indispensable
party? (2) Does CIAC have jurisdiction
over the dispute? and (3) Was the
grant of the writs of
injunction/prohibition proper?
Petitioners contention is that private
respondent HPMC is not a party-ininterest to the case since it is a mere
trustee of the construction and
development funds and would not be
directly benefited or injured by the
outcome of the case.
Private respondent contends that
upon its incorporation and election of
its Board of Trustees, it assumed
ownership of the Heritage Park
Project. Further, since it is a non-stock,
non-profit corporation, with the
certificate holders as its members,
any claim against the PEA is in reality
a claim against all the parties who
pooled and contributed their resources
for the project; hence, it is an
indispensable party.[15]
An indispensable party is one whose
interest will be affected by the courts
action in the litigation, and without
whom no final determination of the
case can be had. The partys interest
in the subject matter of the suit and in
the relief sought are so inextricably
intertwined with the other parties that
his legal presence as a party to the
proceeding is an absolute necessity.[16]

Based on the Construction Agreement,

PEA entered into it in its capacity as
Project Manager, pursuant to the
PFTA. According to the provisions of
the PFTA,[17] upon the formation of the
HPMC, the PEA would turn over to the
HPMC all the contracts relating to
the Heritage Park. At the time of the
filing of the CIAC Case on May 31,
2001, PEA ceased to be the Project

Manager of the Heritage Park Project,

pursuant to Section 11 of the
PFTA. Through a Deed of Assignment,
[18]
PEA assigned its interests in all the
existing contracts it entered into as
the Project Manager
for Heritage Park to HPMC. As early
asMarch 17, 2000, PEA officially
turned over to HPMC all the
documents and equipment in its
possession related to the Heritage
Park Project. Petitioner was duly
informed of these incidents through a
letter datedMarch 13, 2000.
[19]
Apparently, as of the date of the
filing of the CIAC Case, PEA is no
longer a party-in-interest. Instead, it is
now private respondent HPMC, as the
assignee, who stands to be benefited
or injured by the judgment in the
suit. In its absence, there cannot be a
resolution of the dispute of the parties
before the court which is effective,
complete or equitable.[20] We thus
reiterate that HPMC is an
indispensable party.
Does CIAC have jurisdiction over the
dispute? Section 4[21] of Executive
Order No. 1008[22] is pertinent. It
provides that the jurisdiction of the
CIAC over the parties is dependent on
the agreement and consent of the
parties to the construction contract, to
submit their dispute for
arbitration. Absent such consent, the
CIAC cannot validly proceed against a
party for lack of jurisdiction.
In this instance, both parties agreed to
submit the dispute for arbitration.
However, the CIAC should have
dismissed the same on the ground
that the private respondent was
not impleaded, it being an
indispensable party to the case.
Indispensable parties must be joined
either as plaintiffs or defendants.
[23]
Whenever it appears to the court in
the course of a proceeding that an
indispensable party has not been
joined, it is the duty of the court to
stop the trial and to order the
inclusion of such party.[24] The absence
of an indispensable party renders all
subsequent actuations of the court
null and void, for want of authority to
act, not only as to the absent parties,
but even as to those present.[25]
It has come to the Courts attention
that from the inception of the case,
PEA informed the CIAC that pursuant
to the PFTA and the Deed of

Assignment, all its rights and

obligations under the contract have
already been assigned to private
respondent.[26]
The responsibility of impleading all the
indispensable parties rests on the
plaintiff. The defendant does not have
the right to compel the plaintiff to
prosecute the action against a party if
he does not wish to do so, but the
plaintiff will have to suffer the
consequences of any error he might
commit in exercising his option.[27]
As to the third issue -- on the propriety
of the writs of injunction/prohibition -the matter has been mooted by our
disquisitions above, and the issue has
become academic.
WHEREFORE, the petition is DENIED,
without prejudice to the re-filing of the
case against the proper party in
interest.
Costs against petitioner.

LAPERAL DEVT. CORP. V.

CA, 223 SCRA 261 (1993)
G.R. No. 96354 June 8, 1993
LAPERAL DEVELOPMENT
CORPORATION and SUNBEAMS
CONVENIENCE FOOD
CORPORATION,petitioners,
vs.
HON. COURT OF APPEALS and THE
HEIRS OF FILOTEO T.
BANZON, respondents.
Vicente R. Acsay for petitioners.

CRUZ, J.:
In Civil Case No. Q-34907 in the Court
of First Instance of Rizal, Quezon City,
Atty. Filoteo T. Banzon sought recovery
of attorney's fees from Oliverio
Laperal, Laperal Development
Corporation, and Imperial
Development Corporation for
professional services rendered by him
in the following cases:
1. Land Registration
Case No. 20, Court
of First Instance of
Bataan, Branch 1.

22
2. Land Registration
Case, Court of First
Instance of Bataan,
Branch 2.
3. G.R. No. L-47074,
Laperal
Development
Corp., et al. vs. Hon.
Abraham P. Vera,
Ascario Tuazon,et al.
4. Petition for Land
Registration, Court
of First Instance of
Bataan, Branch 1.
5. Land Registration
Case No. N-398,
Court of First
Instance of Baguio.
6. Civil Case No.
3922, Court of First
Instance of Bataan,
Branch 2, Oliverio
Laperal vs. Mario
Francisco.
7. Civil Case No.
4062, Court of First
Instance of Bataan,
Republic vs.
Sunbeams
Convenience Foods,
Inc., et al.
8. Civil Case No.
4437, Court of First
Instance of Bataan,
Laperal
Development
Corporation et al.
vs. Spouses Ascario
Tyazon and
Purificacion
Ampil, et al.
9. Administrative
action filed by the
Solicitor General
against Laperal
Development
Corporation for
annulment of title to
400 hectares of
land.
10. Civil Case No. Q22933, Court of First
Instance of Quezon
City, Imperial

Development Corp.
vs. P & B Taxicab
Inc..
On April 8, 1983, the case was
decided on the basis of a Compromise
Agreement reading in part as follows:
Atty. Filoteo Banzon
by this agreement,
does hereby
voluntarily and
freely waive, forfeit,
or consider as fully
paid any and all
other claims of
money or otherwise
that he may have
against the
defendants, in all
cases in the
Philippines that he
may have handled
for the defendants
in the past,
including whatever
money claims he
may have in the
above-entitled case
outside of this
agreement, inclusive
of representation
fees, representation
expenses,
appearance fees, or
retainers fees, or
other forms of
attorneys fees and,
hereby re-affirm that
he will undertake
upon his
professional oath
and standing, to
protect the interest
of the defendants in
all unfinished
appealed cases that
the herein plaintiff
had appeared in the
past in
representation of
the defendants,
without any further
renumeration or
attorneys fees,
representation fees,
appearance fees
and expenses in
connection
therewith.
On May 19, 1987, Banzon filed a
complaint against Oliverio Laperal.

Laperal Development Corporation.

Imperial Development Corporation,
Sunbeams Convenience Foods, Inc.
and Vicente Acsay for: 1) the
annulment of the aforequoted portion
of the Compromise Agreement; 2) the
collection of attorney's fees for his
services in the cases of: a) Imperial
Development Corporation vs. Aover,
b) Republic vs. Sunbeams
Convenience Foods, Inc., et al., and
c) Laperal Development vs. Ascario
Tuazon and Ascario Tuazon v. Judge
Maglalang, et al.; 3) the recovery of
the amount of P10,000.00 that was
adjudged payable to him as attorney's
fees by Ascario Tuazon in Civil Case
No. 3918; and 4) the payment to him
of nominal damages and attorney's
fees.
Docketed as Civil Case 50823 in
Branch 92 of the Regional Trial Court
of Quezon City, this case was
dismissed on the ground that the trial
court had no jurisdiction to annul the
Compromise Agreement as approved
by an equal and coordinate court. It
was held that the issue was
cognizable by the Court of Appeals. An
additional ground was that the
Compromise Agreement already
covered the plaintiff's professional
services in the aforementioned
cases. 1
On appeal, the decision was affirmed
on the issue of jurisdiction. The Court
of Appeals held, however, that
attorney's fees were due the private
respondent in the cases of Laperal
Development Corporation v. Ascario
Tuazon and Ascario Tuazon v. Judge
Maglalang and Republic v. Sunbeams
Convenience Foods. Inc.. 2
The petitioners are now before us to
challenge the decision insofar as it
orders them to pay Banzon attorney's
fees for his legal services in the
aforementioned cases.
An examination of the list of cases for
which Banzon was suing for attorney's
fees in Civil Case No. Q-34907 shows
that the case of Laperal Development
Corporation v. Ascario Tuazon was
included therein although it was
erroneously referred to as Civil Case
No. 4437. Even if it was not mentioned
in the complaint, it was nevertheless
covered by the Compromise
Agreement, where Atty. Banzon

23
waived all other claims against the
defendants * "in all cases in the
Philippines that he may have handled
for the defendants in the past,
including whatever money claims he
may have in the above-entitled case
outside of this agreement." He also
undertook therein to protect the
interest of the defendants in all
unfinished appealed cases where he
appeared in the past in representation
of latter, without any further
remuneration or attorney's fees,
representation fees, appearance fees
and expenses in connection therewith.
The undertaking clearly covered the
case of Laperal Development
Corporation v. Ascario Tuazon, (ACG.R. CV No. 70186), which was still
pending in the Court of Appeals at the
time of the Compromise Agreement,
and the subsequent case of Ascario
Tuazon v. Judge Maglalang (CA-G.R. SP
No. 07370). The respondent court
erred in supposing that the said
agreement covered only past services,
disregarding the clear stipulation for
the continuation of the private
respondent's services in all pending
appealed cases in which he had
earlier appeared.
Concerning the case of Republic vs.
Sunbeams Convenience Foods, Inc.
(G.R. No. 50464), the Court of Appeals
said:
At the time of the
execution of the
compromise
agreement and
rendition of the
judgment based
thereon on April 8,
1983, the
aforementioned
case bearing G.R.
No. 50464 was still
pending in the
Supreme Court. It
was not, however,
the subject of the
compromise
agreement (Exhibits
C and 2; Annex 2,
answer, pp. 47-55,
65-66, rec.). It could
not have been so
because Sunbeams
Convenience Foods,
Inc. was not a party
defendant in the

second amended
complaint, although
reference was made
to it in the
appellant's seventh
cause of action for
which he has
rendered
professional services
but for which
attorney's fees were
being claimed from
the herein appellee
Oliverio Laperal
(Exhibits A and 1).
But nothing is
mentioned in the
second amended
complaint and in the
compromise
agreement (Exhibits
A and 1; C and 2)
which would
indicate that
Sunbeams
Convenience Foods,
Inc. itself was a
party plaintiff
therein privy to the
case. Appellee
Oliverio Laperal and
Sunbeams
Convenience Foods,
Inc. do not appear to
be one and the
same.
It appearing that it
was the herein
appellant who filed
the brief for
Sunbeams
Convenience Foods,
Inc. in the Supreme
Court on March 14,
1980 (Exhibit D), he
should be
compensated for his
services.
Banzon's claim for attorney's fees in
the said case was also among those
enumerated in his complaint in Civil
Case No. Q-34907 against Oliverio
Laperal, Laperal Development
Corporation, and Imperial
Development Corporation. Notably,
Sunbeams Convenience Foods, Inc.
(Sunbeams, for brevity), referred to in
the complaint as "Mr. Laperal's
Corporation," was not joined by name
as a party-defendant. Apparently, the
private respondent believed that
Oliverio Laperal, being the president

of the said company, was directly

obligated to him for the attorney's
fees due him for his handling of the
case for Sunbeams.
It is settled that a corporation is
clothed with a personality separate
and distinct from that of the persons
composing it. 3 It may not generally
be held liable for the personal
indebtedness of its stockholders or
those of the entities connected with
it. 4 Conversely, a stockholder cannot
be made to answer for any of its
financial obligations even if he should
be its president. 5
There is no evidence that Sunbeams
and Laperal are one and the same
person. While it is true that Laperal is
a stockholder, director and officer of
Sunbeams, that status alone does not
make him answerable for the liabilities
of the said corporation. Such liabilities
include Banzon's attorney's fees for
representing it in the case of Republic
v. Sunbeams Convenience Foods, Inc.
Sunbeams should have been joined as
a party-defendant in order that the
judgment of the lower court could
legally affect it. But even if it was not
impleaded, the court could still validly
proceed with the case because
Sunbeams was not an indespensable
party but only a proper party. A proper
party is one which ought to be a party
if complete relief is to be accorded as
between those already parties. 6 A
party is indespensable if no final
determination can be had of an action
unless it is joined either as plaintiff or
defendant. 7
The Compromise Agreement upon
which the decision of the court was
based was between plaintiff Atty.
Banzon and the defendants
represented by Oliverio Laperal. To
repeat, Sunbeams was not a party to
this agreement and so could not be
affected by it.
It is noted, however, that in his
complaint in Civil Case No. 50823
against Sunbeams et al., Banzon
stated:
1. On the 1st cause
of action, to declare
the portions of the
compromise

24
agreement (Annex
A) alleged in par. 4
of the 1st cause of
action where
plaintiff waives his
attorney's fees and
other fees in all
other cases he
handled in the past
for the defendants
Oliverio Laperal and
his corporations not
included in the
complaint for
attorney's fee . . .
(emphasis supplied)
This declaration amounted to an
admission that he had also waived his
attorney's fees in the cases he had
handled for Laperal's corporations
which were not impleaded in Civil
Case Q-34907, including Sunbeams.
Moreover, in the hearing Civil Case
50823, Banzon testified as follows.
Atty. Banzon: I am
not claiming my
attorney's fees from
1974 to 1981. What
I was claiming was
the attorney's fees
for the services I
have rendered after
the compromise
agreement in 1983
to 1987 by virtue of
the new agreement .
. .. (TSN, Sept. 15, p.
7 Records, Vol. II, p.
129).
xxx xxx xxx
Court: So you are
not claiming
anymore your
attorney's fees in
those ten cases?
Atty. Banzon: I am
claiming only for the
services I have
rendered from 1983
to 1987 by virtue of
a new agreement.
Court: These
services of yours
exclude the ten?

Atty. Banzon:
Exclude the ten,
Your Honor. (Ibid, p.
16)
xxx xxx xxx
Atty. Banzon: I
admit, Your Honor
that those 10
services are those
services I rendered
in the past wherein I
waived my
attorney's fees; my
services covered
from 1974 to 1981
but not my services
after the
compromise
agreement. (ibid, p.
22).
The Sunbeams case was one of the
ten cases listed in the complaint in
Civil Case No. 34907. It was pending
before this Court when Civil Case No.
Q-34907 and Civil Case No. 50823
were instituted. To prove his claim for
attorney's fees for his services in the
Sunbeams case, Banzon submitted to
the Regional Trial Court of Quezon
City, Branch 92, "Petitioner's Brief"
(Exh. "D") and "Petitioner's Reply to
Respondents' Brief" (Exh. "D-1") dated
March 14, 1980 and August 12, 1980,
respectively, which had earlier been
filled with this Court in connection
with the said case. Significantly, the
preparation and filing of those
pleadings were done sometime in
1980, which means that they were
among those ten cases referred to by
Atty. Banzon for which he had waived
his attorney's fees. There is no other
proof of his services in the said case
after 1983 to 1987.
The private respondent's claim for
attorney's fees in the Sunbeam case
was waived by him not by virtue of
the Compromise Agreement to which
Sunbeams, not being a defendant in
Civil Case No. Q-34907, could not
have been a party. What militates
against his claim is his own judicial
admission that he had waived his
attorney's fees for the cases he had
handled from 1974 to 1981 for
Oliverio Laperal and his corporations,
including those not impleaded in his
complaint in Civil Case No. Q-34907.

ACCORDINGLY, the petition is

GRANTED. The decision of the
respondent court dated November 21,
1990 is MODIFIED. Petitioners Laperal
Development Corporation and
Sunbeams Convenience Foods, Inc.
are declared no longer liable to the
private respondents for attorney's
fees in AC-G.R. CV No. 70186, CA-G.R.
SP No. 07370 and G.R. No. 50464.
Costs against the private respondent.
SO ORDERED.
Grio-Aquino, Bellosillo and Quiason,
JJ., concur.

OPOSA V. FACTORAN, 224

SCRA 792 (1993)
DAVIDE, JR., J.:
In a broader sense, this petition bears
upon the right of Filipinos to a
balanced and healthful ecology which
the petitioners dramatically associate
with the twin concepts of "intergenerational responsibility" and "intergenerational justice." Specifically, it
touches on the issue of whether the
said petitioners have a cause of action
to "prevent the misappropriation or
impairment" of Philippine rainforests
and "arrest the unabated hemorrhage
of the country's vital life support
systems and continued rape of Mother
Earth."
The controversy has its genesis in Civil
Case No. 90-77 which was filed before
Branch 66 (Makati, Metro Manila) of
the Regional Trial Court (RTC), National
Capital Judicial Region. The principal
plaintiffs therein, now the principal
petitioners, are all minors duly
represented and joined by their
respective parents. Impleaded as an
additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a
domestic, non-stock and non-profit
corporation organized for the purpose
of, inter alia, engaging in concerted
action geared for the protection of our
environment and natural resources.
The original defendant was the
Honorable Fulgencio S. Factoran, Jr.,
then Secretary of the Department of
Environment and Natural Resources
(DENR). His substitution in this
petition by the new Secretary, the

25
Honorable Angel C. Alcala, was
subsequently ordered upon proper
motion by the petitioners. 1 The
complaint 2 was instituted as a
taxpayers' class suit 3 and alleges that
the plaintiffs "are all citizens of the
Republic of the Philippines, taxpayers,
and entitled to the full benefit, use
and enjoyment of the natural resource
treasure that is the country's virgin
tropical forests." The same was filed
for themselves and others who are
equally concerned about the
preservation of said resource but are
"so numerous that it is impracticable
to bring them all before the Court."
The minors further asseverate that
they "represent their generation as
well as generations yet
unborn." 4 Consequently, it is prayed
for that judgment be rendered:
. . . ordering
defendant, his
agents,
representatives and
other persons acting
in his behalf to
(1) Cancel all
existing timber
license agreements
in the country;
(2) Cease and desist
from receiving,
accepting,
processing,
renewing or
approving new
timber license
agreements.
and granting the plaintiffs ". . . such
other reliefs just and equitable under
the premises." 5
The complaint starts off with the
general averments that the Philippine
archipelago of 7,100 islands has a
land area of thirty million (30,000,000)
hectares and is endowed with rich,
lush and verdant rainforests in which
varied, rare and unique species of
flora and fauna may be found; these
rainforests contain a genetic,
biological and chemical pool which is
irreplaceable; they are also the habitat
of indigenous Philippine cultures which
have existed, endured and flourished
since time immemorial; scientific
evidence reveals that in order to
maintain a balanced and healthful

ecology, the country's land area

should be utilized on the basis of a
ratio of fifty-four per cent (54%) for
forest cover and forty-six per cent
(46%) for agricultural, residential,
industrial, commercial and other uses;
the distortion and disturbance of this
balance as a consequence of
deforestation have resulted in a host
of environmental tragedies, such as
(a) water shortages resulting from
drying up of the water table,
otherwise known as the "aquifer," as
well as of rivers, brooks and streams,
(b) salinization of the water table as a
result of the intrusion therein of salt
water, incontrovertible examples of
which may be found in the island of
Cebu and the Municipality of Bacoor,
Cavite, (c) massive erosion and the
consequential loss of soil fertility and
agricultural productivity, with the
volume of soil eroded estimated at
one billion (1,000,000,000) cubic
meters per annum approximately
the size of the entire island of
Catanduanes, (d) the endangering and
extinction of the country's unique,
rare and varied flora and fauna, (e)
the disturbance and dislocation of
cultural communities, including the
disappearance of the Filipino's
indigenous cultures, (f) the siltation of
rivers and seabeds and consequential
destruction of corals and other aquatic
life leading to a critical reduction in
marine resource productivity, (g)
recurrent spells of drought as is
presently experienced by the entire
country, (h) increasing velocity of
typhoon winds which result from the
absence of windbreakers, (i) the
floodings of lowlands and agricultural
plains arising from the absence of the
absorbent mechanism of forests, (j)
the siltation and shortening of the
lifespan of multi-billion peso dams
constructed and operated for the
purpose of supplying water for
domestic uses, irrigation and the
generation of electric power, and (k)
the reduction of the earth's capacity
to process carbon dioxide gases which
has led to perplexing and catastrophic
climatic changes such as the
phenomenon of global warming,
otherwise known as the "greenhouse
effect."
Plaintiffs further assert that the
adverse and detrimental
consequences of continued and
deforestation are so capable of
unquestionable demonstration that

the same may be submitted as a

matter of judicial notice. This
notwithstanding, they expressed their
intention to present expert witnesses
as well as documentary, photographic
and film evidence in the course of the
trial.
As their cause of action, they
specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead
by reference the
foregoing
allegations.
8. Twenty-five (25)
years ago, the
Philippines had
some sixteen (16)
million hectares of
rainforests
constituting roughly
53% of the country's
land mass.
9. Satellite images
taken in 1987 reveal
that there remained
no more than 1.2
million hectares of
said rainforests or
four per cent (4.0%)
of the country's land
area.
10. More recent
surveys reveal that
a mere 850,000
hectares of virgin
old-growth
rainforests are left,
barely 2.8% of the
entire land mass of
the Philippine
archipelago and
about 3.0 million
hectares of
immature and
uneconomical
secondary growth
forests.
11. Public records
reveal that the
defendant's,
predecessors have
granted timber
license agreements
('TLA's') to various

26
corporations to cut
the aggregate area
of 3.89 million
hectares for
commercial logging
purposes.
A copy of the TLA
holders and the
corresponding areas
covered is hereto
attached as Annex
"A".
12. At the present
rate of
deforestation, i.e. ab
out 200,000
hectares per annum
or 25 hectares per
hour nighttime,
Saturdays, Sundays
and holidays
included the
Philippines will be
bereft of forest
resources after the
end of this ensuing
decade, if not
earlier.
13. The adverse
effects, disastrous
consequences,
serious injury and
irreparable damage
of this continued
trend of
deforestation to the
plaintiff minor's
generation and to
generations yet
unborn are evident
and incontrovertible.
As a matter of fact,
the environmental
damages
enumerated in
paragraph 6 hereof
are already being
felt, experienced
and suffered by the
generation of
plaintiff adults.
14. The continued
allowance by
defendant of TLA
holders to cut and
deforest the
remaining forest
stands will work
great damage and

irreparable injury to
plaintiffs
especially plaintiff
minors and their
successors who
may never see, use,
benefit from and
enjoy this rare and
unique natural
resource treasure.
This act of
defendant
constitutes a
misappropriation
and/or impairment
of the natural
resource property he
holds in trust for the
benefit of plaintiff
minors and
succeeding
generations.
15. Plaintiffs have a
clear and
constitutional right
to a balanced and
healthful ecology
and are entitled to
protection by the
State in its capacity
as the parens
patriae.
16. Plaintiff have
exhausted all
administrative
remedies with the
defendant's office.
On March 2, 1990,
plaintiffs served
upon defendant a
final demand to
cancel all logging
permits in the
country.
A copy of the
plaintiffs' letter
dated March 1, 1990
is hereto attached
as Annex "B".
17. Defendant,
however, fails and
refuses to cancel the
existing TLA's to the
continuing serious
damage and
extreme prejudice of
plaintiffs.

18. The continued

failure and refusal
by defendant to
cancel the TLA's is
an act violative of
the rights of
plaintiffs, especially
plaintiff minors who
may be left with a
country that is
desertified (sic),
bare, barren and
devoid of the
wonderful flora,
fauna and
indigenous cultures
which the
Philippines had been
abundantly blessed
with.
19. Defendant's
refusal to cancel the
aforementioned
TLA's is manifestly
contrary to the
public policy
enunciated in the
Philippine
Environmental Policy
which, in pertinent
part, states that it is
the policy of the
State
(a) to create,
develop, maintain
and improve
conditions under
which man and
nature can thrive in
productive and
enjoyable harmony
with each other;
(b) to fulfill the
social, economic
and other
requirements of
present and future
generations of
Filipinos and;
(c) to ensure the
attainment of an
environmental
quality that is
conductive to a life
of dignity and wellbeing. (P.D. 1151, 6
June 1977)

27
20. Furthermore,
defendant's
continued refusal to
cancel the
aforementioned
TLA's is
contradictory to the
Constitutional policy
of the State to
a. effect "a more
equitable
distribution of
opportunities,
income and wealth"
and "make full and
efficient use of
natural resources
(sic)." (Section 1,
Article XII of the
Constitution);
b. "protect the
nation's marine
wealth." (Section
2, ibid);
c. "conserve and
promote the nation's
cultural heritage and
resources (sic)"
(Section 14, Article
XIV,id.);
d. "protect and
advance the right of
the people to a
balanced and
healthful ecology in
accord with the
rhythm and
harmony of nature."
(Section 16, Article
II, id.)
21. Finally,
defendant's act is
contrary to the
highest law of
humankind the
natural law and
violative of plaintiffs'
right to selfpreservation and
perpetuation.
22. There is no other
plain, speedy and
adequate remedy in
law other than the
instant action to
arrest the unabated

hemorrhage of the
country's vital life
support systems and
continued rape of
Mother Earth. 6
On 22 June 1990, the original
defendant, Secretary Factoran, Jr.,
filed a Motion to Dismiss the
complaint based on two (2) grounds,
namely: (1) the plaintiffs have no
cause of action against him and (2)
the issue raised by the plaintiffs is a
political question which properly
pertains to the legislative or executive
branches of Government. In their 12
July 1990 Opposition to the Motion,
the petitioners maintain that (1) the
complaint shows a clear and
unmistakable cause of action, (2) the
motion is dilatory and (3) the action
presents a justiciable question as it
involves the defendant's abuse of
discretion.
On 18 July 1991, respondent Judge
issued an order granting the
aforementioned motion to dismiss. 7 In
the said order, not only was the
defendant's claim that the
complaint states no cause of action
against him and that it raises a
political question sustained, the
respondent Judge further ruled that
the granting of the relief prayed for
would result in the impairment of
contracts which is prohibited by the
fundamental law of the land.
Plaintiffs thus filed the instant special
civil action for certiorari under Rule 65
of the Revised Rules of Court and ask
this Court to rescind and set aside the
dismissal order on the ground that the
respondent Judge gravely abused his
discretion in dismissing the action.
Again, the parents of the plaintiffsminors not only represent their
children, but have also joined the
latter in this case. 8
On 14 May 1992, We resolved to give
due course to the petition and
required the parties to submit their
respective Memoranda after the Office
of the Solicitor General (OSG) filed a
Comment in behalf of the respondents
and the petitioners filed a reply
thereto.
Petitioners contend that the complaint
clearly and unmistakably states a
cause of action as it contains

sufficient allegations concerning their

right to a sound environment based
on Articles 19, 20 and 21 of the Civil
Code (Human Relations), Section 4 of
Executive Order (E.O.) No. 192
creating the DENR, Section 3 of
Presidential Decree (P.D.) No. 1151
(Philippine Environmental Policy),
Section 16, Article II of the 1987
Constitution recognizing the right of
the people to a balanced and healthful
ecology, the concept of generational
genocide in Criminal Law and the
concept of man's inalienable right to
self-preservation and self-perpetuation
embodied in natural law. Petitioners
likewise rely on the respondent's
correlative obligation per Section 4 of
E.O. No. 192, to safeguard the
people's right to a healthful
environment.
It is further claimed that the issue of
the respondent Secretary's alleged
grave abuse of discretion in granting
Timber License Agreements (TLAs) to
cover more areas for logging than
what is available involves a judicial
question.
Anent the invocation by the
respondent Judge of the Constitution's
non-impairment clause, petitioners
maintain that the same does not apply
in this case because TLAs are not
contracts. They likewise submit that
even if TLAs may be considered
protected by the said clause, it is well
settled that they may still be revoked
by the State when the public interest
so requires.
On the other hand, the respondents
aver that the petitioners failed to
allege in their complaint a specific
legal right violated by the respondent
Secretary for which any relief is
provided by law. They see nothing in
the complaint but vague and nebulous
allegations concerning an
"environmental right" which
supposedly entitles the petitioners to
the "protection by the state in its
capacity as parens patriae." Such
allegations, according to them, do not
reveal a valid cause of action. They
then reiterate the theory that the
question of whether logging should be
permitted in the country is a political
question which should be properly
addressed to the executive or
legislative branches of Government.
They therefore assert that the

28
petitioners' resources is not to file an
action to court, but to lobby before
Congress for the passage of a bill that
would ban logging totally.
As to the matter of the cancellation of
the TLAs, respondents submit that the
same cannot be done by the State
without due process of law. Once
issued, a TLA remains effective for a
certain period of time usually for
twenty-five (25) years. During its
effectivity, the same can neither be
revised nor cancelled unless the
holder has been found, after due
notice and hearing, to have violated
the terms of the agreement or other
forestry laws and regulations.
Petitioners' proposition to have all the
TLAs indiscriminately cancelled
without the requisite hearing would be
violative of the requirements of due
process.
Before going any further, We must
first focus on some procedural
matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The
original defendant and the present
respondents did not take issue with
this matter. Nevertheless, We hereby
rule that the said civil case is indeed a
class suit. The subject matter of the
complaint is of common and general
interest not just to several, but to all
citizens of the Philippines.
Consequently, since the parties are so
numerous, it, becomes impracticable,
if not totally impossible, to bring all of
them before the court. We likewise
declare that the plaintiffs therein are
numerous and representative enough
to ensure the full protection of all
concerned interests. Hence, all the
requisites for the filing of a valid class
suit under Section 12, Rule 3 of the
Revised Rules of Court are present
both in the said civil case and in the
instant petition, the latter being but
an incident to the former.
This case, however, has a special and
novel element. Petitioners minors
assert that they represent their
generation as well as generations yet
unborn. We find no difficulty in ruling
that they can, for themselves, for
others of their generation and for the
succeeding generations, file a class
suit. Their personality to sue in behalf
of the succeeding generations can
only be based on the concept of
intergenerational responsibility insofar

as the right to a balanced and

healthful ecology is concerned. Such a
right, as hereinafter expounded,
considers
the "rhythm and harmony of nature."
Nature means the created world in its
entirety. 9 Such rhythm and harmony
indispensably include, inter alia, the
judicious disposition, utilization,
management, renewal and
conservation of the country's forest,
mineral, land, waters, fisheries,
wildlife, off-shore areas and other
natural resources to the end that their
exploration, development and
utilization be equitably accessible to
the present as well as future
generations. 10 Needless to say, every
generation has a responsibility to the
next to preserve that rhythm and
harmony for the full enjoyment of a
balanced and healthful ecology. Put a
little differently, the minors' assertion
of their right to a sound environment
constitutes, at the same time, the
performance of their obligation to
ensure the protection of that right for
the generations to come.
The locus standi of the petitioners
having thus been addressed, We shall
now proceed to the merits of the
petition.
After a careful perusal of the
complaint in question and a
meticulous consideration and
evaluation of the issues raised and
arguments adduced by the parties,
We do not hesitate to find for the
petitioners and rule against the
respondent Judge's challenged order
for having been issued with grave
abuse of discretion amounting to lack
of jurisdiction. The pertinent portions
of the said order reads as follows:
xxx xxx xxx
After a careful and
circumspect
evaluation of the
Complaint, the Court
cannot help but
agree with the
defendant. For
although we believe
that plaintiffs have
but the noblest of all
intentions, it (sic)
fell short of alleging,
with sufficient
definiteness, a

specific legal right

they are seeking to
enforce and protect,
or a specific legal
wrong they are
seeking to prevent
and redress (Sec. 1,
Rule 2, RRC).
Furthermore, the
Court notes that the
Complaint is replete
with vague
assumptions and
vague conclusions
based on unverified
data. In fine,
plaintiffs fail to state
a cause of action in
its Complaint
against the herein
defendant.
Furthermore, the
Court firmly believes
that the matter
before it, being
impressed with
political color and
involving a matter of
public policy, may
not be taken
cognizance of by
this Court without
doing violence to
the sacred principle
of "Separation of
Powers" of the three
(3) co-equal
branches of the
Government.
The Court is likewise
of the impression
that it cannot, no
matter how we
stretch our
jurisdiction, grant
the reliefs prayed
for by the
plaintiffs, i.e., to
cancel all existing
timber license
agreements in the
country and to
cease and desist
from receiving,
accepting,
processing,
renewing or
approving new
timber license
agreements. For to
do otherwise would
amount to

29
"impairment of
contracts" abhored
(sic) by the
fundamental law. 11
We do not agree with the trial court's
conclusions that the plaintiffs failed to
allege with sufficient definiteness a
specific legal right involved or a
specific legal wrong committed, and
that the complaint is replete with
vague assumptions and conclusions
based on unverified data. A reading of
the complaint itself belies these
conclusions.
The complaint focuses on one specific
fundamental legal right the right to
a balanced and healthful ecology
which, for the first time in our nation's
constitutional history, is solemnly
incorporated in the fundamental law.
Section 16, Article II of the 1987
Constitution explicitly provides:
Sec. 16. The State
shall protect and
advance the right of
the people to a
balanced and
healthful ecology in
accord with the
rhythm and
harmony of nature.
This right unites
with the right to
health which is
provided for in the
preceding section of
the same article:
Sec. 15. The State
shall protect and
promote the right to
health of the people
and instill health
consciousness
among them.
While the right to a balanced and
healthful ecology is to be found under
the Declaration of Principles and State
Policies and not under the Bill of
Rights, it does not follow that it is less
important than any of the civil and
political rights enumerated in the
latter. Such a right belongs to a
different category of rights altogether
for it concerns nothing less than selfpreservation and self-perpetuation
aptly and fittingly stressed by the

petitioners the advancement of

which may even be said to predate all
governments and constitutions. As a
matter of fact, these basic rights need
not even be written in the Constitution
for they are assumed to exist from the
inception of humankind. If they are
now explicitly mentioned in the
fundamental charter, it is because of
the well-founded fear of its framers
that unless the rights to a balanced
and healthful ecology and to health
are mandated as state policies by the
Constitution itself, thereby
highlighting their continuing
importance and imposing upon the
state a solemn obligation to preserve
the first and protect and advance the
second, the day would not be too far
when all else would be lost not only
for the present generation, but also
for those to come generations
which stand to inherit nothing but
parched earth incapable of sustaining
life.
The right to a balanced and healthful
ecology carries with it the correlative
duty to refrain from impairing the
environment. During the debates on
this right in one of the plenary
sessions of the 1986 Constitutional
Commission, the following exchange
transpired between Commissioner
Wilfrido Villacorta and Commissioner
Adolfo Azcuna who sponsored the
section in question:
MRVILLACORTA:
Does this section mandate the State
to provide sanctions against all forms
of pollution air, water and noise
pollution?
MR. AZCUNA:
Yes, Madam President. The right to
healthful (sic) environment
necessarily carries with it the
correlative duty of not impairing the
same and, therefore, sanctions may
be provided for impairment of
environmental balance. 12
The said right implies, among many
other things, the judicious
management and conservation of the
country's forests.
Without such forests, the
ecological or environmental
balance would be irreversiby
disrupted.

Conformably with the enunciated right

to a balanced and healthful ecology
and the right to health, as well as the
other related provisions of the
Constitution concerning the
conservation, development and
utilization of the country's natural
resources, 13 then President Corazon
C. Aquino promulgated on 10 June
1987 E.O. No. 192, 14 Section 4 of
which expressly mandates that the
Department of Environment and
Natural Resources "shall be the
primary government agency
responsible for the conservation,
management, development and
proper use of the country's
environment and natural resources,
specifically forest and grazing lands,
mineral, resources, including those in
reservation and watershed areas, and
lands of the public domain, as well as
the licensing and regulation of all
natural resources as may be provided
for by law in order to ensure equitable
sharing of the benefits derived
therefrom for the welfare of the
present and future generations of
Filipinos." Section 3 thereof makes the
following statement of policy:
Sec. 3. Declaration
of Policy. It is
hereby declared the
policy of the State to
ensure the
sustainable use,
development,
management,
renewal, and
conservation of the
country's forest,
mineral, land, offshore areas and
other natural
resources, including
the protection and
enhancement of the
quality of the
environment, and
equitable access of
the different
segments of the
population to the
development and
the use of the
country's natural
resources, not only
for the present
generation but for
future generations
as well. It is also the
policy of the state to
recognize and apply

30
a true value system
including social and
environmental cost
implications relative
to their utilization,
development and
conservation of our
natural resources.
This policy declaration is substantially
re-stated it Title XIV, Book IV of the
Administrative Code of
1987, 15specifically in Section 1
thereof which reads:
Sec. 1. Declaration
of Policy. (1) The
State shall ensure,
for the benefit of the
Filipino people, the
full exploration and
development as well
as the judicious
disposition,
utilization,
management,
renewal and
conservation of the
country's forest,
mineral, land,
waters, fisheries,
wildlife, off-shore
areas and other
natural resources,
consistent with the
necessity of
maintaining a sound
ecological balance
and protecting and
enhancing the
quality of the
environment and
the objective of
making the
exploration,
development and
utilization of such
natural resources
equitably accessible
to the different
segments of the
present as well as
future generations.
(2) The State shall
likewise recognize
and apply a true
value system that
takes into account
social and
environmental cost
implications relative
to the utilization,

development and
conservation of our
natural resources.
The above provision stresses "the
necessity of maintaining a sound
ecological balance and protecting and
enhancing the quality of the
environment." Section 2 of the same
Title, on the other hand, specifically
speaks of the mandate of the DENR;
however, it makes particular reference
to the fact of the agency's being
subject to law and higher authority.
Said section provides:
Sec. 2. Mandate.
(1) The Department
of Environment and
Natural Resources
shall be primarily
responsible for the
implementation of
the foregoing policy.
(2) It shall, subject
to law and higher
authority, be in
charge of carrying
out the State's
constitutional
mandate to control
and supervise the
exploration,
development,
utilization, and
conservation of the
country's natural
resources.
Both E.O. NO. 192 and the
Administrative Code of 1987 have set
the objectives which will serve as the
bases for policy formulation, and have
defined the powers and functions of
the DENR.
It may, however, be recalled that even
before the ratification of the 1987
Constitution, specific statutes already
paid special attention to the
"environmental right" of the present
and future generations. On 6 June
1977, P.D. No. 1151 (Philippine
Environmental Policy) and P.D. No.
1152 (Philippine Environment Code)
were issued. The former "declared a
continuing policy of the State (a) to
create, develop, maintain and improve
conditions under which man and
nature can thrive in productive and
enjoyable harmony with each other,
(b) to fulfill the social, economic and

other requirements of present and

future generations of Filipinos, and (c)
to insure the attainment of an
environmental quality that is
conducive to a life of dignity and wellbeing." 16 As its goal, it speaks of the
"responsibilities of each generation as
trustee and guardian of the
environment for succeeding
generations." 17 The latter statute, on
the other hand, gave flesh to the said
policy.
Thus, the right of the petitioners (and
all those they represent) to a balanced
and healthful ecology is as clear as
the DENR's duty under its mandate
and by virtue of its powers and
functions under E.O. No. 192 and the
Administrative Code of 1987 to
protect and advance the said right.
A denial or violation of that right by
the other who has the corelative duty
or obligation to respect or protect the
same gives rise to a cause of action.
Petitioners maintain that the granting
of the TLAs, which they claim was
done with grave abuse of discretion,
violated their right to a balanced and
healthful ecology; hence, the full
protection thereof requires that no
further TLAs should be renewed or
granted.
A cause of action is defined as:
. . . an act or
omission of one
party in violation of
the legal right or
rights of the other;
and its essential
elements are legal
right of the plaintiff,
correlative
obligation of the
defendant, and act
or omission of the
defendant in
violation of said
legal right. 18
It is settled in this jurisdiction that in a
motion to dismiss based on the
ground that the complaint fails to
state a cause of action, 19 the question
submitted to the court for resolution
involves the sufficiency of the facts
alleged in the complaint itself. No
other matter should be considered;
furthermore, the truth of falsity of the
said allegations is beside the point for

31
the truth thereof is deemed
hypothetically admitted. The only
issue to be resolved in such a case is:
admitting such alleged facts to be
true, may the court render a valid
judgment in accordance with the
prayer in the complaint? 20 In Militante
vs. Edrosolano, 21 this Court laid down
the rule that the judiciary should
"exercise the utmost care and
circumspection in passing upon a
motion to dismiss on the ground of the
absence thereof [cause of action] lest,
by its failure to manifest a correct
appreciation of the facts alleged and
deemed hypothetically admitted, what
the law grants or recognizes is
effectively nullified. If that happens,
there is a blot on the legal order. The
law itself stands in disrepute."
After careful examination of the
petitioners' complaint, We find the
statements under the introductory
affirmative allegations, as well as the
specific averments under the subheading CAUSE OF ACTION, to be
adequate enough to show, prima
facie, the claimed violation of their
rights. On the basis thereof, they may
thus be granted, wholly or partly, the
reliefs prayed for. It bears stressing,
however, that insofar as the
cancellation of the TLAs is concerned,
there is the need to implead, as party
defendants, the grantees thereof for
they are indispensable parties.
The foregoing considered, Civil Case
No. 90-777 be said to raise a political
question. Policy formulation or
determination by the executive or
legislative branches of Government is
not squarely put in issue. What is
principally involved is the
enforcement of a right vis-avis policies already formulated and
expressed in legislation. It must,
nonetheless, be emphasized that the
political question doctrine is no longer,
the insurmountable obstacle to the
exercise of judicial power or the
impenetrable shield that protects
executive and legislative actions from
judicial inquiry or review. The second
paragraph of section 1, Article VIII of
the Constitution states that:
Judicial power
includes the duty of
the courts of justice
to settle actual
controversies

involving rights
which are legally
demandable and
enforceable, and to
determine whether
or not there has
been a grave abuse
of discretion
amounting to lack or
excess of jurisdiction
on the part of any
branch or
instrumentality of
the Government.
Commenting on this provision in his
book, Philippine Political Law, 22 Mr.
Justice Isagani A. Cruz, a distinguished
member of this Court, says:
The first part of the
authority represents
the traditional
concept of judicial
power, involving the
settlement of
conflicting rights as
conferred as law.
The second part of
the authority
represents a
broadening of
judicial power to
enable the courts of
justice to review
what was before
forbidden territory,
to wit, the discretion
of the political
departments of the
government.
As worded, the new
provision vests in
the judiciary, and
particularly the
Supreme Court, the
power to rule upon
even the wisdom of
the decisions of the
executive and the
legislature and to
declare their acts
invalid for lack or
excess of jurisdiction
because tainted with
grave abuse of
discretion. The
catch, of course, is
the meaning of
"grave abuse of
discretion," which is
a very elastic phrase

that can expand or

contract according
to the disposition of
the judiciary.
In Daza vs. Singson, 23 Mr. Justice
Cruz, now speaking for this Court,
noted:
In the case now
before us, the
jurisdictional
objection becomes
even less tenable
and decisive. The
reason is that, even
if we were to
assume that the
issue presented
before us was
political in nature,
we would still not be
precluded from
revolving it under
the expanded
jurisdiction
conferred upon us
that now covers, in
proper cases, even
the political
question. Article VII,
Section 1, of the
Constitution clearly
provides: . . .
The last ground invoked by the trial
court in dismissing the complaint is
the non-impairment of contracts
clause found in the Constitution. The
court a quo declared that:
The Court is likewise
of the impression
that it cannot, no
matter how we
stretch our
jurisdiction, grant
the reliefs prayed
for by the
plaintiffs, i.e., to
cancel all existing
timber license
agreements in the
country and to
cease and desist
from receiving,
accepting,
processing,
renewing or
approving new
timber license
agreements. For to
do otherwise would

32
amount to
"impairment of
contracts" abhored
(sic) by the
fundamental law. 24
We are not persuaded at all; on the
contrary, We are amazed, if not
shocked, by such a sweeping
pronouncement. In the first place, the
respondent Secretary did not, for
obvious reasons, even invoke in his
motion to dismiss the non-impairment
clause. If he had done so, he would
have acted with utmost infidelity to
the Government by providing undue
and unwarranted benefits and
advantages to the timber license
holders because he would have
forever bound the Government to
strictly respect the said licenses
according to their terms and
conditions regardless of changes in
policy and the demands of public
interest and welfare. He was aware
that as correctly pointed out by the
petitioners, into every timber license
must be read Section 20 of the
Forestry Reform Code (P.D. No. 705)
which provides:
. . . Provided, That
when the national
interest so requires,
the President may
amend, modify,
replace or rescind
any contract,
concession, permit,
licenses or any other
form of privilege
granted herein . . .
Needless to say, all licenses
may thus be revoked or
rescinded by executive
action. It is not a contract,
property or a property right
protested by the due process
clause of the Constitution.
In Tan vs. Director of
Forestry, 25 this Court held:
. . . A timber license
is an instrument by
which the State
regulates the
utilization and
disposition of forest
resources to the end
that public welfare is
promoted. A timber
license is not a

contract within the

purview of the due
process clause; it is
only a license or
privilege, which can
be validly withdrawn
whenever dictated
by public interest or
public welfare as in
this case.
A license is merely a
permit or privilege
to do what
otherwise would be
unlawful, and is not
a contract between
the authority,
federal, state, or
municipal, granting
it and the person to
whom it is granted;
neither is it property
or a property right,
nor does it create a
vested right; nor is it
taxation (37 C.J.
168). Thus, this
Court held that the
granting of license
does not create
irrevocable rights,
neither is it property
or property rights
(People vs. Ong Tin,
54 O.G. 7576).
We reiterated this pronouncement
in Felipe Ysmael, Jr. & Co., Inc. vs.
Deputy Executive Secretary: 26
. . . Timber licenses,
permits and license
agreements are the
principal
instruments by
which the State
regulates the
utilization and
disposition of forest
resources to the end
that public welfare is
promoted. And it
can hardly be
gainsaid that they
merely evidence a
privilege granted by
the State to
qualified entities,
and do not vest in
the latter a
permanent or
irrevocable right to

the particular
concession area and
the forest products
therein. They may
be validly amended,
modified, replaced
or rescinded by the
Chief Executive
when national
interests so require.
Thus, they are not
deemed contracts
within the purview
of the due process
of law clause
[See Sections 3(ee)
and 20 of Pres.
Decree No. 705, as
amended. Also, Tan
v. Director of
Forestry, G.R. No. L24548, October 27,
1983, 125 SCRA
302].
Since timber licenses are not
contracts, the non-impairment clause,
which reads:
Sec. 10. No law
impairing, the
obligation of
contracts shall be
passed. 27
cannot be invoked.
In the second place, even if it is to be
assumed that the same are contracts,
the instant case does not involve a
law or even an executive issuance
declaring the cancellation or
modification of existing timber
licenses. Hence, the non-impairment
clause cannot as yet be invoked.
Nevertheless, granting further that a
law has actually been passed
mandating cancellations or
modifications, the same cannot still be
stigmatized as a violation of the nonimpairment clause. This is because by
its very nature and purpose, such as
law could have only been passed in
the exercise of the police power of the
state for the purpose of advancing the
right of the people to a balanced and
healthful ecology, promoting their
health and enhancing the general
welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of
contract, under our

33
system of
government, is not
meant to be
absolute. The same
is understood to be
subject to
reasonable
legislative regulation
aimed at the
promotion of public
health, moral, safety
and welfare. In other
words, the
constitutional
guaranty of nonimpairment of
obligations of
contract is limited
by the exercise of
the police power of
the State, in the
interest of public
health, safety, moral
and general welfare.
The reason for this is emphatically set
forth in Nebia vs. New York, 29 quoted
in Philippine American Life Insurance
Co. vs. Auditor General, 30 to wit:
Under our form of
government the use
of property and the
making of contracts
are normally
matters of private
and not of public
concern. The
general rule is that
both shall be free of
governmental
interference. But
neither property
rights nor contract
rights are absolute;
for government
cannot exist if the
citizen may at will
use his property to
the detriment of his
fellows, or exercise
his freedom of
contract to work
them harm. Equally
fundamental with
the private right is
that of the public to
regulate it in the
common interest.
In short, the non-impairment clause
must yield to the police power of the
state. 31

Finally, it is difficult to imagine, as the

trial court did, how the nonimpairment clause could apply with
respect to the prayer to enjoin the
respondent Secretary from receiving,
accepting, processing, renewing or
approving new timber licenses for,
save in cases of renewal, no contract
would have as of yet existed in the
other instances. Moreover, with
respect to renewal, the holder is not
entitled to it as a matter of right.
WHEREFORE, being impressed with
merit, the instant Petition is hereby
GRANTED, and the challenged Order
of respondent Judge of 18 July 1991
dismissing Civil Case No. 90-777 is
hereby set aside. The petitioners may
therefore amend their complaint to
implead as defendants the holders or
grantees of the questioned timber
license agreements.
No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Grio-Aquino,
Regalado, Romero, Nocon, Bellosillo,
Melo and Quiason, JJ., concur.
Narvasa, C.J., Puno and Vitug, JJ., took
no part.
Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my
distinguished brother in the Court,
Davide, Jr., J., in this case which, to my
mind, is one of the most important
cases decided by this Court in the last
few years. The seminal principles laid
down in this decision are likely to
influence profoundly the direction and
course of the protection and
management of the environment,
which of course embraces the
utilization of all the natural resources
in the territorial base of our polity. I
have therefore sought to clarify,
basically to myself, what the Court
appears to be saying.
The Court explicitly states that
petitioners have the locus
standi necessary to sustain the

bringing and, maintenance of this suit

(Decision, pp. 11-12). Locus standi is
not a function of petitioners' claim
that their suit is properly regarded as
a class suit. I understand locus
standi to refer to the legal interest
which a plaintiff must have in the
subject matter of the suit. Because of
the very broadness of the concept of
"class" here involved membership
in this "class" appears to
embrace everyone living in the
country whether now or in the
future it appears to me that
everyone who may be expected to
benefit from the course of action
petitioners seek to require public
respondents to take, is vested with
the necessary locus standi. The Court
may be seen therefore to be
recognizing a beneficiaries' right of
action in the field of environmental
protection, as against both the public
administrative agency directly
concerned and the private persons or
entities operating in the field or sector
of activity involved. Whether such
beneficiaries' right of action may be
found under any and all
circumstances, or whether some
failure to act, in the first instance, on
the part of the governmental agency
concerned must be shown ("prior
exhaustion of administrative
remedies"), is not discussed in the
decision and presumably is left for
future determination in an appropriate
case.
The Court has also declared that the
complaint has alleged and focused
upon "one specific fundamental legal
right the right to a balanced and
healthful ecology" (Decision, p. 14).
There is no question that "the right to
a balanced and healthful ecology" is
"fundamental" and that, accordingly,
it has been "constitutionalized." But
although it is fundamental in
character, I suggest, with very great
respect, that it cannot be
characterized as "specific," without
doing excessive violence to language.
It is in fact very difficult to fashion
language more comprehensive in
scope and generalized in character
than a right to "a balanced and
healthful ecology." The list of
particular claims which can be
subsumed under this rubic appears to
be entirely open-ended: prevention
and control of emission of toxic fumes
and smoke from factories and motor
vehicles; of discharge of oil, chemical

34
effluents, garbage and raw sewage
into rivers, inland and coastal waters
by vessels, oil rigs, factories, mines
and whole communities; of dumping
of organic and inorganic wastes on
open land, streets and thoroughfares;
failure to rehabilitate land after stripmining or open-pit mining; kaingin or
slash-and-burn farming; destruction of
fisheries, coral reefs and other living
sea resources through the use of
dynamite or cyanide and other
chemicals; contamination of ground
water resources; loss of certain
species of fauna and flora; and so on.
The other statements pointed out by
the Court: Section 3, Executive Order
No. 192 dated 10 June 1987; Section
1, Title XIV, Book IV of the 1987
Administrative Code; and P.D. No.
1151, dated 6 June 1977 all appear
to be formulations of policy, as
general and abstract as the
constitutional statements of basic
policy in Article II, Section 16 ("the
right to a balanced and healthful
ecology") and 15 ("the right to
health").
P.D. No. 1152, also dated 6 June 1977,
entitled "The Philippine Environment
Code," is, upon the other hand, a
compendious collection of more
"specific environment management
policies" and "environment quality
standards" (fourth "Whereas" clause,
Preamble) relating to an extremely
wide range of topics:
(a) air quality
management;
(b) water quality
management;
(c) land use
management;
(d) natural resources
management and
conservation
embracing:
(i) fisheries and
aquatic resources;
(ii) wild life;
(iii) forestry and soil
conservation;

(iv) flood control and

natural calamities;
(v) energy
development;
(vi) conservation
and utilization of
surface and ground
water
(vii) mineral
resources
Two (2) points are worth making in
this connection. Firstly, neither
petitioners nor the Court has identified
the particular provision or provisions
(if any) of the Philippine Environment
Code which give rise to a specific legal
right which petitioners are seeking to
enforce. Secondly, the Philippine
Environment Code identifies with
notable care the particular
government agency charged with the
formulation and implementation of
guidelines and programs dealing with
each of the headings and subheadings mentioned above. The
Philippine Environment Code does not,
in other words, appear to contemplate
action on the part of private
persons who are beneficiaries of
implementation of that Code.
As a matter of logic, by finding
petitioners' cause of action as
anchored on a legal right comprised in
the constitutional statements above
noted, the Court is in effect saying
that Section 15 (and Section 16) of
Article II of the Constitution are selfexecuting and judicially enforceable
even in their present form. The
implications of this doctrine will have
to be explored in future cases; those
implications are too large and farreaching in nature even to be hinted
at here.
My suggestion is simply that
petitioners must, before the trial
court, show a more specific legal right
a right cast in language of a
significantly lower order of generality
than Article II (15) of the Constitution
that is or may be violated by the
actions, or failures to act, imputed to
the public respondent by petitioners
so that the trial court can validly
render judgment granting all or part of
the relief prayed for. To my mind, the

Court should be understood as simply

saying that such a more specific legal
right or rights may well exist in
our corpus of law, considering the
general policy principles found in the
Constitution and the existence of the
Philippine Environment Code, and that
the trial court should have given
petitioners an effective opportunity so
to demonstrate, instead of aborting
the proceedings on a motion to
dismiss.
It seems to me important that the
legal right which is an essential
component of a cause of action be a
specific, operable legal right, rather
than a constitutional or
statutory policy, for at least two (2)
reasons. One is that unless the legal
right claimed to have been violated or
disregarded is given specification in
operational terms, defendants may
well be unable to defend themselves
intelligently and effectively; in other
words, there are due process
dimensions to this matter.
The second is a broader-gauge
consideration where a specific
violation of law or applicable
regulation is not alleged or proved,
petitioners can be expected to fall
back on the expanded conception of
judicial power in the second
paragraph of Section 1 of Article VIII of
the Constitution which reads:
Section 1. . . .
Judicial power
includes the duty of
the courts of justice
to settle actual
controversies
involving rights
which are legally
demandable and
enforceable, and to
determine whether
or not there has
been agrave abuse
of
discretion amountin
g to lack or excess
of jurisdiction on the
part of any branch
or instrumentality of
the Government.
(Emphasis supplied)
When substantive standards
as general as "the right to a

35
balanced and healthy
ecology" and "the right to
health" are combined with
remedial standards as broad
ranging as "a grave abuse of
discretion amounting to lack
or excess of jurisdiction," the
result will be, it is respectfully
submitted, to propel courts
into the uncharted ocean of
social and economic policy
making. At least in respect of
the vast area of
environmental protection and
management, our courts
have no claim to special
technical competence and
experience and professional
qualification. Where no
specific, operable norms and
standards are shown to exist,
then the policy making
departments the
legislative and executive
departments must be
given a real and effective
opportunity to fashion and
promulgate those norms and
standards, and to implement
them before the courts
should intervene.
My learned brother Davide, Jr., J.,
rightly insists that the timber
companies, whose concession
agreements or TLA's petitioners
demand public respondents should
cancel, must be impleaded in the
proceedings below. It might be asked
that, if petitioners' entitlement to the
relief demanded is not dependent
upon proof of breach by the timber
companies of one or more of the
specific terms and conditions of their
concession agreements (and this,
petitioners implicitly assume), what
will those companies litigate about?
The answer I suggest is that they may
seek to dispute the existence of the
specific legal right petitioners should
allege, as well as the reality of the
claimed factual nexus between
petitioners' specific legal rights and
the claimed wrongful acts or failures
to act of public respondent
administrative agency. They may also
controvert the appropriateness of the
remedy or remedies demanded by
petitioners, under all the
circumstances which exist.
I vote to grant the Petition
for Certiorari because the protection
of the environment, including the

forest cover of our territory, is of

extreme importance for the country.
The doctrines set out in the Court's
decision issued today should,
however, be subjected to closer
examination.

# Separate Opinions
FELICIANO, J., concurring
I join in the result reached by my
distinguished brother in the Court,
Davide, Jr., J., in this case which, to my
mind, is one of the most important
cases decided by this Court in the last
few years. The seminal principles laid
down in this decision are likely to
influence profoundly the direction and
course of the protection and
management of the environment,
which of course embraces the
utilization of all the natural resources
in the territorial base of our polity. I
have therefore sought to clarify,
basically to myself, what the Court
appears to be saying.
The Court explicitly states that
petitioners have the locus
standi necessary to sustain the
bringing and, maintenance of this suit
(Decision, pp. 11-12). Locus standi is
not a function of petitioners' claim
that their suit is properly regarded as
a class suit. I understand locus
standi to refer to the legal interest
which a plaintiff must have in the
subject matter of the suit. Because of
the very broadness of the concept of
"class" here involved membership
in this "class" appears to
embrace everyone living in the
country whether now or in the
future it appears to me that
everyone who may be expected to
benefit from the course of action
petitioners seek to require public
respondents to take, is vested with
the necessary locus standi. The Court
may be seen therefore to be
recognizing a beneficiaries' right of
action in the field of environmental
protection, as against both the public
administrative agency directly
concerned and the private persons or
entities operating in the field or sector
of activity involved. Whether such

beneficiaries' right of action may be

found under any and all
circumstances, or whether some
failure to act, in the first instance, on
the part of the governmental agency
concerned must be shown ("prior
exhaustion of administrative
remedies"), is not discussed in the
decision and presumably is left for
future determination in an appropriate
case.
The Court has also declared that the
complaint has alleged and focused
upon "one specific fundamental legal
right the right to a balanced and
healthful ecology" (Decision, p. 14).
There is no question that "the right to
a balanced and healthful ecology" is
"fundamental" and that, accordingly,
it has been "constitutionalized." But
although it is fundamental in
character, I suggest, with very great
respect, that it cannot be
characterized as "specific," without
doing excessive violence to language.
It is in fact very difficult to fashion
language more comprehensive in
scope and generalized in character
than a right to "a balanced and
healthful ecology." The list of
particular claims which can be
subsumed under this rubic appears to
be entirely open-ended: prevention
and control of emission of toxic fumes
and smoke from factories and motor
vehicles; of discharge of oil, chemical
effluents, garbage and raw sewage
into rivers, inland and coastal waters
by vessels, oil rigs, factories, mines
and whole communities; of dumping
of organic and inorganic wastes on
open land, streets and thoroughfares;
failure to rehabilitate land after stripmining or open-pit mining; kaingin or
slash-and-burn farming; destruction of
fisheries, coral reefs and other living
sea resources through the use of
dynamite or cyanide and other
chemicals; contamination of ground
water resources; loss of certain
species of fauna and flora; and so on.
The other statements pointed out by
the Court: Section 3, Executive Order
No. 192 dated 10 June 1987; Section
1, Title XIV, Book IV of the 1987
Administrative Code; and P.D. No.
1151, dated 6 June 1977 all appear
to be formulations of policy, as
general and abstract as the
constitutional statements of basic
policy in Article II, Section 16 ("the
right to a balanced and healthful

36
ecology") and 15 ("the right to
health").
P.D. No. 1152, also dated 6 June 1977,
entitled "The Philippine Environment
Code," is, upon the other hand, a
compendious collection of more
"specific environment management
policies" and "environment quality
standards" (fourth "Whereas" clause,
Preamble) relating to an extremely
wide range of topics:
(a) air quality
management;
(b) water quality
management;
(c) land use
management;
(d) natural resources
management and
conservation
embracing:
(i) fisheries and
aquatic resources;
(ii) wild life;
(iii) forestry and soil
conservation;
(iv) flood control and
natural calamities;
(v) energy
development;
(vi) conservation
and utilization of
surface and ground
water
(vii) mineral
resources
Two (2) points are worth making in
this connection. Firstly, neither
petitioners nor the Court has identified
the particular provision or provisions
(if any) of the Philippine Environment
Code which give rise to a specific legal
right which petitioners are seeking to
enforce. Secondly, the Philippine
Environment Code identifies with
notable care the particular
government agency charged with the

formulation and implementation of

guidelines and programs dealing with
each of the headings and subheadings mentioned above. The
Philippine Environment Code does not,
in other words, appear to contemplate
action on the part of private
persons who are beneficiaries of
implementation of that Code.
As a matter of logic, by finding
petitioners' cause of action as
anchored on a legal right comprised in
the constitutional statements above
noted, the Court is in effect saying
that Section 15 (and Section 16) of
Article II of the Constitution are selfexecuting and judicially enforceable
even in their present form. The
implications of this doctrine will have
to be explored in future cases; those
implications are too large and farreaching in nature even to be hinted
at here.
My suggestion is simply that
petitioners must, before the trial
court, show a more specific legal right
a right cast in language of a
significantly lower order of generality
than Article II (15) of the Constitution
that is or may be violated by the
actions, or failures to act, imputed to
the public respondent by petitioners
so that the trial court can validly
render judgment granting all or part of
the relief prayed for. To my mind, the
Court should be understood as simply
saying that such a more specific legal
right or rights may well exist in
our corpus of law, considering the
general policy principles found in the
Constitution and the existence of the
Philippine Environment Code, and that
the trial court should have given
petitioners an effective opportunity so
to demonstrate, instead of aborting
the proceedings on a motion to
dismiss.

It seems to me important that the

legal right which is an essential
component of a cause of action be a
specific, operable legal right, rather
than a constitutional or
statutory policy, for at least two (2)
reasons. One is that unless the legal
right claimed to have been violated or
disregarded is given specification in
operational terms, defendants may
well be unable to defend themselves
intelligently and effectively; in other
words, there are due process
dimensions to this matter.
The second is a broader-gauge
consideration where a specific
violation of law or applicable
regulation is not alleged or proved,
petitioners can be expected to fall
back on the expanded conception of
judicial power in the second
paragraph of Section 1 of Article VIII of
the Constitution which reads:
Section 1. . . .
Judicial power
includes the duty of
the courts of justice
to settle actual
controversies
involving rights
which are legally
demandable and
enforceable, and to
determine whether
or not there has
been agrave abuse
of
discretion amountin
g to lack or excess
of jurisdiction on the
part of any branch
or instrumentality of
the Government.
(Emphasis supplied)
When substantive standards
as general as "the right to a
balanced and healthy
ecology" and "the right to
health" are combined with
remedial standards as broad
ranging as "a grave abuse of
discretion amounting to lack
or excess of jurisdiction," the
result will be, it is respectfully
submitted, to propel courts
into the uncharted ocean of
social and economic policy
making. At least in respect of
the vast area of

37
environmental protection and
management, our courts
have no claim to special
technical competence and
experience and professional
qualification. Where no
specific, operable norms and
standards are shown to exist,
then the policy making
departments the
legislative and executive
departments must be
given a real and effective
opportunity to fashion and
promulgate those norms and
standards, and to implement
them before the courts
should intervene.
My learned brother Davide, Jr., J.,
rightly insists that the timber
companies, whose concession
agreements or TLA's petitioners
demand public respondents should
cancel, must be impleaded in the
proceedings below. It might be asked
that, if petitioners' entitlement to the
relief demanded is not dependent
upon proof of breach by the timber
companies of one or more of the
specific terms and conditions of their
concession agreements (and this,
petitioners implicitly assume), what
will those companies litigate about?
The answer I suggest is that they may
seek to dispute the existence of the
specific legal right petitioners should
allege, as well as the reality of the
claimed factual nexus between
petitioners' specific legal rights and
the claimed wrongful acts or failures
to act of public respondent
administrative agency. They may also
controvert the appropriateness of the
remedy or remedies demanded by
petitioners, under all the
circumstances which exist.
I vote to grant the Petition
for Certiorari because the protection
of the environment, including the
forest cover of our territory, is of
extreme importance for the country.
The doctrines set out in the Court's
decision issued today should,
however, be subjected to closer
examination.
# Footnotes

MATAHY V. CONSOLIDATED
BANK , 58 SCRA 559 (1974)
G.R. No. L-23136 August 26, 1974
ISMAEL MATHAY, JOSEFINA
MATHAY, DIOGRACIAS T. REYES
and S. ADOR DIONISIO, plaintiffsappellants,
vs.
THE CONSOLIDATED BANK AND
TRUST COMPANY, JOSE MARINO
OLONDRIZ, WILFRIDO C. TECSON,
SIMON R. PATERNO, FERMIN Z.
CARAM, JR., ANTONIO P.
MADRIGAL, JOSE P. MADRIGAL,
CLAUDIO TEEHANKEE, and
ALFONSO JUAN OLONDRIZ,
defendants-appellees. CIPRIANO
AZADA, MARIA CRISTINA
OLONDRIZ PERTIERRA jointly with
her husband ARTURO PERTIERRA,
and MARIA DEL PUY OLONDRIZ DE
STEVENS, movants-intervenorsappellants.
Deogracias T. Reyes & Associates for
appellants.
Taada, Teehankee & Carreon for
appellees.
Paterno Pedrena for appellee Fermin
Z. Caram, Jr.
ZALDIVAR, J.:p
In this appeal, appellants-plaintiffs and
movants-intervenors seek the reversal
of the order dated March 21, 1964 of
the Court of First Instance of Manila
dismissing the complaint together
with all other pending incidents in Civil
Case No. 55810.
The complaint in this case, filed on
December 24, 1963 as a class suit,
under Section 12, Rule 3, of the Rules
of Court, contained six causes of
action. Under the first cause of action,
plaintiffs-appellants alleged that they
were, on or before March 28, 1962,
stockholders in the Consolidated
Mines, Inc. (hereinafter referred to as
CMI), a corporation duly organized and
existing under Philippine laws; that
the stockholders of the CMI, including
the plaintiffs-appellants, passed, at a
regular stockholders' meeting, a
Resolution providing: (a) that the
Consolidated Bank & Trust Co.
(hereinafter referred to as Bank) be

organized with an authorized capital

of P20,000,000.00; (b) that the
organization be undertaken by a
Board of Organizers composed of the
President and Members of the Board
of Directors of the CMI; (c) that all
stockholders of the CMI, who were
legally qualified to become
stockholders, would be entitled to
subscribe to the capital stock of the
proposed Bank "at par value to the
same extent and in the same amount
as said stockholders' respective share
holdings in the CMI," as shown in its
stock books on a date to be fixed by
the Board of Directors [which date was
subsequently fixed as January 15,
1963], provided that the right to
subscribe should be exercised within
thirty days from the date so fixed, and
"that if such right to subscription be
not so exercised then the stockholders
concerned shall be deemed to have
thereby waived and released ipso
facto their right to such subscription in
favor of the Interim Board of
Organizers of the Defendant Bank or
their assignees;" and (d) that the
Board of Directors of the CMI be
authorized to declare a "special
dividend" in an amount it would fix,
which the subscribing stockholders
might authorize to be paid directly to
the treasurer of the proposed Bank in
payment of the subscriptions; that the
President and members of the Board
of Directors of the CMI, who are the
individuals-defendants-appellees in
the instant case, constituted
themselves as the Interim Board of
Organizers; that said Board sent out,
on or about November 20, 1962, to
the CMI stockholders, including the
plaintiffs-appellants, circular letters
with "Pre-Incorporation Agreement to
Subscribe" forms that provided that
the payment of the subscription
should be made in cash from time to
time or by the application of the
special dividend declared by the CMI,
and that the subscription must be
made within the period from
December 4, 1962 to January 15,
1963, "otherwise such subscription
right shall be deemed to have been
thereby ipso facto waived and
released in favor of the Board of
Organizers of the Defendant Bank and
their assignees"; that the plaintiffsappellants accomplished and filed
their respective "Pre-Incorporation
Agreement to Subscribe" and paid in
full their subscriptions; that plaintiffsappellants and the other CMI

38
subscribing stockholders in whose
behalf the action was brought also
subscribed to a very substantial
amount of shares; that on June 25,
1963, the Board of Organizers caused
the execution of the Articles or
Incorporation of the proposed Bank
indicating an original subscription of
50,000 shares worth P5,000,000
subscribed and paid only by six of the
individuals-defendants-appellees,
namely, Antonio P. Madrigal, Jose P.
Madrigal Simon R. Paterno, Fermin Z.
Caram, Jr., Claudio Teehankee, and
Wilfredo C. Tecson, thereby excluding
the plaintiffs-appellants and the other
CMI subscribing stockholders who had
already subscribed; that the execution
of said Articles of Incorporation was
"in violation of law and in breach of
trust and contractual agreement as a
means to gain control of Defendant
Bank by Defendant Individuals and
persons or entities chosen by them
and for their personal profit or gain in
disregard of the rights of Plaintiffs and
other CMI Subscribing Stockholders;"
that the paid-in capital stock was
raised, as required by the Monetary
Board, to P8,000,000.00, and
individuals-defendants-appellees
caused to be issued from the unissued
shares 30,000 shares amounting to
P3,000,000.00, all of which were again
subscribed and paid for entirely by
individuals-defendants-appellees or
entities chosen by them "to the
exclusion of Plaintiffs and other CMI
subscribing stockholders" "in violation
of law and breach of trust and of the
contractual agreement embodied in
the contractual agreement of March
28, 1962"; that the Articles were filed
with the Securities and Exchange
Commission which issued the
Certificate of Incorporation on June 25,
1963; that as of the date of the
Complaint, the plaintiffs-appellants
and other CMI subscribing
stockholders had been denied,
through the unlawful acts and
manipulation of the defendant Bank
and Individuals-defendants-appellees,
the right to subscribe at par value, in
proportion to their equities
established under their respective
"Pre-Incorporation Agreements to
Subscribe" to the capital stock, i.e., (a)
to the original issue of 50,000 shares
and/or (b) to the additional issue of
30,000 shares, and/or (c) in that
portion of said original or additional
issue which was unsubscribed; that
the individuals-defendants-appellees

and the persons chosen by them had

unlawfully acquired stockholdings in
the defendant-appellee Bank in excess
of what they were lawfully entitled
and held such shares "in trust" for the
plaintiffs-appellants and the other CMI
stockholders; that it would have been
vain and futile to resort to intra
corporate remedies under the facts
and circumstances alleged above. As
relief on the first cause of action,
plaintiffs-appellants prayed that the
subscriptions and share holdings
acquired by the individualsdefendants- appellees and the
persons chosen by them, to the extent
that plaintiffs-appellants and the other
CMI stockholders had been deprived
of their right to subscribe, be annulled
and transferred to plaintiffs-appellants
and other CMI subscribing
stockholders.
Besides reproducing all the above
allegations in the other causes of
action, plaintiffs-appellants further
alleged under the second cause of
action that on or about August 28,
1963, defendants-appellees Antonio P.
Madrigal, Jose P. Madrigal: Fermin Z.
Caram, Jr., and Wilfredo C. Tecson
"falsely certified to the calling of a
special stockholders' meeting
allegedly pursuant to due notice and
call of Defendant Bank" although
plaintiffs-appellants and other CMI
stockholders were not notified thereof,
and amended the Articles of
Incorporation increasing the number
of Directors from 6 to 7, and had the
illegally created Position of Director
filled up by defendant-appellee
Alfonso Juan Olondriz, who was not
competent or qualified to hold such
position. In the third cause of action,
plaintiffs-appellants claimed actual
damages in an amount equivalent to
the difference between the par value
of the shares they were entitled, but
failed, to acquire and the higher
market value of the same shares. In
the fourth cause of action, Plaintiffsappellants claimed moral damages; in
the fifth, exemplary damages; and in
the sixth, attorney's fees.
In his manifestation to the court on
January 4, 1964, Francisco Sevilla,
who was one of the original plaintiffs,
withdrew. On January 15, 1964
Cipriano Azada, Maria Cristina
Olondriz Pertierra, Maria del Puy
Olondriz de Stevens (who later
withdrew as intervenors-appellants)

and Carmen Sievert de Amoyo, filed a

motion to intervene, and to join the
plaintiffs-appellants on record, to
which motion defendants-appellees,
except Fermin Z. Caram, Jr., filed, on
January 17, 1964 their opposition.
On February 7, 1964 defendantsappellees, except Fermin Z. Caram, Jr.,
filed a motion to dismiss on the
grounds that (a) plaintiffs-appellants
had no legal standing or capacity to
institute the alleged class suit; (b) that
the complaint did not state a sufficient
and valid cause of action; and (c) that
plaintiffs-appellants' complaint against
the increase of the number of
directors did not likewise state a
cause of action. Plaintiffs-appellants
filed their opposition thereto on
February 21, 1964.
On March 4, 1964 appellants, plaintiffs
and intervenors, filed a verified
petition for a writ of preliminary
injunction to enjoin defendantsappellees from considering or ratifying
by resolution, at the meeting of the
stockholders of defendant-appellee
Bank to be held the following day, the
unlawful apportionment of the shares
of the defendant-appellee Bank and
the illegal amendment to its Articles of
Incorporation increasing the number
of Directors, The Court, after hearing,
granted the writ, but subsequently set
it aside upon the appellees' filing a
counter bond.
Some subscribers to the capital stock
of the Bank like Concepcion Zuluaga,
et al., and Carlos Moran Sison, et al.,
filed separate manifestations that
they were opposing and disauthorizing
the suit of plaintiffs-appellants.
On March 7, 1964 defendantsappellees, except Fermin Z. Caram, Jr.,
filed a supplemental ground for their
motion to dismiss, to wit, that the
stockholders, except Fermin Z. Caram,
Jr., who abstained, had unanimously,
at their regular annual meeting held
on March 5, 1964, ratified and
confirmed all the actuations of the
organizers-directors in the
incorporation, organization and
establishment of the Bank.
In its order, dated March 21, 1964, the
trial court granted the motion to
dismiss, holding, among other things,
that the class suit could not be

39
maintained because of the absence of
a showing in the complaint that the
plaintiffs-appellants were sufficiently
numerous and representative, and
that the complaint failed to state a
cause of action. From said order,
appellants, plaintiffs and intervenors,
interposed this appeal to this Court on
questions of law and fact, contending
that the lower court erred as follows:
1. In holding that
plaintiffs-appellants
could not maintain
the present class
suit because of the
absence of a
showing in the
complaint that they
were sufficiently
numerous and
representative;
II. In holding that the
instant action could
not be maintained
as a class suit
because plaintiffsappellants did not
have a common
legal interest in the
subject matter of
the suit;
III. In dismissing the
present class suit on
the ground that it
did not meet the
requirements of Rule
3, section 12 of the
Rules of Court;
IV. In holding that
the complaint was
fatally defective in
that it failed to state
with particularity
that plaintiffsappellants had
resorted to, and
exhausted, intracorporate remedies;
V. In resolving
defendantsappellees' motion on
the basis of facts
not alleged in the
complaint;
VI. In holding that
plaintiffs-appellants'

complaint stated no
valid cause of action
against defendantsappellees;
VII. In not holding
that a trust
relationship existed
between the Interim
Board of Organizers
of defendantappellee Bank and
the CMI subscribing
stockholders and in
not holding that the
waiver was in favor
of the Board of
Trustees for the CMI
subscribing
stockholders;
VIII. In holding that
the failure of
plaintiffs-appellants
to allege that they
had paid or had
offered to pay for
the shares allegedly
pertaining to them
constituted another
ground for dismissal;
XI. In holding that
the allegations
under the second
cause of action
stated no valid
cause of action due
to a fatal omission
to allege that
plaintiffs-appellants
were stockholders of
record at the time of
the holding of the
special stockholders'
meeting;
X. In holding that
plaintiffs-appellants'
complaint stated no
cause of action
against defendantappellee Bank; and
XI. In considering
the resolution of
ratification and
confirmation and in
holding that the
resolution rendered
the issues in this
case moot.

The assigned error revolve around two

questions namely: (1) whether the
instant action could be maintained as
a class suit, and (2) whether the
complaint stated a cause of action.
These issues alone will be discussed.
1. Appellants contended in the first
three assigned errors that the trial
court erred in holding that the present
suit could not be maintained as a
class suit, and in support thereof
argued that the propriety of a class
suit should be determined by the
common interest in the subject matter
of the controversy; that in the instant
case there existed such common
interest which consisted not only in
the recovery of the shares of which
the appellants were unlawfully
deprived, but also in divesting the
individuals-defendants-appellees and
the person or entities chosen by them
of control of the appellee Bank. 1 ; that
the complaint showed that besides
the four plaintiff-appellants of record,
and the four movant-intervenorsappellants there were in the appellee
Bank many other stockholders who,
tough similarly situated as the
appellants, did not formally include
themselves as parties on record in
view of the representative character
of the suit; that the test, in order to
determine the legal standing of a
party to institute a class suit, was not
one, of number, but whether or not
the interest of said party was
representative of the persons in
whose behalf the class suit was
instituted; that granting arguendo,
that the plaintiffs-appellants were not
sufficiently numerous and
representative, the court should not
have dismissed the action, for
insufficiency of number in a class suit
was not a ground for a motion to
dismiss, and the court should have
treated the suit as an action under
Rule 3, section 6, of the Rules of Court
which permits a joinder of parties.
Defendants-appellees, on the
contrary, stressed that the instant suit
was instituted as a class suit and the
plaintiffs-appellants did not sue in
their individual capacities for the
protection of their individual interests;
that the plaintiffs appellants of record
could not be considered numerous
and representative, as said plaintiffsappellants were only four out of 1,500
stockholders, and owned only 8 shares
out of the 80,000 shares of stock of

40
the appellee Bank; that even if to the
four plaintiffs-appellants were added
the four movants-intervenorsappellants the situation would be the
same as two of the intervenors, to wit,
Ma. Cristina Olondriz Pertierra and Ma.
del Puy Olondriz de Stevens, could not
sue as they did not have their
husbands' consent; that it was
necessary that in a class suit the
complaint itself should allege facts
showing that the plaintiffs were
sufficiently numerous and
representative, and this did not obtain
in the instant case, as the complaint
did not. even allege how many other
CMI stockholders were "similarly
situated"; that the withdrawal of one
plaintiff, Francisco Sevilla, the
subsequent disclaimers of any interest
in the suit made in two separate
pleadings by other CMI stockholders
and the disauthorization of their being
represented by plaintiffs-appellants by
the 986 (out of 1,663) stockholders
who attended the annual meeting of
bank stockholders on March 5, 1964,
completely negated plaintiffsappellants' pretension that they were
sufficiently numerous and
representative or that there were
many other stockholders similarly
situated whom the plaintiffsappellants allegedly represented; that
plaintiffs-appellants did not have that
common or general interest required
by the Rules of Court in the subject
matter of the suit. 2
In their Reply Brief, appellants insisted
that non-compliance with Section 12,
Rule 3, not being one enumerated in
Rules 16 and 17, was not a ground for
dismissal; that the requirements for a
class had been complied with; that the
required common interest existed
even if the interests were several for
there was a common question of law
or fact and a common relief was
sought; that the common or general
interest could be in the object of the
action, in the result of the
proceedings, or in the question
involved in the action, as long as there
was a common right based on the
same essential facts; that plaintiffsappellants adequately represented the
aggrieved group of bank stockholders,
inasmuch as appellants' interests
were not antagonistic to those of the
latter, and appellants were in the
same position as the group in whose
behalf the complaint was filed.

The governing statutory provision for

the maintenance of a class suit is
Section 12 of Rule 3 of the Rules of
Court, which reads as follows:
Sec. 12. Class suit
When the subject
matter of the
controversy is one of
common or general
interest to many
persons, and the
parties are so
numerous that it is
impracticable to
bring them all
before the court,
one or more may
sue or defend for
the benefit of -ill.
But in such case the
court shall make
sure that the parties
actually before it are
sufficiently
numerous and
representative so
that all interests
concerned are fully
protected. Any party
in interest shall have
a right to intervene
in protection of his
individual interest.
The necessary elements for the
maintenance of a class suit are
accordingly: (1) that the subject
matter of the controversy be one of
common or general interest to many
persons, and (2) that such persons be
so numerous as to make it
impracticable to bring them all to the
court. An action does not become a
class suit merely because it is
designated as such in the pleadings.
Whether the suit is or is not a class
quit depends upon the attending
facts, and the complaint, or other
pleading initiating the class action
should allege the existence of the
necessary facts, to wit, the existence
of a subject matter of common
interest, and the existence of a class
and the number of persons in the
alleged class, 3 in order that the court
might be enabled to determine
whether the members of the class are
so numerous as to make it
impracticable to bring them all before
the court, to contrast the number
appearing on the record with the
number in the class and to determine
whether claimants on record

adequately represent the class and

the subject matter of general or
common interest. 4
The complaint in the instant case
explicitly declared that the plaintiffsappellants instituted the "present
class suit under Section 12, Rule 3, of
the Rules of Court in. behalf of CMI
subscribing stockholders" 5 but did not
state the number of said CMI
subscribing stockholders so that the
trial court could not infer, much
less make sure as explicitly required
by the sufficiently numerous and
representative in order that all
statutory provision, that the parties
actually before it were interests
concerned might be fully protected,
and that it was impracticable to bring
such a large number of parties before
the court.
The statute also requires, as a
prerequisite to a class suit, that the
subject-matter of the controversy be
of common or general interest to
numerous persons. Although it has
been remarked that the "innocent
'common or general interest'
requirement is not very helpful in
determining whether or not the suit is
proper", 6 the decided cases in our
jurisdiction have more incisively
certified the matter when there is
such common or general interest in
the subject matter of the controversy.
By the phrase "subject matter of the
action" is meant "the physical facts,
the things real or personal, the
money, lands, chattels, and the like, in
relation to which the suit is
prosecuted, and not the delict or
wrong committed by the defendant." 7
This Court has ruled that a class suit
did not lie in an action for recovery of
real property where separate portions
of the same parcel were occupied and
claimed individually by different
parties to the exclusion of each other,
such that the different parties had
determinable, though undivided
interests, in the property in
question. 8 It his likewise held that a
class suit would not lie against 319
defendants individually occupying
different portions of a big parcel of
land, where each defendant had an
interest only in the particular portion
he was occupying, which portion was
completely different from the other
portions individually occupied by other

41
defendants, for the applicable section
118 of the Code of Civil Procedure
relates to a common and general
interest in single specific things and
not to distinct ones. 9 In an action for
the recovery of amounts that
represented surcharges allegedly
collected by the city from some
30,000 customers of four movie
houses, it was held that a class suit
did not lie, as no one plaintiff had any
right to, or any share in the amounts
individually claimed by the others, as
each of them was entitled, if at all,
only to the return of what he had
personally paid. 10
The interest, subject matter of the
class suits in the above cited cases, is
analogous to the interest claimed by
appellants in the instant case. The
interest that appellants, plaintiffs and
intervenors, and the CMI stockholders
had in the subject matter of this suit
the portion of stocks offering of the
Bank left unsubscribed by CMI
stockholders who failed to exercise
their right to subscribe on or before
January 15, 1963 was several, not
common or general in the sense
required by the statute. Each one of
the appellants and the CMI
stockholders had determinable
interest; each one had a right, if any,
only to his respective portion of the
stocks. No one of them had any right
to, or any interest in, the stock to
which another was entitled. Anent this
point, the trial court correctly
remarked:
It appears to be the
theory of the
plaintiffs borne out
by the prayer, that
each subscribing
CMI stockholder is
entitled to further
subscribe to a
certain Proportion
depending upon his
stockholding in the
CMI, of the P8
million capital stock
of the defendant
bank open to
subscription (out of
the 20 million
authorized capital
stock) as well as the
unsubscribed
portion of the P8
million stock offering
which were left

unsubscribed by
those CMI
stockholders who for
one reason or
another had failed
to exercise their
subscription rights
on or before January
15, 1963. Under the
plaintiffs' theory
therefore, each
subscribing CMI
stockholder was
entitled to subscribe
to a definite number
of shares both in the
original offering of
P8 million and in
that part thereof not
subscribed on or
before the deadline
mentioned, so that
one subscribing CMI
stockholder may be
entitled to subscribe
to one share,
another to 3 shares
and a third to
11 shares, and so
on, depending upon
the amount and
extent of CMI
stockholding. But
except for the fact
that a question of
law the proper
interpretation of the
waiver provisions of
the CMI
stockholders'
resolution of March
28, 1962 is
common to all, each
CMI subscribing
stock holder has a
legal interest in, and
a claim to, only his
respective
proportion of shares
in the defendant
bank, and none with
regard to any of the
shares to which
another stockholder
is entitled. Thus
plaintiff Ismael
Mathay has no legal
interest in, or claim
to, any share
claimed by any or all
of his co-plaintiffs
from the defendant
individuals. Hence,
no CMI subscribing

stockholder or, for

that matter, not any
number of CMI
stockholders can
maintain a class suit
in behalf of
others,... 11
Even if it be assumed, for the sake of
argument, that the appellants and the
CMI stockholders suffered wrongs that
had been committed by similar means
and even pursuant to a single plan of
the Interim Board of Organizers of the
Bank, the wrong suffered by each of
them would constitute a wrong
separate from those suffered by the
other stockholders, and those wrongs
alone would not create that common
or general interest in the subject
matter of the controversy as would
entitle any one of them to bring a
class suit on behalf of the others.
Anent this point it has been said that:
Separate wrongs to
separate persons,
although committed
by similar means
and even pursuant
to a single plan, do
not alone create a
'common' or
'general' interest in
those who are
wronged so as to
entitle them to
maintain a
representative
action. 12
Appellants, however, insisted, citing
American authorities, 13 that a class
suit might be brought even if the
interests of plaintiffs-appellants might
be several as long as there was a
common question of law or fact
affecting them and a common relief
was sought. We have no conflict with
the authorities cited; those were
rulings under the Federal Rules of Civil
Procedure, pursuant to Rule 23 of
which, there were three types of class
suits, namely: the true, the hybrid,
and the spurious, and these three had
only one feature in common, that is, in
each the persons constituting the
class must be so numerous as to make
it impracticable to bring them all
before the court. The authorities cited
by plaintiffs-appellants refer to the
spurious class action (Rule 23 (a) (3)
which involves a right sought to be

42
enforced, which is several, and there
is a common question of law or fact
affecting the several rights and a
common relief is sought. 14 The
spurious class action is merely a
permissive joinder device; between
the members of the class there is
no jural relationship, and the right or
liability of each is distinct, the class
being formed solely by the presence
of a common question of law or
fact. 15 This permissive joinder is
provided in Section 6 of Rule 3, of our
Rules of Court. Such joinder is not and
cannot be regarded as a class suit,
which this action purported and was
intended to be as per averment of the
complaint.
It may be granted that the claims of
all the appellants involved the same
question of law. But this alone, as said
above, did not constitute the common
interest over the subject matter
indispensable in a class suit. The right
to purchase or subscribe to the shares
of the proposed Bank, claimed by
appellants herein, is analogous to the
right of preemption that stockholders
have when their corporation increases
its capital. The right to preemption, it
has been said, is personal to each
stockholder, 16 and while a
stockholder may maintain a suit to
compel the issuance of his
proportionate share of stock, it has
been ruled, nevertheless, that he may
not maintain a representative action
on behalf of other stockholders who
are similarly situated. 17 By analogy,
the right of each of the appellants to
subscribe to the waived stocks was
personal, and no one of them could
maintain on behalf of others similarly
situated a representative suit.
Straining to make it appear that
appellants and the CMI subscribing
stockholders had a common or
general interest in the subject matter
of the suit, appellants stressed in their
brief that one of the reliefs sought in
the instant action was "to divest
defendant individuality and the
persons or entities chosen by them of
control of the defendant bank." 18 This
relief allegedly sought by appellants
did not, however, appear either in the
text or in the prayer of the complaint.
Appellants, furthermore, insisted that
insufficiency of number in a class suit
was not a ground for dismissal of one

action. This Court has, however, said

that where it appeared that no
sufficient representative parties had
been joined, the dismissal by the trial
court of the action, despite the
contention by plaintiffs that it was a
class suit, was correct. 19 Moreover,
insofar as the instant case is
concerned, even if it be granted for
the sake of argument, that the suit
could not be dismissed on that
ground, it could have been dismissed,
nevertheless, on the ground of lack of
cause of action which will be presently
discussed. .
2. Appellants supported their assigned
error that the court erred in holding
that the complaint stated no valid
cause of action, by claiming that
paragraph 15 together with the other
allegations of the complaint to the
effect that defendants-appellees had
unlawfully acquired stockholdings in
the capital stock of defendantappellee Bank in excess of what they
were lawfully entitled to, in violation
of law and in breach of trust and the
contractual agreement, constituted a
valid and sufficient cause of
action; 20 and that only the allegations
in the complaint should have been
considered by the trial court in
determining whether the complaint
stated a cause of action or not.
Defendants-appellees, on the
contrary, maintained that the
allegations of the complaint should
not be the only ones to be considered
in determining whether there is a
cause of action; that even if the
ultimate facts alleged in the first
cause of action of the complaint be
the only ones considered the
complaint would still fail to state a
valid cause of action on the following
grounds: first, there was no allegation
regarding appellants' qualification to
subscribe to the capital stock of the
appellee Bank, for under the CMI
stockholders' resolution of March 28,
1962, only those qualified under the
law were entitled to subscribe, and
under the regulations of the Monetary
Board, only natural-born Filipino
citizens could be stockholders of a
banking corporation organized under
the laws of the Philippines, and
nowhere did the complaint alleged
that plaintiffs-appellants were natural
born Filipino citizens. 21Second,
appellants' averment in paragraph 8
that they "subscribed," and their

averment in paragraph 15 that they

were "denied the right to subscribe ...
to the capital stock of the defendant
Bank", were inconsistent, and hence
neutralized each other, thereby
leaving in shambles the first cause of
action. Third, there was no allegation
that appellants had not yet received
or had not been issued the
corresponding certificates of stock
covering the shares they had
subscribed and paid for. Fourth, the
allegations failed to show the
existence of the supposed trust; and
fifth, the complaint failed to allege
that plaintiffs-appellants had paid or
offered to pay for the shares allegedly
pertaining to them. 22
Let us premise the legal principles
governing the motion to dismiss on
the ground of lack of cause of action.
Section 1, Rule 16 of the Rules of
Court providing in part that: .
Within the time for
pleading a motion to
dismiss may be
made on any of the
following
grounds: ....
(g) That the
complaint states no
cause of action. ..1.
explicitly requires that the sufficiency
of the complaint must be tested
exclusively on the basis of the
complaint itself and no other should
be considered when the ground for
motion to dismiss is that the
complaint states no cause of action.
Pursuant thereto this Court has ruled
that:
As a rule the sufficiency of the
complaint, when Challenged in a
motion to dismiss, must be
determined exclusively on the basis of
the facts alleged therein. 23
It has been likewise held that a motion
to dismiss based on lack of cause of
action hypothetically admits the truth
of the allegations of fact made in the
complaint. 24 It is to be noted that only
the facts well pleaded in the
complaint, and likewise, any
inferences fairly deducible therefrom,
are deemed admitted by a motion to

43
dismiss. Neither allegations of
conclusions25 nor allegations of facts
the falsity of which the court may take
judicial notice are deemed
admitted. 26 The question, therefore,
submitted to the Court in a motion to
dismiss based on lack of cause of
action is not whether the facts alleged
in the complaint are true, for these are
hypothetically admitted, but whether
the facts alleged are sufficient to
constitute a cause of action such that
the court may render a valid judgment
upon the facts alleged therein.
A cause of action is an act or omission
of one party in violation of the legal
right of the other. Its essential
elements are, namely: (1) the
existence of a legal right in the
plaintiff, (2) a correlative legal duty in
the defendant, and (3) an act or
omission of the defendant in violation
of plaintiff's right with consequential
injury or damage to the plaintiff for
which he may maintain an action for
the recovery of damages or other
appropriate relief. 27 On the other
hand, Section 3 of Rule 6 of the Rules
of Court provides that the complaint
must state the ultimate facts
constituting the plaintiff's cause of
action. Hence, where the complaint
states ultimate facts that constitute
the three essential elements of a
cause of action, the complaint states a
cause of action; 28 otherwise, the
complaint must succumb to a motion
to dismiss on that ground.
The legal principles having been
premised, let us now analyze and
discuss appellant's various causes of
action.
Appellants' first cause of action,
pursuant to what has been premised
above, should have consisted of: (1)
the right of appellants as well as of
the other CMI stockholders to
subscribe, in proportion to their
equities established under their
respective "Pre-Incorporation
Agreements to Subscribe", to that
portion of the capital stock which was
unsubscribed because of failure of the
CMI stockholders to exercise their
right to subscribe thereto; (2) the
legal duty of the appellant to have
said portion of the capital stock to be
subscribed by appellants and other
CMI stockholders; and (3) the violation
or breach of said right of appellants

and other CMI stockholders by the

appellees.
Did the complaint state the important
and substantial facts directly forming
the basis of the primary right claimed
by plaintiffs? Before proceeding to
elucidate this question, it should be
noted that a bare allegation that one
is entitled to something is an
allegation of a conclusion. Such
allegations adds nothing to the
pleading, it being necessary to plead
specifically the facts upon which such
conclusion is founded. 29 The
complaint alleged that appellants
were stockholders of the CMI; that as
such stockholders, they were entitled;
by virtue of the resolution of March
28, 1962, to subscribe to the capital
stock of the proposed Consolidated
Bank and Trust Co., at par value to the
same extent and in the same amount
as said stockholders' respective share
holdings in the CMI as shown in the
latter's stock book as of January 15,
1963, the right to subscribe to be
exercised until January 15, 1963,
provided said stockholders of the CMI
were qualified under the law to
become stockholders of the proposed
Bank; 30 that appellants accomplished
and filed their respective "PreIncorporation Agreements to
Subscribe" and fully paid the
subscription. 31
These alleged specific facts did not
even show that appellants were
entitled to subscribe to the capital
stock of the proposed Bank, for said
right depended on a condition
precedent, which was, that they were
qualified under the law to become
stockholders of the Bank, and there
was no direct averment in the
complaint of the facts that qualified
them to become stockholders of the
Bank. The allegation of the fact that
they subscribed to the stock did not,
by necessary implication, show that
they were possessed of the necessary
qualifications to become stockholders
of the proposed Bank.
Assuming arguendo that appellants
were qualified to become stockholders
of the Bank, they could subscribe,
pursuant to the explicit terms of the
resolution of March 28, 1962, "to the
same extent and in the same amount
as said stockholders' respective
stockholdings in the CMI" as of

January 15, 1963. 32 This was the

measure of the right they could claim
to subscribe to waived stocks.
Appellants did not even aver that the
stocks waived to the subscription of
which they claimed the right to
subscribe, were comprised in "the
extent and amount" of their
respective share holdings in the CMI.
It is not surprising that they did not
make such an averment for they did
not even allege the amount of shares
of stock to which they claimed they
were entitled to subscribe. The failure
of the complaint to plead specifically
the above facts rendered it impossible
for the court to conclude by natural
reasoning that the appellants and
other CMI stockholders had a right to
subscribe to the waived shares of
stock, and made any allegation to that
effect a conclusion of the pleader, not
an ultimate fact, in accordance with
the test suggested by the California
Supreme Court, to wit:
If from the facts in
evidence, the result
can be reached by
that process of
natural reasoning
adopted in the
investigation of
truth, it becomes an
ultimate fact, to be
found as such. If, on
the other hand,
resort must be had
to the artificial
processes of the
law, in order to
reach a final
determination, the
result is a conclusion
of law. 33
Let us now pass to the second and
third elements that would have
constituted the first cause of action.
Did the complaint allege as ultimate
facts the legal duty of defendantsappellees to have a portion of the
capital stock subscribed to by
appellants? Did the complaint allege
as ultimate facts that defendants
appellees had violated appellants'
right?
Even if it be assumed arguendo that
defendants-appellees had the duty to
have the waived stocks subscribed to
by the CMI stockholders, this duty was
not owed to all the CMI stockholders,

44
but only to such CMI stockholders as
were qualified to become stockholders
of the proposed Bank. Inasmuch as it
has been shown that the complaint
did not contain ultimate facts to show
that plaintiffs-appellants were
qualified to become stockholders of
the Bank, it follows that the complaint
did not show that defendantsappellees were under duty to have
plaintiffs-appellants subscribe to the
stocks of the proposed Bank. It
inevitably follows also that the
complaint did not contain ultimate
facts to show that the right of the
plaintiffs-appellants to subscribe to
the shares of the proposed Bank had
been violated by defendantsappellees. How could a non-existent
right be violated?
Let us continue the discussion further.
The complaint alleged that by virtue
of the resolution of March 28, 1962,
the President and Members of the
Board of Directors of the CMI would be
constituted as a Board of Organizers
to undertake and carry out the
organization of the Bank; 34 that the
Board of Organizers was constituted
and proceeded with the establishment
of the Bank, 35 that the persons
composing the Board of Organizers
were the individuals-defendantsappellees;36 that the Board of
Organizers sent our circular letters
with "Pre-Incorporation Agreement to
Subscribe" forms 37 which specified,
among others, "such subscription right
shall be deemed ipso facto waived
and released in favor of the Board of
Organizers of the defendant Bank and
their assignees"; 38 that in the Articles
of Incorporation prepared by the
Board of Organizers, the individualsdefendants-appellees alone appeared
to have subscribe to the 50,
shares; 39 and that individualsdefendants-appellees again subscribe
to all the additional 30,000
shares. 40 From these facts, appellants
concluded that they were denied their
right to subscribe in proportion to
their equities; 41 that the individualsdefendants-appellees unlawfully
acquired stockholdings far in excess of
what they were lawfully entitled in
violation of law and in breach of trust
and of contractual agreement; 42 and
that, because of matters already
alleged, the individuals-defendantsappellees "hold their shares in the
defendant bank in trust for
plaintiffs." 43

The allegation in the complaint that

the individuals-defendants-appellees
held their shares "in trust" for
plaintiffs-appellants without averment
of the facts from which the court could
conclude the existence of the alleged
trust, was not deemed admitted by
the motion to dismiss for that was a
conclusion of law. Express averments
"that a party was the beneficial owner
of certain property; ... that property or
money was received or held in trust,
or for the use of another; that
particular funds were trust funds; that
a particular transaction created an
irrevocable trust; that a person held
Property as constructive trustee; that
on the transfer of certain property a
trust resulted" have been considered
as mere conclusions of law. 44 The
facts alleged in the complaint did not,
by logical reasoning, necessarily lead
to the conclusion that defendantsappellees were trustees in favor of
appellants of the shares of stock
waived by the CMI stockholders who
failed to exercise their right to
subscribe. In this connection, it has
been likewise said that:
"The general rule is that an allegation
of duty in terms unaccompanied by a
statement of the facts showing the
existence of the duty, is a mere
conclusion of law, unless there is a
relation set forth from which the law
raises the duty." 45
In like manner, the allegation that
individuals-defendants-appellees held
said shares in trust was no more than
an interpretation by appellants of the
effect of the waiver clause of the
Resolution and as such it was again a
mere conclusion of law. It has been
said that:
The following are
also conclusions of
law: ... an allegation
characterizing an
instrument or
purporting to
interpret it and state
its effects, ... 46
Allegations in petition in the nature of
conclusions about the meaning of
contract, inconsistent with stated
terms of the contract, cannot be
considered. 47

The allegation that the defendantsappellee acquired stockholdings far in

excess of what they were lawfully
entitled, in violation of law and in
breach of trust and of contractual
agreement, is also mere conclusion of
law.
Of course, the allegation that there
was a violation of trust duty was
plainly a conclusion of law, for "a mere
allegation that it was the duty of a
party to do this or that, or that he was
guilty of a breach of duty, is a
statement of a conclusion not of
fact." 48
An averment ... that
an act was 'unlawful'
or 'wrongful' is a
mere legal
conclusion or
opinion of the
pleader. 49
Moreover, plaintiffs-appellants did not
state in the complaint the amount of
subscription the individual defendantappellee were entitled to; hence there
was no basis for the court to
determine what amount subscribed to
by them was excessive.
From what has been said, it is clear
that the ultimate facts stated under
the first cause of action are not
sufficient to constitute a cause of
action.
The further allegations in the second
cause of action that the calling of a
special meeting was "falsely certified",
that the seventh position of Director
was "illegally created" and that
defendant Alfonso Juan Olondriz was
"not competent or qualified" to be a
director are mere conclusions of law,
the same not being necessarily
inferable from the ultimate facts
stated in the first and second causes
of action. It has been held in this
connection that:
An averment that ...
an act was 'unlawful'
or 'wrongful' is a
mere legal
conclusion or
opinion of the
pleader. The same is
true of allegations
that an instrument

45
was 'illegally'
certified or ... that
an act was
arbitrarily
done ..." 50
A pleader states a
mere conclusion
when he makes any
of the following
allegations: that a
party was
incapacitated to
enter into a contract
or convey
property ... 51

PANGANIBAN, J.:
The Rules require the legal
representatives of a dead litigant to
be substituted as parties to a
litigation.
This
requirement
is
necessitated by due process. Thus,
when the rights of the legal
representatives of a decedent are
actually recognized and protected,
noncompliance or belated formal
compliance with the Rules cannot
affect the validity of the promulgated
decision. After all, due process had
thereby been satisfied.
The Case

The third, fourth, fifth and sixth

causes of action depended on the first
cause of action, which, as has been
shown, did not state ultimate facts
sufficient to constitute a cause of
action. It stands to reason, therefore,
that said causes of action would also
be fatally defective.
It having been shown that the
complaint failed to state ultimate facts
to constitute a cause of action, it
becomes unnecessary to discuss the
other assignments of errors.
WHEREFORE, the instant appeal is
dismissed, and the order dated March
21, 1964 of the Court of First Instance
of Manila dismissing the complaint in
Civil Case No. 55810 is affirmed, with
costs in this instance against
appellants. It is so ordered.
Fernando, Barredo, Fernandez and
Aquino, JJ, concur.
Antonio, J., took no part.

DE LA CRUZ V. JOAQUIN,
464 SCRA 576 (2005)
[G.R. No. 162788. July 28, 2005]
Spouses JULITA DE LA CRUZ and
FELIPE
DE
LA
CRUZ, petitioners,
vs.
PEDRO
JOAQUIN, respondent.
DECISION

Before us is a Petition for

Review[1] under Rule 45 of the Rules of
Court, assailing the August 26, 2003
Decision[2] and the March 9, 2004
Resolution[3] of the Court of Appeals
(CA) in CA-GR CV No. 34702. The
challenged Decision disposed as
follows:
WHEREFORE, the foregoing
considered, the appeal is DISMISSED
and the assailed decision accordingly
AFFIRMED in toto. No costs.[4]
On the other hand, the trial
courts affirmed Decision disposed as
follows:
WHEREFORE, judgment is hereby
rendered:
a) declaring the Deed
of Absolute Sale
(Exh. D) and
Kasunduan
(Exhibit B), to
be a sale with
right of
repurchase;
b) ordering the
plaintiff to pay
the defendants
the sum
of P9,000.00 by
way of
repurchasing
the land in
question;
c) ordering the
defendants to
execute a deed
of

reconveyance
of said land in
favor of the
plaintiff after
the latter has
paid them the
amount
of P9,000.00 to
repurchase the
land in
question;
d) ordering the
defendants to
yield
possession of
the subject land
to the plaintiff
after the latter
has paid them
the amount
of P9,000.00 to
repurchase the
property from
them; and
e) ordering the
defendants to
pay the plaintiff
the amount
of P10,000.00
as actual and
compensatory
damages; the
amount
of P5,000[.00]
as exemplary
damages; the
amount
of P5,000.00 as
expenses of
litigation and
the amount
of P5,000.00 by
way of
attorneys fees.
[5]

The Facts
The case originated from a
Complaint
for
the
recovery
of
possession
and
ownership,
the
cancellation of title, and damages,
filed by Pedro Joaquin against
petitioners in the Regional Trial Court
of Baloc, Sto. Domingo, Nueva Ecija.
[6]
Respondent alleged that he had
obtained a loan from them in the
amount of P9,000 on June 29, 1974,
payable after five (5) years; that is, on
June 29, 1979. To secure the payment
of the obligation, he supposedly

46
executed a Deed of Sale in favor of
petitioners. The Deed was for a parcel
of land in Pinagpanaan, Talavera,
Nueva Ecija, covered by TCT No. T111802. The parties also executed
another
document
entitled Kasunduan. [7]
Respondent
claimed
that
the Kasunduan showed the Deed of
Sale to be actually an equitable
mortgage.[8] Spouses De la Cruz
contended that this document was
merely an accommodation to allow
the repurchase of the property until
June 29, 1979, a right that he failed to
exercise.[9]
On April 23, 1990, the RTC issued
a Decision in his favor. The trial court
declared that the parties had entered
into a sale with a right of repurchase.
[10]
It further held that respondent had
made a valid tender of payment on
two separate occasions to exercise his
right of repurchase.[11] Accordingly,
petitioners were required to reconvey
the property upon his payment.[12]
Ruling of the Court of Appeals
Sustaining the trial court, the CA
noted that petitioners had given
respondent the right to repurchase the
property within five (5) years from the
date of the sale or until June 29, 1979.
Accordingly, the parties executed
theKasunduan to express the terms
and
conditions
of
their
actual
agreement.[13] The appellate court also
found no reason to overturn the
finding that respondent had validly
exercised his right to repurchase the
land.[14]
In the March 9, 2004 Resolution,
the CA denied reconsideration and
ordered a substitution by legal
representatives,
in
view
of
respondents death on December 24,
1988.[15]
Hence, this Petition.[16]
The Issues
Petitioners assign the following
errors for our consideration:
I. Public Respondent Twelfth Division
of the Honorable Court of Appeals
seriously erred in dismissing the

appeal and affirming in toto the

Decision of the trial court in Civil Case
No. SD-838;
II. Public Respondent Twelfth Division
of the Honorable Court of Appeals
likewise erred in denying [petitioners]
Motion for Reconsideration given the
facts and the law therein presented.[17]
Succinctly,
the
issues
are
whether the trial court lost jurisdiction
over the case upon the death of Pedro
Joaquin, and whether respondent was
guilty of forum shopping.[18]
The Courts Ruling
The Petition has no merit.
First Issue:

appoint a guardian ad litem for the

minor heirs.
The court shall forthwith order said
legal representative or
representatives to appear and be
substituted within a period of thirty
(30) days from notice.
If no legal representative is named by
the counsel for the deceased party, or
if the one so named shall fail to
appear within the specified period, the
court may order the opposing party,
within a specified time, to procure the
appointment of an executor or
administrator for the estate of the
deceased, and the latter shall
immediately appear for and on behalf
of the deceased. The court charges in
procuring such appointment, if
defrayed by the opposing party, may
be recovered as costs.

Jurisdiction
Petitioners assert that the RTCs
Decision was invalid for lack of
jurisdiction.[19] They
claim
that
respondent died during the pendency
of the case. There being no
substitution by the heirs, the trial
court allegedly lacked jurisdiction over
the litigation.[20]
Rule on Substitution
When a party to a pending action
dies and the claim is not extinguished,
[21]
the Rules of Court require a
substitution of the deceased. The
procedure is specifically governed by
Section 16 of Rule 3, which reads
thus:
Section 16. Death of a party; duty of
counsel. Whenever a party to a
pending action dies, and the claim is
not thereby extinguished, it shall be
the duty of his counsel to inform the
court within thirty (30) days after such
death of the fact thereof, and to give
the name and address of his legal
representative or representatives.
Failure of counsel to comply with this
duty shall be a ground for disciplinary
action.
The heirs of the deceased may be
allowed to be substituted for the
deceased, without requiring the
appointment of an executor or
administrator and the court may

The rule on the substitution of

parties was crafted to protect every
partys right to due process. [22] The
estate of the deceased party will
continue to be properly represented in
the suit through the duly appointed
legal representative.[23] Moreover, no
adjudication can be made against the
successor of the deceased if the
fundamental right to a day in court is
denied.[24]
The Court has nullified not only
trial proceedings conducted without
the
appearance
of
the
legal
representatives of the deceased, but
also the resulting judgments.[25] In
those instances, the courts acquired
no jurisdiction over the persons of the
legal representatives or the heirs upon
whom no judgment was binding.[26]
This
general
rule
notwithstanding, a formal substitution
by heirs is not necessary when they
themselves
voluntarily
appear,
participate in the case, and present
evidence in defense of the deceased.
[27]
These actions negate any claim
that the right to due process was
violated.
The Court is not unaware
of Chittick v. Court of Appeals,[28] in
which the failure of the heirs to
substitute for the original plaintiff
upon her death led to the nullification
of the trial courts Decision. The latter

47
had sought to recover support in
arrears and her share in the conjugal
partnership.
The
children
who
allegedly substituted for her refused
to continue the case against their
father and vehemently objected to
their inclusion as parties.[29] Moreover,
because he died during the pendency
of the case, they were bound to
substitute for the defendant also. The
substitution effectively merged the
persons of the plaintiff and the
defendant and thus extinguished the
obligation being sued upon.[30]
Clearly, the present case is not
similar, much less identical, to the
factual milieu of Chittick.
Strictly speaking, the rule on the
substitution by heirs is not a matter of
jurisdiction, but a requirement of due
process. Thus, when due process is
not violated, as when the right of the
representative or heir is recognized
and protected, noncompliance or
belated formal compliance with the
Rules cannot affect the validity of a
promulgated decision.[31] Mere failure
to substitute for a deceased plaintiff is
not a sufficient ground to nullify a trial
courts decision. The alleging party
must prove that there was an
undeniable violation of due process.
Substitution in
the Instant Case
The records of the present case
contain a Motion for Substitution of
Party Plaintiff dated February 15,
2002, filed before the CA. The prayer
states as follows:

ordered[33] his legal representatives to

appear and substitute for him. The
substitution even on appeal had been
ordered correctly. In all proceedings,
the legal representatives must appear
to protect the interests of the
deceased.[34] After the rendition of
judgment, further proceedings may be
held,
such
as
a
motion
for
reconsideration or a new trial, an
appeal, or an execution.[35]
Considering
the
foregoing
circumstances,
the
Motion
for
Substitution may be deemed to have
been granted; and the heirs, to have
substituted for the deceased, Pedro
Joaquin. There being no violation of
due process, the issue of substitution
cannot be upheld as a ground to
nullify the trial courts Decision.
Second Issue:
Forum Shopping
Petitioners
also
claim
that
respondents were guilty of forum
shopping, a fact that should have
compelled the trial court to dismiss
the Complaint.[36] They claim that prior
to the commencement of the present
suit on July 7, 1981, respondent had
filed a civil case against petitioners on
June 25, 1979. Docketed as Civil Case
No. SD-742 for the recovery of
possession and for damages, it was
allegedly dismissed by the Court of
First Instance of Nueva Ecija for lack of
interest to prosecute.
Forum Shopping Defined

It is further prayed that henceforth the

undersigned counsel[32] for the heirs of
Pedro Joaquin be furnished with copies
of notices, orders, resolutions and
other pleadings at its address below.

Forum shopping is the institution

of two or more actions or proceedings
involving the same parties for the
same
cause
of
action,
either
simultaneously or successively, on the
supposition that one or the other court
would make a favorable disposition.
[37]
Forum shopping may be resorted to
by a party against whom an adverse
judgment or order has been issued in
one forum, in an attempt to seek a
favorable opinion in another, other
than by an appeal or a special civil
action for certiorari.[38]

Evidently, the heirs of Pedro

Joaquin voluntary appeared and
participated in the case. We stress
that
the
appellate
court
had

Forum shopping trifles with the

courts,
abuses
their
processes,
degrades the administration of justice,
and congests court dockets.[39] Willful

WHEREFORE, it is respectfully prayed

that the Heirs of the deceased
plaintiff-appellee as represented by
his daughter Lourdes dela Cruz be
substituted as party-plaintiff for the
said Pedro Joaquin.

and deliberate violation of the rule

against it is a ground for the summary
dismissal of the case; it may also
constitute direct contempt of court.[40]
The test for determining the
existence of forum shopping is
whether
the
elements
of litis
pendentia are present, or whether a
final judgment in one case amounts
to res judicata in another.[41] We note,
however, petitioners claim that the
subject matter of the present case has
already been litigated and decided.
Therefore, the applicable doctrine
is res judicata.[42]
Applicability of Res Judicata
Under res
judicata, a
final
judgment or decree on the merits by a
court of competent jurisdiction is
conclusive of the rights of the parties
or their privies, in all later suits and on
all points and matters determined in
the previous suit.[43] The term literally
means a matter adjudged, judicially
acted upon, or settled by judgment.
[44]
The principle bars a subsequent
suit involving the same parties,
subject matter, and cause of action.
Public
policy
requires
that
controversies must be settled with
finality at a given point in time.
The elements of res judicata are
as follows: (1) the former judgment or
order must be final; (2) it must have
been rendered on the merits of the
controversy; (3) the court that
rendered it must have had jurisdiction
over the subject matter and the
parties; and (4) there must have been
-- between the first and the second
actions -- an identity of parties,
subject matter and cause of action.[45]
Failure to Support Allegation
The onus of proving allegations
rests upon the party raising them.
[46]
As to the matter of forum shopping
and res judicata, petitioners have
failed to provide this Court with
relevant and clear specifications that
would show the presence of an
identity of parties, subject matter, and
cause of action between the present
and the earlier suits. They have also
failed to show whether the other case
was decided on the merits. Instead,
they have made only bare assertions

48
involving
its
existence
without
reference to its facts. In other words,
they have alleged conclusions of law
without stating any factual or legal
basis. Mere mention of other civil
cases without showing the identity of
rights asserted and reliefs sought is
not enough basis to claim that

respondent
is
guilty
of
forum
shopping, or that res judicata exists.[47]
WHEREFORE,
the
Petition
is DENIED and the assailed Decision
and Resolution are AFFIRMED. Costs
against petitioners.
SO ORDERED.

Sandoval-Gutierrez,
Carpio-Morales, and Garcia,
JJ., concur.

Corona,