Before us is a petition for review assailing the

Resolutions dated June 15, 2004[1] and August 23,

2004[2] of the Court of Appeals in CA-G.R. SP No.
SECOND DIVISION
83895 for annulment of judgment.
EDUARDO L. RAYO, G.R. No. 165142
Petitioner, The pertinent facts are undisputed.
Present:
Midas Diversified Export Corp. (Midas), thru
QUISUMBING, its president, Mr. Samuel U. Lee, obtained six (6)
- versus - CARPIO, loans from private respondent Metropolitan Bank and
CARPIO MORALES, Trust Company (Metrobank), amounting
TINGA, and to P588,870,000 as evidenced by promissory
VELASCO, JR., notes. To secure the payment of an P8,000,000 loan,
Louisville Realty & Development Corporation
METROPOLITAN BANK AND Promulgated: (Louisville), thru its president, Mr. Samuel U. Lee,
TRUST COMPANY AND BRANCH executed in favor of Metrobank, a real estate
223 OF THE REGIONAL TRIAL December 10, 2007mortgage over three parcels of land situated at No. 40
COURT OF QUEZON CITY, Timog Ave., Brgy. Laging Handa, Quezon City, with
Respondents. all the buildings and improvements thereon. The
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - properties are covered by Transfer Certificates of Title
- - - - - - - - - - - - - -x (TCT) Nos. N-163455, N-166349 and N-166350
issued by the Registry of Deeds of Quezon City.
DECISION
When the debtor-mortgagor failed to
QUISUMBING, J.: pay, Metrobank extra-judicially foreclosed the real
estate mortgage in accordance with Act No. 3135,[3] as
amended. Thereafter, in a public auction, Metrobank
was the highest bidder. A Certificate of
Sale[4] dated December 11, 2000 was duly registered
with the Registry of Deeds of Quezon City
on December 13, 2000. When Louisville refused to
turn over the real properties, on March 17, 2001,
Metrobank filed before the Regional Trial Court
(RTC), Branch 223, Quezon City,
[5]
an ex partepetition for the issuance of a writ of
possession docketed as LRC Case No. Q-
13915(01). After presentation of evidence ex parte,
the RTC granted the petition in an Order [6]dated July
5, 2001, the dispositive portion of which reads as
follows:
WHEREFORE, in consideration of the
foregoing premises, the instant petition is
hereby GRANTED. Upon the filing of a bond in
the amount of ONE HUNDRED THOUSAND
PESOS ([P]100,000.00), let a Writ of
Possession over the properties covered by
Transfer Certificates of Title Nos. N-163455, N-
166349 & N-166350 issue in favor of the
petitioner METROPOLITAN BANK & TRUST
COMPANY to be implemented by the Deputy
Sheriff of Branch 223, Regional Trial Court of
Quezon City by placing the petitioner in
possession over the parcels of land with all its
improvements.
SO ORDERED.[7]
On September 24, 2001, Metrobank posted the
required bond. Consequently, a writ of possession was
issued on October 9, 2001. This was partially
implemented as to TCT No. N-163455, as evidenced
by the Turn-Over Receipt[8] dated December 13,
2002. The writ over the two remaining properties,
under TCT Nos. N-166349 and N-166350, were
subsequently implemented as evidenced by the Turn-
Over Receipt[9] dated December 3, 2003.
Meanwhile, on April 3, 2002, petitioner
Eduardo L. Rayo filed a complaint[10] docketed as
Civil Case No. Q02-46514 against Metrobank for
Nullification of Real Estate Mortgage Contract(s) and
Extrajudicial Foreclosure Sale, in the RTC, Branch
99, Quezon City.
On May 13, 2004, petitioner Rayo filed with the
Court of Appeals a Petition[11] for Annulment of
Judgment on the ground of absolute lack of due
process. Petitioner alleged that his
predecessor, Louisville, was not notified of the
proceedings and that Section 7[12] (ex parte motion or
petition for the issuance of a writ of possession) of
Act No. 3135 is unconstitutional.
On June 15, 2004, the Court of Appeals denied
the petition for lack of merit. The Court of Appeals
ruled that petitioner is neither the registered owner nor
the successor-in-interest of the registered owner;
hence, not a real party-in-interest. It also ruled that
there is no basis to challenge the constitutionality of
Section 7 of Act No. 3135, as amended as it
constitutes a collateral attack against said
provision. Further, petitioner availed of the wrong
remedy in filing Civil Case No. Q02-46514. Petitioner
sought reconsideration, but was likewise denied.
Petitioner now comes before us raising the following
as primary issue:
WHETHER OR NOT SECTION 7 OF ACT
NO. 3135 IS CONTRARY TO THE DUE
PROCESS PROVISION OF THE
PHILIPPINE CONSTITUTION
CONSIDERING THAT SUCH SECTION 7
OF THE LAW PROVIDES OR ALLOWS,
ACCORDING TO THIS HONORABLE
COURT, FOR AN EX-PARTE
PROCEEDING WHICH IS A JUDICIAL
PROCEEDING BROUGHT FOR THE
BENEFIT OF ONE PARTY ONLY, AND
WITHOUT NOTICE TO, OR CONSENT
BY ANY PERSON ADVERSELY
INTERESTED OR A PROCEEDING
WHEREIN RELIEF IS GRANTED
WITHOUT AN OPPORTUNITY FOR THE
PERSON AGAINST WHOM THE RELIEF
IS SOUGHT TO BE HEARD, AS HELD IN
THE CASE OF GOVERNMENT SERVICE
INSURANCE SYSTEM VS. COURT OF
APPEALS, 169 SCRA 244 @ 255, JANUARY
20, 1989.[13]
He also raises the following as secondary
issues:
I.
WHETHER OR NOT THE PETITIONER HAS
THE LEGAL PERSONALITY TO SEEK THE
ANNULMENT OF JUDGMENT IN [THE]
SUBJECT LRC CASE NO. Q-13915(01).
II.
WHETHER OR NOT PRIVATE
RESPONDENT VIOLATED THE RULE
AGAINST FORUM-SHOPPING WHEN IT
DID NOT INFORM THE HONORABLE
BRANCH 223 OF THE REGIONAL TRIAL
COURT OF QUEZON CITY REGARDING
THE FILING OF CIVIL CASE NO. Q-02-
46514 FOR NULLIFICATION OF REAL
ESTATE MORTGAGE CONTRACT AND
THE EXTRA-JUDICIAL
FORECLOSURE SALE OF THE SAME
SUBJECT REAL PROPERTIES AND THE
PENDENCY OF THE SAME BEFORE THE
HONORABLE BRANCH 99 OF THE SAME
REGIONAL TRIAL COURT.[14]
 Stated simply, the issues raised are: (1) Does
petitioner have the legal personality in the annulment
of judgment proceedings? (2) Is Section 7 of Act No.
3135, as amended, unconstitutional? (3) Is respondent
guilty of forum-shopping?
Petitioner insists that contrary to the ruling of
the Court of Appeals, he has the legal personality to
institute the annulment of judgment case against
Metrobank, considering that the March 25, 2002 deed
of assignment he entered into with Louisville and
Winston Linwy L. Chua makes him a co-assignee
over the subject real properties.
For its part, Metrobank claims that it was not a
party to the deed of assignment among Louisville,
Chua and petitioner, hence, it has no privity of
contract with petitioner Rayo. Moreover, Metrobank
points out that the real properties had already been
extrajudicially foreclosed when petitioner and his
assignors executed the deed of assignment.
Under Section 2,[15] Rule 3 of the Rules of
Court, every action must be prosecuted or defended in
the name of the real party-in-interest, or one who
stands to be benefited or injured by the judgment in
the suit.[16] A real party-in-interest is one with a
present substantial interest which means such interest
of a party in the subject matter of the action as will
entitle him, under the substantive law, to recover if the
evidence is sufficient, or that he has the legal title to
demand.[17]
Now, is petitioner Rayo a real party-in-
interest? Initially, we recognized herein petitioner as
the co-assignee of the subject real properties as shown
in the March 25, 2002deed of assignment. However,
while petitioner would be injured by the judgment in
this suit, we find that petitioner has no present
substantial interest to institute the annulment of
judgment proceedings and nullify the order granting
the writ of possession.
First, there was no violation of petitioners right
to constitutional due process. In a long line of cases,
[18]
we have consistently ruled that the issuance of a
writ of possession in favor of the purchaser in a
foreclosure sale of a mortgaged property under
Section 7 of Act No. 3135, as amended is a ministerial
duty of the court. The purchaser of the foreclosed
property, upon ex parte application and the posting of
the required bond, has the right to acquire possession
of the foreclosed property during the 12-month
redemption period and with more reason, after the
expiration of the redemption period.
 An ex parte petition for the issuance of a writ of
possession under Section 7 of Act No. 3135 is not,
strictly speaking, a judicial process as contemplated in
Article 433[19]of the Civil Code. It is a judicial
proceeding for the enforcement of ones right of
possession as purchaser in a foreclosure sale. It is not
an ordinary suit filed in court, by which one party
sues another for the enforcement of a wrong or
protection of a right, or the prevention or redress of a
wrong. It is a non-litigious proceeding authorized in
an extrajudicial foreclosure of mortgage pursuant to
Act No. 3135, as amended, and is brought for the
benefit of one party only, and without notice to, or
consent by any person adversely interested. It is a
proceeding where the relief is granted without
requiring an opportunity for the person against whom
the relief is sought to be heard. No notice is needed to
be served upon persons interested in the subject
property.[20]
Second, in the deed of assignment, petitioner
also acknowledged that the subject real properties
were already sold at various extrajudicial foreclosure
sales and bought by Metrobank. Clearly, petitioner
recognized the prior existing right of Metrobank as
the mortgagee-purchaser over the subject real
properties.[21] Actual knowledge of a prior mortgage
with Metrobank is equivalent to notice of
registration[22] in accordance with Article 2125 [23] of
the Civil Code. Conformably with Articles
1312[24] and 2126[25] of the Civil Code, a real right or
lien in favor of Metrobank had already been
established, subsisting over the properties until the
discharge of the principal obligation, whoever the
possessor(s) of the land might be. [26] As petitioner is
not a party whose interest is adverse to that
of Louisville, there was no bar to the issuance of a
writ of possession to Metrobank. It does not matter
that petitioner was not specifically named in the writ
of possession nor notified of such proceedings.
Third, we also note that petitioner availed of the
wrong remedy in filing Civil Case No. Q02-46514,
for nullification of real estate mortgage and
extrajudicial foreclosure sale, more than six (6)
months after the issuance of the writ of possession
considering the mandate of Section 8 [27] of Act No.
3135, as amended. Hence, even petitioners action for
annulment of judgment cannot prosper as it cannot be
a substitute for a lost remedy.
Now, petitioner is challenging the
constitutionality of Section 7 of Act No. 3135, as
amended. He avers that Section 7 violates the due
process clause because, by the mere filing of
an ex parte motion in the proper cadastral court, the
purchaser in a foreclosure sale is allowed to obtain
possession of the foreclosed property during the WHEREFORE, the petition is DENIED for
redemption period. lack of merit. The assailed Resolutions dated June 15,
2004 and August 23, 2004 of the Court of Appeals in
The Court of Appeals ruled that petitioners CA-G.R. SP No. 83895 are
attempt to challenge the constitutionality of Section 7 hereby AFFIRMED. Costs against the petitioner.
of Act No. 3135, as amended, constitutes a collateral
attack that is not allowed. We fully agree with the SO ORDERED.
appellate courts ruling. For reasons of public policy,
the constitutionality of a law cannot be attacked
collaterally.[28]

With regard to forum-shopping; forum-

shopping is the filing of multiple suits involving the
same parties for the same cause of action, either
simultaneously or successively, for the purpose of
obtaining a favorable judgment. It exists where the
elements of litis pendentia are present or where a
final judgment in one case will amount to res
judicata in another.[29] The issuance of the writ of
possession being a ministerial function, and summary
in nature, it cannot be said to be a judgment on the
merits. It is only an incident in the transfer of
title. Hence, a separate case for annulment of
mortgage and foreclosure sale cannot be barred
by litis pendentia or res judicata.[30] Clearly, insofar
as LRC Case No. Q-13915(01) and Civil Case No.
Q02-46514 are concerned, Metrobank is not guilty of
forum-shopping.
 LEONARDO A. QUISUMBING
Associate Justice
EN BANC
[G.R. No. 161065. April 15, 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. SIP-
AN, 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. Corollary to this
[1]
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, especially in its Organizational
[3]
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.
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, Agan, Jr. v. Philippine
[4]
International Air Terminals Co., Inc.,
and Information Technology Foundation of the
[5]
Philippines v. Commission on Elections that where
[6]
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., they have not shown a
[7]
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.
Nor may petitioners claim that as taxpayers, they
[8]
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,
Agan,
[10]
Jr., and Information
[11]
Technology
Foundation is flawed.
[12]
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. A [15]
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
(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. 2002-034 providing for the guidelines
[17]
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, or misconduct.
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.
SECOND DIVISION
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, Ynares-Santiago, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr.,
Azcuna, Tinga, Chico-Nazario, and Garcia,
JJ., concur.
[G.R. No. 154745. January 29, 2004]
COMMISSIONER ANDREA D. DOMINGO,
BUREAU OF IMMIGRATION, petitioner,
vs. HERBERT MARKUS EMIL
SCHEER, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of
the Rules of Court, as amended, of the
Decision of the Court of Appeals in CA-G.R. SP
[1]
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 of the Board of Commissioners (BOC) and
[2]
its Omnibus Resolution denying the respondents
[3]
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. The Bureau of Immigration and
[4]
Deportation (BID) issued in favor of the respondent
Alien Certificate of Registration No. B-396907
dated September 16, 1987 and Immigration [5]
Certificate of Residence No. 256789 dated
February 24, 1988. The Commissioner stated that
[6]
the granting of the petition would redound to the
benefit of the Filipino people. During his sojourn in
[7]
the Philippines, the respondent married widowed
Edith delos Reyes with whom he had two
[8]
daughters. They had a son, Herbert Scheer, Jr.,
but he passed away on November 13, 1995. They [9]
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. The Embassy requested the Department of
[12]
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. The BOC
[14]
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. Then Presidential Assistant Teodorico
[15]
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. In his [16]
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 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. The German Embassy in
[18]
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.
Subsequently, on March 12, 1996, the German
[19]
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. At about midnight on June 6, 2002,
[20]
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 and his employees, the
[21]
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. The respondent
[23]
(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 and that his Urgent Motion for
[24]
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,
and Lou vs. Vivo. The BOC also held that it was
[26] [27]
not competent to reverse the September 27, 1995
Order, citing our ruling in Immigration
Commissioner vs. Fernandez. It declared that the
[28]
respondent may seek the waiver of his exclusion
via deportation proceedings through the
exceptions provided by Commonwealth Act No.
613, Section 29 (a)(15), but that his application
[29]
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.
The Puerto Princesa City Philippine National
[30]
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. On July 18, 2002, the BOC
[32]
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 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 re-apply for admission and residency
status with the assurance that he would be re-
admitted. The respondents counsel manifested to
[34]
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:
RELIEF
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 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.
SO ORDERED. [37]
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
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.
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.
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.
The respondent counters that the petitioner is
already estopped from raising this issue. He
argues that -
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]
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
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.
Strangers to a case are not bound by the
[45]
judgment rendered by the court. The absence of
[46]
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. The responsibility of impleading all
[47]
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.
If the petitioner/plaintiff refuses to implead an
[49]
indispensable party despite the order of the court,
the latter may dismiss the complaint/petition for the
petitioner/plaintiffs failure to comply therefor. The
[50]
remedy is to implead the non-party claimed to be
indispensable. In this case, the CA did not require
[51]
the respondent (petitioner therein) to implead the
BOC as respondent, but merely relied on the
rulings of the Court in Vivo v. Arca, and Vivo v.
[52]
Cloribel. The CAs reliance on the said rulings is,
[53]
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. In [54]
Salvador, et al., v. Court of Appeals, et al., we
[55]
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 party-
respondent. 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. After all, the Office of the Solicitor
[56]
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, was the respondent in
[57]
the CA, and the petitioner in the instant
recourse. In Alonso v. Villamor, we had the
[58]
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. The
[59]
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, by[60]
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, the Court may look into and resolve
[61]
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, the United States Federal
[62]
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, the United States
[63]
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, the Court ruled
[64]
that courts may supervise the actions of the
administrative offices authorized to deport aliens
and 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, we held,
[66]
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, we held that:
[67]
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, the United
[68]
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 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, an alien who is a
[70]
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 may be classified as
[72]
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, when [73]
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,
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.
V
ery truly
yours,
(
Sgd.) ANDREA D.
DOMINGO
C
ommissioner [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. The petition of the respondent in
[76]
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, citing Sheor v.
[77]
Bengson, thus:
[78]
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; and, the
[82]
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.
However, the rulings cited by the petitioner are
[83]
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 and Lou v. Vivo, we ruled that
[84] [85]
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 subpoena and/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,
we held that the BOC composed of new
[86]
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, or
[88]
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 and under Rule 37, a motion for
[89]
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
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 Santiago. [91]
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, we held to connote as follows:
[92]
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 self-determination 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 same unjust,
unfair or illegal. To direct the respondent to leave
[94]
the country first before allowing him re-entry is
downright iniquitous. If the respondent does leave
[95]
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, Mr. Justice Murphy
[96]
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 practices
of despotism. As Justice Brewer opined in Fong
Yue Ting v. United States, deportation is a
[97]
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 [98]
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
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168979 December 2, 2013
REBECCA PACAA-CONTRERAS and ROSALIE
PACAA, Petitioners,
vs.
ROVILA WATER SUPPLY, INC., EARL U KOKSENG, LILIA
TORRES, DALLA P. ROMANILLOS and MARISSA
GABUYA, Respondents.
DECISION
country as approved by the Secretary of Justice
had been cancelled. Our ruling in Bing v.
Commission on Immigration, even buttresses the
[99]
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.
IN LIGHT OF ALL THE FOREGOING, the
petition is DENIED. The Decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-
Martinez, and Tinga, JJ., concur.
BRION, J.:
Before the Court is a petition for review on certiorari under
1
Rule 4 of the Rules of Court seeking the reversal of the
decision dated January 27, 2005 and the resolution dated
2 3
June 6, 2005 of the Courts of Appeals (CA) in CA-G.R. SP No.
71551. The CA set aside the orders dated February 28,
2002 and April 1, 2002 of the Regional Trial Court (RTC),
4 5
Branch 8, Cebu City, which denied the motion to dismiss for
reconsideration respectively, of respondents Rovila Water
Supply, Inc. (Rovilla, Inc.), Earl U. Kokseng, Lialia Torres, Dalla
P. Romanillos and Marissa Gabuya.
THE FACTUAL ANTECEDENTS
Petitioners Rebecca Pacaa-Contreras and Rosalie Pacaa,
children of Lourdes Teves Pacaa and Luciano Pacaa, filed
the present case against Rovila Inc., Earl, Lilia, Dalla and
Marisa for accounting and damages. 6
The petitioners claimed that their family has long been known
in the community to be engaged in the water supply business;
they operated the "Rovila Water Supply" from their family
residence and were engaged in the distribution of water to
customers in Cebu City. The petitioners alleged that Lilia was a
former trusted employee in the family business who hid
business records and burned and ransacked the family files.
Lilia also allegedly posted security guards and barred the
members of the Pacaa family from operating their business.
She then claimed ownership over the family business through
a corporation named "Rovila Water Supply, Inc." (Rovila Inc.)
Upon inquiry with the Securities and Exchange Commission
(SEC), the petitioners claimed that Rovila Inc. was
surreptitiously formed with the respondents as the majority
stockholders. The respondents did so by conspiring with one
another and forming the respondent corporation to takeover
and illegally usurp the family business registered name.
7 was granted by the trial court. At the subsequent pre-trial, the
In forming the respondent corporation, the respondents
allegedly used the name of Lourdes as one of the
incorporators and made it appear in the SEC documents that
the family business was operated in a place other than the
Pacaa residence. Thereafter, the respondents used the
Pacaa familys receipts and the deliveries and sales were
made to appear as those of the respondent Rovila Inc. Using
this scheme, the respondents fraudulently appropriated the
collections and payments. 8
The petitioners filed the complaint in their own names although
Rosalie was authorized by Lourdes through a sworn
declaration and special power of attorney (SPA). The
respondents filed a first motion to dismiss on the ground that
the RTC had no jurisdiction over an intra-corporate
controversy.9
The RTC denied the motion. On September 26, 2000, Lourdes
died and the petitioners amended their complaint, with leave
10
of court, on October 2, 2000 to reflect this development.
11
They still attached to their amended complaint the sworn
declaration with SPA, but the caption of the amended
complaint remained the same. 12
On October 10, 2000, Luciano also died. 13
The respondents filed their Answer on November 16, 2000. 14
The petitioners sister, Lagrimas Pacaa-Gonzales, filed a
motion for leave to intervene and her answer-in-intervention
respondents manifested to the RTC that a substitution of the
parties was necessary in light of the deaths of Lourdes and
Luciano. They further stated that they would seek the
dismissal of the complaint because the petitioners are not the
real parties in interest to prosecute the case. The pre-trial
pushed through as scheduled and the RTC directed the
respondents to put into writing their earlier manifestation. The
RTC issued a pre-trial order where one of the issues submitted
was whether the complaint should be dismissed for failure to
comply with Section 2, Rule 3 of the Rules of Court which
requires that every action must be prosecuted in the name of
the real party in interest.15
On January 23, 2002, the respondents again filed a motion to
16
dismiss on the grounds, among others, that the petitioners are
not the real parties in interest to institute and prosecute the
case and that they have no valid cause of action against the
respondents.
THE RTC RULING
The RTC denied the respondents motion to dismiss. It ruled
that, save for the grounds for dismissal which may be raised at
any stage of the proceedings, a motion to dismiss based on
the grounds invoked by the respondents may only be filed
within the time for, but before, the filing of their answer to the
amended complaint. Thus, even granting that the defenses
invoked by the respondents are meritorious, their motion was
filed out of time as it was filed only after the conclusion of the
pre-trial conference. Furthermore, the rule on substitution of
parties only applies when the parties to the case die, which is
not what happened in the present case. 17
The RTC likewise denied the respondents motion for
reconsideration.18
The respondents filed a petition for certiorari under Rule 65 of
the Rules of Court with the CA, invoking grave abuse of
discretion in the denial of their motion to dismiss. They argued
that the deceased spouses Luciano and Lourdes, not the
petitioners, were the real parties in interest. Thus, the
petitioners violated Section 16, Rule 3 of the Rules of Court on
the substitution of parties. 19
Furthermore, they seasonably moved for the dismissal of the
case and the RTC never acquired jurisdiction over the
20
persons of the petitioners as heirs of Lourdes and Luciano. 21
THE CA RULING
The CA granted the petition and ruled that the RTC committed
grave abuse of discretion as the petitioners filed the complaint
and the amended complaint as attorneys-in-fact of their
parents. As such, they are not the real parties in interest and
cannot bring an action in their own names; thus, the complaint
should be dismissed pursuant to the Courts ruling in Casimiro
22
v. Roque and Gonzales. 23
Neither are the petitioners suing as heirs of their deceased
parents. Pursuant to jurisprudence, the petitioners should first
24
be declared as heirs before they can be considered as the real
parties in interest. This cannot be done in the present ordinary
civil case but in a special proceeding for that purpose. The CA
agreed with the respondents that they alleged the following
issues as affirmative defenses in their answer: 1) the
petitioners are not the real parties in interest; and 2) that they
had no legal right to institute the action in behalf of their
parents. 25
That the motion to dismiss was filed after the period to file an
answer has lapsed is of no moment. The RTC judge
entertained it and passed upon its merit. He was correct in
doing so because in the pre-trial order, one of the submitted
issues was whether the case must be dismissed for failure to
comply with the requirements of the Rules of Court.
Furthermore, in Dabuco v. Court of Appeals, the Court held
26
that the ground of lack of cause of action may be raised in a
motion to dismiss at anytime. 27
The CA further ruled that, in denying the motion to dismiss, the
RTC judge acted contrary to established rules and
jurisprudence which may be questioned via a petition for
certiorari. The phrase "grave abuse of discretion" which was
traditionally confined to "capricious and whimsical exercise of
judgment" has been expanded to include any action done
"contrary to the Constitution, the law or jurisprudence[.]" 28
THE PARTIES ARGUMENTS
The petitioners filed the present petition and argued that, first,
in annulling the interlocutory orders, the CA unjustly allowed
the motion to dismiss which did not conform to the rules. 29
Specifically, the motion was not filed within the time for, but
before the filing of, the answer to the amended complaint, nor
were the grounds raised in the answer. Citing Section 1, Rule
9 of the Rules of Court, the respondents are deemed to have
waived these grounds, as correctly held by the RTC. 30
Second, even if there is non-joinder and misjoinder of parties
or that the suit is not brought in the name of the real party in
interest, the remedy is not outright dismissal of the complaint,
but its amendment to include the real parties in interest. 31
Third, the petitioners sued in their own right because they
have actual and substantial interest in the subject matter of the
action as heirs or co-owners, pursuant to Section 2, Rule 3 of
the Rules of Court. 32
Their declaration as heirs in a special proceeding is not
necessary, pursuant to the Courts ruling in Marabilles, et al. v.
Quito.33
Finally, the sworn declaration is evidentiary in nature which
remains to be appreciated after the trial is completed. 34
The respondents reiterated in their comment that the
petitioners are not the real parties in interest.
35
They likewise argued that they moved for the dismissal of the
case during the pre-trial conference due to the petitioners
procedural lapse in refusing to comply with a condition
precedent, which is, to substitute the heirs as plaintiffs.
Besides, an administrator of the estates of Luciano and
Lourdes has already been appointed. 36
The respondents also argued that the grounds invoked in their
motion to dismiss were timely raised, pursuant to Section 2,
paragraphs g and i, Rule 18 of the Rules of Court. Specifically,
the nature and purposes of the pre-trial include, among others,
the dismissal of the action, should a valid ground therefor be
found to exist; and such other matters as may aid in the
prompt disposition of the action. Finally, the special civil action
of certiorari was the proper remedy in assailing the order of the
RTC. 37
THE COURTS RULING
We find the petition meritorious.
Petition for certiorari under Rule 65 is a proper remedy for a
denial of a motion to dismiss attended by grave abuse of
discretion
In Barrazona v. RTC, Branch 61, Baguio City, the Court held
38
that while an order denying a motion to dismiss is interlocutory
and non-appealable, certiorari and prohibition are proper
remedies to address an order of denial made without or in
excess of jurisdiction. The writ of certiorari is granted to keep
an inferior court within the bounds of its jurisdiction or to
prevent it from committing grave abuse of discretion
amounting to lack or excess of jurisdiction.
The history and development of the ground "fails to state a
cause of action" in the 1940, 1964 and the present 1997 Rules
of Court Preliminarily, a suit that is not brought in the name of
the real party in interest is dismissible on the ground that the
complaint "fails to state a cause of action."
39
Pursuant to jurisprudence, this is also the ground invoked
40
when the respondents alleged that the petitioners are not the
real parties in interest because: 1) the petitioners should not
have filed the case in their own names, being merely
attorneys-in-fact of their mother; and 2) the petitioners should
first be declared as heirs. A review of the 1940, 1964 and the
present 1997 Rules of Court shows that the fundamentals of
the ground for dismissal based on "failure to state a cause of
action" have drastically changed over time. A historical
background of this particular ground is in order to preclude any
confusion or misapplication of jurisprudence decided prior to
the effectivity of the present Rules of Court. The 1940 Rules of
Court provides under Section 10, Rule 9 that:
Section 10. Waiver of defenses- Defenses and objections not
pleaded either in a motion to dismiss or in the answer are
deemed waived; except the defense of failure to state a cause
of action, which may be alleged in a later pleading, if one is
permitted, or by motion for judgment on the pleadings, or at
the trial on the merits; but in the last instance, the motion shall
be disposed of as provided in section 5 of Rule 17 in the light
of any evidence which may have been received. Whenever it
appears that the court has no jurisdiction over the subject-
matter, it shall dismiss the action. [underscoring supplied]
This provision was essentially reproduced in Section 2, Rule 9
of the 1964 Rules of Court, and we quote:
Section 2. Defenses and objections not pleaded deemed
waived. Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived; except
the failure to state a cause of action which may be alleged in a
later pleading, if one is permitted, or by motion for judgment on
the pleadings, or at the trial on the merits; but in the last
instance, the motion shall be disposed of as provided in
section 5 of Rule 10 in the light of any evidence which may
have been received. Whenever it appears that the court has
no jurisdiction over the subject-matter, it shall dismiss the
action. [underscoring supplied]
Under the present Rules of Court, this provision was reflected
in Section 1, Rule 9, and we quote:
Section 1. Defenses and objections not pleaded. Defenses
and objections not pleaded either in a motion to dismiss or in
the answer are deemed waived. However, when it appears
from the pleadings or the evidence on record that the court
has no jurisdiction over the subject matter, that there is
another action pending between the same parties for the same
cause, or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.
[underscoring supplied]
Notably, in the present rules, there was a deletion of the
ground of "failure to state a cause of action" from the list of
those which may be waived if not invoked either in a motion to
dismiss or in the answer. Another novelty introduced by the
present Rules, which was totally absent in its two precedents,
is the addition of the period of time within which a motion to
dismiss should be filed as provided under Section 1, Rule 16
and we quote:
Section 1. Grounds. Within the time for but before filing the
answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following
grounds: xxx [underscoring supplied]
All these considerations point to the legal reality that the new
Rules effectively restricted the dismissal of complaints in
general, especially when what is being invoked is the ground
of "failure to state a cause of action." Thus, jurisprudence
governed by the 1940 and 1964 Rules of Court to the effect
that the ground for dismissal based on failure to state a cause
of action may be raised anytime during the proceedings, is
already inapplicable to cases already governed by the present
Rules of Court which took effect on July 1, 1997. As the rule
now stands, the failure to invoke this ground in a motion to
dismiss or in the answer would result in its waiver. According
to Oscar M. Herrera, the reason for the deletion is that failure
41
to state a cause of action may be cured under Section 5, Rule
10 and we quote:
Section 5. Amendment to conform to or authorize presentation
of evidence. When issues not raised by the pleadings are
tried with the express or implied consent of the parties they
shall be treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to
raise these issues may be made upon motion of any party at
any time, even after judgment; but failure to amend does not
effect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the
issues made by the pleadings, the court may allow the
pleadings to be amended and shall do so with liberality if the
presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. The court may
grant a continuance to enable the amendment to be made.
With this clarification, we now proceed to the substantial
issues of the petition.
The motion to dismiss in the present case based on failure to
state a cause of action was not timely filed and was thus
waived
Applying Rule 16 of the Rules of Court which provides for the
grounds for the dismissal of a civil case, the respondents
grounds for dismissal fall under Section 1(g) and (j), Rule 16 of
the Rules of Court, particularly, failure to state a cause of
action and failure to comply with a condition precedent
(substitution of parties), respectively. The first paragraph of
Section 1,42
Rule 16 of the Rules of Court provides for the period within
which to file a motion to dismiss under the grounds
enumerated. Specifically, the motion should be filed within the
time for, but before the filing of, the answer to the complaint or
pleading asserting a claim. Equally important to this provision
is Section 1, 43
Rule 9 of the Rules of Court which states that defenses and
objections not pleaded either in a motion to dismiss or in the
answer are deemed waived, except for the following grounds:
1) the court has no jurisdiction over the subject matter; 2) litis
pendencia; 3) res judicata; and 4) prescription. Therefore, the
grounds not falling under these four exceptions may be
considered as waived in the event that they are not timely
invoked. As the respondents motion to dismiss was based on
the grounds which should be timely invoked, material to the
resolution of this case is the period within which they were
raised. Both the RTC and the CA found that the motion to
dismiss was only filed after the filing of the answer and after
the pre-trial had been concluded. Because there was no
motion to dismiss before the filing of the answer, the
respondents should then have at least raised these grounds
as affirmative defenses in their answer. The RTCs assailed
orders did not touch on this particular issue but the CA ruled
that the respondents did, while the petitioners insist that the
respondents did not. In the present petition, the petitioners
reiterate that there was a blatant non-observance of the rules
when the respondents did not amend their answer to invoke
the grounds for dismissal which were raised only during the
pre-trial and, subsequently, in the subject motion to dismiss. 44
The divergent findings of the CA and the petitioners
arguments are essentially factual issues. Time and again, we
have held that the jurisdiction of the Court in a petition for
review on certiorari under Rule 45, such as the present case,
is limited only to questions of law, save for certain exceptions.
One of these is attendant herein, which is, when the findings
are conclusions without citation of specific evidence on which
they are based. 45
In the petition filed with the CA, the respondents made a
passing allegation that, as affirmative defenses in their answer,
they raised the issue that the petitioners are not the real
parties in interest. 46
On the other hand, the petitioners consistently argued
otherwise in their opposition to the motion to dismiss, and in
47
their comment and in their memorandum on the
48 49
respondents petition before the CA. Our examination of the
records shows that the CA had no basis in its finding that the
respondents alleged the grounds as affirmative defenses in
their answer. The respondents merely stated in their petition
for certiorari that they alleged the subject grounds in their
answer. However, nowhere in the petition did they support this
allegation; they did not even attach a copy of their answer to
the petition. It is basic that the respondents had the duty to
prove by substantial evidence their positive assertions.
Considering that the petition for certiorari is an original and not
an appellate action, the CA had no records of the RTCs
proceedings upon which the CA could refer to in order to
validate the respondents claim. Clearly, other than the
respondents bare allegations, the CA had no basis to rule,
without proof, that the respondents alleged the grounds for
dismissal as affirmative defenses in the answer. The
respondents, as the parties with the burden of proving that
they timely raised their grounds for dismissal, could have at
least attached a copy of their answer to the petition. This
simple task they failed to do. That the respondents did not
allege in their answer the subject grounds is made more
apparent through their argument, both in their motion to
dismiss and in their comment, that it was only during the pre-
50 51
trial stage that they verbally manifested and invited the
attention of the lower court on their grounds for dismissal. In
order to justify such late invocation, they heavily relied on
Section 2(g) and (i), Rule 18 of the Rules of Court that the
52
nature and purpose of the pre-trial include, among others, the
propriety of dismissing the action should there be a valid
ground therefor and matters which may aid in the prompt
disposition of the action. The respondents are not correct. The
rules are clear and require no interpretation. Pursuant to
Section 1, Rule 9 of the Rules of Court, a motion to dismiss
based on the grounds invoked by the respondents may be
waived if not raised in a motion to dismiss or alleged in their
answer. On the other hand, "the pre-trial is primarily intended
to make certain that all issues necessary to the disposition of a
case are properly raised. The purpose is to obviate the
element of surprise, hence, the parties are expected to
disclose at the pre-trial conference all issues of law and fact
which they intend to raise at the trial, except such as may
involve privileged or impeaching matter." 53
The issues submitted during the pre-trial are thus the issues
that would govern the trial proper. The dismissal of the case
based on the grounds invoked by the respondents are
specifically covered by Rule 16 and Rule 9 of the Rules of
Court which set a period when they should be raised;
otherwise, they are deemed waived.
The Dabuco ruling is inapplicable in the present case; the
ground for dismissal "failure to state a cause of action"
distinguished from "lack of cause of action"
To justify the belated filing of the motion to dismiss, the CA
reasoned out that the ground for dismissal of "lack of cause of
action" may be raised at any time during the proceedings,
pursuant to Dabuco v. Court of Appeals. 54
This is an erroneous interpretation and application of Dabuco
as will be explained below.
First, in Dabuco, the grounds for dismissal were raised as
affirmative defenses in the answer which is in stark contrast to
the present case.
Second, in Dabuco, the Court distinguished between the
dismissal of the complaint for "failure to state a cause of
action" and "lack of cause of action." The Court emphasized
that in a dismissal of action for lack of cause of action,
"questions of fact are involved, [therefore,] courts hesitate to
declare a plaintiff as lacking in cause of action. Such
declaration is postponed until the insufficiency of cause is
apparent from a preponderance of evidence.
Usually, this is done only after the parties have been given the
opportunity to present all relevant evidence on such questions
of fact."
55
In fact, in Dabuco, the Court held that even the preliminary
hearing on the propriety of lifting the restraining order was
declared insufficient for purposes of dismissing the complaint
for lack of cause of action. This is so because the issues of
fact had not yet been adequately ventilated at that preliminary
stage. For these reasons, the Court declared in Dabuco that
the dismissal by the trial court of the complaint was premature.
In the case of Macaslang v. Zamora, the Court noted that the
56
incorrect appreciation by both the RTC and the CA of the
distinction between the dismissal of an action, based on
"failure to state a cause of action" and "lack of cause of
action," prevented it from properly deciding the case, and we
quote:
Failure to state a cause of action and lack of cause of action
are really different from each other. On the one hand, failure to
state a cause of action refers to the insufficiency of the
pleading, and is a ground for dismissal under Rule 16 of the
Rules of Court. On the other hand, lack of cause [of] action
refers to a situation where the evidence does not prove the
cause of action alleged in the pleading. Justice Regalado, a
recognized commentator on remedial law, has explained the
distinction: xxx What is contemplated, therefore, is a failure to
state a cause of action which is provided in Sec. 1(g) of Rule
16. This is a matter of insufficiency of the pleading. Sec. 5 of
Rule 10, which was also included as the last mode for raising
the issue to the court, refers to the situation where the
evidence does not prove a cause of action. This is, therefore,
a matter of insufficiency of evidence. Failure to state a cause
of action is different from failure to prove a cause of action.
The remedy in the first is to move for dismissal of the pleading,
while the remedy in the second is to demur to the evidence,
hence reference to Sec. 5 of Rule 10 has been eliminated in
this section. The procedure would consequently be to require
the pleading to state a cause of action, by timely objection to
its deficiency; or, at the trial, to file a demurrer to evidence, if
such motion is warranted. [italics supplied]
Based on this discussion, the Court cannot uphold the
dismissal of the present case based on the grounds invoked
by the respondents which they have waived for failure to
invoke them within the period prescribed by the Rules. The
Court cannot also dismiss the case based on "lack of cause of
action" as this would require at least a preponderance of
evidence which is yet to be appreciated by the trial court.
Therefore, the RTC did not commit grave abuse of discretion
in issuing the assailed orders denying the respondents motion
to dismiss and motion for reconsideration. The Court shall not
resolve the merits of the respondents grounds for dismissal
which are considered as waived.
Other heirs of the spouses Pacaa to be impleaded in the
case.
It should be emphasized that insofar as the petitioners are
concerned, the respondents have waived the dismissal of the
complaint based on the ground of failure to state a cause of
action because the petitioners are not the real parties in
interest. At this juncture, a distinction between a real party in
interest and an indispensable party is in order. In Carandang v.
Heirs of de Guzman, et al., the Court clarified these two
57
concepts and held that "[a] real party in interest is the party
who stands to be benefited or injured by the judgment of the
suit, or the party entitled to the avails of the suit. On the other
hand, an indispensable party is a party in interest without
whom no final determination can be had of an action, in
contrast to a necessary party, which is one who is not
indispensable but who ought to be joined as a party if
complete relief is to be accorded as to those already parties,
or for a complete determination or settlement of the claim
subject of the action. xxx If a suit is not brought in the name of
or against the real party in interest, a motion to dismiss may be
filed on the ground that the complaint states no cause of
action. However, the dismissal on this ground entails an
examination of whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all
persons interested in such outcome are actually pleaded. The
latter query is relevant in discussions concerning
indispensable and necessary parties, but not in discussions
concerning real parties in interest. Both indispensable and
necessary parties are considered as real parties in interest,
since both classes of parties stand to be benefited or injured
by the judgment of the suit."
At the inception of the present case, both the spouses Pacaa
were not impleaded as parties-plaintiffs. The Court notes,
however, that they are indispensable parties to the case as the
alleged owners of Rovila Water Supply. Without their inclusion
as parties, there can be no final determination of the present
case. They possess such an interest in the controversy that a
final decree would necessarily affect their rights, so that the
courts cannot proceed without their presence. Their interest in
the subject matter of the suit and in the relief sought is
inextricably intertwined with that of the other parties. 58
Jurisprudence on the procedural consequence of the inclusion
or non-inclusion of an indispensable party is divided in our
jurisdiction. Due to the non-inclusion of indispensable parties,
the Court dismissed the case in Lucman v. Malawi, et al. and 59
Go v. Distinction Properties Development Construction,
Inc., while in Casals, et al. v. Tayud Golf and Country Club et
60
al., the Court annulled the judgment which was rendered
61
without the inclusion of the indispensable parties. In Arcelona
et al. v. Court of Appeals and Bulawan v. Aquende, and
62 63
Metropolitan Bank & Trust Company v. Alejo et al. the Court
64
ruled that the burden to implead or order the impleading of an
indispensable party rests on the plaintiff and on the trial court,
respectively. Thus, the non-inclusion of the indispensable
parties, despite notice of this infirmity, resulted in the
annulment of these cases. In Plasabas, et al. v. Court of
Appeals, et al., the Court held that the trial court and the CA
65
committed reversible error when they summarily dismissed the
case, after both parties had rested their cases following a
protracted trial, on the sole ground of failure to implead
indispensable parties. Non-joinder of indispensable parties is
not a ground for the dismissal of an action. The remedy is to
implead the non-party claimed to be indispensable. However,
in the cases of Quilatan, et al. v. Heirs of Quilatan, et al. and
66
Lagunilla, et al. v. Monis, et al., the Court remanded the case
67
to the RTC for the impleading of indispensable parties. On the
other hand, in Lotte Phil. Co., Inc. v. Dela Cruz, PepsiCo, Inc.
68
v. Emerald Pizza, and Valdez Tallorin, v. Heirs of Tarona, et
69
al., the Court directly ordered that the indispensable parties
70
be impleaded. Mindful of the differing views of the Court as
regards the legal effects of the non-inclusion of indispensable
parties, the Court clarified in Republic of the Philippines v.
Sandiganbayan, et al., that the failure to implead
71
indispensable parties is a curable error and the foreign origin
of our present rules on indispensable parties permitted this
corrective measure. This cited case held:
Even in those cases where it might reasonably be argued that
the failure of the Government to implead the sequestered
corporations as defendants is indeed a procedural aberration
xxx, slight reflection would nevertheless lead to the conclusion
that the defect is not fatal, but one correctible under applicable
adjective rules e.g., Section 10, Rule 5 of the Rules of Court
[specifying the remedy of amendment during trial to authorize
or to conform to the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule respecting
omission of so-called necessary or indispensable parties, set
out in Section 11, Rule 3 of the Rules of Court. It is relevant in
this context to advert to the old familiar doctrines that the
omission to implead such parties "is a mere technical defect
which can be cured at any stage of the proceedings even after
judgment"; and that, particularly in the case of indispensable
parties, since their presence and participation is essential to
the very life of the action, for without them no judgment may
be rendered, amendments of the complaint in order to implead
them should be freely allowed, even on appeal, in fact even
after rendition of judgment by this Court, where it appears that
the complaint otherwise indicates their identity and character
as such indispensable parties." Although there are decided
cases wherein the non-joinder of indispensable parties in fact
led to the dismissal of the suit or the annulment of judgment,
such cases do not jibe with the matter at hand. The better view
is that non-joinder is not a ground to dismiss the suit or annul
the judgment. The rule on joinder of indispensable parties is
founded on equity. And the spirit of the law is reflected in
Section 11, Rule 3 of the 1997 Rules of Civil Procedure. It
prohibits the dismissal of a suit on the ground of non-joinder or
misjoinder of parties and allows the amendment of the
complaint at any stage of the proceedings, through motion or
on order of the court on its own initiative. Likewise,
jurisprudence on the Federal Rules of Procedure, from which
our Section 7, Rule 3 on indispensable parties was copied,
allows the joinder of indispensable parties even after judgment
has been entered if such is needed to afford the moving party
full relief. Mere delay in filing the joinder motion does not
necessarily result in the waiver of the right as long as the delay
is excusable.
In Galicia, et al. v. Vda. De Mindo, et al., the Court ruled that
72
in line with its policy of promoting a just and inexpensive
disposition of a case, it allowed the intervention of the
indispensable parties instead of dismissing the complaint.
Furthermore, in Commissioner Domingo v. Scheer, the Court
73
cited Salvador, et al. v. Court of Appeals, et al. and held that
74
the Court has full powers, apart from that power and authority
which are 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, and to order its amendment in
order to implead an indispensable party. With these
discussions as premises, the Court is of the view that the
proper remedy in the present case is to implead the
indispensable parties especially when their non-inclusion is
merely a technical defect. To do so would serve proper
administration of justice and prevent further delay and
multiplicity of suits. Pursuant to Section 9, Rule 3 of the Rules
of Court, 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. If
the plaintiff refuses to implead an indispensable party despite
the order of the court, then the court may dismiss the
complaint for the plaintiffs failure to comply with a lawful court
order.75
The operative act that would lead to the dismissal of the case
would be the refusal to comply with the directive of the court
for the joinder of an indispensable party to the case. 76
Obviously, in the present case, the deceased Pacaas can no
longer be included in the complaint as indispensable parties
because of their death during the pendency of the case. Upon
their death, however, their ownership and rights over their
properties were transmitted to their heirs, including herein
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-23136 August 26, 1974
petitioners, pursuant to Article 774 in relation with Article
77
777 of the Civil Code.
78
In Orbeta, et al. v. Sendiong, the Court acknowledged that the
79
heirs, whose hereditary rights are to be affected by the case,
are deemed indispensable parties who should have been
impleaded by the trial court. Therefore, to obviate further delay
in the proceedings of the present case and given the Courts
authority to order the inclusion of an indispensable party at any
stage of the proceedings, the heirs of the spouses Pacaa,
except the petirioners who are already parties to the case are
Lagrimas Pacaa-Gonzalez who intervened in the case, are
hereby ordered impleaded as parties-plaintiffs.
WHEREFORE, the petition is GRANTED. The decision dated January 27,
2005 and the resolution date June 6, 2005 of the Court of Appeals in CA-
G.R. SP No. 71551 are REVERSED and SET ASIDE. The heirs of the
spouses Luciano and Lourdes Pacaa, except herein petitioner and
Lagrimas Pacaa-Gonzalez, are ORDERED IMPLEADED as parties
plaintiffs and the RTC is directed tp proceed with the trial of the case with
DISPATCH.
SO ORDERED.
ARTURO D. BRION
Associate Justice
ISMAEL MATHAY, JOSEFINA MATHAY, DIOGRACIAS T.
REYES and S. ADOR DIONISIO, plaintiffs-appellants,
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-intervenors-appellants.
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 plaintiffs-
appellants accomplished and filed their respective "Pre-
Incorporation Agreement to Subscribe" and paid in full their
subscriptions; that plaintiffs-appellants and the other CMI
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 individuals-defendants- 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,
Plaintiffs-appellants 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 defendants-appellees, 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
defendants-appellees 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 defendants-appellees, 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 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 plaintiffs-
appellants 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 plaintiffs-appellants had
resorted to, and exhausted, intra-corporate
remedies;
V. In resolving defendants-appellees' 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 defendants-appellees;
VII. In not holding that a trust relationship
existed between the Interim Board of
Organizers of defendant-appellee 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 defendant-
appellee 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-intervenors-appellants 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 plaintiffs-appellants were only four out
of 1,500 stockholders, and owned only 8 shares out of the
80,000 shares of stock of the appellee Bank; that even if to the
four plaintiffs-appellants were added the four movants-
intervenors-appellants 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 plaintiffs-
appellants' pretension that they were sufficiently numerous
and representative or that there were many other stockholders
similarly situated whom the plaintiffs-appellants 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
plaintiffs-appellants 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
plaintiffs- appellants 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 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 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 defendant-appellee 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 dismiss. Neither allegations of conclusions 25 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 "Pre-
Incorporation 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 defendants-appellees
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, 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 defendants-appellees 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 defendants-appellees.
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-defendants-appellees; 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 individuals-defendants-appellees
alone appeared to have subscribe to the 50, shares; 39 and that
individuals-defendants-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 individuals-defendants-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-defendants-appellees "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 defendants-appellees 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 defendants-appellee 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 defendant-appellee
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 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
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.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-63559 May 30, 1986
NEWSWEEK, INC., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, and NATIONAL
FEDERATION OF SUGARCANE PLANTERS INC.,
BINALBAGAN-ISABELA PLANTERS ASSOCIATION, INC.,
ASOCIACION DE AGRICULTORES DE LA CARLOTA, LA
CASTELLANA y PONTEVEDRA, INC., DONEDCO
PLANTERS ASSOCIATION INC., ARMANDO GUSTILO,
ENRIQUE ROJAS, ALFREDO MONTELIBANO, JR., PABLO
SOLA, JOSE MONTALVO, VICENTE GUSTILO, JOSEPH
MARANON, ROBERTO CUENCA, JOSE SICANGCO,
FLORENCIO ALONSO, MIGUEL GATUSLAO, PEDRO
YULO, MARINO RUBIN and BENJAMIN
BAUTISTA, respondents.
San Juan, Africa, Gonzales & San Agustin Law Offices for
private respondents.
FERIA, J.:
Petitioner, Newsweek, Inc., a foreign corporation licensed to
do business in the Philippines, in this special action for
certiorari, prohibition with preliminary injunction, seeks to annul
the decision of the Intermediate Appellate Court dated
December 17, 1982 sustaining the Order of the then Court of
First Instance of Bacolod City which denied petitioner's Motion
to Dismiss the complaint for libel filed by private respondents
(Civil Case No. 15812), and the Resolution dated March 10,
1983 which denied its Motion for Reconsideration.
It appears that on March 5, 1981, private respondents,
incorporated associations of sugarcane planters in Negros
Occidental claiming to have 8,500 members and several
individual sugar planters, filed Civil Case No. 15812 in their
own behalf and/or as a class suit in behalf of all sugarcane
planters in the province of Negros Occidental, against
petitioner and two of petitioners' non-resident
correspondents/reporters Fred Bruning and Barry Came. The
complaint alleged that petitioner and the other defendants
committed libel against them by the publication of the article
"An Island of Fear" in the February 23, 1981 issue of
petitioner's weekly news magazine Newsweek. The article
supposedly portrayed the island province of Negros Occidental
as a place dominated by big landowners or sugarcane planters
who not only exploited the impoverished and underpaid
sugarcane workers/laborers, but also brutalized and killed
them with imprunity. Complainants therein alleged that said
article, taken as a whole, showed a deliberate and malicious
use of falsehood, slanted presentation and/or
misrepresentation of facts intended to put them (sugarcane
planters) in bad light, expose them to public ridicule, discredit
and humiliation here in the Philippines and abroad, and make
them objects of hatred, contempt and hostility of their
agricultural workers and of the public in general. They prayed
that defendants be ordered to pay them PlM as actual and
compensatory damages, and such amounts for moral,
exemplary and corrective damages as the court may
determine, plus expenses of litigation, attorney's fees and
costs of suit. A photo copy of the article was attached to the
complaint.
On November 5, 1981, petitioner filed a motion to dismiss on
the grounds that (1) the printed article sued upon is not
actionable in fact and in law; and (2) the complaint is bereft of
allegations that state, much less support a cause of action. It
pointed out the non-libelous nature of the article and,
consequently, the failure of the complaint to state a cause of
action. Private respondents filed an Opposition to the motion
to dismiss and petitioner filed a reply.
On March 17, 1982, the trial court denied the motion to
dismiss, stating that the grounds on which the motion to
dismiss are predicated are not indubitable as the complaint on
its face states a valid cause of action; and the question as to
whether the printed article sued upon its actionable or not is a
matter of evidence. Petitioner's motion for reconsideration was
denied on May 28, 1982.
On June 18, 1982, petitioner filed a petition for certiorari with
respondent Court (CA-G. R. No. 14406) seeking the
annulment of the aforecited trial court's Orders for having been
issued with such a grave abuse of discretion as amounting to
lack of jurisdiction and praying for the dismissal of the
complaint for failure to state a cause of action.
As earlier stated, respondent Court affirmed the trial court's
Orders in a Decision dated December 17, 1982 and ordered
the case to be tried on the merits on the grounds that -(1) the
complaint contains allegations of fact which called for the
presentation of evidence; and (2) certiorari under Rule 65
cannot be made to substitute for an appeal where an appeal
would lie at a proper time. Subsequently, on March 10, 1983,
the respondent Court denied petitioner's Motion for
Reconsideration of the aforesaid decision, hence this petition.
The proper remedy which petitioner should have taken from
the decision of respondent Court is an appeal by certiorari
under Rule 45 of the Rules of Court and not the special civil
action of certiorari and prohibition under Rule 65 of said Rules.
However, since the petition was filed on time within fifteen
days from notice of the Resolution denying the motion for
reconsideration, we shall treat the same as a petition for
review on certiorari. The two (2) issues raised in the petition
are: (1) whether or not the private respondents' complaint
failed to state a cause of action; and (2) whether or not the
petition for certiorari and prohibition is proper to question the
denial of a motion to dismiss for failure to state a cause of
action.
First, petitioner argues that private respondents' complaint
failed to state a cause of action because the complaint made
no allegation that anything contained in the article complained
of regarding sugarcane planters referred specifically to any
one of the private respondents; that libel can be committed
only against individual reputation; and that in cases where libel
is claimed to have been directed at a group, there is actionable
defamation only if the libel can be said to reach beyond the
mere collectivity to do damage to a specific, individual group
member's reputation.
We agree with petitioner.
In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this
Court ruled that "in order to maintain a libel suit, it is essential
that the victim be identifiable (People vs. Monton, L-16772,
November 30, 1962), although it is not necessary that he be
named (19 A.L.R. 116)." In an earlier case, this Court declared
that" ... defamatory matter which does not reveal the Identity of
the person upon whom the imputation is cast, affords no
ground of action unless it be shown that the readers of the libel
could have Identified the personality of the individual
defamed." (Kunkle vs. Cablenews-American and Lyons 42
Phil. 760).
This principle has been recognized to be of vital importance,
especially where a group or class of persons, as in the case at
bar, claim to have been defamed, for it is evident that the
larger the collectivity, the more difficult it is for the individual
member to prove that the defamatory remarks apply to him.
(Cf. 70 ALR 2d. 1384).
In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, this
Court held as follows:
Defamatory remarks directed at a class or
group of persons in general language only, are
not actionable by individuals composing the
class or group unless the statements are
sweeping; and it is very probable that even then
no action would lie where the body is composed
of so large a number of persons that common
sense would tell those to whom the publication
was made that there was room for persons
connected with the body to pursue an upright
and law abiding course and that it would be
unreasonable and absurd to condemn all
because of the actions of a part. (supra p. 628).
It is evident from the above ruling that where the defamation is
alleged to have been directed at a group or class, it is
essential that the statement must be so sweeping or all-
embracing as to apply to every individual in that group or
class, or sufficiently specific so that each individual in the class
or group can prove that the defamatory statement specifically
pointed to him, so that he can bring the action separately, if
need be.
We note that private respondents filed a "class suit" in
representation of all the 8,500 sugarcane planters of Negros
Occidental. Petitioner disagrees and argues that the absence
of any actionable basis in the complaint cannot be cured by
the filing of a class suit on behalf of the aforesaid sugar
planters.
We find petitioner's contention meritorious.
The case at bar is not a class suit. It is not a case where one
or more may sue for the benefit of all (Mathay vs.
Consolidated Bank and Trust Company, 58 SCRA 559) or
where the representation of class interest affected by the
judgment or decree is indispensable to make each member of
the class an actual party (Borlaza vs. Polistico, 47 Phil. 348).
We have here a case where each of the plaintiffs has a
separate and distinct reputation in the community. They do not
have a common or general interest in the subject matter of the
controversy.
The disputed portion of the article which refers to plaintiff Sola
and which was claimed to be libelous never singled out plaintiff
Sola as a sugar planter. The news report merely stated that
the victim had been arrested by members of a special police
unit brought into the area by Pablo Sola, the mayor of
Kabankalan. Hence, the report, referring as it does to an
official act performed by an elective public official, is within the
realm of privilege and protected by the constitutional
guarantees of free speech and press.
The article further stated that Sola and the commander of the
special police unit were arrested. The Court takes judicial
notice of this fact. (People vs. Sola, 103 SCRA 393.)
The second issue to be resolved here is whether or not the
special civil action of certiorari or prohibition is available to
petitioner whose motion to dismiss the complaint and
subsequent motion for reconsideration were denied.
As a general rule, an order denying a motion to dismiss is
merely interlocutory and cannot be subject of appeal until final
judgment or order is rendered. (Sec. 2 of Rule 4 1). The
ordinary procedure to be followed in such a case is to file an
answer, go to trial and if the decision is adverse, reiterate the
issue on appeal from the final judgment. The same rule
applies to an order denying a motion to quash, except that
instead of filing an answer a plea is entered and no appeal lies
from a judgment of acquittal.
This general rule is subject to certain exceptions. If the court,
in denying the motion to dismiss or motion to quash, acts
without or in excess of jurisdiction or with grave abuse of
discretion, then certiorari or prohibition lies. The reason is that
it would be unfair to require the defendant or accused to
undergo the ordeal and expense of a trial if the court has no
jurisdiction over the subject matter or offense, or is not the
court of proper venue, or if the denial of the motion to dismiss
or motion to quash is made with grave abuse of discretion or a
whimsical and capricious exercise of judgment. In such cases,
the ordinary remedy of appeal cannot be plain and adequate.
The following are a few examples of the exceptions to the
general rule.
In De Jesus vs. Garcia (19 SCRA 554), upon the denial of a
motion to dismiss based on lack of jurisdiction over the subject
matter, this Court granted the petition for certiorari and
prohibition against the City Court of Manila and directed the
respondent court to dismiss the case.
In Lopez vs. City Judge (18 SCRA 616), upon the denial of a
motion to quash based on lack of jurisdiction over the offense,
this Court granted the petition for prohibition and enjoined the
respondent court from further proceeding in the case.
In Enriquez vs. Macadaeg (84 Phil. 674), upon the denial of a
motion to dismiss based on improper venue, this Court
granted the petition for prohibition and enjoined the
respondent judge from taking cognizance of the case except to
dismiss the same.
In Manalo vs. Mariano (69 SCRA 80), upon the denial of a
motion to dismiss based on bar by prior judgment, this Court
granted the petition for certiorari and directed the respondent
judge to dismiss the case.
In Yuviengco vs. Dacuycuy (105 SCRA 668), upon the denial
of a motion to dismiss based on the Statute of Frauds, this
Court granted the petition for certiorari and dismissed the
amended complaint.
In Tacas vs. Cariaso (72 SCRA 527), this Court granted the
petition for certiorari after the motion to quash based on
double jeopardy was denied by respondent judge and ordered
him to desist from further action in the criminal case except to
dismiss the same.
In People vs. Ramos (83 SCRA 11), the order denying the
motion to quash based on prescription was set aside on
certiorari and the criminal case was dismissed by this Court.
Respondent Court correctly stated the general rule and its
exceptions. However, it ruled that none of the exceptions is
present in the case at bar and that the case appears complex
and complicated, necessitating a full-blown trial to get to the
bottom of the controversy.
Petitioner's motion to dismiss is based on the ground that the
complaint states no cause of action against it by pointing out
the non-libelous nature of the article sued upon. There is no
need of a trial in view of the conclusion of this Court that the
article in question is not libelous. The specific allegation in the
complaint, to the effect that the article attributed to the
sugarcane planters the deaths and brutalization of sugarcane
workers, is not borne out by a perusal of the actual text.
The complaint contains a recital of the favorable working
conditions of the agricultural workers in the sugar industry and
the various foundations and programs supported by planters'
associations for the benefit of their workers. Undoubtedly, the
statements in the article in question are sweeping and
exaggerated; but, paraphrasing the ruling in the Uy Tioco case
above quoted, it would be unreasonable and absurd to
condemn the majority of the sugarcane planters, who have at
heart the welfare of their workers, because of the actions of a
part. Nonetheless, articles such as the one in question may
also serve to prick the consciences of those who have but are
not doing anything or enough for those who do not have.
On the other hand, petitioner would do well to heed the
admonition of the President to media that they should check
the sources of their information to ensure the publication of the
truth. Freedom of the press, like all freedoms, should be
exercised with responsibility.
WHEREFORE, the decision of the Intermediate Appellate
Court is reversed and the complaint in Civil Case No. 15812 of
the Court of First Instance of Negros Occidental is dismissed,
without pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all
surnamed OPOSA, minors, and represented by their
parents ANTONIO and RIZALINA OPOSA, ROBERTA
NICOLE SADIUA, minor, represented by her parents
CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD
and PATRISHA, all surnamed FLORES, minors and
represented by their parents ENRICO and NIDA FLORES,
GIANINA DITA R. FORTUN, minor, represented by her
parents SIGRID and DOLORES FORTUN, GEORGE II and
MA. CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA MISA,
BENJAMIN ALAN V. PESIGAN, minor, represented by his
parents ANTONIO and ALICE PESIGAN, JOVIE MARIE
ALFARO, minor, represented by her parents JOSE and
MARIA VIOLETA ALFARO, MARIA CONCEPCION T.
CASTRO, minor, represented by her parents FREDENIL
and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA
Teehankee, C.J., Abad Santos, Yap, Fernan, Narvasa,
Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz and Paras,
JJ., concur.
DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor,
represented by his parents GREGORIO II and CRISTINE
CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO,
MA. ANGELA and MARIE GABRIELLE, all surnamed
SAENZ, minors, represented by their parents ROBERTO
and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY,
GOLDA MARTHE and DAVID IAN, all surnamed KING,
minors, represented by their parents MARIO and HAYDEE
KING, DAVID, FRANCISCO and THERESE VICTORIA, all
surnamed ENDRIGA, minors, represented by their parents
BALTAZAR and TERESITA ENDRIGA, JOSE MA. and
REGINA MA., all surnamed ABAYA, minors, represented
by their parents ANTONIO and MARICA ABAYA, MARILIN,
MARIO, JR. and MARIETTE, all surnamed CARDAMA,
minors, represented by their parents MARIO and LINA
CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE
LYN, all surnamed OPOSA, minors and represented by
their parents RICARDO and MARISSA OPOSA, PHILIP
JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all
surnamed QUIPIT, minors, represented by their parents
JOSE MAX and VILMI QUIPIT, BUGHAW CIELO,
CRISANTO, ANNA, DANIEL and FRANCISCO, all
surnamed BIBAL, minors, represented by their parents
FRANCISCO, JR. and MILAGROS BIBAL, and THE
PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his
capacity as the Secretary of the Department of
Environment and Natural Resources, and THE
HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of
the RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.
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
"inter-generational responsibility" and "inter-generational
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 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 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. about 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 well-being. (P.D. 1151, 6 June
1977)
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 self-
preservation 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
plaintiffs-minors 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
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 "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 Constitution itself, thereby highlighting their continuing
incorporated in the fundamental law. Section 16, Article II of importance and imposing upon the state a solemn obligation to
the 1987 Constitution explicitly provides: 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
Sec. 16. The State shall protect and advance the present generation, but also for those to come
the right of the people to a balanced and generations which stand to inherit nothing but parched earth
healthful ecology in accord with the rhythm and incapable of sustaining life.
harmony of nature.
The right to a balanced and healthful ecology carries with it the
This right unites with the right to health which is correlative duty to refrain from impairing the environment.
provided for in the preceding section of the During the debates on this right in one of the plenary sessions
same article: of the 1986 Constitutional Commission, the following
exchange transpired between Commissioner Wilfrido Villacorta
Sec. 15. The State shall protect and promote and Commissioner Adolfo Azcuna who sponsored the section
the right to health of the people and instill health in question:
consciousness among them.
MR. VILLACORTA:
While the right to a balanced and healthful ecology is to be
found under the Declaration of Principles and State Policies Does this section mandate the
and not under the Bill of Rights, it does not follow that it is less State to provide sanctions
important than any of the civil and political rights enumerated against all forms of pollution
in the latter. Such a right belongs to a different category of air, water and noise pollution?
rights altogether for it concerns nothing less than self-
preservation and self-perpetuation aptly and fittingly MR. AZCUNA:
stressed by the petitioners the advancement of which may
even be said to predate all governments and constitutions. As Yes, Madam President. The right
a matter of fact, these basic rights need not even be written in to healthful (sic) environment
the Constitution for they are assumed to exist from the necessarily carries with it the
inception of humankind. If they are now explicitly mentioned in correlative duty of not impairing
the fundamental charter, it is because of the well-founded fear the same and, therefore,
of its framers that unless the rights to a balanced and healthful sanctions may be provided for
ecology and to health are mandated as state policies by the
 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, off-shore 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 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 well-being." 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 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 sub-heading
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-a-vis 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
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. L-24548, 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 non-impairment 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 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 non-
impairment 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
non-impairment 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 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 strip-mining 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 sub-headings 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
self-executing 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 far-
reaching 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 a grave abuse of
discretion amounting 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 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 strip-mining 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 sub-headings 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
self-executing 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 far-
reaching 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 a grave abuse of
discretion amounting 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 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.
THIRD DIVISION
[G.R. No. 162788. July 28, 2005]
Spouses JULITA DE LA CRUZ and FELIPE DE
LA CRUZ, petitioners, vs. PEDRO
JOAQUIN, respondent.
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.
DECISION
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
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 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. T-111802. 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
the Kasunduan 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:
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 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.
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 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:
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.
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.
Evidently, the heirs of Pedro Joaquin voluntary
appeared and participated in the case. We stress
that the appellate court had 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
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]
Forum shopping trifles with the courts, abuses
their processes, degrades the administration of
justice, and congests court dockets.[39] Willful 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 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, Corona, Carpio-
Morales, and Garcia, JJ., concur.
 Republic of the Philippines VELASCO, JR., J.:
SUPREME COURT
Manila Anyone who has ever struggled with poverty
knows how extremely expensive it is to be poor.
THIRD DIVISION
James Baldwin

SPOUSES ANTONIO F. ALGURA G.R. No.

150135 The Constitution affords litigantsmoneyed or
and LORENCITA S.J. ALGURA, poorequal access to the courts; moreover, it
Petitioners, specifically provides that poverty shall not bar any
Present: person from having access to the courts.
- versus - QUISUMBING, J., Chairperson, [1]
Accordingly, laws and rules must be formulated,
CARPIO,
CARPIO MORALES, interpreted, and implemented pursuant to the intent
THE LOCAL GOVERNMENT TINGA, and and spirit of this constitutional provision. As such,
UNIT OF THE CITY OF NAGA, VELASCO, filing fees, though one of the essential elements in
JR., JJ. court procedures, should not be an obstacle to poor
ATTY. MANUEL TEOXON, litigants opportunity to seek redress for their
ENGR. LEON PALMIANO,
grievances before the courts.
NATHAN SERGIO and Promulgated:
BENJAMIN NAVARRO, SR., The Case
Respondents. October 30, 2006
This Petition for Review on Certiorari seeks the
x---------------------------------------------------------------- annulment of the September 11, 2001 Order of the
-------------------------x
Regional Trial Court (RTC) of Naga City, Branch 27,
in Civil Case No. 99-4403 entitled Spouses Antonio F.
DECISION Algura and Lorencita S.J. Algura v. The Local
Government Unit of the City of Naga, et al.,
dismissing the case for failure of petitioners Algura
spouses to pay the required filing fees.[2] Since the
instant petition involves only a question of law based
on facts established from the pleadings and
documents submitted by the parties,[3] the Court gives
due course to the instant petition sanctioned under
Section 2(c) of Rule 41 on Appeal from the RTCs, and
governed by Rule 45 of the 1997 Rules of Civil
Procedure.
The Facts
On September 1, 1999, spouses Antonio F. Algura and
Lorencita S.J. Algura filed a Verified Complaint
dated August 30, 1999[4] for damages against the Naga
City Government and its officers, arising from the
alleged illegal demolition of their residence and
boarding house and for payment of lost income
derived from fees paid by their boarders amounting to
PhP 7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte Motion
to Litigate as Indigent Litigants,[5] to which petitioner
Antonio Alguras Pay Slip No. 2457360 (Annex A of
motion) was appended, showing a gross monthly
income of Ten Thousand Four Hundred Seventy Four
Pesos (PhP 10,474.00) and a net pay of Three
Thousand Six Hundred Sixteen Pesos and Ninety
Nine Centavos (PhP 3,616.99) for [the month of] July
1999.[6] Also attached as Annex B to the motion was a
July 14, 1999 Certification[7] issued by the Office of
the City Assessor of Naga City, which stated that
petitioners had no property declared in their name for
taxation purposes.
Finding that petitioners motion to litigate as indigent
litigants was meritorious, Executive Judge Jose T.
Atienza of the Naga City RTC, in the September 1,
1999 Order,[8] granted petitioners plea for exemption
from filing fees.
Meanwhile, as a result of respondent Naga City
Governments demolition of a portion of petitioners
house, the Alguras allegedly lost a monthly income of
PhP 7,000.00 from their boarders rentals. With the
loss of the rentals, the meager income from Lorencita
Alguras sari-sari store and Antonio Alguras small
take home pay became insufficient for the expenses of
the Algura spouses and their six (6) children for their
basic needs including food, bills, clothes, and
schooling, among others.
On October 13, 1999, respondents filed an Answer
with Counterclaim dated October 10, 1999,[9] arguing
that the defenses of the petitioners in the complaint
had no cause of action, the spouses boarding house
blocked the road right of way, and said structure was a
nuisance per se.
Praying that the counterclaim of defendants
(respondents) be dismissed, petitioners then filed their
Reply with Ex-Parte Request for a Pre-Trial
Setting[10] before the Naga City RTC on October 19,
1999. On February 3, 2000, a pre-trial was held
wherein respondents asked for five (5) days within
which to file a Motion to Disqualify Petitioners as
Indigent Litigants.
On March 13, 2000, respondents filed a Motion to
Disqualify the Plaintiffs for Non-Payment of Filing
Fees dated March 10, 2000.[11] They asserted that in
addition to the more than PhP 3,000.00 net income of
petitioner Antonio Algura, who is a member of the
Philippine National Police, spouse Lorencita Algura
also had a mini-store and a computer shop on the
ground floor of their residence along Bayawas St.,
Sta. Cruz, Naga City. Also, respondents claimed that
petitioners second floor was used as their residence
and as a boarding house, from which they earned
more than PhP 3,000.00 a month. In addition, it was
claimed that petitioners derived additional income
from their computer shop patronized by students and
from several boarders who paid rentals to them.
Hence, respondents concluded that petitioners were
not indigent litigants.
On March 28, 2000, petitioners subsequently
interposed their Opposition to the Motion [12] to
respondents motion to disqualify them for non-
payment of filing fees.
On April 14, 2000, the Naga City RTC issued an
Order disqualifying petitioners as indigent litigants on
the ground that they failed to substantiate their claim
for exemption from payment of legal fees and to
comply with the third paragraph of Rule 141, Section
18 of the Revised Rules of Courtdirecting them to pay
the requisite filing fees.[13]
On April 28, 2000, petitioners filed a Motion for
Reconsideration of the April 14, 2000 Order. On May
8, 2000, respondents then filed their
Comment/Objections to petitioners Motion for
Reconsideration.
On May 5, 2000, the trial court issued an
[14]
Order giving petitioners the opportunity to comply
with the requisites laid down in Section 18, Rule 141,
for them to qualify as indigent litigants.
On May 13, 2000, petitioners submitted their
Compliance[15] attaching the affidavits of petitioner
Lorencita Algura[16] and Erlinda Bangate,[17] to comply
with the requirements of then Rule 141, Section 18 of
the Rules of Court and in support of their claim to be
declared as indigent litigants.
In her May 13, 2000 Affidavit, petitioner
Lorencita Algura claimed that the demolition of their
small dwelling deprived her of a monthly income
amounting to PhP 7,000.00. She, her husband, and
their six (6) minor children had to rely mainly on her
husbands salary as a policeman which provided them
a monthly amount of PhP 3,500.00, more or
less. Also, they did not own any real property as
certified by the assessors office of Naga City. More
so, according to her, the meager net income from her
small sari-saristore and the rentals of some boarders,
plus the salary of her husband, were not enough to
pay the familys basic necessities.
To buttress their position as qualified indigent
litigants, petitioners also submitted the affidavit of
Erlinda Bangate, who attested under oath, that she
personally knew spouses Antonio Algura and
Lorencita Algura, who were her neighbors; that they
derived substantial income from their boarders; that
they lost said income from their boarders rentals when
the Local Government Unit of the City of Naga,
through its officers, demolished part of their house
because from that time, only a few boarders could be
accommodated; that the income from the small store,
the boarders, and the meager salary of Antonio Algura
were insufficient for their basic necessities like food
and clothing, considering that the Algura spouses had
six (6) children; and that she knew that petitioners did
not own any real property.
Thereafter, Naga City RTC Acting Presiding Judge
Andres B. Barsaga, Jr. issued his July 17,
2000[18] Order denying the petitioners Motion for
Reconsideration.
Judge Barsaga ratiocinated that the pay slip of
Antonio F. Algura showed that the GROSS INCOME
or TOTAL EARNINGS of plaintiff Algura
[was] 10,474.00 which amount [was] over and
above the amount mentioned in the first paragraph of
Rule 141, Section 18 for pauper litigants residing
outside Metro Manila.[19] Said rule provides that the
gross income of the litigant should not exceed PhP
3,000.00 a month and shall not own real estate with an
assessed value of PhP 50,000.00. The trial court found
that, in Lorencita S.J. Alguras May 13,
2000 Affidavit, nowhere was it stated that she and her
immediate family did not earn a gross income of PhP
3,000.00.
The Issue
Unconvinced of the said ruling, the Alguras instituted
the instant petition raising a solitary issue for the
consideration of the Court: whether petitioners should
be considered as indigent litigants who qualify for
exemption from paying filing fees.
The Ruling of the Court
The petition is meritorious.
A review of the history of the Rules of Court on suits
in forma pauperis (pauper litigant) is necessary before
the Court rules on the issue of the Algura spouses
claim to exemption from paying filing fees.
When the Rules of Court took effect on January 1,
1964, the rule on pauper litigants was found in Rule 3,
Section 22 which provided that:
SECTION 22. Pauper litigant.Any
court may authorize a litigant to
prosecute his action or defense as a
pauper upon a proper showing that he
has no means to that effect by
 affidavits, certificate of the
corresponding provincial, city or
municipal treasurer, or otherwise.
Such authority[,] once given[,] shall
include an exemption from payment
of legal fees and from filing appeal
bond, printed record and printed
brief. The legal fees shall be a lien to
any judgment rendered in the case
[favorable] to the pauper, unless the
court otherwise provides.
From the same Rules of Court, Rule 141 on
Legal Fees, on the other hand, did not contain any
provision on pauper litigants.
On July 19, 1984, the Court, in Administrative Matter
No. 83-6-389-0 (formerly G.R. No. 64274), approved
the recommendation of the Committee on the
Revision of Rates and Charges of Court Fees, through
its Chairman, then Justice Felix V. Makasiar, to revise
the fees in Rule 141 of the Rules of Court to generate
funds to effectively cover administrative costs for
services rendered by the courts.[20] A provision on
pauper litigants was inserted which reads:
SECTION 16. Pauper-litigants
exempt from payment of court
fees.Pauper-litigants include wage
earners whose gross income do not
exceed P2,000.00 a month or
P24,000.00 a year for those residing
in Metro Manila, and P1,500.00 a
month or P18,000.00 a year for those
residing outside Metro Manila, or
those who do not own real property
with an assessed value of not more
than P24,000.00, or not more than
P18,000.00 as the case may be.
Such exemption shall include
exemption from payment of fees for
filing appeal bond, printed record and
printed brief.
The legal fees shall be a lien on the
monetary or property judgment
rendered in favor of the pauper-
litigant.
To be entitled to the exemption
herein provided, the pauper-litigant
shall execute an affidavit that he does
not earn the gross income
abovementioned, nor own any real
 property with the assessed value
afore-mentioned [sic], supported by a
certification to that effect by the
provincial, city or town assessor or
treasurer.
When the Rules of Court on Civil Procedure were
amended by the 1997 Rules of Civil Procedure
(inclusive of Rules 1 to 71) in Supreme Court
Resolution in Bar Matter No. 803 dated April 8, 1997,
which became effective on July 1, 1997, Rule 3,
Section 22 of the Revised Rules of Court was
superseded by Rule 3, Section 21 of said 1997 Rules
of Civil Procedure, as follows:
SECTION 21. Indigent party.A party
may be authorized to litigate his
action, claim or defense as an
indigent if the court, upon an ex
parte application and hearing, is
satisfied that the party is one who has
no money or property sufficient and
available for food, shelter and basic
necessities for himself and his family.
Such authority shall include an
exemption from payment of docket
and other lawful fees, and of
transcripts of stenographic notes
which the court may order to be
furnished him. The amount of the
docket and other lawful fees which
the indigent was exempted from
paying shall be a lien on any
judgment rendered in the case
favorable to the indigent, unless the
court otherwise provides.
Any adverse party may contest the
grant of such authority at any time
before judgment is rendered by the
trial court. If the court should
determine after hearing that the party
declared as an indigent is in fact a
person with sufficient income or
property, the proper docket and other
lawful fees shall be assessed and
collected by the clerk of court. If
payment is not made within the time
fixed by the court, execution shall
issue for the payment thereof,
without prejudice to such other
sanctions as the court may impose.
At the time the Rules on Civil Procedure were
amended by the Court in Bar Matter No. 803,
however, there was no amendment made on Rule 141,
Section 16 on pauper litigants.
On March 1, 2000, Rule 141 on Legal Fees was
amended by the Court in A.M. No. 00-2-01-SC,
whereby certain fees were increased or adjusted. In
this Resolution, the Court amended Section 16 of
Rule 141, making it Section 18, which now reads:
SECTION 18. Pauper-litigants
exempt from payment of legal
fees.Pauper litigants (a) whose gross
income and that of their immediate
family do not exceed four thousand
(P4,000.00) pesos a month if residing
in Metro Manila, and three thousand
(P3,000.00) pesos a month if residing
outside Metro Manila, and (b) who
do not own real property with an
assessed value of more than fifty
thousand (P50,000.00) pesos shall be
exempt from the payment of legal
fees.
The legal fees shall be a lien on any
judgment rendered in the case
favorably to the pauper litigant,
unless the court otherwise provides.
To be entitled to the exemption
herein provided, the litigant shall
execute an affidavit that he and his
immediate family do not earn the
gross income abovementioned, nor
do they own any real property with
the assessed value aforementioned,
supported by an affidavit of a
disinterested person attesting to the
truth of the litigants affidavit.
Any falsity in the affidavit of a
litigant or disinterested person shall
be sufficient cause to strike out the
pleading of that party, without
prejudice to whatever criminal
liability may have been incurred.
It can be readily seen that the rule on pauper litigants
was inserted in Rule 141 without revoking or
amending Section 21 of Rule 3, which provides for
the exemption of pauper litigants from payment of
filing fees. Thus, on March 1, 2000, there were two
existing rules on pauper litigants; namely, Rule 3,
The legal fees shall be a lien on any
Section 21 and Rule 141, Section 18.
judgment rendered in the case
favorable to the indigent litigant
On August 16, 2004, Section 18 of Rule 141 was unless the court otherwise provides.
further amended in Administrative Matter No. 04-2-
04-SC, which became effective on the same date. It To be entitled to the exemption
herein provided, the litigant shall
then became Section 19 of Rule 141, to wit: execute an affidavit that he and his
immediate family do not earn a
gross income abovementioned, and
they do not own any real property
SEC. 19. Indigent litigants exempt with the fair value aforementioned,
from payment of legal supported by an affidavit of a
fees.INDIGENT LITIGANTS disinterested person attesting to the
(A) WHOSE GROSS INCOME truth of the litigants affidavit. The
AND THAT OF THEIR current tax declaration, if any, shall
IMMEDIATE FAMILY DO NOT be attached to the litigants affidavit.
EXCEED AN AMOUNT DOUBLE
THE MONTHLY MINIMUM Any falsity in the affidavit of litigant
WAGE OF AN EMPLOYEE AND or disinterested person shall be
(B) WHO DO NOT OWN REAL sufficient cause to dismiss the
PROPERTY WITH A FAIR complaint or action or to strike out
MARKET VALUE AS STATED IN the pleading of that party, without
THE CURRENT TAX prejudice to whatever criminal
DECLARATION OF MORE THAN liability may have been
THREE HUNDRED THOUSAND incurred. (Emphasis supplied.)
(P300,000.00) PESOS SHALL BE
EXEMPT FROM PAYMENT OF
LEGAL FEES.
Amendments to Rule 141 (including the amendment
to Rule 141, Section 18) were made to implement RA
9227 which brought about new increases in filing
fees. Specifically, in the August 16, 2004 amendment,
the ceiling for the gross income of litigants applying
for exemption and that of their immediate family was
increased from PhP 4,000.00 a month in Metro Manila
and PhP 3,000.00 a month outside Metro Manila, to
double the monthly minimum wage of an employee;
and the maximum value of the property owned by the
applicant was increased from an assessed value of
PhP 50,000.00 to a maximum market value of PhP
300,000.00, to be able to accommodate more indigent
litigants and promote easier access to justice by the
poor and the marginalized in the wake of these new
increases in filing fees.
Even if there was an amendment to Rule 141
on August 16, 2004, there was still no amendment or
recall of Rule 3, Section 21 on indigent litigants.
With this historical backdrop, let us now move on to
the sole issuewhether petitioners are exempt from the
payment of filing fees.
It is undisputed that the Complaint (Civil Case No.
99-4403) was filed on September 1, 1999. However,
the Naga City RTC, in its April 14, 2000 and July 17,
2000 Orders, incorrectly applied Rule 141, Section
18 on Legal Fees when the applicable rules at that
time were Rule 3, Section 21 on Indigent
Party which took effect on July 1, 1997 and Rule
141, Section 16 on Pauper Litigants which became
effective on July 19, 1984 up to February 28, 2000.
The old Section 16, Rule 141 requires applicants to
file an ex-parte motion to litigate as a pauper litigant
by submitting an affidavit that they do not have a
gross income of PhP 2,000.00 a month or PhP
24,000.00 a year for those residing in Metro Manila
and PhP 1,500.00 a month or PhP 18,000.00 a year for
those residing outside Metro Manila or those who do
not own real property with an assessed value of not
more than PhP 24,000.00 or not more than PhP
18,000.00 as the case may be. Thus, there are two
requirements: a) income requirementthe applicants
should not have a gross monthly income of more than
PhP 1,500.00, and b) property requirementthey should
not own property with an assessed value of not more
than PhP 18,000.00.
In the case at bar, petitioners Alguras submitted the
Affidavits of petitioner Lorencita Algura and neighbor
Erlinda Bangate, the pay slip of petitioner Antonio F.
Algura showing a gross monthly income of PhP
10,474.00,[21] and a Certification of the Naga City
assessor stating that petitioners do not have property
declared in their names for taxation.[22]Undoubtedly,
petitioners do not own real property as shown by the
Certification of the Naga City assessor and so the
property requirement is met. However with respect to
the income requirement, it is clear that the gross
monthly income of PhP 10,474.00 of petitioner
Antonio F. Algura and the PhP 3,000.00 income of
Lorencita Algura when combined, were above the PhP
1,500.00 monthly income threshold prescribed by
then Rule 141, Section 16 and therefore, the income
requirement was not satisfied. The trial court was
therefore correct in disqualifying petitioners Alguras
as indigent litigants although the court should have
applied Rule 141, Section 16 which was in effect at
the time of the filing of the application on September
1, 1999. Even if Rule 141, Section 18 (which
superseded Rule 141, Section 16 on March 1, 2000)
were applied, still the application could not have been
granted as the combined PhP 13,474.00 income of
petitioners was beyond the PhP 3,000.00 monthly
income threshold.
Unrelenting, petitioners however argue in their
Motion for Reconsideration of the April 14, 2000
Order disqualifying them as indigent litigants[23] that
the rules have been relaxed by relying on Rule 3,
Section 21 of the 1997 Rules of Civil procedure
which authorizes parties to litigate their action as
indigents if the court is satisfied that the party is one
who has no money or property sufficient and available
for food, shelter and basic necessities for himself and
his family. The trial court did not give credence to this
view of petitioners and simply applied Rule 141 but
ignored Rule 3, Section 21 on Indigent Party.
The position of petitioners on the need to use Rule 3,
Section 21 on their application to litigate as indigent
litigants brings to the fore the issue on whether a trial
court has to apply both Rule 141, Section 16 and Rule
3, Section 21 on such applications or should the court
apply only Rule 141, Section 16 and discard Rule 3,
Section 21 as having been superseded by Rule 141,
Section 16 on Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141,
Section 16 (later amended as Rule 141, Section 18 on
March 1, 2000 and subsequently amended by Rule
141, Section 19 on August 16, 2003, which is now the
present rule) are still valid and enforceable rules on
indigent litigants.
For one, the history of the two seemingly conflicting
rules readily reveals that it was not the intent of the
Court to consider the old Section 22 of Rule 3, which
took effect on January 1, 1994 to have been amended
and superseded by Rule 141, Section 16, which took
effect on July 19, 1984 through A.M. No. 83-6-389-
0. If that is the case, then the Supreme Court, upon the
recommendation of the Committee on the Revision on
Rules, could have already deleted Section 22 from
Rule 3 when it amended Rules 1 to 71 and approved
the 1997 Rules of Civil Procedure, which took effect
on July 1, 1997. The fact that Section 22 which
became Rule 3, Section 21 on indigent litigant was
retained in the rules of procedure, even elaborating on
the meaning of an indigent party, and was also
strengthened by the addition of a third paragraph on
the right to contest the grant of authority to litigate
only goes to show that there was no intent at all to
consider said rule as expunged from the 1997 Rules of
Civil Procedure.
Furthermore, Rule 141 on indigent litigants was
amended twice: first on March 1, 2000 and
the second on August 16, 2004; and yet, despite these
two amendments, there was no attempt to delete
Section 21 from said Rule 3. This clearly evinces the
desire of the Court to maintain the two (2) rules on
indigent litigants to cover applications to litigate as an
indigent litigant.
It may be argued that Rule 3, Section 21 has been
impliedly repealed by the recent 2000 and 2004
amendments to Rule 141 on legal fees. This position
is bereft of merit. Implied repeals are frowned upon
unless the intent of the framers of the rules is
unequivocal. It has been consistently ruled that:

(r)epeals by implication are not
favored, and will not be decreed,
unless it is manifest that the
legislature so intended. As laws are
presumed to be passed with
deliberation and with full knowledge
of all existing ones on the subject, it
is but reasonable to conclude that in
passing a statute[,] it was not
intended to interfere with or abrogate
any former law relating to same
matter, unless the repugnancy
between the two is not only
irreconcilable, but also clear and
convincing, and flowing necessarily
from the language used, unless the
later act fully embraces the subject
matter of the earlier, or unless the
reason for the earlier act is beyond
peradventure removed. Hence, every
effort must be used to make all acts
stand and if, by any
reasonable construction they can
be reconciled, the later act will not
operate as a repeal of the earlier.
[24]
(Emphasis supplied).
Instead of declaring that Rule 3, Section 21 has been
superseded and impliedly amended by Section 18 and
later Section 19 of Rule 141, the Court finds that the
two rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and
Rule 141, Section 19 because it is a settled principle
that when conflicts are seen between two provisions,
all efforts must be made to harmonize them. Hence,
every statute [or rule] must be so construed and
harmonized with other statutes [or rules] as to form a
uniform system of jurisprudence.[25]
In Manila Jockey Club, Inc. v. Court of Appeals, this
Court enunciated that in the interpretation of
seemingly conflicting laws, efforts must be made to
first harmonize them. This Court thus ruled:
Consequently, every statute should be
construed in such a way that will
harmonize it with existing laws. This
principle is expressed in the legal
maxim interpretare et concordare
leges legibus est optimus
interpretandi, that is, to interpret and
 to do it in such a way as to harmonize
laws with laws is the best method of
interpretation.[26]
In the light of the foregoing considerations, therefore,
the two (2) rules can stand together and are
compatible with each other. When an application to
litigate as an indigent litigant is filed, the court shall
scrutinize the affidavits and supporting documents
submitted by the applicant to determine if the
applicant complies with the income and property
standards prescribed in the present Section 19 of Rule
141that is, the applicants gross income and that of the
applicants immediate family do not exceed an amount
double the monthly minimum wage of an employee;
and the applicant does not own real property with a
fair market value of more than Three Hundred
Thousand Pesos (PhP 300,000.00). If the trial court
finds that the applicant meets the income and property
requirements, the authority to litigate as indigent
litigant is automatically granted and the grant is a
matter of right.
However, if the trial court finds that one or both
requirements have not been met, then it would set a
hearing to enable the applicant to prove that the
applicant has no money or property sufficient and
available for food, shelter and basic necessities for
himself and his family. In that hearing, the adverse
party may adduce countervailing evidence to disprove
the evidence presented by the applicant; after which
the trial court will rule on the application depending
on the evidence adduced. In addition, Section 21 of
Rule 3 also provides that the adverse party may later
still contest the grant of such authority at any time
before judgment is rendered by the trial court,
possibly based on newly discovered evidence not
obtained at the time the application was heard. If the
court determines after hearing, that the party declared
as an indigent is in fact a person with sufficient
income or property, the proper docket and other
lawful fees shall be assessed and collected by the
clerk of court. If payment is not made within the time
fixed by the court, execution shall issue or the
payment of prescribed fees shall be made, without
prejudice to such other sanctions as the court may
impose.
The Court concedes that Rule 141, Section 19
provides specific standards while Rule 3, Section 21
does not clearly draw the limits of the entitlement to
the exemption. Knowing that the litigants may abuse
the grant of authority, the trial court must use sound
discretion and scrutinize evidence strictly in granting
exemptions, aware that the applicant has not hurdled
the precise standards under Rule 141. The trial court
must also guard against abuse and misuse of the
privilege to litigate as an indigent litigant to prevent
the filing of exorbitant claims which would otherwise
be regulated by a legal fee requirement.
Thus, the trial court should have applied Rule 3,
Section 21 to the application of the Alguras after their
affidavits and supporting documents showed that
petitioners did not satisfy the twin requirements on
gross monthly income and ownership of real property
under Rule 141. Instead of disqualifying the Alguras
as indigent litigants, the trial court should have called
a hearing as required by Rule 3, Section 21 to enable
the petitioners to adduce evidence to show that they
didnt have property and money sufficient and
available for food, shelter, and basic necessities for
them and their family.[27] In that hearing, the
respondents would have had the right to also present
evidence to refute the allegations and evidence in
support of the application of the petitioners to litigate
as indigent litigants. Since this Court is not a trier of
facts, it will have to remand the case to the trial court
to determine whether petitioners can be considered as
indigent litigants using the standards set in Rule 3,
Section 21.
Recapitulating the rules on indigent litigants,
therefore, if the applicant for exemption meets the
salary and property requirements under Section 19 of
Rule 141, then the grant of the application is
mandatory. On the other hand, when the application
does not satisfy one or both requirements, then the
application should not be denied outright; instead, the
court should apply the indigency test under Section 21
of Rule 3 and use its sound discretion in determining
the merits of the prayer for exemption.
Access to justice by the impoverished is held
sacrosanct under Article III, Section 11 of the 1987
Constitution. The Action Program for Judicial
Reforms (APJR) itself, initiated by former Chief ASIDE. Furthermore, the Naga City RTC is ordered
Justice Hilario G. Davide, Jr., placed prime to set the Ex-Parte Motion to Litigate as Indigent
importance on easy access to justice by the poor as Litigants for hearing and apply Rule 3, Section 21 of
one of its six major components. Likewise, the the 1997 Rules of Civil Procedure to determine
judicial philosophy of Liberty and Prosperity of Chief whether petitioners can qualify as indigent litigants.
Justice Artemio V. Panganiban makes it imperative
that the courts shall not only safeguard but also No costs.
enhance the rights of individualswhich are considered SO ORDERED.
sacred under the 1987 Constitution. Without doubt,
one of the most precious rights which must be
PRESBITERO J. VELASCO, JR.
shielded and secured is the unhampered access to the Associate Justice
justice system by the poor, the underprivileged, and
the marginalized.
WHEREFORE, the petition is GRANTED and the
April 14, 2000 Order granting the disqualification of
WE CONCUR:
petitioners, the July 17, 2000 Order denying
petitioners Motion for Reconsideration, and the
September 11, 2001 Order dismissing the case in Civil LEONARDO A. QUISUMBING
Case No. RTC-99-4403 before the Naga City RTC, Associate Justice
Branch 27 are ANNULLED and SET Chairperson

Republic of the Philippines G.R. No. 122846 January 20, 2009

SUPREME COURT
Manila WHITE LIGHT CORPORATION, TITANIUM CORPORATION
and STA. MESA TOURIST & DEVELOPMENT
EN BANC CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR
ALFREDO S. LIM, Respondent.
DECISION
Tinga, J.:
With another city ordinance of Manila also principally involving
the tourist district as subject, the Court is confronted anew with
the incessant clash between government power and individual
liberty in tandem with the archetypal tension between law and
morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the
nullification of a city ordinance barring the operation of motels
and inns, among other establishments, within the Ermita-
Malate area. The petition at bar assails a similarly-motivated
city ordinance that prohibits those same establishments from
offering short-time admission, as well as pro-rated or "wash
up" rates for such abbreviated stays. Our earlier decision
tested the city ordinance against our sacred constitutional
rights to liberty, due process and equal protection of law. The
same parameters apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil
Procedure, which seeks the reversal of the Decision3 in C.A.-
G.R. S.P. No. 33316 of the Court of Appeals, challenges the
validity of Manila City Ordinance No. 7774 entitled, "An
Ordinance Prohibiting Short-Time Admission, Short-Time
Admission Rates, and Wash-Up Rate Schemes in Hotels,
Motels, Inns, Lodging Houses, Pension Houses, and Similar
Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim)
signed into law the Ordinance.4 The Ordinance is reproduced
in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared
policy of the City Government to protect the best interest,
health and welfare, and the morality of its constituents in
general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An
Ordinance" prohibiting short time admission in hotels, motels,
lodging houses, pension houses and similar establishments in
the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission
and rate [sic], wash-up rate or other similarly concocted terms,
are hereby prohibited in hotels, motels, inns, lodging houses,
pension houses and similar establishments in the City of
Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean
admittance and charging of room rate for less than twelve (12)
hours at any given time or the renting out of rooms more than
twice a day or any other term that may be concocted by
owners or managers of said establishments but would mean
the same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall
violate any provision of this ordinance shall upon conviction
thereof be punished by a fine of Five Thousand (P5,000.00)
Pesos or imprisonment for a period of not exceeding one (1)
year or both such fine and imprisonment at the discretion of
the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the
operation thereof shall be liable: Provided, further, That in case
of subsequent conviction for the same offense, the business
license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City
ordinances not consistent with or contrary to this measure or
any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect
immediately upon approval.
Enacted by the city Council of Manila at its regular session
today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development
Corporation (MTDC) filed a complaint for declaratory relief with
prayer for a writ of preliminary injunction and/or temporary
restraining order ( TRO)5 with the Regional Trial Court (RTC) of
Manila, Branch 9 impleading as defendant, herein respondent
City of Manila (the City) represented by Mayor Lim.6 MTDC
prayed that the Ordinance, insofar as it includes motels and
inns as among its prohibited establishments, be declared
invalid and unconstitutional. MTDC claimed that as owner and
operator of the Victoria Court in Malate, Manila it was
authorized by Presidential Decree (P.D.) No. 259 to admit
customers on a short time basis as well as to charge
customers wash up rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation
(WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and
Development Corporation (STDC) filed a motion to intervene
and to admit attached complaint-in-intervention7 on the ground
that the Ordinance directly affects their business interests as
operators of drive-in-hotels and motels in Manila.8 The three
companies are components of the Anito Group of Companies
which owns and operates several hotels and motels in Metro
Manila.9
On December 23, 1992, the RTC granted the motion to
intervene.10 The RTC also notified the Solicitor General of the
proceedings pursuant to then Rule 64, Section 4 of the Rules
of Court. On the same date, MTDC moved to withdraw as
plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to
withdraw.12 The RTC issued a TRO on January 14, 1993,
directing the City to cease and desist from enforcing the
Ordinance.13 The City filed an Answer dated January 22, 1993
alleging that the Ordinance is a legitimate exercise of police
power.14
On February 8, 1993, the RTC issued a writ of preliminary
injunction ordering the city to desist from the enforcement of
the Ordinance.15 A month later, on March 8, 1993, the Solicitor
General filed his Comment arguing that the Ordinance is
constitutional.
During the pre-trial conference, the WLC, TC and STDC
agreed to submit the case for decision without trial as the case
involved a purely legal question.16 On October 20, 1993, the
RTC rendered a decision declaring the Ordinance null and
void. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No.
7774 of the City of Manila is hereby declared null and void.
Accordingly, the preliminary injunction heretofor issued is
hereby made permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the personal
liberty of the individual guaranteed and jealously guarded by
the Constitution."18 Reference was made to the provisions of
the Constitution encouraging private enterprises and the
incentive to needed investment, as well as the right to operate
economic enterprises. Finally, from the observation that the
illicit relationships the Ordinance sought to dissuade could
nonetheless be consummated by simply paying for a 12-hour
stay, the RTC likened the law to the ordinance annulled
in Ynot v. Intermediate Appellate Court,19 where the legitimate
purpose of preventing indiscriminate slaughter of carabaos
was sought to be effected through an inter-province ban on the
transport of carabaos and carabeef.
The City later filed a petition for review on certiorari with the
Supreme Court.20 The petition was docketed as G.R. No.
112471. However in a resolution dated January 26, 1994, the
Court treated the petition as a petition for certiorari and
referred the petition to the Court of Appeals.21
Before the Court of Appeals, the City asserted that the
Ordinance is a valid exercise of police power pursuant to
Section 458 (4)(iv) of the Local Government Code which
confers on cities, among other local government units, the
power:
[To] regulate the establishment, operation and maintenance of
cafes, restaurants, beerhouses, hotels, motels, inns, pension
houses, lodging houses and other similar establishments,
including tourist guides and transports.22
The Ordinance, it is argued, is also a valid exercise of the
power of the City under Article III, Section 18(kk) of the
Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for
the sanitation and safety, the furtherance of the prosperity and
the promotion of the morality, peace, good order, comfort,
convenience and general welfare of the city and its
inhabitants, and such others as be necessary to carry into
effect and discharge the powers and duties conferred by this
Chapter; and to fix penalties for the violation of ordinances
which shall not exceed two hundred pesos fine or six months
imprisonment, or both such fine and imprisonment for a single
offense.23
Petitioners argued that the Ordinance is unconstitutional and
void since it violates the right to privacy and the freedom of
movement; it is an invalid exercise of police power; and it is an
unreasonable and oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and
affirmed the constitutionality of the Ordinance.24First, it held
that the Ordinance did not violate the right to privacy or the
freedom of movement, as it only penalizes the owners or
operators of establishments that admit individuals for short
time stays. Second, the virtually limitless reach of police power
is only constrained by having a lawful object obtained through
a lawful method. The lawful objective of the Ordinance is
satisfied since it aims to curb immoral activities. There is a
lawful method since the establishments are still allowed to
operate. Third, the adverse effect on the establishments is
justified by the well-being of its constituents in general. Finally,
as held in Ermita-Malate Motel Operators Association v. City
Mayor of Manila, liberty is regulated by law.
TC, WLC and STDC come to this Court via petition for review
on certiorari.25 In their petition and Memorandum, petitioners in
essence repeat the assertions they made before the Court of
Appeals. They contend that the assailed Ordinance is an
invalid exercise of police power.
II.
We must address the threshold issue of petitioners standing.
Petitioners allege that as owners of establishments offering
"wash-up" rates, their business is being unlawfully interfered
with by the Ordinance. However, petitioners also allege that
the equal protection rights of their clients are also being
interfered with. Thus, the crux of the matter is whether or not
these establishments have the requisite standing to plead for
protection of their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate
to the court sufficient connection to and harm from the law or
action challenged to support that party's participation in the
case. More importantly, the doctrine of standing is built on the
principle of separation of powers,26 sparing as it does
unnecessary interference or invalidation by the judicial branch
of the actions rendered by its co-equal branches of
government.
The requirement of standing is a core component of the
judicial system derived directly from the Constitution.27The
constitutional component of standing doctrine incorporates
concepts which concededly are not susceptible of precise
definition.28 In this jurisdiction, the extancy of "a direct and
personal interest" presents the most obvious cause, as well as
the standard test for a petitioner's standing.29 In a similar vein,
the United States Supreme Court reviewed and elaborated on
the meaning of the three constitutional standing requirements
of injury, causation, and redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several
exceptions such as the overbreadth doctrine, taxpayer suits,
third party standing and, especially in the Philippines, the
doctrine of transcendental importance.31
For this particular set of facts, the concept of third party
standing as an exception and the overbreadth doctrine are
appropriate. In Powers v. Ohio,32 the United States Supreme
Court wrote that: "We have recognized the right of litigants to
bring actions on behalf of third parties, provided three
important criteria are satisfied: the litigant must have suffered
an injury-in-fact, thus giving him or her a "sufficiently concrete
interest" in the outcome of the issue in dispute; the litigant
must have a close relation to the third party; and there must
exist some hindrance to the third party's ability to protect his or
her own interests."33 Herein, it is clear that the business
interests of the petitioners are likewise injured by the
Ordinance. They rely on the patronage of their customers for
their continued viability which appears to be threatened by the
enforcement of the Ordinance. The relative silence in
constitutional litigation of such special interest groups in our
nation such as the American Civil Liberties Union in the United
States may also be construed as a hindrance for customers to
bring suit.34
American jurisprudence is replete with examples where
parties-in-interest were allowed standing to advocate or invoke
the fundamental due process or equal protection claims of
other persons or classes of persons injured by state action.
In Griswold v. Connecticut,35 the United States Supreme Court
held that physicians had standing to challenge a reproductive
health statute that would penalize them as accessories as well
as to plead the constitutional protections available to their
patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be
diluted or adversely affected unless those rights are
considered in a suit involving those who have this kind of
confidential relation to them."36
An even more analogous example may be found in Craig v.
Boren,37 wherein the United States Supreme Court held that a
licensed beverage vendor has standing to raise the equal
protection claim of a male customer challenging a statutory
scheme prohibiting the sale of beer to males under the age of
21 and to females under the age of 18. The United States High
Court explained that the vendors had standing "by acting as
advocates of the rights of third parties who seek access to
their market or function."38
Assuming arguendo that petitioners do not have a relationship
with their patrons for the former to assert the rights of the
latter, the overbreadth doctrine comes into play. In overbreadth
analysis, challengers to government action are in effect
permitted to raise the rights of third parties. Generally applied
to statutes infringing on the freedom of speech, the
overbreadth doctrine applies when a statute needlessly
restrains even constitutionally guaranteed rights.39 In this case,
the petitioners claim that the Ordinance makes a sweeping
intrusion into the right to liberty of their clients. We can see
that based on the allegations in the petition, the Ordinance
suffers from overbreadth.
We thus recognize that the petitioners have a right to assert
the constitutional rights of their clients to patronize their
establishments for a "wash-rate" time frame.
 III.
To students of jurisprudence, the facts of this case will recall to
mind not only the recent City of Manila ruling, but our 1967
decision in Ermita-Malate Hotel and Motel Operations
Association, Inc., v. Hon. City Mayor of Manila.40Ermita-
Malate concerned the City ordinance requiring patrons to fill up
a prescribed form stating personal information such as name,
gender, nationality, age, address and occupation before they
could be admitted to a motel, hotel or lodging house. This
earlier ordinance was precisely enacted to minimize certain
practices deemed harmful to public morals. A purpose similar
to the annulled ordinance in City of Manila which sought a
blanket ban on motels, inns and similar establishments in the
Ermita-Malate area. However, the constitutionality of the
ordinance in Ermita-Malate was sustained by the Court.
The common thread that runs through those decisions and the
case at bar goes beyond the singularity of the localities
covered under the respective ordinances. All three ordinances
were enacted with a view of regulating public morals including
particular illicit activity in transient lodging establishments. This
could be described as the middle case, wherein there is no
wholesale ban on motels and hotels but the services offered
by these establishments have been severely restricted. At its
core, this is another case about the extent to which the State
can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of
decisions including City of Manila has held that for an
ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and pass
according to the procedure prescribed by law, it must also
conform to the following substantive requirements: (1) must
not contravene the Constitution or any statute; (2) must not be
unfair or oppressive; (3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade; (5) must be
general and consistent with public policy; and (6) must not be
unreasonable.41
The Ordinance prohibits two specific and distinct business
practices, namely wash rate admissions and renting out a
room more than twice a day. The ban is evidently sought to be
rooted in the police power as conferred on local government
units by the Local Government Code through such implements
as the general welfare clause.
A.
Police power, while incapable of an exact definition, has been
purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response as the
conditions warrant.42 Police power is based upon the concept
of necessity of the State and its corresponding right to protect
itself and its people.43 Police power has been used as
justification for numerous and varied actions by the State.
These range from the regulation of dance halls,44 movie
theaters,45 gas stations46 and cockpits.47 The awesome scope
of police power is best demonstrated by the fact that in its
hundred or so years of presence in our nations legal system,
its use has rarely been denied.
The apparent goal of the Ordinance is to minimize if not
eliminate the use of the covered establishments for illicit sex,
prostitution, drug use and alike. These goals, by themselves,
are unimpeachable and certainly fall within the ambit of the
police power of the State. Yet the desirability of these ends do
not sanctify any and all means for their achievement. Those
means must align with the Constitution, and our emerging
sophisticated analysis of its guarantees to the people. The Bill
of Rights stands as a rebuke to the seductive theory of
Macchiavelli, and, sometimes even, the political majorities
animated by his cynicism.
Even as we design the precedents that establish the
framework for analysis of due process or equal protection
questions, the courts are naturally inhibited by a due
deference to the co-equal branches of government as they
exercise their political functions. But when we are compelled to
nullify executive or legislative actions, yet another form of
caution emerges. If the Court were animated by the same
passing fancies or turbulent emotions that motivate many
political decisions, judicial integrity is compromised by any
perception that the judiciary is merely the third political branch
of government. We derive our respect and good standing in
the annals of history by acting as judicious and neutral arbiters
of the rule of law, and there is no surer way to that end than
through the development of rigorous and sophisticated legal
standards through which the courts analyze the most
fundamental and far-reaching constitutional questions of the
day.
B.
The primary constitutional question that confronts us is one of
due process, as guaranteed under Section 1, Article III of the
Constitution. Due process evades a precise definition.48 The
purpose of the guaranty is to prevent arbitrary governmental
encroachment against the life, liberty and property of
individuals. The due process guaranty serves as a protection
against arbitrary regulation or seizure. Even corporations and
partnerships are protected by the guaranty insofar as their
property is concerned.
The due process guaranty has traditionally been interpreted as
imposing two related but distinct restrictions on government,
"procedural due process" and "substantive due process."
Procedural due process refers to the procedures that the
government must follow before it deprives a person of life,
liberty, or property.49 Procedural due process concerns itself
with government action adhering to the established process
when it makes an intrusion into the private sphere. Examples
range from the form of notice given to the level of formality of a
hearing.
If due process were confined solely to its procedural aspects,
there would arise absurd situation of arbitrary government
action, provided the proper formalities are followed.
Substantive due process completes the protection envisioned
by the due process clause. It inquires whether the government
has sufficient justification for depriving a person of life, liberty,
or property.50
The question of substantive due process, moreso than most
other fields of law, has reflected dynamism in progressive legal
thought tied with the expanded acceptance of fundamental
freedoms. Police power, traditionally awesome as it may be, is
now confronted with a more rigorous level of analysis before it
can be upheld. The vitality though of constitutional due
process has not been predicated on the frequency with which
it has been utilized to achieve a liberal result for, after all, the
libertarian ends should sometimes yield to the prerogatives of
the State. Instead, the due process clause has acquired
potency because of the sophisticated methodology that has
emerged to determine the proper metes and bounds for its
application.
C.
The general test of the validity of an ordinance on substantive
due process grounds is best tested when assessed with the
evolved footnote 4 test laid down by the U.S. Supreme Court
in U.S. v. Carolene Products.51 Footnote 4 of the Carolene
Products case acknowledged that the judiciary would defer to
the legislature unless there is a discrimination against a
"discrete and insular" minority or infringement of a
"fundamental right."52 Consequently, two standards of judicial
review were established: strict scrutiny for laws dealing with
freedom of the mind or restricting the political process, and the
rational basis standard of review for economic legislation.
A third standard, denominated as heightened or immediate
scrutiny, was later adopted by the U.S. Supreme Court for
evaluating classifications based on gender53 and
legitimacy.54 Immediate scrutiny was adopted by the U.S.
Supreme Court in Craig,55 after the Court declined to do so in
Reed v. Reed.56 While the test may have first been articulated
in equal protection analysis, it has in the United States since
been applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly
in analysis of equal protection challenges.57 Using the rational
basis examination, laws or ordinances are upheld if they
rationally further a legitimate governmental interest.58 Under
intermediate review, governmental interest is extensively
examined and the availability of less restrictive measures is
considered.59 Applying strict scrutiny, the focus is on the
presence of compelling, rather than substantial, governmental
interest and on the absence of less restrictive means for
achieving that interest.
In terms of judicial review of statutes or ordinances, strict
scrutiny refers to the standard for determining the quality and
the amount of governmental interest brought to justify the
regulation of fundamental freedoms.60 Strict scrutiny is used
today to test the validity of laws dealing with the regulation of
speech, gender, or race as well as other fundamental rights as
expansion from its earlier applications to equal
protection.61 The United States Supreme Court has expanded
the scope of strict scrutiny to protect fundamental rights such
as suffrage,62 judicial access63 and interstate travel.64
If we were to take the myopic view that an Ordinance should
be analyzed strictly as to its effect only on the petitioners at
bar, then it would seem that the only restraint imposed by the
law which we are capacitated to act upon is the injury to
property sustained by the petitioners, an injury that would
warrant the application of the most deferential standard the
rational basis test. Yet as earlier stated, we recognize the
capacity of the petitioners to invoke as well the constitutional
rights of their patrons those persons who would be deprived
of availing short time access or wash-up rates to the lodging
establishments in question.
Viewed cynically, one might say that the infringed rights of
these customers were are trivial since they seem shorn of
political consequence. Concededly, these are not the sort of
cherished rights that, when proscribed, would impel the people
to tear up their cedulas. Still, the Bill of Rights does not shelter
gravitas alone. Indeed, it is those "trivial" yet fundamental
freedoms which the people reflexively exercise any day
without the impairing awareness of their constitutional
consequence that accurately reflect the degree of liberty
enjoyed by the people. Liberty, as integrally incorporated as a
fundamental right in the Constitution, is not a Ten
Commandments-style enumeration of what may or what may
not be done; but rather an atmosphere of freedom where the
people do not feel labored under a Big Brother presence as
they interact with each other, their society and nature, in a
manner innately understood by them as inherent, without
doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental
rights to liberty which we upheld in City of Manila v. Hon.
Laguio, Jr. We expounded on that most primordial of rights,
thus:
Liberty as guaranteed by the Constitution was defined by
Justice Malcolm to include "the right to exist and the right to be
free from arbitrary restraint or servitude. The term cannot be
dwarfed into mere freedom from physical restraint of the
person of the citizen, but is deemed to embrace the right of
man to enjoy the facilities with which he has been endowed by
his Creator, subject only to such restraint as are necessary for
the common welfare."[65] In accordance with this case, the
rights of the citizen to be free to use his faculties in all lawful
ways; to live and work where he will; to earn his livelihood by
any lawful calling; and to pursue any avocation are all deemed
embraced in the concept of liberty.[66]
The U.S. Supreme Court in the case of Roth v. Board of
Regents, sought to clarify the meaning of "liberty." It said:
While the Court has not attempted to define with exactness the
liberty . . . guaranteed [by the Fifth and Fourteenth
Amendments], the term denotes not merely freedom from
bodily restraint but also the right of the individual to contract, to
engage in any of the common occupations of life, to acquire
useful knowledge, to marry, establish a home and bring up
children, to worship God according to the dictates of his own
conscience, and generally to enjoy those privileges long
recognized . . . as essential to the orderly pursuit of happiness
by free men. In a Constitution for a free people, there can be
no doubt that the meaning of "liberty" must be broad
indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the
ordinance is the curtailment of sexual behavior. The City
asserts before this Court that the subject establishments "have
gained notoriety as venue of prostitution, adultery and
fornications in Manila since they provide the necessary
atmosphere for clandestine entry, presence and exit and thus
became the ideal haven for prostitutes and thrill-
seekers."68 Whether or not this depiction of a mise-en-scene of
vice is accurate, it cannot be denied that legitimate sexual
behavior among willing married or consenting single adults
which is constitutionally protected69 will be curtailed as well, as
it was in the City of Manila case. Our holding therein retains
significance for our purposes:
The concept of liberty compels respect for the individual
whose claim to privacy and interference demands respect. As
the case of Morfe v. Mutuc, borrowing the words of Laski, so
very aptly stated:
Man is one among many, obstinately refusing reduction to
unity. His separateness, his isolation, are indefeasible; indeed,
they are so fundamental that they are the basis on which his
civic obligations are built. He cannot abandon the
consequences of his isolation, which are, broadly speaking,
that his experience is private, and the will built out of that
experience personal to himself. If he surrenders his will to
others, he surrenders himself. If his will is set by the will of
others, he ceases to be a master of himself. I cannot believe
that a man no longer a master of himself is in any real sense
free.
Indeed, the right to privacy as a constitutional right was
recognized in Morfe, the invasion of which should be justified
by a compelling state interest. Morfe accorded recognition to
the right to privacy independently of its identification with
liberty; in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions
into the personal life of the citizen.70
We cannot discount other legitimate activities which the
Ordinance would proscribe or impair. There are very legitimate
uses for a wash rate or renting the room out for more than
twice a day. Entire families are known to choose pass the time
in a motel or hotel whilst the power is momentarily out in their
homes. In transit passengers who wish to wash up and rest
between trips have a legitimate purpose for abbreviated stays
in motels or hotels. Indeed any person or groups of persons in
need of comfortable private spaces for a span of a few hours
with purposes other than having sex or using illegal drugs can
legitimately look to staying in a motel or hotel as a convenient
alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate
depriving patrons of a product and the petitioners of lucrative
business ties in with another constitutional requisite for the
legitimacy of the Ordinance as a police power measure. It
must appear that the interests of the public generally, as
distinguished from those of a particular class, require an
interference with private rights and the means must be
reasonably necessary for the accomplishment of the purpose
and not unduly oppressive of private rights.71 It must also be
evident that no other alternative for the accomplishment of the
purpose less intrusive of private rights can work. More
importantly, a reasonable relation must exist between the
purposes of the measure and the means employed for its
accomplishment, for even under the guise of protecting the
public interest, personal rights and those pertaining to private
property will not be permitted to be arbitrarily invaded.72
Lacking a concurrence of these requisites, the police measure
shall be struck down as an arbitrary intrusion into private
rights. As held in Morfe v. Mutuc, the exercise of police power
is subject to judicial review when life, liberty or property is
affected.73 However, this is not in any way meant to take it
away from the vastness of State police power whose exercise
enjoys the presumption of validity.74
Similar to the Comelec resolution requiring newspapers to
donate advertising space to candidates, this Ordinance is a
blunt and heavy instrument.75 The Ordinance makes no
distinction between places frequented by patrons engaged in
illicit activities and patrons engaged in legitimate actions. Thus
it prevents legitimate use of places where illicit activities are
rare or even unheard of. A plain reading of section 3 of the
Ordinance shows it makes no classification of places of
lodging, thus deems them all susceptible to illicit patronage
and subject them without exception to the unjustified
prohibition.
The Court has professed its deep sentiment and tenderness of
the Ermita-Malate area, its longtime home,76 and it is skeptical
of those who wish to depict our capital city the Pearl of the
Orient as a modern-day Sodom or Gomorrah for the Third
World set. Those still steeped in Nick Joaquin-dreams of the
grandeur of Old Manila will have to accept that Manila like all
evolving big cities, will have its problems. Urban decay is a
fact of mega cities such as Manila, and vice is a common
problem confronted by the modern metropolis wherever in the
world. The solution to such perceived decay is not to prevent
legitimate businesses from offering a legitimate product.
Rather, cities revive themselves by offering incentives for new
businesses to sprout up thus attracting the dynamism of
individuals that would bring a new grandeur to Manila.
The behavior which the Ordinance seeks to curtail is in fact
already prohibited and could in fact be diminished simply by
applying existing laws. Less intrusive measures such as
curbing the proliferation of prostitutes and drug dealers
through active police work would be more effective in easing
the situation. So would the strict enforcement of existing laws
and regulations penalizing prostitution and drug use. These
measures would have minimal intrusion on the businesses of
the petitioners and other legitimate merchants. Further, it is
apparent that the Ordinance can easily be circumvented by
merely paying the whole day rate without any hindrance to
those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele
by charging their customers a portion of the rent for motel
rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected
only to the extent that may fairly be required by the legitimate
demands of public interest or public welfare. The State is a
leviathan that must be restrained from needlessly intruding into
the lives of its citizens. However well-intentioned the
Ordinance may be, it is in effect an arbitrary and whimsical
intrusion into the rights of the establishments as well as their
patrons. The Ordinance needlessly restrains the operation of
the businesses of the petitioners as well as restricting the
rights of their patrons without sufficient justification. The
Ordinance rashly equates wash rates and renting out a room
more than twice a day with immorality without accommodating
innocuous intentions.
The promotion of public welfare and a sense of morality
among citizens deserves the full endorsement of the judiciary
provided that such measures do not trample rights this Court is
sworn to protect.77 The notion that the promotion of public
morality is a function of the State is as old as Aristotle.78 The
advancement of moral relativism as a school of philosophy
does not de-legitimize the role of morality in law, even if it may
foster wider debate on which particular behavior to penalize. It
is conceivable that a society with relatively little shared
morality among its citizens could be functional so long as the
pursuit of sharply variant moral perspectives yields an
adequate accommodation of different interests.79
To be candid about it, the oft-quoted American maxim that
"you cannot legislate morality" is ultimately illegitimate as a
matter of law, since as explained by Calabresi, that phrase is
more accurately interpreted as meaning that efforts to legislate
morality will fail if they are widely at variance with public
attitudes about right and wrong.80 Our penal laws, for one, are
founded on age-old moral traditions, and as long as there are
widely accepted distinctions between right and wrong, they will
remain so oriented.
Yet the continuing progression of the human story has seen
not only the acceptance of the right-wrong distinction, but also
the advent of fundamental liberties as the key to the enjoyment
of life to the fullest. Our democracy is distinguished from non-
free societies not with any more extensive elaboration on our
part of what is moral and immoral, but from our recognition
that the individual liberty to make the choices in our lives is
innate, and protected by the State. Independent and fair-
minded judges themselves are under a moral duty to uphold
the Constitution as the embodiment of the rule of law, by
reason of their expression of consent to do so when they take
the oath of office, and because they are entrusted by the
people to uphold the law.81
Even as the implementation of moral norms remains an
indispensable complement to governance, that prerogative is
hardly absolute, especially in the face of the norms of due
process of liberty. And while the tension may often be left to
the courts to relieve, it is possible for the government to avoid
the constitutional conflict by employing more judicious, less
drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the SO ORDERED.
Court of Appeals is REVERSED, and the Decision of the
Regional Trial Court of Manila, Branch 9, is REINSTATED. DANTE O. TINGA
Ordinance No. 7774 is hereby declared Associate Justice
UNCONSTITUTIONAL. No pronouncement as to costs.