CIVIL PROCEDURE CASES SESSION 2
G.R. No. 81006 May 12, 1989
VICTORINO C. FRANCISCO vs. WINAI PERMSKUL and CA
An important constitutional question has been injected in this case which started
out as an ordinary complaint for a sum of money. The question squarely
presented to the Court is the validity of the memorandum decision authorized
under Section 40 of B.P. Blg. 129 in the light of Article VIII, Section 14 of the
Constitution.
On May 21, 1984, the petitioner leased his apartment in Makati to the private
respondent for a period of one year for the stipulated rental of P3,000.00 a
month. Pursuant to the lease contract, the private respondent deposited with the
petitioner the amount of P9,000.00 to answer for unpaid rentals or any damage
to the leased premises except when caused by reasonable wear and tear. On
May 31, 1985, the private respondent vacated the property. He thereafter
requested the refund of his deposit minus the sum of P1,000.00, representing
the rental for the additional ten days of his occupancy after the expiration of the
lease. The petitioner rejected this request. He said the lessee still owed him for
other charges, including the electricity and water bills and the sum of P2,500.00
for repainting of the leased premises to restore them to their original condition. 1
The private respondent sued in the Metropolitan Trial Court of Makati. After the
submission of position papers by the parties, a summary judgment was
rendered on October 11, 1985, sustaining the complainant and holding that the
repainting was not chargeable to him. The defendant was ordered to pay the
plaintiff the amount of P7,750.00, representing the balance of the deposit after
deducting the water and electricity charges. The plaintiff was also awarded the
sum of P1,250.00 as attorney's fees, plus the Costs. 2
This decision was appealed to the Regional Trial Court of Makati and was
affirmed by Judge Jose C. de la Rama on January 14, 1987. This was done in
a memorandum decision reading in full as follows:
MEMORANDUM DECISION
After a careful and thorough perusal, evaluation and study of the
records of this case, this Court hereby adopts by reference the findings
of fact and conclusions of law contained in the decision of the
Metropolitan Trial Court of Makati, Metro Manila, Branch 63 and finds
that there is no cogent reason to disturb the same.
WHEREFORE, judgment appealed from is hereby affirmed in toto. 3
When the defendant went to the Court of Appeals, his petition for review was
denied on September 29, 1987, as so too was his motion for reconsideration,
on December 1, 1987. 4 He is now before us to fault the respondent court,
principally for sustaining the memorandum decision of the regional trial court.
His contention is that it violates Article VIII, Section 14 of the Constitution.
This provision reads as follows:
Sec. 14. No decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration of a decision of the
court shall be refused due course or denied without stating the legal
basis therefor.
Except for the second paragraph, which was introduced only in the present
charter, Section 14 has been in force since the Constitution of 1935. The
provision was recast in affirmative terms in the 1973 Constitution but has been
virtually restored to its original form in the Constitution of 1987, to apply to all
courts, including the municipal courts. The purpose has always been the same,
viz., to inform the person reading the decision, and especially the parties, of how
it was reached by the court after consideration of the pertinent facts and
examination of the applicable laws.
The parties are entitled to no less than this explanation if only to assure them
that the court rendering the decision actually studied the case before
pronouncing its judgment. But there are more substantial reasons. For one
thing, the losing party must be given an opportunity to analyze the decision so
that, if permitted, he may elevate what he may consider its errors for review by
a higher tribunal. For another, the decision, if well-presented and reasoned, may
convince the losing party of its merits and persuade it to accept the verdict in
good grace instead of prolonging the litigation with a useless appeal. A third
reason is that decisions with a full exposition of the facts and the law on which
they are based, especially those coming from the Supreme Court, will constitute
a valuable body of case law that can serve as useful references and even as
precedents in the resolution of future controversies. As the Court said in Rosales
v. Court of First Instance. 5
Precedents are helpful in deciding cases when they are on all fours or
at least substantially Identical with previous litigations. Argumentum a
simili valet in lege. Earlier decisions are guideposts that can lead us in
the right direction as we tread the highways and byways of the law in
the search for truth and justice. These pronouncements represent the
wisdom of the past. They are the voice of vanished judges talking to the
1

future. Except where there is a need to reverse them because of an
emergent viewpoint or an altered situation, they urge us strongly that,
indeed, the trodden path is best.
According to the petitioner, the memorandum decision rendered by the regional
trial court should be revoked for non-compliance with the above-quoted
constitutional mandate. He asks that the case be remanded to the regional trial
court for a full blown hearing on the merits, to be followed by a decision stating
therein clearly and distinctly the facts and the law on which it is based. For his
part, the private respondent demurs. He justifies the memorandum decision as
authorized by B.P. Blg. 129 and invokes the ruling of this Court in Romero v.
Court of Appeals, 6 Which sustained the said law.
Section 40 of B.P. Blg. 129 reads as follows:
Sec. 40. Form of decision in appealed cases. Every decision or final
resolution of a court in appealed cases shall clearly and distinctly state
the findings of fact and the conclusions of law on which it is based which
may be contained in the decision or final resolution itself, or adopted by
reference from those set forth in the decision, order or resolution
appealed from.
The above section was applied in the Romero case, together with a similar rule
embodied in Section 18 of P.D. No. 946, providing that:
All cases of the Court of Agrarian Relations now pending before the
Court of Appeals shall remain in the Division to which they have been
assigned, and shall be decided within sixty (60) days from the effectivity
of this Decree; Provided, however, That if the decision or order be an
affirmance in toto of the dispositive conclusion of the judgment
appealed from, then the Court of Appeals may, instead of rendering an
extended opinion, indicate clearly the trial court's findings of fact and
pronouncements of law which have been adopted as basis for the
affirmance.
In the said case, Justice Jose Y. Feria, speaking for a unanimous Court,
declared:
As previously stated, the decision of the Court of Agrarian Relations
consisted of thirteen pages, single space. The above-quoted decision
of the respondent Court of Appeals consists of four pages, three of
which contains verbatim the dispositive portion of the decision appealed
from. The remaining page is devoted to an explanation of why "for
judicial convenience and expediency, therefore, We hereby adopt, by
CIVIL PROCEDURE CASES SESSION 2
way of reference, the findings of facts and conclusions of the court a
quo spread in its decision, as integral part of this Our decision." The
said decision may be considered as substantial compliance with the
above-quoted provisions in Section 18 of P.D. No. 946 and Section 40
of B.P. Blg. 129.
Nevertheless, he was quick to add a tenable misgiving and to express the
following reservation:
The authority given the appellate court to adopt by reference the
findings of fact and conclusions of law from those set forth in the
appealed decisions should be exercised with caution and prudence,
because the tendency would be to follow the line of least resistance by
just adopting the findings and conclusions of the lower court without
thoroughly studying the appealed case.
This caveat was necessary because, as he correctly observed:
It cannot be too strongly emphasized that just as important as the
intrinsic validity of a decision is the perception by the parties-litigants
that they have been accorded a fair opportunity to be heard by a fair
and responsible magistrate before judgment is rendered. It is this
perception, coupled with a clear conscience, which enables the
members of the judiciary to discharge the awesome responsibility of
sitting in judgment on their fellowmen.
There is no question that the purpose of the law in authorizing the memorandum
decision is to expedite the termination of litigations for the benefit of the parties
as well as the courts themselves.
Concerned with the mounting problem of delay in the administration of justice,
the Constitution now contains a number of provisions aimed at correcting this
serious difficulty that has caused much disaffection among the people. Thus,
Section 16 of the Bill of Rights reiterates the original provision in the 1973
Constitution guaranteeing to all persons "the right to a speedy disposition of their
cases before all judicial, quasi-judicial or administrative bodies." Section 14(2)
of the same Article III retains the rule that the accused shall be entitled to a trial
that shall not only be public and impartial but also speedy. In Article VIII, Section
5(3), the Supreme Court is expressly permitted to temporarily assign a judge
from one station to another when the public interest so requires, as when there
is a necessity for less occupied judge to help a busier colleague dispose of his
cases. In paragraph 5 of the same section, it is stressed that the rules of court
to be promulgated by the Supreme Court "shall provide a simplified and
inexpensive procedure for the speedy disposition of cases." In Section 15, of
2

the same article, maximum periods are prescribed for the decision or resolution
of cases, to wit, twenty-four months in the case of Supreme Court and, unless
reduced by the Supreme Court, twelve months for all lower collegiate courts and
three months for all other lower courts.
The courts of justice are really hard put at coping with the tremendous number
of cases in their dockets which, to make matters worse, continues to grow by
the day despite the efforts being taken to reduce it. In the Supreme Court alone,
an average of 400 cases is received every month as against the average of 300
cases disposed of during the same month, leaving a difference of 100 cases
monthly that is added to some 5,000 still unresolved cases that have
accumulated during the last two decades or so. At this rate, the backlog will
increase by 1,200 cases every year on top of the earlier balance, much of which,
despite its age, is still viable and have still to be resolved. Considering that the
Court spends four days of the week for studying and deliberating on these cases
in its en banc and division sessions, one can appreciate the limited time allowed
its members for the actual writing of its decisions. (This particular decision, while
extended, happens fortunately to be less complicated than many of the other
cases submitted to it, which require more time to write, not to mention the
antecedent research that may have to be made.)
Viewed in the light of these practical considerations, the memorandum decision
can be welcomed indeed as an acceptable method of dealing expeditiously with
the case load of the courts of justice, But expediency alone, no matter how
compelling, cannot excuse non-compliance with the Constitution; or to put it
more familiarly, the end does not justify the means. It is plain that if Section 40
of B.P. Blg. 129 is unconstitutional, it must be struck down.
In the case at bar, we find that a judgment was made by the metropolitan trial
court in compliance with the rule on summary procedure. The decision consisted
of three typewritten pages, single space, and stated clearly and distinctly the
facts and the law on which it was based. It was a concise and well-written
decision, and a correct one to boot, for which Judge Paciano B. Balita is to be
commended.
The problem, though, as the petitioner sees it, is that in affirming this judgment,
the regional trial court of Makati rendered a mere memorandum decision that
simply adopted by reference the findings of fact and law made by Judge Balita
and then concluded, without saying more, that "there was no cogent reason to
disturb the same." It is claimed that as Judge de la Rama did not make his own
statement of the facts and the law as required by the Constitution, his
memorandum decision was a total nullity. Worse, when the appeal was taken to
the respondent court, what it reviewed was not the memorandum decision of the
regional trial court but the decision rendered by the metropolitan trial court
which, legally speaking, was not before the appellate court.
CIVIL PROCEDURE CASES SESSION 2
It is not really correct to say that the Court of Appeals did not review the
memorandum decision of the regional trial court which was the subject of the
petition for review. A reading of its own decision will show that it dealt extensively
with the memorandum decision and discussed it at some length in the light of
the observations and reservations of this Court in the Romero case.
Moreover, in reviewing the decision of the metropolitan trial court, the Court of
Appeals was actually reviewing the decision of the regional trial court, which had
incorporated by reference the earlier decision rendered by Judge Balita.
The question, of course, is whether such incorporation by reference was a valid
act that effectively elevated the decision of the metropolitan trial court for
examination by the Court of Appeals.
To be fair, let it be said that when Judge dela Rama availed himself of the
convenience offered by Section 40 of B.P. Blg. 129, he was only acting in
accordance with the ruling announced in Romero permitting the use of the
memorandum decision. It must also be observed that even if the respondent
court appeared to be partial to the reservation rather than the rule in the said
case, it nevertheless had the duty which it discharged to abide by the
doctrine announced therein by the highest tribunal of the land. The respondent
court could not have acted otherwise.
This Court is not hampered by such inhibitions. As we may re-examine our own
rulings and modify or reverse them whenever warranted, we take a second look
at the memorandum decision and the Romero case and test them on the
touchstone of the Constitution.
The law does not define the memorandum decision and simply suggests that
the court may adopt by reference the findings of fact and the conclusions of law
stated in the decision, order or resolution on appeal before it. No particular form
is prescribed; the conditions for its use are not indicated. In fact, B.P. Blg. 129
does not even employ the term "memorandum decision" in Section 40 or
elsewhere in the rest of the statute. This phrase appears to have been
introduced in this jurisdiction not by that law but by Section 24 of the Interim
Rules and Guidelines, reading as follows:
Sec. 24. Memorandum decisions. -The judgment or final
resolution of a court in appealed cases may adopt by reference
the findings of fact and conclusions of law contained in the
decision or final order appealed from.
It is clear that where the decision of the appellate court actually reproduces the
findings of fact or the conclusions of law of the court below, it is not a
memorandum decision as envisioned in the above provision. The distinctive
3

features of the memorandum decision are, first, it is rendered by an appellate
court, and second, it incorporates by reference the findings of fact or the
conclusions of law contained in the decision, order or ruling under review. Most
likely, the purpose is to affirm the decision, although it is not impossible that the
approval of the findings of fact by the lower court may lead to a different
conclusion of law by the higher court. At any rate, the reason for allowing the
incorporation by reference is evidently to avoid the cumbersome reproduction
of the decision of the lower court, or portions thereof, in the decision of the higher
court. The Idea is to avoid having to repeat in the body of the latter decision the
findings or conclusions of the lower court since they are being approved or
adopted anyway.
Parenthetically, the memorandum decision is also allowed in the United States,
but its form (at least) differs from the one under consideration in this case. Such
a decision is rendered in that country upon a previous' determination by the
judge that there is no need for a published opinion and that it will have no
precedential effect. The judgment is usually limited to the dispositive portion but
a memorandum is attached containing a brief statement of the facts and the law
involved, mainly for the information of the parties to the case.
When a law is questioned before the Court, we employ the presumption in favor
of its constitutionality. As we said in Peralta v. Commission of Elections, "to
justify the nullification of a law, there must be a clear and unequivocal breach of
the Constitution, not a doubtful and argumentative implication." 7 Courts will
bend over backward to sustain that presumption. In case of doubt, it is the duty
of the judiciary to exert every effort to prevent the invalidation of the law and the
nullification of the will of the legislature that enacted it and the executive that
approved it. This norm is based on a becoming respect that the judiciary is
expected to accord the political departments of the government which, it must
be assumed in fairness, thoroughly studied the measure under challenge and
assured themselves of its constitutionality before agreeing to enact it.
The Court has deliberated extensively on the challenge posed against the
memorandum decision as now authorized by law. Taking into account the
salutary purpose for which it is allowed, and bearing in mind the above-
discussed restraint we must observe when a law is challenged before us, we
have come to the conclusion that Section 40 of B.P. Blg. 129, as we shall
interpret it here, is not unconstitutional.
What is questioned about the law is the permission it gives for the appellate
court to merely adopt by reference in its own decision the judgment of the lower
court on appeal. It is easy to understand that this device may feed the suspicion
feared by Justice Feria that the court has not given the appeal the attention it
deserved and thus deprived the parties of due process. True or not, this
impression is likely to undermine popular faith in the judiciary as an impartial
CIVIL PROCEDURE CASES SESSION 2
forum which hears before it decides and bases its decision on the established
facts and the applicable law.
No less objectionable is the inconvenience involved in having to search for the
decision referred to, which, having been incorporated by reference only, does
not have to be attached to the memorandum decision. The Court had occasion
earlier to complain about this difficulty in the case of Gindoy v. Tapucar, 8 where
we said:
. . . True it is that the Court of First Instance may adopt in toto either
expressly or impliedly the findings and conclusions of the inferior court,
and as a rule, such adoption would amount to a substantial compliance
with the constitutional mandate discussed herein, but where, as in this
case, the specific arguments presented against the decision of the
inferior court are of such nature that a blanket affirmance of said
decision does not in fact adequately dispose of the strictures against it,
it is but proper, if only to facilitate the action to be taken by the appellate
court on the petition for review, that the concrete bases of the impugned
decision should appear on its face, instead of the appellate court having
to dig into the records to find out how the inferior court resolved the
issues of the case.
As to this problem, the Solicitor General correctly points out that it does not exist
in the case at bar because the decision of the Court of Appeals extensively
quoted from the decision of the metropolitan trial court. Although only
incorporated by reference in the memorandum decision of the regional trial
court, Judge Balita's decision was nevertheless available to the Court of
Appeals. It is this circumstance, or even happenstance, if you will, that has
validated the memorandum decision challenged in this case and spared it from
constitutional infirmity.
That same circumstance is what will move us now to lay down the following
requirement, as a condition for the proper application of Section 40 of B.P. Blg.
129. The memorandum decision, to be valid, cannot incorporate the findings of
fact and the conclusions of law of the lower court only by remote reference,
which is to say that the challenged decision is not easily and immediately
available to the person reading the memorandum decision. For the incorporation
by reference to be allowed, it must provide for direct access to the facts and the
law being adopted, which must be contained in a statement attached to the said
decision. In other words, the memorandum decision authorized under Section
40 of B.P. Blg. 129 should actually embody the findings of fact and conclusions
of law of the lower court in an annex attached to and made an indispensable
part of the decision.
4

It is expected that this requirement will allay the suspicion that no study was
made of the decision of the lower court and that its decision was merely affirmed
without a proper examination of the facts and the law on which it was based.
The proximity at least of the annexed statement should suggest that such an
examination has been undertaken. It is, of course, also understood that the
decision being adopted should, to begin with, comply with Article VIII, Section
14 as no amount of incorporation or adoption will rectify its violation.
The Court finds it necessary to emphasize that the memorandum decision
should be sparingly used lest it become an addictive excuse for judicial sloth. It
is an additional condition for its validity that this kind of decision may be resorted
to only in cases where the facts are in the main accepted by both parties or
easily determinable by the judge and there are no doctrinal complications
involved that will require an extended discussion of the laws involved. The
memorandum decision may be employed in simple litigations only, such as
ordinary collection cases, where the appeal is obviously groundless and
deserves no more than the time needed to dismiss it.
CIVIL PROCEDURE CASES SESSION 2
Judge Balita incorporated by reference in the memorandum decision of Judge
de la Rama. The memorandum decision as then understood under the Romero
decision was a valid act at the time it was rendered by Judge de la Rama and
produced binding legal effect. We also affirm the finding of the respondent court
that the summary judgment without a formal trial was in accord with the Rule on
Summary Procedure and that the award of attorney's fees is not improper.
Henceforth, all memorandum decisions shall comply with the requirements
herein set forth both as to the form prescribed and the occasions when they may
be rendered. Any deviation will summon the strict enforcement of Article VIII,
Section 14 of the Constitution and strike down the flawed judgment as a lawless
disobedience.
WHEREFORE, the petition is DENIED, with costs against the petitioner. This
decision is immediately executory. It is so ordered.

Despite the convenience afforded by the memorandum decision, it is still

desirable that the appellate judge exert some effort in restating in his own words
the findings of fact of the lower court and presenting his own interpretation of
the law instead of merely parroting the language of the court a quo as if he
cannot do any better. There must be less intellectual indolence and more pride
of authorship in the writing of a decision, especially if it comes from an appellate
court.

It ill becomes an appellate judge to write his rulings with a pair of scissors and
a pot of paste as if he were a mere researcher. He is an innovator, not an echo.
The case usually becomes progressively simpler as it passes through the
various levels of appeal and many issues become unimportant or moot and drop
along the way. The appellate judge should prune the cluttered record to make
the issues clearer. He cannot usually do this by simply mimicking the lower
court. He must use his own perceptiveness in unraveling the rollo and his own
discernment in discovering the law. No less importantly, he must use his own
language in laying down his judgment. And in doing so, he should also guard
against torpidity lest his pronouncements excite no more fascination than a
technical tract on the values of horse manure as a fertilizer. A little style will help
liven the opinion trapped in the tortuous lexicon of the law with all its whereases
and wherefores. A judicial decision does not have to be a bore.

The interpretation we make today will not apply retroactively to the

memorandum decision rendered by the regional trial court in the case at bar, or
to the decision of the respondent court such decision on the strength of Romero
v. Court of Appeals. As earlier observed, there was substancial compliance with
Section 40 because of the direct availability and actual review of the decision of
5

G.R. No. 101041 November 13, 1991
HON. JUDGE VILLAMOR vs. HON. JUDGE LL. SALAS and GEORGE
CARLOS
CIVIL PROCEDURE CASES SESSION 2
In 1977, Civil Case No. B-398 (Gloria Naval vs. George Carlos) for recovery of
ownership of a parcel of coconut land was filed and subsequently raffled to the
sala of the petitioner, Judge Adriano Villamor. While the civil case was pending
there, respondent Carlos filed Criminal Cases Nos. N-989, N-990, N-991, N-992
and N-993 for qualified theft against Gloria Naval and her helpers. The criminal
cases were also assigned to the sala of Judge Villamor.
Due to the pendency of Civil Case No. B-398, the criminal cases were
temporarily archived.
After trial in Civil Case No. B-398, a decision was rendered in favor of Naval
who was declared the lawful owner and possessor of the disputed land. Carlos
was ordered to vacate the land.
Thereafter, respondent Carlos, through counsel, moved to activate the archived
criminal cases. Having declared Naval the lawful owner and possessor of the
contested land in Civil Case No. B-398, Judge Villamor dismissed the criminal
cases against her and her co-accused.
Judge Villamor likewise granted execution pending appeal of his decision in Civil
Case No. B-398. This order was challenged by Carlos in the Court of Appeals
and in this Court, both without success.
Afterwards, Carlos filed an administrative case, A.M. No. RTJ-87-105, against
Judge Villamor, charging him with having issued illegal orders and an unjust
decision in Civil Case No. B-398. On November 21, 1988, this Court, in an En
Banc resolution, summarily dismissed the administrative case.
Dissatisfied with the outcome of the administrative case, respondent Carlos filed
a civil action for damages (Civil Case No. CEB-6478) against Judge Villamor for
knowingly rendering an unjust judgment when he dismissed the five (5) criminal
cases against Naval, et al.
The summons in Civil Case No. CEB-6478 was served upon Judge Villamor on
December 10, 1987. The next day (December 11, 1987), instead of answering
the complaint, Judge Villamor issued in Criminal Cases Nos. N-0989 to 0993 an
order of direct contempt against Carlos and his lawyer. Attorney Antonio T.
Guerrero, "for degrading the respect and dignity of the court through the use of
derogatory and contemptous language before the court," and sentenced each
of them to suffer the penalty of imprisonment for five (5) days and to pay a fine
of P500.
Carlos immediately filed in this Court a petition for certiorari with a prayer for the
issuance of a writ of preliminary injunction against the Judge (G.R. Nos. 82238-
6

42). We promptly restrained Judge Villamor from enforcing his Order of
Contempt against Carlos and Attorney Guerrero. On November 13, 1989, we
annulled the contempt order. (See pp. 26-34, Rollo of G.R. No. 101041.)
Back to Civil Case No. CEB-6478; Judge Villamor filed a motion to dismiss the
complaint for lack of jurisdiction. The trial court granted the motion. The order of
dismissal was affirmed by the Court of Appeals (CA-G.R. CV No. 20657, June
26, 1990). Carlos appealed to this Court which also denied the petition. (p.
125, Rollo of G.R. No. 101296.)
Unfazed by these setbacks, Carlos and his counsel, Attorney Antonio Guerrero,
filed separate complaints for damages against Judge Villamor for knowingly
rendering an unjust order of contempt.
Attorney Guerrero's complaint for damages (Civil Case No. CEB-8802) was
raffled to Branch 21, Regional Trial Court, Cebu City, presided over by Judge
Peary G. Aleonar. Carlos' complaint for damages was docketed as Civil Case
No. CEB-8823 and raffled to Branch 8, Regional Trial Court of Cebu City
presided over by Judge Bernardo LL. Salas.
On March 30, 1990, Judge Villamor filed a motion to dismiss Civil Case No.
CEB-8802 but it was denied by Judge Aleonar (p. 33, Rollo of G.R. No. 101296).
Hence, this petition for certiorari and prohibition with restraining order docketed
as G.R. No. 101296.
On September 19, 1991, this Court issued a temporary restraining order against
Judge Aleonar to stop him from proceeding in Civil Case No. CEB-8802 (pp. 45-
46, Rollo of G.R. No. 101296).
On May 20, 1991, a Manifestation was filed by Judge Villamor praying Judge
Salas to dismiss Civil Case No. CEB-8823 but the motion was denied by
respondent Judge on July 2, 1991 (pp. 13-16, Rollo of G.R. No. 101041).
Hence, this second petition for certiorari and prohibition with restraining order
(G.R. No. 101041).
On August 21, 1991, a Resolution was issued by this Court: 1) temporarily
restraining Judge Salas from further proceeding in Civil Case No. CEB-8823;
and 2) granting the petitioner's prayer that this case be consolidated with G.R.
No. 101296 (pp. 37-39, Rollo of G.R. No. 101041).
CIVIL PROCEDURE CASES SESSION 2
The sole issue here is: whether or not Judges Aleonar and Salas may take
cognizance of the actions for damages against Judge Villamor for allegedly
having rendered an unjust order of direct contempt against Carlos and Attorney
Guerrero which this Court subsequently annulled.
The answer is no.
As very aptly held by this Court in a Resolution it issued in connection with a
previous case filed by respondent Carlos against Judge Villamor, over a similar
action for "Damages and Attorney's Fees Arising From Rendering an Unjust
Judgment," in dismissing the five (5) criminal cases for qualified theft which he
(respondent Carlos) had filed against Gloria P. Naval and others
Indeed, no Regional Trial Court can pass upon and scrutinize, and
much less declare as unjust a judgment of another Regional Trial Court
and sentence the judge thereof liable for damages without running afoul
with the principle that only the higher appellate courts, namely, the Court
of Appeals and the Supreme Court, are vested with authority to review
and correct errors of the trial courts. (George D. Carlos vs. CA, G.R. No.
95560, November 5, 1990; p. 125, Rollo of G.R No. 101296.)
To allow respondent Judges Aleonar and Salas to proceed with the trial of the
actions for damages against the petitioner, a co-equal judge of a co-equal court,
would in effect permit a court to review and interfere with the judgment of a co-
equal court over which it has no appellate jurisdiction or power of review. The
various branches of a Court of First Instance (now the Regional Trial Court)
being co-equal, may not interfere with each other's cases, judgments and orders
(Parco vs. Court of Appeals, 111 SCRA 262).
This Court has already ruled that only after the Appellate Court, in a final
judgment, has found that a trial judge's errors were committed deliberately and
in bad faith may a charge of knowingly rendering an unjust decision be levelled
against the latter (Garcia vs. Alconcel, 111 SCRA 178; Sta. Maria vs. Ubay, 87
SCRA 179; Gahol vs. Riodique, 64 SCRA 494).
Nowhere in this Court's decision annulling Judge Villamor's order of direct
contempt (G.R. Nos. 82238-42, November 13, 1989) can there be found a
declaration that the erroneous order was rendered maliciously or with conscious
and deliberate intent to commit an injustice. In fact, a previous order of direct
contempt issued by Judge Villamor against Carlos' former counsel was
sustained by this Court (Jaynes C. Abarrientos, et al. vs. Judge Villamor, G.R.
No. 82237, June 1, 1988).
7

At most, the order of direct contempt which we nullified may only be considered
an error of judgment for which Judge Villamor may not be held criminally or
civilly liable to the respondents.
A judge is not liable for an erroneous decision in the absence of malice or
wrongful conduct in rendering it (Barroso vs. Arche, 67 SCRA 161).
WHEREFORE, the consolidated petitions for certiorari are GRANTED, Civil
Cases Nos. CEB-8802 and CEB-8823, respectively, pending in the salas of
respondents Judge Peary G. Aleonar and Judge Bernardo LL. Salas, are hereby
dismissed. The temporary restraining orders issued by this Court in these cases
are hereby made permanent. No costs. SO ORDERED.
G.R. No. 124642 February 23, 2004
ALFREDO CHING and ENCARNACION CHING vs. CA and ALLIED
BANKING CORP.
This petition for review, under Rule 45 of the Revised Rules of Court, assails
the Decision1 of the Court of Appeals (CA) dated November 27, 1995 in CA-
G.R. SP No. 33585, as well as the Resolution2 on April 2, 1996 denying the
petitioners motion for reconsideration. The impugned decision granted the
private respondents petition for certiorari and set aside the Orders of the trial
court dated December 15, 19933 and February 17, 19944 nullifying the
attachment of 100,000 shares of stocks of the Citycorp Investment Philippines
under the name of petitioner Alfredo Ching.
The following facts are undisputed:
CIVIL PROCEDURE CASES SESSION 2
On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI)
obtained a loan of P9,000,000.00 from the Allied Banking Corporation (ABC).
By virtue of this loan, the PBMCI, through its Executive Vice-President Alfredo
Ching, executed a promissory note for the said amount promising to pay on
December 22, 1978 at an interest rate of 14% per annum. 5 As added security
for the said loan, on September 28, 1978, Alfredo Ching, together with Emilio
Taedo and Chung Kiat Hua, executed a continuing guaranty with the ABC
binding themselves to jointly and severally guarantee the payment of all the
PBMCI obligations owing the ABC to the extent of P38,000,000.00.6 The loan
was subsequently renewed on various dates, the last renewal having been
made on December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI
in the amount of P13,000,000.00 payable in eighteen months at 16% interest
per annum. As in the previous loan, the PBMCI, through Alfredo Ching,
executed a promissory note to evidence the loan maturing on June 29,
1981.8 This was renewed once for a period of one month.9
The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981,
the ABC filed a complaint for sum of money with prayer for a writ of preliminary
attachment against the PBMCI to collect the P12,612,972.88 exclusive of
interests, penalties and other bank charges. Impleaded as co-defendants in the
complaint were Alfredo Ching, Emilio Taedo and Chung Kiat Hua in their
capacity as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court of
Manila, Branch XVIII.10 In its application for a writ of preliminary attachment, the
ABC averred that the "defendants are guilty of fraud in incurring the obligations
upon which the present action is brought11 in that they falsely represented
themselves to be in a financial position to pay their obligation upon maturity
thereof."12 Its supporting affidavit stated, inter alia, that the "[d]efendants have
removed or disposed of their properties, or [are] ABOUT to do so, with intent to
defraud their creditors."13
On August 26, 1981, after an ex-parte hearing, the trial court issued an Order
denying the ABCs application for a writ of preliminary attachment. The trial court
decreed that the grounds alleged in the application and that of its supporting
affidavit "are all conclusions of fact and of law" which do not warrant the
issuance of the writ prayed for.14 On motion for reconsideration, however, the
trial court, in an Order dated September 14, 1981, reconsidered its previous
order and granted the ABCs application for a writ of preliminary attachment on
a bond of P12,700,000. The order, in relevant part, stated:
8

With respect to the second ground relied upon for the grant of the writ of
preliminary attachment ex-parte, which is the alleged disposal of properties by
the defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule
57 of the Rules of Court, the affidavits can only barely justify the issuance of
said writ as against the defendant Alfredo Ching who has allegedly bound
himself jointly and severally to pay plaintiff the defendant corporations
obligation to the plaintiff as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the
defendant Alfredo Ching requiring the sheriff of this Court to attach all the
properties of said Alfredo Ching not exceeding P12,612,972.82 in value, which
are within the jurisdiction of this Court and not exempt from execution upon, the
filing by plaintiff of a bond duly approved by this Court in the sum of Twelve
Million Seven Hundred Thousand Pesos (P12,700,000.00) executed in favor of
the defendant Alfredo Ching to secure the payment by plaintiff to him of all the
costs which may be adjudged in his favor and all damages he may sustain by
reason of the attachment if the court shall finally adjudge that the plaintiff was
not entitled thereto.
SO ORDERED.15
Upon the ABCs posting of the requisite bond, the trial court issued a writ of
preliminary attachment. Subsequently, summonses were served on the
defendants,16 save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a petition
for suspension of payments with the Securities and Exchange Commission
(SEC), docketed as SEC Case No. 2250, at the same time seeking the PBMCIs
rehabilitation.17
On July 9, 1982, the SEC issued an Order placing the PBMCIs business,
including its assets and liabilities, under rehabilitation receivership, and ordered
that "all actions for claims listed in Schedule "A" of the petition pending before
any court or tribunal are hereby suspended in whatever stage the same may be
until further orders from the Commission."18 The ABC was among the PBMCIs
creditors named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed
a Motion to Dismiss and/or motion to suspend the proceedings in Civil Case No.
142729 invoking the PBMCIs pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already assumed
jurisdiction.19 On February 4, 1983, the ABC filed its Opposition thereto.20
CIVIL PROCEDURE CASES SESSION 2
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied on
attachment the 100,000 common shares of Citycorp stocks in the name of
Alfredo Ching.21
Thereafter, in an Order dated September 16, 1983, the trial court partially
granted the aforementioned motion by suspending the proceedings only with
respect to the PBMCI. It denied Chings motion to dismiss the complaint/or
suspend the proceedings and pointed out that P.D. No. 1758 only concerns the
activities of corporations, partnerships and associations and was never intended
to regulate and/or control activities of individuals. Thus, it directed the individual
defendants to file their answers.22
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to Suspend
Proceedings on the same ground of the pendency of SEC Case No. 2250. This
motion met the opposition from the ABC.23
On January 20, 1984, Taedo filed his Answer with counterclaim and cross-
claim.24 Ching eventually filed his Answer on July 12, 1984.25
On October 25, 1984, long after submitting their answers, Ching filed an
Omnibus Motion,26 again praying for the dismissal of the complaint or
suspension of the proceedings on the ground of the July 9, 1982 Injunctive
Order issued in SEC Case No. 2250. He averred that as a surety of the PBMCI,
he must also necessarily benefit from the defenses of his principal. The ABC
opposed Chings omnibus motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus Motion27 praying for the
dismissal of the complaint, arguing that the ABC had "abandoned and waived"
its right to proceed against the continuing guaranty by its act of resorting to
preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his
preliminary attachment bond from P12,700,000 to P6,350,000.28 Alfredo Ching
opposed the motion,29 but on April 2, 1987, the court issued an Order setting
the incident for further hearing on May 28, 1987 at 8:30 a.m. for the parties to
adduce evidence on the actual value of the properties of Alfredo Ching levied
on by the sheriff.30
On March 2, 1988, the trial court issued an Order granting the motion of the ABC
and rendered the attachment bond of P6,350,000.31
On November 16, 1993, Encarnacion T. Ching, assisted by her husband Alfredo
Ching, filed a Motion to Set Aside the levy on attachment. She alleged inter alia
that the 100,000 shares of stocks levied on by the sheriff were acquired by her
9

and her husband during their marriage out of conjugal funds after the Citycorp
Investment Philippines was established in 1974. Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive suretyship contract
executed by petitioner Alfredo Ching for the account of PBMCI did not redound
to the benefit of the conjugal partnership. She, likewise, alleged that being the
wife of Alfredo Ching, she was a third-party claimant entitled to file a motion for
the release of the properties.32 She attached therewith a copy of her marriage
contract with Alfredo Ching.33
The ABC filed a comment on the motion to quash preliminary attachment and/or
motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this
present case; thus, she has no personality to file any motion before this
Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention
pursuant to Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-
Party Claim conformably with Sec. 14, Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the supposed movant has
the required personality, her Motion cannot be acted upon by this Honorable
Court as the above-entitled case is still in the archives and the proceedings
thereon still remains suspended. And there is no previous Motion to revive the
same.34
The ABC also alleged that the motion was barred by prescription or by laches
because the shares of stocks were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence
her marriage contract to Alfredo Ching to prove that they were married on
January 8, 1960;35 the articles of incorporation of Citycorp Investment
Philippines dated May 14, 1979;36 and, the General Information Sheet of the
corporation showing that petitioner Alfredo Ching was a member of the Board
of Directors of the said corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the
motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December 15,
1993 an Order37 lifting the writ of preliminary attachment on the shares of stocks
CIVIL PROCEDURE CASES SESSION 2
and ordering the sheriff to return the said stocks to the petitioners. The
dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated
November 9, 1993, is hereby granted. Let the writ of preliminary attachment
subject matter of said motion, be quashed and lifted with respect to the attached
100,000 common shares of stock of Citycorp Investment Philippines in the name
of the defendant Alfredo Ching, the said shares of stock to be returned to him
and his movant-spouse by Deputy Sheriff Apolonio A. Golfo who effected the
levy thereon on July 26, 1983, or by whoever may be presently in possession
thereof.
SO ORDERED.38
The plaintiff Allied Banking Corporation filed a motion for the reconsideration of
the order but denied the same on February 17, 1994. The petitioner bank
forthwith filed a petition for certiorari with the CA, docketed as CA-G.R. SP No.
33585, for the nullification of the said order of the court, contending that:
1. The respondent Judge exceeded his authority thereby acted without
jurisdiction in taking cognizance of, and granting a "Motion" filed by a
complete stranger to the case.
2. The respondent Judge committed a grave abuse of discretion in lifting
the writ of preliminary attachment without any basis in fact and in law,
and contrary to established jurisprudence on the matter.39
On November 27, 1995, the CA rendered judgment granting the petition and
setting aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting
aside the questioned orders (dated December 15, 1993 and February 17, 1994)
for being null and void.
SO ORDERED.40
The CA sustained the contention of the private respondent and set aside the
assailed orders. According to the CA, the RTC deprived the private respondent
of its right to file a bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial court; hence, she
had no right of action to have the levy annulled with a motion for that purpose.
Her remedy in such case was to file a separate action against the private
respondent to nullify the levy on the 100,000 Citycorp shares of stocks. The
10

court stated that even assuming that Encarnacion T. Ching had the right to file
the said motion, the same was barred by laches.
Citing Wong v. Intermediate Appellate Court,41 the CA ruled that the
presumption in Article 160 of the New Civil Code shall not apply where, as in
this case, the petitioner-spouses failed to prove the source of the money used
to acquire the shares of stock. It held that the levied shares of stocks belonged
to Alfredo Ching, as evidenced by the fact that the said shares were registered
in the corporate books of Citycorp solely under his name. Thus, according to the
appellate court, the RTC committed a grave abuse of its discretion amounting
to excess or lack of jurisdiction in issuing the assailed orders. The petitioners
motion for reconsideration was denied by the CA in a Resolution dated April 2,
1996.
The petitioner-spouses filed the instant petition for review on certiorari, asserting
that the RTC did not commit any grave abuse of discretion amounting to excess
or lack of jurisdiction in issuing the assailed orders in their favor; hence, the CA
erred in reversing the same. They aver that the source of funds in the acquisition
of the levied shares of stocks is not the controlling factor when invoking the
presumption of the conjugal nature of stocks under Art. 160, 42 and that such
presumption subsists even if the property is registered only in the name of one
of the spouses, in this case, petitioner Alfredo Ching.43 According to the
petitioners, the suretyship obligation was not contracted in the pursuit of the
petitioner-husbands profession or business.44 And, contrary to the ruling of the
CA, where conjugal assets are attached in a collection suit on an obligation
contracted by the husband, the wife should exhaust her motion to quash in the
main case and not file a separate suit.45 Furthermore, the petitioners contend
that under Art. 125 of the Family Code, the petitioner-husbands gratuitous
suretyship is null and void ab initio,46and that the share of one of the spouses in
the conjugal partnership remains inchoate until the dissolution and liquidation of
the partnership.47
In its comment on the petition, the private respondent asserts that the CA
correctly granted its petition for certiorari nullifying the assailed order. It
contends that the CA correctly relied on the ruling of this Court in Wong v.
Intermediate Appellate Court. Citing Cobb-Perez v. Lantin and G-Tractors, Inc.
v. Court of Appeals, the private respondent alleges that the continuing guaranty
and suretyship executed by petitioner Alfredo Ching in pursuit of his profession
or business. Furthermore, according to the private respondent, the right of the
petitioner-wife to a share in the conjugal partnership property is merely inchoate
before the dissolution of the partnership; as such, she had no right to file the
said motion to quash the levy on attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has the
right to file the motion to quash the levy on attachment on the 100,000 shares
CIVIL PROCEDURE CASES SESSION 2
of stocks in the Citycorp Investment Philippines; (b) whether or not the RTC
committed a grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had the
right to file the said motion, although she was not a party in Civil Case No.
142729.48
In Ong v. Tating,49 we held that the sheriff may attach only those properties of
the defendant against whom a writ of attachment has been issued by the court.
When the sheriff erroneously levies on attachment and seizes the property of a
third person in which the said defendant holds no right or interest, the superior
authority of the court which has authorized the execution may be invoked by the
aggrieved third person in the same case. Upon application of the third person,
the court shall order a summary hearing for the purpose of determining whether
the sheriff has acted rightly or wrongly in the performance of his duties in the
execution of the writ of attachment, more specifically if he has indeed levied on
attachment and taken hold of property not belonging to the plaintiff. If so, the
court may then order the sheriff to release the property from the erroneous levy
and to return the same to the third person. In resolving the motion of the third
party, the court does not and cannot pass upon the question of the title to the
property with any character of finality. It can treat the matter only insofar as may
be necessary to decide if the sheriff has acted correctly or not. If the claimants
proof does not persuade the court of the validity of the title, or right of possession
thereto, the claim will be denied by the court. The aggrieved third party may also
avail himself of the remedy of "terceria" by executing an affidavit of his title or
right of possession over the property levied on attachment and serving the same
to the office making the levy and the adverse party. Such party may also file an
action to nullify the levy with damages resulting from the unlawful levy and
seizure, which should be a totally separate and distinct action from the former
case. The above-mentioned remedies are cumulative and any one of them may
be resorted to by one third-party claimant without availing of the other
remedies.50
In this case, the petitioner-wife filed her motion to set aside the levy on
attachment of the 100,000 shares of stocks in the name of petitioner-husband
claiming that the said shares of stocks were conjugal in nature; hence, not liable
for the account of her husband under his continuing guaranty and suretyship
agreement with the PBMCI. The petitioner-wife had the right to file the motion
for said relief.
On the second issue, we find and so hold that the CA erred in setting aside and
reversing the orders of the RTC. The private respondent, the petitioner in the
CA, was burdened to prove that the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction. The tribunal acts without
11

jurisdiction if it does not have the legal purpose to determine the case; there is
excess of jurisdiction where the tribunal, being clothed with the power to
determine the case, oversteps its authority as determined by law. There is grave
abuse of discretion where the tribunal acts in a capricious, whimsical, arbitrary
or despotic manner in the exercise of its judgment and is equivalent to lack of
jurisdiction.51
It was incumbent upon the private respondent to adduce a sufficiently strong
demonstration that the RTC acted whimsically in total disregard of evidence
material to, and even decide of, the controversy before certiorari will lie. A
special civil action for certiorari is a remedy designed for the correction of errors
of jurisdiction and not errors of judgment. When a court exercises its jurisdiction,
an error committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.52
After a comprehensive review of the records of the RTC and of the CA, we find
and so hold that the RTC did not commit any grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired during
the marriage are presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband, or to the wife. In Tan v. Court
of Appeals,53 we held that it is not even necessary to prove that the properties
were acquired with funds of the partnership. As long as the properties were
acquired by the parties during the marriage, they are presumed to be conjugal
in nature. In fact, even when the manner in which the properties were acquired
does not appear, the presumption will still apply, and the properties will still be
considered conjugal. The presumption of the conjugal nature of the properties
acquired during the marriage subsists in the absence of clear, satisfactory and
convincing evidence to overcome the same.54
In this case, the evidence adduced by the petitioners in the RTC is that the
100,000 shares of stocks in the Citycorp Investment Philippines were issued to
and registered in its corporate books in the name of the petitioner-husband when
the said corporation was incorporated on May 14, 1979. This was done during
the subsistence of the marriage of the petitioner-spouses. The shares of stocks
are, thus, presumed to be the conjugal partnership property of the petitioners.
The private respondent failed to adduce evidence that the petitioner-husband
acquired the stocks with his exclusive money.55 The barefaced fact that the
shares of stocks were registered in the corporate books of Citycorp Investment
Philippines solely in the name of the petitioner-husband does not constitute
proof that the petitioner-husband, not the conjugal partnership, owned the
same.56 The private respondents reliance on the rulings of this Court in
Maramba v. Lozano57 and Associated Insurance & Surety Co., Inc. v.
Banzon58 is misplaced. In the Maramba case, we held that where there is no
CIVIL PROCEDURE CASES SESSION 2
showing as to when the property was acquired, the fact that the title is in the
wifes name alone is determinative of the ownership of the property. The
principle was reiterated in the Associated Insurance case where the
uncontroverted evidence showed that the shares of stocks were acquired during
the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this Court in
Wong v. Intermediate Appellate Court59 buttresses the case for the petitioners.
In that case, we ruled that he who claims that property acquired by the spouses
during their marriage is not conjugal partnership property but belongs to one of
them as his personal property is burdened to prove the source of the money
utilized to purchase the same. In this case, the private respondent claimed that
the petitioner-husband acquired the shares of stocks from the Citycorp
Investment Philippines in his own name as the owner thereof. It was, thus, the
burden of the private respondent to prove that the source of the money utilized
in the acquisition of the shares of stocks was that of the petitioner-husband
alone. As held by the trial court, the private respondent failed to adduce
evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty and
suretyship agreement with the private respondent for the payment of the PBMCI
loans, the petitioner-husband was in the exercise of his profession, pursuing a
legitimate business. The appellate court erred in concluding that the conjugal
partnership is liable for the said account of PBMCI under Article 161(1) of the
New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3] 60 of the Family
Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same
purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship
agreement as security for the payment of the loan obtained by the PBMCI from
the private respondent in the amount of P38,000,000. In Ayala Investment and
Development Corp. v. Court of Appeals,61 this Court ruled "that the signing as
surety is certainly not an exercise of an industry or profession. It is not
embarking in a business. No matter how often an executive acted on or was
persuaded to act as surety for his own employer, this should not be taken to
mean that he thereby embarked in the business of suretyship or guaranty."
12

For the conjugal partnership to be liable for a liability that should appertain to
the husband alone, there must be a showing that some advantages accrued to
the spouses. Certainly, to make a conjugal partnership responsible for a liability
that should appertain alone to one of the spouses is to frustrate the objective of
the New Civil Code to show the utmost concern for the solidarity and well being
of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal
partnership.62
CIVIL PROCEDURE CASES SESSION 2
rightly so, that such obligation will redound to the benefit of the conjugal
partnership.65
The Court held in the same case that the rulings of the Court in Cobb-Perez and
G-Tractors, Inc. are not controlling because the husband, in those cases,
contracted the obligation for his own business. In this case, the petitioner-
husband acted merely as a surety for the loan contracted by the PBMCI from
the private respondent.

In this case, the private respondent failed to prove that the conjugal partnership IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision
of the petitioners was benefited by the petitioner-husbands act of executing a and Resolution of the Court of Appeals are SET ASIDE AND REVERSED. The
continuing guaranty and suretyship agreement with the private respondent for assailed orders of the RTC are AFFIRMED. SO ORDERED.
and in behalf of PBMCI. The contract of loan was between the private
respondent and the PBMCI, solely for the benefit of the latter. No presumption
can be inferred from the fact that when the petitioner-husband entered into an
accommodation agreement or a contract of surety, the conjugal partnership
would thereby be benefited. The private respondent was burdened to establish
that such benefit redounded to the conjugal partnership.63

It could be argued that the petitioner-husband was a member of the Board of

Directors of PBMCI and was one of its top twenty stockholders, and that the
shares of stocks of the petitioner-husband and his family would appreciate if the
PBMCI could be rehabilitated through the loans obtained; that the petitioner-
husbands career would be enhanced should PBMCI survive because of the
infusion of fresh capital. However, these are not the benefits contemplated by
Article 161 of the New Civil Code. The benefits must be those directly resulting
from the loan. They cannot merely be a by-product or a spin-off of the loan
itself.64

This is different from the situation where the husband borrows money or
receives services to be used for his own business or profession. In the Ayala
case, we ruled that it is such a contract that is one within the term "obligation for G.R. No. 145022 September 23, 2005
the benefit of the conjugal partnership." Thus: ARMAND NOCUM and THE PHILIPPINE DAILY INQUIRER vs. LUCIO TAN

(A) If the husband himself is the principal obligor in the contract, i.e., he directly
received the money and services to be used in or for his own business or his
own profession, that contract falls within the term " obligations for the benefit
of the conjugal partnership." Here, no actual benefit may be proved. It is enough
that the benefit to the family is apparent at the time of the signing of the contract.
From the very nature of the contract of loan or services, the family stands to
benefit from the loan facility or services to be rendered to the business or
profession of the husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated, where the husband
contracts obligations on behalf of the family business, the law presumes, and
Assailed in a Petition for Review on Certiorari under Rule 45 of the 1997 Rules
of Civil Procedure are the decision1 of the Court of Appeals dated 19 April 2000
that affirmed the order of the Regional Trial Court (RTC) of Makati City, Branch
56, in Civil Case No. 98-2288, dated 19 April 1999, admitting respondent Lucio
Tans Amended Complaint for Damages for the alleged malicious and
defamatory imputations against him in two (2) articles of the Philippine Daily
Inquirer, and its Resolution2 dated 15 September 2000 denying petitioners
Armand Nocum and The Philippine Daily Inquirer, Inc.s motion for
reconsideration.
The antecedents are summarized by the Court of Appeals.
13

On September 27, 1998, Lucio Tan filed a complaint against reporter Armand
Nocum, Capt. Florendo Umali, ALPAP and Inquirer with the Regional Trial Court
of Makati, docketed as Civil Case No. 98-2288, seeking moral and exemplary
damages for the alleged malicious and defamatory imputations contained in a
news article.
INQUIRER and NOCUM filed their joint answer, dated October 27, 1998,
wherein they alleged that: (1) the complaint failed to state a cause of action; (2)
the defamatory statements alleged in the complaint were general conclusions
without factual premises; (3) the questioned news report constituted fair and true
report on the matters of public interest concerning a public figure and therefore,
was privileged in nature; and (4) malice on their part was negated by the
publication in the same article of plaintiffs or PALs side of the dispute with the
pilots union.
ALPAP and UMALI likewise filed their joint answer, dated October 31, 1998, and
alleged therein that: (1) the complaint stated no cause of action; (2) venue was
improperly laid; and (3) plaintiff Lucio Tan was not a real party in interest. It
appeared that the complaint failed to state the residence of the complainant at
the time of the alleged commission of the offense and the place where the
libelous article was printed and first published.
Thus, the Regional Trial Court of Makati issued an Order dated February 10,
1999, dismissing the complaint without prejudice on the ground of improper
venue.
Aggrieved by the dismissal of the complaint, respondent Lucio Tan filed an
Omnibus Motion dated February 24, 1999, seeking reconsideration of the
dismissal and admission of the amended complaint. In par. 2.01.1 of the
amended complaint, it is alleged that "This article was printed and first published
in the City of Makati" (p. 53, Rollo, CA-G.R. SP No. 55192), and in par. 2.04.1,
that "This caricature was printed and first published in the City of Makati" (p. 55,
id.).
The lower court, after having the case dismissed for improper venue, admitted
the amended complaint and deemed set aside the previous order of dismissal,
supra, stating, inter alia, that:
"The mistake or deficiency in the original complaint appears now to have been
cured in the Amended Complaint which can still be properly admitted, pursuant
to Rule 10 of the 1997 Rules of Civil Procedure, inasmuch as the Order of
dismissal is not yet final. Besides, there is no substantial amendment in the
Amended Complaint which would affect the defendants defenses and their
CIVIL PROCEDURE CASES SESSION 2
Answers. The Amendment is merely formal, contrary to the contention of the
defendants that it is substantial."
Dissatisfied, petitioners, together with defendants Capt. Florendo Umali and the
Airline Pilots Association of the Philippines, Inc. (ALPAP), appealed the RTC
decision to the Court of Appeals. Two petitions for certiorariwere filed, one filed
by petitioners which was docketed as CA-G.R. SP No. 55192, and the other by
defendants Umali and ALPAP which was docketed as CA-G.R. SP No. 54894.
The two petitions were consolidated.
On 19 April 2000, the Court of Appeals rendered its decision the dispositive
portion of which reads:
WHEREFORE, premises considered, the petition is hereby DENIED DUE
COURSE and DISMISSED for lack of merit. The Order of the court a quo is
hereby AFFIRMED.
The motions for reconsideration filed by petitioners and by defendants Umali
and ALPAP were likewise denied in a resolution dated 15 September 2000.
Both petitioners and defendants Umali and ALPAP appealed to this Court.
Under consideration is the petition for review filed by petitioners.
On 11 December 2000, the Court required respondent Tan to comment on the
petition filed by petitioners.3
Respondent filed his comment on 22 January 2001 4 to which petitioners filed a
reply on 26 April 2001.5
In a Manifestation filed on 19 February 2001, respondent stated that the
petition6 filed by defendants Umali and ALPAP has already been denied by the
Court in a resolution dated 17 January 2001.7
On 20 August 2003, the Court resolved to give due course to the petition and
required the parties to submit their respective memoranda within thirty (30) days
from notice.8 Both petitioners and respondent complied.9
Petitioners assigned the following as errors:
A. THE COURT OF APPEALS ERRED IN RULING (1) THAT THE LOWER
COURT HAD JURISDICTION OVER THE CASE (ON THE BASIS OF THE
ORIGINAL COMPLAINT) NOTWITHSTANDING THE FACT THAT THE
LOWER COURT HAD EARLIER DISMISSED THE ORIGINAL COMPLAINT
14

FOR ITS FAILURE TO CONFER JURISDICTION UPON THJE COURT; AND
(2) THAT THE AMENDED COMPLAINT WAS PROPERLY ALLOWED OR
ADMITTED BECAUSE THE LOWER COURT WAS "NEVER DIVESTED" OF
JURISDICTION OVER THE CASE;
B. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE ORIGINAL
COMPLAINT OF RESPONDENT WAS AMENDED PURPOSELY TO CONFER
UPON THE LOWER COURT JURISDICTION OVER THE CASE.10
Petitioners state that Article 360 of the Revised Penal Code vests jurisdiction
over all civil and criminal complaints for libel on the RTC of the place: (1) where
the libelous article was printed and first published; or (2) where the complainant,
if a private person, resides; or (3) where the complainant, if a public official,
holds office. They argue that since the original complaint only contained the
office address of respondent and not the latters actual residence or the place
where the allegedly offending news reports were printed and first published, the
original complaint, by reason of the deficiencies in its allegations, failed to confer
jurisdiction on the lower court.
The question to be resolved is: Did the lower court acquire jurisdiction over the
civil case upon the filing of the original complaint for damages?
We rule in the affirmative.
It is settled that jurisdiction is conferred by law based on the facts alleged in the
complaint since the latter comprises a concise statement of the ultimate facts
constituting the plaintiff's causes of action.11 In the case at bar, after examining
the original complaint, we find that the RTC acquired jurisdiction over the case
when the case was filed before it. From the allegations thereof, respondents
cause of action is for damages arising from libel, the jurisdiction of which is
vested with the RTC. Article 360 of the Revised Penal Code provides that it is a
Court of First Instance12 that is specifically designated to try a libel case.13
Petitioners are confusing jurisdiction with venue. A former colleague, the Hon.
Florenz D. Regalado,14differentiated jurisdiction and venue as follows: (a)
Jurisdiction is the authority to hear and determine a case; venue is the place
where the case is to be heard or tried; (b) Jurisdiction is a matter of substantive
law; venue, of procedural law; (c) Jurisdiction establishes a relation between the
court and the subject matter; venue, a relation between plaintiff and defendant,
or petitioner and respondent; and, (d) Jurisdiction is fixed by law and cannot be
conferred by the parties; venue may be conferred by the act or agreement of
the parties.
CIVIL PROCEDURE CASES SESSION 2
In the case at bar, the additional allegations in the Amended Complaint that the
article and the caricature were printed and first published in the City of Makati
referred only to the question of venue and not jurisdiction. These additional
allegations would neither confer jurisdiction on the RTC nor would respondents
failure to include the same in the original complaint divest the lower court of its
jurisdiction over the case. Respondents failure to allege these allegations gave
the lower court the power, upon motion by a party, to dismiss the complaint on
the ground that venue was not properly laid.
In Laquian v. Baltazar,15 this Court construed the term "jurisdiction" in Article
360 of the Revised Penal Code as referring to the place where actions for libel
shall be filed or "venue."
In Escribano v. Avila,16 pursuant to Republic Act No. 4363,17 we laid down the
following rules on the venue of the criminal and civil actions in written
defamations.
1. General rule: The action may be filed in the Court of First Instance of the
province or city where the libelous article is printed and first published or where
any of the offended parties actually resides at the time of the commission of the
offense.
2. If the offended party is a public officer with office in Manila at the time the
offense was committed, the venue is Manila or the city or province where the
libelous article is printed and first published.
3. Where an offended party is a public official with office outside of Manila, the
venue is the province or the city where he held office at the time of the
commission of the offense or where the libelous article is printed and first
published.
4. If an offended party is a private person, the venue is his place of residence at
the time of the commission of the offense or where the libelous article is printed
and first published.
The common feature of the foregoing rules is that whether the offended party is
a public officer or a private person, he has always the option to file the action in
the Court of First Instance of the province or city where the libelous article is
printed or first published.
We further restated18 the rules on venue in Article 360 as follows:
15

1. Whether the offended party is a public official or a private person, the criminal
action may be filed in the Court of First Instance of the province or city where
the libelous article is printed and first published.
2. If the offended party is a private individual, the criminal action may also be
filed in the Court of First Instance of the province where he actually resided at
the time of the commission of the offense.
3. If the offended party is a public officer whose office is in Manila at the time of
the commission of the offense, the action may be filed in the Court of First
Instance of Manila.
4. If the offended party is a public officer holding office outside of Manila, the
action may be filed in the Court of First Instance of the province or city where he
held office at the time of the commission of the offense.
We fully agree with the Court of Appeals when it ruled:
We note that the amended complaint or amendment to the complaint was not
intended to vest jurisdiction to the lower court, where originally it had none. The
amendment was merely to establish the proper venue for the action. It is a well-
established rule that venue has nothing to do with jurisdiction, except in criminal
actions. Assuming that venue were properly laid in the court where the action
was instituted, that would be procedural, not a jurisdictional impediment. In fact,
in civil cases, venue may be waived.
Consequently, by dismissing the case on the ground of improper venue, the
lower court had jurisdiction over the case. Apparently, the herein petitioners
recognized this jurisdiction by filing their answers to the
complaint, albeit, questioning the propriety of venue, instead of a motion to
dismiss.
...
We so hold that dismissal of the complaint by the lower court was proper
considering that the complaint, indeed, on its face, failed to allege neither the
residence of the complainant nor the place where the libelous article was printed
and first published. Nevertheless, before the finality of the dismissal, the same
may still be amended as in fact the amended complaint was admitted, in view
of the court a quos jurisdiction, of which it was never divested. In so doing, the
court acted properly and without any grave abuse of discretion.19
CIVIL PROCEDURE CASES SESSION 2
It is elementary that objections to venue in CIVIL ACTIONS arising from libel
may be waived since they do not involve a question of jurisdiction. The laying of
venue is procedural rather than substantive, relating as it does to jurisdiction of
the court over the person rather than the subject matter. Venue relates to trial
and not to jurisdiction.20 It is a procedural, not a jurisdictional, matter. It relates
to the place of trial or geographical location in which an action or proceeding
should be brought and not to the jurisdiction of the court.21 It is meant to provide
convenience to the parties, rather than restrict their access to the courts as it
relates to the place of trial.22 In contrast, in criminal actions, it is fundamental
that venue is jurisdictional it being an essential element of jurisdiction. 23
Petitioners argument that the lower court has no jurisdiction over the case
because respondent failed to allege the place where the libelous articles were
printed and first published would have been tenable if the case filed were a
criminal case. The failure of the original complaint to contain such information
would be fatal because this fact involves the issue of venue which goes into the
territorial jurisdiction of the court. This is not to be because the case before us
is a civil action where venue is not jurisdictional.
The cases24 cited by petitioners are not applicable here. These cases involve
amendments on complaints that confer jurisdiction on courts over which they
originally had none. This is not true in the case at bar. As discussed above, the
RTC acquired jurisdiction over the subject matter upon the filing of the original
complaint. It did not lose jurisdiction over the same when it dismissed it on the
ground of improper venue. The amendment merely laid down the proper venue
of the case.
WHEREFORE, the foregoing considered, the decision of the Court of Appeals
dated 19 April 2000 is AFFIRMED in toto. No costs.SO ORDERED.
16
 CIVIL PROCEDURE CASES SESSION 2

G.R. No. 170478 May 22, 2008

SPS. TERESITO VILLACASTIN & LOURDES FUA VILLACASTIN vs. PAUL
PELAEZ

A conflict of jurisdiction between the Department of Agrarian Reform

Adjudication Board (DARAB) and the regular trial courts is at the core of the
present case. Petitioners question the Decision1 of the Court of Appeals dated
February 7, 2005, in CA-G.R. SP. No. 83873, which upheld the primary and
exclusive jurisdiction of the DARAB in cases involving the use or possession of
lands covered by agrarian laws.

The facts, as culled from the record, are as follows:

On June 29, 1976, respondent Paul Pelaez and his wife mortgaged their
agricultural lands bearing Original Certificates of Title Nos. 0-10343, 0-10344
and 0-10345, situated in Barrio Kodia, Madridejos, Cebu, to the Development
Bank of the Philippines (DBP) Bogo Branch, Cebu. For failure of the Pelaez
spouses to pay their mortgage obligation, the properties were foreclosed and
subsequently sold at public auction.

The purported tenants of the property, Anastacio Alob, Francisco Alob, Jesus
Cordova, Manuel Sanchez, Elia Giltendez, Flora dela Pea, Eliseo Rayco,
Benjamin Santillan, Pascual Gilbuena, Jesus Alob, Renaldo Grande, and Julieto
Manzueto, filed an action to annul the mortgage, foreclosure and sale of the
properties, claiming that they are the owners thereof under Presidential Decree
No. 27. the case was docketed as Reg. Case No. VII-76-C-90.

In the meantime, on May 10, 1988, petitioners filed a Complaint for Forcible
Entry with Prayer for a Writ of Preliminary Mandatory Injunction, 2 docketed as
Civil Case No. 79, with the First Municipal Circuit Trial Court (MCTC) of
Bantayan, Cebu, against respondent and a certain Elesio Monteseven. The
complaint averred that plaintiffs (petitioners herein) are the owners and actual
possessors of the subject landholding and that defendants, having entered the
property through stealth and strategy, unlawfully deprived plaintiffs of
possession thereof.

17

Respondent countered that he is the owner of the subject property, which was
foreclosed by the DBP and later purchased by petitioners at an auction sale.
Petitioners, however, were allegedly never in possession of the subject property
as they failed to apply for a writ of possession therefor. Respondent further
claimed that he had redeemed the property on March 3, 1988 and accordingly
reacquired possession thereof.3
Meanwhile, the Provincial Agrarian Reform Adjudicator in Cebu rendered a
decision in Reg. Case No. VII-76-C-90 dated February 15, 1993, in favor of the
tenants, the dispositive portion of which states:
WHEREFORE, in the light of the foregoing view, DECISION is hereby
rendered as follows:
1. Declaring complainants herein with the exception of Silbino
Arranquez[,] Jr. and Claro Gilbuela who earlier withdraw from this case
as bonafide tenant farmers of the parcels in question covered by P.D.
[No.] 27;
2. Declaring the mortgage executed by Sps. Paul and Elnora Pelaez to
respondent DBP and the subsequent foreclosure and eventual sale
thereof to Sps. Teresito and Lourdes Villacastin as null and void ab initio
as it is contrary to law, public order and public policy;
3. Declaring complainants herein to properly account their deposited
shares/lease rentals before the DAR office of Bantayan[,] Cebu and
deliver the said deposited [share/lease] rentals including the
forthcoming harvest thereon to respondent landowners Sps. Paul and
Elnora Pelaez with the assistance of the MARO of Bantayan,
Madridejos, Cebu.
4. No pronouncement as to cost.4
This decision was affirmed by the DARAB in a Decision5 dated February 22,
2000.
On January 6, 2000, the MCTC rendered judgment in Civil Case No. 79 in favor
of petitioners and disposed as follows:
WHEREFORE, premises considered, defendant is hereby ordered:
a) To return to plaintiffs possession of the parcel of land above-
described and vacate the premises;
CIVIL PROCEDURE CASES SESSION 2
b) To pay the costs of litigation;
c) Moral and exemplary damages not recoverable in ejectment suit is
denied;
d) Expenses claimed not duly proven are disallowed;
e) To release in favor of the plaintiffs the cash bond the sum
of P5,000.00 deposited pursuant to the issuance of a Writ of Preliminary
Mandatory Injunction.6
In a Decision7 dated March 10, 2004, the Regional Trial Court (RTC) of Dakit,
Bogo, Cebu, Branch 61, affirmed the MCTC decision.
The Court of Appeals, however, ruled that regular courts should respect the
primary jurisdiction vested upon the DARAB in cases involving agricultural lands
such as the property subject of this case. Accordingly, it set aside the decision
rendered by the RTC and the MCTC, and dismissed the complaint for forcible
entry filed by petitioners in this case.
The appellate court denied reconsideration in its Resolution 8 dated November
11, 2005.
Petitioners contend that Civil Case No. 79 did not involve any agrarian matter
and thus, the MCTC correctly exercised jurisdiction over the case.
In his Comment9 dated March 21, 2006, respondent underscores the fact that
the parcels of land subject of this case are tenanted agricultural lands. Before
judgment was rendered in the forcible entry case, the tenants of the property
already filed a suit with the DARAB for the annulment of the real estate mortgage
executed by respondent over the same in favor of DBP and the subsequent
foreclosure and auction sale in favor of petitioners. The DARAB's decision
declaring the mortgage, foreclosure and auction sale null and void became final
as regards petitioners who did not appeal from the decision. Respondent asserts
that the complaint for forcible entry filed by petitioners had lost its legal basis
after the DARAB declared that the foreclosure and auction sale of the subject
property were null and void.
Petitioners filed a Reply10 dated July 28, 2006, insisting that the tenant-farmers
involved in the DARAB case were not parties to the forcible entry case, the only
defendant therein being respondent in this case. Respondent, in turn, raised the
defense of ownership, thereby joining the issues regarding possession and
ownership.
18

Petitioners further note their argument in their Motion for Reconsideration11of
the Decision of the Court of Appeals that the subject property had been declared
as wilderness area and the same had been classified as alienable and
disposable on December 22, 1987. In support of this contention, they submitted
a Department of Agrarian Reform Order12 dated September 12, 1997 to the
effect that the subject property falls within the administrative authority or
competence of the Department of Environment and Natural Resources (DENR).
The order directed the PARO of Cebu and the MARO of Bantayan, Cebu to
cease and desist from further activities affecting the subject property under
Operation Land Transfer, and to refer the matter to the DENR.
Jurisdiction over the subject matter is determined by the allegations of the
complaint.13 In ascertaining, for instance, whether an action is one for forcible
entry falling within the exclusive jurisdiction of the inferior courts, the averments
of the complaint and the character of the relief sought are to be examined.14
A review of the complaint reveals that the pertinent allegations thereof
sufficiently vest jurisdiction over the action on the MCTC. The complaint alleges
as follows:
III
That the plaintiffs are the owners and legal as well as actual possessors
of a parcel of agricultural land more particularly described as follows:
xxx
IV
That the defendant, sometime in the second week of March 1988, by
strategy and through stealth entered the above-described land of the
plaintiffs and took possession thereof; thus, depriving said plaintiffs of
the possession thereof;
That several demands were made the plaintiffs upon the defendants to
restore to them the possession of the above-described parcel of land;
but, defendants refused and still refuse to restore possession of said
property to the plaintiffs;15
It has not escaped our notice that no landowner-tenant vinculum juris or juridical
tie was alleged between petitioners and respondent, let alone that which would
CIVIL PROCEDURE CASES SESSION 2
characterize the relationship as an agrarian dispute.16 Rule II of the DARAB
Rules17 provides that the DARAB "shall have primary jurisdiction, both original
and appellate, to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic Act No. 6657,
Executive Order Nos. 229, 228 and 129-A, Republic Act No, 3844 as amended
by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws
and their implementing rules and regulations."
Petitioners' action is clearly for the recovery of physical or material possession
of the subject property only, a question which both the MCTC and the RTC ruled
petitioners are entitled to. It does not involve the adjudication of an agrarian
reform matter, nor an agrarian dispute falling within the jurisdiction of the
DARAB.
Courts have jurisdiction over possessory actions involving public or private
agricultural lands to determine the issue of physical possession as this issue is
independent of the question of disposition and alienation of such lands which
should be threshed out in the DAR.18 Thus, jurisdiction was rightfully exercised
by the MCTC and the RTC.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
in CA-G.R. SP. No. 83873 dated February 7, 2005, and its Resolution dated
November 11, 2005, are REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Dakit, Bogo, Cebu, Branch 61, dated March 10, 2004,
affirming the decision of the Municipal Circuit Trial Court of Bantayan, Cebu,
dated June 6, 2000, is REINSTATED. No pronouncement as to costs.
SO ORDERED.
19

G.R. No. 92625 December 26, 1990.
JOSE ORDA and IMELDA LOZADA vs. CA and GIL GALANG
The question presented in this case is whether or not the Court of Appeals may
refer a petition for habeas corpus originally filed with it to the Regional Trial Court
for a full-blown trial due to conflicting facts presented by the parties.
Originally, private respondent filed a petition for habeas corpus with the
Regional Trial Court of San Pablo City to regain custody of his minor daughter,
Joyce, who continued staying with her maternal grandparents, petitioners
herein, her mother being already deceased at the initiation of the action. The
case was eventually dismissed for lack of jurisdiction because petitioners, as
defendants therein, had moved to Bataan and any writ of habeas corpus to be
issued by the trial court may not be enforced against them.
Subsequently, private respondent, on the basis of his being the sole surviving
parent of his daughter, filed a petition for habeas corpus with the respondent
Court of Appeals docketed as CA-G.R. No. 13912-SP, an original action to
compel petitioners to produce the body of minor Joyce Orda Galang and explain
the basis of their custody. Petitioners herein filed their Opposition/Answer 1
alleging that private respondent abandoned his wife and child, had no source of
livelihood and therefore could not support his daughter, they prayed that care
and custody of the child be awarded them.
On 13 April 1988, respondent court issued its assailed decision, as follows:
The conflicting thesis (sic), however, of petitioner [private respondent
herein] and respondents [petitioners herein] require a full-blown trial of
the facts alleged by the parties. This could be shown by the initial
discussions aforestated.
The records show that [private respondent] had already filed a similar
petition before the Regional Trial Court, Fourth Judicial Region, Branch
31, San Pablo City, on November 23, 1987, in Special Proceedings No.
SP-719 (87). However, the writ was returned unserved as [petitioners]
ostensibly transferred their domicile at the Philippine Refugee
Processing Center at Barrio Sabang, Morong, Bataan.
Inasmuch as [petitioners] have submitted to the jurisdiction of the Court
by producing the body of the child, Joyce Orda Galang, and submitted
their comments to the petition, the trial on the merits could now proceed
to determine who of the parties are entitled to the custody of the child.
WHEREFORE, premises considered, this Court hereby decides to
REMAND this case to the Regional Trial Court, Branch 31, San Pablo
City, for trial on the merits as to which of the parties are legally entitled
to the custody of the child, Joyce Orda Galang.
SO ORDERED. 2
CIVIL PROCEDURE CASES SESSION 2
In conformity with the foregoing decision the Regional Trial Court of San Pablo
City, the Hon. Napoleon R. Flojo presiding, before which private respondent filed
his first action, ordered the reinstatement of Special Proceedings No. SP-719
(87) and scheduled the case for trial on the merits. 3 Upon examination of the
records of said case, petitioners noted that only the order of dismissal of the
same was in the expediente of the case. They brought this matter to the
attention of the trial court which then issued an order dated 27 January 1989
directing the Chief, Archives Section of the Court of Appeals "to transmit to this
Court the original record of case AC-G.R. No. SP-13912 (sic) immediately upon
receipt of this Order." 4
In reply, the respondent Court of Appeals advised the trial court that no records
can be remanded because no expediente from the lower court was ever
elevated. For this reason, petitioners filed with respondent court on 21 April 1989
a Motion for Clarification of its earlier decision alleging that CA-G.R. No. SP-
13912 was an original action, not an appeal emanating from, or a special civil
action to assail, a case filed with the trial court, hence no record of the case can
be remanded because no expediente from the lower court was ever elevated to
the Court of Appeals; that Special Proceedings No. SP-719 (87) was dismissed
for lack of jurisdiction and the order of dismissal has long become final and,
moreover, herein petitioners were never brought to the jurisdiction of the trial
court in said special proceedings, so much so that they have not even presented
an answer or opposition in said special proceedings; and that a reinstatement
of Special Proceedings No. SP-719 (87), over which the trial court had lost
jurisdiction, may not be justified by virtue of the order of the Court of Appeals to
remand CA-G.R. No. 13912 for trial on the merits. 5
The Court of Appeals 6 resolved this motion on 6 June 1989 as follows:
At the outset, it is necessary to point out that this Court entertained this petition
for Habeas Corpus in the exercise of its original jurisdiction over such case. Said
petition is in no way connected with the one dismissed by the lower court in SP-
719 (87).
In their Motion for Clarification, [petitioners] appear to be confused by this
Court's directive remanding the case to the lower court.
It should be noted that when this Court ordered the same, it did not mean the
remanding of the records, but (the) referring (of) the case to the court a quo for
appropriate action, it enjoying original and concurrent jurisdiction with this Court
over habeas corpus cases (B.P. 129).
Judge Napoleon Flojo also appears to be mixed up as he issued an Order dated
January 27, 1989, which inter alia require the Chief, Archives Section of this
Court "to transmit" to the Regional Trial Court "the original record of case AC-
G.R. No. 13912 immediately upon receipt of this order." (p. 106, Rollo) (sic) But
no records can be transmitted back to the lower court simply because no records
were elevated in that, as aforesaid, the case was filed here as an original action.
20

The [petitioners] have manifested in their motion that they were not given an
opportunity to answer or at least comment on the petition. Now the same is in
the lower court as directed in the decision sought to be clarified. Indeed, issues
cannot be joined if the lower court will deprive the [petitioners] (of) their right to
respond to the petition.
WHEREFORE, for the sake of clarity the dispositive portion of the
decision dated April 13, 1988 is hereby MODIFIED to read as follows:
"WHEREFORE, premises considered, this Court hereby
decides to REFER this case to the Regional Trial Court, Branch
31, San Pablo City, for trial on the merits as to which of the
parties are legally entitled to the custody of the child, Joyce
Orda Galang. FOR ISSUES TO BE JOINED, THE LOWER
COURT IS HEREBY ORDERED TO REQUIRE THE
[petitioners] TO ANSWER THE PETITION."
SO ORDERED." 7
Both parties filed separate motions for reconsideration of the foregoing
resolution. Petitioners contended that respondent Court of Appeals had no
authority to refer the case to the lower court for trial on the merits because said
court, in the original habeas corpus case filed by private respondent, had never
acquired jurisdiction over their persons. Further, that respondent court had no
power to order a case docketed with the lower court without private respondent
having paid the docketing fee and filing an appropriate pleading therein. Private
respondent, on the other hand, also set forth similar contentions and prayed that
trial on the merits be resumed by respondent Court.
The Court of Appeals 8 resolved both motions for reconsideration on 13 March
1990 as follows:
We entertain no doubt that [petitioners] had never been brought to the
jurisdiction of the lower court in SP: PROC. No. SP-719 (87)and agree
with the claim that the Order of dismissal issued in said case had
already become final and executory. But then, it must be pointed out
again that with the filing of another petition for habeas corpus before
this Court (docketed as AC [sic] G.R. SP No. 13912), an entirely new
proceeding was commenced. Unlike the lower court in the previous
habeas corpus case, this Court acquired jurisdiction over the persons
of [petitioners] upon their filing of an Opposition/Answer on April 4, 1988
(p. 14, Rollo).
Section 9[1] in relation to Section 21 of Batas Pambansa Blg. 129 confers upon
the Court of Appeals authority to try and decide habeas corpus cases concurrent
with the Regional Trial Courts. Concurrent or coordinate jurisdiction has been
defined as that which is possessed by a court together with another or others
over the same subject matter. Clearly, therefore, Batas Pambansa Blg. 129
provides the basis for Us to refer AC (sic) G.R. SP No. 13912 to the lower court
CIVIL PROCEDURE CASES SESSION 2
for trial on the merits. With the referral of AC (sic) G.R. SP No. 13912, the
jurisdiction which this Court acquired over the persons of [petitioners] was
transferred to and conferred upon the Regional Trial Court, which necessarily
must treat said case as a separate and distinct proceeding from the one it earlier
dismissed. This means that the Regional Trial Court must assign the referred
case a new number, but need not require the [private respondent] to remit the
prescribed docketing fee inasmuch as the same had already been paid with this
Court. What the parties need to do though is to reproduce the pleadings they
filed in AC (sic) G.R. SP No. 13912 before the Regional Trial Court in order for
issues to be joined therein.
Accordingly, the dispositive portion of the Decision dated April 13, 1988 is
hereby further clarified to read thus:
"WHEREFORE, premises considered, this Court hereby decides to
REFER this case to the regional Trial Court, Branch 31, San Pablo City,
for trial on the merits as to which of the parties are legally entitled to the
custody of the child, Joyce Orda Galang. FOR THIS PURPOSE, THE
PARTIES ARE DIRECTED TO REPRODUCE ALL THE PLEADINGS
THEY FILED IN AC (sic) G.R. SP NO. 13912 BEFORE THE
REGIONAL TRIAL COURT, UPON THE RECEIPT OF WHICH, SHALL
ASSIGN THE CASE A NEW NUMBER WITHOUT REQUIRING [private
respondent] TO PAY THE DOCKETING FEE."
SO ORDERED. 9
In this special civil action for Certiorari petitioners assign the following as errors
committed by the Court of Appeals:
1. Respondent Court of Appeals erred, as it is without authority [to do
so], in referring the original action for habeas corpus filed before it
to the Regional Trial Court, Branch 31, San Pablo City, for trial on
the merits to determine the issue as to which of the parties are
legally entitled to the custody of the child, its reliance on Section
9[1] in relation to Section 21 of B.P. Blg. 21 being specious.
2. Respondent Court of Appeals erred in ordering the parties to the
original action for habeas corpus filed before it to reproduce before
the Regional Trial Court all the pleadings they filed in AC-G.R. SP
No. 13912 (sic).
3. Respondent Court of Appeals erred, as it is without authority [to do
so], in directing the Regional Trial Court, Branch 31, San Pablo City,
to assign the case a new case number without requiring herein
private respondent (as petitioner therein) to pay the docket fee
therefor. 10
There is merit in the contentions of petitioners.
21

Essentially, petitioners argue that the Court of Appeals has no power to issue
the decision remanding the proceedings to the trial court and the two
subsequent resolutions clarifying the same.
The assailed decision and the two resolutions of the Court of Appeals are not
supported by law and the Rules of Court. The provisions of the Judiciary
Reorganization Act (B.P. Blg. 129) cited by the respondent Court of Appeals in
its resolution dated 13 March 1990 are not in point. Sections 9(1) and 21 thereof
merely provide that the Court of Appeals and Regional Trial Courts, respectively,
exercise original jurisdiction to issue writs of habeas corpus, among others.
While recognizing the concurrent original jurisdiction of both courts over habeas
corpus cases as special proceedings, these provisions are not authority for
remanding or referring to the latter original actions filed with the former.
On the contrary, the Court of Appeals is specifically given the power to receive
evidence and perform any and all acts necessary to resolve factual issues raised
in cases falling within its original jurisdiction. 11 Furthermore, under the
Supreme Court Resolution dated 11 February 1983 implementing B.P. Blg. 129
pending the corresponding thorough revision of the Rules of Court, the Court of
Appeals is authorized to conduct a trial or hearing to receive evidence and for
the purpose shall observe the procedure prescribed for the trial courts. 12
Clearly, the Court of Appeals should not have remanded or referred the petition
for a writ of habeas corpus to the trial court.
Finally, the questioned decision and resolutions go against the Revised Internal
Rules of the Court of Appeals. 13 Under Rule 6, Section 2(c) (5) thereof, the
proper procedure is as follows:
RULE 6
PROCEDURE IN SPECIAL CASES
CIVIL PROCEDURE CASES SESSION 2
perform any acts to resolve the factual issues raised in the case
(Emphasis supplied.)
Attention is also directed to the fact that the foregoing provision is silent as to
whether or not the hearing may be delegated, unlike that of the provision on
annulment of judgments, Section 1(c)(3) of the same Rule, where, on motion of
the parties, referral of any of the issues to a Commissioner is allowed in
accordance with Rule 33 of the Rules of Court.
Under the foregoing disquisition, the Court of Appeals was in error in ordering
the remand and later on the referral of the original petition for habeas corpus
filed with it to the Regional Trial Court. What respondent court should have done
was to conduct the reception of evidence and pass upon the merits of the
conflicting allegations of the parties insofar as the petition for a writ of habeas
corpus is concerned.
While We agree with the conclusion reached by respondent court that the case
requires a full-blown trial of the facts, the same should be done in the context of
the special proceedings for custody of minors under Rule 99 of the Rules of
Court, and not a remand or referral of the original action for a writ of habeas
corpus filed with the respondent court. Parenthetically, the proper venue in this
action is the place where the petitioner therein resides. 14 Petitioners' third
assigned error is disposed of accordingly.
WHEREFORE, the petition for Certiorari is hereby GRANTED. The assailed
decision and resolutions of the respondent Court of Appeals are SET ASIDE
and a new one is rendered DISMISSING the petition for habeas corpus
WITHOUT PREJUDICE to the filing by private respondent of the appropriate
special proceedings to gain custody of his minor child. Let copies of this decision
be furnished all Members of the respondent Court of Appeals. No costs. SO
ORDERED.

xxx
SEC. 2. Special Civil Action. Original verified petitions for Certiorari,
prohibition, mandamus, habeas corpus, quo warranto and other writs
may be filed in the Court of Appeals . . .
xxx
c. Judicial Action. The Court may either deny due course or dismiss
the petition outright, or require the private respondent or respondents to
comment on the petition, or give due course thereto.
xxx
(5) If it appears that there is need for reception of evidence, the Division
to which the Justice to whom the case is assigned for study and report
belongs shall conduct the hearing. The Division shall have the power to
22
 CIVIL PROCEDURE CASES SESSION 2

G.R. No. 101428 August 5, 1992

DR. ISABELITA VITAL-GOZON vs. CA and DR. ALEJANDRO DE LA
FUENTE

Whether or not the Court of Appeals has jurisdiction, in a special civil action
of mandamus against a public officer, to take cognizance of the matter of
damages sought to be recovered from the defendant officer, is the chief issue
raised in the certiorari action at bar. Also put the issue is whether or not the
Solicitor General may represent the defendant public officer in
the mandamus suit, in so far as the claim for damages is concerned, in light of
the Court's rulings in Urbano , et al. v. Chavez, et al., and Co v. Regional Trial
Court of Pasig, et al. 1

There is no dispute about the facts from which these issues arise.

In the early months of 1987 and pursuant to Executive Order No. 119 issued
on January 30, 1987 by President Corazon Aquino reorganization of the
various offices of the Ministry of Health commenced; existing offices were
abolished, transfers of personnel effected.

At the time of the reorganization, Dr. Alejandro S. de la Fuente was the Chief of
the Clinics of the National Children's Hospital, having been appointed to that
position on December 20, 1978. Prior thereto, he occupied the post of Medical
Specialist II, a position to which he was promoted in 1977 after serving as
Medical Specialist I of the same hospital for six (6) years (since 1971).

On February 4, 1988 Dr. de la Fuente received notice from the Department of

Health that he would be re-appointed "Medical Specialist II." Considering this is
to be a demotion by no less than two ranks from his post as Chief of Clinics, Dr.
de la Fuente filed a protest with the DOH Reorganization Board. When his
protest was ignored, he brought his case to the Civil Service Commission where
it was docketed as CSC Case No. 4. In the meantime "the duties and
responsibilities pertaining to the position of Chief of Clinics were turned over to

23

and were allowed to be exercised by Dr. Jose D. Merencilla,
Jr." 2
Dr. de la Fuente's case was decided by the Civil Service Commission in a
Resolution dated August 9, 1988. In that Resolution, the Commission made the
following conclusion and disposition, to wit:
. . (The Commission) declares the demotion/transfer of appellant de la
Fuente, Jr. from Chief of Clinics to Medical Specialists II as null and
void: hence, illegal. Considering further that since the National
Children's Hospital was not abolished and the position therein remained
intact although the title or the position of Chief of Clinics was changed
to "Chief of Medical Professional Staff" with substantially the same
functions and responsibilities, the Commission hereby orders that:
1. Appellant de la Fuente, Jr. be retained or considering as never having
relinquished his position of Chief of Clinics (now Chief of Medical
Professional Staff) without loss of seniority rights; and
2. He be paid back salaries, transportation, representation and housing
allowances and such other benefits withheld from him from the date of
his illegal demotion/transfer.
No motion for reconsideration of this Resolution was ever submitted nor appeal
therefrom essayed to the Supreme Court, within the thirty-day period prescribed
therefor by the Constitution. 3 Consequently, the resolution became final, on
September 21, 1988.
De la Fuente thereupon sent two (2) letters to Dr. Vital-Gozon, the Medical
Center Chief of National Children's Hospital, 4 demanding the implementation of
the Commission's decision. Dr. Vital-Gozon referred "de la Fuente's claims to
the Department of Health Assistant Secretary for Legal Affairs for appropriate
advice and/or action . . (She did this allegedly because, according to the Solicitor
General, she was) unaware when and how a CSC Resolution becomes final
and executory, whether such Resolution had in fact become final and executory
and whether the DOH Legal Department would officially assail the mentioned
Resolution." 5 But she did not answer Dr. de la Fuente's letters, not even to
inform him of the referral thereof to the Assistant Secretary. She chose simply
to await "legal guidance from the DOH Legal Department." On the other hand,
no one in the DOH Legal Department bothered to reply to Dr. de la Fuente, or
to take steps to comply or otherwise advise compliance, with the final and
executory Resolution of the Civil Service Commission. In fact, de la Fuente
claims that Vital-Gozon had "actually threatened to stop paying . . . (his) salary
CIVIL PROCEDURE CASES SESSION 2
and allowances on the pretext that he has as yet no 'approved' appointment
even as 'Medical Specialist II' . . . 6
Three months having elapsed without any word from Vital-Gozon or anyone in
her behalf, or any indication whatever that the CSC Resolution of August 9, 1988
would be obeyed, and apprehensive that the funds to cover the salaries and
allowances otherwise due him would revert to the General Fund, Dr. de al
Fuente repaired to the Civil Service Commission and asked it to enforce its
judgment. He was however "told to file in court a petition
for mandamus because of the belief that the Commission had no coercive
powers unlike a court to enforceits final decisions/resolutions. 7
So he instituted in the Court of Appeals on December 28, 1988 an action of
"mandamus and damages with preliminary injunction" to compel Vital-Gozon,
and the Administrative Officer, Budget Officer and Cashier of the NCH to comply
with the final and executory resolution of the Civil Service Commission. He
prayed for the following specific reliefs:
(1) (That) . . a temporary restraining order be issued immediately,
ordering the principal and other respondents to revert the funds the of
the NCH corresponding to the amounts necessary to implement the final
resolution of the CSC in CSC Case No. 4 in favor of herein petitioner,
Dr. Alejandro S. de la Fuente, Jr., and to pay such sums which have
accrued and due and payable as of the date of said order;
(2) After hearing on the prayer for preliminary injunction, that the
restraining order be converted to a writ of preliminary injunction; and
that a writ of preliminary mandatory injunction be issued ordering
principal respondent and the other respondents to implement in full the
said final resolution; and
(3) That, after hearing on the merits of the petition, that judgment be
rendered seeking (sic) permanent writs issued and that principal
respondent be ordered and commanded to comply with and implement
the said final resolution without further delay; and, furthermore, that the
principal respondent be ordered to pay to the sums of P100,000.00 and
P20,000.00 as moral and exemplary damages, and P10,000.00 for
litigation expenses and attorney's fees.
xxx xxx xxx
The Court of Appeals required the respondents to answer. It also issued a
temporary restraining order as prayed for, and required the respondent to show
cause why it should not be converted to a writ of preliminary injunction. The
24

record shows that the respondents prayed for and were granted an extension of
fifteen (15) days to file their answer "through counsel, who," as the Court of
Appeals was later to point out, 8 "did not bother to indicate his address, thus
notice was sent to him through the individual respondents. . . . (However, no)
answer was filed; neither was there any show cause (sic) against a writ of
preliminary injunction." It was a certain Atty. Jose Fabia who appeared in Vital-
Gozon's behalf. 9
About a month afterwards, de la Fuente filed with the same Court a
"Supplemental/Amended Petition" dated February 2, 1989. The second petition
described as one for "quo warranto" aside from "mandamus", added three
respondents including Dr. Jose Merencilla, Jr.; and alleged inter alia that he (de
la Fuente) had "clear title" to the position in question in virtue of the final and
executory judgment of the Civil Service Commission; that even after the
Commission's judgment had become final and executory and been
communicated to Vital-Gozon, the latter allowed "Dr. Merencilla, Jr. as 'OIC
Professional Service' to further usurp, intrude into and unlawfully hold and
exercise the public office/position of petitioner, (under a duly approved
permanent appointment as 'Chief of Clinics' since 1978). De la Fuente thus
prayed, additionally, for judgment:
(a) Declaring that principal respondent Dr. Jose D. Merencilla, Jr. is not
legally entitled to the office of "Chief of Clinics" (now retitled/known as
"Chief of Medical Professional Staff," NCH), ousting him therefrom and
ordering said respondent to immediately cease and desist from further
performing as "OIC Professional Service" any and all duties and
responsibilities of the said office; (and)
(b) Declaring that the petitioner, Dr. Alejandro S. de la Fuente, Jr., is the
lawful or de jure Chief of Clinics (now known as "Chief of the Medical
Professional Staff") and placing him in the possession of said
office/position, without the need of reappointment or new appointment
as held by the Civil Service Commission in its resolution of August 9,
1988, in CSC Case No. 4.
xxx xxx xxx
Copy of the "Supplemental/Amended Petition" was sent to Atty. Jose A. Fabia,
Counsel for Respondents c/o Dr. Ma. Isabelita Vital-Gozon, etc., National
Children's Hospital, E. Rodriguez Ave., Quezon City (Atty. Fabia's address not
being indicated or mentioned in his motion for Extension of Time). 10
Again the Court of Appeals required answer of the respondents. Again, none
was filed. The petitions were consequently "resolved on the basis of their
CIVIL PROCEDURE CASES SESSION 2
allegations and the annexes." The Appellate Court promulgated its judgment on
June 9, 1989. 11 It held that
The question of whether petitioner may be divested of his position as
Chief of Clinics by the expedient of having him appointed to another,
lower position is no longer an issue. It ceased to be such when the
resolution in CSC Case No. 4 became final. The said resolution is
explicit in its mandate; petitioner was declared the lawful and de
jure Chief of Clinics (Chief of the Medical Professional Staff) of the
National Children's Hospital, and by this token, respondent Dr. Jose D.
Merencilla, Jr. is not legally entitled to the office. Respondents,
particularly Dr. Isabelita Vital-Gozon, had no discretion or choice on the
matter; the resolution had to be complied with. It was ill-advised of
principal respondent, and violative of the rule of law, that the resolution
has not been obeyed or implemented.
and accordingly ordered
. . . respondents, particularly Dr. Isabelita Vital-Gozon, . . . to forthwith
comply with, obey and implement the resolution CSC Case No. 4 (and)
. . . Dr. Jose D. Merencilla, Jr., who is not entitled to the office, . . . to
immediately cease and desist from further performing and acting as OIC
Professional Service.
But de la Fuente's prayer for damages founded essentially on the refusal of
Gozon, et al. to obey the final and executory judgment of the Civil Service
Commission, which thus compelled him to litigate anew in a different forum
was denied by the Court of Appeals on the ground that the "petitions
(for mandamus) are not the vehicle nor is the Court the forum for . . . (said) claim
of damages."
Gozon acknowledged in writing that she received a copy of the Appellate
Tribunal's Decision of June 9, 1989 on June 15, 1989. 12 Respondent de la
Fuente acknowledged receipt of his own copy on June 15, 1989. 13 Neither Vital-
Gozon nor her co-party, Dr. Merencilla, Jr., moved for reconsideration of, or
attempted to appeal the decision.
It was de la Fuente who sought reconsideration of the judgment, by motion filed
through new counsel, Atty. Ceferino Gaddi. 14 He insisted that the Appellate
Court had competence to award damages in a mandamus action. He argued
that while such a claim for damages might not have been proper in
a mandamus proceeding in the Appellate Court "before the enactment of B.P.
Blg. 129 because the Court of Appeals had authority to issue such writs only 'in
aid of its appellate jurisdiction,'" the situation was changed by said BP 129 in
25

virtue of which three levels of courts the Supreme Court, the Regional Trial
Court, and the Court of Appeals were conferred concurrent original
jurisdiction to issue said writs, and the Court of Appeals was given power to
conduct hearings and receive evidence to resolve factual issues. To require him
to separately litigate the matter of damages he continued, would lead to that
multiplicity of suits which is abhorred by the law.
While his motion for reconsideration was pending, de la Fuente sought to
enforce the judgment of the Court of Appeals of June 9, 1989 directing his
reinstatement pursuant to the Civil Service Commission's Resolution of August
9, 1988, supra. He filed on July 4, 1989 a "Motion for Execution," alleging that
the judgment of June 9, 1989 had become final and executory for failure of
Gozon, et al. served with notice thereof on June 16, 1989 to move for its
reconsideration or elevate the same to the Supreme Court. 15 His motion was
granted by the Court of Appeals in a Resolution dated July 7, 1989, 16 reading
as follows:
The decision of June 9, 1989 having become final and executory, as
prayed for, let the writ of execution issue forthwith.
The corresponding writ of execution issued on July 13, 1989, 17 on the invoked
authority of Section 9, Rule 39. 18 The writ quoted the dispositive portion of the
judgment of June 9, 1989, including, as the Solicitor General's Office points out,
the second paragraph to the effect that the petitions "are not the vehicle nor is
the Court the forum for the claim of damages; (hence,) the prayer therefor is
denied."
The writ of execution notwithstanding, compliance with the June 9, 1989
judgment was not effected. Consequently, de la Fuente filed, on July 20, 1989,
an "Urgent Ex Parte Manifestation with Prayer to Cite Respondents for
Contempt," complaining that although Gozon and her co-parties had been
served with the writ of execution on July 14, they had not complied therewith.
By Resolution dated July 26, 1989, the Court required Gozon and Merencilla to
appear before it on August 3, 1989 to answer the charge and show cause "why
they should not be adjudged in contempt for disobeying and/or resisting the
judgment." 19
At the hearing Gozon and Merencilla duly presented themselves, accompanied
by their individual private lawyers one for Gozon (Felipe Hidalgo, Jr.), two for
Merencilla (Bernardo S. Nera and Moises S. Rimando). One other lawyer
appeared in their behalf, from the Health Department, Artemio Manalo, who
stated that he was there "in behalf of Jose A. Fabia." 20 They explained that they
had no intention to defy the Court, they had simply referred the matter to their
superiors in good faith; and they were perfectly willing to comply with the
CIVIL PROCEDURE CASES SESSION 2
judgment, undertaking to do so "even in the afternoon" of that same day. The
Court consequently ordered them "to comply with their undertaking . . . without
any further delay," and report the action taken towards this end, within five (5)
days.
On August 9, 1989, Gozon as "Medical Center Chief," sent a letter to Associate
Justice Pedro A. Ramirez, advising that under Hospital Special Order No. 31
dated August 3, 1989, de la Fuente had been directed to assume the position
of Chief of the Medical Professional Staff, and that a voucher for the payment of
his allowances had been prepared and was being processed. 21
More than a month later, or more precisely on September 27, 1989, the Court
of Appeals promulgated another Resolution, this time resolving de la Fuente's
motion for reconsideration of June 29, 1989. 22 It modified the Decision of June
9, 1989 by (a) deleting its last paragraph (disallowing the claim of
damages, supra), (b) consequently describing and treating it as a "PARTIAL
DECISION," and (c) scheduling "further proceedings for the purpose of receiving
evidence (of damages)," since said question "cannot be resolved by mere
reference to the pleadings." 23 This was done in reliance on Section 3, Rule 65
of the Rules of Court, invoked by de la Fuente, which reads as follows: 24
Sec. 3. Mandamus. When any tribunal, corporation, board, or person
unlawfully neglects the performance of an act which the law specifically
enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or office to
which such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper court alleging the facts
with certainty and praying that judgment be rendered commanding the
defendant, immediately or at some other specified time, to do the act
required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of
the defendant.
At about this time, yet another lawyer, Atty. Pedro F. Martinez entered his
appearance for Isabelita Gozon. 25 At his instance, the Court gave him an
"opportunity to . . . file a motion for reconsideration" of the Resolution of
September 27, 1989. 26 That motion he filed by registered mail on November
10, 1989. 27 His basic contentions were (a) that the decision of June 9, 1989
could no longer be altered, having become final and executory and having in
fact been executed, and (b) that under BP 129, the Appellate Court had no
jurisdiction over the question of damages in a mandamus action.
26

The Office of the Solicitor General also put in an appearance in Gozon's behalf
at this juncture, saying that the case had been referred to it only on November
14, 1989. It, too, sought reconsideration of the Resolution of September 27,
1989. It filed on November 16, 1989 an "Omnibus Motion; I. For Reconsideration
of Resolution dated September 27, 1989; and II. To defer hearing on petitioner's
claims for damages." 28
Both motions were denied by the Court of Appeals in a Resolution dated
January 11, 1991. In that Resolution, the Court
1) declared that the amended decision had already become final and
could no longer be re-opened because, although "a copy of the
amendatory resolution was received by counsel who was representing
Gozon on October 3, 1989," the first motion for reconsideration was not
mailed until November 10, 1989 and the Solicitor General's "Omnibus
Motion" was not filed until November 16, 1989; and
2) prohibited the Solicitor General from representing Gozon "in
connection with . . . (de la Fuente's) claim for damages," on the authority
of this Court's ruling promulgated on March 19, 1990 in G.R. No. 87977
(Urbano, et al. v. Chavez, et al.) and G.R. No. 88578 (Co v. Regional
Trial Court of Pasig). 29
Notice of this Resolution of January 11, 1991 was served on the Solicitor
General's Office on January 18, 1991. 30Again the Solicitor General sought
reconsideration, by motion dated January 25, 1991 and filed on January 30,
1991. 31Again it was rebuffed. In a Resolution rendered on August 7,
1991, 32 served on the Solicitor General's Office on August 20, 1991, 33 the
Court of Appeals denied the motion. It ruled that the "question of the authority
of the Solicitor General to appear as counsel for respondent Gozon . . . (had
already) been extensively discussed," and that its "jurisdiction . . . to hear and
determine issues on damages proceeds from Sec. 9, Batas Pambansa 129 as
amended."
In an attempt to nullify the adverse dispositions of the Court of
Appeals and obtain "the ultimate and corollary relief of dismissing respondent
de la Fuente's claim for damages" the Solicitor General's Office had instituted
the special civil action of certiorari at bar. It contends that the Court of Appeals
is not legally competent to take cognizance of and decide the question of
damages in a mandamus suit. It argues that
1) B.P. Blg. 129 does not confer jurisdiction upon the Court of Appeals to hear,
as a trial court, claims for moral and exemplary damages;
CIVIL PROCEDURE CASES SESSION 2
2) assuming that the Court of Appeals does have jurisdiction over the claims for
damages, it lost the power to take cognizance thereof after the Decision of June
9, 1989 had, by its own pronouncement, become final and executory; and
3) the Urbano and Co doctrines cited by the Appellate Tribunal do not disqualify
the Solicitor General's Office from representing government officials sued in
their official capacities and in damage claims not arising from a felony.
It is in light of these facts, just narrated, that this Court will now proceed to deal
with the legal issues raised in this action. But first, a few brief observations
respecting the proceedings in the Civil Service Commission.
I
The record demonstrates that Vital-Gozon was fully aware of the following acts
and events: 34
1) the proceedings commenced by de la Fuente in the Civil Service Commission
in protest against his demotion;
2) the Commission's Resolution of August 9, 1988 as well, particularly, as the
direction therein that de la Fuente be reinstated and paid all his back salaries
and other monetary benefits otherwise due him, this being couched in fairly
simple language obviously understandable to persons of ordinary or normal
intelligence;
3) no less than two (2) written demands of de la Fuente for implementation of
the CSC's aforesaid Resolution of August 9, 1988;
4) the petition filed by de la Fuente in the Court of Appeals for enforcement of
the CSC Resolution of August 9, 1988;
5) the extension granted by said Court of Appeals within which to file answer,
notice thereof having been sent directly to her and her co-respondents since the
attorney who sought the extension in their behalf (Atty. Fabia) did not set out his
address in his motion for extension;
6) the "supplemental/amended petition" subsequently presented by de la
Fuente, copy of which was sent to Atty. Fabia, c/o Dr. Vital-Gozon; and
7) the Decision and Amendatory Decision sent to her counsel on October 3,
1989.
27

To all these, her reaction, and that of the officials of the Department of Health
concerned, was a regrettably cavalier one, to say the least. Neither she nor the
Health officials concerned accorded said acts and events any importance. She
never bothered to find out what was being done to contest or negate de la
Fuente's petitions and actions, notwithstanding that as time went by, de la
Fuente's efforts were being met with success.
Nothing in the record even remotely suggests that Vital-Gozon merits relief from
the final and executory Resolution of the Civil Service Commission. This Court
will not disturb that Resolution. It is satisfied that no procedural or substantive
errors taint that Resolution, or its becoming final and executory.
II
Now, final and executory judgments are enforced by writ of execution and not
by another, separate action, whether of mandamus or otherwise. Hence,
execution of the Civil Service Commission's decision of August 9, 1988 should
have been ordered and effected by the Commission itself, when de la Fuente
filed a motion therefor. It declined to do so, however, on the alleged ground, as
de la Fuente claims he was told, that it "had no coercive powers unlike a court
to enforce its final decisions/resolutions." 35 That proposition, communicated
to de la Fuente, of the Commission's supposed lack of coercive power to enforce
its final judgments, is incorrect. It is inconsistent with previous acts of the
Commission of actually directing execution of its decisions and resolutions,
which this Court has sanctioned in several cases; 36 and it is not in truth a correct
assessment of its powers under the Constitution and the relevant laws.
In an En Banc Decision promulgated on October 15, 1991 in G.R. No. 96938
entitled "Government Service Insurance System (GSIS) versus Civil Service
Commission, et al.," 37 this Court declared that in light of the pertinent provisions
of the Constitution and relevant statutes
. . . it would appear absurd to deny to the Civil Service Commission the
power or authority to enforce or order execution of its decisions,
resolutions or orders which, it should be stressed, it has been exercising
through the years. It would seem quite obvious that the authority to
decide cases in inutile unless accompanied by the authority to see that
what has been decided is carried out. Hence, the grant to a tribunal or
agency of adjudicatory power, or the authority to hear and adjudge
cases, should normally and logically be deemed to include the grant of
authority to enforce or execute the judgments it thus renders, unless the
law otherwise provides.
CIVIL PROCEDURE CASES SESSION 2
In any event, the Commission's exercise of that power of execution has
been sanctioned by this Court in several cases.
Be this as it may, the fact is that by reason of the Commission's mistaken refusal
to execute its final and executory Resolution of August 9, 1988, extended
proceedings have taken place in the Court of Appeals and certain issues have
been expressly raised in relation thereto, supra. Those issues appear to the
Court to be important enough to deserve serious treatment and resolution,
instead of simply being given short shrift by a terse ruling that the proceedings
in the Court Service Commission actually had the power to execute its final and
executory Resolution.
III
The first such issue is whether or not the Court of Appeals has jurisdiction to
take cognizance of the matter of damages in a special civil action of mandamus.
The Solicitor General's Office argues that since jurisdiction is conferred only by
law, not by agreement of the parties, or acquiescence of the court, and since
the law conferring jurisdiction on the Court of Appeals, Section 9 of B.P. Blg.
129, makes no reference to "actions for moral and exemplary damages, as
those claimed by . . . (de la Fuente)," it follows that the Court of Appeals has no
competence to act on said claim of damages. And Section 3 of Rule 65, which
authorizes the petitioner in a mandamus suit to pray for judgment commanding
the defendant inter alia "to pay the damages sustained by the petitioner by
reason of the wrongful acts of the defendant," is "nothing more than a procedural
rule allowing joinder of causes of action, i.e., mandamus and damages," and
such an award of damages is allowable only in actions commenced in Regional
Trial Courts but not in the Court of Appeals or this Court.
The argument is specious. It cannot be sustained.
The Solicitor General's Office correctly identifies Section 9, B.P. 129 as the legal
provision specifying the original and appellate jurisdiction of the Court of
Appeals. The section pertinently declares that the "Intermediate Appellate Court
(now the Court of Appeals) shall exercise . .," among others:
. . . Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction . .
. 38
The Solicitor General's Office evidently searched said Section 9 for an explicit
and specific statement regarding "actions for moral and exemplary damages,"
and finding none, concluded that the Court of Appeals had not been granted
28

competence to assume cognizance of claims for such damages. The conclusion
is incorrect. Section 19, governing the exclusive original jurisdiction of Regional
Trial Courts in civil cases, contains no reference whatever to claims "for moral
and exemplary damages," and indeed does not use the word "damages" at all;
yet it is indisputable that said courts have power to try and decide claims for
moral, exemplary and other classes of damages accompanying any of the types
or kinds of cases falling within their specified jurisdiction. The Solicitor General's
theory that the rule in question is a mere procedural one allowing joinder of an
action of mandamus and another for damages, is untenable, for it implies that a
claim for damages arising from the omission or failure to do an act subject of
a mandamus suit may be litigated separately from the latter, the matter of
damages not being inextricably linked to the cause of action for mandamus,
which is certainly not the case.
Now, at the time of the enactment of B.P. 129, the issuance of the extraordinary
writs above mentioned was controlled by the Rules of Court of 1964, as they
continue to date to be so controlled. More particularly, the principal writs
of mandamus, prohibition and certiorari were (and continue to be) governed by
Rule 65; the writ of habeas corpus, by Rule 102; and the writ of quo warranto,
by Rule 66. The so-called auxiliary writs were (and continue to be) also
governed by the same code e.g., preliminary attachment, by Rule 57;
preliminary injunction, by Rule 58, receivership, by Rule 59; writ of seizure or
delivery in a replevin suit, by Rule 60.
At that time, Section 3 of Rule 65 authorized (as it continues to authorize to date)
rendition of judgment in a mandamus action "commanding the defendant,
immediately or at some other specified time, to do the act required to be done
to protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant." 39 The provision
makes plain that the damages are an incident, or the result of, the defendant's
wrongful act in failing and refusing to do the act required to be done. It is
noteworthy that the Rules of 1940 had an identical counterpart provision. 40
Moreover, Section 4 of the same Rule 65 authorized, as it continues to authorize
to date, the filing of the petition "in the Supreme Court, or, if it relates to the acts
or omissions of an inferior court, or of a corporation, board, officer or person, in
a Court of First Instance (now Regional Trial Court) having jurisdiction thereof,"
as well as "in the Court of Appeals (whether or not) 41 in aid of its appellate
jurisdiction."
Worthy of note, too, is that Rule 66 of the Rules of Court similarly authorizes the
recovery of damages in a quo warranto action against a corporate officer an
action within the concurrent jurisdiction of the Court of Appeals as follows: 42
CIVIL PROCEDURE CASES SESSION 2
Sec. 14. Liability of officer neglecting to deliver property of corporation
to receiver. An officer of such corporation who refuses or neglects,
upon demand, to deliver over to the receiver all money, property, books,
deeds, notes, bills, obligations, and papers of every description within
his power or control, belonging to the corporation, or in any wise
necessary for the settlement of its affairs, or the discharge of its debts
and liabilities, may be punished for contempt as having disobeyed a
lawful order of the court, and shall be liable to the receiver for the value
of all money or other things so refused or neglected to be surrendered,
together with all damages that may have been sustained by the
stockholders and creditors of the corporation, or any of them, in
consequence of such neglect or refusal.
An award of damages was and is also allowed in connection with the auxiliary
writ of preliminary attachment, preliminary injunction or receivership which the
Court of Appeals has the power to issue in common with the Supreme Court
and the Regional Trial Courts, 43 payable by the sureties of the bond given in
support of the writ, upon seasonable application and summary hearing. 44
Since it cannot but be assumed that in formulating, and incorporating in BP 129,
the provision governing the jurisdiction of the Intermediate Appellate Court, now
Court of Appeals, the Batasang Pambansa was fully cognizant of the relevant
provisions of the Rules of Court just cited, as well as the rule against multiplicity
of actions, it follows that in conferring on the Court of Appeals original jurisdiction
over the special civil action of mandamus, among others, as well as over the
issuance of auxiliary writs or processes, the Batasang Pambansa clearly
intended that said Court should exercise all the powers then possessed by it
under the Rules of Court in relation to said action of mandamus and auxiliary
writs, including the adjudication of damages to the petitioner in the action in
appropriate cases.
IV
The next issue is whether or not the Solicitor General may properly represent a
public official like Dr. Vital-Gozon, who is sued for damages for allegedly
refusing to comply with a lawful and executory judgment of competent authority.
The doctrine laid down in the Urbano and Co cases already adverted to, 45 is
quite clear:
. . . (T)he Office of the Solicitor General is not authorized to represent a
public official at any stage of a criminal case. . . .
This observation should apply as well to a public official who is haled to
court on a civil suit for damages arising from a felony allegedly
29

committed by him (Article 100, Revised Penal Code). Any pecuniary
liability he may be held to account for on the occasion of such civil suit
is for his own account. The State is not liable for the same. A fortiori, the
Office of the Solicitor General likewise has no authority to represent him
in such a civil suit for damages.
It being quite evident that Dr. Vital-Gozon is not here charged with a crime, or
civilly prosecuted for damages arising from a crime, there is no legal obstacle to
her being represented by the Office of the Solicitor General.
V as concerned his reinstatement to the position from which he had been illegally
The last issue is whether or not the decision of the Court of Appeals of June 9,
1989 could still be modified after it was pronounced final and executory and was
in fact executed with respect to de la Fuente's reinstatement to his position and
the payment of the salaries and allowances due him.
There would seem to be no question about the timeliness of de la Fuente's
motion for reconsideration of the June 9, 1989 decision. As already narrated,
notice of said decision was served on him on the 15th of June, and his motion
for reconsideration was presented on June 29, 1989, or fourteen (14) days after
receiving a copy of the judgment, i.e., within the fifteen-day period prescribed
by Section 1, Rule 37 of the Rules of Court for filing a motion for new trial
reconsideration.
This being so, it would certainly have been entirely within the authority of the
Court of Appeals, under normal circumstances, to rule on that motion for
reconsideration and, in its discretion, act favorably on it, as it did through its
Resolution of September 27, 1991 by amending the decision of June 9, 1989,
declaring it a partial judgment, and setting a date for reception of evidence on
the la Fuente's claim for damages.
It would also appear that the motions for reconsideration of said Resolution of
September 27, 1991 separately submitted in Gozon's behalf, by her own private
attorney and by the Solicitor General's Office, were filed way out of time. As also
already pointed out, notice of that Resolution of September 27, 1991 was served
on Gozon's counsel on October 3, 1989 and on Gozon herself on October 4,
1989; but the motion for reconsideration of Atty. Martinez (Gozon's private
lawyer) was not filed until November 10, 1989, thirty-eight (38) days afterwards,
and that of the Solicitor General, until November 16, 1989, or forty-four (44) days
later. What is worse is that, its motion for reconsideration of November 16, 1989
having been denied by a Resolution dated January 11, 1991, notice of which it
received on January 18, 1991, the Solicitor General's Office filed still another
motion for reconsideration on January 30, 1991, ostensibly directed against that
CIVIL PROCEDURE CASES SESSION 2
Resolution of January 11, 1991 but actually seeking the setting aside of the
Resolution of September 17, 1989. In effect it filed a second motion for
reconsideration which, of course, is prohibited by law. 46
However, disposition of the question simply and solely on the foregoing
premises is precluded by the fact that prior to the promulgation by the Appellate
Court of its Resolution of September 27, 1989. granting de la Fuente's motion
for reconsideration of June 29, 1989 de la Fuente had asked for and been
granted by the Court of Appeals, authority to execute the decision of June 9,
1989 and had in fact succeeded in bringing about satisfaction thereof, in so far
ousted and the payment to him his salaries and allowances.
It has therefore become essential to determine the effect of the execution of said
decision of June 9, 1989 at de la Fuente's instance, on the power of the Court
of Appeals to modify that judgment as earlier prayed for by de la Fuente in such
a way as to concede the latter's capacity to claim damages in
his mandamus action, and consequently authorize him to present evidence on
the matter.
The general rule is that when a judgment has been satisfied, it passes beyond
review, satisfaction being the last act and end of the proceedings, and payment
of satisfaction of the obligation thereby established produces permanent and
irrevocable discharge; 47 hence, a judgment debtor who acquiesces in and
voluntarily complies with the judgment, is estopped from taking an appeal
therefrom. 48
On the other hand the question of whether or not a judgment creditor is estopped
from appealing or seeking modification of a judgment which has been executed
at his instance, is one dependent upon the nature of the judgment as being
indivisible or not. This is the doctrine laid down by this Court in a case decided
as early as 1925, Verches v. Rios. 49 In that case this Court held that although
"there are cases holding the contrary view," where the judgment is indivisible,
"the weight of authority is to the effect that an acceptance of full satisfaction of
the judgment annihilates the right to further prosecute the appeal; . . . that a
party who has recovered judgment on a claim which cannot be split up and
made the basis of several causes of action, and afterwards coerced full
satisfaction by writ of execution or authority of the court, cannot maintain an
appeal from the judgment against the objections of the judgment debtor;" and
that even partial execution by compulsory legal process at the instance of a
party in whose favor a judgment appealed from was rendered, places said party
in estoppel to ask that the judgment be amended, either "by appeal or answer
to his adversary's appeal, or otherwise." 50
30

A converso, where the judgment is divisible, estoppel should not operate
against the judgment creditor who causes implementation of a part of the
decision by writ of execution. This is the clear import of Verches and the
precedents therein invoked. It is an aspect of the principle above mentioned that
is fully consistent not only with the dissenting opinion that "(a)cceptance
of payment of . . . only the uncontroverted part of the claim . . . should not
preclude the plaintiff from prosecuting his appeal, to determine whether he
should not have been allowed more," 51 but also with logic and common sense.
In this case, the amended judgment of the Court of Appeals is clearly divisible,
satisfaction of which may be "split up." One part has reference to the
enforcement of the final and executory judgment of the Civil Service
Commission, that de la Fuente should be reinstated to the position of Chief of
Clinics (now Chief of Medical Professional Staff) without loss of seniority rights
and that he be paid his back salaries and all monetary benefits due him from
the date of his illegal demotion. This part is no longer issuable, and has not in
truth been controverted by Gozon herself. The other part has reference to the
damages which de la Fuente contends he suffered as a result of the unjustified
refusal of Gozon and her co-parties to comply with the final and executory
judgment of the Civil Service Commission, and which the Appellate Tribunal has
allowed him to prove. Obviously, the second part cannot possibly affect the first.
Whether de la Fuente succeeds or fails in his bid to recover damages against
Gozon, et al. because of their refusal to obey the judgment of the Civil Service
Commission, is a contingency that cannot affect the unalterable enforceability
of that judgment. Similarly, the enforcement of the Commission's judgment
(already accomplished by writ of execution of the Court of Appeals issued at de
la Fuente's instance) cannot influence in any manner the question whether or
not there was culpable refusal on the part of Gozon, et al. to comply with said
judgment when first required so to do, and whether de la Fuente did in fact suffer
compensable injury thereby.
CIVIL PROCEDURE CASES SESSION 2
finality of the Civil Service Commission's judgment were being ventilated and
resolved these issues being, to repeat, whether or not the refusal by Gozon,
et al. obey said judgment of the Commission could be justified, and whether or
not, by reason of that refusal to obey, de la Fuente did in fact suffer compensable
injury.
It was therefore correct for the Court of Appeals, albeit by implication, to treat its
judgment as divisible, or capable of being enforced by parts, and to consider de
la Fuente as not having been placed in estoppel to pursue his claim for damages
by seeking and obtaining authority for a partial execution of the judgment. De la
Fuente not being in estoppel, it follows that his motion for reconsideration, timely
filed, was not deemed abandoned or waived by the partial execution of the
judgment, and jurisdiction of the Court of Appeals to amend the judgment was
retained and not lost. It follows, too, that since no motion for reconsideration was
filed against, or appeal attempted to be taken from, the Resolution of the Court
of Appeals amending its original judgment, within the time prescribed therefor
by law, said amendatory resolution has long since become final and immutable,
particularly in so far as it holds itself competent to take cognizance of the matter
of damages and authorizes the reception of evidence on de la Fuente's claim
therefor.
WHEREFORE, the petition is DENIED, and the challenged Resolutions of
September 27, 1989, January 11, 1991 and August 7, 1991 are AFFIRMED,
without pronouncement as to costs. SO ORDERED.

It bears stressing that the juridical situation in which de la Fuente finds himself
is not of his making. It is a consequence of circumstances not attributable to any
fault on his part, i.e., the unwarranted refusal or neglect of his superiors to obey
the executory judgment of the Civil Service Commission; the erroneous refusal
of the Commission to execute its own decision which made necessary, in de la
Fuente's view, the filing of a mandamusaction in the Court of Appeals; the initial
refusal of the latter Court to acknowledge his right to damages in connection
with the mandamus suit; and ultimately, the change of view by the Court of
Appeals, on de la Fuente's motion, as regards its competence to take
cognizance of the matter of damages in relation to the mandamus proceeding.

Under these circumstances, there was no reason whatsoever to defer

concession to de la Fuente of the relief of reinstatement to which he
was indisputably already entitled in the meantime that issues arising after
31

G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME vs. NLRC and BIENVENIDO ARICAYOS
The present petition for certiorari stemmed from a complaint for illegal dismissal
filed by herein private respondent before the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando,
Pampanga. Private respondent alleges that he started working as Operations
Manager of petitioner St. Martin Funeral Home on February 6, 1995. However,
there was no contract of employment executed between him and petitioner nor
was his name included in the semi-monthly payroll. On January 22, 1996, he
was dismissed from his employment for allegedly misappropriating P38,000.00
which was intended for payment by petitioner of its value added tax (VAT) to the
Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that private respondent was not its employee
but only the uncle of Amelita Malabed, the owner of petitioner St. Martin's
Funeral Home. Sometime in 1995, private respondent, who was formerly
working as an overseas contract worker, asked for financial assistance from the
mother of Amelita. Since then, as an indication of gratitude, private respondent
voluntarily helped the mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took
over the management of the business. She then discovered that there were
arrears in the payment of taxes and other government fees, although the records
purported to show that the same were already paid. Amelita then made some
changes in the business operation and private respondent and his wife were no
longer allowed to participate in the management thereof. As a consequence, the
latter filed a complaint charging that petitioner had illegally terminated his
employment. 2
Based on the position papers of the parties, the labor arbiter rendered a decision
in favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no
jurisdiction over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a "volunteer" and not as an
employee of St. Martin Funeral Home from February 6, 1995 to January 23,
1996, or a period of about one year; and (3) in ruling that there was no employer-
employee relationship between him and petitioner. 4
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
CIVIL PROCEDURE CASES SESSION 2
5
proceedings. Petitioner then filed a motion for reconsideration which was
denied by the NLRC in its resolution dated August 18, 1997 for lack of
merit, 6 hence the present petition alleging that the NLRC committed grave
abuse of discretion. 7
Before proceeding further into the merits of the case at bar, the Court feels that
it is now exigent and opportune to reexamine the functional validity and systemic
practicability of the mode of judicial review it has long adopted and still follows
with respect to decisions of the NLRC. The increasing number of labor disputes
that find their way to this Court and the legislative changes introduced over the
years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code
of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary
Reorganization Act of 1980) now stridently call for and warrant a reassessment
of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in
the Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions
were expressly declared to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the
same to take effect six months after its promulgation. 8 Created and regulated
therein is the present NLRC which was attached to the Department of Labor and
Employment for program and policy coordination only. 9 Initially, Article 302
(now, Article 223) thereof also granted an aggrieved party the remedy of appeal
from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391
subsequently amended said provision and abolished such appeals. No
appellate review has since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for
appeals from the decision of the NLRC. 10 The present Section 223, as last
amended by Section 12 of R.A. No. 6715, instead merely provides that the
Commission shall decide all cases within twenty days from receipt of the answer
of the appellee, and that such decision shall be final and executory after ten
calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has
no jurisdiction to review the decisions of the NLRC, and formerly of the Secretary
of Labor, since there is no legal provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on questions of law and jurisdiction
even though no right of review is given by statute; that the purpose of judicial
review is to keep the administrative agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that part of the checks and balances
32

which restricts the separation of powers and forestalls arbitrary and unjust
adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this
Court, the remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent remedy, 12 and
then seasonably avail of the special civil action of certiorari under Rule 65, 13 for
which said Rule has now fixed the reglementary period of sixty days from notice
of the decision. Curiously, although the 10-day period for finality of the decision
of the NLRC may already have lapsed as contemplated in Section 223 of the
Labor Code, it has been held that this Court may still take cognizance of the
petition for certiorari on jurisdictional and due process considerations if filed
within the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
Sec. 9. Jurisdiction. The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of
judgments of Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards, or commissions, except
those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts
necessary to resolve factual issues raised in cases falling within its
original and appellate jurisdiction, including the power to grant and
conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders
issued under the Labor Code of the Philippines and by the Central
Board of Assessment Appeals. 15
CIVIL PROCEDURE CASES SESSION 2
Subsequently, and as it presently reads, this provision was amended by R.A.
No. 7902 effective March 18, 1995, to wit:
Sec. 9. Jurisdiction. The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary
writs or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of
judgments of Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the
Securities and Exchange Commission, the Social Security Commission,
the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to
resolve factual issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant and conduct new
trials or further proceedings. Trials or hearings in the Court of Appeals
must be continuous and must be completed within, three (3) months,
unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower
appellate court, 16 the following amendments of the original provisions of
Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and
replaced by a new paragraph granting the Court of Appeals limited powers to
conduct trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein
now provides "except those falling within the appellate jurisdiction of the
33

Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis
supplied).
3. Contrarily, however, specifically added to and included among the quasi-
judicial agencies over which the Court of Appeals shall have exclusive appellate
jurisdiction are the Securities and Exchange Commission, the Social Security
Commission, the Employees Compensation Commission and the Civil Service
Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose
and terminology. As earlier explained, our mode of judicial review over decisions
of the NLRC has for some time now been understood to be by a petition
for certiorari under Rule 65 of the Rules of Court. This is, of course, a special
original action limited to the resolution of jurisdictional issues, that is, lack or
excess of jurisdiction and, in almost all cases that have been brought to us,
grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now
grants exclusive appellate jurisdiction to the Court of Appeals over all final
adjudications of the Regional Trial Courts and the quasi-judicial agencies
generally or specifically referred to therein except, among others, "those falling
within the appellate jurisdiction of the Supreme Court in accordance with . . . the
Labor Code of the Philippines under Presidential Decree No. 442, as amended,
. . . ." This would necessarily contradict what has been ruled and said all along
that appeal does not lie from decisions of the NLRC. 17 Yet, under such
excepting clause literally construed, the appeal from the NLRC cannot be
brought to the Court of Appeals, but to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that the
Court of Appeals has no appellate jurisdiction over decisions falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution,
the provisions of B.P. No. 129, and those specified cases in Section 17 of the
Judiciary Act of 1948. These cases can, of course, be properly excluded from
the exclusive appellate jurisdiction of the Court of Appeals. However, because
of the aforementioned amendment by transposition, also supposedly excluded
are cases falling within the appellate jurisdiction of the Supreme Court in
accordance with the Labor Code. This is illogical and impracticable, and
Congress could not have intended that procedural gaffe, since there are no
cases in the Labor Code the decisions, resolutions, orders or awards wherein
are within the appellate jurisdiction of the Supreme Court or of any other court
for that matter.
CIVIL PROCEDURE CASES SESSION 2
A review of the legislative records on the antecedents of R.A. No. 7902
persuades us that there may have been an oversight in the course of the
deliberations on the said Act or an imprecision in the terminology used therein.
In fine, Congress did intend to provide for judicial review of the adjudications of
the NLRC in labor cases by the Supreme Court, but there was an inaccuracy in
the term used for the intended mode of review. This conclusion which we have
reluctantly but prudently arrived at has been drawn from the considerations
extant in the records of Congress, more particularly on Senate Bill No. 1495 and
the Reference Committee Report on S. No. 1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his
sponsorship speech 19 from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg.
129, reorganized the Court of Appeals and at the same time expanded
its jurisdiction and powers. Among others, its appellate jurisdiction was
expanded to cover not only final judgment of Regional Trial Courts, but
also all final judgment(s), decisions, resolutions, orders or awards of
quasi-judicial agencies, instrumentalities, boards and commissions,
except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the provisions of BP Blg. 129
and of subparagraph 1 of the third paragraph and subparagraph 4 of
Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the
Supreme Court by the transfer of some of its burden of review of factual
issues to the Court of Appeals. However, whatever benefits that can be
derived from the expansion of the appellate jurisdiction of the Court of
Appeals was cut short by the last paragraph of Section 9 of Batas
Pambansa Blg. 129 which excludes from its coverage the "decisions
and interlocutory orders issued under the Labor Code of the Philippines
and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme
Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate
the exceptions enumerated in Section 9 and, additionally, extends the
coverage of appellate review of the Court of Appeals in the decision(s)
of the Securities and Exchange Commission, the Social Security
Commission, and the Employees Compensation Commission to reduce
the number of cases elevated to the Supreme Court. (Emphases and
corrections ours)
Senate Bill No. 1495 authored by our distinguished Colleague from
Laguna provides the ideal situation of drastically reducing the workload
34

of the Supreme Court without depriving the litigants of the privilege of
review by an appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice
Teehankee in 1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the
Supreme Court of the burden of reviewing these cases which
present no important issues involved beyond the particular fact
and the parties involved, so that the Supreme Court may wholly
devote its time to cases of public interest in the discharge of its
mandated task as the guardian of the Constitution and the
guarantor of the people's basic rights and additional task
expressly vested on it now "to determine whether or not there
has been a grave abuse of discretion amounting to lack of
jurisdiction on the part of any branch or instrumentality of the
Government.
We used to have 500,000 cases pending all over the land, Mr.
President. It has been cut down to 300,000 cases some five years ago.
I understand we are now back to 400,000 cases. Unless we distribute
the work of the appellate courts, we shall continue to mount and add to
the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons
we have submitted, the Committee on Justice and Human Rights
requests the support and collegial approval of our Chamber.
Surprisingly, however, in a subsequent session, the following Committee
Amendment was introduced by the said sponsor and the following proceedings
transpired: 20
Senator Roco. On page 2, line 5, after the line "Supreme Court in
accordance with the Constitution," add the phrase "THE LABOR CODE
OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it
becomes clear, Mr. President, that issues arising from the Labor Code
will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be
deleted. This was also discussed with our Colleagues in the House of
CIVIL PROCEDURE CASES SESSION 2
Representatives and as we understand it, as approved in the House,
this was also deleted, Mr. President.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. There are no further Committee amendments, Mr.
President.
Senator Romulo. Mr. President, I move that we close the period of
Committee amendments.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved. (Emphasis supplied).
xxx xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495
was passed on second reading and being a certified bill, its unanimous approval
on third reading followed. 21 The Conference Committee Report on Senate Bill
No. 1495 and House Bill No. 10452, having theretofore been approved by the
House of Representatives, the same was likewise approved by the Senate on
February 20, 1995, 22 inclusive of the dubious formulation on appeals to the
Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from
the NLRC to the Supreme Court were eliminated, the legislative intendment was
that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of the word "appeal" in relation
thereto and in the instances we have noted could have been a lapsus
plumae because appeals by certiorari and the original action for certiorari are
both modes of judicial review addressed to the appellate courts. The important
distinction between them, however, and with which the Court is particularly
concerned here is that the special civil action of certiorari is within the concurrent
original jurisdiction of this Court and the Court of Appeals; 23 whereas to indulge
in the assumption that appeals by certiorari to the Supreme Court are allowed
would not subserve, but would subvert, the intention of Congress as expressed
in the sponsorship speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the
opinion that recourse from the NLRC to the Court of Appeals as an initial step
in the process of judicial review would be circuitous and would prolong the
proceedings. On the contrary, as he commendably and realistically emphasized,
that procedure would be advantageous to the aggrieved party on this reasoning:
35
 CIVIL PROCEDURE CASES SESSION 2
On the other hand, Mr. President, to allow these cases to be appealed the rules of procedure, or as better equipped to resolve the issues since
to the Court of Appeals would give litigants the advantage to have all this Court is not a trier of facts. We, therefore, reiterate the judicial policy
the evidence on record be reexamined and reweighed after which the that this Court will not entertain direct resort to it unless the redress
findings of facts and conclusions of said bodies are correspondingly desired cannot be obtained in the appropriate courts or where
affirmed, modified or reversed. exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of our primary jurisdiction.
Under such guarantee, the Supreme Court can then apply strictly the
axiom that factual findings of the Court of Appeals are final and may not WHEREFORE, under the foregoing premises, the instant petition for certiorari is
be reversed on appeal to the Supreme Court. A perusal of the records hereby REMANDED, and all pertinent records thereof ordered to be
will reveal appeals which are factual in nature and may, therefore, be FORWARDED, to the Court of Appeals for appropriate action and disposition
dismissed outright by minute resolutions. 24 consistent with the views and ruling herein set forth, without pronouncement as
to costs. SO ORDERED.
While we do not wish to intrude into the Congressional sphere on the matter of
the wisdom of a law, on this score we add the further observations that there is
a growing number of labor cases being elevated to this Court which, not being
a trier of fact, has at times been constrained to remand the case to the NLRC
for resolution of unclear or ambiguous factual findings; that the Court of Appeals
is procedurally equipped for that purpose, aside from the increased number of
its component divisions; and that there is undeniably an imperative need for
expeditious action on labor cases as a major aspect of constitutional protection
to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby
declared to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence forth be initially filed in the Court
of Appeals in strict observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al. 25 should be taken into account:

One final observation. We discern in the proceedings in this case a

propensity on the part of petitioner, and, for that matter, the same may
be said of a number of litigants who initiate recourses before us, to
disregard the hierarchy of courts in our judicial system by seeking relief
directly from this Court despite the fact that the same is available in the
lower courts in the exercise of their original or concurrent jurisdiction, or
is even mandated by law to be sought therein. This practice must be
stopped, not only because of the imposition upon the precious time of
this Court but also because of the inevitable and resultant delay,
intended or otherwise, in the adjudication of the case which often has
to be remanded or referred to the lower court as the proper forum under

36
 CIVIL PROCEDURE CASES SESSION 2

G.R. No. 186450 April 14, 2010

NATIONAL WATER RESOURCES BOARD (NWRB), Petitioner,

vs.
A. L. ANG NETWORK, INC., Respondent.

DECISION

CARPIO MORALES, J.:

In issue is whether Regional Trial Courts have jurisdiction over appeals from
decisions, resolutions or orders of the National Water Resources Board
(petitioner).

A.L. Ang Network (respondent) filed on January 23, 2003 an application for a
Certificate of Public Convenience (CPC) with petitioner to operate and maintain
a water service system in Alijis, Bacolod City.

Bacolod City Water District (BACIWA) opposed respondents application on the

ground that it is the only government agency authorized to operate a water
service system within the city.1

By Decision of August 20, 2003, petitioner granted respondents CPC

application. BACIWA moved to have the decision reconsidered, contending that
its right to due process was violated when it was not allowed to present evidence
in support of its opposition.2

Petitioner reconsidered its Decision and allowed BACIWA to present

evidence,3 drawing respondent to file a petition for certiorari with the Regional
Trial Court (RTC) of Bacolod City against petitioner and BACIWA. Petitioner
moved to dismiss the petition, arguing that the proper recourse of respondent
was to the Court of Appeals, citing Rule 43 of the Rules of Court.

The RTC, by Order of April 15, 2005, 4 dismissed respondents petition for lack
of jurisdiction, holding that it is the Court of Appeals which has "exclusive
appellate jurisdiction over all final judgments, decisions, resolutions, order[s] or
awards of . . . quasi-judicial agencies, instrumentalities, boards or commission[s]
. . . except those within the appellate jurisdiction of the Supreme Court . . . ."
Thus the RTC explained:

37

Art. 89 of P.D. 1067 having been long repealed by BP 129, as amended, which
has effectively and explicitly removed the Regional Trial Courts appellate
jurisdiction over the decisions, resolutions, order[s] or awards of quasi-judicial
agencies such as [petitioner] NWRB, and vested with the Court of Appeals, very
clearly now, this Court has no jurisdiction over this instant petition.
Its motion for reconsideration having been denied, respondent filed a petition for
certiorari at the Court of Appeals, which, by Decision of January 25,
2008,5 annulled and set aside the RTC April 15, 2005, holding that it is the RTC
which has jurisdiction over appeals from petitioners decisions. Thus the
appellate court discoursed.
In the analogous case of BF Northwest Homeowners Association, Inc. vs.
Intermediate Appellate Court[,] the Supreme Court . . . categorically pronounced
the RTCs jurisdiction over appeals from the decisions of the NWRB consistent
with Article 89 of P.D. No. 1067 and ratiocinated in this wise:
x x x x.
The logical conclusion, therefore, is that jurisdiction over actions for annulment
of NWRC decisions lies with the Regional Trial Courts, particularly, when we
take note of the fact that the appellate jurisdiction of the Regional Trial Court
over NWRC decisions covers such broad and all embracing grounds as grave
abuse of discretion, questions of law, and questions of fact and law (Art. 89,
P.D. No. 1067). This conclusion is also in keeping with the Judiciary
Reorganization Act of 1980, which vests Regional Trial Courts with original
jurisdiction to issue writs of certiorari, prohibition, mandamus, etc. (Sec. 21 [1],
B.P. Blg. 129) relating to acts or omissions of an inferior court (Sec. 4, Rule 65,
Rules of Court).
x x x x.
Similarly, in Tanjay Water District vs. Pedro Gabaton, the Supreme Court
conformably ruled, viz:
"Inasmuch as Civil Case No. 8144 involves the appropriation, utilization and
control of water, We hold that the jurisdiction to hear and decide the dispute in
the first instance, pertains to the Water Resources Council as provided in PD
No. 1067 which is the special law on the subject. The Court of First Instance
(now Regional Trial Court) has only appellate jurisdiction over the case."
Based on the foregoing jurisprudence, there is no doubt that [petitioner] NWRB
is mistaken in its assertion. As no repeal is expressly made, Article 89 of P.D.
No. 1067 is certainly meant to be an exception to the jurisdiction of the Court of
Appeals over appeals or petitions for certiorari of the decisions of quasi-judicial
CIVIL PROCEDURE CASES SESSION 2
bodies. This finds harmony with Paragraph 2, Section 4, Rule 65 of the Rules of
Court wherein it is stated that, "If it involves the acts of a quasi-judicial agency,
unless otherwise provided by law or these rules, the petition shall be filed in and
cognizable only by the Court of Appeals." Evidently, not all petitions for certiorari
under Rule 65 involving the decisions of quasi-judicial agencies must be filed
with the Court of Appeals. The rule admits of some exceptions as plainly
provided by the phrase "unless otherwise provided by law or these rules"
and Article 89 of P.D. No. 1067 is verily an example of these exceptions. (italics
and emphasis partly in the original; underscoring supplied)
Petitioners motion for reconsideration having been denied by the appellate
court by Resolution of February 9, 2009,6 petitioner filed the present petition for
review, contending that:
THE REGIONAL TRIAL COURT HAS NO CERTIORARI
JURISDICTION OVER THE [PETITIONER] SINCE SECTION
89, PD NO. 1067, REGARDING APPEALS, HAS BEEN
SUPERSEDED AND REPEALED BY [BATAS PAMBANSA
BILANG] 129 AND THE RULES OF COURT.
FURTHERMORE, PD 1067 ITSELF DOES NOT
CONTEMPLATE THAT THE REGIONAL TRIAL COURT
SHOULD HAVE CERTIORARI JURISDICTION OVER THE
[PETITIONER].7 (underscoring supplied)
Petitioner maintains that the RTC does not have jurisdiction over a petition for
certiorari and prohibition to annul or modify its acts or omissions as a quasi-
judicial agency. Citing Section 4 of Rule 65 of the Rules of Court, petitioner
contends that there is no law or rule which requires the filing of a petition for
certiorari over its acts or omissions in any other court or tribunal other than the
Court of Appeals.8
Petitioner goes on to fault the appellate court in holding that Batas Pambansa
Bilang 129 (BP 129) or the Judiciary Reorganization Act did not expressly repeal
Article 89 of Presidential Decree No. 1067 (PD 1067) otherwise known as the
Water Code of the Philippines.9
Respondent, on the other hand, maintains the correctness of the assailed
decision of the appellate court.
The petition is impressed with merit.
Section 9 (1) of BP 129 granted the Court of Appeals (then known as the
Intermediate Appellate Court) original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction.10
38

Since the appellate court has exclusive appellate jurisdiction over quasi-judicial
agencies under Rule 4311 of the Rules of Court, petitions for writs of certiorari,
prohibition or mandamus against the acts and omissions of quasi-judicial
agencies, like petitioner, should be filed with it. This is what Rule 65 of the Rules
imposes for procedural uniformity. The only exception to this instruction is when
the law or the Rules itself directs otherwise, as cited in Section 4, Rule 65.12 The
appellate courts construction that Article 89 of PD 1067, which reads:
ART. 89. The decisions of the [NWRB] on water rights controversies may be
appealed to the [RTC] of the province where the subject matter of the
controversy is situated within fifteen (15) days from the date the party appealing
receives a copy of the decision, on any of the following grounds: (1) grave abuse
of discretion; (2) question of law; and (3) questions of fact and law (emphasis
and underscoring supplied), is such an exception, is erroneous.
Article 89 of PD 1067 had long been rendered inoperative by the passage of BP
129. Aside from delineating the jurisdictions of the Court of Appeals and the
RTCs, Section 47 of BP 129 repealed or modified:
x x x. [t]he provisions of Republic Act No. 296, otherwise known as the Judiciary
Act of 1948, as amended, of Republic Act No. 5179, as amended, of the Rules
of Court, and of all other statutes, letters of instructions and general orders or
parts thereof, inconsistent with the provisions of this Act x x x. (emphasis and
underscoring supplied)
The general repealing clause under Section 47 "predicates the intended repeal
under the condition that a substantial conflict must be found in existing and prior
acts."13
In enacting BP 129, the Batasang Pambansa was presumed to have knowledge
of the provision of Article 89 of P.D. No. 1067 and to have intended to change
it.14 The legislative intent to repeal Article 89 is clear and manifest given the
scope and purpose of BP 129, one of which is to provide a homogeneous
procedure for the review of adjudications of quasi-judicial entities to the Court of
Appeals.
More importantly, what Article 89 of PD 1067 conferred to the RTC was the
power of review on appeal the decisions of petitioner. It appears that the
appellate court gave significant consideration to the ground of "grave abuse of
discretion" to thus hold that the RTC has certiorari jurisdiction over petitioners
decisions. A reading of said Article 89 shows, however, that it only made "grave
abuse of discretion" as another ground to invoke in an ordinary appeal to the
RTC. Indeed, the provision was unique to the Water Code at the time of its
application in 1976.
CIVIL PROCEDURE CASES SESSION 2
The issuance of BP 129, specifically Section 9 (Jurisdiction of the Court of
Appeals, then known as Intermediate Appellate Court), and the subsequent
formulation of the Rules, clarified and delineated the appellate and certiorari
jurisdictions of the Court of Appeals over adjudications of quasi-judicial bodies.
Grave abuse of discretion may be invoked before the appellate court as a
ground for an error of jurisdiction.
It bears noting that, in the present case, respondent assailed petitioners order
via certiorari before the RTC, invoking grave abuse of discretion amounting to
lack or excess of jurisdiction as ground-basis thereof. In other words, it invoked
such ground not for an error of judgment.
While Section 9 (3) of BP 12915 and Section 1 of Rule 43 of the Rules of
Court16 does not list petitioner as "among" the quasi-judicial agencies whose
final judgments, orders, resolutions or awards are appealable to the appellate
court, it is non sequitur to hold that the Court of Appeals has no appellate
jurisdiction over petitioners judgments, orders, resolutions or awards. It is
settled that the list of quasi-judicial agencies specifically mentioned in Rule 43
is not meant to be exclusive.17 The employment of the word "among" clearly
instructs so.1avvphi1
BF Northwest Homeowners Association v. Intermediate Appellate Court, 18 a
1987 case cited by the appellate court to support its ruling that RTCs have
jurisdiction over judgments, orders, resolutions or awards of petitioner, is no
longer controlling in light of the definitive instruction of Rule 43 of the Revised
Rules of Court.
Tanjay Water District v. Gabaton19 is not in point either as the issue raised
therein was which between the RTC and the then National Water Resources
Council had jurisdiction over disputes in the appropriation, utilization and control
of water.
In fine, certiorari and appellate jurisdiction over adjudications of petitioner
properly belongs to the Court of Appeals.
WHEREFORE, the challenged Decision and Resolution of the Court of Appeals
are REVERSED and SET ASIDE. The April 15, 2005 Order of the Regional Trial
Court of Bacolod City dismissing petitioners petition for lack of jurisdiction is
UPHELD.
No costs.
SO ORDERED.
39

G.R. No. 155014 November 11, 2005
CRESCENT PETROLEUM LTD. vs. MV LOK MAHESHWARI THE
SHIPPING CORPORATION OF INDIA, and PORTSERV LIMITED and/or
TRANSMAR SHIPPING, INC.
This petition for review on certiorari under Rule 45 seeks the (a) reversal of the
November 28, 2001 Decision of the Court of Appeals in CA-G.R. No. CV-
54920,1 which dismissed for "want of jurisdiction" the instant case, and the
September 3, 2002 Resolution of the same appellate court, 2 which denied
petitioners motion for reconsideration, and (b) reinstatement of the July 25,
1996 Decision3 of the Regional Trial Court (RTC) in Civil Case No. CEB-18679,
which held that respondents were solidarily liable to pay petitioner the sum
prayed for in the complaint.
The facts are as follows: Respondent M/V "Lok Maheshwari" (Vessel) is an
oceangoing vessel of Indian registry that is owned by respondent Shipping
Corporation of India (SCI), a corporation organized and existing under the laws
of India and principally owned by the Government of India. It was time-chartered
by respondent SCI to Halla Merchant Marine Co. Ltd. (Halla), a South Korean
company. Halla, in turn, sub-chartered the Vessel through a time charter to
Transmar Shipping, Inc. (Transmar). Transmar further sub-chartered the Vessel
to Portserv Limited (Portserv). Both Transmar and Portserv are corporations
organized and existing under the laws of Canada.
On or about November 1, 1995, Portserv requested petitioner Crescent
Petroleum, Ltd. (Crescent), a corporation organized and existing under the laws
of Canada that is engaged in the business of selling petroleum and oil products
for the use and operation of oceangoing vessels, to deliver marine fuel oils
(bunker fuels) to the Vessel. Petitioner Crescent granted and confirmed the
request through an advice via facsimile dated November 2, 1995. As security
for the payment of the bunker fuels and related services, petitioner Crescent
received two (2) checks in the amounts of US$100,000.00 and US$200,000.00.
Thus, petitioner Crescent contracted with its supplier, Marine Petrobulk Limited
(Marine Petrobulk), another Canadian corporation, for the physical delivery of
the bunker fuels to the Vessel.
On or about November 4, 1995, Marine Petrobulk delivered the bunker fuels
amounting to US$103,544 inclusive of barging and demurrage charges to the
Vessel at the port of Pioneer Grain, Vancouver, Canada. The Chief Engineer
Officer of the Vessel duly acknowledged and received the delivery
receipt. Marine Petrobulk issued an invoice to petitioner Crescent for the
US$101,400.00 worth of the bunker fuels. Petitioner Crescent issued a check
for the same amount in favor of Marine Petrobulk, which check was duly
encashed.
CIVIL PROCEDURE CASES SESSION 2
Having paid Marine Petrobulk, petitioner Crescent issued a revised invoice
dated November 21, 1995 to "Portserv Limited, and/or the Master, and/or
Owners, and/or Operators, and/or Charterers of M/V Lok Maheshwari" in the
amount of US$103,544.00 with instruction to remit the amount on or before
December 1, 1995. The period lapsed and several demands were made but no
payment was received. Also, the checks issued to petitioner Crescent as
security for the payment of the bunker fuels were dishonored for insufficiency of
funds. As a consequence, petitioner Crescent incurred additional expenses of
US$8,572.61 for interest, tracking fees, and legal fees.
On May 2, 1996, while the Vessel was docked at the port of Cebu City, petitioner
Crescent instituted before the RTC of Cebu City an action "for a sum of money
with prayer for temporary restraining order and writ of preliminary attachment"
against respondents Vessel and SCI, Portserv and/or Transmar. The case was
raffled to Branch 10 and docketed as Civil Case No. CEB-18679.
On May 3, 1996, the trial court issued a writ of attachment against the Vessel
with bond at P2,710,000.00. Petitioner Crescent withdrew its prayer for a
temporary restraining order and posted the required bond.
On May 18, 1996, summonses were served to respondents Vessel and SCI,
and Portserv and/or Transmar through the Master of the Vessel. On May 28,
1996, respondents Vessel and SCI, through Pioneer Insurance and Surety
Corporation (Pioneer), filed an urgent ex-parte motion to approve Pioneers
letter of undertaking, to consider it as counter-bond and to discharge the
attachment. On May 29, 1996, the trial court granted the motion; thus, the letter
of undertaking was approved as counter-bond to discharge the attachment.
For failing to file their respective answers and upon motion of petitioner
Crescent, the trial court declared respondents Vessel and SCI, Portserv and/or
Transmar in default. Petitioner Crescent was allowed to present its evidence ex-
parte.
On July 25, 1996, the trial court rendered its decision in favor of petitioner
Crescent, thus:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
plaintiff [Crescent] and against the defendants [Vessel, SCI, Portserv and/or
Transmar].
Consequently, the latter are hereby ordered to pay plaintiff jointly and solidarily,
the following:
(a) the sum of US$103,544.00, representing the outstanding obligation;
40

(b) interest of US$10,978.50 as of July 3, 1996, plus additional interest at 18%
per annum for the period thereafter, until the principal account is fully paid;
(c) attorneys fees of P300,000.00; and
(d) P200,000.00 as litigation expenses.
SO ORDERED.
On August 19, 1996, respondents Vessel and SCI appealed to the Court of
Appeals. They attached copies of the charter parties between respondent SCI
and Halla, between Halla and Transmar, and between Transmar and Portserv.
They pointed out that Portserv was a time charterer and that there is a clause in
the time charters between respondent SCI and Halla, and between Halla and
Transmar, which states that "the Charterers shall provide and pay for all the fuel
except as otherwise agreed." They submitted a copy of Part II of the Bunker
Fuel Agreement between petitioner Crescent and Portserv containing a
stipulation that New York law governs the "construction, validity and
performance" of the contract. They likewise submitted certified copies of the
Commercial Instruments and Maritime Lien Act of the United States (U.S.),
some U.S. cases, and some Canadian cases to support their defense.
On November 28, 2001, the Court of Appeals issued its assailed Decision, which
reversed that of the trial court, viz:
WHEREFORE, premises considered, the Decision dated July 25, 1996, issued
by the Regional Trial Court of Cebu City, Branch 10, is hereby REVERSED and
SET ASIDE, and a new one is entered DISMISSING the instant case for want
of jurisdiction.
The appellate court denied petitioner Crescents motion for reconsideration
explaining that it "dismissed the instant action primarily on the ground of forum
non conveniens considering that the parties are foreign corporations which are
not doing business in the Philippines."
Hence, this petition submitting the following issues for resolution, viz:
1. Philippine courts have jurisdiction over a foreign vessel found inside
Philippine waters for the enforcement of a maritime lien against said vessel
and/or its owners and operators;
2. The principle of forum non conveniens is inapplicable to the instant case;
CIVIL PROCEDURE CASES SESSION 2
3. The trial court acquired jurisdiction over the subject matter of the instant case,
as well as over the res and over the persons of the parties;
4. The enforcement of a maritime lien on the subject vessel is expressly granted
by law. The Ship Mortgage Acts as well as the Code of Commerce provides for
relief to petitioner for its unpaid claim;
5. The arbitration clause in the contract was not rigid or inflexible but expressly
allowed petitioner to enforce its maritime lien in Philippine courts provided the
vessel was in the Philippines;
6. The law of the state of New York is inapplicable to the present controversy as
the same has not been properly pleaded and proved;
7. Petitioner has legal capacity to sue before Philippine courts as it is suing upon
an isolated business transaction;
8. Respondents were duly served summons although service of summons upon
respondents is not a jurisdictional requirement, the action being a suit quasi in
rem;
9. The trial courts decision has factual and legal bases; and,
10. The respondents should be held jointly and solidarily liable.
In a nutshell, this case is for the satisfaction of unpaid supplies furnished by a
foreign supplier in a foreign port to a vessel of foreign registry that is owned,
chartered and sub-chartered by foreign entities.
Under Batas Pambansa Bilang 129, as amended by Republic Act No. 7691,
RTCs exercise exclusive original jurisdiction "(i)n all actions in admiralty and
maritime where the demand or claim exceeds two hundred thousand pesos
(P200,000) or in Metro Manila, where such demand or claim exceeds four
hundred thousand pesos (P400,000)." Two (2) tests have been used to
determine whether a case involving a contract comes within the admiralty and
maritime jurisdiction of a court - the locational test and the subject matter
test. The English rule follows the locational test wherein maritime and admiralty
jurisdiction, with a few exceptions, is exercised only on contracts made upon the
sea and to be executed thereon. This is totally rejected under the American rule
where the criterion in determining whether a contract is maritime depends on
the nature and subject matter of the contract, having reference to maritime
service and transactions.4 In International Harvester Company of the
Philippines v. Aragon,5 we adopted the American rule and held that "(w)hether
41

or not a contract is maritime depends not on the place where the contract is
made and is to be executed, making the locality the test, but on the subject
matter of the contract, making the true criterion a maritime service or a maritime
transaction."
A contract for furnishing supplies like the one involved in this case is maritime
and within the jurisdiction of admiralty.6 It may be invoked before our courts
through an action in rem or quasi in rem or an action in personam. Thus: 7
xxx
"Articles 579 and 584 [of the Code of Commerce] provide a method of collecting
or enforcing not only the liens created under Section 580 but also for the
collection of any kind of lien whatsoever." 8 In the Philippines, we have a
complete legislation, both substantive and adjective, under which to bring an
action in rem against a vessel for the purpose of enforcing liens. The substantive
law is found in Article 580 of the Code of Commerce. The procedural law is to
be found in Article 584 of the same Code. The result is, therefore, that in the
Philippines any vessel even though it be a foreign vessel found in any port
of this Archipelago may be attached and sold under the substantive law which
defines the right, and the procedural law contained in the Code of Commerce
by which this right is to be enforced.9 x x x. But where neither the law nor the
contract between the parties creates any lien or charge upon the vessel, the
only way in which it can be seized before judgment is by pursuing the remedy
relating to attachment under Rule 59 [now Rule 57] of the Rules of Court.10
But, is petitioner Crescent entitled to a maritime lien under our laws? Petitioner
Crescent bases its claim of a maritime lien on Sections
21, 22 and 23 of Presidential Decree No. 1521 (P.D. No. 1521), also known as
the Ship Mortgage Decree of 1978, viz:
Sec. 21. Maritime Lien for Necessaries; persons entitled to such lien. - Any
person furnishing repairs, supplies, towage, use of dry dock or maritime railway,
or other necessaries, to any vessel, whether foreign or domestic, upon the order
of the owner of such vessel, or of a person authorized by the owner, shall have
a maritime lien on the vessel, which may be enforced by suit in rem, and it shall
be necessary to allege or prove that credit was given to the vessel.
Sec. 22. Persons Authorized to Procure Repairs, Supplies and Necessaries. -
The following persons shall be presumed to have authority from the owner to
procure repairs, supplies, towage, use of dry dock or marine railway, and other
necessaries for the vessel: The managing owner, ships husband, master or any
person to whom the management of the vessel at the port of supply is entrusted.
CIVIL PROCEDURE CASES SESSION 2
No person tortuously or unlawfully in possession or charge of a vessel shall
have authority to bind the vessel.
Sec. 23. Notice to Person Furnishing Repairs, Supplies and Necessaries. - The
officers and agents of a vessel specified in Section 22 of this Decree shall be
taken to include such officers and agents when appointed by a charterer, by an
owner pro hac vice, or by an agreed purchaser in possession of the vessel; but
nothing in this Decree shall be construed to confer a lien when the furnisher
knew, or by exercise of reasonable diligence could have ascertained, that
because of the terms of a charter party, agreement for sale of the vessel, or for
any other reason, the person ordering the repairs, supplies, or other necessaries
was without authority to bind the vessel therefor.
Petitioner Crescent submits that these provisions apply to both domestic and
foreign vessels, as well as domestic and foreign suppliers of necessaries. It
contends that the use of the term "any person" in Section 21 implies that the law
is not restricted to domestic suppliers but also includes all persons who supply
provisions and necessaries to a vessel, whether foreign or domestic. It points
out further that the law does not indicate that the supplies or necessaries must
be furnished in the Philippines in order to give petitioner the right to seek
enforcement of the lien with a Philippine court.11
Respondents Vessel and SCI, on the other hand, maintain that Section 21 of
the P.D. No. 1521 or the Ship Mortgage Decree of 1978 does not apply to a
foreign supplier like petitioner Crescent as the provision refers only to a situation
where the person furnishing the supplies is situated inside the territory of the
Philippines and not where the necessaries were furnished in a foreign
jurisdiction like Canada.12
We find against petitioner Crescent.
I.
P.D. No. 1521 or the Ship Mortgage Decree of 1978 was enacted "to accelerate
the growth and development of the shipping industry" and "to extend the benefits
accorded to overseas shipping under Presidential Decree No. 214 to domestic
shipping."13 It is patterned closely from the U.S. Ship Mortgage Act of 1920 and
the Liberian Maritime Law relating to preferred mortgages.14 Notably, Sections
21, 22 and 23 of P.D. No. 1521 or the Ship Mortgage Decree of 1978 are
identical to Subsections P, Q, and R, respectively, of the U.S. Ship Mortgage
Act of 1920, which is part of the Federal Maritime Lien Act. Hence, U.S.
jurisprudence finds relevance to determining whether P.D. No. 1521 or the Ship
Mortgage Decree of 1978 applies in the present case.
42

The various tests used in the U.S. to determine whether a maritime lien exists
are the following:
One. "In a suit to establish and enforce a maritime lien for supplies furnished to
a vessel in a foreign port, whether such lien exists, or whether the court has or
will exercise jurisdiction, depends on the law of the country where the
supplies were furnished, which must be pleaded and proved."15 This principle
was laid down in the 1888 case of The Scotia,16 reiterated in The Kaiser
Wilhelm II17 (1916), in The Woudrichem18 (1921) and in The City of
Atlanta19 (1924).
Two. The Lauritzen-Romero-Rhoditis trilogy of cases, which replaced such
single-factor methodologies as the law of the place of supply. 20
In Lauritzen v. Larsen,21 a Danish seaman, while temporarily in New York,
joined the crew of a ship of Danish flag and registry that is owned by a Danish
citizen. He signed the ships articles providing that the rights of the crew
members would be governed by Danish law and by the employers contract with
the Danish Seamens Union, of which he was a member. While in Havana and
in the course of his employment, he was negligently injured. He sued the
shipowner in a federal district court in New York for damages under the Jones
Act. In holding that Danish law and not the Jones Act was applicable, the
Supreme Court adopted a multiple-contact test to determine, in the absence
of a specific Congressional directive as to the statutes reach, which
jurisdictions law should be applied. The following factors were considered: (1)
place of the wrongful act; (2) law of the flag; (3) allegiance or domicile of
the injured; (4) allegiance of the defendant shipowner; (5) place of
contract; (6) inaccessibility of foreign forum; and (7) law of the forum.
Several years after Lauritzen, the U.S. Supreme Court in the case of Romero
v. International Terminal Operating Co.22 again considered a foreign
seamans personal injury claim under both the Jones Act and the general
maritime law. The Court held that the factors first announced in the case of
Lauritzen were applicable not only to personal injury claims arising under
the Jones Act but to all matters arising under maritime law in general.23
Hellenic Lines, Ltd. v. Rhoditis24 was also a suit under the Jones Act by a
Greek seaman injured aboard a ship of Greek registry while in American waters.
The ship was operated by a Greek corporation which has its largest office in
New York and another office in New Orleans and whose stock is more than 95%
owned by a U.S. domiciliary who is also a Greek citizen. The ship was engaged
in regularly scheduled runs between various ports of the U.S. and the Middle
East, Pakistan, and India, with its entire income coming from either originating
or terminating in the U.S. The contract of employment provided that Greek law
CIVIL PROCEDURE CASES SESSION 2
and a Greek collective bargaining agreement would apply between the
employer and the seaman and that all claims arising out of the employment
contract were to be adjudicated by a Greek court. The U.S. Supreme Court
observed that of the seven factors listed in the Lauritzen test, four were in
favor of the shipowner and against jurisdiction. In arriving at the conclusion
that the Jones Act applies, it ruled that the application of the Lauritzen test is not
a mechanical one. It stated thus: "[t]he significance of one or more factors must
be considered in light of the national interest served by the assertion of Jones
Act jurisdiction. (footnote omitted) Moreover, the list of seven factors in Lauritzen
was not intended to be exhaustive. x x x [T]he shipowners base of operations
is another factor of importance in determining whether the Jones Act is
applicable; and there well may be others."
The principles enunciated in these maritime tort cases have been extended to
cases involving unpaid supplies and necessaries such as the
cases of Forsythe International U.K., Ltd. v. M/V Ruth
Venture,25 and Comoco Marine Services v. M/V El Centroamericano.26
Three. The factors provided in Restatement (Second) of Conflicts of
Law have also been applied, especially in resolving cases brought under the
Federal Maritime Lien Act. Their application suggests that in the absence of an
effective choice of law by the parties, the forum contacts to be considered
include: (a) the place of contracting; (b) the place of negotiation of the contract;
(c) the place of performance; (d) the location of the subject matter of the
contract; and (e) the domicile, residence, nationality, place of incorporation and
place of business of the parties.27
In Gulf Trading and Transportation Co. v. The Vessel Hoegh Shield,28 an
admiralty action in rem was brought by an American supplier against a vessel
of Norwegian flag owned by a Norwegian Company and chartered by a London
time charterer for unpaid fuel oil and marine diesel oil delivered while the vessel
was in U.S. territory. The contract was executed in London. It was held that
because the bunker fuel was delivered to a foreign flag vessel within the
jurisdiction of the U.S., and because the invoice specified payment in the U.S.,
the admiralty and maritime law of the U.S. applied. The U.S. Court of Appeals
recognized the modern approach to maritime conflict of law problems introduced
in the Lauritzen case. However, it observed that Lauritzen involved a torts claim
under the Jones Act while the present claim involves an alleged maritime lien
arising from unpaid supplies. It made a disclaimer that its conclusion is limited
to the unique circumstances surrounding a maritime lien as well as the statutory
directives found in the Maritime Lien Statute and that the initial choice of law
determination is significantly affected by the statutory policies
surrounding a maritime lien. It ruled that the facts in the case call for the
application of the Restatement (Second) of Conflicts of Law. The U.S. Court
gave much significance to the congressional intent in enacting the Maritime Lien
43

Statute to protect the interests of American supplier of goods, services or
necessaries by making maritime liens available where traditional services are
routinely rendered. It concluded that the Maritime Lien Statute represents a
relevant policy of the forum that serves the needs of the international legal
system as well as the basic policies underlying maritime law. The court also
gave equal importance to the predictability of result and protection of justified
expectations in a particular field of law. In the maritime realm, it is expected that
when necessaries are furnished to a vessel in an American port by an American
supplier, the American Lien Statute will apply to protect that supplier regardless
of the place where the contract was formed or the nationality of the vessel.
The same principle was applied in the case of Swedish Telecom Radio v. M/V
Discovery I29 where the American court refused to apply the Federal Maritime
Lien Act to create a maritime lien for goods and services supplied by foreign
companies in foreign ports. In this case, a Swedish company supplied radio
equipment in a Spanish port to refurbish a Panamanian vessel damaged by fire.
Some of the contract negotiations occurred in Spain and the agreement for
supplies between the parties indicated Swedish companys willingness to
submit to Swedish law. The ship was later sold under a contract of purchase
providing for the application of New York law and was arrested in the U.S. The
U.S. Court of Appeals also held that while the contacts-based framework set
forth in Lauritzen was useful in the analysis of all maritime choice of law
situations, the factors were geared towards a seamans injury claim. As in Gulf
Trading, the lien arose by operation of law because the ships owner was not a
party to the contract under which the goods were supplied. As a result, the court
found it more appropriate to consider the factors contained in Section 6 of the
Restatement (Second) of Conflicts of Law. The U.S. Court held that the primary
concern of the Federal Maritime Lien Act is the protection of American suppliers
of goods and services.
The same factors were applied in the case of Ocean Ship Supply, Ltd. v. M/V
Leah.30
II.
Finding guidance from the foregoing decisions, the Court cannot sustain
petitioner Crescents insistence on the application of P.D. No. 1521 or the Ship
Mortgage Decree of 1978 and hold that a maritime lien exists.
First. Out of the seven basic factors listed in the case of Lauritzen, Philippine
law only falls under one the law of the forum. All other elements are foreign
Canada is the place of the wrongful act, of the allegiance or domicile of the
injured and the place of contract; India is the law of the flag and the allegiance
of the defendant shipowner. Balancing these basic interests, it is inconceivable
CIVIL PROCEDURE CASES SESSION 2
that the Philippine court has any interest in the case that outweighs the interests
of Canada or India for that matter.
Second. P.D. No. 1521 or the Ship Mortgage Decree of 1978 is inapplicable
following the factors under Restatement (Second) of Conflict of Laws. Like the
Federal Maritime Lien Act of the U.S., P.D. No. 1521 or the Ship Mortgage
Decree of 1978 was enacted primarily to protect Filipino suppliers and was not
intended to create a lien from a contract for supplies between foreign entities
delivered in a foreign port.
Third. Applying P.D. No. 1521 or the Ship Mortgage Decree of 1978 and rule
that a maritime lien exists would not promote the public policy behind the
enactment of the law to develop the domestic shipping industry. Opening up our
courts to foreign suppliers by granting them a maritime lien under our laws even
if they are not entitled to a maritime lien under their laws will encourage forum
shopping.
Finally. The submission of petitioner is not in keeping with the reasonable
expectation of the parties to the contract. Indeed, when the parties entered into
a contract for supplies in Canada, they could not have intended the laws of a
remote country like the Philippines to determine the creation of a lien by the
mere accident of the Vessels being in Philippine territory.
III.
But under which law should petitioner Crescent prove the existence of its
maritime lien?
In light of the interests of the various foreign elements involved, it is clear that
Canada has the most significant interest in this dispute. The injured party is a
Canadian corporation, the sub-charterer which placed the orders for the
supplies is also Canadian, the entity which physically delivered the bunker fuels
is in Canada, the place of contracting and negotiation is in Canada, and the
supplies were delivered in Canada.
The arbitration clause contained in the Bunker Fuel Agreement which states that
New York law governs the "construction, validity and performance" of the
contract is only a factor that may be considered in the choice-of-law analysis but
is not conclusive. As in the cases of Gulf Trading and Swedish Telecom, the
lien that is the subject matter of this case arose by operation of law and not by
contract because the shipowner was not a party to the contract under which the
goods were supplied.
44

It is worthy to note that petitioner Crescent never alleged and proved Canadian
law as basis for the existence of a maritime lien. To the end, it insisted on its
theory that Philippine law applies. Petitioner contends that even if foreign law
applies, since the same was not properly pleaded and proved, such foreign law
must be presumed to be the same as Philippine law pursuant to the doctrine of
processual presumption.
Thus, we are left with two choices: (1) dismiss the case for petitioners failure to
establish a cause of action31 or (2) presume that Canadian law is the same as
Philippine law. In either case, the case has to be dismissed.
It is well-settled that a party whose cause of action or defense depends upon a
foreign law has the burden of proving the foreign law. Such foreign law is treated
as a question of fact to be properly pleaded and proved. 32Petitioner Crescents
insistence on enforcing a maritime lien before our courts depended on the
existence of a maritime lien under the proper law. By erroneously claiming a
maritime lien under Philippine law instead of proving that a maritime lien exists
under Canadian law, petitioner Crescent failed to establish a cause of action. 33
Even if we apply the doctrine of processual presumption, the result will still be
the same. Under P.D. No. 1521 or the Ship Mortgage Decree of 1978, the
following are the requisites for maritime liens on necessaries to exist: (1) the
"necessaries" must have been furnished to and for the benefit of the vessel; (2)
the "necessaries" must have been necessary for the continuation of the voyage
of the vessel; (3) the credit must have been extended to the vessel; (4) there
must be necessity for the extension of the credit; and (5) the necessaries must
be ordered by persons authorized to contract on behalf of the vessel. 34 These
do not avail in the instant case.
First. It was not established that benefit was extended to the vessel. While this
is presumed when the master of the ship is the one who placed the order, it is
not disputed that in this case it was the sub-charterer Portserv which placed the
orders to petitioner Crescent.35 Hence, the presumption does not arise and it is
incumbent upon petitioner Crescent to prove that benefit was extended to the
vessel. Petitioner did not.
Second. Petitioner Crescent did not show any proof that the marine products
were necessary for the continuation of the vessel.
Third. It was not established that credit was extended to the vessel. It is
presumed that "in the absence of fraud or collusion, where advances are
made to a captain in a foreign port, upon his request, to pay for necessary
repairs or supplies to enable his vessel to prosecute her voyage, or to pay
harbor dues, or for pilotage, towage and like services rendered to the vessel,
CIVIL PROCEDURE CASES SESSION 2
that they are made upon the credit of the vessel as well as upon that of her
owners."36 In this case, it was the sub-charterer Portserv which requested for
the delivery of the bunker fuels. The issuance of two checks amounting to
US$300,000 in favor of petitioner Crescent prior to the delivery of the bunkers
as security for the payment of the obligation weakens petitioner Crescents
contention that credit was extended to the Vessel.
We also note that when copies of the charter parties were submitted by
respondents in the Court of Appeals, the time charters between respondent SCI
and Halla and between Halla and Transmar were shown to contain a clause
which states that "the Charterers shall provide and pay for all the fuel except as
otherwise agreed." This militates against petitioner Crescents position that
Portserv is authorized by the shipowner to contract for supplies upon the credit
of the vessel.
Fourth. There was no proof of necessity of credit. A necessity of credit will be
presumed where it appears that the repairs and supplies were necessary for the
ship and that they were ordered by the master. This presumption does not arise
in this case since the fuels were not ordered by the master and there was no
proof of necessity for the supplies.
Finally. The necessaries were not ordered by persons authorized to contract in
behalf of the vessel as provided under Section 22 of P.D. No. 1521 or the Ship
Mortgage Decree of 1978 - the managing owner, the ships husband, master or
any person with whom the management of the vessel at the port of supply is
entrusted. Clearly, Portserv, a sub-charterer under a time charter, is not
someone to whom the management of the vessel has been entrusted. A time
charter is a contract for the use of a vessel for a specified period of time or for
the duration of one or more specified voyages wherein the owner of the time-
chartered vessel retains possession and control through the master and crew
who remain his employees.37 Not enjoying the presumption of authority,
petitioner Crescent should have proved that Portserv was authorized by the
shipowner to contract for supplies. Petitioner failed.
A discussion on the principle of forum non conveniens is unnecessary.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. No. CV
54920, dated November 28, 2001, and its subsequent Resolution of September
3, 2002 are AFFIRMED. The instant petition for review on certiorari is DENIED
for lack of merit. Cost against petitioner. SO ORDERED.
G.R. No. 137793 September 29, 1999
NILO RAYMUNDO vs. CA and JUAN MACROS ARELLANO
45

1
The petition for review on certiorari before the Court assails the resolution of
the Court of Appeals dismissing the petition for certiorari filed by petitioner Nilo
H. Raymundo to nullify the decision of the Regional Trial Court, Branch 67,
Pasig City. 2
The facts are as follows:
On October 22, 1996, private respondent Juan Marcos Arellano, Jr. filed with
the Regional Trial Court, Pasig City, a complaint 3 against petitioner for
collection of a sum of money.
On November 12, 1996, petitioner filed with the trial court his answer with
counterclaim to the complaint. 4
On January 7, 1997, at 9:00 a.m., the trial court scheduled a pre-trial
conference. It was nonetheless postponed in view of petitioner's motion for
leave to file an amended answer.
On January 9, 1997, petitioner filed with the trial court his amended answer with
counterclaim 5 together with a manifestation. 6 In time, private respondent filed
an opposition 7 to the admission of the amended answer, to which petitioner filed
a reply. 8
On February 24, 1997, the trial court issued an order 9 striking out petitioner's
manifestation and amended answer with counterclaim for failure to comply with
the provisions of Section 3, Rule 10 of the Rules of Court.
Meanwhile, the trial court scheduled the pre-trial conference on March 5, 1997,
at 8:30 a.m., conditioned on whether or not petitioner's amended answer with
counterclaim would be admitted.
As his motion to admit amended answer was not yet resolved, petitioner did not
attend the pre-trial conference scheduled on March 5, 1997. Later that day,
petitioner learned that the trial court declared him in default for non-appearance
at the pre-trial conference and allowed respondent to present his evidence ex-
parte the following day, March 6, 1997.1wphi1.nt
On March 6, 1997, petitioner filed with the trial court an urgent motion to set
aside default order. 10 Despite the motion, the trial court proceeded to receive
private respondent's evidence ex-parte.
On March 7, 1997, petitioner filed with the trial court a motion to set aside
respondent's ex-parte evidence. 11
CIVIL PROCEDURE CASES SESSION 2
On September 3, 1997, the trial court, without resolving petitioner's motion to
set aside default order and motion to set aside plaintiffs ex-parte evidence,
rendered a decision, 12 the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Juan
Marco Arellano, Jr. and against defendant Nilo Raymundo who is
hereby ordered to pay the following:
1. to pay plaintiff the amount of P3,625,000.00 representing the
principal obligation and to pay the legal interest from October 1,
1996 until fully paid;
2. to pay P15,000.00 by way of moral damages;
3. to pay P10,000.00 by way of exemplary damages;
4. to pay 25% of the amount recovered by way of attorney's
fees; and
5. to pay the cost of suit.
SO ORDERED.
Pasig City, September 3, 1997.
(s/t) APOLINARIO B. SANTOS
Judge
On October 15, 1997, petitioner filed with the trial court a motion for
reconsideration 13 of the decision, to which private respondent filed an
opposition. 14
On November 14, 1997, petitioner filed with the trial court an "ad
cautelam" omnibus petition for relief from judgment, order or other
proceedings. 15
On May 12, 1998, the trial court issued an order 16 denying petitioner's motion
for reconsideration and "ad cautelam" omnibus petition.
On May 28, 1998, petitioner filed with the trial court a notice of appeal 17 to the
Court of Appeals 18 from the trial court's decision dated September 3, 1997, and
46

its order dated May 12, 1998, which the trial court approved in an order dated
June 9, 1998. 19
On July 16, 1998, petitioner filed with the Court of Appeals a special civil action
for certiorari challenging the validity of the trial court's decision and other
proceedings as having been rendered with grave abuse of discretion. 20
On February 19, 1999, the Court of Appeals promulgated its decision dismissing
the petition outright ruling that certiorari lies only when there is no appeal or any
other plain, speedy or adequate remedy available to petitioner.
Also, certiorari will not issue to cure errors in proceedings or erroneous
conclusions of law or fact. The Court of Appeals added that where appeal is the
proper remedy, certiorari would not lie. The failure of the trial court to resolve
petitioner's motion to set aside default order and motion to set aside private
respondent's ex-parteevidence before rendering judgment is "purely
errors/oversight in the proceedings, not necessarily an error of jurisdiction." 21
Hence, this petition. 22
On June 14, 1999, the Court required respondents to comment on the petition,
not to file a motion to dismiss, within ten (10) days from notice. 23
On July 20, 1999, private respondent filed his comment. 24
We give due course to the petition, which we find meritorious.
The basic issue is whether the Court of Appeals erred in denying the issuance
of a writ of certiorari because of the availability of appeal. It ruled that the right
to appeal is antithetical to a special civil action of certiorari. Petitioner submits
that certiorari is proper even where appeal is available where the orders
complained of were issued in excess or without jurisdiction and the appeal is
not adequate or equally beneficial, speedy and sufficient.
We agree.
An ordinary appeal is the proper remedy in questioning a judgment by default;
appeal is also the proper remedy from an order denying a petition for relief of
judgment. 25 Hence, in the normal course of events, the Court of Appeals
correctly denied the petition for certiorari before it, assailing the trial court's
decision by default and denial of the petition for relief, in view of the availability
of appeal therefrom. However, in the exceptional circumstances presented in
this case, appeal seems to be inadequate; consequently, even if petitioner
CIVIL PROCEDURE CASES SESSION 2
interposed an appeal, certiorari lies to correct such a despotic exercise of
discretion. 26
The failure of the trial court to act on the twin motions of petitioner to set aside
the order of default and to set aside the evidence ex-parte, cannot be lightly
dismissed as a mere error or oversight. It seriously affected the discretion of the
trial court, for such omission amounted to grave abuse of discretion depriving
petitioner of the opportunity to be heard on the two crucial motions which, if
granted, would have allowed petitioner to regain his standing in court and to
present his evidence.
Purportedly, the trial court declared petitioner as in default when he failed to
attend the scheduled March 5, 1997 pre-trial conference. Petitioner, however,
explained that he did not attend because he was awaiting resolution of his
motion to admit amended answer filed as early as January 9, 1997. Thus,
petitioner need not attend the March 5, 1997 pre-trial conference because the
resolution of his motion to admit amended answer takes precedence over the
pre-trial conference. The trial court gravely abused its discretion in declaring
petitioner as in default when it was itself remiss in not resolving petitioner's
pending motions.
Worse, the trial court acted despotically in allowing respondent to present
evidence ex-parte even if petitioner could not be lawfully declared in default for
non-appearance due to the trial court's own failure to rule on the admission of
his amended answer because the original answer was on record. More, in
deciding the case without resolving petitioner's motion to set aside default and
motion to set aside ex-parte evidence, the trial court exercised its discretion
capriciously, arbitrarily and whimsically. 27 Thus, the trial court gravely abused
its discretion amounting to lack or excess of jurisdiction.
We have time and again allowed recourse to the extraordinary remedy
of certiorari where an appeal is not adequate, or equally beneficial, speedy and
sufficient. 28
WHEREFORE, the petition is hereby GRANTED. The Resolution of the Court
of Appeals in CA-G.R. SP No. 48017, promulgated on February 19, 1999 is
REVERSED and SET ASIDE.
In lieu thereof, judgment is hereby rendered setting aside the trial court's
decision dated September 3, 1997 and order dated May 12, 1998, in Civil Case
No. 65956. This renders petitioner's appeal in CA-G.R. CV No. 60459 of the
Court of Appeals functus officio.
47

Let the case be remanded to the trial court for further proceedings. No
costs.1wphi1.nt SO ORDERED.
G.R. No. 119347 March 17, 1999
EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA
T. REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS,
GREGORIO TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX
TAUTHO, WILLIAM TAUTHO, AND MARILYN PERALES vs. HONORABLE
AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO,
JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND
ARTEMIO CABATINGAN
Before us is a Petition for Certiorari to set aside the Order dated January 12,
1995 issued by respondent Judge Augustine A. Vestil of the Regional Trial Court
of Mandaue City, Branch 56, dismissing the complaint filed by petitioners on
ground of lack of jurisdiction, as well as his Order dated February 13, 1995
denying petitioners' Motion for Reconsideration of the order of dismissal.
The facts of the case are as follows:
On September 28, 1994, petitioners filed a complaint against private
respondents, denominated "DECLARATION OF NULLITY AND PARTITION,"
with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil
Case No. MAN-2275. The complaint, in substance, alleged that petitioners are
co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and
containing an area of 56,977.40 square meters, more or less. The land was
previously owned by the spouses Casimero Tautho and Cesaria Tautho. Upon
the death of said spouses, the property was inherited by their legal heirs, herein
petitioners and private respondents. Since then, the lot had remained undivided
until petitioners discovered a public document denominated "DECLARATION
OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL
AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this
deed, private respondents divided the property among themselves to the
exclusion of petitioners who are also entitled to the said lot as heirs of the late
spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that the
document was false and perjurious as the private respondents were not the only
heirs and that no oral partition of the property whatsoever had been made
between the heirs. The complaint prayed that the document be declared null
and void and an order be issued to partition the land among all the heirs. 1
On November 24, 1994, private respondents filed a Motion to Dismiss 2 the
complaint on the ground of lack of jurisdiction over the nature of the case as the
total assessed value of the subject land is P5,000.00 which under section 33
(3) 3 of Batas Pambansa Blg. 129, as amended by R.A. No. 7691, 4 falls within
CIVIL PROCEDURE CASES SESSION 2
the exclusive jurisdiction of the Municipal Circuit Trial Curt of Liloan,
Compostela. 5
Petitioners filed an Opposition to the Motion to Dismiss 6 saying that the
Regional Trial Court has jurisdiction over the case since the action is one which
is incapable of pecuniary estimation within the contemplation of Section 19(1)
of B.P. 129, as amended. 7
On January 12, 1995, the respondent judge issued an Order granting the Motion
to Dismiss. 8 A Motion for Reconsideration of said order was filed by petitioners
on January 30, 1995 alleging that the same is contrary to law because their
action is not one for recovery of title to or possession of the land but an action
to annul a document or declare it null and void, 9 hence, one incapable of
pecuniary estimation falling within the jurisdiction of the Regional Trial Court.
Private respondents did not oppose the motion for reconsideration.
On February 13, 1995, the respondent judge issued another Order denying the
motion for reconsideration. 10
Hence, this petition wherein the sole issue raised is whether or not the Regional
Trial Court has jurisdiction to entertain Civil Case No. MAN-2275.
We find merit in the petition.
Petitioners maintain the view that the complaint filed before the Regional Trial
Court is for the annulment of a document denominated as "DECLARATION OF
HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION,"
which is clearly one incapable of pecuniary estimation, thus, cognizable by the
Regional Trial Court.
Private respondents, on the other hand, insists that the action is one for re-
partition and since the assessed value of the property as stated in the complaint
is P5,000.00, then, the case falls within the jurisdiction of the Municipal Circuit
Trial Court of Liloan, Compostela, Cebu.
For better appreciation of the facts, the pertinent portions of the complaint are
reproduced hereunder:
xxx xxx xxx
3. That the plaintiffs and the defendants are the legal heirs of spouses
Casimero Tautho and Cesaria N. Tautho who died long time ago;
48

4. That in life the spouses became the owners in fee simple of a certain
parcel of land, which is more particularly described as follows:
A parcel of land containing 56,97740 square meters,
more or less, located at Cotcot, Liloan, Cebu.
designated as Lot 6149 per Technical Description and Certification
issued by the Office of the Land Management copy of which are hereto
attached as Annexes "A" and "A-1" and are made part hereof: total
assessed value is P5,000.00;
5. That the passed to the children of the spouses (who are all deceased
except for defendant Marcelo Tautho), namely: Zacarias, Epifania,
Vicenta, Felecisimo, Maria, Lorencia and Marcelo, and which in turn
passed to the plaintiffs and defendants upon their death they being their
descendants and legal heirs;
6. That the subject parcel of land has for year been undivided by and
among the legal heirs of said previous owners;
7. That, very recently, plaintiffs discovered a public document, which is
a declaration of heirs and deed of confirmation of a previous oral
agreement of partition, affecting the land executed by and among the
defendants whereby defendants divided the property among
themselves to the exclusion of plaintiffs who are entitled thereto;
attached hereto as Annex "B" and is made part hereof is xerox copy of
said document;
8. That the instrument (Annex "B") is false and perjurious and is a
complete nullity because the defendants are not the only heirs of
Casimero Tautho; plaintiffs are also heirs and descendants of said
deceased; moreover, there has been no oral partition of the property;
9. That pursuant to said document (Annex "B"), defendants had
procured tax declarations of the land for their supposed "shares" to the
great damage and prejudice of plaintiffs;
10. That the property in controversy should be divided into seven (7)
equal parts since Casimero Tautho and Cesaria N. Tautho had seven
children;
CIVIL PROCEDURE CASES SESSION 2
11. That the parties had failed to settle the controversy amicably at the
barangay level; attached hereto as Annex "C" is Certification to file
Action;
12. That by reason of the foregoing unjust and illegal act of defendants,
plaintiffs were forced to bring instant action and contract the services of
the undersigned counsel with whom they bind themselves to pay
P30,000.00 as attorney's fees.
WHEREFORE, it is most respectfully prayed of this Honorable Court to
declare null and void the document (Annex "B") of declaration of heirs
and confirmation and to order the partition of the land into seven (7)
equal parts; each part shall respectively go to the seven (7) children of
Casimero Tautho and considering six (6) of them died already the same
shall go to their children or descendants, and to order the defendants to
pay plaintiffs attorney's fees in the amount of P30,000.00.
Plaintiffs further pray for such other reliefs and remedies just and
equitable under the premises. 11
We agree with petitioners.
The complaint filed before the Regional Trial Court is doubtless one
incapable of pecuniary estimation and therefore within the jurisdiction
of said court.
In Singsong vs. Isabela Sawmill, 12 we had the occasion to rule that:
[I]n determining whether an action is one the subject matter of which is
not capable of pecuniary estimation this Court has adopted the criterion
of first ascertaining the nature of the principal action or remedy sought.
If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction is
in the municipal courts or in instance would depend on the amount of
the claim. However, where the basic issue is something other than the
right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, this Court
has considered such where the subject of the litigation may not be
estimated in terms of money, and are cognizable exclusively by courts
of first instance (now Regional Trial Courts). 13
Examples of actions incapable of pecuniary estimation are those for specific
performance, support, or foreclosure of mortgage or annulment of
judgment; 14 also actions questioning the validity of a mortgage, 15 annulling a
49

16
deed of sale or conveyance and to recover the price paid and for rescession,
which is a counterpart of specific performance. 17
While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary
estimation, the law specifically mandates that they are cognizable by the MTC,
METC, or MCTC where the assessed value of the real property involved does
exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the
value exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional
Trial Courts which have jurisdiction under Sec. 19(2). 18 However, the subject
matter of the complaint in this case is annulment of a document denominated
as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION."
The main purpose of petitioners in filing the complaint is to declare null and void
the document in which private respondents declared themselves as the only
heirs of the late spouses Casimero Tautho and Cesaria Tautho and divided his
property among themselves to the exclusion of petitioners who also claim to be
legal heirs and entitled to the property. While the complaint also prays for the
partition of the property, this is just incidental to the main action, which is the
declaration of nullity of the document above-described. It is axiomatic that
jurisdiction over the subject matter of a case is conferred by law and is
determined by the allegations in the complaint and the character of the relief
sought, irrespective of whether the plaintiff is entitled to all or some of the claims
asserted therein. 19
WHEREFORE, premises considered, the petition is hereby GRANTED. The
Order dismissing Civil Case No. MAN-2275, as well as the Order denying the
motion for reconsideration of said Order, is SET ASIDE.
The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed
with dispatch in resolving Civil Case No. MAN-2275. No costs.
SO ORDERED.
G.R. No. 146886 April 30, 2003
DEBORAH BARDILLON vs. BRGY. MASILI OF CALAMBA LAGUNA
An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls
within the jurisdiction of regional trial courts, regardless of the value of the
subject property.
The Case
CIVIL PROCEDURE CASES SESSION 2
Review1
Before us is a Petition for under Rule 45 of the Rules of Court, seeking
to set aside the January 10, 2001 Decision and the February 5, 2001 Resolution
of the Court of Appeals2 (CA) in CA-GR SP No. 61088. The dispositive part of
the Decision reads:
"WHEREFORE, premises considered, the present [P]etition for
[C]ertiorari is hereby DENIED DUE COURSE and accordingly
DISMISSED, for lack of merit."3
The assailed Resolution4 denied petitioner's Motion for Reconsideration.
The Facts
The factual antecedents are summarized by the CA as follows:
"At the root of this present [P]etition is the controversy surrounding the
two (2) [C]omplaints for eminent domain which were filed by herein
respondent for the purpose of expropriating a ONE HUNDRED FORTY
FOUR (144) square meter-parcel of land, otherwise known as Lot 4381-
D situated in Barangay Masili, Calamba, Laguna and owned by herein
petitioner under Transfer Certificate of Title No. 383605 of the Registry
of Deeds of Calamba, Laguna. Petitioner acquired from Makiling
Consolidated Credit Corporation the said lot pursuant to a Deed of
Absolute Sale which was executed by and between the former and the
latter on October 7, 1996.
"The first [C]omplaint for eminent domain, docketed as Civil Case No.
3648 and entitled 'Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara,
Eugenia Almazan & Devorah E. Bardillon,' was filed before the
Municipal Trial Court of Calamba, Laguna ('MTC') on February 23,
1998, following the failure of Barangay Masili to reach an agreement
with herein petitioner on the purchase offer of TWO HUNDRED
THOUSAND PESOS (P200,000.00). The expropriation of Lot 4381-D
was being pursued in view of providing Barangay Masili a multi-purpose
hall for the use and benefit of its constituents.
"On March 5, 1999, the MTC issued an order dismissing Civil Case No.
3648 'for lack of interest' for failure of the [respondent] and its counsel
to appear at the pre-trial. The MTC, in its Order dated May 3, 1999,
denied [respondent's] [M]otion for [R]econsideration thereof.
"The second [C]omplaint for eminent domain, docketed as Civil Case
No. 2845-99-C and entitled 'Brgy. Masili, Calamba, Laguna v. Devorah
E. Bardillon' was filed before Branch 37 of the Regional Trial Court of
50

Calamba, Laguna ('RTC') on October 18, 1999. This [C]omplaint also
sought the expropriation of the said Lot 4381-D for the erection of a
multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion
to Dismiss, opposed this [C]omplaint by alleging in the main that it
violated Section 19(f) of Rule 16 in that [respondent's] cause of action
is barred by prior judgment, pursuant to the doctrine of res judicata.
"On January 21, 2000, [the] Judge issued an order denying
petitioner's Motion to Dismiss, holding that the MTC which ordered the
dismissal of Civil Case No. 3648 has no jurisdiction over the said
expropriation proceeding.
"With the subsequent approval of Municipal Ordinance No. 2000-261
on July 10, 2000, and the submission thereof in compliance with [the]
Judge's Order dated June 9, 2000 requiring herein respondent to
produce the authority for the expropriation through the Municipal
Council of Calamba, Laguna, the assailed Order dated August 4, 2000
was issued in favor of Barangay Masili x x x and, on August 16, 2000,
the corresponding order for the issuance of the [W]rit of
[P]ossession over Lot 4381-D."5
Ruling of the Court of Appeals
In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of
Calamba, Laguna (Branch 37)6 did not commit grave abuse of discretion in
issuing the assailed Orders. It ruled that the second Complaint for eminent
domain (Civil Case No. 2845-99-C) was not barred by res judicata. The reason
is that the Municipal Trial Court (MTC), which dismissed the first Complaint for
eminent domain (Civil Case No. 3648), had no jurisdiction over the action.
Hence, this Petition.7
The Issues
In her Memorandum, petitioner raises the following issues for our consideration:
"A. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion amounting to lack of jurisdiction when it denied and
dismissed petitioner's appeal;
"B. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion when it did not pass upon and consider the pending
Motion for Reconsideration which was not resolved by the Regional
CIVIL PROCEDURE CASES SESSION 2
Trial Court before issuing the questioned Orders of 4 and 16 August
2000;
"C. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in taking the total amount of the assessed value of
the land and building to confer jurisdiction to the court a quo;
"D. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in ignoring the fact that there is an existing multi-
purpose hall erected in the land owned by Eugenia Almazan which
should be subject of expropriation; and
"E. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in failing to consider the issue of forum shopping
committed by Respondent Masili."8
Simply put, the issues are as follows: (1) whether the MTC had jurisdiction over
the expropriation case; (2) whether the dismissal of that case before the MTC
constituted res judicata; (3) whether the CA erred when it ignored the issue of
entry upon the premises; and (4) whether respondent is guilty of forum
shopping.
The Court's Ruling
The Petition has no merit.
First Issue:
Jurisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the MTC had
jurisdiction over the case.9
On the other hand, the appellate court held that the assessed value of the
property was P28,960.10 Thus, the MTC did not have jurisdiction over the
expropriation proceedings, because the amount involved was beyond the
P20,000 jurisdictional amount cognizable by MTCs.
An expropriation suit does not involve the recovery of a sum of money. Rather,
it deals with the exercise by the government of its authority and right to take
property for public use.11 As such, it is incapable of pecuniary estimation and
should be filed with the regional trial courts.12
51

This was explained by the Court in Barangay San Roque v. Heirs of Francisco
Pastor:13
"It should be stressed that the primary consideration in an expropriation
suit is whether the government or any of its instrumentalities has
complied with the requisites for the taking of private property. Hence,
the courts determine the authority of the government entity, the
necessity of the expropriation, and the observance of due process. In
the main, the subject of an expropriation suit is the government's
exercise of eminent domain, a matter that is incapable of pecuniary
estimation.
"True, the value of the property to be expropriated is estimated in
monetary terms, for the court is duty-bound to determine the just
compensation for it. This, however, is merely incidental to the
expropriation suit. Indeed, that amount is determined only after the
court is satisfied with the propriety of the expropriation."
"Verily, the Court held in Republic of the Philippines v. Zurbano that
'condemnation proceedings are within the jurisdiction of Courts of First
Instance,' the forerunners of the regional trial courts. The said case was
decided during the effectivity of the Judiciary Act of 1948 which, like BP
129 in respect to RTCs, provided that courts of first instance had original
jurisdiction over 'all civil actions in which the subject of the litigation is
not capable of pecuniary estimation.' The 1997 amendments to the
Rules of Court were not intended to change these jurisprudential
precedents.14
To reiterate, an expropriation suit is within the jurisdiction of the RTC regardless
of the value of the land, because the subject of the action is the government's
exercise of eminent domain a matter that is incapable of pecuniary
estimation.
Second Issue:
Res Judicata
Petitioner claims that the MTC's dismissal of the first Complaint for eminent
domain was with prejudice, since there was no indication to the contrary in the
Order of dismissal. She contends that the filing of the second Complaint before
the RTC should therefore be dismissed on account of res judicata.
Res judicata literally means a matter adjudged, judicially acted upon or decided,
or settled by judgment.15 It provides that a final judgment on the merits rendered
by a court of competent jurisdiction is conclusive as to the rights of the parties
CIVIL PROCEDURE CASES SESSION 2
and their privies; and constitutes an absolute bar to subsequent actions
involving the same claim, demand or cause of action.16
The following are the requisites of res judicata: (1) the former judgment must be
final; (2) the court that rendered it had jurisdiction over the subject matter and
the parties; (3) it is a judgment on the merits; and (4) there is between the
first and the second actions an identity of parties, subject matter and cause
of action.17
Since the MTC had no jurisdiction over expropriation proceedings, the doctrine
of res judicata finds no application even if the Order of dismissal may have been
an adjudication on the merits.
Third Issue:
Legality of Entry Into Premises
Petitioner argues that the CA erred when it ignored the RTC's Writ of Possession
over her property, issued despite the pending Motion for Reconsideration of the
ruling dismissing the Complaint. We are not persuaded.
The requirements for the issuance of a writ of possession in an expropriation
case are expressly and specifically governed by Section 2 of Rule 67 of the 1997
Rules of Civil Procedure.18 On the part of local government units, expropriation
is also governed by Section 19 of the Local Government Code.19 Accordingly,
in expropriation proceedings, the requisites for authorizing immediate entry are
as follows: (1) the filing of a complaint for expropriation sufficient in form and
substance; and (2) the deposit of the amount equivalent to 15 percent of the fair
market value of the property to be expropriated based on its current tax
declaration.20
In the instant case, the issuance of the Writ of Possession in favor of respondent
after it had filed the Complaint for expropriation and deposited the amount
required was proper, because it had complied with the foregoing requisites.
The issue of the necessity of the expropriation is a matter properly addressed
to the RTC in the course of the expropriation proceedings. If petitioner objects
to the necessity of the takeover of her property, she should say so in her Answer
to the Complaint.21 The RTC has the power to inquire into the legality of the
exercise of the right of eminent domain and to determine whether there is a
genuine necessity for it.22
Fourth Issue:
Forum Shopping
52

Petitioner claims that respondent is guilty of forum shopping, because it scouted
for another forum after obtaining an unfavorable Decision from the MTC.
The test for determining the presence of forum shopping is whether the
elements of litis pendentia are present in two or more pending cases, such that
a final judgment in one case will amount to res judicata in another.23
Be it noted that the earlier case lodged with the MTC had already been
dismissed when the Complaint was filed before the RTC. Even
granting arguendo that both cases were still pending, a final judgment in the
MTC case will not constitute res judicata in the RTC, since the former had no
jurisdiction over the expropriation case.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.
Costs against petitioner. SO ORDERED.
G.R. No. 163021 April 27, 2007
PATRICIO A. VILLENA vs. PATRICIO S. PAYOYO
This petition for review on certiorari assails the Decision 1 dated November 21,
2003 of the Court of Appeals in CA-G.R. CV No. 70513 and its Resolution2 dated
March 18, 2004, denying petitioners motion for reconsideration. The appellate
court had affirmed with modification the Decision3 dated April 26, 2000 of the
Regional Trial Court (RTC) of Quezon City, Branch 78.
The facts are undisputed.
On October 28, 1997, respondent Patricio Payoyo and Novaline, Inc., through
its president, petitioner Patricio Villena, entered into a contract for the delivery
and installation of kitchen cabinets in Payoyos residence. The cabinets were to
be delivered within ninety days from downpayment of 50% of the purchase price.
On October 29, 1997, Payoyo paid Villena P155,183 as downpayment.
On December 9, 1997, Payoyo entered into another contract with Villena for the
delivery of home appliances. On the same day, Payoyo paid 50% of the
purchase price equal to P29,638.50 as downpayment.
However, Villena failed to install the kitchen cabinets and deliver the appliances.
Payoyo made several demands upon Villena but the latter failed to comply.
In a letter dated March 12, 1998, Payoyo demanded the cancellation of the
contracts and the refund in full of the downpayments amounting to P184,821.50.
Villena promised to install the kitchen cabinets on or before May 10, 1998 and
CIVIL PROCEDURE CASES SESSION 2
to deliver the appliances. Despite repeated demands, Villena again failed to do
so.
Payoyo sent Villena two demand letters on June 24, 1998 and on July 28, 1998
asking the latter to either deliver all items or return the downpayments.
On October 26, 1998, Payoyo filed a complaint for recovery of a sum of money
and damages against Villena. Villena moved to dismiss the complaint for failure
to state a cause of action. He argued that there was no ground to cancel the
contract; thus, there was no basis for refund. The trial court denied his motion.
Villena thereafter filed an answer with compulsory counterclaim citing as an
affirmative defense Payoyos failure to state a cause of action.
On June 1, 1999, immediately after the trial court issued a pre-trial order, Villena
filed a second motion to dismiss on the ground of lack of jurisdiction over the
subject matter but it was denied. Thereafter, trial ensued.
The trial court decided in favor of Payoyo, reasoning that the power to rescind
is implied in reciprocal obligations. Considering that Villena repeatedly failed to
comply with his obligation, Payoyo had the right to rescind the contract and
demand a refund. The trial court ordered petitioner to pay
respondent P184,821.50 as actual damages plus 12% interest per annum from
the date of filing of the complaint and P20,000 as moral damages plus legal
interest from judicial demand until fully paid.
The Court of Appeals affirmed the RTC decision with the following modifications:
1) [Petitioner Villena is] hereby ordered to pay [respondent Payoyo]
actual damages in the amount of P155,183.00 with 12% interest per
annum from the date of the filing of the complaint;
2) [Petitioner is] likewise ordered to deliver the Indesit Multifunction
Oven and Indesit Hob in favor of [respondent] within thirty (30) days
from the finality of this decision; and
3) [Respondent] is hereby ordered to pay the purchase price of the
Indesit Multifunction Oven and Indesit Hob in favor of [petitioner] on the
day the delivery is made.4
The appellate court reasoned that while there was delay in the delivery and
installation of the kitchen cabinets, there was none in the delivery of the
appliances. The contract for said appliances did not specify the date of delivery
but that delivery should be made upon payment of the 50% balance of the
53

purchase price. Considering that Payoyo failed to pay the balance, Villena did
not incur delay.
Hence, the instant petition, where petitioner raises the following issues:
I.
WHETHER OR NOT THE TRIAL COURT HAD JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE.
II.
WHETHER OR NOT [THE] DEFENDANTS-APPELLANTS (PETITIONER AND
NOVALINE, INC.), ARE ESTOPPED FROM QUESTIONING THE
JURISDICTION OF THE COURT UNDER THE CIRCUMSTANCES.5
Simply, the issue in this case is whether the trial court had jurisdiction over the
complaint.
Petitioner maintains that the RTC should have dismissed the complaint for lack
of jurisdiction. He posits that the RTC has no jurisdiction over the complaint
since it is mainly for recovery of a sum of money in the amount of P184,821.50
which is below the jurisdictional amount set for RTCs. 6 Moreover, petitioner
contends that the issue of jurisdiction may be raised at any time, even on appeal,
since jurisdiction is conferred only by law and cannot be acquired through or
waived by any act or omission of the parties.7
Respondent, on the other hand, contends that the RTC has jurisdiction over the
complaint as the allegations therein show that it is actually a case for rescission
of the contracts. The recovery of a sum of money is merely a necessary
consequence of the cancellation of the contracts.8
The pertinent portion of Section 19 of Batas Pambansa Bilang 129, as amended
by Republic Act No. 7691,9provides:
SEC. 19. Jurisdiction in civil cases.Regional Trial Courts shall exercise
exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
xxxx
CIVIL PROCEDURE CASES SESSION 2
(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorneys fees, litigation expenses, and costs or the value of the
property in controversy exceeds One Hundred Thousand pesos (P100,000.00)
or, in such other cases in Metro Manila, where the demand, exclusive of the
abovementioned items exceeds Two Hundred Thousand pesos (P200,000.00).
In determining the jurisdiction of an action whose subject is incapable of
pecuniary estimation, the nature of the principal action or remedy sought must
first be ascertained. If it is primarily for the recovery of a sum of money, the claim
is considered capable of pecuniary estimation and the jurisdiction of the court
depends on the amount of the claim. But, where the primary issue is something
other than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, such are actions
whose subjects are incapable of pecuniary estimation, hence cognizable by the
RTCs.10
Verily, what determines the nature of the action and which court has jurisdiction
over it are the allegations of the complaint and the character of the relief
sought.11
In our considered view, the complaint, albeit entitled as one for collection of a
sum of money with damages, is one incapable of pecuniary estimation; thus,
one within the RTCs jurisdiction. The allegations therein show that it is actually
for breach of contract, thus,
xxxx
7. Under their Contracts, prestation and/or delivery of the items will be
performed and delivered within NINETY (90) DAYS from the receipt of
downpayment. Plaintiff complied with its prestation but defendants defaulted
with their obligation;
xxxx
10. On 12 March 1998, plaintiff sent letter to defendants requesting the latter for
the cancellation of the purchase contracts and refund in full the (50%)
downpayment paid in the total amount of (P 184, 821.50) within five (5) days
upon receipt of the letter
xxxx
12. On 24 March 1998, plaintiff and defendant Patricio A. Villena, personally
talked [to] each other regarding the full refund of the (50%) downpayment in the
54

amount of P 184, 821.50. Defendant informed the plaintiff that it was their fault
because the order from their Australian supplier was made only on 15 December
1997. Defendant promised plaintiff [delivery of] the three (3) Kitchen Cabinets
on or before 10 [M]ay 1998, and the three (3) home appliances were considered
fully paid applying the (50%) downpayment of (P 29,638.50) for home
appliances only. But defendant did not fulfill his promise;
13. Despite all these, repeated demands for the installation of the (3) three
kitchen [c]abinets and complete delivery of home appliances were made, but
defendants did nothing;
x x x x12 (Emphasis added.)
A case for breach of contract is a cause of action either for specific performance
or rescission of contracts.13 An action for rescission of contract, as a counterpart
of an action for specific performance, is incapable of pecuniary estimation, and
therefore falls under the jurisdiction of the RTC.14 In the present case, the
averments in the complaint show that Payoyo sought the cancellation of the
contracts and refund of the downpayments since Villena failed to comply with
the obligation to deliver the appliances and install the kitchen cabinets subject
of the contracts. The court then must examine the facts and the applicable law
to determine whether there is in fact substantial breach that would warrant
rescission or cancellation of the contracts and entitle the respondent for a
refund. While the respondent prayed for the refund, this is just incidental to the
main action, which is the rescission or cancellation of the contracts.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated
November 21, 2003 of the Court of Appeals in CA-G.R. CV No. 70513 and the
Resolution dated March 18, 2004 are AFFIRMED. Costs against petitioner. SO
ORDERED.
G.R. No. 153690 February 15, 2011
DAVID LU vs. PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU
YM, JOHN LU YM, KELLY LU YM, and LUDO & LUYM DEVELOPMENT
CORPORATION
By Decision of August 26, 2008, the Court1 unanimously disposed of the three
present petitions as follows:
WHEREFORE, premises considered, the petitions in G.R. Nos. 153690 and
157381 are DENIED for being moot and academic; while the petition in G.R. No.
170889 is DISMISSED for lack of merit. Consequently, the Status QuoOrder
dated January 23, 2006 is hereby LIFTED.
CIVIL PROCEDURE CASES SESSION 2
The Court of Appeals is DIRECTED to proceed with CA-G.R. CV No. 81163 and
to resolve the same with dispatch.
SO ORDERED[,]2
which Decision was, on motion for reconsideration, the Court voting 4-
1,3 reversed by Resolution of August 4, 2009, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, the Motion for Reconsideration filed by
John Lu Ym and Ludo & LuYm Development Corporation is GRANTED. The
Decision of this Court dated August 26, 2008 is RECONSIDERED and SET
ASIDE. The Complaint in SRC Case No. 021-CEB, now on appeal with the
Court of Appeals in CA-G.R. CV No. 81163, is DISMISSED.
All interlocutory matters challenged in these consolidated petitions are DENIED
for being moot and academic.
SO ORDERED.4
David Lus Motion for Reconsideration and Motion to Refer Resolution to the
Court En Banc was denied by minute Resolution of September 23, 2009.
Following his receipt on October 19, 2009 of the minute Resolution, David Lu
personally filed on October 30, 2009 a Second Motion for Reconsideration and
Motion to Refer Resolution to the Court En Banc. On even date, he filed through
registered mail an "Amended Second Motion for Reconsideration and Motion to
Refer Resolution to the Court En Banc." And on November 3, 2009, he filed a
"Motion for Leave to File [a] Motion for Clarification[, and the] Second Motion for
Reconsideration and Motion to Refer Resolution to the Court En Banc." He later
also filed a "Supplement to Second Motion for Reconsideration with Motion to
Dismiss" dated January 6, 2010.
John Lu Ym and Ludo & Luym Development Corporation (LLDC), meanwhile,
filed with leave a Motion5 for the Issuance of an Entry of Judgment of February
2, 2010, which merited an Opposition from David Lu.
In compliance with the Courts Resolution of January 11, 2010, Kelly Lu Ym,
Victor Lu Ym and Paterno Lu Ym, Jr. filed a Comment/Opposition of March 20,
2010, while John Lu Ym and LLDC filed a Consolidated Comment of March 25,
2010, a Supplement thereto of April 20, 2010, and a Manifestation of May 24,
2010.
55

The present cases were later referred to the Court en banc by Resolution of
October 20, 2010.
Brief Statement of the Antecedents
The three consolidated cases stemmed from the complaint for "Declaration of
Nullity of Share Issue, Receivership and Dissolution" filed on August 14, 2000
before the Regional Trial Court (RTC) of Cebu City by David Lu, et al.against
Paterno Lu Ym, Sr. and sons (Lu Ym father and sons) and LLDC.
By Decision of March 1, 2004, Branch 12 of the RTC ruled in favor of David et
al. by annulling the issuance of the shares of stock subscribed and paid by Lu
Ym father and sons at less than par value, and ordering the dissolution and
asset liquidation of LLDC. The appeal of the trial courts Decision remains
pending with the appellate court in CA-G.R. CV No. 81163.
Several incidents arising from the complaint reached the Court through the
present three petitions.
In G.R. No. 153690 wherein David, et al. assailed the appellate courts
resolutions dismissing their complaint for its incomplete signatory in the
certificate of non-forum shopping and consequently annulling the placing of the
subject corporation under receivership pendente lite, the Court, by Decision of
August 26, 2008, found the issue to have been mooted by the admission by the
trial court of David et al.s Amended Complaint, filed by them pursuant to the
trial courts order to conform to the requirements of the Interim Rules of
Procedure Governing Intra-Corporate Controversies.
Since an amended pleading supersedes the pleading that it amends, the original
complaint of David, et al. was deemed withdrawn from the records.
The Court noted in G.R. No. 153690 that both parties admitted the mootness of
the issue and that the trial court had already rendered a decision on the merits
of the case. It added that the Amended Complaint stands since Lu Ym father
and sons availed of an improper mode (via an Urgent Motion filed with this
Court) to assail the admission of the Amended Complaint.
In G.R. No. 157381 wherein Lu Ym father and sons challenged the appellate
courts resolution restraining the trial court from proceeding with their motion to
lift the receivership order which was filed during the pendency of G.R. No.
153690, the Court, by Decision of August 26, 2008 resolved that the issue was
mooted by the amendment of the complaint and by the trial courts decision on
the merits. The motion having been filed ancillary to the main action, which main
CIVIL PROCEDURE CASES SESSION 2
action was already decided on the merits by the trial court, the Court held
that there was nothing more to enjoin.
G.R. No. 170889 involved the denial by the appellate court of Lu Ym father and
sons application in CA-G.R. CV No. 81163 for a writ of preliminary injunction.
By August 26, 2008 Decision, the Court dismissed the petition after finding no
merit on their argument which they raised for the first time in their motion for
reconsideration before the appellate court of lack of jurisdiction for non-
payment of the correct RTC docket fees.
As reflected early on, the Court, in a turnaround, by Resolution of August 4,
2009, reconsidered its position on the matter of docket fees. It ruled that the trial
court did not acquire jurisdiction over the case for David Lu, et al.s failure to pay
the correct docket fees, hence, all interlocutory matters and incidents subject of
the present petitions must consequently be denied.
Taking Cognizance of the Present Incidents
The Internal Rules of the Supreme Court (IRSC) states that the Court en
banc shall act on the following matters and cases:
(a) cases in which the constitutionality or validity of any treaty,
international or executive agreement, law, executive order, presidential
decree, proclamation, order, instruction, ordinance, or regulation is in
question;
(b) criminal cases in which the appealed decision imposes the death
penalty or reclusion perpetua;
(c) cases raising novel questions of law;
(d) cases affecting ambassadors, other public ministers, and consuls;
(e) cases involving decisions, resolutions, and orders of the Civil
Service Commission, the Commission on Elections, and the
Commission on Audit;
(f) cases where the penalty recommended or imposed is the dismissal
of a judge, the disbarment of a lawyer, the suspension of any of them
for a period of more than one year, or a fine exceeding forty thousand
pesos;
56

(g) cases covered by the preceding paragraph and involving the
reinstatement in the judiciary of a dismissed judge, the reinstatement of
a lawyer in the roll of attorneys, or the lifting of a judges suspension or
a lawyers suspension from the practice of law;
(h) cases involving the discipline of a Member of the Court, or a
Presiding Justice, or any Associate Justice of the collegial appellate
court;
(i) cases where a doctrine or principle laid down by the Court en banc or
by a Division my be modified or reversed;
(j) cases involving conflicting decisions of two or more divisions;
(k) cases where three votes in a Division cannot be obtained;
(l) Division cases where the subject matter has a huge financial impact
on businesses or affects the welfare of a community;
(m) Subject to Section 11 (b) of this rule, other division cases that, in
the opinion of at least three Members of the Division who are voting and
present, are appropriate for transfer to the Court en banc;
(n) cases that the Court en banc deems of sufficient importance to merit
its attention; and
(o) all matters involving policy decisions in the administrative
supervision of all courts and their personnel.6(underscoring supplied)
The enumeration is an amalgamation of SC Circular No. 2-89 (February 7,
1989), as amended by En Banc Resolution of November 18, 1993, and the
amplifications introduced by Resolution of January 18, 2000 in A.M. No. 99-12-
08-SC with respect to administrative cases and matters.
The present cases fall under at least three types of cases for consideration by
the Court En Banc. At least three members of the Courts Second Division (to
which the present cases were transferred,7 they being assigned to a Member
thereof) found, by Resolution of October 20, 2010, that the cases were
appropriate for referral-transfer to the Court En Banc which subsequently
accepted8 the referral in view of the sufficiently important reason to resolve all
doubts on the validity of the challenged resolutions as they appear to modify or
reverse doctrines or principles of law.
CIVIL PROCEDURE CASES SESSION 2
In Firestone Ceramics v. Court of Appeals,9 the Court treated the consolidated
cases as En Banc cases and set the therein petitioners motion for oral
argument, after finding that the cases were of sufficient importance to merit the
Court En Bancs attention. It ruled that the Courts action is a legitimate and valid
exercise of its residual power.10
In Limketkai Sons Milling, Inc. v. Court of Appeals, the Court conceded that it is
not infallible. Should any error of judgment be perceived, it does not blindly
adhere to such error, and the parties adversely affected thereby are not
precluded from seeking relief therefrom, by way of a motion for reconsideration.
In this jurisdiction, rectification of an error, more than anything else, is of
paramount importance.
xxxx
It bears stressing that where, as in the present case, the Court En Banc
entertains a case for its resolution and disposition, it does so without implying
that the Division of origin is incapable of rendering objective and fair justice. The
action of the Court simply means that the nature of the cases calls for en banc
attention and consideration. Neither can it be concluded that the Court has taken
undue advantage of sheer voting strength. It was merely guided by the well-
studied finding and sustainable opinion of the majority of its actual membership
that, indeed, subject cases are of sufficient importance meriting the action and
decision of the whole Court. It is, of course, beyond cavil that all the members
of this highest Court of the land are always embued with the noblest of intentions
in interpreting and applying the germane provisions of law, jurisprudence, rules
and Resolutions of the Court to the end that public interest be duly safeguarded
and rule of law be observed.11
It is argued that the assailed Resolutions in the present cases have already
become final,12 since a second motion for reconsideration is prohibited except
for extraordinarily persuasive reasons and only upon express leave first
obtained;13 and that once a judgment attains finality, it thereby becomes
immutable and unalterable, however unjust the result of error may appear.
The contention, however, misses an important point. The doctrine of
immutability of decisions applies only to final and executory decisions. Since the
present cases may involve a modification or reversal of a Court-ordained
doctrine or principle, the judgment rendered by the Special Third Division may
be considered unconstitutional, hence, it can never become final. It finds
mooring in the deliberations of the framers of the Constitution:
On proposed Section 3(4), Commissioner Natividad asked what the effect would
be of a decision that violates the proviso that "no doctrine or principle of law laid
57

down by the court in a decision rendered en banc or in division may be modified
or reversed except by the court en banc." The answer given was that such a
decision would be invalid. Following up, Father Bernas asked whether the
decision, if not challenged, could become final and bindingat least on the parties.
Romulo answered that, since such a decision would be in excess of
jurisdiction, the decision on the case could be reopened
anytime.14 (emphasis and underscoring supplied)
A decision rendered by a Division of this Court in violation of this constitutional
provision would be in excess of jurisdiction and, therefore, invalid.15 Any entry
of judgment may thus be said to be "inefficacious" 16 since the decision is void
for being unconstitutional.
While it is true that the Court en banc exercises no appellate jurisdiction over its
Divisions, Justice Minerva Gonzaga-Reyes opined in Firestone and concededly
recognized that "[t]he only constraint is that any doctrine or principle of law laid
down by the Court, either rendered en banc or in division, may be overturned or
reversed only by the Court sitting en banc."17
That a judgment must become final at some definite point at the risk of
occasional error cannot be appreciated in a case that embroils not only a
general allegation of "occasional error" but also a serious accusation of a
violation of the Constitution, viz., that doctrines or principles of law were
modified or reversed by the Courts Special Third Division August 4, 2009
Resolution.
The law allows a determination at first impression that a doctrine or principle laid
down by the court en banc or in division may be modified or reversed in a case
which would warrant a referral to the Court En Banc. The use of the word "may"
instead of "shall" connotes probability, not certainty, of modification or reversal
of a doctrine, as may be deemed by the Court. Ultimately, it is the entire Court
which shall decide on the acceptance of the referral and, if so, "to reconcile any
seeming conflict, to reverse or modify an earlier decision, and to declare the
Courts doctrine."18
The Court has the power and prerogative to suspend its own rules and to
exempt a case from their operation if and when justice requires it,19 as in the
present circumstance where movant filed a motion for leave after the prompt
submission of a second motion for reconsideration but, nonetheless, still
within 15 days from receipt of the last assailed resolution.
Well-entrenched doctrines or principles of law that went astray need to be
steered back to their proper course. Specifically, as David Lu correctly points
out, it is necessary to reconcile and declare the legal doctrines regarding actions
CIVIL PROCEDURE CASES SESSION 2
that are incapable of pecuniary estimation, application of estoppel by laches in
raising an objection of lack of jurisdiction, and whether bad faith can be deduced
from the erroneous annotation of lis pendens.
Upon a considered, thorough reexamination, the Court grants David Lus
Motion for Reconsideration. The assailed Resolutions of August 4, 2009
and September 23, 2009, which turn turtle settled doctrines, must be
overturned. The Court thus reinstates the August 26, 2008 Decision wherein a
three-tiered approach was utilized to analyze the issue on docket fees:
In the instant case, however, we cannot grant the dismissal prayed for because
of the following reasons: First, the case instituted before the RTC is one
incapable of pecuniary estimation. Hence, the correct docket fees were
paid. Second, John and LLDC are estopped from questioning the
jurisdiction of the trial court because of their active participation in the
proceedings below, and because the issue of payment of insufficient docket fees
had been belatedly raised before the Court of Appeals, i.e., only in their motion
for reconsideration. Lastly, assuming that the docket fees paid were truly
inadequate, the mistake was committed by the Clerk of Court who
assessed the same and not imputable to David; and as to the deficiency, if
any, the same may instead be considered a lien on the judgment that may
thereafter be rendered.20 (italics in the original; emphasis and underscoring
supplied)
The Value of the Subject Matter Cannot be Estimated
On the claim that the complaint had for its objective the nullification of the
issuance of 600,000 shares of stock of LLDC, the real value of which based on
underlying real estate values, as alleged in the complaint, stands
at P1,087,055,105, the Courts assailed August 4, 2009 Resolution found:
Upon deeper reflection, we find that the movants [Lu Ym father & sons] claim
has merit. The 600,000 shares of stock were, indeed, properties in litigation.
They were the subject matter of the complaint, and the relief prayed for entailed
the nullification of the transfer thereof and their return to LLDC. David, et al., are
minority shareholders of the corporation who claim to have been prejudiced by
the sale of the shares of stock to the Lu Ym father and sons. Thus, to the extent
of the damage or injury they allegedly have suffered from this sale of the shares
of stock, the action they filed can be characterized as one capable of pecuniary
estimation. The shares of stock have a definite value, which was declared by
plaintiffs [David Lu, et al.] themselves in their complaint. Accordingly, the docket
fees should have been computed based on this amount. This is clear from the
following version of Rule 141, Section 7, which was in effect at the time the
complaint was filed[.]21 (emphasis and underscoring supplied)
58

The said Resolution added that the value of the 600,000 shares of stock, which
are the properties in litigation, should be the basis for the computation of the
filing fees. It bears noting, however, that David, et al. are not claiming to own
these shares. They do not claim to be the owners thereof entitled to be the
transferees of the shares of stock. The mention of the real value of the shares
of stock, over which David, et al. do not, it bears emphasis, interpose a
claim of right to recovery, is merely narrative or descriptive in order to
emphasize the inequitable price at which the transfer was effected.
The assailed August 4, 2009 Resolution also stated that "to the extent of the
damage or injury [David, et al.] allegedly have suffered from this sale," the action
"can be characterized as one capable of pecuniary estimation." The Resolution
does not, however, explore the value of the extent of the damage or injury. Could
it be the pro ratadecrease (e.g., from 20% to 15%) of the percentage
shareholding of David, et al. vis--vis to the whole?
Whatever property, real or personal, that would be distributed to the
stockholders would be a mere consequence of the main action. In the end, in
the event LLDC is dissolved, David, et al. would not be getting the value of the
600,000 shares, but only the value of their minority number of shares, which are
theirs to begin with.
The complaint filed by David, et al. is one for declaration of nullity of share
issuance. The main relief prayed for both in the original complaint and the
amended complaint is the same, that is, to declare null and void the issuance of
600,000 unsubscribed and unissued shares to Lu Ym father and sons, et al. for
a price of 1/18 of their real value, for being inequitable, having been done in
breach of directors fiduciarys duty to stockholders, in violation of the minority
stockholders rights, and with unjust enrichment.
As judiciously discussed in the Courts August 26, 2008 Decision, the test in
determining whether the subject matter of an action is incapable of pecuniary
estimation is by ascertaining the nature of the principal action or remedy sought.
It explained:
x x x To be sure, the annulment of the shares, the dissolution of the corporation
and the appointment of receivers/management committee are actions which do
not consist in the recovery of a sum of money. If, in the end, a sum of money
or real property would be recovered, it would simply be the consequence of such
principal action. Therefore, the case before the RTC was incapable of pecuniary
estimation.22 (italics in the original, emphasis and underscoring supplied)
CIVIL PROCEDURE CASES SESSION 2
Actions which the Court has recognized as being incapable of pecuniary
estimation include legality of conveyances. In a case involving annulment of
contract, the Court found it to be one which cannot be estimated:
Petitioners argue that an action for annulment or rescission of a contract of sale
of real property is a real action and, therefore, the amount of the docket fees to
be paid by private respondent should be based either on the assessed value of
the property, subject matter of the action, or its estimated value as alleged in
the complaint, pursuant to the last paragraph of 7(b) of Rule 141, as amended
by the Resolution of the Court dated September 12, 1990. Since private
respondents alleged that the land, in which they claimed an interest as heirs,
had been sold for P4,378,000.00 to petitioners, this amount should be
considered the estimated value of the land for the purpose of determining the
docket fees.
On the other hand, private respondents counter that an action for annulment or
rescission of a contract of sale of real property is incapable of pecuniary
estimation and, so, the docket fees should be the fixed amount of P400.00 in
Rule 141, 7(b)(1). In support of their argument, they cite the cases of Lapitan
v. Scandia, Inc. and Bautista v. Lim. In Lapitan this Court, in an opinion by
Justice J.B.L. Reyes, held:
A review of the jurisprudence of this Court indicates that in determining whether
an action is one the subject matter of which is not capable of pecuniary
estimation, this Court has adopted the criterion of first ascertaining the nature of
the principal action or remedy sought. If it is primarily for the recovery of a sum
of money, the claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first instance would
depend on the amount of the claim. However, where the basic issue is
something other than the right to recover a sum of money, or where the money
claim is purely incidental to, or a consequence of, the principal relief sought, like
in suits to have the defendant perform his part of the contract (specific
performance) and in actions for support, or for annulment of a judgment or to
foreclose a mortgage, this Court has considered such actions as cases where
the subject of the litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance. The rationale of the rule is
plainly that the second class cases, besides the determination of
damages, demand an inquiry into other factors which the law has deemed
to be more within the competence of courts of first instance, which were
the lowest courts of record at the time that the first organic laws of the Judiciary
were enacted allocating jurisdiction (Act 136 of the Philippine Commission of
June 11, 1901).
Actions for specific performance of contracts have been expressly pronounced
to be exclusively cognizable by courts of first instance: De Jesus vs. Judge
59

Garcia, L-26816, February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu
Liong, L-21285, April 29, 1966. And no cogent reason appears, and none is
here advanced by the parties, why an action for rescission (or resolution)
should be differently treated, a "rescission" being a counterpart, so to
speak, of "specific performance". In both cases, the court would certainly
have to undertake an investigation into facts that would justify one act or
the other. No award for damages may be had in an action for rescission
without first conducting an inquiry into matters which would justify the
setting aside of a contract, in the same manner that courts of first instance
would have to make findings of fact and law in actions not capable of pecuniary
estimation expressly held to be so by this Court, arising from issues like those
raised in Arroz v. Alojado, et al., L-22153, March 31, 1967 (the legality or
illegality of the conveyance sought for and the determination of the validity of
the money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950 (validity
of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of a
mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the
parties, the right to support created by the relation, etc., in actions for
support), De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or
nullity of documents upon which claims are predicated). Issues of the same
nature may be raised by a party against whom an action for rescission has been
brought, or by the plaintiff himself. It is, therefore, difficult to see why a prayer
for damages in an action for rescission should be taken as the basis for
concluding such action as one capable of pecuniary estimation a prayer
which must be included in the main action if plaintiff is to be compensated for
what he may have suffered as a result of the breach committed by defendant,
and not later on precluded from recovering damages by the rule against splitting
a cause of action and discouraging multiplicity of suits. 23 (emphasis and
underscoring supplied)
IN FINE, the Court holds that David Lu, et al.s complaint is one incapable of
pecuniary estimation, hence, the correct docket fees were paid. The Court thus
proceeds to tackle the arguments on estoppel and lien, mindful that the
succeeding discussions rest merely on a contrary assumption, viz., that there
was deficient payment.
Estoppel Has Set In
Assuming arguendo that the docket fees were insufficiently paid, the doctrine of
estoppel already applies.
The assailed August 4, 2009 Resolution cited Vargas v. Caminas24 on the non-
applicability of the Tijam doctrine where the issue of jurisdiction was, in fact,
raised before the trial court rendered its decision. Thus the Resolution
explained:
CIVIL PROCEDURE CASES SESSION 2
Next, the Lu Ym father and sons filed a motion for the lifting of the receivership
order, which the trial court had issued in the interim. David, et al., brought the
matter up to the CA even before the trial court could resolve the motion.
Thereafter, David, at al., filed their Motion to Admit Complaint to Conform to the
Interim Rules Governing Intra-Corporate Controversies. It was at this point that
the Lu Ym father and sons raised the question of the amount of filing fees paid.
They also raised this point again in the CA when they appealed the trial courts
decision in the case below.
We find that, in the circumstances, the Lu Ym father and sons are not estopped
from challenging the jurisdiction of the trial court. They raised the insufficiency
of the docket fees before the trial court rendered judgment and continuously
maintained their position even on appeal to the CA. Although the manner of
challenge was erroneous they should have addressed this issue directly to the
trial court instead of the OCA they should not be deemed to have waived their
right to assail the jurisdiction of the trial court.25 (emphasis and underscoring
supplied)
Lu Ym father and sons did not raise the issue before the trial court. The narration
of facts in the Courts original decision shows that Lu Ym father and sons merely
inquired from the Clerk of Court on the amount of paid docket fees on January
23, 2004. They thereafter still "speculat[ed] on the fortune of litigation."26 Thirty-
seven days later or on March 1, 2004 the trial court rendered its decision
adverse to them.
Meanwhile, Lu Ym father and sons attempted to verify the matter of docket fees
from the Office of the Court Administrator (OCA). In their Application for the
issuance a writ of preliminary injunction filed with the Court of Appeals, they still
failed to question the amount of docket fees paid by David Lu, et al. It was only
in their Motion for Reconsideration of the denial by the appellate court of their
application for injunctive writ that they raised such issue.
Lu Ym father and sons further inquiry from the OCA cannot redeem them. A
mere inquiry from an improper officeat that, could not, by any stretch, be
considered as an act of having raised the jurisdictional question prior to the
rendition of the trial courts decision. In one case, it was held:
Here it is beyond dispute that respondents paid the full amount of docket fees
as assessed by the Clerk of Court of the Regional Trial Court of Malolos,
Bulacan, Branch 17, where they filed the complaint. If petitioners believed that
the assessment was incorrect, they should have questioned it before the trial
court. Instead, petitioners belatedly question the alleged underpayment of
docket fees through this petition, attempting to support their position with
the opinion and certification of the Clerk of Court of another judicial
60

region. Needless to state, such certification has no bearing on the instant
case.27 (italics in the original; emphasis and underscoring in the original)
The inequity resulting from the abrogation of the whole proceedings at this late
stage when the decision subsequently rendered was adverse to the father and
sons is precisely the evil being avoided by the equitable principle of estoppel.
No Intent to Defraud the Government
Assuming arguendo that the docket fees paid were insufficient, there is no proof
of bad faith to warrant a dismissal of the complaint, hence, the following doctrine
applies:
x x x In Sun Insurance Office, Ltd., (SIOL) v. Asuncion, this Court ruled that the
filing of the complaint or appropriate initiatory pleading and the payment of the
prescribed docket fee vest a trial court with jurisdiction over the subject matter
or nature of the action. If the amount of docket fees paid is insufficient
considering the amount of the claim, the clerk of court of the lower court involved
or his duly authorized deputy has the responsibility of making a deficiency
assessment. The party filing the case will be required to pay the deficiency, but
jurisdiction is not automatically lost.28 (underscoring supplied)
The assailed Resolution of August 4, 2009 held, however, that the above-quoted
doctrine does not apply since there was intent to defraud the government, citing
one attendant circumstance the annotation of notices of lis pendens on real
properties owned by LLDC. It deduced:
From the foregoing, it is clear that a notice of lis pendens is availed of mainly in
real actions. Hence, when David, et al., sought the annotation of notices of lis
pendens on the titles of LLDC, they acknowledged that the complaint they had
filed affected a title to or a right to possession of real properties. At the very
least, they must have been fully aware that the docket fees would be based on
the value of the realties involved. Their silence or inaction to point this out to the
Clerk of Court who computed their docket fees, therefore, becomes highly
suspect, and thus, sufficient for this Court to conclude that they have crossed
beyond the threshold of good faith and into the area of fraud. Clearly, there was
an effort to defraud the government in avoiding to pay the correct docket fees.
Consequently, the trial court did not acquire jurisdiction over the case. 29
All findings of fraud should begin the exposition with the presumption of good
faith. The inquiry is not whether there was good faith on the part of David, et al.,
but whether there was bad faith on their part.
CIVIL PROCEDURE CASES SESSION 2
The erroneous annotation of a notice of lis pendens does not negate good faith.
The overzealousness of a party in protecting pendente lite his perceived
interest, inchoate or otherwise, in the corporations properties from depletion or
dissipation, should not be lightly equated to bad faith.
That notices of lis pendens were erroneously annotated on the titles does not
have the effect of changing the nature of the action. The aggrieved party is not
left without a remedy, for they can move to cancel the annotations. The assailed
August 4, 2009 Resolution, however, deemed such act as an acknowledgement
that the case they filed was a real action, concerning as it indirectly does the
corporate realties, the titles of which were allegedly annotated. This conclusion
does not help much in ascertaining the filing fees because the value of these
real properties and the value of the 600,000 shares of stock are different.
Further, good faith can be gathered from the series of amendments on the
provisions on filing fees, that the Court was even prompted to make a
clarification.1avvphi1
When David Lu, et al. filed the Complaint on August 14, 2000 or five days after
the effectivity of the Securities Regulation Code or Republic Act No. 8799,30 the
then Section 7 of Rule 141 was the applicable provision, without any restricted
reference to paragraphs (a) and (b) 1 & 3 or paragraph (a) alone. Said section
then provided:
SEC. 7. Clerks of Regional Trial Courts.
(a) For filing an action or a permissive counterclaim or money claim
against an estate not based on judgment, or for filing with leave of court
a third-party, fourth-party, etc. complaint, or a complaint in intervention,
and for all clerical services in the same, if the total sum claimed,
exclusive of interest, or the stated value of the property in litigation,
is:
xxxx
(b) For filing:
1. Actions where the value of the subject ... x
matter cannot be estimated xx
2. Special civil actions except judicial foreclosure
of mortgage which shall be governed by .....
paragraph (a) above xxx
61

3. . (2) Controversies arising out of intra-corporate, partnership, or
All other actions not involving property
xxx
In a real action, the assessed value of the property, or if there is none, the
estimated value thereof shall be alleged by the claimant and shall be the basis
in computing the fees.
x x x x31 (emphasis supplied)
The Court, by Resolution of September 4, 2001 in A. M. No. 00-8-10-
SC,32 clarified the matter of legal fees to be collected in cases formerly
cognizable by the Securities and Exchange Commission following their transfer
to the RTC.
Clarification has been sought on the legal fees to be collected and the period of
appeal applicable in cases formerly cognizable by the Securities and Exchange
Commission. It appears that the Interim Rules of Procedure on Corporate
Rehabilitation and the Interim Rules of Procedure for Intra-Corporate
Controversies do not provide the basis for the assessment of filing fees and the
period of appeal in cases transferred from the Securities and Exchange
Commission to particular Regional Trial Courts.
The nature of the above mentioned cases should first be ascertained. Section
3(a), Rule 1 of the 1997 Rules of Civil Procedure defines civil action as one by
which a party sues another for the enforcement or protection of a right, or the
prevention or redress of a wrong. It further states that a civil action may either
be ordinary or special, both being governed by the rules for ordinary civil actions
subject to the special rules prescribed for special civil actions. Section 3(c) of
the same Rule, defines a special proceeding as a remedy by which a party
seeks to establish a status, a right, or a particular fact.
Applying these definitions, the cases covered by the Interim Rules for Intra-
Corporate Controversies should be considered as ordinary civil actions.
These cases either seek the recovery of damages/property or specific
performance of an act against a party for the violation or protection of a
right. These cases are:
(1) Devices or schemes employed by, or any act of, the board of
directors, business associates, officers or partners, amounting to fraud
or misrepresentation which may be detrimental to the interest of the
public and/or of the stockholders, partners, or members of any
corporation, partnership, or association;
CIVIL PROCEDURE CASES SESSION 2
association relations, between and among stockholders, members or
associates; and between, any or all of them and the corporation,
partnership, or association of which they are stockholders, members or
associates, respectively;
(3) Controversies in the election or appointment of directors, trustees,
officers, or managers of corporations, partnerships, or associations;
(4) Derivative suits; and
(5) Inspection of corporate books.
On the other hand, a petition for rehabilitation, the procedure for which is
provided in the Interim Rules of Procedure on Corporate Recovery, should be
considered as a special proceeding. It is one that seeks to establish the status
of a party or a particular fact. As provided in section 1, Rule 4 of the Interim
Rules on Corporate Recovery, the status or fact sought to be established is the
inability of the corporate debtor to pay its debts when they fall due so that a
rehabilitation plan, containing the formula for the successful recovery of the
corporation, may be approved in the end. It does not seek a relief from an injury
caused by another party.
Section 7 of Rule 141 (Legal Fees) of the Revised Rules of Court lays the
amount of filing fees to be assessed for actions or proceedings filed with the
Regional Trial Court. Section 7(a) and (b) apply to ordinary civil actionswhile
7(d) and (g) apply to special proceedings.
In fine, the basis for computing the filing fees in intra-corporate cases
shall be section 7(a) and (b) l & 3 of Rule 141. For petitions for rehabilitation,
section 7(d) shall be applied. (emphasis and underscoring supplied)
The new Section 21(k) of Rule 141 of the Rules of Court, as amended by A.M.
No. 04-2-04-SC33 (July 20, 2004), expressly provides that "[f]or petitions for
insolvency or other cases involving intra-corporate controversies, the fees
prescribed under Section 7(a) shall apply." Notatu dignum is
that paragraph (b) 1 & 3 of Section 7 thereof was omitted from the reference.
Said paragraph34 refers to docket fees for filing "[a]ctions where the value of the
subject matter cannot be estimated" and "all other actions not involving
property."
By referring the computation of such docket fees to paragraph (a) only, it
denotes that an intra-corporate controversy always involves a property in
litigation, the value of which is always the basis for computing the applicable
62

filing fees. The latest amendments seem to imply that there can be no case of
intra-corporate controversy where the value of the subject matter cannot be
estimated. Even one for a mere inspection of corporate books.
If the complaint were filed today, one could safely find refuge in the express
phraseology of Section 21 (k) of Rule 141 that paragraph (a) alone applies.
In the present case, however, the original Complaint was filed on August 14,
2000 during which time Section 7, without qualification, was the applicable
provision. Even the Amended Complaint was filed on March 31, 2003 during
which time the applicable rule expressed that paragraphs (a) and (b) l & 3 shall
be the basis for computing the filing fees in intra-corporate cases, recognizing
that there could be an intra-corporate controversy where the value of the subject
matter cannot be estimated, such as an action for inspection of corporate books.
The immediate illustration shows that no mistake can even be attributed to the
RTC clerk of court in the assessment of the docket fees.
Finally, assuming there was deficiency in paying the docket fees and assuming
further that there was a mistake in computation, the deficiency may be
considered a lien on the judgment that may be rendered, there being no
established intent to defraud the government.
WHEREFORE, the assailed Resolutions of August 4, 2009 and September 23,
2009 are REVERSED and SET ASIDE. The Courts Decision of August 26,
2008 is REINSTATED.
The Court of Appeals is DIRECTED to resume the proceedings and resolve the
remaining issues with utmost dispatch in CA-G.R. CV No. 81163. SO
ORDERED.
G.R. No. 165777 July 25, 2011
CEFERINA DE UNGRIA [DECEASED], substituted by her HEIRS,
represented by LOLITA UNGRIA SAN JUAN-JAVIER, and RHODORA R.
PELOMIDA as their Attorney-in-fact vs. CA, RTC, ROSARIO DIDELES
VDA. DE CASTOR, NEPTHALIE CASTOR ITUCAS, FEROLYN CASTOR
FACURIB, RACHEL DE CASTOR, LEA CASTOR DOLLOLOSA, and
ROSALIE CASTOR BENEDICTO
Assailed in this petition for review on certiorari are the Decision 1 dated May 26,
2004 and the Resolution2 dated September 17, 2004 of the Court of Appeals
(CA) in CA-G.R. SP No. 60764.
On August 26, 1999, respondents Rosario Dideles Vda. de Castor (Rosario),
Nepthalie Castor Itucas, Ferolyn Castor Facurib (Ferolyn), Rachel De Castor,
CIVIL PROCEDURE CASES SESSION 2
Lea Castor Dollolosa and Rosalie Castor Benedicto, filed with the Regional Trial
Court (RTC) of General Santos City a Complaint3 for ownership, possession and
damages, and alternative causes of action either to declare two documents as
patent nullities, and/or for recovery of Rosario's conjugal share with damages or
redemption of the subject land against petitioner Ceferina de Ungria, defendants
Avelino Gumban, Dolores Cagaitan, Zacasio Poutan, PO1 Jonas Montales,
Ignacio Olarte and alias Dory. Respondent Rosario is the surviving wife of the
late Fernando Castor, while the rest of the respondents are their legitimate
children. The documents they sought to annul are (1) the Deed of Transfer of
Rights and Interest including Improvements thereon dated October 3, 1960
allegedly executed by Fernando in favor of Eugenio de Ungria, petitioner's
father; and (2) the Affidavit of Relinquishment dated November 23, 1960
executed by Eugenio in favor of petitioner.
Petitioner Ceferina filed a Motion to Dismiss4 (Ex-Abundante Ad Cautelam) on
the following grounds: (1) the claim or demand has been extinguished by virtue
of the valid sale of Lot No. 1615 to Eugenio; (2) the action is barred by
extraordinary acquisitive prescription; (3) the action is barred by laches; and (4)
plaintiff failed to state a cause of action, or filed the case prematurely for failure
to resort to prior barangay conciliation proceedings.
Petitioner also filed an Addendum to the Motion to Dismiss5 raising the following
additional grounds: (1) plaintiffs have no legal capacity to sue; and (2) the court
has no jurisdiction over the case for failure of plaintiffs to pay the filing fee in full.
Respondents filed their Opposition thereto.
On November 19, 1999, the RTC issued an Order 6 denying the motion to
dismiss, to wit:
After the motion to dismiss and its addendum have been received, it is now ripe
for resolution. One of the grounds alleged in the complaint is for the recovery of
conjugal share on Lot No. 1615, of Pls-209 D with damages.
It is alleged that the late Fernando Castor and Rosario Dideles Vda. de Castor
were married on September 15, 1952, and the application to the land was dated
January 17, 1952 and the patent was issued by the President on November 19,
1954.
The said land was sold to the defendant on October 3, 1960 (Annex C) and an
Affidavit of Relinquishment dated November 23, 1960 which was made a part
thereof as Annex "D." Considering the marriage of September 15, 1992, the said
land became conjugal as of the date of the marriage and, therefore, thereof
belongs to the wife, Rosario Dideles Vda. de Castor.
63

Thus, considering the above, the motion to dismiss is DENIED.7
Petitioner Ceferina filed a Motion for Reconsideration,8 which the RTC denied
in an Order9 dated February 4, 2000.
Petitioner filed an Omnibus Motion10 asking the RTC to resolve the issues of (1)
whether or not the complaint should be dismissed or expunged from the records
pursuant to Supreme Court (SC) Circular No. 7; (2) reconsidering the findings
contained in the Order dated February 4, 2000; and (3) holding in abeyance the
submission of the answer to the complaint.
Pending resolution of the motion, respondents filed a Motion to Allow11 them to
continue prosecuting this case as indigent litigants.
On March 8, 2000, the RTC resolved the Omnibus Motion in an Order 12 that
read in this wise:
On the omnibus motion regarding filing fees, the plaintiffs asserted in its motion
that they are charging defendant actual and compensatory damages such as
are proved during the hearing of this case. So also are attorneys fees and moral
damages, all to be proved during the hearing of this case.
Since there was no hearing yet, they are not in a possession (sic) to determine
how much is to be charged.
At any rate, if after hearing the Clerk of Court determine that the filing fees is still
insufficient, considering the total amount of the claim, the Clerk of Court should
determine and, thereafter, if any amount is found due, he must require the
private respondent to pay the same x x x.
As to the second issue, the same has already been decided in its order dated
February 4, 2000.
WHEREFORE, premises considered, the omnibus motion is DENIED.
The defendant shall file their answer within fifteen (15) days from receipt of this
order.13
From this Order, petitioner filed a motion for reconsideration and clarification on
whether plaintiffs should be allowed to continue prosecuting the case as indigent
litigants.
On March 30, 2000, the RTC issued a Clarificatory Order14 reading as follows:
CIVIL PROCEDURE CASES SESSION 2
As has been said, the plaintiff asserted in its motion that they are charging
defendants actual and compensatory damages as has been proved during the
hearing of this case. So also are attorney's fees and moral damages all to be
proved during the hearing of this case.
Since there was no hearing yet, they are not in a possession (sic) to determine
how much is to be charged.
At any rate, after hearing, the Clerk of Court determines that the filing fee is still
insufficient, the same shall be considered as lien on the judgment that may be
entered.
As to the motion seeking from the Honorable Court allowance to allow plaintiff
to continue prosecuting this case as indigent litigants, suffice it to say that the
same is already provided for in this order.
WHEREFORE, the defendants shall file their answer within fifteen (15) days
from receipt of this Order.15
In an Order dated May 31, 2000, the RTC again denied petitioner's motion for
reconsideration.
Petitioner filed with the CA a petition for certiorari and prohibition with prayer for
the issuance of a temporary restraining order and/or writ of preliminary
injunction. Petitioner sought the nullification of the Order dated November 19,
1999 and the subsequent orders issued by the RTC thereto for having been
issued with grave abuse of discretion amounting to lack or excess of jurisdiction.
Respondents filed their Comment thereto.
In a Decision dated May 26, 2004, the CA dismissed the petition. The CA found
that SC Circular No. 7 would not apply where the amount of damages or value
of the property was immaterial; that the Circular could be applied only in cases
where the amount claimed or the value of the personal property was
determinative of the court's jurisdiction citing the case of Tacay v. RTC of
Tagum, Davao del Norte.16 The CA found that respondents had paid the
corresponding docket fees upon the filing of the complaint, thus, the RTC had
acquired jurisdiction over the case despite the failure to state the amount of
damages claimed in the body of the complaint or in the prayer thereof. The CA
found that the RTC did not commit grave abuse of discretion amounting to lack
of jurisdiction when it denied petitioner's motion to dismiss. It noted that the
RTC's Clarificatory Order dated March 30, 2000, which stated that "if after
hearing the Clerk of Court determines that the filing fee is still insufficient, the
same shall be considered as lien on the judgment that may be entered" was in
accordance with the rule laid down in Sun Insurance Office, Ltd. v.
64

Asuncion.17 The CA proceeded to state that a judicious examination of the
complaint pointed to a determination of the respective rights and interests of the
parties over the property based on the issues presented therein which could
only be determined in a full-blown trial on the merits of the case.
Petitioner filed a Motion for Reconsideration, which the CA denied in a
Resolution dated September 17, 2004. The CA ruled, among others, that the
defenses of acquisitive prescription and laches were likewise unavailing. It
found that the subject property is covered by a Torrens title (OCT No. V-19556);
thus, it is axiomatic that adverse, notorious and continuous possession under a
claim of ownership for the period fixed by law is ineffective against a Torrens
title; that unless there are intervening rights of third persons which may be
affected or prejudiced by a decision directing the return of the lot to petitioner,
the equitable defense of laches will not apply as against the registered owner.
Hence, this petition for review on certiorari where petitioner raises the following
assignment of errors:
THE COURT OF APPEALS ERRED IN NOT FINDING THAT
RESPONDENT TRIAL COURT COMMITTED GRAVE ABUSE OF
DISCRETION IN DENYING PETITIONER'S MOTION TO DISMISS
DESPITE RESPONDENTS' NON-PAYMENT OF THE CORRECT
DOCKET FEES.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE
ACTION OF PRIVATE RESPONDENTS IS BARRED BY LACHES
AND EXTRAORDINARY ACQUISITIVE PRESCRIPTION.18
We find the petition without merit.
Preliminarily, although not raised as an issue in this petition, we find it necessary
to discuss the issue of jurisdiction over the subject matter of this case.
Respondents' complaint was filed in 1999, at the time Batas Pambansa Blg.
(BP) 129, the Judiciary Reorganization Act of 1980, was already amended by
Republic Act (RA) No. 7691, An Act Expanding the Jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts, amending for the purpose BP Blg. 129.19 Section 1 of RA 7691,
amending BP Blg. 129, provides that the RTC shall exercise exclusive original
jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the
"Judiciary Reorganization Act of 1980," is hereby amended to read as follows:
CIVIL PROCEDURE CASES SESSION 2
Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty Thousand Pesos (P20,000.00) or for
civil actions in Metro Manila, where such value exceeds Fifty Thousand
Pesos (P50,000.00), except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is
conferred upon the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts; x x x
Section 3 of RA No. 7691 expanded the exclusive original jurisdiction of the first
level courts, thus:
Section 3. Section 33 of the same law (BP Blg. 129) is hereby amended to read
as follows:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty Thousand Pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty Thousand Pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes, the value of
such property shall be determined by the assessed value of the adjacent lots.
Respondents filed their Complaint with the RTC; hence, we would first
determine whether the RTC has jurisdiction over the subject matter of this case
based on the above-quoted provisions.
The Complaint filed by respondents in the RTC was for ownership, possession
and damages, and alternative causes of action either to declare two documents
as patent nullities and/or for recovery of conjugal share on the subject land with
65

damages or redemption of the subject land. In their Complaint, respondents
claimed that Rosario and Fernando are the registered owners of the subject land
with an assessed value of P12,780.00; that the couple left the cultivation and
enjoyment of the usufruct of the subject land to Fernando's mother and her
second family to augment their means of livelihood; that respondent Rosario
and Fernando thought that when the latter's mother died in 1980, the subject
land was in the enjoyment of the second family of his mother, but later learned
that the subject land was leased by petitioner Ceferina; that sometime in August
1999, respondents learned of the existence of the Deed of Transfer of Rights
and Interest including Improvements thereon dated October 3, 1960, where
Fernando had allegedly transferred his rights and interests on the subject land
in favor of Eugenio, petitioner Ceferina's father, as well as an Affidavit of
Relinquishment dated November 23, 1960 executed by Eugenio in favor of
petitioner Ceferina; that Fernando's signature in the Deed of Transfer was not
his but a forgery; and the Affidavit of Relinquishment was also void as it was a
direct result of a simulated Deed of Transfer.
Respondents prayed that they be declared as absolute and lawful owners of the
subject land and to order petitioner and the other defendants to vacate the
premises and restore respondents to its possession and enjoyment therefore.
On their second cause of action, they prayed that the Deed of Transfer of Rights
and Interest Including Improvements Thereon be declared as a forgery, purely
simulated and without any consideration; hence, inexistent, void ab initio and/or
a patent nullity, as well as the Affidavit of Relinquishment which was the direct
result of the Deed of Transfer. Respondents also prayed in the alternative that
if the Deed be finally upheld as valid, to order petitioner to reconvey to
respondent Rosario the undivided one-half portion of the subject land as
conjugal owner thereof and to account and reimburse her of its usufruct; and/or
to allow them to redeem the subject land.
It would appear that the first cause of action involves the issue of recovery of
possession and interest of the parties over the subject land which is a real
action. Respondents alleged that the assessed value of the subject land
was P12,780.00 based on Tax Declaration No. 15272. Thus, since it is a real
action with an assessed value of less than P20,000.00, the case would fall under
the jurisdiction of the MTC as provided under the above-quoted Section 33 (3)
of BP 129, as amended.
Notably, however, respondents in the same Complaint filed alternative causes
of action assailing the validity of the Deed of Transfer of Rights and Interest
executed by Fernando in favor of petitioner's father. Respondents also sought
for the reconveyance to respondent Rosario of the undivided one-half portion of
the subject land as conjugal owner thereof in case the Deed of Transfer of
Rights and Interest will be upheld as valid; and/or for redemption of the subject
land. Clearly, this is a case of joinder of causes of action which comprehends
CIVIL PROCEDURE CASES SESSION 2
more than the issue of possession of, or any interest in the real property under
contention, but includes an action to annul contracts and reconveyance which
are incapable of pecuniary estimation and, thus, properly within the jurisdiction
of the RTC.20
In Singson v. Isabela Sawmill,21 we held that:
In determining whether an action is one the subject matter of which is not
capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is primarily
for the recovery of a sum of money, the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the municipal courts or in the courts of
first instance would depend on the amount of the claim. However, where the
basic issue is something other than the right to recover a sum of money, where
the money claim is purely incidental to, or a consequence of, the principal relief
sought, this Court has considered such actions as cases where the subject of
the litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance (now Regional Trial Courts). 22
Thus, respondents correctly filed their Complaint with the RTC.
It is a settled rule in this jurisdiction that when an action is filed in court, the
complaint must be accompanied by the payment of the requisite docket and
filing fees.23 It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a trial court
with jurisdiction over the subject matter or nature of the action.24
Section 7(b)(1) of Rule 141 of the Rules of Court provides:
SEC. 7. Clerks of Regional Trial Courts. - (a) For filing an action or a permissive
counter-claim or money claim against an estate not based on judgment, or for
filing with leave of court a third-party, fourth-party, etc. complaint, or a complaint-
in-intervention, and for all clerical services in the same, if the total-sum claimed,
exclusive of interest, or the stated value of the property in litigation, is:
xxxx
(b) For filing:
1. Actions where the value of the subject matter
cannot be estimated ........ P400.00
66

2. x x x
In a real action, the assessed value of the property, or if there is none,
the estimated value thereof shall be alleged by the claimant and shall
be the basis in computing the fees.25
Since we find that the case involved the annulment of contract which is not
susceptible of pecuniary estimation, thus, falling within the jurisdiction of the
RTC, the docket fees should not be based on the assessed value of the subject
land as claimed by petitioner in their memorandum, but should be based on
Section 7(b)(1) of Rule 141. A perusal of the entries in the Legal Fees Form
attached to the records would reflect that the amount of P400.00 was paid to
the Clerk of Court, together with the other fees, as assessed by the Clerk of
Court. Thus, upon respondents' proof of payment of the assessed fees, the RTC
has properly acquired jurisdiction over the complaint. Jurisdiction once acquired
is never lost, it continues until the case is terminated. 26
Notably, petitioners claim that the RTC did not acquire jurisdiction in this case
is premised on her contention that respondents violated SC Circular No. 7
issued on March 24, 1998 requiring that all complaints must specify the amount
of damages sought not only in the body of the pleadings but also in the prayer
to be accepted and admitted for filing. Petitioner argues that respondents
alleged in paragraph 13 of their Complaint that:
(T)he reasonable rental for the use of the [subject] land is P2,000.00 per
hectare, every crop time, once every four months, or P6,000.00 a year per
hectare; that defendants in proportion and length of time of their respective
occupancy is and/or are jointly and severally liable to plaintiffs of the produce
thereby in the following proportions, viz: (a) for defendant Ceferina de Ungria for
a period of time claimed by her as such; (b) for defendants Dolores Cagautan,
a certain alias "Dory," and PO1 Jonas Montales, of an undetermined area, the
latter having entered the area sometime in 1998 and defendant alias "Dory,"
only just few months ago; that defendant Ignacio Olarte and Zacasio Puutan of
occupying about one-half hectare each.27
and in their prayer asked:
x x x Ordering the defendants, jointly and severally, in proportion to the length
and area of their respective occupancy, to pay reasonable rentals to the plaintiffs
in the proportion and amount assessed in paragraph 13 of the First Cause of
Action.
xxxx
CIVIL PROCEDURE CASES SESSION 2
(a) Ordering the defendants, jointly and severally, to pay plaintiffs actual
and compensatory damages such as are proved during the hearing of
this case;
(b) Ordering the defendants, jointly and severally, to pay plaintiffs
attorneys' fees and moral damages, all to be proved during the hearing
of this case.28
Thus, the RTC should have dismissed the case, since respondents did not
specify the amount of damages in their prayer.
We are not persuaded.
SC Circular No. 7 was brought about by our ruling in Manchester Development
Corporation v. Court of Appeals,29where we held that a pleading which does not
specify in the prayer the amount of damages being asked for shall not be
accepted or admitted, or shall otherwise be expunged from the record; and that
the Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee.
However, in Sun Insurance Office, Ltd. v. Asuncion,30 we laid down the following
guidelines in the payment of docket fees, to wit:
1. It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a trial
court with jurisdiction over the subject matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow payment of the fee within
a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims
and similar pleadings, which shall not be considered filed until and
unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond
its applicable prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the
court, the additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his duly-
67

authorized deputy to enforce said lien and assess and collect the
additional fee.
Subsequently, in Heirs of Bertuldo Hinog v. Melicor,31 we said:
Furthermore, the fact that private respondents prayed for payment of damages
"in amounts justified by the evidence" does not call for the dismissal of the
complaint for violation of SC Circular No. 7, dated March 24, 1988 which
required that all complaints must specify the amount of damages sought not
only in the body of the pleadings but also in the prayer in order to be accepted
and admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by
providing that filing fees for damages and awards that cannot be estimated
constitute liens on the awards finally granted by the trial court.
x x x judgment awards which were left for determination by the court or as may
be proven during trial would still be subject to additional filing fees which shall
constitute a lien on the judgment. It would then be the responsibility of the Clerk
of Court of the trial court or his duly-authorized deputy to enforce said lien and
assess and collect the additional fees.32
A reading of the allegations in the complaint would show that the amount of the
rental due can only be determined after a final judgment, since there is a need
to show supporting evidence when the petitioner and the other defendants
started to possess the subject land. Thus, we find no reversible error committed
by the CA when it ruled that there was no grave abuse of discretion committed
by the RTC in issuing its Order dated March 30, 2000, where the RTC stated
that "since there was no hearing yet, respondents are not in a position to
determine how much is to be charged and that after hearing, the Clerk of Court
determines that the filing fee is still insufficient, the same shall be considered as
lien on the judgment that may be entered."
Petitioner claims that the action is barred by extraordinary acquisitive
prescription and laches. Petitioner contends that she took possession of the land
in the concept of an owner, open, exclusive, notorious and continuous since
1952 through her predecessor-in-interest, Eugenio, and by herself up to the
present; that the late Fernando and private respondents had never taken
possession of the land at any single moment; and that, granting without
admitting that the transfer of rights between Fernando and Eugenio was null and
void for any reason whatsoever, petitioner's possession of the land had already
ripened into ownership after the lapse of 30 years from August 1952 by virtue of
the extraordinary acquisitive prescription.
We are not persuaded.
CIVIL PROCEDURE CASES SESSION 2
It is a well-entrenched rule in this jurisdiction that no title to registered land in
derogation of the rights of the registered owner shall be acquired by prescription
or adverse possession.33 Prescription is unavailing not only against the
registered owner but also against his hereditary successors. 34 In this case, the
parcel of land subject of this case is a titled property, i.e., titled in the name of
the late Fernando Castor, married to Rosario Dideles.
Petitioner claims that respondent had impliedly admitted the fact of sale by
Fernando to Eugenio in August 1952, but only according to respondents, the
sale was null and void because it violated the provisions of the Public Land Act.
Petitioner argues that the application of Fernando, dated January 17, 1952, was
not the homestead application referred to in Sections 118 and 124 of the Public
Land Act; and that Fernando's application was only as settler, or for the
allocation of the subject land to him vice the original settler Cadiente.
Such argument does not persuade.
The trial in this case has not yet started as in fact no answer has yet been filed.
We find that these issues are factual which must be resolved at the trial of this
case on the merits wherein both parties will be given ample opportunity to prove
their respective claims and defenses.
Anent petitioner's defense of laches, the same is evidentiary in nature and
cannot be established by mere allegations in the pleadings. Without solid
evidentiary basis, laches cannot be a valid ground to dismiss respondents'
complaint.35 Notably, the allegations of respondents in their petition filed before
the RTC which alleged among others:
7. That sometime between the years 1965 to 1970, defendant Ceferina
de Ungria, accompanied by Miss Angela Jagna-an, appeared in the
residence of plaintiff Rosario Dideles Vda. de Castor in Bo.1, Banga,
South Cotabato, and requested her to sign a folded document with her
name only appearing thereon, telling her that it has something to do with
the land above-described, of which she refused telling her that she
better return it to the person who requested her to do so (referring to
her mother-in-law), more so that her husband was out at that time;
8. That when the matter was brought home to Fernando Castor, the
latter just commented that [his] mother desires the land above-
described to be sold to defendant Ceferina de Ungria which however he
was opposed to do so even as they occasionally come into heated
arguments everytime this insistence on the same subject propped up;
68

9. That even after the death of the mother of the late Fernando Castor
in Bo. Bula, City of General Santos, sometime in 1980, the latter and
his surviving wife thought all the while that the land above-described
was in the enjoyment of his late mother's family with his 2nd husband;
that it was only after sometime when plaintiff Rosario Dideles Vda. de
Castor heard that the land above-described had even been leased by
defendant Ceferina de Ungria with the Stanfilco and Checkered farm;
10. That sometime in 1997, defendant Ceferina de Ungria sent
overtures to plaintiffs through Ester Orejana, who is the half sister-in-
law of plaintiff Rosario Dideles Vda. de Castor that she desires to settle
with them relating to the land above-described; that the overtures
developed into defendant Ceferina de Ungria meeting for the purpose
plaintiff Ferolyn Castor Facurib where the negotiation continued with
Lolita Javier as attorney-in-fact after defendant Ceferina de Ungria left
to reside in Manila and which resulted later to the attorney-in-fact
offering the plaintiffs P100,000.00 to quitclaim on their rights over the
said land, which offer, however, was refused by plaintiffs as so
[insignificant] as compared to the actual value of the same land; that in
that negotiation, defendant Ceferina de Ungria was challenged to show
any pertinent document to support her claim on the land in question and
where she meekly answered by saying at the time that she does not
have any of such document;
x x x x36
would not conclusively establish laches.1avvphil Thus, it is necessary for
petitioners to proceed to trial and present controverting evidence to prove the
elements of laches. WHEREFORE, the petition for review is DENIED. SO
ORDERED.
G.R. No. 160384. April 29, 2005
CESAR T. HILARIO, for himself and as Attorney-in-Fact of IBARRA,
NESTOR, LINA and PRESCILLA, all surnamed HILARIO vs. ALLAN T.
SALVADOR
This is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 63737
as well as its Resolution2 denying the motion for the reconsideration of the said
decision.
The Antecedents
CIVIL PROCEDURE CASES SESSION 2
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and Prescilla, all
surnamed Hilario, filed a complaint with the Regional Trial Court (RTC) of
Romblon, Romblon, Branch 71, against private respondent Allan T. Salvador.
They alleged therein, inter alia, as follows:
2. That, the plaintiffs are co-owners by inheritance from Concepcion Mazo
Salvador of a parcel of land designated as Cad. Lot No. 3113-part, located at
Sawang, Romblon, Romblon, which property was [adjudged] as the hereditary
share of their father, Brigido M. Hilario, Jr. when their father was still single, and
which adjudication was known by the plaintiffs[] fathers co-heirs;
3. That, sometime in 1989, defendant constructed his dwelling unit of mixed
materials on the property of the plaintiffs father without the knowledge of the
herein plaintiffs or their predecessors-in-interest;
4. That, demands have been made of the defendant to vacate the premises but
the latter manifested that he have (sic) asked the prior consent of their
grandmother, Concepcion Mazo Salvador;
5. That, to reach a possible amicable settlement, the plaintiffs brought the matter
to the Lupon of Barangay Sawang, to no avail, evidenced by the CERTIFICATE
TO FILE ACTION hereto attached as ANNEX B;
6. That, the unjustified refusal of the defendant to vacate the property has
caused the plaintiffs to suffer shame, humiliation, wounded feelings, anxiety and
sleepless nights;
7. That, to protect their rights and interest, plaintiffs were constrained to engage
the services of a lawyer.3
The petitioners prayed that, after due proceedings, judgment be rendered in
their favor, thus:
WHEREFORE, it is prayed of this Honorable Court that after due process (sic),
an order be issued for the defendant to vacate and peacefully turn over to the
plaintiffs the occupied property and that defendant be made to pay plaintiffs:
a. actual damages, as follows:
a.1. transportation expenses in connection with the projected settlement of the
case amounting to P1,500.00 and for the subsequent attendance to the hearing
of this case at P1,500.00 each schedule;
69

a.2. attorneys fees in the amount of P20,000.00 and P500.00 for every court
appearance;
b. moral and exemplary damages in such amount incumbent upon the
Honorable Court to determine; and
c. such other relief and remedies just and equitable under the premises. 4
The private respondent filed a motion to dismiss the complaint on the ground of
lack of jurisdiction over the nature of the action, citing Section 33 of Batas
Pambansa (B.P.) Blg. 129, as amended by Section 3(3) of Republic Act (R.A.)
No. 7691.5 He averred that
(1) the complaint failed to state the assessed value of the land in dispute;
(2) the complaint does not sufficiently identify and/or describe the parcel of land
referred to as the subject-matter of this action;
both of which are essential requisites for determining the jurisdiction of the Court
where the case is filed. In this case, however, the assessed value of the land in
question is totally absent in the allegations of the complaint and there is nothing
in the relief prayed for which can be picked-up for determining the Courts
jurisdiction as provided by law.
In the face of this predicament, it can nevertheless be surmised by reading
between the lines, that the assessed value of the land in question cannot
exceed P20,000.00 and, as such, it falls within the jurisdiction of the Municipal
Trial Court of Romblon and should have been filed before said Court rather than
before the RTC. 6
The petitioners opposed the motion.7 They contended that the RTC had
jurisdiction over the action since the court can take judicial notice of the market
value of the property in question, which was P200.00 per square meter and
considering that the property was 14,797 square meters, more or less, the total
value thereof is P3,500,000.00. Besides, according to the petitioners, the motion
to dismiss was premature and "the proper time to interpose it is when the
[petitioners] introduced evidence that the land is of such value."
On November 7, 1996, the RTC issued an Order8 denying the motion to dismiss,
holding that the action was incapable of pecuniary estimation, and therefore,
cognizable by the RTC as provided in Section 19(1) of B.P. Blg. 129, as
amended.
CIVIL PROCEDURE CASES SESSION 2
After the denial of the motion to dismiss, the private respondent filed his answer
with counterclaim.9 Traversing the material allegations of the complaint, he
contended that the petitioners had no cause of action against him since the
property in dispute was the conjugal property of his grandparents, the spouses
Salustiano Salvador and Concepcion Mazo-Salvador.
On April 8, 1997, Regidor and Virginia Salvador filed their Answer-in-
Intervention10 making common cause with the private respondent. On her own
motion, however, Virginia Salvador was dropped as intervenor.11
During trial, the petitioners adduced in evidence Tax Declaration No. 8590-A
showing that in 1991 the property had an assessed value of P5,950.00.12
On June 3, 1999, the trial court rendered judgment finding in favor of the
petitioners. The dispositive portion of the decision reads:
WHEREFORE, as prayed for, judgment is rendered:
Ordering the defendant to vacate and peacefully turn over to the plaintiffs the
occupied property; and
Dismissing defendants counterclaim.
SO ORDERED.13
Aggrieved, the private respondent and respondent-intervenor Regidor Salvador
appealed the decision to the CA, which rendered judgment on May 23, 2003
reversing the ruling of the RTC and dismissing the complaint for want of
jurisdiction. The fallo of the decision is as follows:
IN VIEW OF THE FOREGOING, the appealed decision is REVERSED, and the
case DISMISSED, without prejudice to its refilling in the proper court.
SO ORDERED.14
The CA declared that the action of the petitioners was one for the recovery of
ownership and possession of real property. Absent any allegation in the
complaint of the assessed value of the property, the Municipal Trial Court (MTC)
had exclusive jurisdiction over the action, conformably to Section 33 15 of R.A.
No. 7691.
70

The petitioners filed a motion for reconsideration of the said decision, which the
appellate court denied.16 Hence, they filed the instant petition, with the following
assignment of errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN HOLDING THAT THE INSTANT CASE, ACCION
REINVINDICATORIA, FALLS WITHIN THE EXCLUSIVE ORIGINAL
JURISDICTION OF THE MUNICIPAL TRIAL COURT OF ROMBLON, AND
NOT WITH THE REGIONAL TRIAL COURT OF ROMBLON.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN ORDERING THE REFILING OF THE CASE IN THE
[PROPER] COURT, INSTEAD OF DECIDING THE CASE ON THE MERITS
BASED ON THE COMPLETE RECORDS ELEVATED BEFORE SAID
APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE DECISION OF
THE TRIAL COURT.17
The Ruling of the Court
The lone issue for our resolution is whether the RTC had jurisdiction over the
action of the petitioners, the plaintiffs in the RTC, against the private respondent,
who was the defendant therein.
The petitioners maintain that the RTC has jurisdiction since their action is
an accion reinvindicatoria, an action incapable of pecuniary estimation; thus,
regardless of the assessed value of the subject property, exclusive jurisdiction
falls within the said court. Besides, according to the petitioners, in their
opposition to respondents motion to dismiss, they made mention of the increase
in the assessed value of the land in question in the amount of P3.5 million.
Moreover, the petitioners maintain that their action is also one for damages
exceeding P20,000.00, over which the RTC has exclusive jurisdiction under
R.A. No. 7691.
The petition has no merit.
It bears stressing that the nature of the action and which court has original and
exclusive jurisdiction over the same is determined by the material allegations of
the complaint, the type of relief prayed for by the plaintiff and the law in effect
when the action is filed, irrespective of whether the plaintiffs are entitled to some
CIVIL PROCEDURE CASES SESSION 2
or all of the claims asserted therein.18
The caption of the complaint is not
determinative of the nature of the action. Nor does the jurisdiction of the court
depend upon the answer of the defendant or agreement of the parties or to the
waiver or acquiescence of the parties.
We do not agree with the contention of the petitioners and the ruling of the CA
that the action of the petitioners in the RTC was an accion reinvindicatoria. We
find and so rule that the action of the petitioners was an accion publiciana, or
one for the recovery of possession of the real property subject matter thereof.
An accion reinvindicatoria is a suit which has for its object the recovery of
possession over the real property as owner. It involves recovery of ownership
and possession based on the said ownership. On the other hand, an accion
publiciana is one for the recovery of possession of the right to possess. It is also
referred to as an ejectment suit filed after the expiration of one year after the
occurrence of the cause of action or from the unlawful withholding of possession
of the realty.19
The action of the petitioners filed on September 3, 1996 does not involve a claim
of ownership over the property. They allege that they are co-owners thereof,
and as such, entitled to its possession, and that the private respondent, who
was the defendant, constructed his house thereon in 1989 without their
knowledge and refused to vacate the property despite demands for him to do
so. They prayed that the private respondent vacate the property and restore
possession thereof to them.
When the petitioners filed their complaint on September 3, 1996, R.A. No. 7691
was already in effect. Section 33(3) of the law provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise:
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty Thousand Pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty Thousand Pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorneys fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes, the value of
such property shall be determined by the assessed value of the adjacent lots.
Section 19(2) of the law, likewise, provides that:
71

Sec. 19. Jurisdiction in civil cases. The Regional Trial Court shall exercise
exclusive original jurisdiction:
(2) In all civil actions, which involve the title to, or possession of, real property,
or any interest therein, where the assessed value of the property involved
exceeds Twenty Thousand Pesos (P20,000.00) or, for civil actions in Metro
Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts.
The jurisdiction of the court over an action involving title to or possession of land
is now determined by the assessed value of the said property and not the market
value thereof. The assessed value of real property is the fair market value of the
real property multiplied by the assessment level. It is synonymous to taxable
value.20 The fair market value is the price at which a property may be sold by a
seller, who is not compelled to sell, and bought by a buyer, who is not compelled
to buy.
Even a cursory reading of the complaint will show that it does not contain an
allegation stating the assessed value of the property subject of the
complaint.21 The court cannot take judicial notice of the assessed or market
value of lands.22 Absent any allegation in the complaint of the assessed value
of the property, it cannot thus be determined whether the RTC or the MTC had
original and exclusive jurisdiction over the petitioners action.
We note that during the trial, the petitioners adduced in evidence Tax
Declaration No. 8590-A, showing that the assessed value of the property in 1991
was P5,950.00. The petitioners, however, did not bother to adduce in evidence
the tax declaration containing the assessed value of the property when they filed
their complaint in 1996. Even assuming that the assessed value of the property
in 1991 was the same in 1995 or 1996, the MTC, and not the RTC had
jurisdiction over the action of the petitioners since the case involved title to or
possession of real property with an assessed value of less than P20,000.00.23
We quote with approval, in this connection, the CAs disquisition:
The determining jurisdictional element for the accion reinvindicatoria is, as RA
7691 discloses, the assessed value of the property in question. For properties
in the provinces, the RTC has jurisdiction if the assessed value
exceeds P20,000, and the MTC, if the value is P20,000 or below. An assessed
value can have reference only to the tax rolls in the municipality where the
property is located, and is contained in the tax declaration. In the case at bench,
the most recent tax declaration secured and presented by the plaintiffs-
CIVIL PROCEDURE CASES SESSION 2
appellees is Exhibit B. The loose remark made by them that the property was
worth 3.5 million pesos, not to mention that there is absolutely no evidence for
this, is irrelevant in the light of the fact that there is an assessed value. It is the
amount in the tax declaration that should be consulted and no other kind of
value, and as appearing in Exhibit B, this is P5,950. The case, therefore, falls
within the exclusive original jurisdiction of the Municipal Trial Court of Romblon
which has jurisdiction over the territory where the property is located, and not
the court a quo.24
It is elementary that the tax declaration indicating the assessed value of the
property enjoys the presumption of regularity as it has been issued by the proper
government agency.25
Unavailing also is the petitioners argumentation that since the complaint,
likewise, seeks the recovery of damages exceeding P20,000.00, then the RTC
had original jurisdiction over their actions. Section 33(3) of B.P. Blg. 129, as
amended, quoted earlier, explicitly excludes from the determination of the
jurisdictional amount the demand for "interest, damages of whatever kind,
attorneys fees, litigation expenses, and costs." This Court issued Administrative
Circular No. 09-94 setting the guidelines in the implementation of R.A. No. 7691,
and paragraph 2 thereof states that
2. The exclusion of the term "damages of whatever kind" in determining the
jurisdictional amount under Section 19(8) and Section 33(1) of B.P. Blg. 129, as
amended by R.A. 7691, applies to cases where the damages are merely
incidental to or a consequence of the main cause of action. However, in cases
where the claim for damages is the main cause of action, or one of the causes
of action, the amount of such claim shall be considered in determining the
jurisdiction of the court.
Neither may the petitioners find comfort and solace in Section 19(8) of B.P. Blg.
129, as amended, which states:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:
(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses, and costs or the value of the
property in controversy exceeds One Hundred Thousand Pesos (P100,000.00)
or, in such other cases in Metro Manila, where the demand, exclusive of the
above-mentioned items exceeds Two Hundred Thousand Pesos (P200,000.00).
72

The said provision is applicable only to "all other cases" other than an action
involving title to, or possession of real property in which the assessed value is
the controlling factor in determining the courts jurisdiction. The said damages
are merely incidental to, or a consequence of, the main cause of action for
recovery of possession of real property.26
Since the RTC had no jurisdiction over the action of the petitioners, all the
proceedings therein, including the decision of the RTC, are null and void. The
complaint should perforce be dismissed.27
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. CV No. 63737 are AFFIRMED. Costs against
the petitioners. SO ORDERED.
G.R. No. 164560 July 22, 2009
ANA DE GUIA SAN PEDRO and ALEJO DOPEO vs. HON. FATIMA G.
ASDALA, in her capacity as the Presiding Judge of the Regional Trial
Court of Quezon City, Branch 87; HON. MANUEL TARO, in his capacity
as the Presiding Judge of the Metropolitan Trial Court of Quezon City,
Branch 42; and the HEIRS OF SPOUSES APOLONIO V. DIONISIO and
VALERIANA DIONISIO (namely, ALLAN GEORGE R. DIONISIO and
ELEANOR R. DIONISIO, herein represented by ALLAN GEORGE R.
DIONISIO)
This resolves the petition for certiorari under Rule 65 of the Rules of Court,
praying that the Resolutions1 of the Court of Appeals (CA) dated September 15,
2003 and June 1, 2004, respectively, in CA-G.R. SP No. 78978, be reversed
and set aside.
The antecedent facts are as follows.
Sometime in July 2001, private respondents, heirs of spouses Apolonio and
Valeriana Dionisio, filed with the Metropolitan Trial Court (MeTC) of Quezon
City, Branch 42, a Complaint2 against herein petitioners and Wood Crest
Residents Association, Inc., for Accion Reivindicatoria, Quieting of Title and
Damages, with Prayer for Preliminary Mandatory Injunction. Private
respondents alleged that subject property located in Batasan Hills, Quezon City,
with an assessed value of P32,100.00, was titled in the name of spouses
Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad
faith, claimed that they were the owners of a parcel of land that encompasses
and covers subject property. Private respondents had allegedly been prevented
from entering, possessing and using subject property. It was further alleged in
the Complaint that petitioners' Transfer Certificate of Title over their alleged
property was spurious. Private respondents then prayed that they be declared
CIVIL PROCEDURE CASES SESSION 2
the sole and absolute owners of the subject property; that petitioners be ordered
to surrender possession of subject property to them; that petitioners and Wood
Crest and/or its members be ordered to pay actual and moral damages, and
attorney's fees.
Petitioners, for their part, filed a Motion to Dismiss3 said complaint on the ground
that the MeTC had no jurisdiction over the subject matter of the action, as the
subject of litigation was incapable of pecuniary estimation.
The MeTC then issued an Order4 dated July 4, 2002 denying the motion to
dismiss, ruling that, under Batas Pambansa (B.P.) Blg. 129, as amended, the
MeTC had exclusive original jurisdiction over actions involving title to or
possession of real property of small value.
Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was
denied.
Petitioners assailed the aforementioned Order by filing a petition for certiorari
with the Regional Trial Court (RTC) of Quezon City, Branch 87. However, in its
Decision5 dated March 10, 2003, the RTC dismissed the petition, finding no
grave abuse of discretion on the part of the MeTC Presiding Judge. The RTC
sustained the MeTC ruling, stating that, in accordance with Section 33(3) of
Republic Act (R.A.) No. 7691, amending B.P. Blg. 129, the MeTC had
jurisdiction over the complaint for Accion Reivindicatoria, as it involves recovery
of ownership and possession of real property located in Quezon City, with an
assessed value not exceeding P50,000.00. A Motion for Reconsideration6 of the
Decision was filed by petitioners, but was denied in an Order 7 dated July 3,
2003.
Petitioners then filed with the Court of Appeals another petition for certiorari,
insisting that both the MeTC and RTC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction by not ordering the dismissal of the
complaint for Accion Reivindicatoria, for lack of jurisdiction over the same. In the
assailed CA Resolution dated September 15, 2003, the CA dismissed the
petition outright, holding that certiorari was not available to petitioners as they
should have availed themselves of the remedy of appeal. Petitioners' motion for
reconsideration of the resolution of dismissal was denied per Resolution 8 dated
June 1, 2004.
Thus, petitioners filed the instant petition and, in support thereof, they allege
that:
THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF
73

JURISDICTION IN DENYING THE PETITION FOR CERTIORARI AND FOR
FAILURE TO RESOLVE THE ISSUE RAISED IN THE CERTIORARI
REGARDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURT
TO TAKE COGNIZANCE OF A CASE OF ACCION REINVINDICATORIA.
THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA,
AS PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
(SIC) JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARI
AND IN RESOLVING THAT A CASE OF ACCION REINVINDICATORIA IS
WITHIN THE JURISDICTION OF THE METROPOLITAN TRIAL COURT.
THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING
JUDGE MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF
JURISDICTION IN SO TAKING COGNIZANCE OF THE COMPLAINT
FOR ACCION REINVINDICATORIA IN CIVIL CASE NO. 27434 ENTITLED,
"HEIRS OF SPS. APOLONIO V. DIONISIO AND VALERIANA DIONISIO, ETC.
VS. ANA DE GUIA SAN PEDRO, ET. AL."9
The present Petition for Certiorari is doomed and should not have been
entertained from the very beginning.
The settled rule is that appeals from judgments or final orders or resolutions of
the CA should be by a verified petition for review on certiorari, as provided for
under Rule 45 of the Revised Rules of Civil Procedure. Thus, in Pasiona, Jr. v.
Court of Appeals,10 the Court expounded as follows:
The aggrieved party is proscribed from assailing a decision or final order of the
CA via Rule 65, because such recourse is proper only if the party has no plain,
speedy and adequate remedy in the course of law. In this case, petitioner had
an adequate remedy, namely, a petition for review on certiorari under Rule 45
of the Rules of Court. A petition for review on certiorari, not a special civil action
for certiorari was, therefore, the correct remedy.
xxxx
Settled is the rule that where appeal is available to the aggrieved party, the
special civil action for certiorari will not be entertained remedies of appeal and
certiorari are mutually exclusive, not alternative or successive. Hence, certiorari
is not and cannot be a substitute for a lost appeal, especially if one's own
negligence or error in one's choice of remedy occasioned such loss or lapse.
One of the requisites of certiorari is that there be no available appeal or any
plain, speedy and adequate remedy. Where an appeal was available, as in
CIVIL PROCEDURE CASES SESSION 2
this case, certiorari will not prosper, even if the ground therefor is grave
abuse of discretion. Petitioner's resort to this Court by Petition for Certiorari
was a fatal procedural error, and the instant petition must, therefore, fail.11
For the very same reason given above, the CA, therefore, acted properly when
it dismissed the petition for certiorari outright, on the ground that petitioners
should have resorted to the remedy of appeal instead of certiorari. Verily, the
present Petition for Certiorari should not have been given due course at all.
Moreover, since the period for petitioners to file a petition for review
on certiorari had lapsed by the time the instant petition was filed, the assailed
CA Resolutions have attained finality.1avvphi1
Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs
of Valeriano S. Concha, Sr. v. Spouses Lumocso,12 to wit:
In a number of cases, we have held that actions for reconveyance of or for
cancellation of title to or to quiet title over real property are actions that fall under
the classification of cases that involve "title to, or possession of, real property,
or any interest therein."
xxxx
x x x Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129, or one involving title to property
under Section 19(2). The distinction between the two classes became crucial
with the amendment introduced by R.A. No. 7691 in 1994, which expanded the
exclusive original jurisdiction of the first level courts to include "all civil actions
which involve title to, or possession of, real property, or any interest therein
where the assessed value of the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where
such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses and costs." Thus, under the present law, original jurisdiction over
cases the subject matter of which involves "title to, possession of, real
property or any interest therein" under Section 19(2) of B.P. 129 is divided
between the first and second level courts, with the assessed value of the
real property involved as the benchmark. This amendment was introduced
to "unclog the overloaded dockets of the RTCs which would result in the
speedier administration of justice."13
Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over
private respondents' complaint for Accion Reivindicatoria.
74

IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of
merit. The Resolutions of the Court of Appeals in CA-G.R. SP No. 78978, dated
September 15, 2003 and June 1, 2004, are AFFIRMED. SO ORDERED.
G.R. No. 174908 June 17, 2013
DARMA MASLAG vs. ELIZABETH MONZON, WILLIAM GESTON, and
REGISTRY OF DEEDS OF BENGUET
"It is incumbent upon x x x appellants to utilize the correct mode of appeal of the
decisions of trial courts to the appellate courts. In the mistaken choice of their
remedy, they can blame no one but themselves."1
This is a Petition for Review on Certiorari2 of the May 31, 2006 Resolution3 of
the Court of Appeals (CA) in CA-G.R. CV No. 83365, which dismissed petitioner
Darma Maslag's (petitioner) ordinary appeal to it for being an improper remedy.
The Resolution disposed of the case as follows:
WHEREFORE, the Motion to Dismiss is GRANTED, and the Appeal is hereby
DISMISSED.
SO ORDERED.4
The Petition also assails the CAs September 22, 2006 Resolution 5 denying
petitioners Motion for Reconsideration.6
Factual Antecedents
In 1998, petitioner filed a Complaint7 for reconveyance of real property with
declaration of nullity of original certificate of title (OCT) against respondents
Elizabeth Monzon (Monzon), William Geston and the Registry of Deeds of La
Trinidad, Benguet. The Complaint was filed before the Municipal Trial Court
(MTC) of La Trinidad, Benguet.
After trial, the MTC found respondent Monzon guilty of fraud in obtaining an
OCT over petitioners property.8 It ordered her to reconvey the said property to
petitioner, and to pay damages and costs of suit.9
Respondents appealed to the Regional Trial Court (RTC) of La Trinidad,
Benguet.
After going over the MTC records and the parties respective memoranda, the
RTC of La Trinidad, Benguet, Branch 10, through Acting Presiding Judge
Fernando P. Cabato (Judge Cabato), issued its October 22, 2003
CIVIL PROCEDURE CASES SESSION 2
Order,10 declaring the MTC without jurisdiction over petitioners cause of action.
It further held that it will take cognizance of the case pursuant to Section 8, Rule
40 of the Rules of Court, which reads:
SECTION 8. Appeal from orders dismissing case without trial; lack of
jurisdiction. x x x
If the case was tried on the merits by the lower court without jurisdiction over
the subject matter, the Regional Trial Court on appeal shall not dismiss the case
if it has original jurisdiction thereof, but shall decide the case in accordance with
the preceding section, without prejudice to the admission of amended pleadings
and additional evidence in the interest of justice. Both parties acknowledged
receipt of the October 22, 2003 Order,11 but neither presented additional
evidence before the new judge, Edgardo B. Diaz De Rivera, Jr. (Judge Diaz De
Rivera).12
On May 4, 2004, Judge Diaz De Rivera issued a Resolution13 reversing the MTC
Decision. The fallo reads as follows:
WHEREFORE, the Judgment appealed from the Municipal Trial Court of La
Trinidad, Benguet is set aside. [Petitioner] is ordered to turn over the possession
of the 4,415 square meter land she presently occupies to [Monzon]. This case
is remanded to the court a quo for further proceedings to determine whether
[Maslag] is entitled to the remedies afforded by law to a builder in good faith for
the improvements she constructed thereon.
No pronouncement as to damages and costs.
SO ORDERED.14
Petitioner filed a Notice of Appeal15 from the RTCs May 4, 2004 Resolution.
Petitioner assailed the RTCs May 4, 2004 Resolution for reversing the MTCs
factual findings16 and prayed that the MTC Decision be adopted. Her prayer
before the CA reads:
WHEREFORE, premises considered, it is most respectfully prayed that the
decision of the Regional Trial Court, Branch 10 of La Trinidad, Benguet,
appealed from be reversed in toto and that the Honorable Court adopt the
decision of the Municipal Trial Court. Further reliefs just and equitable under the
premises are prayed for.17
75

Respondents moved to dismiss petitioners ordinary appeal for being the
improper remedy. They asserted that the proper mode of appeal is a Petition for
Review under Rule 42 because the RTC rendered its May 4, 2004 Resolution
in its appellate jurisdiction.18
Ruling of the Court of Appeals
The CA dismissed petitioners appeal. It observed that the RTCs May 4, 2004
Resolution (the subject matter of the appeal before the CA) set aside an MTC
Judgment; hence, the proper remedy is a Petition for Review under Rule 42,
and not an ordinary appeal.19
Petitioner sought reconsideration.20 She argued, for the first time, that the RTC
rendered its May 4, 2004 Resolution in its original jurisdiction. She cited the
earlier October 22, 2003 Order of the RTC declaring the MTC without jurisdiction
over the case.
The CA denied petitioners Motion for Reconsideration in its September 22,
2006 Resolution:21
A perusal of the May 4, 2004 Resolution of the RTC, which is the subject matter
of the appeal, clearly reveals that it took cognizance of the MTC case in the
exercise of its appellate jurisdiction. Consequently, as We have previously
enunciated, the proper remedy, is a petition for review under Rule 42 and not
an ordinary appeal under Rule 41.
WHEREFORE, premises considered, the instant Motion for Reconsideration is
DENIED. The May 31, 2006 Resolution of this Court is hereby AFFIRMED in
toto.
SO ORDERED.22
Hence this Petition wherein petitioner prays that the CA be ordered to take
cognizance of her appeal.23
Issues
Petitioner set forth the following issues in her Petition:
WHETHER X X X THE COURT OF APPEALS WAS CORRECT IN
DISMISSING THE APPEAL FILED BY THE PETITIONER, CONSIDERING
THAT THE REGIONAL TRIAL COURT, BRANCH 10 OF LA TRINIDAD,
BENGUET HELD THAT THE ORIGINAL COMPLAINT AS FILED BEFORE
CIVIL PROCEDURE CASES SESSION 2
THE MUNICIPAL TRIAL COURT OF LA TRINIDAD, BENGUET WAS
DECIDED BY THE LATTER WITHOUT ANY JURISDICTION AND, IN
ORDERING THAT THE CASE SHALL BE DECIDED PURSUANT TO THE
PROVISION OF SECTION 8 OF RULE 40 OF THE RULES OF COURT, IT
DECIDED THE CASE NOT ON ITS APPELLATE JURISDICTION BUT ON ITS
ORIGINAL JURISDICTION WHAT WILL BE THE EFFECT OF THE DECISION
OF THE REGIONAL TRIAL COURT, BRANCH 10 OF LA TRINIDAD,
BENGUET, WHEN IT DECIDED A CASE APPEALED BEFORE IT UNDER THE
PROVISION OF SECTION 8, RULE 40 OF THE RULES OF COURT OF THE
PHILIPPINES, AS TO THE COURSE OF REMEDY THAT MAY BE AVAILED
OF BY THE PETITIONER A PETITION FOR REVIEWUNDER RULE 42 OR
AN ORDINARY APPEAL UNDER RULE 41.24
Our Ruling
In its October 22, 2003 Order, the RTC declared that the MTC has no jurisdiction
over the subject matter of the case based on the supposition that the same is
incapable of pecuniary estimation. Thus, following Section 8, Rule 40 of the
Rules of Court, it took cognizance of the case and directed the parties to adduce
further evidence if they so desire. The parties bowed to this ruling of the RTC
and, eventually, submitted the case for its decision after they had submitted their
respective memoranda.
We cannot, however, gloss over this jurisdictional faux pas of the RTC. Since it
involves a question of jurisdiction, we may motu proprio review and pass upon
the same even at this late stage of the proceedings.25
In her Complaint26 for reconveyance of real property with declaration of nullity
of OCT, petitioner claimed that she and her father had been in open, continuous,
notorious and exclusive possession of the disputed property since the 1940s.
She averred:
7. Sometime in the year 1987, Elizabeth Monzon, the owner of the
adjacent parcel of land being occupied by plaintiff [Maslag], informed
the plaintiff that the respective parcels of land being claimed by them
can now be titled. A suggestion was, thereafter made, that those who
were interested to have their lands titled, will contribute to a common
fund for the surveying and subsequent titling of the land;
8. Since plaintiff had, for so long, yearned for a title to the land she
occupies, she contributed to the amount being requested by Elizabeth
Monzon;
76

9. A subdivision survey was made and in the survey, the respective
areas of the plaintiff and the defendants were defined and delimited
all for purposes of titling. x x x
10. But alas, despite the assurance of subdivided titles, when the title
was finally issued by the Registry of Deeds, the same was only in the
name of Elizabeth Monzon and WILLIAM GESTON. The name of
Darma Maslag was fraudulently, deliberately and in bad faith omitted.
Thus, the title to the property, to the extent of 18,295 square meters,
was titled solely in the name of ELIZABETH MONZON.
As a relief, petitioner prayed that Monzon be ordered to reconvey the portion of
the property which she claimed was fraudulently included in Monzons title. Her
primary relief was to recover ownership of real property. Indubitably, petitioners
complaint involves title to real property. An action "involving title to real
property," on the other hand, was defined as an action where "the plaintiffs
cause of action is based on a claim that she owns such property or that she has
the legal rights to have exclusive control, possession, enjoyment, or disposition
of the same."27
Under the present state of the law, in cases involving title to real property,
original and exclusive jurisdiction belongs to either the RTC or the MTC,
depending on the assessed value of the subject property.28 Pertinent provisions
of Batas Pambansa Blg. (BP) 129,29 as amended by Republic Act (RA) No.
7691,30 provides:
Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty thousand pesos (P20,000.00) or for
civil actions in Metro Manila, where x x x the assessed value of the
property exceeds Fifty thousand pesos ([P]50,000.00) except actions
for forcible entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
xxxx
CIVIL PROCEDURE CASES SESSION 2
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00) x x x.
In the case at bench, annexed to the Complaint is a Declaration of Real
Property31 dated November 12, 1991, which was later marked as petitioners
Exhibit "A",32 showing that the disputed property has an assessed value
of P12,40033 only. Such assessed value of the property is well within the
jurisdiction of the MTC. In fine, the RTC, thru Judge Cabato, erred in applying
Section 19(1) of BP 129 in determining which court has jurisdiction over the case
and in pronouncing that the MTC is divested of original and exclusive
jurisdiction.
This brings to fore the next issue of whether the CA was correct in dismissing
petitioners appeal.
Section 2, Rule 50 of the Rules of Court provides for the dismissal of an improper
appeal:
SECTION 2. Dismissal of improper appeal to the Court of Appeals. An appeal
under Rule 41 taken from the Regional Trial Court to the Court of Appeals
raising only questions of law shall be dismissed, issues purely of law not being
reviewable by said court. Similarly, an appeal by notice of appeal instead of by
petition for review from the appellate judgment of a Regional Trial Court shall be
dismissed.
An appeal erroneously taken to the Court of Appeals shall not be transferred to
the appropriate court but shall be dismissed outright.1wphi1 (Emphasis
supplied)
There are two modes of appealing an RTC decision or resolution on issues of
fact and law.34 The first mode is an ordinary appeal under Rule 41 in cases
where the RTC exercised its original jurisdiction. It is done by filing a Notice of
Appeal with the RTC. The second mode is a petition for review under Rule 42
in cases where the RTC exercised its appellate jurisdiction over MTC decisions.
It is done by filing a Petition for Review with the CA. Simply put, the distinction
77

between these two modes of appeal lies in the type of jurisdiction exercised by
the RTC in the Order or Decision being appealed.
As discussed above, the MTC has original and exclusive jurisdiction over the
subject matter of the case; hence, there is no other way the RTC could have
taken cognizance of the case and review the court a quos Judgment except in
the exercise of its appellate jurisdiction. Besides, the new RTC Judge who
penned the May 4, 2004 Resolution, Judge Diaz de Rivera, actually treated the
case as an appeal despite the October 22, 2003 Order. He started his
Resolution by stating, "This is an appeal from the Judgment rendered by the
Municipal Trial Court (MTC) of La Trinidad Benguet"35 and then proceeded to
discuss the merits of the "appeal." In the dispositive portion of said Resolution,
he reversed the MTCs findings and conclusions and remanded residual issues
for trial with the MTC. Thus, in fact and in law, the RTC Resolution was a
continuation of the proceedings that originated from the MTC. It was a judgment
issued by the RTC in the exercise of its appellate jurisdiction. With regard to the
RTCs earlier October 22, 2003 Order, the same should be disregarded for it
produces no effect (other than to confuse the parties whether the RTC was
invested with original or appellate jurisdiction). It cannot be overemphasized that
jurisdiction over the subject matter is conferred only by law and it is "not within
the courts, let alone the parties, to themselves determine or conveniently set
aside."37 Neither would the active participation of the parties nor estoppel
operate to confer original and exclusive jurisdiction where the court or tribunal
only wields appellate jurisdiction over the case.38 Thus, the CA is correct in
holding that the proper mode of appeal should have been a Petition for Review
under Rule 42 of the Rules of Court, and not an ordinary appeal under Rule 41.
Seeing the futility of arguing against what the RTC actually did, petitioner resorts
to arguing for what the RTC should have done. She maintains that the RTC
should have issued its May 4, 2004 Resolution in its original jurisdiction because
it had earlier ruled that the MTC had no jurisdiction over the cause of action.
Petitioners argument lacks merit. To reiterate, only statutes can confer
jurisdiction. Court issuances cannot seize or appropriate jurisdiction. It has been
repeatedly held that "any judgment, order or resolution issued without
jurisdiction is void and cannot be given any effect."39 By parity of reasoning, an
order issued by a court declaring that it has original and exclusive jurisdiction
over the subject matter of the case when under the law it has none cannot
likewise be given effect. It amounts to usurpation of jurisdiction which cannot be
countenanced. Since BP 129 already apportioned the jurisdiction of the MTC
and the RTC in cases involving title to property, neither the courts nor the
petitioner could alter or disregard the same. Besides, in determining the proper
mode of appeal from an RTC Decision or Resolution, the determinative factor is
the type of jurisdiction actually exercised by the RTC in rendering its Decision
or Resolution. Was it rendered by the RTC in the exercise of its original
CIVIL PROCEDURE CASES SESSION 2
jurisdiction, or in the exercise of its appellate jurisdiction? In short, we look at
what type of jurisdiction was actually exercised by the RTC. We do not look into
what type of jurisdiction the RTC should have exercised. This is but logical.
Inquiring into what the RTC should have done in disposing of the case is a
question which already involves the merits of the appeal, but we obviously
cannot go into that where the mode of appeal was improper to begin with.
WHEREFORE, premises considered, the Petition for Review is DENIED for lack
of merit. The assailed May 31, 2006 and September 22, 2006 Resolutions of
the Court of Appeals in CA-G.R. CV No. 83365 are AFFIRMED. SO ORDERED.
G.R. No. 131755 October 25, 1999
MOVERS-BASECO INTEGRATED PORT SERVICES vs. CYBORG
LEASING CORP
The instant matter has been brought to this Court via a petition for review under
Rule 45 of the Rules of Court to seek a reversal of the decision of the decision
of the Regional Trial Court ("RTC") of Manila, Branch 16, in Civil Case No. 97-
85267.1wphi1.nt
Cyborg Leasing Corporation ("Cyborg"), herein private respondent, filed on 22
August 1996 before the Metropolitan Trial Court ("MTC") of Manila a case,
captioned "Damages with Prayer for a Writ of Replevin" (Civil Case No. 152839),
against Conpac Warehousing, Inc. ("Conpac"), and herein petitioner Movers-
Baseco Integrated Port Services ("Movers"). The complaint alleged that
pursuant to a lease agreement, Cyborg had delivered one (1) NISSAN forklift to
CONPAC. The lease agreement stipulated a monthly rental of P11,000.00 for
the use of the equipment from its date of delivery. Conpac supposedly failed
and refused to pay the stipulated rentals starting April 1995 notwithstanding
demands therefor. Sometime in May 1995, petitioner took control of the
operations of Conpac and seized all cargoes and equipment including the
subject forklift. Petitioner ignored Cyborg's demand for the return to it of the
equipment and the formal disclaimer of ownership made by CONPAC. In its
Complaint, Cyborg prayed:
UPON RECEIPT AND BEFORE ANSWER
That an ORDER be issued directing the Sheriff or other officer of this
Court to forthwith take custody and possession of the subject equipment
and to dispose it in accordance with the Rules of Court.
AFTER TRIAL
78

That judgment be rendered for the plaintiff ordering the defendants,
jointly and severally, to pay the following amounts:
(1) P11,000.00 per month as actual damages by way of reasonable
compensation for the use, enjoyment and/or rental of the subject
equipment from April 9, 1995 until it is repossessed by the plaintiff;
(2) P1,000.000.00 as exemplary damages and
(3) P50,000.00 as attorney's fees and costs.
IN THE ALTERNATIVE
In the event that the subject equipment could not be seized, that
defendants be jointly and severally ordered to pay the plaintiff its actual
market value of One Hundred Fifty Thousand Pesos (P150,000.00),
Philippine Currency, exclusive of the damages under paragraphs (1),
(2), and (3) stated supra.
Plaintiff further prays for other equitable reliefs and remedies. 1 5th rev. ed., p. 9).
Upon application of Cyborg, a writ of replevin was issued following the filing of
a P300,000.00 replevin bond. The directive was contained in the court's order
of 27 August 1996, viz:
WHEREFORE, pursuant to Sections 1 to 3, Rule 60 of the Revised
Rules of Court, a Writ of Replevin is hereby ordered issued requiring
the Sheriff of this Court to fortwith take possession of the property
specified on the face of this Order after serving a copy of this Order to
defendants, together with a copy of the application, affidavit, and bond.
Accordingly, the Sheriff of this Court is hereby required to comply with
Sections 4 to 8 of Rule 60.
IT IS SO ORDERED. 2
On 06 February 1997, petitioner was served with a copy of the summons and
the writ of replevin. On 14 February 1997, petitioner filed a motion to dismiss
the case on the ground of lack of jurisdiction on the part of the MTC since the
complaint had asked for, among other things, the following:
(a) . . . actual market value of the equipment (par. 8 of the complaint)
P150,000.00
CIVIL PROCEDURE CASES SESSION 2
(b) . . . actual damages for use of the equipment at the rate of
P11,000.00 monthly from 09 April 1995 up to the time possession was
taken by the plaintiff under the order of the Honorable Court (par, 9(a)
of the complaint) 242,000.00
(c) exemplary damages 1,000,000.00
(d) attorney's fees 50,000.00
Total P1,442,000.00
On 18 March 1997, the MTC issued an order dismissing the complaint for lack
of jurisdiction, and ratiocinating, thus
It is a fundamental axiom in adjective law that jurisdiction is conferred
by law, and where there is none, no agreement of the parties can
vest competencia (Leonor vs. Court of Appeals, 256 SCRA 69;
(1996); Department of Health vs. National Labor Commission, 251
SCRA 700; 707 (1995); 1 Regalado, Remedial Law Compendium, 1988
Albeit the subject equipment has a market value of P150,000.00
(paragraph 8, Complaint) and while it is true that interest, damages of
whatever kind, attorney's fees, litigation expenses and costs are
excluded in ascertaining jurisdiction per Section 3 of Republic Act No.
7691 and are considered only to determine the filing fees, it is equally
true that if the principal request in the complaint is for damages, or one
of the causes of action, the amount of such claim shall be determinative
of competencia under Supreme Court Circular No. 09-94 dated June
14, 1994.
The amount sought to be recovered is the "amount of the demand"
(Oteng vs. Tan Kiem, Ta, 61 Phil. 87) and included in the computation
of the jurisdictional amount are attorney's fees recoverable as damages
(Article 2208, New Civil Code), consequential damages, exemplary
damages if the amount thereof is specified in the complaint (Enerio
vs. Alampay, 64 SCRA 142, and moral damages, if quantified in the
complaint (Quiason, Philippines Courts and their Jurisdictions, 1986
ed., pp. 166-168).
Hence, on the basis of the clarification of the Supreme Court, the total
claims of the plaintiff are beyond the purview of this Court's jurisdiction.
79

Accordingly, Civil Case No. 152839 is hereby DISMISSED for lack of
jurisdiction as prayed for. 3
The MTC, in its order of 10 June 1997, denied Cyborg's motion for
reconsideration, elaborating that it
. . . is not unaware of Justice Regalado's discourse in his treatise that
"replevin is available only where the principal relief sought in the action
is the recovery of personal property, the other reliefs, like damages,
being merely incidental thereto" (1 Regalado, Remedial Law
Compendium, 1988 5th rev. ed., p. 437) which was utilized by plaintiffs
counsel to secure re-evaluation of the challenged Order (page 2,
Additional Arguments Relative to the Motion for Reconsideration). Yet,
this Court cannot also ignore the language of Supreme Court
Administrative Circular No. 09-94 dated June 14, 1994 that if the
principal supplication is for damages, or is one of the causes of action,
like in this case, the amount of such claim will spell the difference in
jurisdiction between the Metropolitan Trial Court and the Regional Trial
Court.
WHEREFORE, the plaintiff's Motion for Reconsideration and plaintiffs
additional arguments relative to the motion for reconsideration are
hereby DENIED. Accordingly, as prayed for by defendant's counsel on
May 27, 1997, Sheriff Abulencia is hereby directed to RETURN the
Nissan Forklift described as Equipment No. C-201, 2 Tonner, Engine
No. G1-214511 FG 25 TCM to defendant Movers-Baseco Integrated
Port Services, Inc. 4
Cyborg did not succeed in its motion for clarificatory judgment which the court
took as just a second motion for reconsideration. Then, on 26 September 1997,
Cyborg filed a petition for certiorari and prohibition, with preliminary injunction
and/or prayer for temporary restraining order, against the MTC Judge, Conpac
Warehousing and Movers, before the RTC of Manila (Civil Case No. 97-85267).
This petition was opposed by Movers as being tardily filed. Still, later, an answer
to this petition was filed by Movers.
On 20 October 1997, the RTC issued an order granting Cyborg's application for
preliminary injunction; the court said:
The MTC dismissed the complaint filed by petitioner Cyborg for replevin
of a leased Nissan forklift by defendant Compac and later taken into
custody by defendant Movers-Baseco. Upon the MTC's denial of
Cyborg's motion for reconsideration, Cyborg caused the filing of the
instant petition.
CIVIL PROCEDURE CASES SESSION 2
In its motion to dismiss before the MTC Manila, Movers-Baseco argued
that the MTC had no jurisdiction over this case because while the
alleged amount of the forklift is P150,000, together with the other
amounts/damages claimed, the total is beyond the MTC's jurisdiction.
Cyborg argued that since the principal action is for replevin, the other
amounts being merely incidental, as the amount of P150,000 is within
the MTC jurisdiction, the latter is competent to take cognizance of the
case.
Such arguments, however, are better reserved for the adjudication on
the merits of this petition. The issue now is whether there is sufficient
legal ground to issue a writ of preliminary injunction to enjoin
enforcement of the MTC's order dated June 10, 1997 which directed the
delivery of the replevied forklift back to Movers-Baseco.
The MTC complaint alleged that the rentals of P11,000 per month are
not being paid in the interim which lease contract is dated January 5,
1995 (Record, page 35).
It appears that Cyborg is the lessor-owner of the forklift. In the
meantime, the rentals are not being paid it. As owner of the same,
Cyborg has a clear right to the possession of the same during the
pendency of this proceedings, the MTC having already issued a writ of
replevin to gain possession of the forklift which is now in the possession
of Cyborg. This status quo existing at the time this petition was filed
should be maintained pending the resolution of the case, otherwise,
great damage will be caused to Cyborg, the owner.
The 1997 Rules on Civil Procedure allow the ex parte issuance of a 20-
day TRO, the Rules silent as to whether a bond should cover the 20-
day TRO, as it is the writ of preliminary injunction that requires the filing
of an injunction bond. Hence, this Court issued a TRO until October 22,
1997 (Rule 58, Section 5), otherwise, with the rentals in the interim
being unpaid, Cyborg is destined to suffer GREAT damage (not
necessarily irreparable), the Rule expressly mentioning great OR
irreparable injury.1wphi1.nt
WHEREFORE, PREMISES CONSIDERED, let a writ of preliminary
injunction issue against the respondents. The public and private
respondents, the sheriff concerned, and any person acting for and in
their behalf are restrained from implementing the order of the MTC
Manila dated June 10, 1997 directing the delivery of the forklift back to
80

the private respondent Movers-Baseco until the Court resolves the
petition with finality.
Serve a copy of this order, together with a copy of the affidavit, upon the
public and private respondents. No additional injunction bond is being
required because Cyborg already filed an injunction bond before the
MTC Manila. 5
Feeling aggrieved, petitioner filed before the RTC on 24 October 1997 this
manifestation:
For accuracy, respondent Movers-Baseco would like to state that:
(a) respondent Movers-Baseco never took custody of the forklift after
the respondent Sheriff took possession of the same pursuant to the writ
of replevin issued by the MTC; and
(b) moreover, there is no bond posted by the petitioner for the issuance
of the injunction. The bond referred to by this Court is the replevin bond
posted in the Metropolitan Trial Court. 6
Ultimately, on 04 December 1997, the RTC promulgated its judgment in Civil
Case No. 97-85267; resolving the merits of the petition, it concluded:
WHEREFORE, PREMISES CONSIDERED, the petition for certiorari is
hereby GRANTED. Consequently,
1. Having been rendered with grave abuse of
discretion, the orders of respondent judge dated March
18, (Annex A), June 10, 1997 (Annex B), and August
22, 1997 (Annex C) are hereby ANNULLED and SET
ASIDE.
2. Respondent judge is ordered to refrain from
implementing his order dated June 10, 1997 for the
delivery of the forklift to respondent MOVERS-
BASECO, making the writ of injunction permanent.
3. Remanding the case to the MTC Manila for trial on
the merits.
Let a certified copy of this judgment be served upon the public
respondent MTC Manila judge. Serve likewise a copy of this judgment
CIVIL PROCEDURE CASES SESSION 2
upon the respondent Sheriff, counsel for petitioner, counsel for
CONPAC, and counsel for MOVERS-BASECO. 7
Petitioner timely resorted to this Court, via the instant petition for review,
assailing the decision of the RTC and submitting to the Court the following legal
issues: Whether or not
(1) the MTC had jurisdiction over respondent's complaint;
(2) the MTC's order of dismissal had become final and executory;
(3) Cyborg's special civil action of certiorari and prohibition before the RTC can
be a substitute for a lost appeal; and
(4) a temporary restraining order or preliminary writ of injunction can be issued
without an injunction bond apart from the replevin bond.
The threshold issue concerns MTC's jurisdiction over the action filed by Cyborg
in Civil Case No. 152839 for "Damages with prayer for a writ of replevin." Hardly
disputable is that the jurisdiction of the court and the nature of the action must
be determined by the averments in the complaint and the character of the relief
sought 8 vis-a-visthe corresponding provisions of the law involved. 9
Sec. 33 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691,
states:
Sec. 33. Jurisdiction of Metropolitan Trial Courts; Municipal Trial Courts
and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall
exercise:
(1) Exclusive original jurisdiction over civil actions and probate
proceedings testate and intestate, including the grant of provisional
remedies in proper cases, where the value of the personal property,
estate, or amount of the demand does not exceed, or amount of the
demand does not exceed One hundred thousand pesos (P100,000.00)
or, in Metro Manila where such personal property, estate, or amount of
the demand does not exceed Two hundred thousand pesos
(P200,000.00), exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and costs, the amount of which
must be specifically alleged: Provided, That interest, damages of
whatever kind, attorney's fees, litigation expenses, and costs shall be
included in the determination of the filing fees: Provided,further, That
81

where there are several claims or causes of actions between the same
or different parties, embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or
different transactions;
Supreme Court Administrative Circular No. 09-94, in turn, provides:
SUBJECT: Guidelines in the Implementation of the Republic Act No.
7691, Entitled "An Act Expanding the Jurisdiction of the Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts,
Amending For the Purpose Batas Pambansa Blg. 129, otherwise
Known As the Judiciary Reorganization Act of 1980."
xxx xxx xxx
2. the exclusion of the term "damages" of whatever kind in determining
the jurisdictional amount under Section 19(8) and Section 33(1) of B.P.
Blg. 129, as amended by R.A. No. 7691, applies to cases where the
damages are merely incidental to or a consequence of the main cause
of action. However, in cases where the claim for damages is the main
cause of action, or one of the causes of action, the amount of such claim
shall be considered in determining the jurisdiction of the court.
The complaint filed by Cyborg with the Metropolitan Trial Court of Manila prayed
for the return of the Nissan Forklift to it, as owner and as lessor pursuant to a
lease agreement executed by it in favor of Conpac, or, in the alternative for the
payment of P150,000.00 (the actual market value of the forklift), plus damages,
plus the amount of unpaid lease, starting 09 April 1995 at P11,000.00 per month,
which as of the time of the filing of the complaint on 22 August 1996 had
amounted to P180,000.00 which, together with the value of the forklift, reach the
sum of P230,000.00 excluding the amount of damages and attorney's fees
likewise claimed. It would be incorrect to argue that the actual damages in the
form of unpaid rentals were just incident of the action for the return of the forklift,
considering that private respondent specifically sought in the complaint not only
the seizure of the forklift from petitioner-Movers, which took control of the
operations of Conpac, but likewise the payment of unpaid and outstanding
rentals. Verily, the Metropolitan Trial Court's orders of 18 March 1997 and 10
June 1997 dismissing the complaint and denying the motion of private
respondent, respectively, were properly decreed.
Another set back for Cyborg's cause was the fact that its petition for certiorari,
with preliminary injunction and prayer for temporary restraining order, filed
before the RTC should not have been allowed not only for being late but also
CIVIL PROCEDURE CASES SESSION 2
for not being a valid substitute for a lost appeal. A petition for certiorari under
the 1997 Rules of Civil Procedure should be filed within 60 days from receipt of
the assailed decision, order or resolution. Cyborg's petition with the RTC was
filed fourteen (14) days late 10 on 26 September 1997, or on the 74th day from
its receipt of the order denying the motion for reconsideration on 14 July 1997.
The RTC acted on the mistaken notion that the 1997 Rules of Civil Procedure
took effect only in October 1997; in fact, the new rules became operative since
01 July 1997.
Having thus concluded, the Court need not take up the other issues raised.
WHEREFORE, the petition for review is GRANTED, and the decision of the
Regional Trial Court of Manila in Civil Case No. 97-85267 is ANNULLED and
SET ASIDE. The orders dated 18 March 1997, 10 June 1997 and 22 August
1997 of the Metropolitan Trial Court of Manila in Civil Case No. 152839 for
"Damages With Prayer for a Writ of Replevin" are reinstated. Civil Case No.
152839 for damages is ordered DISMISSED for lack of jurisdiction.1wphi1.nt
SO ORDERED.
G.R. No. 143951 October 25, 2005
Norma Mangaliag and Narciso Solano vs. Hon. Edelwina Catubig-
Pastoral, Judge of the Regional Trial Court, 1st Judicial Region, San
Carlos City, (Pangasinan), Branch 56 and Apolinario Serquina, Jr
Before us is a petition for certiorari, with a prayer for the issuance of a temporary
restraining order, to set aside the Order dated April 17, 2000 of the Regional
Trial Court (RTC), Branch 56, San Carlos City in Civil Case No. SCC-2240,
which denied petitioners motion to dismiss; and the Order dated June 13, 2000,
which denied petitioners motion for reconsideration.
The factual background of the case is as follows:
On May 10, 1999, private respondent Apolinario Serquina, Jr. filed before the
RTC a complaint for damages against petitioners Norma Mangaliag and Narciso
Solano. The complaint alleges that: on January 21, 1999, from 9:00 to 10:00
a.m., private respondent, together with Marco de Leon, Abner Mandapat and
Manuel de Guzman, was on board a tricycle driven by Jayson Laforte; while in
Pagal, San Carlos City, a dump truck owned by petitioner Mangaliag and driven
by her employee, petitioner Solano, coming from the opposite direction, tried to
overtake and bypass a tricycle in front of it and thereby encroached the left lane
and sideswiped the tricycle ridden by private respondent; due to the gross
negligence, carelessness and imprudence of petitioner Solano in driving the
truck, private respondent and his co-passengers sustained serious injuries and
82

permanent deformities; petitioner Mangaliag failed to exercise due diligence
required by law in the selection and supervision of her employee; private
respondent was hospitalized and spent P71,392.00 as medical expenses;
private respondent sustained a permanent facial deformity due to a fractured
nose and suffers from severe depression as a result thereof, for which he should
be compensated in the amount of P500,000.00 by way of moral damages; as a
further result of his hospitalization, private respondent lost income
of P25,000.00; private respondent engaged the services of counsel on a
contingent basis equal to 25% of the total award.1
On July 21, 1999, petitioners filed their answer with counterclaim denying that
private respondent has a cause of action against them. They attributed fault or
negligence in the vehicular accident on the tricycle driver, Jayson Laforte, who
was allegedly driving without license.2
Following pre-trial conference, trial on the merits ensued. When private
respondent rested his case, petitioner Solano testified in his defense.
Subsequently, on March 8, 2000, petitioners, assisted by a new counsel, filed a
motion to dismiss on the ground of lack of jurisdiction over the subject matter of
the claim, alleging that the Municipal Trial Court (MTC) has jurisdiction over the
case since the principal amount prayed for, in the amount of P71,392.00, falls
within its jurisdiction.3Private respondent opposed petitioners motion to
dismiss.4 On March 24, 2000, petitioners filed a supplement in support of their
motion to dismiss.5
On April 17, 2000, the respondent RTC Judge, Edelwina Catubig-Pastoral,
issued the first assailed Order denying petitioners motion to dismiss, 6 relying
upon the mandate of Administrative Circular No. 09-94, paragraph 2 of which
reads:
2. The exclusion of the term "damages of whatever kind in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applied to cases where the damages are merely
incidental to or a consequence of the main cause of action. However, in cases
where the claim for damages is the main cause of action, or one of the causes
of action, the amount of such claim shall be considered in determining the
jurisdiction of the court.
The respondent RTC Judge also cited the 1999 case of Ong vs. Court of
Appeals,7 where an action for damages due to a vehicular accident, with prayer
for actual damages of P10,000.00 and moral damages of P1,000,000.00, was
tried in a RTC.
CIVIL PROCEDURE CASES SESSION 2
On May 19, 2000, petitioners filed a motion for reconsideration 8 but it was
denied by the respondent RTC Judge in her second assailed Order, dated June
13, 2000.9
Hence, the present petition for certiorari, with prayer for the issuance of a
temporary restraining order.10
On August 9, 2000, the Court resolved to issue the temporary restraining order
prayed for by petitioners. Consequently, the respondent RTC Judge desisted
from hearing further Civil Case No. SCC-2240.11
Petitioners propound this issue for consideration: In an action for recovery of
damages, does the amount of actual damages prayed for in the complaint
provide the sole test for determining the courts jurisdiction, or is the total amount
of all the damages claimed, regardless of kind and nature, such as moral,
exemplary, nominal damages, and attorneys fees, etc., to be computed
collectively with the actual damages to determine what court whether the MTC
or the RTC has jurisdiction over the action?
Petitioners maintain that the courts jurisdiction should be based exclusively on
the amount of actual damages, excluding therefrom the amounts claimed as
moral, exemplary, nominal damages and attorneys fee, etc. They submit that
the specification in Administrative Circular No. 09-94 that "in cases where the
claim for damages is the main cause of action. . . the amount of such claim shall
be considered in determining the jurisdiction of the court"signifies that the courts
jurisdiction must be tested solely by the amount of that damage which is
principally and primarily demanded, and not the totality of all the damages
sought to be recovered.
Petitioners insist that private respondents claim for actual damages in the
amount of P71,392.00 is the principal and primary demand, the same being the
direct result of the alleged negligence of petitioners, while the moral damages
for P500,000.00 and attorneys fee, being the consequent effects thereof, may
prosper only upon a prior finding by the court of the existence of petitioners
negligence that caused the actual damages. Considering that the amount of
actual damages claimed by private respondent in Civil Case No. SCC-2240
does not exceed P200,000.00, which was then the jurisdictional amount of the
MTC, the jurisdiction over the case clearly pertains to the MTC, and not to the
RTC. Therefore, the RTC should have dismissed the case for lack of jurisdiction.
Petitioners cite as relevant the case of Movers-Baseco Integrated Port Services,
Inc. vs. Cyborg Leasing Corporation12 wherein the Court, in disposing of the
jurisdictional issue, limited its consideration only to the actual or compensatory
damages.
83

Furthermore, while admitting that the defense of lack of jurisdiction was only
raised during the trial, petitioners nevertheless contend that jurisdiction may be
raised anytime, even after judgment, but before it is barred by laches or
estoppel. They submit that they seasonably presented the objection to the
RTCs lack of jurisdiction, i.e., during the trial stage where no decision had as
yet been rendered, must less one unfavorable to them.
At any rate, they argue that when the jurisdictional flaw is evident from the record
of the case, the court may, even without the urgings of the parties, take judicial
notice of such fact, and thereupon dismiss the case motu proprio.Thus, even if
lack of jurisdiction was not initially raised in a motion to dismiss or in the answer,
no waiver may be imputed to them.
Private respondent, on the other hand, submits that in an action for recovery of
damages arising from a tortious act, the claim of moral damages is not merely
an incidental or consequential claim but must be considered in the amount of
demand which will determine the courts jurisdiction. He argues that the position
taken by petitioners is a misreading of paragraph 2 of Administrative Circular
No. 09-94. The clear and explicit language of said circular leaves no room for
doubt; hence, needs no interpretation.
He further submits that petitioners reliance on Movers-Baseco Integrated Port
Services, Inc. is misplaced since that case is for recovery of the value of vehicle
and unpaid rentals on the lease of the same. He contends that Section 18,
paragraph 8 of Batas Pambansa Blg. 129, as amended by Republic Act No.
7691, upon which petitioners anchor their stand, refers to all the demands
involving collection of sums of money based on obligations arising from contract,
express or implied, where the claim for damages is just incidental thereto and it
does not apply to actions for damages based on obligations arising from quasi-
delict where the claim for damages of whatever kind is the main action.
Private respondent also contends that, being incapable of pecuniary
computation, the amount of moral damages that he may be awarded depends
on the sound discretion of the trial court, not restrained by the limitation of the
jurisdictional amount. Should the Court follow petitioners line of reasoning,
private respondent argues that it will result in an absurd situation where he can
only be awarded moral damages of not more than P200,000.00 although he
deserves more than this amount, taking into consideration his physical suffering,
as well as social and financial standing, simply because his claim for actual
damages does not exceed P200,000.00 which amount falls under the
jurisdiction of the MTC.
Lastly, he asserts that it is too late in the day for petitioners to question the
jurisdiction of the RTC since they are estopped from invoking this ground. He
CIVIL PROCEDURE CASES SESSION 2
contends that after actively taking part in the trial proceedings and presenting a
witness to seek exoneration, it would be unfair and legally improper for
petitioners to seek the dismissal of the case.
At the outset, it is necessary to stress that generally a direct recourse to this
Court is highly improper, for it violates the established policy of strict observance
of the judicial hierarchy of courts. Although this Court, the RTCs and the Court
of Appeals (CA) have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of court
forum. This Court is a court of last resort, and must so remain if it is to
satisfactorily perform the functions assigned to it by the Constitution and
immemorial tradition.13
Thus, this Court, as a rule, will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and
compelling circumstances, such as cases of national interest and of serious
implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction.14 Such exceptional
and compelling circumstances were present in the following cases: (a) Chavez
vs. Romulo15 on the citizens right to bear arms; (b) Government of the United
States of America vs. Purganan16 on bail in extradition proceedings;
(c) Commission on Elections vs. Quijano-Padilla17 on a government contract on
the modernization and computerization of the voters registration list; (d) Buklod
ng Kawaning EIIB vs. Zamora[18] on the status and existence of a public office;
and (e) Fortich vs. Corona19 on the so-called "Win-Win Resolution" of the Office
of the President which modified the approval of the conversion to agro-industrial
area of a 144-hectare land.
Be that as it may, the judicial hierarchy of courts is not an iron-clad rule. It
generally applies to cases involving warring factual allegations. For this reason,
litigants are required to repair to the trial courts at the first instance to determine
the truth or falsity of these contending allegations on the basis of the evidence
of the parties. Cases which depend on disputed facts for decision cannot be
brought immediately before appellate courts as they are not triers of
facts.20 Therefore, a strict application of the rule of hierarchy of courts is not
necessary when the cases brought before the appellate courts do not involve
factual but legal questions.
In the present case, petitioners submit a pure question of law involving the
interpretation and application of paragraph 2 of Administrative Circular No. 09-
94. This legal question and in order to avoid further delay are compelling enough
reasons to allow petitioners invocation of this Courts jurisdiction in the first
instance.
84

Before resolving this issue, the Court shall deal first on the question of estoppel
posed by private respondent. Private respondent argues that the defense of lack
of jurisdiction may be waived by estoppel through active participation in the trial.
Such, however, is not the general rule but an exception, best characterized by
the peculiar circumstances in Tijam vs. Sibonghanoy.21 In Sibonghanoy, the
party invoking lack of jurisdiction did so only after fifteen years and at a stage
when the proceedings had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches, which was defined therein
as failure or neglect for an unreasonable and unexplained length of time to do
that which, by exercising due diligence, could or should have been done earlier;
it is the negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert has abandoned it or
declined to assert it.22
As enunciated in Calimlim vs. Ramirez,23 this Court held:
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at any
stage of the proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in said case
had been applied to situations which were obviously not contemplated therein.
The exceptional circumstances involved in Sibonghanoy which justified the
departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing altogether the time
honored principle that the issue of jurisdiction is not lost by waiver or by
estoppel.
...
It is neither fair nor legal to bind a party by the result of a suit or proceeding
which was taken cognizance of in a court which lacks jurisdiction over the same
irrespective of the attendant circumstances. The equitable defense of estoppel
requires knowledge or consciousness of the facts upon which it is based. The
same thing is true with estoppel by conduct which may be asserted only when
it is shown, among others, that the representation must have been made with
knowledge of the facts and that the party to whom it was made is ignorant of the
truth of the matter (De Castro vs. Gineta, 27 SCRA 623). The filing of an action
or suit in a court that does not possess jurisdiction to entertain the same may
not be presumed to be deliberate and intended to secure a ruling which could
later be annulled if not favorable to the party who filed such suit or proceeding.
CIVIL PROCEDURE CASES SESSION 2
Instituting such an action is not a one-sided affair. It can just as well be
prejudicial to the one who file the action or suit in the event that he obtains a
favorable judgment therein which could also be attacked for having been
rendered without jurisdiction. The determination of the correct jurisdiction of a
court is not a simple matter. It can raise highly debatable issues of such
importance that the highest tribunal of the land is given the exclusive appellate
jurisdiction to entertain the same. The point simply is that when a party commits
error in filing his suit or proceeding in a court that lacks jurisdiction to take
cognizance of the same, such act may not at once be deemed sufficient basis
of estoppel. It could have been the result of an honest mistake or of divergent
interpretations of doubtful legal provisions. If any fault is to be imputed to a party
taking such course of action, part of the blame should be placed on the court
which shall entertain the suit, thereby lulling the parties into believing that they
pursued their remedies in the correct forum. Under the rules, it is the duty of the
court to dismiss an action "whenever it appears that court has no jurisdiction
over the subject matter." (Section 2, Rule 9, Rules of Court) Should the Court
render a judgment without jurisdiction, such judgment may be impeached or
annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years
from the finality of the same (Art. 1144, par. 3, Civil Code).24
In the present case, no judgment has yet been rendered by the RTC. 25 As a
matter of fact, as soon as the petitioners discovered the alleged jurisdictional
defect, they did not fail or neglect to file the appropriate motion to dismiss.
Hence, finding the pivotal element of laches to be absent,
the Sibonghanoy doctrine does not control the present controversy. Instead, the
general rule that the question of jurisdiction of a court may be raised at any stage
of the proceedings must apply. Therefore, petitioners are not estopped from
questioning the jurisdiction of the RTC.
In any event, the petition for certiorari is bereft of merit.
Section 1 of Republic Act (R.A.) No. 7691, which took effect on April 15, 1994,
provides inter alia that where the amount of the demand in civil cases
exceeds P100,000.00,26 exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses, and costs, the exclusive jurisdiction thereof
is lodged with in the RTC. Under Section 3 of the same law, where the amount
of the demand in the complaint does not exceed P100,000.00, exclusive of
interest, damages of whatever kind, attorneys fees, litigation expenses, and
costs, the exclusive jurisdiction over the same is vested in the Metropolitan Trial
Court, MTC and Municipal Circuit Trial Court. The jurisdictional amount was
increased to P200,000.00,27 effective March 20, 1999, pursuant to Section
528 of R.A. No. 7691 and Administrative Circular No. 21-99.
85

In Administrative Circular No. 09-94 dated March 14, 1994, the Court specified
the guidelines in the implementation of R.A. No. 7691. Paragraph 2 of the
Circular provides:
2. The exclusion of the term "damages of whatever kind in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129,
as amended by R.A. No. 7691, applied to cases where the damages are merely
incidental to or a consequence of the main cause of action. However, in cases
where the claim for damages is the main cause of action, or one of the
causes of action, the amount of such claim shall be considered in
determining the jurisdiction of the court. (Emphasis supplied)
The well-entrenched principle is that the jurisdiction of the court over the subject
matter of the action is determined by the material allegations of the complaint
and the law, irrespective of whether or not the plaintiff is entitled to recover all
or some of the claims or reliefs sought therein.29 In the present case, the
allegations in the complaint plainly show that private respondent seeks to
recover not only his medical expenses, lost income but also damages for
physical suffering and mental anguish due to permanent facial deformity from
injuries sustained in the vehicular accident. Viewed as an action for quasi-delict,
the present case falls squarely within the purview of Article 2219 (2), 30 which
provides for the payment of moral damages in cases of quasi-delict causing
physical injuries.
Private respondents claim for moral damages of P500,000.00 cannot be
considered as merely incidental to or a consequence of the claim for actual
damages. It is a separate and distinct cause of action or an independent
actionable tort. It springs from the right of a person to the physical integrity of
his or her body, and if that integrity is violated, damages are due and
assessable.31 Hence, the demand for moral damages must be considered as a
separate cause of action, independent of the claim for actual damages and must
be included in determining the jurisdictional amount, in clear consonance with
paragraph 2 of Administrative Circular No. 09-94.
If the rule were otherwise, i.e., the courts jurisdiction in a case of quasi-delict
causing physical injuries would only be based on the claim for actual damages
and the complaint is filed in the MTC, it can only award moral damages in an
amount within its jurisdictional limitations, a situation not intended by the framers
of the law.
It must be remembered that moral damages, though incapable of pecuniary
estimation, are designed to compensate and alleviate in some way the physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury unjustly
CIVIL PROCEDURE CASES SESSION 2
caused a person.32 Moral damages are awarded to enable the injured party to
obtain means, diversions or amusements that will serve to alleviate the moral
suffering he/she has undergone, by reason of the defendants culpable action.
Its award is aimed at restoration, as much as possible, of the spiritual status quo
ante; thus, it must be proportionate to the suffering inflicted. Since each case
must be governed by its own peculiar circumstances, there is no hard and fast
rule in determining the proper amount.33
The petitioners reliance in the case of Movers-Baseco Integrated Port Services,
Inc. vs. Cyborg Leasing Corporation34 is misplaced. The claim for damages
therein was based on a breach of a contract of lease, not a quasi-delict causing
physical injuries, as in this case. Besides, there was no claim therein for moral
damages. Furthermore, moral damages are generally not recoverable in
damage actions predicated on a breach of contract in view of the provisions of
Article 222035 of the Civil Code.
In view of the foregoing, the Court is convinced that the respondent RTC Judge
committed no grave abuse of discretion in issuing the assailed Orders dated
April 17, 2000 and June 13, 2000.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
The temporary restraining order issued by this Court on August 9, 2000 is
LIFTED.
The Regional Trial Court, Branch 56, San Carlos City is DIRECTED to continue
with the trial proceedings in Civil Case No. SCC-2240 and resolve the case with
dispatch.
Costs against petitioners. SO ORDERED.
G.R. No. 138542 August 25, 2000
ALFREDO P. PASCUAL and LORETA S. PASCUAL vs. COURT OF
APPEALS
The question for decision in this case is whether an action for reconveyance of
a piece of land and for accounting and damages which private respondent
Ernesto P. Pascual brought against his brother, petitioner Alfredo P. Pascual,
and the latters wife involves an intra-corporate dispute beyond the jurisdiction
of the Regional Trial Court, Branch 121, Kalookan City in which it was filed. The
trial court held that the action did not constitute an intra-corporate dispute and,
therefore, denied petitioners motion to dismiss. The Court of Appeals sustained
the order of the trial court. Hence, this petition for review of the decision 1 of the
appellate court. We affirm.
86

The facts are as follows:
On February 7, 1996, private respondent Ernesto P. Pascual filed a complaint
in the Regional Trial Court for "accounting, reconveyance of real property based
on implied trust resulting from fraud, declaration of nullity of TCT, recovery of
sums of money, and damages" against his brother, petitioner Alfredo, and the
latters wife Loreta Pascual. The pertinent parts of his complaint read:
3. Plaintiff Ernesto and defendant Alfredo Pascual are full blood
brothers. They, along with Araceli P. Castro, Ester P. Abad, Edgardo P.
Pascual, Sr. (now deceased), Corazon P. Montenegro, Leonor P.
Rivera, Luciano Pascual, Jr., and Teresita P. Manuel, are legitimate
children of Luciano Pascual, Sr. and Consolacion Pascual. Defendant
Loreta Pascual is the wife of defendant Alfredo.
4. Between 1963 to 1975, Luciano R. Pascual, Sr. acquired substantial
shares in Phillens Manufacturing Corp. Luciano, Sr. parceled out and
assigned a good number of these shares in the names of his children.
5. With Lucianos substantial shareholdings, his eldest son, defendant
Alfredo became President, General Manager, and Vice-Chairman of the
Board of Phillens. Plaintiff was only 20 years old then.
6. Defendant Alfredo was also president of L.R. Pascual & Sons, Inc.
which held substantial shares in Phillens. (Plaintiff is a stockholder of L.
R. Pascual & Sons, Inc.)
7. Although during and after the lifetime of the parties parents,
defendant Alfredo held family property in trust for Luciano Sr. and
Consolacion, and for his brothers and sisters, defendant Alfredo gave
the latter no accounting at any point in time contrary to what their father
intended.
8. Because from 1969 to 1990, defendant Alfredo turned over zero profit
to plaintiff Ernesto as far as his share was concerned, plaintiff tried to
arrange a meeting between them about the matter of accounting --
without any success during a 5-year period (1990-1995). Defendant
Alfredo would each time be sensitive, evasive, and drunk, so nothing
became of those efforts.
....
CIVIL PROCEDURE CASES SESSION 2
10. Since defendant Alfredo was President of L.R. Pascual & Sons, Inc.
which held family properties in Quezon City, Manila, and Baguio,
plaintiff wanted this matter taken up in a meeting he requested with
defendant Alfredo. In addition, plaintiff asked defendant Alfredo for an
accounting in L.R. Pascual & Co., a registered partnership distinct from
L.R. Pascual & Sons, Inc. which would be discussed in that requested
meeting.
....
12. Because of defendant Alfredos icy silence and unmistakable
attempts to claim the lid on plaintiff Ernesto Pascual, plaintiff conducted
an inquiry. As a result, he discovered that when defendant Alfredo
caused the dissolution of Phillens Manufacturing Corporation by asking
for a shortening of its term, defendant Alfredo represented in an affidavit
of undertaking that
(a) he is the owner of the majority of the outstanding capital
stock of the corporation;
(b) that the corporation has no obligation, whether existing or
contingent, direct or indirect, due or payable to any person
whomsoever, natural or juridical;
(c) he is assuming and will pay any and all valid claims or
demands by creditors, stockholders, or any third person or
persons, presented after the dissolution of the corporation.
13. By taking a position adverse to the trust and to his familys,
defendant Alfredo, greatly profiting from Phillens, now held he owned
majority and will undertake to pay any claimant or creditor. Yet,
defendant Alfredo had not paid plaintiff what was properly owing to him.
14. Plaintiff also discovered, to his dismay, that defendant Alfredo had
written an October 8, 1990 letter to the Securities & Exchange
Commission falsely representing as follows:
October 8, 1990
Examiner & Appraiser Dept. [sic]
Securities & Exchange Commission
E. de los Santos Avenue
Mandaluyong, Metro Manila
87

Gentlemen:
This will certify that the P3.3-million notes payable as shown in the
balance sheet of Phillens Manufacturing Corporation as of June 30,
1990, is [sic] my personal advances.
Since I am assuming the assets and liabilities of the company, to which
all the stockholders have consented, I am likewise giving my consent to
the dissolution of the corporation.
Very truly yours,
ALFREDO P. PASCUAL
16. Further, on inquiry, plaintiff discovered that last April 3, 1989,
defendant Alfredo caused an appraisal of the fair market value of the
land and buildings of Phillens in Kalookan, excluding equipment,
remaining stock and inventory. Aware that Cuervo had appraised such
properties at P10,977,000 as of March 10, 1989, defendant Alfredo
hatched a ploy to buy for himself such properties at only P4.5 million. (A
copy of the April 3, 1989 Cuervo report addressed to defendant Alfredo
is here attached as Annex A.)
18. To consummate his fraudulent design, defendant Alfredo caused in
bad faith the cancellation of TCT C-28572 and the issuance of TCT
215804 in his and defendant Loretas name (copy of which is here
attached as Annex D). That TCT is of course void, proceeding as it does
from a void transfer, which constitutes fraud and a breach of trust.
On March 21, 1996, petitioners filed a motion to dismiss on the ground that the
complaint raises an intra-corporate controversy between the parties over which
original and exclusive jurisdiction is vested in the Securities and Exchange
Commission (SEC). At first, the trial court granted petitioners motion and
dismissed the complaint on the ground that the complaint stemmed from alleged
fraudulent acts and misrepresentations of petitioner Alfredo P. Pascual as a
corporate officer of Phillens Manufacturing Corp. (Phillens) and thus the SEC
had jurisdiction over the case. However, on respondents motion, the trial court
reconsidered its order and reinstated respondents action. In an order, dated
September 29, 1997, the trial court held that, since the corporation had been
dissolved in 1990 and its corporate affairs terminated in 1993, there were no
more corporate affairs to speak of at the time of the filing of the complaint. The
court also allowed the amendment of the complaint. It appears that, pending
resolution of the motion for reconsideration, respondent amended his complaint
by alleging the following matters which are underlined:
CIVIL PROCEDURE CASES SESSION 2
4. Luciano R. Pascual, Sr. together with L.R. Pascual & Sons.
Inc. acquired approximately 38% of shares in Phillens Manufacturing
Corp., a close corporation. Luciano Sr. died in 1984 while Consolacion
died in 1986. Thus, plaintiff became owner by operation of law of 1/9 of
his parents stockholdings since they died intestate without obligations.
5. With Lucianos substantial shareholdings, defendant Alfredo became
President, General Manager, and Vice-Chairman of Phillens in 1968 or
1969, positions which he held until 1990 when Phillens was dissolved.
6. Defendant Alfredo held in trust for the benefit of Luciano Sr. and
Consolacion, and for his brothers and sisters, plaintiff included, said
stockholdings and the properties of Phillens.
7. As trustee defendant Alfredo did not turn over the properties and
sums due to plaintiff and the former even failed to account for the trust
estate and its earnings, to the grave prejudice of the latter.
8. One of the properties composing the trust estate, TCT No. C-28572
with an area of 7,528 square meters located in Caloocan City, was
registered in the name of defendants under devious and fraudulent
circumstances engineered by Alfredo.
8.1. Said property was appraised conservatively to have a
market value of no less than P10.9 Million in 1989.
8.2 Although Alfredo was fully aware of its market value, Alfredo
schemed, manipulated and succeeded in transferring title to
and possession in his favor of TCT No. C-28572 in 1989 for an
alleged consideration of P4.5 Million, in violation of his duties
as trustee.
8.3 In order to cover-up such serious breach of trust, Alfredo
maliciously caused the dissolution of Phillens in 1990, shortly
after ownership was transferred to him, and further caused the
destruction of Phillens records thereby rendering its stocks
valueless after its corporate affairs were wound up in 1993.
8.4 Defendants presently appear as legal and beneficial
owners by virtue of TCT No. C-215804.
Petitioners reiterate their contention that the complaint against them involves an
intra-corporate dispute cognizable by the SEC and, therefore, the Regional Trial
88

Court should have dismissed the complaint. They complain that the trial court
should not have allowed the amendment of the complaint because it was done
in order to confer jurisdiction on the trial court.
First. Petitioners contend that the existence of a corporation at the time of filing
of a complaint involving an intra-corporate dispute is not required in order that
such dispute be cognizable by the SEC because such requirement is not found
in P.D. No. 902-A.
This contention has no merit. P.D. 902-A, 5 provides:
In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of
association registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving:
....
b) Controversies arising out of intra-corporate or partnership relations, between
and among stockholders, members, or associates; between any or all of them
and the corporation, partnership or association of which they are stockholders,
members or associates, respectively; and between such corporation,
partnership or association and the state insofar as it concerns their individual
franchise or right to exist as such entity;
....
Sec. 5(b) does not define what an intra-corporate controversy is, but case law
has fashioned out two tests for determining what suit is cognizable by the SEC
or the regular courts, and sometimes by the National Labor Relations
Commission. The first test uses the enumeration in 5(b) of the relationships to
determine jurisdiction,2 to wit:
(1) Those between and among stockholders and members;
(2) Those between and among stockholders and members, on one
hand, and the corporation, on the other hand; and
(3) Those between the corporation and the State but only insofar as its
franchise or right to exist as an entity is concerned.
CIVIL PROCEDURE CASES SESSION 2
The second test, on the other hand, focuses on the nature of the controversy
itself.3 Recent decisions of this Court consider not only the subject of their
controversy but also the status of the parties.4
We hold that the Court of Appeals correctly ruled that the regular courts, not the
SEC, have jurisdiction over this case.1wphi1 Petitioners and private
respondent never had any corporate relations in Phillens. It appears that private
respondent was never a stockholder in Phillens, of which the parties
predecessor-in-interest, Luciano Pascual, Sr., was a stockholder and whose
properties are being litigated. Private respondents allegation is that, upon the
death of their father, he became co-owner in the estate left by him, and part of
this estate includes the corporate interests in Phillens. He also alleges that
petitioners repudiated the trust relationship created between them and
appropriated to themselves even the property that should have belonged to
respondent. It is thus clear that there is no corporate relationship involved here.
That petitioner Alfredo Pascual was a corporate officer holding in trust for his
brother their fathers corporate interests did not create an intra-corporate
relationship between them.
Nor is the controversy corporate in nature. As we have stated before, the grant
of jurisdiction must be viewed in the light of the nature and function of the SEC
under the law.5 P.D. No. 902-A, 3 gives the SEC jurisdiction, supervision, and
control over all corporations, partnerships or associations, who are the grantees
of primary franchise and/or a license or permit issued by the government to
operate in the Philippines. From this, it can be deduced that the regulatory and
adjudicatory functions of the SEC, insofar as intra-corporate controversies are
concerned, comes into play only if a corporation still exists.
In the case at bar, the corporation whose properties are being contested no
longer exists, it having been completely dissolved in 1993; consequently, the
supervisory authority of the SEC over the corporation has likewise come to an
end.
It is true that a complaint for accounting, reconveyance, etc. of corporate
properties has previously been held to be within the jurisdiction of the
SEC.6 Nonetheless, a distinction can be drawn between those cases and the
case at bar, for, in those cases, the corporations involved were still existing,
whereas in the present case, there is no more corporation involved. There is no
question that assessing the financial status of an existing corporation, for
purposes of an action for accounting, requires the expertise of the SEC. But in
the case of a dissolved corporation, no such expertise is required, for all its
business has been properly accounted for already, and what is left to be
determined is properly within the competence of regular courts.
89

It may be noted in this connection that pursuant to R.A. No. 8799, 5.2,7 which
took effect on August 8, 2000, the jurisdiction of the SEC to decide cases
involving intra-corporate dispute was transferred to courts of general jurisdiction
and, in accordance therewith, all cases of this nature, with the exception only of
those submitted for decision, were transferred to the regular courts. Hence, the
question whether this case should be filed in the SEC is now only of academic
interest. For even if it involves an intra-corporate dispute, it would be remanded
to the Regional Trial Court just the same.
Second. Petitioners contend that the lower courts erred in allowing the
amendment of the complaint, which were actually made to confer jurisdiction on
the trial court after the original complaint was dismissed.
This contention has no basis. The original complaint alleged that Phillens has
already been completely dissolved. In addition, it alleged a breach by petitioner
Alfredo P. Pascual of the implied trust created between him and his brother,
respondent Ernesto P. Pascual, after the death of their father. Thus, even
without the amendments, the allegations in the original complaint were sufficient
to confer jurisdiction on the trial court. The amendments made by respondent
were merely for the purpose of making more specific his original allegations.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED. SO
ORDERED.
G.R. No. 140453 October 17, 2000
TRANSFARM & CO., INC., and TRANSDAEWOO AUTOMOTIVE
MANUFACTURING COMPANY vs. DAEWOO CORPORATION and
DAEWOO MOTOR CO., LTD
Assailed in the Petition for Review on Certiorari under consideration are the
decision and the resolution of the Court of Appeals, dated 29 July and 13
October 1999, respectively, in CA-G.R. SP No. 47558.
Sometime in 1994, Daewoo Corporation (Daewoo) entered into a joint venture
agreement with Transfarm & Co. (Transfarm) for the delivery, assembly,
production and distribution of Daewoo cars in the Philippines. Under the
agreement, Transdaewoo Automotive Manufacturing Company (TAMC) was to
be incorporated with Transfarm owning seventy percent (70%) and Daewoo
holding thirty percent (30%) of the shares of stock. The new firm was also to
undertake the manufacture, assembly, marketing, wholesale distribution and
sale and after-sales service of Daewoo products. Transfarm and the joint
venture company TAMC were then to enter into a separate agreement that
would name Transfarm as the exclusive distributor in the Philippines of Daewoo
cars.
CIVIL PROCEDURE CASES SESSION 2
The parties stipulated that any dispute, controversy or claim among the parties
arising out of, relating to, or in connection with the joint venture agreement itself
should be settled by arbitration to be conducted in Hongkong. The joint venture
agreement, however, was to be governed by and construed in accordance with
the laws of the Philippines.
The agreement went awry in December of 1997. Transfarm and TAMC filed a
complaint with the Regional Trial Court (RTC), Branch 5, of Cebu City, docketed
Civil Case No. CEB-21367, against Daewoo and Daewoo Motor Co., Ltd.
(DMCL), a corporation organized under the laws of the Republic of Korea and
not doing business in the Philippines, praying that Daewoo and DMCL be
ordered to refrain from conducting and doing, directly or indirectly, automotive
business in the Philippines.
On 20 January 1998, Daewoo and DMCL filed a motion to dismiss the case
moored, inter alia, on the ground that the case involved an intra-corporate
dispute cognizable exclusively by the Securities and Exchange Commission
(SEC). In its resolution of 25 March 1998, the RTC denied the Motion to Dismiss
and directed the defendants to file their respective answers.
Transfarm and TAMC filed a petition for certiorari, prohibition
and mandamus before the Court of Appeals. The appellate court, in its 29th July
1999 decision, declared that the jurisdiction over the case rested with the SEC
and, accordingly, granted the petition and ordered the dismissal of the
complaint. The subsequent motion for reconsideration was rebuffed.
Hence, the instant petition.
The Court required respondents to file their comment and petitioners to file their
reply thereon, respectively, in its resolutions of 25 November 1999 and 21 June
2000.
During the pendency of the petition, Republic Act No. 8799, otherwise also
known as The Securities Regulation Code, was enacted into law,
providing, inter alia, that -
"5.2. The Commission's jurisdiction over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme
Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission
shall retain jurisdiction over pending cases involving intra-corporate disputes
submitted for final resolution which should be resolved within one (1) year from
the enactment of this Code. The Commission shall retain jurisdiction over
90

pending suspension of payments/rehabilitation cases filed as of 30 June 2000
until finally disposed."1
Statutes regulating court jurisdiction and procedures are generally construed to
be applicable to actions pending and undetermined at the time of the passage
of said enactments.1wphi12 The instant case, neither filed with the Securities
and Exchange Commission nor therewith pending, let alone ready for final
resolution by it, is clearly cognizable by the RTC under the amendatory law.
WHEREFORE, the decision of the appellate court subject of the instant petition
for review is SET ASIDE, and the case is REMANDED to the Regional Trial
Court of Cebu City for further proceedings. No costs. SO ORDERED.
G.R. No. 181416 November 11, 2013
MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION vs. ROBERT
H. CULLEN
This is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the Court of Appeals (CA) Decision1 dated July 10, 2007 and
Resolution2 dated January 25, 2008 in CA-G.R. CV No. 86614. The assailed
decision reversed and set aside the September 9, 2005 Order 3 of the Regional
Trial Court (RTC) of Makati, Branch 58 in Civil Case No. 03-1018; while the
assailed resolution denied the separate motions for reconsideration filed by
petitioner Medical Plaza Makati Condominium Corporation (MPMCC) and
Meridien Land Holding, Inc. (MLHI).
The factual and procedural antecedents are as follows:
Respondent Robert H. Cullen purchased from MLHI condominium Unit No.
1201 of the Medical Plaza Makati covered by Condominium Certificate of Title
No. 45808 of the Register of Deeds of Makati. Said title was later cancelled and
Condominium Certificate of Title No. 64218 was issued in the name of
respondent.
On September 19, 2002, petitioner, through its corporate secretary, Dr. Jose
Giovanni E. Dimayuga, demanded from respondent payment for alleged unpaid
association dues and assessments amounting to P145,567.42. Respondent
disputed this demand claiming that he had been religiously paying his dues
shown by the fact that he was previously elected president and director of
petitioner.4 Petitioner, on the other hand, claimed that respondents obligation
was a carry-over of that of MLHI.5 Consequently, respondent was prevented
from exercising his right to vote and be voted for during the 2002 election of
petitioners Board of Directors.6Respondent thus clarified from MLHI the veracity
CIVIL PROCEDURE CASES SESSION 2
of petitioners claim, but MLHI allegedly claimed that the same had already been
settled.7 This prompted respondent to demand from petitioner an explanation
why he was considered a delinquent payer despite the settlement of the
obligation. Petitioner failed to make such explanation. Hence, the Complaint for
Damages8 filed by respondent against petitioner and MLHI, the pertinent
portions of which read:
xxxx
6. Thereafter, plaintiff occupied the said condominium unit no. 1201 and
religiously paid all the corresponding monthly contributions/association
dues and other assessments imposed on the same. For the years 2000
and 2001, plaintiff served as President and Director of the Medical Plaza
Makati Condominium Corporation;
7. Nonetheless, on September 19, 2002, plaintiff was
shocked/surprised to receive a letter from the incumbent Corporate
Secretary of the defendant Medical Plaza Makati, demanding payment
of alleged unpaid association dues and assessments arising from
plaintiffs condominium unit no. 1201. The said letter further stressed
that plaintiff is considered a delinquent member of the defendant
Medical Plaza Makati.
x x x;
8. As a consequence, plaintiff was not allowed to file his certificate of
candidacy as director. Being considered a delinquent, plaintiff was also
barred from exercising his right to vote in the election of new members
of the Board of Directors x x x;
9. x x x Again, prior to the said election date, x x x counsel for the
defendant [MPMCC] sent a demand letter to plaintiff, anent the said
delinquency, explaining that the said unpaid amount is a carry-over from
the obligation of defendant Meridien. x x x;
10. Verification with the defendant [MPMCC] resulted to the issuance of
a certification stating that Condominium Unit 1201 has an outstanding
unpaid obligation in the total amount of P145,567.42 as of November
30, 2002, which again, was attributed by defendant [MPMCC] to
defendant Meridien. x x x;
11. Due to the seriousness of the matter, and the feeling that defendant
Meridien made false representations considering that it fully warranted
to plaintiff that condominium unit 1201 is free and clear from all liens
91

and encumbrances, the matter was referred to counsel, who
accordingly sent a letter to defendant Meridien, to demand for the
payment of said unpaid association dues and other assessments
imposed on the condominium unit and being claimed by defendant
[MPMCC]. x x x;
12. x x x defendant Meridien claimed however, that the obligation does
not exist considering that the matter was already settled and paid by
defendant Meridien to defendant [MPMCC]. x x x;
13. Plaintiff thus caused to be sent a letter to defendant [MPMCC] x x
x. The said letter x x x sought an explanation on the fact that, as per the
letter of defendant Meridien, the delinquency of unit 1201 was already
fully paid and settled, contrary to the claim of defendant [MPMCC]. x x
x;
14. Despite receipt of said letter on April 24, 2003, and to date however,
no explanation was given by defendant [MPMCC], to the damage and
prejudice of plaintiff who is again obviously being barred from
voting/participating in the election of members of the board of directors
for the year 2003;
15. Clearly, defendant [MPMCC] acted maliciously by insisting that
plaintiff is a delinquent member when in fact, defendant Meridien had
already paid the said delinquency, if any. The branding of plaintiff as
delinquent member was willfully and deceitfully employed so as to
prevent plaintiff from exercising his right to vote or be voted as director
of the condominium corporation; 16. Defendant [MPMCC]s ominous
silence when confronted with claim of payment made by defendant
Meridien is tantamount to admission that indeed, plaintiff is not really a
delinquent member;
17. Accordingly, as a direct and proximate result of the said acts of
defendant [MPMCC], plaintiff experienced/suffered from mental
anguish, moral shock, and serious anxiety. Plaintiff, being a doctor of
medicine and respected in the community further suffered from social
humiliation and besmirched reputation thereby warranting the grant of
moral damages in the amount of P500,000.00 and for which defendant
[MPMCC] should be held liable;
18. By way of example or correction for the public good, and as a stern
warning to all similarly situated, defendant [MPMCC] should be ordered
to pay plaintiff exemplary damages in the amount of P200,000.00;
CIVIL PROCEDURE CASES SESSION 2
19. As a consequence, and so as to protect his rights and interests,
plaintiff was constrained to hire the services of counsel, for an
acceptance fee of P100,000.00 plus P2,500.00 per every court hearing
attended by counsel;
20. In the event that the claim of defendant [MPMCC] turned out to be
true, however, the herein defendant Meridien should be held liable
instead, by ordering the same to pay the said delinquency of
condominium unit 1201 in the amount of P145,567.42 as of November
30, 2002 as well as the above damages, considering that the non-
payment thereof would be the proximate cause of the damages suffered
by plaintiff;9
Petitioner and MLHI filed their separate motions to dismiss the complaint on the
ground of lack of jurisdiction.10MLHI claims that it is the Housing and Land Use
Regulatory Board (HLURB) which is vested with the exclusive jurisdiction to
hear and decide the case. Petitioner, on the other hand, raises the following
specific grounds for the dismissal of the complaint: (1) estoppel as respondent
himself approved the assessment when he was the president; (2) lack of
jurisdiction as the case involves an intra-corporate controversy; (3) prematurity
for failure of respondent to exhaust all intra-corporate remedies; and (4) the case
is already moot and academic, the obligation having been settled between
petitioner and MLHI.11
On September 9, 2005, the RTC rendered a Decision granting petitioners and
MLHIs motions to dismiss and, consequently, dismissing respondents
complaint.
The trial court agreed with MLHI that the action for specific performance filed by
respondent clearly falls within the exclusive jurisdiction of the HLURB. 12 As to
petitioner, the court held that the complaint states no cause of action,
considering that respondents obligation had already been settled by MLHI. It,
likewise, ruled that the issues raised are intra-corporate between the corporation
and member.13
On appeal, the CA reversed and set aside the trial courts decision and
remanded the case to the RTC for further proceedings. Contrary to the RTC
conclusion, the CA held that the controversy is an ordinary civil action for
damages which falls within the jurisdiction of regular courts. 14 It explained that
the case hinged on petitioners refusal to confirm MLHIs claim that the subject
obligation had already been settled as early as 1998 causing damage to
respondent.15 Petitioners and MLHIs motions for reconsideration had also
been denied.16
92

Aggrieved, petitioner comes before the Court based on the following grounds:
I.
THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE, NOT
THERETOFORE DETERMINED BY THE SUPREME COURT, OR HAS
DECIDED IT IN A WAY NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT DECLARED
THE INSTANT CASE AN ORDINARY ACTION FOR DAMAGES INSTEAD OF
AN INTRA-CORPORATE CONTROVERSY COGNIZABLE BY A SPECIAL
COMMERCIAL COURT.
II.
THE COURT A QUO HAS DECIDED THE INSTANT CASE IN A WAY NOT IN
ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
SUPREME COURT WHEN IT TOOK COGNIZANCE OF THE APPEAL WHILE
RAISING ONLY PURE QUESTIONS OF LAW.17
The petition is meritorious.
It is a settled rule that jurisdiction over the subject matter is determined by the
allegations in the complaint. It is not affected by the pleas or the theories set up
by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction
would become dependent almost entirely upon the whims of the
defendant.18 Also illuminating is the Courts pronouncement in Go v. Distinction
Properties Development and Construction, Inc.:19
Basic as a hornbook principle is that jurisdiction over the subject matter of a
case is conferred by law and determined by the allegations in the complaint
which comprise a concise statement of the ultimate facts constituting the
plaintiffs cause of action. The nature of an action, as well as which court or body
has jurisdiction over it, is determined based on the allegations contained in the
complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. The averments in the
complaint and the character of the relief sought are the ones to be consulted.
Once vested by the allegations in the complaint, jurisdiction also remains vested
irrespective of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein. x x x20
Based on the allegations made by respondent in his complaint, does the
controversy involve intra-corporate issues as would fall within the jurisdiction of
the RTC sitting as a special commercial court or an ordinary action for damages
within the jurisdiction of regular courts?
CIVIL PROCEDURE CASES SESSION 2
In determining whether a dispute constitutes an intra-corporate controversy, the
Court uses two tests, namely, the relationship test and the nature of the
controversy test.21
An intra-corporate controversy is one which pertains to any of the following
relationships: (1) between the corporation, partnership or association and the
public; (2) between the corporation, partnership or association and the State
insofar as its franchise, permit or license to operate is concerned; (3) between
the corporation, partnership or association and its stockholders, partners,
members or officers; and (4) among the stockholders, partners or associates
themselves.22 Thus, under the relationship test, the existence of any of the
above intra-corporate relations makes the case intra-corporate.23
Under the nature of the controversy test, "the controversy must not only be
rooted in the existence of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties correlative rights and obligations under
the Corporation Code and the internal and intra-corporate regulatory rules of the
corporation."24 In other words, jurisdiction should be determined by considering
both the relationship of the parties as well as the nature of the question
involved.25
Applying the two tests, we find and so hold that the case involves intra-corporate
controversy. It obviously arose from the intra-corporate relations between the
parties, and the questions involved pertain to their rights and obligations under
the Corporation Code and matters relating to the regulation of the corporation. 26
Admittedly, petitioner is a condominium corporation duly organized and existing
under Philippine laws, charged with the management of the Medical Plaza
Makati. Respondent, on the other hand, is the registered owner of Unit No. 1201
and is thus a stockholder/member of the condominium corporation. Clearly,
there is an intra-corporate relationship between the corporation and a
stockholder/member.
The nature of the action is determined by the body rather than the title of the
complaint.1wphi1 Though denominated as an action for damages, an
examination of the allegations made by respondent in his complaint shows that
the case principally dwells on the propriety of the assessment made by petitioner
against respondent as well as the validity of petitioners act in preventing
respondent from participating in the election of the corporations Board of
Directors. Respondent contested the alleged unpaid dues and assessments
demanded by petitioner.
The issue is not novel. The nature of an action involving any dispute as to the
validity of the assessment of association dues has been settled by the Court in
93

Chateau de Baie Condominium Corporation v. Moreno.27 In that case,
respondents therein filed a complaint for intra-corporate dispute against the
petitioner therein to question how it calculated the dues assessed against them,
and to ask an accounting of association dues. Petitioner, however, moved for
the dismissal of the case on the ground of lack of jurisdiction alleging that since
the complaint was against the owner/developer of a condominium whose
condominium project was registered with and licensed by the HLURB, the latter
has the exclusive jurisdiction. In sustaining the denial of the motion to dismiss,
the Court held that the dispute as to the validity of the assessments is purely an
intra-corporate matter between petitioner and respondent and is thus within the
exclusive jurisdiction of the RTC sitting as a special commercial court. More so
in this case as respondent repeatedly questioned his characterization as a
delinquent member and, consequently, petitioners decision to bar him from
exercising his rights to vote and be voted for. These issues are clearly corporate
and the demand for damages is just incidental. Being corporate in nature, the
issues should be threshed out before the RTC sitting as a special commercial
court. The issues on damages can still be resolved in the same special
commercial court just like a regular RTC which is still competent to tackle civil
law issues incidental to intra-corporate disputes filed before it.28
Moreover, Presidential Decree No. 902-A enumerates the cases over which the
Securities and Exchange Commission (SEC) exercises exclusive jurisdiction:
xxxx
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between
any or all of them and the corporation, partnership or association of
which they are stockholders, members, or associates, respectively; and
between such corporation, partnership or association and the State
insofar as it concerns their individual franchise or right to exist as such
entity; and
c) Controversies in the election or appointment of directors, trustees,
officers, or managers of such corporations, partnerships, or
associations.29
To be sure, this action partakes of the nature of an intra-corporate controversy,
the jurisdiction over which pertains to the SEC. Pursuant to Section 5.2 of
Republic Act No. 8799, otherwise known as the Securities Regulation Code, the
jurisdiction of the SEC over all cases enumerated under Section 5 of
Presidential Decree No. 902-A has been transferred to RTCs designated by this
Court as Special Commercial Courts.30 While the CA may be correct that the
RTC has jurisdiction, the case should have been filed not with the regular court
CIVIL PROCEDURE CASES SESSION 2
but with the branch of the RTC designated as a special commercial court.
Considering that the RTC of Makati City, Branch 58 was not designated as a
special commercial court, it was not vested with jurisdiction over cases
previously cognizable by the SEC.31The CA, therefore, gravely erred in
remanding the case to the RTC for further proceedings.
Indeed, Republic Act (RA) No. 9904, or the Magna Carta for Homeowners and
Homeowners Associations, approved on January 7, 2010 and became effective
on July 10, 2010, empowers the HLURB to hear and decide inter-association
and/or intra-association controversies or conflicts concerning homeowners
associations. However, we cannot apply the same in the present case as it
involves a controversy between a condominium unit owner and a condominium
corporation. While the term association as defined in the law covers
homeowners associations of other residential real property which is broad
enough to cover a condominium corporation, it does not seem to be the
legislative intent. A thorough review of the deliberations of the bicameral
conference committee would show that the lawmakers did not intend to extend
the coverage of the law to such kind of association. We quote hereunder the
pertinent portion of the Bicameral Conference Committees deliberation, to wit:
THE CHAIRMAN (SEN. ZUBIRI). Lets go back, Mr. Chair, very quickly on
homeowners.
THE ACTING CHAIRMAN (REP. ZIALCITA). Ang sa akin lang, I think our views
are similar, Your Honor, Senator Zubiri, the entry of the condominium units might
just complicate the whole matters. So wed like to put it on record that were very
much concerned about the plight of the Condominium Unit Homeowners
Association. But this could very well be addressed on a separate bill that Im
willing to co-sponsor with the distinguished Senator Zubiri, to address in the
Condominium Act of the Philippines, rather than address it here because it might
just create a red herring into the entire thing and it will just complicate matters,
hindi ba?
THE CHAIRMAN (SEN. ZUBIRI). I also agree with you although I sympathize
with them---although we sympathize with them and we feel that many times their
rights have been also violated by abusive condominium corporations. However,
there are certain things that we have to reconcile. There are certain issues that
we have to reconcile with this version.
In the Condominium Code, for example, they just raised a very peculiar situation
under the Condominium Code --- Condominium Corporation Act. Its five years
the proxy, whereas here, its three years. So there would already be violation or
there will be already a problem with their version and our version. Sino ang
matutupad doon? Will it be our version or their version?
94

So I agree that has to be studied further. And because they have a law pertaining
to the condominium housing units, I personally feel that it would complicate
matters if we include them. Although I agree that they should be looked after
and their problems be looked into.
Probably we can ask our staff, Your Honor, to come up already with the bill
although we have no more time. Hopefully we can tackle this again on the 15th
Congress. But I agree with the sentiments and the inputs of the Honorable Chair
of the House panel.
May we ask our resource persons to also probably give comments?
Atty. Dayrit.
MR. DAYRIT.
Yes I agree with you. There are many, I think, practices in their provisions in the
Condominium Law that may be conflicting with this version of ours.
For instance, in the case of, lets say, the condominium, the so-called common
areas and/or maybe so called open spaces that they may have, especially
common areas, they are usually owned by the condominium corporation. Unlike
a subdivision where the open spaces and/or the common areas are not
necessarily owned by the association. Because sometimes --- generally these
are donated to the municipality or to the city. And it is only when the city or
municipality gives the approval or the conformity that this is donated to the
homeowners association. But generally, under PD [Presidential Decree] 957,
its donated. In the Condominium Corporation, hindi. Lahat ng mga open spaces
and common areas like corridors, the function rooms and everything, are owned
by the corporation. So thats one main issue that can be conflicting.
THE CHAIRMAN (SEN. ZUBIRI). Ill just ask for a one-minute suspension so we
can talk.
THE ACTING CHAIRMAN (REP. ZIALCITA). Unless you want to put a catchall
phrase like what we did in the Senior Citizens Act. Something like, to the extent
--- paano ba iyon? To the extent that it is practicable and applicable, the rights
and benefits of the homeowners, are hereby extended to the --- mayroon kaming
ginamit na phrase eh...to the extent that it be practicable and applicable to the
unit homeoweners, is hereby extended, something like that. Its a catchall
phrase. But then again, it might create a...
CIVIL PROCEDURE CASES SESSION 2
MR. JALANDONI. It will become complicated. There will be a lot of conflict of
laws between the two laws.
THE ACTING CHAIRMAN (REP. ZIALCITA). Kaya nga eh. At saka, I dont
know. I think the --- mayroon naman silang protection sa ano eh, di ba? Buyers
decree doon sa Condominium Act. Im sure there are provisions there eh.
Huwag na lang, huwag na lang.
MR. JALANDONI. Mr. Chairman, I think it would be best if your previous
comments that youd be supporting an amendment.1wphi1 I think that would
be --- Well, that would be the best course of action with all due respect.
THE ACTING CHAIRMAN (REP. ZIALCITA). Yeah. Okay. Thank you. So iyon
na lang final proposal naming yung catchall phrase, "With respect to the..." 32
xxxx
THE CHAIRMAN (SEN. ZUBIRI). xxx And so, what is their final decision on the
definition of homeowners?
THE ACTING CHAIRMAN (REP. ZIALCITA).
We stick to the original, Mr. Chairman. Well just open up a whole can of worms
and a whole new ball game will come into play. Besides, I am not authorized,
neither are you, by our counterparts to include the condominium owners.
THE CHAIRMAN (SEN. ZUBIRI).
Basically that is correct. We are not authorized by the Senate nor because we
have discussed this lengthily on the floor, actually, several months on the floor.
And we dont have the authority as well for other Bicam members to add a
provision to include a separate entity that has already their legal or their
established Republic Act tackling on that particular issue. But we just like to put
on record, we sympathize with the plight of our friends in the condominium
associations and we will just guarantee them that we will work on an amendment
to the Condominium Corporation Code. So with that we skipped, that is
correct, we have to go back to homeowners association definition, Your Honor,
because we had skipped it altogether. So just quickly going back to Page 7
because there are amendments to the definition of homeowners. If it is alright
with the House Panel, adopt the opening phrase of Subsection 7 of the Senate
version as opening phrase of Subsection 10 of the reconciled version.
x x x x33
95

To be sure, RA 4726 or the Condominium Act was enacted to specifically govern
a condominium. Said law sanctions the creation of the condominium corporation
which is especially formed for the purpose of holding title to the common area,
in which the holders of separate interests shall automatically be members or
shareholders, to the exclusion of others, in proportion to the appurtenant interest
of their respective units.34 The rights and obligations of the condominium unit
owners and the condominium corporation are set forth in the above Act.
Clearly, condominium corporations are not covered by the amendment. Thus,
the intra-corporate dispute between petitioner and respondent is still within the
jurisdiction of the RTC sitting as a special commercial court and not the HLURB.
The doctrine laid down by the Court in Chateau de Baie Condominium
Corporation v. Moreno35 which in turn cited Wack Wack Condominium
Corporation, et al v. CA36 is still a good law.
WHEREFORE, we hereby GRANT the petition and REVERSE the Court of
Appeals Decision dated July 10, 2007 and Resolution dated January 25, 2008
in CA-G.R. CV No. 86614. The Complaint before the Regional Trial Court of
Makati City, Branch 58, which is not a special commercial court, docketed as
Civil Case No. 03-1018 is ordered DISMISSED for lack of jurisdiction. Let the
case be REMANDED to the Executive Judge of the Regional Trial Court of
Makati City for re-raffle purposes among the designated special commercial
courts. SO ORDERED.
G.R. Nos. 160054-55 July 21, 2004
MANOLO P. SAMSON vs. HON. REYNALDO B. DAWAY (RTC), PEOPLE
OF THE PHILIPPINES and CATERPILLAR, INC
Assailed in this petition for certiorari is the March 26, 2003 Order1
of the
Regional Trial Court of Quezon City, Branch 90, which denied petitioners (1)
motion to quash the information; and (2) motion for reconsideration of the
August 9, 2002 Order denying his motion to suspend the arraignment and other
proceedings in Criminal Case Nos. Q-02-108043-44. Petitioner also questioned
its August 5, 2003 Order2 which denied his motion for reconsideration.
The undisputed facts show that on March 7, 2002, two informations for unfair
competition under Section 168.3 (a), in relation to Section 170, of the Intellectual
Property Code (Republic Act No. 8293), similarly worded save for the dates and
places of commission, were filed against petitioner Manolo P. Samson, the
registered owner of ITTI Shoes. The accusatory portion of said informations
read:
CIVIL PROCEDURE CASES SESSION 2
That on or about the first week of November 1999 and sometime prior
or subsequent thereto, in Quezon City, Philippines, and within the
jurisdiction of this Honorable Court, above-named accused,
owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation
located at Robinsons Galleria, EDSA corner Ortigas Avenue, Quezon
City, did then and there willfully, unlawfully and feloniously distribute,
sell and/or offer for sale CATERPILLAR products such as footwear,
garments, clothing, bags, accessories and paraphernalia which are
closely identical to and/or colorable imitations of the authentic
Caterpillar products and likewise using trademarks, symbols and/or
designs as would cause confusion, mistake or deception on the part of
the buying public to the damage and prejudice of CATERPILLAR, INC.,
the prior adopter, user and owner of the following internationally:
"CATERPILLAR", "CAT", "CATERPILLAR & DESIGN", "CAT AND
DESIGN", "WALKING MACHINES" and "TRACK-TYPE TRACTOR &
DESIGN."
CONTRARY TO LAW.3
On April 19, 2002, petitioner filed a motion to suspend arraignment and other
proceedings in view of the existence of an alleged prejudicial question involved
in Civil Case No. Q-00-41446 for unfair competition pending with the same
branch; and also in view of the pendency of a petition for review filed with the
Secretary of Justice assailing the Chief State Prosecutors resolution finding
probable cause to charge petitioner with unfair competition. In an Order dated
August 9, 2002, the trial court denied the motion to suspend arraignment and
other proceedings.
On August 20, 2002, petitioner filed a twin motion to quash the informations and
motion for reconsideration of the order denying motion to suspend, this time
challenging the jurisdiction of the trial court over the offense charged. He
contended that since under Section 170 of R.A. No. 8293, the penalty4 of
imprisonment for unfair competition does not exceed six years, the offense is
cognizable by the Municipal Trial Courts and not by the Regional Trial Court,
per R.A. No. 7691.
In its assailed March 26, 2003 Order, the trial court denied petitioners twin
motions.6 A motion for reconsideration thereof was likewise denied on August
5, 2003.
Hence, the instant petition alleging that respondent Judge gravely abused its
discretion in issuing the assailed orders.
96

The issues posed for resolution are (1) Which court has jurisdiction over
criminal and civil cases for violation of intellectual property rights? (2) Did the
respondent Judge gravely abuse his discretion in refusing to suspend the
arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44 on
the ground of (a) the existence of a prejudicial question; and (b) the pendency
of a petition for review with the Secretary of Justice on the finding of probable
cause for unfair competition?
Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the
criminal penalty for infringement of registered marks, unfair competition, false
designation of origin and false description or representation, is imprisonment
from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to Two Hundred
Thousand Pesos, to wit:
SEC. 170. Penalties. Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment from two
(2) years to five (5) years and a fine ranging from Fifty thousand pesos
(P50,000.00) to Two hundred thousand pesos (P200,000.00), shall be
imposed on any person who is found guilty of committing any of the acts
mentioned in Section 155 [Infringement], Section 168 [Unfair
Competition] and Section 169.1 [False Designation of Origin and False
Description or Representation].
Corollarily, Section 163 of the same Code states that actions (including criminal
and civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought
before the proper courts with appropriate jurisdiction under existing laws, thus
SEC. 163. Jurisdiction of Court. All actions under Sections 150, 155,
164 and 166 to 169 shall be brought before the proper courts with
appropriate jurisdiction under existing laws. (Emphasis supplied)
The existing law referred to in the foregoing provision is Section 27 of R.A. No.
166 (The Trademark Law) which provides that jurisdiction over cases for
infringement of registered marks, unfair competition, false designation of origin
and false description or representation, is lodged with the Court of First Instance
(now Regional Trial Court)
SEC. 27. Jurisdiction of Court of First Instance. All actions under this
Chapter [V Infringement] and Chapters VI [Unfair Competition] and VII
[False Designation of Origin and False Description or Representation],
hereof shall be brought before the Court of First Instance.
We find no merit in the claim of petitioner that R.A. No. 166 was expressly
repealed by R.A. No. 8293. The repealing clause of R.A. No. 8293, reads
CIVIL PROCEDURE CASES SESSION 2
SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent
herewith, more particularly Republic Act No. 165, as
amended; Republic Act No. 166, as amended; and Articles 188 and
189 of the Revised Penal Code; Presidential Decree No. 49, including
Presidential Decree No. 285, as amended, are hereby repealed.
(Emphasis added)
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its
entirety, otherwise, it would not have used the phrases "parts of Acts" and
"inconsistent herewith;" and it would have simply stated "Republic Act No. 165,
as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of
the Revised Penal Code; Presidential Decree No. 49, including Presidential
Decree No. 285, as amended are hereby repealed." It would have removed all
doubts that said specific laws had been rendered without force and effect. The
use of the phrases "parts of Acts" and "inconsistent herewith" only means that
the repeal pertains only to provisions which are repugnant or not susceptible of
harmonization with R.A. No. 8293.6 Section 27 of R.A. No. 166, however, is
consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No.
8293 intended to vest jurisdiction over violations of intellectual property rights
with the Metropolitan Trial Courts, it would have expressly stated so under
Section 163 thereof.
Moreover, the settled rule in statutory construction is that in case of conflict
between a general law and a special law, the latter must prevail. Jurisdiction
conferred by a special law to Regional Trial Courts must prevail over that
granted by a general law to Municipal Trial Courts.7
In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws8 conferring
jurisdiction over violations of intellectual property rights to the Regional Trial
Court. They should therefore prevail over R.A. No. 7691, which is a general
law.9 Hence, jurisdiction over the instant criminal case for unfair competition is
properly lodged with the Regional Trial Court even if the penalty therefor is
imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from
P50,000.00 to P200,000.00.
In fact, to implement and ensure the speedy disposition of cases involving
violations of intellectual property rights under R.A. No. 8293, the Court issued
A.M. No. 02-1-11-SC dated February 19, 2002 designating certain Regional
Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court further
issued a Resolution consolidating jurisdiction to hear and decide Intellectual
Property Code and Securities and Exchange Commission cases in specific
Regional Trial Courts designated as Special Commercial Courts.
97

The case of Mirpuri v. Court of Appeals,10 invoked by petitioner finds no
application in the present case. Nowhere in Mirpuri did we state that Section
27 of R.A. No. 166 was repealed by R.A. No. 8293. Neither did we make a
categorical ruling therein that jurisdiction over cases for violation of intellectual
property rights is lodged with the Municipal Trial Courts. The passing remark
in Mirpuri on the repeal of R.A. No. 166 by R.A. No. 8293 was merely a
backgrounder to the enactment of the present Intellectual Property Code and
cannot thus be construed as a jurisdictional pronouncement in cases for
violation of intellectual property rights.
Anent the second issue, petitioner failed to substantiate his claim that there was
a prejudicial question. In his petition, he prayed for the reversal of the March 26,
2003 order which sustained the denial of his motion to suspend arraignment and
other proceedings in Criminal Case Nos. Q-02-108043-44. For unknown
reasons, however, he made no discussion in support of said prayer in his
petition and reply to comment. Neither did he attach a copy of the complaint in
Civil Case No. Q-00-41446 nor quote the pertinent portion thereof to prove the
existence of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the criminal action
can, according to law, proceed independently of each other.11 Under Rule 111,
Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may
be brought by the offended party. It shall proceed independently of the criminal
action and shall require only a preponderance of evidence.
In the case at bar, the common element in the acts constituting unfair
competition under Section 168 of R.A. No. 8293 is fraud.12 Pursuant to Article
33 of the Civil Code, in cases of defamation, fraud, and physical injuries, a civil
action for damages, entirely separate and distinct from the criminal action, may
be brought by the injured party. Hence, Civil Case No. Q-00-41446, which as
admitted13 by private respondent also relate to unfair competition, is an
independent civil action under Article 33 of the Civil Code. As such, it will not
operate as a prejudicial question that will justify the suspension of the criminal
cases at bar.
Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides
SEC. 11. Suspension of arraignment. Upon motion by the proper
party, the arraignment shall be suspended in the following cases
xxxxxxxxx
CIVIL PROCEDURE CASES SESSION 2
(c) A petition for review of the resolution of the prosecutor is pending at
either the Department of Justice, or the Office of the President;
Provided, that the period of suspension shall not exceed sixty (60) days
counted from the filing of the petition with the reviewing office.
While the pendency of a petition for review is a ground for suspension of the
arraignment, the aforecited provision limits the deferment of the arraignment to
a period of 60 days reckoned from the filing of the petition with the reviewing
office. It follows, therefore, that after the expiration of said period, the trial court
is bound to arraign the accused or to deny the motion to defer arraignment.
In the instant case, petitioner failed to establish that respondent Judge abused
his discretion in denying his motion to suspend. His pleadings and annexes
submitted before the Court do not show the date of filing of the petition for review
with the Secretary of Justice.14 Moreover, the Order dated August 9, 2002
denying his motion to suspend was not appended to the petition. He thus failed
to discharge the burden of proving that he was entitled to a suspension of his
arraignment and that the questioned orders are contrary to Section 11 (c), Rule
116 of the Revised Rules on Criminal Procedure. Indeed, the age-old but
familiar rule is that he who alleges must prove his allegations.
In sum, the dismissal of the petition is proper considering that petitioner has not
established that the trial court committed grave abuse of discretion. So also, his
failure to attach documents relevant to his allegations warrants the dismissal of
the petition, pursuant to Section 3, Rule 46 of the Rules of Civil Procedure, which
states:
SEC. 3. Contents and filing of petition; effect of non-compliance
with requirements. The petition shall contain the full names and
actual addresses of all the petitioners and respondents, a concise
statement of the matters involved, the factual background of the case,
and the grounds relied upon for the relief prayed for.
It shall be filed in seven (7) clearly legible copies together with proof of
service thereof on the respondent with the original copy intended for the
court indicated as such by the petitioner, and shall be accompanied
by a clearly legible duplicate original or certified true copy of the
judgment, order, resolution, or ruling subject thereof, such
material portions of the record as are referred to therein, and other
documents relevant or pertinent thereto.
xxxxxxxxx
98

The failure of the petitioner to comply with any of the foregoing
requirements shall be sufficient ground for the dismissal of the
petition. (Emphasis added)
WHEREFORE, in view of all the foregoing, the petition is dismissed. SO
ORDERED.
G.R. No. 154598 August 16, 2004
IN THE MATTER OF APPLICATION FOR THE ISSUANCE OF A WRIT OF
HABEAS CORPUS RICHARD BRIAN THORNTON for and in behalf of the
minor child SEQUEIRA JENNIFER DELLE FRANCISCO THORNTON vs.
ADELFA FRANCISCO THORNTON
This is a petition to review, under Rule 45 of the Rules of Court, the July 5, 2002
resolution1 of the Court of Appeals, Sixteenth Division, in CA G.R. SP No. 70501
dismissing the petition for habeas corpus on the grounds of lack of jurisdiction
and lack of substance. The dispositive portion2 read:
WHEREFORE, the Court DISMISSES the petition for habeas corpus on
the grounds that: a) this Court has no jurisdiction over the subject matter
of the petition; and b) the petition is not sufficient in substance.
Petitioner, an American, and respondent, a Filipino, were married on August 28,
1998 in the Catholic Evangelical Church at United Nations Avenue, Manila. A
year later, respondent gave birth to a baby girl whom they named Sequeira
Jennifer Delle Francisco Thornton.
However, after three years, respondent grew restless and bored as a plain
housewife. She wanted to return to her old job as a "guest relations officer" in a
nightclub, with the freedom to go out with her friends. In fact, whenever petitioner
was out of the country, respondent was also often out with her friends, leaving
her daughter in the care of the househelp.
Petitioner admonished respondent about her irresponsibility but she continued
her carefree ways. On December 7, 2001, respondent left the family home with
her daughter Sequiera without notifying her husband. She told the servants that
she was bringing Sequiera to Purok Marikit, Sta. Clara, Lamitan, Basilan
Province.
Petitioner filed a petition for habeas corpus in the designated Family Court in
Makati City but this was dismissed, presumably because of the allegation that
the child was in Basilan. Petitioner then went to Basilan to ascertain the
whereabouts of respondent and their daughter. However, he did not find them
CIVIL PROCEDURE CASES SESSION 2
there and the barangay office of Sta. Clara, Lamitan, Basilan, issued a
certification3 that respondent was no longer residing there.
Petitioner gave up his search when he got hold of respondents cellular phone
bills showing calls from different places such as Cavite, Nueva Ecija, Metro
Manila and other provinces. Petitioner then filed another petition for habeas
corpus, this time in the Court of Appeals which could issue a writ of habeas
corpus enforceable in the entire country.
However, the petition was denied by the Court of Appeals on the ground that it
did not have jurisdiction over the case. It ruled that since RA 8369 (The Family
Courts Act of 1997) gave family courts exclusive original jurisdiction over
petitions for habeas corpus, it impliedly repealed RA 7902 (An Act Expanding
the Jurisdiction of the Court of Appeals) and Batas Pambansa 129 (The
Judiciary Reorganization Act of 1980):
Under Sec. 9 (1), BP 129 (1981) the Intermediate Appellate Court (now
Court of Appeals) has jurisdiction to issue a writ of habeas corpus
whether or not in aid of its appellate jurisdiction. This conferment of
jurisdiction was re-stated in Sec. 1, RA 7902 (1995), an act expanding
the jurisdiction of this Court. This jurisdiction finds its procedural
expression in Sec. 1, Rule 102 of the Rules of Court.
In 1997, RA 8369 otherwise known as Family Courts Act was enacted.
It provides:
Sec. 5. Jurisdiction of Family Court. The Family Courts shall
have exclusive original jurisdiction to hear and decide the
following cases:
xxx xxx xxx
b. Petition for guardianship, custody of children,
habeas corpus in relation to the latter.
The vital question is, did RA 8369 impliedly repeal BP 129 and RA 7902
insofar as the jurisdiction of this Court to issue writ of habeas corpus in
custody of minor cases is concerned? The simple answer is, yes, it did,
because there is no other meaning of the word "exclusive" than to
constitute the Family Court as the sole court which can issue said writ.
If a court other than the Family Court also possesses the same
competence, then the jurisdiction of the former is not exclusive but
concurrent and such an interpretation is contrary to the simple and
clear wording of RA 8369.
99

Petitioner argues that unless this Court assumes jurisdiction over a
petition for habeas corpus involving custody of minors, a respondent
can easily evade the service of a writ of habeas corpus on him or her
by just moving out of the region over which the Regional Trial Court
issuing the writ has territorial jurisdiction. That may be so but then
jurisdiction is conferred by law. In the absence of a law conferring such
jurisdiction in this Court, it cannot exercise it even if it is demanded by
expediency or necessity.
Whether RA 8369 is a good or unwise law is not within the authority of
this Court or any court for that matter to determine. The enactment
of a law on jurisdiction is within the exclusive domain of the legislature.
When there is a perceived defect in the law, the remedy is not to be
sought form the courts but only from the legislature.
The only issue before us therefore is whether the Court of Appeals has
jurisdiction to issue writs of habeas corpus in cases involving custody of minors
in the light of the provision in RA 8369 giving family courts exclusive original
jurisdiction over such petitions.
In his comment, the Solicitor General points out that Section 20 of the Rule on
Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors
(A.M. No. 03-04-04-SC, effective May 15, 2003) has rendered the issue moot.
Section 20 of the rule provides that a petition for habeas corpus may be filed in
the Supreme Court,4Court of Appeals, or with any of its members and, if so
granted, the writ shall be enforceable anywhere in the Philippines. 5
The petition is granted.
The Court of Appeals should take cognizance of the case since there is nothing
in RA 8369 that revoked its jurisdiction to issue writs of habeas corpus involving
the custody of minors.
The Court of Appeals opines that RA 8369 impliedly repealed RA 7902 and BP
129 since, by giving family courts exclusive jurisdiction over habeas corpus
cases, the lawmakers intended it to be the sole court which can issue writs of
habeas corpus. To the court a quo, the word "exclusive" apparently cannot be
construed any other way.
We disagree with the CAs reasoning because it will result in an iniquitous
situation, leaving individuals like petitioner without legal recourse in obtaining
custody of their children. Individuals who do not know the whereabouts of minors
they are looking for would be helpless since they cannot seek redress from
family courts whose writs are enforceable only in their respective territorial
CIVIL PROCEDURE CASES SESSION 2
jurisdictions. Thus, if a minor is being transferred from one place to another,
which seems to be the case here, the petitioner in a habeas corpus case will be
left without legal remedy. This lack of recourse could not have been the intention
of the lawmakers when they passed the Family Courts Act of 1997. As observed
by the Solicitor General:
Under the Family Courts Act of 1997, the avowed policy of the State is
to "protect the rights and promote the welfare of children." The creation
of the Family Court is geared towards addressing three major issues
regarding childrens welfare cases, as expressed by the legislators
during the deliberations for the law. The legislative intent behind giving
Family Courts exclusive and original jurisdiction over such cases was
to avoid further clogging of regular court dockets, ensure greater
sensitivity and specialization in view of the nature of the case and the
parties, as well as to guarantee that the privacy of the children party to
the case remains protected.
The primordial consideration is the welfare and best interests of the child. We
rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme
Court of their jurisdiction over habeas corpus cases involving the custody of
minors. Again, to quote the Solicitor General:
To allow the Court of Appeals to exercise jurisdiction over the petition
for habeas corpus involving a minor child whose whereabouts are
uncertain and transient will not result in one of the situations that the
legislature seeks to avoid. First, the welfare of the child is paramount.
Second, the ex parte nature of habeas corpus proceedings will not
result in disruption of the childs privacy and emotional well-being;
whereas to deprive the appellate court of jurisdiction will result in the
evil sought to be avoided by the legislature: the childs welfare and well
being will be prejudiced.
This is not the first time that this Court construed the word "exclusive"
as not foreclosing resort to another jurisdiction. As correctly cited by the Solicitor
General, in Floresca vs. Philex Mining Corporation,6 the heirs of miners killed in
a work-related accident were allowed to file suit in the regular courts even if,
under the Workmens Compensation Act, the Workmens Compensation
Commissioner had exclusive jurisdiction over such cases.
We agree with the observations of the Solicitor General that:
While Floresca involved a cause of action different from the case at bar.
it supports petitioners submission that the word "exclusive" in the
Family Courts Act of 1997 may not connote automatic foreclosure of the
100

jurisdiction of other courts over habeas corpus cases involving minors.
In the same manner that the remedies in the Floresca case were
selective, the jurisdiction of the Court of Appeals and Family Court in
the case at bar is concurrent. The Family Court can issue writs of
habeas corpus enforceable only within its territorial jurisdiction. On the
other hand, in cases where the territorial jurisdiction for the enforcement
of the writ cannot be determined with certainty, the Court of Appeals
can issue the same writ enforceable throughout the Philippines, as
provided in Sec. 2, Rule 102 of the Revised Rules of Court, thus:
The Writ of Habeas Corpus may be granted by the Supreme
Court, or any member thereof, on any day and at any time, or
by the Court of Appeals or any member thereof in the instances
authorized by law, and if so granted it shall be enforceable
anywhere in the Philippines, and may be made returnable
before the court or any member thereof, or before a Court of
First Instance, or any judge thereof for hearing and decision on
the merits. It may also be granted by a Court of First Instance,
or a judge thereof, on any day and at any time, and returnable
before himself, enforceable only within his judicial
district. (Emphasis supplied)
In ruling that the Commissioners "exclusive" jurisdiction did not foreclose resort
to the regular courts for damages, this Court, in the same Floresca case, said
that it was merely applying and giving effect to the constitutional guarantees of
social justice in the 1935 and 1973 Constitutions and implemented by the Civil
Code. It also applied the well-established rule that what is controlling is the spirit
and intent, not the letter, of the law:
"Idolatrous reverence" for the law sacrifices the human being. The spirit
of the law insures mans survival and ennobles him. In the words of
Shakespeare, "the letter of the law killeth; its spirit giveth life."
xxx xxx xxx
It is therefore patent that giving effect to the social justice guarantees of
the Constitution, as implemented by the provisions of the New Civil
Code, is not an exercise of the power of law-making, but is rendering
obedience to the mandates of the fundamental law and the
implementing legislation aforementioned.
Language is rarely so free from ambiguity as to be incapable of being used in
more than one sense. Sometimes, what the legislature actually had in mind is
not accurately reflected in the language of a statute, and its literal interpretation
CIVIL PROCEDURE CASES SESSION 2
may render it meaningless, lead to absurdity, injustice or contradiction. 7 In the
case at bar, a literal interpretation of the word "exclusive" will result in grave
injustice and negate the policy "to protect the rights and promote the welfare of
children"8 under the Constitution and the United Nations Convention on the
Rights of the Child. This mandate must prevail over legal technicalities and
serve as the guiding principle in construing the provisions of RA 8369.
Moreover, settled is the rule in statutory construction that implied repeals are
not favored:
The two laws must be absolutely incompatible, and a clear finding
thereof must surface, before the inference of implied repeal may be
drawn. The rule is expressed in the maxim, interpretare et concordare
leqibus est optimus interpretendi, i.e., every statute must be so
interpreted and brought into accord with other laws as to form a uniform
system of jurisprudence. The fundament is that the legislature should
be presumed to have known the existing laws on the subject and not
have enacted conflicting statutes. Hence, all doubts must be resolved
against any implied repeal, and all efforts should be exerted in order to
harmonize and give effect to all laws on the subject."9
The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of
the Court of Appeals and Supreme Court to issue writs of habeas corpus relating
to the custody of minors. Further, it cannot be said that the provisions of RA
8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does
not prohibit the Court of Appeals and the Supreme Court from issuing writs of
habeas corpus in cases involving the custody of minors. Thus, the provisions of
RA 8369 must be read in harmony with RA 7029 and BP 129 that family
courts have concurrent jurisdiction with the Court of Appeals and the Supreme
Court in petitions for habeas corpus where the custody of minors is at issue.
In any case, whatever uncertainty there was has been settled with the adoption
of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas
Corpus in Relation to Custody of Minors. Section 20 of the rule provides that:
Section 20. Petition for writ of habeas corpus.- A verified petition for a
writ of habeas corpus involving custody of minors shall be filed with the
Family Court. The writ shall be enforceable within its judicial region to
which the Family Court belongs.
xxx xxx xxx
The petition may likewise be filed with the Supreme Court, Court of
Appeals, or with any of its members and, if so granted, the writ shall be
101

enforceable anywhere in the Philippines. The writ may be made
returnable to a Family Court or to any regular court within the region
where the petitioner resides or where the minor may be found for
hearing and decision on the merits. (Emphasis Ours)
From the foregoing, there is no doubt that the Court of Appeals and Supreme
Court have concurrent jurisdiction with family courts in habeas corpus cases
where the custody of minors is involved.
One final note. Requiring the serving officer to search for the child all over the
country is not an unreasonable availment of a remedy which the Court of
Appeals cited as a ground for dismissing the petition. As explained by the
Solicitor General:10
That the serving officer will have to "search for the child all over the
country" does not represent an insurmountable or unreasonable
obstacle, since such a task is no more different from or difficult than the
duty of the peace officer in effecting a warrant of arrest, since the latter
is likewise enforceable anywhere within the Philippines.
WHEREFORE, the petition is hereby GRANTED. The petition for habeas
corpus in CA-G.R.-SP-No. 70501 is hereby REINSTATED and REMANDED to
the Court of Appeals, Sixteenth Division. SO ORDERED.
G.R. No. 159374 July 12, 2007
FELIPE N. MADRIAN vs. FRANCISCA R. MADRIAN
When a family breaks up, the children are always the victims. The ensuing battle
for custody of the minor children is not only a thorny issue but also a highly
sensitive and heart-rending affair. Such is the case here. Even the usually
technical subject of jurisdiction became emotionally charged.
Petitioner Felipe N. Madrian and respondent Francisca R. Madrian were
married on July 7, 1993 in Paraaque City. They resided in San Agustin Village,
Brgy. Moonwalk, Paraaque City.
Their union was blessed with three sons and a daughter: Ronnick, born on
January 30, 1994; Phillip, born on November 19, 1996; Francis Angelo, born on
May 12, 1998 and Krizia Ann, born on December 12, 2000.
After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal
abode and took their three sons with him to Ligao City, Albay and subsequently
to Sta. Rosa, Laguna. Respondent sought the help of her parents and parents-
CIVIL PROCEDURE CASES SESSION 2
in-law to patch things up between her and petitioner to no avail. She then
brought the matter to the Lupong Tagapamayapa in their barangay but this too
proved futile.
Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and
Francis Angelo in the Court of Appeals, alleging that petitioners act of leaving
the conjugal dwelling and going to Albay and then to Laguna disrupted the
education of their children and deprived them of their mothers care. She prayed
that petitioner be ordered to appear and produce their sons before the court and
to explain why they should not be returned to her custody.
Petitioner and respondent appeared at the hearing on September 17, 2002.
They initially agreed that petitioner would return the custody of their three sons
to respondent. Petitioner, however, had a change of heart 1 and decided to file a
memorandum.
On September 3, 2002, petitioner filed his memorandum 2 alleging that
respondent was unfit to take custody of their three sons because she was
habitually drunk, frequently went home late at night or in the wee hours of the
morning, spent much of her time at a beer house and neglected her duties as a
mother. He claimed that, after their squabble on May 18, 2002, it was
respondent who left, taking their daughter with her. It was only then that he went
to Sta. Rosa, Laguna where he worked as a tricycle driver. He submitted a
certification from the principal of the Dila Elementary School in Sta. Rosa,
Laguna that Ronnick and Phillip were enrolled there. He also questioned the
jurisdiction of the Court of Appeals claiming that under Section 5(b) of RA 8369
(otherwise known as the "Family Courts Act of 1997") family courts have
exclusive original jurisdiction to hear and decide the petition for habeas
corpus filed by respondent.3
For her part, respondent averred that she did not leave their home on May 18,
2002 but was driven out by petitioner. She alleged that it was petitioner who was
an alcoholic, gambler and drug addict. Petitioners alcoholism and drug
addiction impaired his mental faculties, causing him to commit acts of violence
against her and their children. The situation was aggravated by the fact that their
home was adjacent to that of her in-laws who frequently meddled in their
personal problems.4
On October 21, 2002, the Court of Appeals5 rendered a decision6 asserting its
authority to take cognizance of the petition and ruling that, under Article 213 of
the Family Code, respondent was entitled to the custody of Phillip and Francis
Angelo who were at that time aged six and four, respectively, subject to the
visitation rights of petitioner. With respect to Ronnick who was then eight years
old, the court ruled that his custody should be determined by the proper family
102

court in a special proceeding on custody of minors under Rule 99 of the Rules
of Court.
Petitioner moved for reconsideration of the Court of Appeals decision but it was
denied. Hence, this recourse.
Petitioner challenges the jurisdiction of the Court of Appeals over the petition
for habeas corpus and insists that jurisdiction over the case is lodged in the
family courts under RA 8369. He invokes Section 5(b) of RA 8369:
Section 5. Jurisdiction of Family Courts. The Family Courts shall have
exclusive original jurisdiction to hear and decide the following cases:
xxx xxx xxx
b) Petitions for guardianship, custody of children, habeas corpus in relation to
the latter;
xxx xxx xxx
Petitioner is wrong.
In Thornton v. Thornton,7 this Court resolved the issue of the Court of Appeals
jurisdiction to issue writs of habeas corpus in cases involving custody of minors
in the light of the provision in RA 8369 giving family courts exclusive original
jurisdiction over such petitions:
The Court of Appeals should take cognizance of the case since there is
nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas
corpus involving the custody of minors.
xxx xxx xxx
We rule therefore that RA 8369 did not divest the Court of Appeals and the
Supreme Court of their jurisdiction over habeas corpus cases involving
the custody of minors.
xxx xxx xxx
The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of
the Court of Appeals and Supreme Court to issue writs of habeas
corpus relating to the custody of minors. Further, it cannot be said that the
provisions of RA 8369, RA 7092 [An Act Expanding the Jurisdiction of the Court
CIVIL PROCEDURE CASES SESSION 2
of Appeals] and BP 129 [The Judiciary Reorganization Act of 1980] are
absolutely incompatible since RA 8369 does not prohibit the Court of Appeals
and the Supreme Court from issuing writs of habeas corpus in cases involving
the custody of minors. Thus, the provisions of RA 8369 must be read in harmony
with RA 7029 and BP 129 that family courts have concurrent jurisdiction
with the Court of Appeals and the Supreme Court in petitions for habeas
corpuswhere the custody of minors is at issue.8 (emphases supplied)
The jurisdiction of the Court of Appeals over petitions for habeas corpus was
further affirmed by A.M. No. 03-03-04-SC (April 22, 2004) in Re: Rule on
Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors:
In any case, whatever uncertainty there was has been settled with the
adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ
of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule
provides that:
Section 20. Petition for writ of habeas corpus. A verified petition for a writ of
habeas corpus involving custody of minors shall be filed with the Family Court.
The writ shall be enforceable within its judicial region to which the Family Court
belongs.
xxx xxx xxx
The petition may likewise be filed with the Supreme Court, Court of
Appeals, or with any of its members and, if so granted, the writ shall be
enforceable anywhere in the Philippines. The writ may be made returnable
to a Family Court or to any regular court within the region where the petitioner
resides or where the minor may be found for hearing and decision on the merits.
From the foregoing, there is no doubt that the Court of Appeals and Supreme
Court have concurrent jurisdiction with family courts in habeas
corpus cases where the custody of minors is involved.9 (emphases
supplied)1avvphi1
We note that after petitioner moved out of their Paraaque residence on May
18, 2002, he twice transferred his sons to provinces covered by different judicial
regions. This situation is what the Thornton interpretation of RA 8369s provision
on jurisdiction precisely addressed:
[The reasoning that by giving family courts exclusive jurisdiction over habeas
corpus cases, the lawmakers intended them to be the sole courts which can
issue writs of habeas corpus] will result in an iniquitous situation, leaving
individuals like [respondent] without legal recourse in obtaining custody of their
103

children. Individuals who do not know the whereabouts of minors they are
looking for would be helpless since they cannot seek redress from family courts
whose writs are enforceable only in their respective territorial
jurisdictions. Thus, if a minor is being transferred from one place to
another, which seems to be the case here, the petitioner in a habeas
corpuscase will be left without legal remedy. This lack of recourse could
not have been the intention of the lawmakers when they passed [RA
8369].10
Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts
are vested with original exclusive jurisdiction in custody cases, not in habeas
corpus cases. Writs of habeas corpus which may be issued exclusively by
family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that
may be availed of in conjunction with a petition for custody of minors under Rule
99 of the Rules of Court. In other words, the issuance of the writ is merely
ancillary to the custody case pending before the family court. The writ must be
issued by the same court to avoid splitting of jurisdiction, conflicting decisions,
interference by a co-equal court and judicial instability.
The rule therefore is: when by law jurisdiction is conferred on a court or judicial
officer, all auxiliary writs, processes and other means necessary to carry it into
effect may be employed by such court or officer. 11 Once a court acquires
jurisdiction over the subject matter of a case, it does so to the exclusion of all
other courts, including related incidents and ancillary matters.
Accordingly, the petition is hereby DENIED. Costs against petitioner. SO
ORDERED.
G.R. No. 179267 June 25, 2013
JESUS C. GARCIA vs. THE HONORABLE RAY ALAN T. DRILON,
Presiding Judge, Regional Trial Court-Branch 41, Bacolod City, and
ROSALIE JAYPE-GARCIA, for herself and in behalf of minor children,
namely: JO-ANN, JOSEPH EDUARD, JESSE ANTHONE, all surnamed
GARCIA
Hailed as the bastion of Christianity in Asia, the Philippines boasts of 86.8 million
Filipinos- or 93 percent of a total population of 93.3 million adhering to the
teachings of Jesus Christ.1 Yet, the admonition for husbands to love their wives
as their own bodies just as Christ loved the church and gave himself up for
her2 failed to prevent, or even to curb, the pervasiveness of violence against
Filipino women. The National Commission on the Role of Filipino Women
(NCRFW) reported that, for the years 2000-2003, "female violence comprised
more than 90o/o of all forms of abuse and violence and more than 90% of these
CIVIL PROCEDURE CASES SESSION 2
reported cases were committed by the women's intimate partners such as their
husbands and live-in partners."3
Thus, on March 8, 2004, after nine (9) years of spirited advocacy by women's
groups, Congress enacted Republic Act (R.A.) No. 9262, entitled "An Act
Defining Violence Against Women and Their Children, Providing for Protective
Measures for Victims, Prescribing Penalties Therefor, and for Other Purposes."
It took effect on March 27, 2004.4
R.A. 9262 is a landmark legislation that defines and criminalizes acts of violence
against women and their children (VAWC) perpetrated by women's intimate
partners, i.e, husband; former husband; or any person who has or had a sexual
or dating relationship, or with whom the woman has a common child.5 The law
provides for protection orders from the barangay and the courts to prevent the
commission of further acts of VAWC; and outlines the duties and responsibilities
of barangay officials, law enforcers, prosecutors and court personnel, social
workers, health care providers, and other local government officials in
responding to complaints of VAWC or requests for assistance.
A husband is now before the Court assailing the constitutionality of R.A. 9262
as being violative of the equal protection and due process clauses, and an
undue delegation of judicial power to barangay officials.
The Factual Antecedents
On March 23, 2006, Rosalie Jaype-Garcia (private respondent) filed, for herself
and in behalf of her minor children, a verified petition 6 (Civil Case No. 06-797)
before the Regional Trial Court (RTC) of Bacolod City for the issuance of a
Temporary Protection Order (TPO) against her husband, Jesus C. Garcia
(petitioner), pursuant to R.A. 9262. She claimed to be a victim of physical abuse;
emotional, psychological, and economic violence as a result of marital infidelity
on the part of petitioner, with threats of deprivation of custody of her children
and of financial support.7
Private respondent's claims
Private respondent married petitioner in 2002 when she was 34 years old and
the former was eleven years her senior. They have three (3) children, namely:
Jo-Ann J. Garcia, 17 years old, who is the natural child of petitioner but whom
private respondent adopted; Jessie Anthone J. Garcia, 6 years old; and Joseph
Eduard J. Garcia, 3 years old.8
Private respondent described herself as a dutiful and faithful wife, whose life
revolved around her husband. On the other hand, petitioner, who is of Filipino-
104

Chinese descent, is dominant, controlling, and demands absolute obedience
from his wife and children. He forbade private respondent to pray, and
deliberately isolated her from her friends. When she took up law, and even when
she was already working part time at a law office, petitioner trivialized her
ambitions and prevailed upon her to just stay at home. He was often jealous of
the fact that his attractive wife still catches the eye of some men, at one point
threatening that he would have any man eyeing her killed.9
Things turned for the worse when petitioner took up an affair with a bank
manager of Robinson's Bank, Bacolod City, who is the godmother of one of their
sons. Petitioner admitted to the affair when private respondent confronted him
about it in 2004. He even boasted to the household help about his sexual
relations with said bank manager. Petitioner told private respondent, though,
that he was just using the woman because of their accounts with the bank. 10
Petitioner's infidelity spawned a series of fights that left private respondent
physically and emotionally wounded. In one of their quarrels, petitioner grabbed
private respondent on both arms and shook her with such force that caused
bruises and hematoma. At another time, petitioner hit private respondent
forcefully on the lips that caused some bleeding. Petitioner sometimes turned
his ire on their daughter, Jo-Ann, who had seen the text messages he sent to
his paramour and whom he blamed for squealing on him. He beat Jo-Ann on
the chest and slapped her many times. When private respondent decided to
leave petitioner, Jo-Ann begged her mother to stay for fear that if the latter
leaves, petitioner would beat her up. Even the small boys are aware of private
respondent's sufferings. Their 6-year-old son said that when he grows up, he
would beat up his father because of his cruelty to private respondent. 11
All the emotional and psychological turmoil drove private respondent to the brink
of despair. On December 17, 2005, while at home, she attempted suicide by
cutting her wrist. She was found by her son bleeding on the floor. Petitioner
simply fled the house instead of taking her to the hospital. Private respondent
was hospitalized for about seven (7) days in which time petitioner never
bothered to visit, nor apologized or showed pity on her. Since then, private
respondent has been undergoing therapy almost every week and is taking anti-
depressant medications.12
When private respondent informed the management of Robinson's Bank that
she intends to file charges against the bank manager, petitioner got angry with
her for jeopardizing the manager's job. He then packed his things and told
private respondent that he was leaving her for good. He even told private
respondent's mother, who lives with them in the family home, that private
respondent should just accept his extramarital affair since he is not cohabiting
with his paramour and has not sired a child with her.13
CIVIL PROCEDURE CASES SESSION 2
Private respondent is determined to separate from petitioner but she is afraid
that he would take her children from her and deprive her of financial support.
Petitioner had previously warned her that if she goes on a legal battle with him,
she would not get a single centavo.14
Petitioner controls the family businesses involving mostly the construction of
deep wells. He is the President of three corporations 326 Realty Holdings,
Inc., Negros Rotadrill Corporation, and J-Bros Trading Corporation of which
he and private respondent are both stockholders. In contrast to the absolute
control of petitioner over said corporations, private respondent merely draws a
monthly salary of P20,000.00 from one corporation only, the Negros Rotadrill
Corporation. Household expenses amounting to not less than P200,000.00 a
month are paid for by private respondent through the use of credit cards, which,
in turn, are paid by the same corporation together with the bills for utilities.15
On the other hand, petitioner receives a monthly salary of P60,000.00 from
Negros Rotadrill Corporation, and enjoys unlimited cash advances and other
benefits in hundreds of thousands of pesos from the corporations. 16After private
respondent confronted him about the affair, petitioner forbade her to hold office
at JBTC Building, Mandalagan, where all the businesses of the corporations are
conducted, thereby depriving her of access to full information about said
businesses. Until the filing of the petition a quo, petitioner has not given private
respondent an accounting of the businesses the value of which she had helped
raise to millions of pesos.17
Action of the RTC of Bacolod City
Finding reasonable ground to believe that an imminent danger of violence
against the private respondent and her children exists or is about to recur, the
RTC issued a TPO18 on March 24, 2006 effective for thirty (30) days, which is
quoted hereunder:
Respondent (petitioner herein), Jesus Chua Garcia, is hereby:
a) Ordered to remove all his personal belongings from the conjugal
dwelling or family home within 24 hours from receipt of the Temporary
Restraining Order and if he refuses, ordering that he be removed by
police officers from the conjugal dwelling; this order is enforceable
notwithstanding that the house is under the name of 236 Realty
Holdings Inc. (Republic Act No. 9262 states "regardless of ownership"),
this is to allow the Petitioner (private respondent herein) to enter the
conjugal dwelling without any danger from the Respondent.
105

After the Respondent leaves or is removed from the conjugal dwelling,
or anytime the Petitioner decides to return to the conjugal dwelling to
remove things, the Petitioner shall be assisted by police officers when
re-entering the family home.
The Chief of Police shall also give the Petitioner police assistance on
Sunday, 26 March 2006 because of the danger that the Respondent will
attempt to take her children from her when he arrives from Manila and
finds out about this suit.
b) To stay away from the petitioner and her children, mother and all her
household help and driver from a distance of 1,000 meters, and shall
not enter the gate of the subdivision where the Petitioner may be
temporarily residing.
c) Not to harass, annoy, telephone, contact or otherwise communicate
with the Petitioner, directly or indirectly, or through other persons, or
contact directly or indirectly her children, mother and household help,
nor send gifts, cards, flowers, letters and the like. Visitation rights to the
children may be subject of a modified TPO in the future.
d) To surrender all his firearms including a .9MM caliber firearm and a
Walther PPK and ordering the Philippine National Police Firearms and
Explosives Unit and the Provincial Director of the PNP to cancel all the
Respondent's firearm licenses. He should also be ordered to surrender
any unlicensed firearms in his possession or control.
e) To pay full financial support for the Petitioner and the children,
including rental of a house for them, and educational and medical
expenses.
f) Not to dissipate the conjugal business.
g) To render an accounting of all advances, benefits, bonuses and other
cash he received from all the corporations from 1 January 2006 up to
31 March 2006, which himself and as President of the corporations and
his Comptroller, must submit to the Court not later than 2 April 2006.
Thereafter, an accounting of all these funds shall be reported to the
court by the Comptroller, copy furnished to the Petitioner, every 15 days
of the month, under pain of Indirect Contempt of Court.
h) To ensure compliance especially with the order granting support
pendente lite, and considering the financial resources of the
Respondent and his threat that if the Petitioner sues she will not get a
CIVIL PROCEDURE CASES SESSION 2
single centavo, the Respondent is ordered to put up a BOND TO KEEP
THE PEACE in the amount of FIVE MILLION PESOS, in two sufficient
sureties.
On April 24, 2006, upon motion19 of private respondent, the trial court
issued an amended TPO,20 effective for thirty (30) days, which included
the following additional provisions:
i) The petitioners (private respondents herein) are given the continued
use of the Nissan Patrol and the Starex Van which they are using in
Negros Occidental.
j) The petitioners are given the continued use and occupation of the
house in Paraaque, the continued use of the Starex van in Metro
Manila, whenever they go to Manila.
k) Respondent is ordered to immediately post a bond to keep the peace,
in two sufficient sureties.
l) To give monthly support to the petitioner provisionally fixed in the sum
of One Hundred Fifty Thousand Pesos (Php 150,000.00) per month plus
rental expenses of Fifty Thousand Pesos (Php 50,000.00) per month
until the matter of support could be finally resolved.
Two days later, or on April 26, 2006, petitioner filed an Opposition to the Urgent
Ex-Parte Motion for Renewal of the TPO21 seeking the denial of the renewal of
the TPO on the grounds that it did not (1) comply with the three-day notice rule,
and (2) contain a notice of hearing. He further asked that the TPO be modified
by (1) removing one vehicle used by private respondent and returning the same
to its rightful owner, the J-Bros Trading Corporation, and (2) cancelling or
reducing the amount of the bond from P5,000,000.00 to a more manageable
level at P100,000.00.
Subsequently, on May 23, 2006, petitioner moved 22 for the modification of the
TPO to allow him visitation rights to his children.
On May 24, 2006, the TPO was renewed and extended yet again, but subject
only to the following modifications prayed for by private respondent:
a) That respondent (petitioner herein) return the clothes and other
personal belongings of Rosalie and her children to Judge Jesus Ramos,
co-counsel for Petitioner, within 24 hours from receipt of the Temporary
106

Protection Order by his counsel, otherwise be declared in Indirect
Contempt of Court;
b) Respondent shall make an accounting or list of furniture and
equipment in the conjugal house in Pitimini St., Capitolville Subdivision,
Bacolod City within 24 hours from receipt of the Temporary Protection
Order by his counsel;
c) Ordering the Chief of the Women's Desk of the Bacolod City Police
Headquarters to remove Respondent from the conjugal dwelling within
eight (8) hours from receipt of the Temporary Protection Order by his
counsel, and that he cannot return until 48 hours after the petitioners
have left, so that the petitioner Rosalie and her representatives can
remove things from the conjugal home and make an inventory of the
household furniture, equipment and other things in the conjugal home,
which shall be submitted to the Court.
d) Deliver full financial support of Php200,000.00 and Php50,000.00 for
rental and Php25,000.00 for clothes of the three petitioners (sic)
children within 24 hours from receipt of the Temporary Protection Order
by his counsel, otherwise be declared in indirect contempt of Court;
e) That respondent surrender his two firearms and all unlicensed
firearms to the Clerk of Court within 24 hours from receipt of the
Temporary Protection Order by his counsel;
f) That respondent shall pay petitioner educational expenses of the
children upon presentation of proof of payment of such expenses.23
Claiming that petitioner continued to deprive them of financial support; failed to
faithfully comply with the TPO; and committed new acts of harassment against
her and their children, private respondent filed another application24 for the
issuance of a TPO ex parte. She alleged inter
alia that petitioner contrived a replevin suit against himself by J-Bros Trading,
Inc., of which the latter was purportedly no longer president, with the end in view
of recovering the Nissan Patrol and Starex Van used by private respondent and
the children. A writ of replevin was served upon private respondent by a group
of six or seven policemen with long firearms that scared the two small boys,
Jessie Anthone and Joseph Eduard.25
While Joseph Eduard, then three years old, was driven to school, two men
allegedly attempted to kidnap him, which incident traumatized the boy resulting
in his refusal to go back to school. On another occasion, petitioner allegedly
CIVIL PROCEDURE CASES SESSION 2
grabbed their daughter, Jo-Ann, by the arm and threatened her.26 The incident
was reported to the police, and Jo-Ann subsequently filed a criminal complaint
against her father for violation of R.A. 7610, also known as the "Special
Protection of Children Against Child Abuse, Exploitation and Discrimination Act."
Aside from the replevin suit, petitioner's lawyers initiated the filing by the
housemaids working at the conjugal home of a complaint for kidnapping and
illegal detention against private respondent. This came about after private
respondent, armed with a TPO, went to said home to get her and her children's
belongings. Finding some of her things inside a housemaid's (Sheryl Jamola)
bag in the maids' room, private respondent filed a case for qualified theft against
Jamola.27
On August 23, 2006, the RTC issued a TPO,28 effective for thirty (30) days,
which reads as follows:
Respondent (petitioner herein), Jesus Chua Garcia, is hereby:
1) Prohibited from threatening to commit or committing, personally or
through another, acts of violence against the offended party;
2) Prohibited from harassing, annoying, telephoning, contacting or
otherwise communicating in any form with the offended party, either
directly or indirectly;
3) Required to stay away, personally or through his friends, relatives,
employees or agents, from all the Petitioners Rosalie J. Garcia and her
children, Rosalie J. Garcia's three brothers, her mother Primitiva Jaype,
cook Novelita Caranzo, driver Romeo Hontiveros, laundrywoman
Mercedita Bornales, security guard Darwin Gayona and the petitioner's
other household helpers from a distance of 1,000 meters, and shall not
enter the gate of the subdivision where the Petitioners are temporarily
residing, as well as from the schools of the three children; Furthermore,
that respondent shall not contact the schools of the children directly or
indirectly in any manner including, ostensibly to pay for their tuition or
other fees directly, otherwise he will have access to the children through
the schools and the TPO will be rendered nugatory;
4) Directed to surrender all his firearms including .9MM caliber firearm
and a Walther PPK to the Court;
5) Directed to deliver in full financial support of Php200,000.00 a month
and Php50,000.00 for rental for the period from August 6 to September
107

6, 2006; and support in arrears from March 2006 to August 2006 the
total amount of Php1,312,000.00;
6) Directed to deliver educational expenses for 2006-2007 the amount
of Php75,000.00 and Php25,000.00;
7) Directed to allow the continued use of a Nissan Patrol with Plate No.
FEW 508 and a Starex van with Plate No. FFD 991 and should the
respondent fail to deliver said vehicles, respondent is ordered to provide
the petitioner another vehicle which is the one taken by J Bros Tading;
8) Ordered not to dissipate, encumber, alienate, sell, lease or otherwise
dispose of the conjugal assets, or those real properties in the name of
Jesus Chua Garcia only and those in which the conjugal partnership of
gains of the Petitioner Rosalie J. Garcia and respondent have an
interest in, especially the conjugal home located in No. 14, Pitimini St.,
Capitolville Subdivision, Bacolod City, and other properties which are
conjugal assets or those in which the conjugal partnership of gains of
Petitioner Rosalie J. Garcia and the respondent have an interest in and
listed in Annexes "I," "I-1," and "I-2," including properties covered by
TCT Nos. T-186325 and T-168814;
9) Ordered that the Register of Deeds of Bacolod City and E.B.
Magalona shall be served a copy of this TEMPORARY PROTECTION
ORDER and are ordered not to allow the transfer, sale, encumbrance
or disposition of these above-cited properties to any person, entity or
corporation without the personal presence of petitioner Rosalie J.
Garcia, who shall affix her signature in the presence of the Register of
Deeds, due to the fear of petitioner Rosalie that her signature will be
forged in order to effect the encumbrance or sale of these properties to
defraud her or the conjugal partnership of gains.
In its Order29 dated September 26, 2006, the trial court extended the
aforequoted TPO for another ten (10) days, and gave petitioner a period of five
(5) days within which to show cause why the TPO should not be renewed,
extended, or modified. Upon petitioner's manifestation, 30 however, that he has
not received a copy of private respondent's motion to modify/renew the TPO,
the trial court directed in its Order31 dated October 6, 2006 that petitioner be
furnished a copy of said motion. Nonetheless, an Order32 dated a day earlier,
October 5, had already been issued renewing the TPO dated August 23, 2006.
The pertinent portion is quoted hereunder:
xxxx
CIVIL PROCEDURE CASES SESSION 2
x x x it appearing further that the hearing could not yet be finally terminated, the
Temporary Protection Order issued on August 23, 2006 is hereby renewed and
extended for thirty (30) days and continuously extended and renewed for thirty
(30) days, after each expiration, until further orders, and subject to such
modifications as may be ordered by the court.
After having received a copy of the foregoing Order, petitioner no longer
submitted the required comment to private respondent's motion for renewal of
the TPO arguing that it would only be an "exercise in futility."33
Proceedings before the CA
During the pendency of Civil Case No. 06-797, petitioner filed before the Court
of Appeals (CA) a petition34 for prohibition (CA-G.R. CEB-SP. No. 01698), with
prayer for injunction and temporary restraining order, challenging (1) the
constitutionality of R.A. 9262 for being violative of the due process and the equal
protection clauses, and (2) the validity of the modified TPO issued in the civil
case for being "an unwanted product of an invalid law."
On May 26, 2006, the appellate court issued a 60-day Temporary Restraining
Order36 (TRO) against the enforcement of the TPO, the amended TPOs and
other orders pursuant thereto.
Subsequently, however, on January 24, 2007, the appellate court
dismissed36 the petition for failure of petitioner to raise the constitutional issue
in his pleadings before the trial court in the civil case, which is clothed with
jurisdiction to resolve the same. Secondly, the challenge to the validity
of R.A. 9262 through a petition for prohibition seeking to annul the protection
orders issued by the trial court constituted a collateral attack on said law.
His motion for reconsideration of the foregoing Decision having been denied in
the Resolution37 dated August 14, 2007, petitioner is now before us alleging that
The Issues
I.
THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION ON THE
THEORY THAT THE ISSUE OF CONSTITUTIONALITY WAS NOT RAISED AT
THE EARLIEST OPPORTUNITY AND THAT, THE PETITION CONSTITUTES
A COLLATERAL ATTACK ON THE VALIDITY OF THE LAW.
108

II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN FAILING TO
CONCLUDE THAT R.A. 9262 IS DISCRIMINATORY, UNJUST, AND
VIOLATIVE OF THE EQUAL PROTECTION CLAUSE.
III.
THE COURT OF APPEALS COMMITTED GRAVE MISTAKE IN NOT FINDING
THAT R.A. 9262 RUNS COUNTER TO THE DUE PROCESS CLAUSE OF THE
CONSTITUTION.
IV.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LAW DOES
VIOLENCE TO THE POLICY OF THE STATE TO PROTECT THE FAMILY AS
A BASIC SOCIAL INSTITUTION.
V.
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT DECLARING R.A.
No. 9262 AS INVALID AND UNCONSTITUTIONAL BECAUSE IT ALLOWS AN
UNDUE DELEGATION OF JUDICIAL POWER TO THE BARANGAY
OFFICIALS.38
The Ruling of the Court
Before delving into the arguments propounded by petitioner against the
constitutionality of R.A. 9262, we shall first tackle the propriety of the dismissal
by the appellate court of the petition for prohibition (CA-G.R. CEB-SP. No.
01698) filed by petitioner.
As a general rule, the question of constitutionality must be raised at the earliest
opportunity so that if not raised in the pleadings, ordinarily it may not be raised
in the trial, and if not raised in the trial court, it will not be considered on
appeal.39 Courts will not anticipate a question of constitutional law in advance of
the necessity of deciding it.40
In defending his failure to attack the constitutionality of R.A. 9262 before the
RTC of Bacolod City, petitioner argues that the Family Court has limited
authority and jurisdiction that is "inadequate to tackle the complex issue of
constitutionality."41
CIVIL PROCEDURE CASES SESSION 2
We disagree.
Family Courts have authority and jurisdiction to consider the constitutionality of
a statute.
At the outset, it must be stressed that Family Courts are special courts, of the
same level as Regional Trial Courts. Under R.A. 8369, otherwise known as the
"Family Courts Act of 1997," family courts have exclusive original jurisdiction to
hear and decide cases of domestic violence against women and children. 42 In
accordance with said law, the Supreme Court designated from among the
branches of the Regional Trial Courts at least one Family Court in each of
several key cities identified.43 To achieve harmony with the first mentioned law,
Section 7 of R.A. 9262 now provides that Regional Trial Courts designated as
Family Courts shall have original and exclusive jurisdiction over cases of VAWC
defined under the latter law, viz:
SEC. 7. Venue. The Regional Trial Court designated as a Family Court shall
have original and exclusive jurisdiction over cases of violence against women
and their children under this law. In the absence of such court in the place where
the offense was committed, the case shall be filed in the Regional Trial Court
where the crime or any of its elements was committed at the option of the
complainant. (Emphasis supplied)
Inspite of its designation as a family court, the RTC of Bacolod City remains
possessed of authority as a court of general original jurisdiction to pass upon all
kinds of cases whether civil, criminal, special proceedings, land registration,
guardianship, naturalization, admiralty or insolvency. 44 It is settled that RTCs
have jurisdiction to resolve the constitutionality of a statute, 45 "this authority
being embraced in the general definition of the judicial power to determine what
are the valid and binding laws by the criterion of their conformity to the
fundamental law."46 The Constitution vests the power of judicial review or the
power to declare the constitutionality or validity of a law, treaty, international or
executive agreement, presidential decree, order, instruction, ordinance, or
regulation not only in this Court, but in all RTCs.47 We said in J.M. Tuason and
Co., Inc. v. CA48 that, "plainly the Constitution contemplates that the inferior
courts should have jurisdiction in cases involving constitutionality of any treaty
or law, for it speaks of appellate review of final judgments of inferior courts in
cases where such constitutionality happens to be in issue." Section 5, Article
VIII of the 1987 Constitution reads in part as follows:
SEC. 5. The Supreme Court shall have the following powers:
xxx
109

2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law
or the Rules of Court may provide, final judgments and orders of lower courts
in:
a. All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.
xxxx
Thus, contrary to the posturing of petitioner, the issue of constitutionality of R.A.
9262 could have been raised at the earliest opportunity in his Opposition to the
petition for protection order before the RTC of Bacolod City, which had
jurisdiction to determine the same, subject to the review of this Court.
Section 20 of A.M. No. 04-10-11-SC, the Rule on Violence Against Women and
Their Children, lays down a new kind of procedure requiring the respondent to
file an opposition to the petition and not an answer.49 Thus:
SEC. 20. Opposition to petition. (a) The respondent may file an opposition to
the petition which he himself shall verify. It must be accompanied by the
affidavits of witnesses and shall show cause why a temporary or permanent
protection order should not be issued.
(b) Respondent shall not include in the opposition any counterclaim, cross-claim
or third-party complaint, but any cause of action which could be the subject
thereof may be litigated in a separate civil action. (Emphasis supplied)
We cannot subscribe to the theory espoused by petitioner that, since a
counterclaim, cross-claim and third-party complaint are to be excluded from the
opposition, the issue of constitutionality cannot likewise be raised therein. A
counterclaim is defined as any claim for money or other relief which a defending
party may have against an opposing party. 50 A cross-claim, on the other hand,
is any claim by one party against a co-party arising out of the transaction or
occurrence that is the subject matter either of the original action or of a
counterclaim therein.51Finally, a third-party complaint is a claim that a defending
party may, with leave of court, file against a person not a party to the action for
contribution, indemnity, subrogation or any other relief, in respect of his
opponent's claim.52As pointed out by Justice Teresita J. Leonardo-De Castro,
the unconstitutionality of a statute is not a cause of action that could be the
subject of a counterclaim, cross-claim or a third-party complaint. Therefore, it is
not prohibited from being raised in the opposition in view of the familiar maxim
expressio unius est exclusio alterius.
CIVIL PROCEDURE CASES SESSION 2
Moreover, it cannot be denied that this issue affects the resolution of the case a
quo because the right of private respondent to a protection order is founded
solely on the very statute the validity of which is being attacked 53 by petitioner
who has sustained, or will sustain, direct injury as a result of its enforcement.
The alleged unconstitutionality of R.A. 9262 is, for all intents and purposes, a
valid cause for the non-issuance of a protection order.
That the proceedings in Civil Case No. 06-797 are summary in nature should
not have deterred petitioner from raising the same in his Opposition. The
question relative to the constitutionality of a statute is one of law which does not
need to be supported by evidence.54 Be that as it may, Section 25 of A.M. No.
04-10-11-SC nonetheless allows the conduct of a hearing to determine legal
issues, among others, viz:
SEC. 25. Order for further hearing. - In case the court determines the need for
further hearing, it may issue an order containing the following:
(a) Facts undisputed and admitted;
(b) Factual and legal issues to be resolved;
(c) Evidence, including objects and documents that have been marked
and will be presented;
(d) Names of witnesses who will be ordered to present their direct
testimonies in the form of affidavits; and
(e) Schedule of the presentation of evidence by both parties which shall
be done in one day, to the extent possible, within the 30-day period of
the effectivity of the temporary protection order issued. (Emphasis
supplied)
To obviate potential dangers that may arise concomitant to the conduct of a
hearing when necessary, Section 26 (b) of A.M. No. 04-10-11-SC provides that
if a temporary protection order issued is due to expire, the trial court may extend
or renew the said order for a period of thirty (30) days each time until final
judgment is rendered. It may likewise modify the extended or renewed
temporary protection order as may be necessary to meet the needs of the
parties. With the private respondent given ample protection, petitioner could
proceed to litigate the constitutional issues, without necessarily running afoul of
the very purpose for the adoption of the rules on summary procedure.
110

In view of all the foregoing, the appellate court correctly dismissed the petition
for prohibition with prayer for injunction and temporary restraining order (CA-
G.R. CEB - SP. No. 01698). Petitioner may have proceeded upon an honest
belief that if he finds succor in a superior court, he could be granted an injunctive
relief. However, Section 22(j) of A.M. No. 04-10-11-SC expressly disallows the
filing of a petition for certiorari, mandamus or prohibition against any
interlocutory order issued by the trial court. Hence, the 60-day TRO issued by
the appellate court in this case against the enforcement of the TPO, the
amended TPOs and other orders pursuant thereto was improper, and it
effectively hindered the case from taking its normal course in an expeditious and
summary manner.
As the rules stand, a review of the case by appeal or certiorari before judgment
is prohibited. Moreover, if the appeal of a judgment granting permanent
protection shall not stay its enforcement,55 with more reason that a TPO, which
is valid only for thirty (30) days at a time,56 should not be enjoined.
The mere fact that a statute is alleged to be unconstitutional or invalid, does not
of itself entitle a litigant to have the same enjoined.57 In Younger v. Harris,
Jr.,58 the Supreme Court of the United States declared, thus:
Federal injunctions against state criminal statutes, either in their entirety or with
respect to their separate and distinct prohibitions, are not to be granted as a
matter of course, even if such statutes are unconstitutional. No citizen or
member of the community is immune from prosecution, in good faith, for his
alleged criminal acts. The imminence of such a prosecution even though alleged
to be unauthorized and, hence, unlawful is not alone ground for relief in equity
which exerts its extraordinary powers only to prevent irreparable injury to the
plaintiff who seeks its aid. (Citations omitted)
The sole objective of injunctions is to preserve the status quo until the trial court
hears fully the merits of the case. It bears stressing, however, that protection
orders are granted ex parte so as to protect women and their children from acts
of violence. To issue an injunction against such orders will defeat the very
purpose of the law against VAWC.
Notwithstanding all these procedural flaws, we shall not shirk from our obligation
to determine novel issues, or issues of first impression, with far-reaching
implications. We have, time and again, discharged our solemn duty as final
arbiter of constitutional issues, and with more reason now, in view of private
respondent's plea in her Comment59 to the instant Petition that we should put
the challenge to the constitutionality of R.A. 9262 to rest. And so we shall.
Intent of Congress in enacting R.A. 9262.
CIVIL PROCEDURE CASES SESSION 2
Petitioner claims that since R.A. 9262 is intended to prevent and criminalize
spousal and child abuse, which could very well be committed by either the
husband or the wife, gender alone is not enough basis to deprive the
husband/father of the remedies under the law.60
A perusal of the deliberations of Congress on Senate Bill No. 2723, 61 which
became R.A. 9262, reveals that while the sponsor, Senator Luisa Pimentel-
Ejercito (better known as Senator Loi Estrada), had originally proposed what
she called a "synthesized measure"62 an amalgamation of two measures,
namely, the "Anti-Domestic Violence Act" and the "Anti-Abuse of Women in
Intimate Relationships Act"63 providing protection to "all family members,
leaving no one in isolation" but at the same time giving special attention to
women as the "usual victims" of violence and abuse,64 nonetheless, it was
eventually agreed that men be denied protection under the same measure. We
quote pertinent portions of the deliberations:
Wednesday, December 10, 2003
Senator Pangilinan. I just wanted to place this on record, Mr. President. Some
women's groups have expressed concerns and relayed these concerns to me
that if we are to include domestic violence apart from against women as well as
other members of the household, including children or the husband, they fear
that this would weaken the efforts to address domestic violence of which the
main victims or the bulk of the victims really are the wives, the spouses or the
female partners in a relationship. We would like to place that on record. How
does the good Senator respond to this kind of observation?
Senator Estrada. Yes, Mr. President, there is this group of women who call
themselves "WIIR" Women in Intimate Relationship. They do not want to include
men in this domestic violence. But plenty of men are also being abused by
women. I am playing safe so I placed here members of the family, prescribing
penalties therefor and providing protective measures for victims. This includes
the men, children, live-in, common-law wives, and those related with the
family.65
xxx
Wednesday, January 14, 2004
xxxx
The President Pro Tempore. x x x
111

Also, may the Chair remind the group that there was the discussion whether to
limit this to women and not to families which was the issue of the AWIR group.
The understanding that I have is that we would be having a broader scope rather
than just women, if I remember correctly, Madam sponsor.
Senator Estrada. Yes, Mr. President.
As a matter of fact, that was brought up by Senator Pangilinan during the
interpellation period.
I think Senator Sotto has something to say to that.
Senator Legarda. Mr. President, the reason I am in support of the measure. Do
not get me wrong. However, I believe that there is a need to protect women's
rights especially in the domestic environment.
As I said earlier, there are nameless, countless, voiceless women who have not
had the opportunity to file a case against their spouses, their live-in partners
after years, if not decade, of battery and abuse. If we broaden the scope to
include even the men, assuming they can at all be abused by the women or their
spouses, then it would not equalize the already difficult situation for women, Mr.
President.
I think that the sponsor, based on our earlier conversations, concurs with this
position. I am sure that the men in this Chamber who love their women in their
lives so dearly will agree with this representation. Whether we like it or not, it is
an unequal world. Whether we like it or not, no matter how empowered the
women are, we are not given equal opportunities especially in the domestic
environment where the macho Filipino man would always feel that he is
stronger, more superior to the Filipino woman.
xxxx
The President Pro Tempore. What does the sponsor say?
Senator Estrada. Mr. President, before accepting this, the committee came up
with this bill because the family members have been included in this proposed
measure since the other members of the family other than women are also
possible victims of violence. While women are most likely the intended victims,
one reason incidentally why the measure focuses on women, the fact remains
that in some relatively few cases, men also stand to be victimized and that
children are almost always the helpless victims of violence. I am worried that
there may not be enough protection extended to other family members
CIVIL PROCEDURE CASES SESSION 2
particularly children who are excluded. Although Republic Act No. 7610, for
instance, more or less, addresses the special needs of abused children. The
same law is inadequate. Protection orders for one are not available in said law.
I am aware that some groups are apprehensive about granting the same
protection to men, fearing that they may use this law to justify their abusive
behavior against women. However, we should also recognize that there are
established procedures and standards in our courts which give credence to
evidentiary support and cannot just arbitrarily and whimsically entertain
baseless complaints.
Mr. President, this measure is intended to harmonize family relations and to
protect the family as the basic social institution. Though I recognize the unequal
power relations between men and women in our society, I believe we have an
obligation to uphold inherent rights and dignity of both husband and wife and
their immediate family members, particularly children.
While I prefer to focus mainly on women, I was compelled to include other family
members as a critical input arrived at after a series of consultations/meetings
with various NGOs, experts, sports groups and other affected sectors, Mr.
President.
Senator Sotto. Mr. President.
The President Pro Tempore. Yes, with the permission of the other senators.
Senator Sotto. Yes, with the permission of the two ladies on the Floor.
The President Pro Tempore. Yes, Sen. Vicente C. Sotto III is recognized.
Senator Sotto. I presume that the effect of the proposed amendment of Senator
Legarda would be removing the "men and children" in this particular bill and
focus specifically on women alone. That will be the net effect of that proposed
amendment. Hearing the rationale mentioned by the distinguished sponsor,
Sen. Luisa "Loi" Ejercito Estrada, I am not sure now whether she is inclined to
accept the proposed amendment of Senator Legarda.
I am willing to wait whether she is accepting this or not because if she is going
to accept this, I will propose an amendment to the amendment rather than object
to the amendment, Mr. President.
xxxx
112

Senator Estrada. The amendment is accepted, Mr. President.
The President Pro Tempore. Is there any objection?
xxxx
Senator Sotto. x x x May I propose an amendment to the amendment.
The President Pro Tempore. Before we act on the amendment?
Senator Sotto. Yes, Mr. President.
The President Pro Tempore. Yes, please proceed.
Senator Sotto. Mr. President, I am inclined to believe the rationale used by the
distinguished proponent of the amendment. As a matter of fact, I tend to agree.
Kung may maaabuso, mas malamang iyong babae kaysa sa lalake. At saka
iyong mga lalake, puwede na talagang magulpi iyan. Okey lang iyan. But I
cannot agree that we remove the children from this particular measure.
So, if I may propose an amendment
The President Pro Tempore. To the amendment.
Senator Sotto. more than the women, the children are very much abused. As
a matter of fact, it is not limited to minors. The abuse is not limited to seven, six,
5-year-old children. I have seen 14, 15-year-old children being abused by their
fathers, even by their mothers. And it breaks my heart to find out about these
things.
Because of the inadequate existing law on abuse of children, this particular
measure will update that. It will enhance and hopefully prevent the abuse of
children and not only women.
SOTTO-LEGARDA AMENDMENTS
Therefore, may I propose an amendment that, yes, we remove the aspect of the
men in the bill but not the children.
Senator Legarda. I agree, Mr. President, with the Minority Leader.
The President Pro Tempore. Effectively then, it will be women AND CHILDREN.
CIVIL PROCEDURE CASES SESSION 2
Senator Sotto. Yes, Mr. President.
Senator Estrada. It is accepted, Mr. President.
The President Pro Tempore. Is there any objection? [Silence] There being none,
the amendment, as amended, is approved.66
It is settled that courts are not concerned with the wisdom, justice, policy, or
expediency of a statute.67 Hence, we dare not venture into the real motivations
and wisdom of the members of Congress in limiting the protection against
violence and abuse under R.A. 9262 to women and children only. No proper
challenge on said grounds may be entertained in this proceeding. Congress has
made its choice and it is not our prerogative to supplant this judgment. The
choice may be perceived as erroneous but even then, the remedy against it is
to seek its amendment or repeal by the legislative. By the principle of separation
of powers, it is the legislative that determines the necessity, adequacy, wisdom
and expediency of any law.68 We only step in when there is a violation of the
Constitution. However, none was sufficiently shown in this case.
R.A. 9262 does not violate the guaranty of equal protection of the laws.
Equal protection simply requires that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities imposed.
The oft-repeated disquisition in the early case of Victoriano v. Elizalde Rope
Workers' Union69 is instructive:
The guaranty of equal protection of the laws is not a guaranty of equality in the
application of the laws upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional prohibition against inequality,
that every man, woman and child should be affected alike by a statute. Equality
of operation of statutes does not mean indiscriminate operation on persons
merely as such, but on persons according to the circumstances surrounding
them. It guarantees equality, not identity of rights. The Constitution does not
require that things which are different in fact be treated in law as though they
were the same. The equal protection clause does not forbid discrimination as to
things that are different. It does not prohibit legislation which is limited either in
the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is
the grouping of things in speculation or practice because they agree with one
another in certain particulars. A law is not invalid because of simple inequality.
The very idea of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the matter of
113

constitutionality. All that is required of a valid classification is that it be
reasonable, which means that the classification should be based on substantial
distinctions which make for real differences; that it must be germane to the
purpose of the law; that it must not be limited to existing conditions only; and
that it must apply equally to each member of the class. This Court has held that
the standard is satisfied if the classification or distinction is based on a
reasonable foundation or rational basis and is not palpably arbitrary. (Emphasis
supplied)
Measured against the foregoing jurisprudential yardstick, we find that R.A. 9262
is based on a valid classification as shall hereinafter be discussed and, as such,
did not violate the equal protection clause by favoring women over men as
victims of violence and abuse to whom the State extends its protection.
I. R.A. 9262 rests on substantial distinctions.
The unequal power relationship between women and men; the fact that women
are more likely than men to be victims of violence; and the widespread gender
bias and prejudice against women all make for real differences justifying the
classification under the law. As Justice McIntyre succinctly states, "the
accommodation of differences ... is the essence of true equality." 70
A. Unequal power relationship between men and women
According to the Philippine Commission on Women (the National Machinery for
Gender Equality and Women's Empowerment), violence against women (VAW)
is deemed to be closely linked with the unequal power relationship between
women and men otherwise known as "gender-based violence". Societal norms
and traditions dictate people to think men are the leaders, pursuers, providers,
and take on dominant roles in society while women are nurturers, men's
companions and supporters, and take on subordinate roles in society. This
perception leads to men gaining more power over women. With power comes
the need to control to retain that power. And VAW is a form of men's expression
of controlling women to retain power.71
The United Nations, which has long recognized VAW as a human rights issue,
passed its Resolution 48/104 on the Declaration on Elimination of Violence
Against Women on December 20, 1993 stating that "violence against women is
a manifestation of historically unequal power relations between men and
women, which have led to domination over and discrimination against women
by men and to the prevention of the full advancement of women, and that
violence against women is one of the crucial social mechanisms by which
women are forced into subordinate positions, compared with men."72
CIVIL PROCEDURE CASES SESSION 2
Then Chief Justice Reynato S. Puno traced the historical and social context of
gender-based violence and developments in advocacies to eradicate VAW, in
his remarks delivered during the Joint Launching of R.A. 9262 and its
Implementing Rules last October 27, 2004, the pertinent portions of which are
quoted hereunder:
History reveals that most societies sanctioned the use of violence against
women. The patriarch of a family was accorded the right to use force on
members of the family under his control. I quote the early studies:
Traditions subordinating women have a long history rooted in patriarchy the
institutional rule of men. Women were seen in virtually all societies to be
naturally inferior both physically and intellectually. In ancient Western societies,
women whether slave, concubine or wife, were under the authority of men. In
law, they were treated as property.
The Roman concept of patria potestas allowed the husband to beat, or even kill,
his wife if she endangered his property right over her. Judaism, Christianity and
other religions oriented towards the patriarchal family strengthened the male
dominated structure of society.
English feudal law reinforced the tradition of male control over women. Even the
eminent Blackstone has been quoted in his commentaries as saying husband
and wife were one and that one was the husband. However, in the late 1500s
and through the entire 1600s, English common law began to limit the right of
husbands to chastise their wives. Thus, common law developed the rule of
thumb, which allowed husbands to beat their wives with a rod or stick no thicker
than their thumb.
In the later part of the 19th century, legal recognition of these rights to chastise
wives or inflict corporeal punishment ceased. Even then, the preservation of the
family was given more importance than preventing violence to women.
The metamorphosis of the law on violence in the United States followed that of
the English common law. In 1871, the Supreme Court of Alabama became the
first appellate court to strike down the common law right of a husband to beat
his wife:
The privilege, ancient though it may be, to beat one's wife with a stick, to pull
her hair, choke her, spit in her face or kick her about the floor, or to inflict upon
her like indignities, is not now acknowledged by our law... In person, the wife is
entitled to the same protection of the law that the husband can invoke for
himself.
114

As time marched on, the women's advocacy movement became more
organized. The temperance leagues initiated it. These leagues had a simple
focus. They considered the evils of alcoholism as the root cause of wife abuse.
Hence, they demonstrated and picketed saloons, bars and their husbands' other
watering holes. Soon, however, their crusade was joined by suffragette
movements, expanding the liberation movement's agenda. They fought for
women's right to vote, to own property, and more. Since then, the feminist
movement was on the roll.
The feminist movement exposed the private invisibility of the domestic violence
to the public gaze. They succeeded in transforming the issue into an important
public concern. No less than the United States Supreme Court, in 1992 case
Planned Parenthood v. Casey, noted:
In an average 12-month period in this country, approximately two million women
are the victims of severe assaults by their male partners. In a 1985 survey,
women reported that nearly one of every eight husbands had assaulted their
wives during the past year. The [American Medical Association] views these
figures as "marked underestimates," because the nature of these incidents
discourages women from reporting them, and because surveys typically exclude
the very poor, those who do not speak English well, and women who are
homeless or in institutions or hospitals when the survey is conducted. According
to the AMA, "researchers on family violence agree that the true incidence of
partner violence is probably double the above estimates; or four million severely
assaulted women per year."
Studies on prevalence suggest that from one-fifth to one-third of all women will
be physically assaulted by a partner or ex-partner during their lifetime... Thus on
an average day in the United States, nearly 11,000 women are severely
assaulted by their male partners. Many of these incidents involve sexual
assault... In families where wife beating takes place, moreover, child abuse is
often present as well.
Other studies fill in the rest of this troubling picture. Physical violence is only the
most visible form of abuse. Psychological abuse, particularly forced social and
economic isolation of women, is also common.
Many victims of domestic violence remain with their abusers, perhaps because
they perceive no superior alternative...Many abused women who find temporary
refuge in shelters return to their husbands, in large part because they have no
other source of income... Returning to one's abuser can be dangerous. Recent
Federal Bureau of Investigation statistics disclose that 8.8 percent of all
homicide victims in the United States are killed by their spouses...Thirty percent
of female homicide victims are killed by their male partners.
CIVIL PROCEDURE CASES SESSION 2
Finally in 1994, the United States Congress enacted the Violence Against
Women Act.
In the International front, the women's struggle for equality was no less
successful. The United States Charter and the Universal Declaration of Human
Rights affirmed the equality of all human beings. In 1979, the UN General
Assembly adopted the landmark Convention on the Elimination of all Forms of
Discrimination Against Women (CEDAW). In 1993, the UN General Assembly
also adopted the Declaration on the Elimination of Violence Against Women.
World conferences on the role and rights of women have been regularly held in
Mexico City, Copenhagen, Nairobi and Beijing. The UN itself established a
Commission on the Status of Women.
The Philippines has been in cadence with the half and full steps of all these
women's movements. No less than Section 14, Article II of our 1987 Constitution
mandates the State to recognize the role of women in nation building and to
ensure the fundamental equality before the law of women and men. Our Senate
has ratified the CEDAW as well as the Convention on the Rights of the Child
and its two protocols. To cap it all, Congress, on March 8, 2004, enacted Rep.
Act No. 9262, entitled "An Act Defining Violence Against Women and Their
Children, Providing for Protective Measures for Victims, Prescribing Penalties
therefor and for other Purposes." (Citations omitted)
B. Women are the "usual" and "most likely"
victims of violence.
At the time of the presentation of Senate Bill No. 2723, official statistics on
violence against women and children show that
x x x physical injuries had the highest number of cases at 5,058 in 2002
representing 55.63% of total cases reported (9,903). And for the first semester
of 2003, there were 2,381 reported cases out of 4,354 cases which represent
54.31%. xxx (T)he total number of women in especially difficult circumstances
served by the Department of Social Welfare and Development (DSWD) for the
year 2002, there are 1,417 physically abused/maltreated cases out of the total
of 5,608 cases. xxx (T)here are 1,091 DSWD cases out of a total number of
3,471 cases for the first semester of 2003. Female violence comprised more
than 90% of all forms of abuse and violence and more than 90% of these
reported cases were committed by the women's intimate partners such as their
husbands and live-in partners.73
Recently, the Philippine Commission on Women presented comparative
statistics on violence against women across an eight-year period from 2004 to
115
 CIVIL PROCEDURE CASES SESSION 2
August of 2011 with violations under R.A. 9262 ranking first among the different spouses, and much less likely to experience sexual assault. In fact, many cases
VAW categories since its implementation in 2004,74 thus: of physical violence by a woman against a spouse are in self-defense or the
result of many years of physical or emotional abuse.76
Table 1. Annual Comparative Statistics on Violence Against Women, 2004 -
2011* While there are, indeed, relatively few cases of violence and abuse perpetrated
against men in the Philippines, the same cannot render R.A. 9262 invalid.
Reported 2004 2005 2006 2007 2008 2009 2010 2011
Cases In a 1960 case involving the violation of a city ordinance requiring drivers of
Rape 997 927 659 837 811 770 1,042 animal-drawn vehicles to pick up, gather and deposit in receptacles the manure
832
Incestuous Rape 38 46 26 22 28 27 19 23emitted or discharged by their vehicle-drawing animals in any public highways,
Attempted Rape 194 148 185 147 204 167 268 streets, plazas, parks or alleys, said ordinance was challenged as violative of
201
Acts of 580 536 382 358 445 485 745 the guaranty of equal protection of laws as its application is limited to owners
625
Lasciviousness and drivers of vehicle-drawing animals and not to those animals, although not
utilized, but similarly pass through the same streets.
Physical 3,553 2,335 1,892 1,505 1,307 1,498 2,018 1,588
Injuries
The ordinance was upheld as a valid classification for the reason that, while
Sexual 53 37 38 46 18 54 83 63
there may be non-vehicle-drawing animals that also traverse the city roads, "but
Harassment
their number must be negligible and their appearance therein merely
RA 9262 218 924 1,269 2,387 3,599 5,285 9,974 9,021
occasional, compared to the rig-drawing ones, as not to constitute a menace to
Threats 319 223 199 182 220 208 374 213
the health of the community."77The mere fact that the legislative classification
Seduction 62 19 29 30 19 19 25 15may result in actual inequality is not violative of the right to equal protection, for
Concubinage 121 102 93 109 109 99 158 128
every classification of persons or things for regulation by law produces inequality
RA 9208 17 11 16 24 34 152 190 62in some degree, but the law is not thereby rendered invalid.78
Abduction 16 34 23 28 18 25 22
/Kidnapping 29 C. Gender bias and prejudices
Unjust Vexation 90 50 59 59 83 703 183 155
Total 6,271 5,374 4,881 5,729 6,905 9,485 15,104 12,948
From the initial report to the police through prosecution, trial, and sentencing,
crimes against women are often treated differently and less seriously than other
*2011 report covers only from January to August crimes. This was argued by then United States Senator Joseph R. Biden, Jr.,
now Vice President, chief sponsor of the Violence Against Women Act (VAWA),
Source: Philippine National Police Women and Children Protection Center in defending the civil rights remedy as a valid exercise of the U.S. Congress'
(WCPC) authority under the Commerce and Equal Protection Clauses. He stressed that
the widespread gender bias in the U.S. has institutionalized historic prejudices
against victims of rape or domestic violence, subjecting them to "double
On the other hand, no reliable estimates may be obtained on domestic abuse
victimization" first at the hands of the offender and then of the legal system. 79
and violence against men in the Philippines because incidents thereof are
relatively low and, perhaps, because many men will not even attempt to report
the situation. In the United Kingdom, 32% of women who had ever experienced Our own Senator Loi Estrada lamented in her Sponsorship Speech for Senate
domestic violence did so four or five (or more) times, compared with 11% of the Bill No. 2723 that "(w)henever violence occurs in the family, the police treat it as
smaller number of men who had ever experienced domestic violence; and a private matter and advise the parties to settle the conflict themselves. Once
women constituted 89% of all those who had experienced 4 or more incidents the complainant brings the case to the prosecutor, the latter is hesitant to file
of domestic violence.75 Statistics in Canada show that spousal violence by a the complaint for fear that it might later be withdrawn. This lack of response or
woman against a man is less likely to cause injury than the other way around reluctance to be involved by the police and prosecution reinforces the
(18 percent versus 44 percent). Men, who experience violence from their escalating, recurring and often serious nature of domestic violence."80
spouses are much less likely to live in fear of violence at the hands of their
116

Sadly, our own courts, as well, have exhibited prejudices and biases against our
women.
In a recent case resolved on March 9, 2011, we fined RTC Judge Venancio J.
Amila for Conduct Unbecoming of a Judge. He used derogatory and irreverent
language in reference to the complainant in a petition for TPO and PPO under
R.A. 9262, calling her as "only a live-in partner" and presenting her as an
"opportunist" and a "mistress" in an "illegitimate relationship." Judge Amila even
called her a "prostitute," and accused her of being motivated by "insatiable
greed" and of absconding with the contested property.81 Such remarks betrayed
Judge Amila's prejudices and lack of gender sensitivity.
The enactment of R.A. 9262 aims to address the discrimination brought about
by biases and prejudices against women. As emphasized by the CEDAW
Committee on the Elimination of Discrimination against Women, addressing or
correcting discrimination through specific measures focused on women does
not discriminate against men.82 Petitioner's contention,83 therefore, that R.A.
9262 is discriminatory and that it is an "anti-male," "husband-bashing," and
"hate-men" law deserves scant consideration. As a State Party to the CEDAW,
the Philippines bound itself to take all appropriate measures "to modify the social
and cultural patterns of conduct of men and women, with a view to achieving
the elimination of prejudices and customary and all other practices which are
based on the idea of the inferiority or the superiority of either of the sexes or on
stereotyped roles for men and women."84 Justice Puno correctly pointed out that
"(t)he paradigm shift changing the character of domestic violence from a private
affair to a public offense will require the development of a distinct mindset on
the part of the police, the prosecution and the judges." 85
II. The classification is germane to the purpose of the law.
The distinction between men and women is germane to the purpose of R.A.
9262, which is to address violence committed against women and children,
spelled out in its Declaration of Policy, as follows:
SEC. 2. Declaration of Policy. It is hereby declared that the State values the
dignity of women and children and guarantees full respect for human rights. The
State also recognizes the need to protect the family and its members particularly
women and children, from violence and threats to their personal safety and
security.
Towards this end, the State shall exert efforts to address violence committed
against women and children in keeping with the fundamental freedoms
guaranteed under the Constitution and the provisions of the Universal
Declaration of Human Rights, the Convention on the Elimination of All Forms of
CIVIL PROCEDURE CASES SESSION 2
Discrimination Against Women, Convention on the Rights of the Child and other
international human rights instruments of which the Philippines is a party.
In 1979, the U.N. General Assembly adopted the CEDAW, which the Philippines
ratified on August 5, 1981. Subsequently, the Optional Protocol to the CEDAW
was also ratified by the Philippines on October 6, 2003. 86 This Convention
mandates that State parties shall accord to women equality with men before the
law87 and shall take all appropriate measures to eliminate discrimination against
women in all matters relating to marriage and family relations on the basis of
equality of men and women.88 The Philippines likewise ratified the Convention
on the Rights of the Child and its two protocols.89 It is, thus, bound by said
Conventions and their respective protocols.
III. The classification is not limited to existing
conditions only, and apply equally to all members
Moreover, the application of R.A. 9262 is not limited to the existing conditions
when it was promulgated, but to future conditions as well, for as long as the
safety and security of women and their children are threatened by violence and
abuse.
R.A. 9262 applies equally to all women and children who suffer violence and
abuse. Section 3 thereof defines VAWC as:
x x x any act or a series of acts committed by any person against a woman who
is his wife, former wife, or against a woman with whom the person has or had a
sexual or dating relationship, or with whom he has a common child, or against
her child whether legitimate or illegitimate, within or without the family abode,
which result in or is likely to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of such acts, battery, assault,
coercion, harassment or arbitrary deprivation of liberty. It includes, but is not
limited to, the following acts:
A. "Physical Violence" refers to acts that include bodily or physical harm;
B. "Sexual violence" refers to an act which is sexual in nature, committed against
a woman or her child. It includes, but is not limited to:
a) rape, sexual harassment, acts of lasciviousness, treating a woman
or her child as a sex object, making demeaning and sexually suggestive
remarks, physically attacking the sexual parts of the victim's body,
forcing her/him to watch obscene publications and indecent shows or
117

forcing the woman or her child to do indecent acts and/or make films
thereof, forcing the wife and mistress/lover to live in the conjugal home
or sleep together in the same room with the abuser;
b) acts causing or attempting to cause the victim to engage in any
sexual activity by force, threat of force, physical or other harm or threat
of physical or other harm or coercion;
c) Prostituting the woman or child.
C. "Psychological violence" refers to acts or omissions causing or likely to cause
mental or emotional suffering of the victim such as but not limited to intimidation,
harassment, stalking, damage to property, public ridicule or humiliation,
repeated verbal abuse and marital infidelity. It includes causing or allowing the
victim to witness the physical, sexual or psychological abuse of a member of the
family to which the victim belongs, or to witness pornography in any form or to
witness abusive injury to pets or to unlawful or unwanted deprivation of the right
to custody and/or visitation of common children.
D. "Economic abuse" refers to acts that make or attempt to make a woman
financially dependent which includes, but is not limited to the following:
1. withdrawal of financial support or preventing the victim from engaging
in any legitimate profession, occupation, business or activity, except in
cases wherein the other spouse/partner objects on valid, serious and
moral grounds as defined in Article 73 of the Family Code;
2. deprivation or threat of deprivation of financial resources and the right
to the use and enjoyment of the conjugal, community or property owned
in common;
3. destroying household property;
4. controlling the victims' own money or properties or solely controlling
the conjugal money or properties.
It should be stressed that the acts enumerated in the aforequoted provision are
attributable to research that has exposed the dimensions and dynamics of
battery. The acts described here are also found in the U.N. Declaration on the
Elimination of Violence Against Women.90 Hence, the argument advanced by
petitioner that the definition of what constitutes abuse removes the difference
between violent action and simple marital tiffs is tenuous.
CIVIL PROCEDURE CASES SESSION 2
There is nothing in the definition of VAWC that is vague and ambiguous that will
confuse petitioner in his defense. The acts enumerated above are easily
understood and provide adequate contrast between the innocent and the
prohibited acts. They are worded with sufficient definiteness that persons of
ordinary intelligence can understand what conduct is prohibited, and need not
guess at its meaning nor differ in its application.91 Yet, petitioner insists92that
phrases like "depriving or threatening to deprive the woman or her child of a
legal right," "solely controlling the conjugal or common money or properties,"
"marital infidelity," and "causing mental or emotional anguish" are so vague that
they make every quarrel a case of spousal abuse. However, we have stressed
that the "vagueness" doctrine merely requires a reasonable degree of certainty
for the statute to be upheld not absolute precision or mathematical exactitude,
as petitioner seems to suggest. Flexibility, rather than meticulous specificity, is
permissible as long as the metes and bounds of the statute are clearly
delineated. An act will not be held invalid merely because it might have been
more explicit in its wordings or detailed in its provisions.93
There is likewise no merit to the contention that R.A. 9262 singles out the
husband or father as the culprit. As defined above, VAWC may likewise be
committed "against a woman with whom the person has or had a sexual or
dating relationship." Clearly, the use of the gender-neutral word "person" who
has or had a sexual or dating relationship with the woman encompasses even
lesbian relationships. Moreover, while the law provides that the offender be
related or connected to the victim by marriage, former marriage, or a sexual or
dating relationship, it does not preclude the application of the principle of
conspiracy under the Revised Penal Code (RPC). Thus, in the case of Go-Tan
v. Spouses Tan,94 the parents-in-law of Sharica Mari L. Go-Tan, the victim, were
held to be proper respondents in the case filed by the latter upon the allegation
that they and their son (Go-Tan's husband) had community of design and
purpose in tormenting her by giving her insufficient financial support; harassing
and pressuring her to be ejected from the family home; and in repeatedly
abusing her verbally, emotionally, mentally and physically.
R.A. 9262 is not violative of the
due process clause of the Constitution.
Petitioner bewails the disregard of R.A. 9262, specifically in the issuance of
POs, of all protections afforded by the due process clause of the Constitution.
Says he: "On the basis of unsubstantiated allegations, and practically no
opportunity to respond, the husband is stripped of family, property, guns, money,
children, job, future employment and reputation, all in a matter of seconds,
without an inkling of what happened."95
A protection order is an order issued to prevent further acts of violence against
women and their children, their family or household members, and to grant other
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necessary reliefs. Its purpose is to safeguard the offended parties from further
harm, minimize any disruption in their daily life and facilitate the opportunity and
ability to regain control of their life.96
"The scope of reliefs in protection orders is broadened to ensure that the victim
or offended party is afforded all the remedies necessary to curtail access by a
perpetrator to the victim. This serves to safeguard the victim from greater risk of
violence; to accord the victim and any designated family or household member
safety in the family residence, and to prevent the perpetrator from committing
acts that jeopardize the employment and support of the victim. It also enables
the court to award temporary custody of minor children to protect the children
from violence, to prevent their abduction by the perpetrator and to ensure their
financial support."97
The rules require that petitions for protection order be in writing, signed and
verified by the petitioner98 thereby undertaking full responsibility, criminal or civil,
for every allegation therein. Since "time is of the essence in cases of VAWC if
further violence is to be prevented,"99 the court is authorized to issue ex parte a
TPO after raffle but before notice and hearing when the life, limb or property of
the victim is in jeopardy and there is reasonable ground to believe that the order
is necessary to protect the victim from the immediate and imminent danger of
VAWC or to prevent such violence, which is about to recur.100
There need not be any fear that the judge may have no rational basis to issue
an ex parte order. The victim is required not only to verify the allegations in the
petition, but also to attach her witnesses' affidavits to the petition. 101
The grant of a TPO ex parte cannot, therefore, be challenged as violative of the
right to due process. Just like a writ of preliminary attachment which is issued
without notice and hearing because the time in which the hearing will take could
be enough to enable the defendant to abscond or dispose of his property, 102 in
the same way, the victim of VAWC may already have suffered harrowing
experiences in the hands of her tormentor, and possibly even death, if notice
and hearing were required before such acts could be prevented. It is a
constitutional commonplace that the ordinary requirements of procedural due
process must yield to the necessities of protecting vital public
interests,103 among which is protection of women and children from violence and
threats to their personal safety and security.
It should be pointed out that when the TPO is issued ex parte, the court shall
likewise order that notice be immediately given to the respondent directing him
to file an opposition within five (5) days from service. Moreover, the court shall
order that notice, copies of the petition and TPO be served immediately on the
CIVIL PROCEDURE CASES SESSION 2
respondent by the court sheriffs. The TPOs are initially effective for thirty (30)
days from service on the respondent.104
Where no TPO is issued ex parte, the court will nonetheless order the immediate
issuance and service of the notice upon the respondent requiring him to file an
opposition to the petition within five (5) days from service. The date of the
preliminary conference and hearing on the merits shall likewise be indicated on
the notice.105
The opposition to the petition which the respondent himself shall verify, must be
accompanied by the affidavits of witnesses and shall show cause why a
temporary or permanent protection order should not be issued.106
It is clear from the foregoing rules that the respondent of a petition for protection
order should be apprised of the charges imputed to him and afforded an
opportunity to present his side. Thus, the fear of petitioner of being "stripped of
family, property, guns, money, children, job, future employment and reputation,
all in a matter of seconds, without an inkling of what happened" is a mere
product of an overactive imagination. The essence of due process is to be found
in the reasonable opportunity to be heard and submit any evidence one may
have in support of one's defense. "To be heard" does not only mean verbal
arguments in court; one may be heard also through pleadings. Where
opportunity to be heard, either through oral arguments or pleadings, is accorded,
there is no denial of procedural due process.107
It should be recalled that petitioner filed on April 26, 2006 an Opposition to the
Urgent Ex-Parte Motion for Renewal of the TPO that was granted only two days
earlier on April 24, 2006. Likewise, on May 23, 2006, petitioner filed a motion for
the modification of the TPO to allow him visitation rights to his children. Still, the
trial court in its Order dated September 26, 2006, gave him five days (5) within
which to show cause why the TPO should not be renewed or extended. Yet, he
chose not to file the required comment arguing that it would just be an "exercise
in futility," conveniently forgetting that the renewal of the questioned TPO was
only for a limited period (30 days) each time, and that he could prevent the
continued renewal of said order if he can show sufficient cause therefor. Having
failed to do so, petitioner may not now be heard to complain that he was denied
due process of law.
Petitioner next laments that the removal and exclusion of the respondent in the
VAWC case from the residence of the victim, regardless of ownership of the
residence, is virtually a "blank check" issued to the wife to claim any property as
her conjugal home.108
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The wording of the pertinent rule, however, does not by any stretch of the
imagination suggest that this is so. It states:
SEC. 11. Reliefs available to the offended party. -- The protection order shall
include any, some or all of the following reliefs:
xxxx
(c) Removing and excluding the respondent from the residence of the offended
party, regardless of ownership of the residence, either temporarily for the
purpose of protecting the offended party, or permanently where no property
rights are violated. If the respondent must remove personal effects from the
residence, the court shall direct a law enforcement agent to accompany the
respondent to the residence, remain there until the respondent has gathered his
things and escort him from the residence;
xxxx
Indubitably, petitioner may be removed and excluded from private respondent's
residence, regardless of ownership, only temporarily for the purpose of
protecting the latter. Such removal and exclusion may be permanent only where
no property rights are violated. How then can the private respondent just claim
any property and appropriate it for herself, as petitioner seems to suggest?
The non-referral of a VAWC case
to a mediator is justified.
Petitioner argues that "by criminalizing run-of-the-mill arguments, instead of
encouraging mediation and counseling, the law has done violence to the
avowed policy of the State to "protect and strengthen the family as a basic
autonomous social institution."109
Under Section 23(c) of A.M. No. 04-10-11-SC, the court shall not refer the case
or any issue thereof to a mediator. The reason behind this provision is well-
explained by the Commentary on Section 311 of the Model Code on Domestic
and Family Violence as follows:110
This section prohibits a court from ordering or referring parties to mediation in a
proceeding for an order for protection. Mediation is a process by which parties
in equivalent bargaining positions voluntarily reach consensual agreement
about the issue at hand. Violence, however, is not a subject for compromise. A
process which involves parties mediating the issue of violence implies that the
victim is somehow at fault. In addition, mediation of issues in a proceeding for
CIVIL PROCEDURE CASES SESSION 2
an order of protection is problematic because the petitioner is frequently unable
to participate equally with the person against whom the protection order has
been sought. (Emphasis supplied)
There is no undue delegation of
judicial power to barangay officials.
Petitioner contends that protection orders involve the exercise of judicial power
which, under the Constitution, is placed upon the "Supreme Court and such
other lower courts as may be established by law" and, thus, protests the
delegation of power to barangay officials to issue protection orders. 111 The
pertinent provision reads, as follows:
SEC. 14. Barangay Protection Orders (BPOs); Who May Issue and How.
Barangay Protection Orders (BPOs) refer to the protection order issued by the
Punong Barangay ordering the perpetrator to desist from committing acts under
Section 5 (a) and (b) of this Act.1wphi1 A Punong Barangay who receives
applications for a BPO shall issue the protection order to the applicant on the
date of filing after ex parte determination of the basis of the application. If the
Punong Barangay is unavailable to act on the application for a BPO, the
application shall be acted upon by any available Barangay Kagawad. If the BPO
is issued by a Barangay Kagawad, the order must be accompanied by an
attestation by the Barangay Kagawad that the Punong Barangay was
unavailable at the time of the issuance of the BPO. BPOs shall be effective for
fifteen (15) days. Immediately after the issuance of an ex parte BPO, the Punong
Barangay or Barangay Kagawad shall personally serve a copy of the same on
the respondent, or direct any barangay official to effect its personal service.
The parties may be accompanied by a non-lawyer advocate in any proceeding
before the Punong Barangay.
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.112 On the other hand, executive power "is
generally defined as the power to enforce and administer the laws. It is the
power of carrying the laws into practical operation and enforcing their due
observance."113
As clearly delimited by the aforequoted provision, the BPO issued by the
Punong Barangay or, in his unavailability, by any available Barangay Kagawad,
merely orders the perpetrator to desist from (a) causing physical harm to the
woman or her child; and (2) threatening to cause the woman or her child physical
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harm. Such function of the Punong Barangay is, thus, purely executive in nature,
in pursuance of his duty under the Local Government Code to "enforce all laws
and ordinances," and to "maintain public order in the barangay."114
We have held that "(t)he mere fact that an officer is required by law to inquire
into the existence of certain facts and to apply the law thereto in order to
determine what his official conduct shall be and the fact that these acts may
affect private rights do not constitute an exercise of judicial powers." 115
In the same manner as the public prosecutor ascertains through a preliminary
inquiry or proceeding "whether there is reasonable ground to believe that an
offense has been committed and the accused is probably guilty thereof," the
Punong Barangay must determine reasonable ground to believe that an
imminent danger of violence against the woman and her children exists or is
about to recur that would necessitate the issuance of a BPO. The preliminary
investigation conducted by the prosecutor is, concededly, an executive, not a
judicial, function. The same holds true with the issuance of a BPO.
We need not even belabor the issue raised by petitioner that since barangay
officials and other law enforcement agencies are required to extend assistance
to victims of violence and abuse, it would be very unlikely that they would remain
objective and impartial, and that the chances of acquittal are nil. As already
stated, assistance by barangay officials and other law enforcement agencies is
consistent with their duty to enforce the law and to maintain peace and order.
Conclusion
Before a statute or its provisions duly challenged are voided, an unequivocal
breach of, or a clear conflict with the Constitution, not merely a doubtful or
argumentative one, must be demonstrated in such a manner as to leave no
doubt in the mind of the Court. In other words, the grounds for nullity must be
beyond reasonable doubt.116 In the instant case, however, no concrete evidence
and convincing arguments were presented by petitioner to warrant a declaration
of the unconstitutionality of R.A. 9262, which is an act of Congress and signed
into law by the highest officer of the co-equal executive department. As we said
in Estrada v. Sandiganbayan, 117 courts must assume that the legislature is ever
conscious of the borders and edges of its plenary powers, and passed laws with
full knowledge of the facts and for the purpose of promoting what is right and
advancing the welfare of the majority.
We reiterate here Justice Puno's observation that "the history of the women's
movement against domestic violence shows that one of its most difficult
struggles was the fight against the violence of law itself. If we keep that in mind,
law will not again be a hindrance to the struggle of women for equality but will
CIVIL PROCEDURE CASES SESSION 2
be itsfulfillment."118Accordingly, the constitutionality of R.A. 9262 is, as it should
be, sustained.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for
lack of merit. SO ORDERED.
G.R. No. L-71959 November 28, 1985
TRADE UNIONS OF THE PHILIPPINES & ALLIED SERVICES LOCAL
CHAPTER NO. 1158 (SUPER GARMENTS MANUFACTURING
CORPORATION WORKERS UNION) vs. HON. JOSE L. COSCOLLUELA
JR., PRESIDING JUDGE OF BRANCH CXLVI REGIONAL TRIAL COURT
OF MAKATI AND RUSTAN COMMERCIAL CORPORATION
The petition seeks to enjoin the public respondent from further proceeding in
Civil Case No. 10905 of the Regional Trial Court of Makati, Metro Manila. Upon
the filing of the petition this Court issued a temporary restraining order and
required the private respondent to comment.
Petitioner union filed a notice of strike with the Ministry of Labor and
Employment against Super Garments Manufacturing Corporation on May 12,
1985. The strike commenced on June 8, 1985 and is said to be still on.
Super Garments and Rustan Commercial Corporation have separate
compartments in the same building at Malugay and streets It is called the
Yupangco building.
It is alleged by the petitioner union that goods of Super Garments were spirited
out of its strike-bound premises thru Rustan's warehouse. Whereupon, the
union picketed not only Super Garments but also Rustan. As a result Rustan
filed Civil Case No. 10905 before the respondent judge for injunction and
damages thru the PECABAR law office and petition No. 971 with the National
Labor Relations Commission also to enjoin the union from picketing its
premises. The petition was filed by another counsel, Atty. Armando B. Ampil.
In Civil Case No. 10905, the respondent judge issued an order on June 21, 1985
setting "the hearing of theapplication for a writ of preliminary injuction on June
27, 1985 at 2:00 o'clock in the afternoon." On July 15, 1985, the respondent
judge issued the writ after finding no employer-employee relationship between
the parties. This order prompted the petitioner union to come to this Court for
the purpose aforesaid.
In the meantime, petitioner union on July 12, 1985, filed a complaint for unfair
labor practice against both Super Garments and Rustan alleging that the former
is but the manufacturing arm of the latter.
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Petitioner union claims that respondent judge has no jurisdiction to issue an
injunction because the case is a labor dispute; that the prerogative belongs to
the Minister of Labor and Employment. Upon the other hand, private respondent
Rustan says that the respondent judge has jurisdiction because there is no labor
dispute between it and the union even as it went to the National Labor Relation
Commission to seek Identical relief.
At this stage there appears to be no labor dispute between the petitioner and
the private respondent for which reason the latter was justified in seeking relief
in respondent judge's court. ihe unfair labor complaint filed by petitioner union
on Page 304 July 12, 1985 does not prove a labor relationship. By the same
token it was improper for the private respondent to have filed Case No. 971 with
the National Labor Relations Commission.
In the light of the foregoing, the petition is dismissed for lack of merit and the
temporary restraining order issued on September 23, 1985 is hereby lifted.
However, private respondent Rustan Commercial Corporation is directed to
withdraw its case before the National Labor Relations Commission. No costs.
SO ORDERED,
G.R. No. 72644 December 14, 1987
ALFREDO F. PRIMERO vs. IAC and DM TRANSIT
The question on which the petitioner's success in the instant appeal depends,
and to which he would have us give an affirmative answer, is whether or
not, having recovered separation pay by judgment of the Labor Arbiter which
held that he had been fired by respondent DM Transit Corporation without just
cause he may subsequently recover moral damages by action in a regular
court, upon the theory that the manner of his dismissal from employment was
tortious and therefore his cause of action was intrinsically civil in nature.
Petitioner Primero was discharged from his employment as bus driver of DM
Transit Corporation (hereafter, simply DM) in August, 1974 after having been
employed therein for over 6 years. The circumstances attendant upon that
dismissal are recounted by the Court of Appeals 1 as follows:
Undisputably, since August 1, 1974, appellee's bus dispatcher
did not assign any bus to be driven by appellant Primero. No
reason or cause was given by the dispatcher to appellant for
not assigning a bus to the latter for 23 days (pp. 6-14, 21-22,
tsn, May 15, 1979).
Also, for 23 days, appellant was given a run-around from one
management official to another, pleading that he be allowed to
CIVIL PROCEDURE CASES SESSION 2
work as his family was in dire need of money and at the same
time inquiring (why) he was not allowed to work or drive a bus
of the company. Poor appellant did not only get negative results
but was given cold treatment, oftentimes evaded and given
confusing information, or ridiculed, humiliated, or sometimes
made to wait in the offices of some management personnel of
the appellee (pp. 2-29, tsn, May 15, 1979).
(The) General Manager and (the) Vice-President and Treasurer
... wilfully and maliciously made said appellant ... seesaw or ...
go back and forth between them for not less than ten (10) times
within a period of 23 days ... but (he) got negative results from
both corporate officials. Worse, on the 23rd day of his ordeal
appellant was suddenly told by General Manager Briones to
seek employment with other bus companies because he was
already dismissed from his job with appellee (without having
been) told of the cause of his hasty and capricious dismissal ...
(pp. 8, 11-13, 25, tsn, May 15, 1979).
Impelled to face the harsh necessities of life as a jobless person
and worried by his immediate need for money, appellant
pleaded with Corporate President Demetrio Munoz, Jr. for his
reinstatement and also asked P300.00 as financial assistance,
but the latter told the former that he (Munoz, Jr.) will not give
him even one centavo and that should appellant sue him in
court, then that will be the time President Munoz, Jr. will pay
him, if Munoz, Jr. loses the case x x (pp. 21-22, tsn, May 15,
1979).
Appellant also advised (the) President of the oppressive, anti-
social and inhumane acts of subordinate officers ... (but)
Munoz, Jr. did nothing to resolve appellant's predicament and
... just told the latter to go back ... to ... Briones, who insisted
that appellant seek employment with other bus firms in Metro
Manila ... (but) admitted that the appellant has not violated any
company rule or regulation ... (pp. 23-26, tsn, May 15, 1979).
... In pursuance (of) defendant's determination to oppress
plaintiff and cause further loss, irreparable injury, prejudice and
damage, (D.M. Transit) in bad faith and with malice persuaded
other firms (California Transit, Pascual Lines, De Dios Transit,
Negrita Corporation, and MD Transit) not to employ (appellant)
in any capacity after he was already unjustly dismissed by said
defendant ... (paragraph 8 of plaintiff's complaint).
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These companies with whom appellant applied for a job called
up the D.M. Transit Office (which) ... told them ... that they
should not accept (appellant) because (he) was dismissed from
that Office.
Primero instituted proceedings against DM with the Labor Arbiters of the
Department of Labor, for illegal dismissal, and for recovery of back wages and
reinstatement. It is not clear from the record whether these proceedings
consisted of one or two actions separately filed. What is certain is that he
withdrew his claims for back wages and reinstatement, "with the end in view of
filing a damage suit" "in a civil court which has exclusive jurisdiction over his
complaint for damages on causes of action founded on tortious acts, breach of
employment contract ... and consequent effects (thereof ). 2
In any case, after due investigation, the Labor Arbiter rendered judgment dated
January 24, 1977 ordering DM to pay complainant Primero P2,000.00 as
separation pay in accordance with the Termination Pay Law. 3 The judgment
was affirmed by the National Labor Relations Commission and later by the
Secretary of Labor, the case having been concluded at this level on March 3,
1978. 4
Under the provisions of the Labor Code in force at that time, Labor Arbiters had
jurisdiction inter alia over
1) claims involving non-payment or underpayment of wages,
overtime compensation, social security and medicare benefits,
and
2) all other cases or matters arising from employer-employee
relations, unless otherwise expressly excluded. 5
And we have since held that under these "broad and comprehensive" terms of
the law, Labor Arbiters possessed original jurisdiction over claims for moral and
other forms of damages in labor disputes. 6
The jurisdiction of Labor Arbiters over such claims was however removed by PD
1367, effective May 1, 1978, which explicitly provided that "Regional Directors
shall not indorse and Labor Arbiters shall not entertain claims for moral or other
forms of damages." 7
Some three months afterwards, Primero brought suit against DM in the Court of
First Instance of Rizal seeking recovery of damages caused not only by the
breach of his employment contract, but also by the oppressive and inhuman,
CIVIL PROCEDURE CASES SESSION 2
and consequently tortious, acts of his employer and its officers antecedent and
subsequent to his dismissal from employment without just cause. 8
While this action was pending in the CFI, the law governing the Labor Arbiters'
jurisdiction was once again revised. The amending act was PD 1691, effective
May 1, 1980. It eliminated the restrictive clause placed by PD 1367, that
Regional Directors shall not indorse and Labor Arbiters entertain claims for
moral or other forms of damages. And, as we have had occasion to declare in
several cases, it restored the principle that "exclusive and original jurisdiction for
damages would once again be vested in labor arbiters;" eliminated "the rather
thorny question as to where in labor matters the dividing line is to be drawn
between the power lodged in an administrative body and a court;' " and, "in the
interest of greater promptness in the disposition of labor matters, ... spared
(courts of) the often onerous task of determining what essentially is a factual
matter, namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from employer-
employee relations." 9Parenthetically, there was still another amendment of the
provision in question which, however, has no application to the case at bar. The
amendment was embodied in B.P. Blg. 227, effective June 1, 1982. 10
On August 11, 1980 the Trial Court rendered judgment dismissing the complaint
on the ground of lack of jurisdiction, for the reason that at the time that the
complaint was filed. on August 17, 1978, the law the Labor Code as amended
by PD 1367, eff. May 1, 1978 conferred exclusive, original jurisdiction over
claims for moral or other damages, not on ordinary courts, but on Labor Arbiters.
This judgment was affirmed by the Intermediate Appellate Court, by Decision
rendered on June 29, 1984. This is the judgment now subject of the present
petition for review on certiorari. The decision was reached by a vote of 3 to 2.
The dissenters, placing reliance on certain of our pronouncements, opined that
Primero's causes of action were cognizable by the courts, that existence of
employment relations was not alone decisive of the issue of jurisdiction, and that
such relations may indeed give rise to "civil" as distinguished from purely labor
disputes, as where an employer's right to dismiss his employee is exercised
tortiously, in a manner oppressive to labor, contrary to morals, good customs or
public policy. 11
Primero has appealed to us from this judgment of the IAC praying that we
overturn the majority view and sustain the dissent.
Going by the literal terms of the law, it would seem clear that at the time that
Primero filed his complaints for illegal dismissal and recovery of backwages, etc.
with the Labor Arbiter, the latter possessed original and exclusive
jurisdiction also over claims for moral and other forms of damages; this, in virtue
123

of Article 265 12 of PD 442, otherwise known as the Labor Code, effective from
May 1, 1974. In other words, in the proceedings before the Labor Arbiter,
Primero plainly had the right to plead and prosecute a claim not only for the
reliefs specified by the Labor Code itself for unlawful termination of employment,
but also for moral or other damages under the Civil Code arising from or
connected with that termination of employment. And this was the state of the
law when he moved for the dismissal of his claims before the Labor Arbiter, for
reinstatement and recovery of back wages, so that he might later file a damage
suit "in a civil court which has exclusive jurisdiction over his complaint ... founded
on tortious acts, breach of employment contract ... and consequent effects
(thereof)." 13
The legislative intent appears clear to allow recovery in proceedings before
Labor Arbiters of moral and other forms of damages, in all cases or matters
arising from employer-employee relations. This would no doubt include,
particularly, instances where an employee has been unlawfully dismissed. In
such a case the Labor Arbiter has jurisdiction to award to the dismissed
employee not only the reliefs specifically provided by labor laws, but also moral
and other forms of damages governed by the Civil Code. Moral damages would
be recoverable, for example, where the dismissal of the employee was not only
effected without authorized cause and/or due process for which relief is granted
by the Labor Code but was attended by bad faith or fraud, or constituted an
act oppressive to labor, or was done in a manner contrary to morals, good
customs or public policy 14 for which the obtainable relief is determined by
the Civil Code 15 (not the Labor Code). Stated otherwise, if the evidence
adduced by the employee before the Labor Arbiter should establish that the
employer did indeed terminate the employee's services without just cause or
without according him due process, the Labor Arbiter's judgment shall be for the
employer to reinstate the employee and pay him his back wages or,
exceptionally, for the employee simply to receive separation pay. These are
reliefs explicitly prescribed by the Labor Code. 16 But any award of moral
damages by the Labor Arbiter obviously cannot be based on the Labor Code but
should be grounded on the Civil Code. Such an award cannot be justified solely
upon the premise (otherwise sufficient for redress under the Labor Code) that
the employer fired his employee without just cause or due process. Additional
facts must be pleaded and proven to warrant the grant of moral damages under
the Civil Code, these being, to repeat, that the act of dismissal was attended by
bad faith or fraud, or was oppressive to labor, or done in a manner contrary to
morals, good customs, or public policy; and, of course, that social humiliation,
wounded feelings, grave anxiety, etc., resulted therefrom. 17
It is clear that the question of the legality of the act of dismissal is intimately
related to the issue of the legality of the manner by which that act of dismissal
was performed. But while the Labor Code treats of the nature of, and the remedy
available as regards the first the employee's separation from employment
CIVIL PROCEDURE CASES SESSION 2
it does not at all deal with the second the manner of that separation which
is governed exclusively by the Civil Code. In addressing the first issue, the Labor
Arbiter applies the Labor Code; in addressing the second, the Civil Code. And
this appears to be the plain and patent intendment of the law. For apart from the
reliefs expressly set out in the Labor Code flowing from illegal dismissal from
employment, no other damages may be awarded to an illegally dismissed
employee other than those specified by the Civil Code. Hence, the fact that the
issue-of whether or not moral or other damages were suffered by an employee
and in the affirmative, the amount that should properly be awarded to him in the
circumstances-is determined under the provisions of the Civil Code and not the
Labor Code, obviously was not meant to create a cause of action independent
of that for illegal dismissal and thus place the matter beyond the Labor Arbiter's
jurisdiction.
Thus, an employee who has been illegally dismissed (i.e., discharged without
just cause or being accorded due process), in such a manner as to cause him
to suffer moral damages (as determined by the Civil Code), has a cause of
action for reinstatement and recovery of back wages and damages. When he
institutes proceedings before the Labor Arbiter, he should make a claim for all
said reliefs. He cannot, to be sure, be permitted to prosecute his claims
piecemeal. He cannot institute proceedings separately and contemporaneously
in a court of justice upon the same cause of action or a part thereof. He cannot
and should not be allowed to sue in two forums: one, before the Labor Arbiter
for reinstatement and recovery of back wages, or for separation pay, upon the
theory that his dismissal was illegal; and two, before a court of justice for
recovery of moral and other damages, upon the theory that the manner of his
dismissal was unduly injurious, or tortious. This is what in procedural law is
known as splitting causes of action, engendering multiplicity of actions. It is
against such mischiefs that the Labor Code amendments just discussed are
evidently directed, and it is such duplicity which the Rules of Court regard as
ground for abatement or dismissal of actions, constituting either litis pendentia
(auter action pendant) or res adjudicata, as the case may be. 18 But this was
precisely what Primero's counsel did. He split Primero's cause of action; and he
made one of the split parts the subject of a cause of action before a court of
justice. Consequently, the judgment of the Labor Arbiter granting Primero
separation pay operated as a bar to his subsequent action for the recovery of
damages before the Court of First Instance under the doctrine of res judicata,
The rule is that the prior "judgment or order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties and their successors in interest by title
subsequent to the commencement of the action or special proceeding, litigating
for the same thing and under the same title and in the same capacity. 19
We are not unmindful of our previous rulings on the matter cited in the dissent
to the decision of the Court of Appeals subject of the instant
124

20
petition, notably, Quisaba v. Sta Ines-Melale Veneer & Plywood Inc., where a
distinction was drawn between the right of the employer to dismiss an employee,
which was declared to be within the competence of labor agencies to pass upon,
and the "manner in which the right was exercised and the effects flowing
therefrom," declared to be a matter cognizable only by the regular courts
because "intrinsically civil." 21 We opine that it is this very distinction which the
law has sought to eradicate as being so tenuous and so difficult to
observe, 22 and, of course, as herein pointed out, as giving rise to split
jurisdiction, or to multiplicity of actions, "a situation obnoxious to the orderly
administration of justice. 23 Actually we merely reiterate in this decision the
doctrine already laid down in other cases (Garcia v. Martinez, 84 SCRA 577;
Ebon v. de Guzman, 13 SCRA 52; Bengzon v. Inciong, 91 SCRA 248; Pepsi-
Cola Bottling Co. v. Martinez, 112 SCRA 578; Aguda v. Vallejos, 113 SCRA 69;
Getz v. C.A., 116 SCRA 86; Cardinal Industries v. Vallejos, 114 SCRA 471;
Sagmit v. Sibulo, 133 SCRA 359) to the effect that the grant of jurisdiction to the
Labor Arbiter by Article 217 of the Labor Code is sufficiently comprehensive to
include claims for moral and exemplary damages sought to be recovered from
an employer by an employee upon the theory of his illegal dismissal. Rulings to
the contrary are deemed abandoned or modified accordingly.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
G.R. No. 72644 December 14, 1987
ALFREDO F. PRIMERO vs. IAC and DM TRANSIT
The question on which the petitioner's success in the instant appeal depends,
and to which he would have us give an affirmative answer, is whether or
not, having recovered separation pay by judgment of the Labor Arbiter which
held that he had been fired by respondent DM Transit Corporation without just
cause he may subsequently recover moral damages by action in a regular
court, upon the theory that the manner of his dismissal from employment was
tortious and therefore his cause of action was intrinsically civil in nature.
Petitioner Primero was discharged from his employment as bus driver of DM
Transit Corporation (hereafter, simply DM) in August, 1974 after having been
employed therein for over 6 years. The circumstances attendant upon that
dismissal are recounted by the Court of Appeals 1 as follows:
Undisputably, since August 1, 1974, appellee's bus dispatcher
did not assign any bus to be driven by appellant Primero. No
reason or cause was given by the dispatcher to appellant for
not assigning a bus to the latter for 23 days (pp. 6-14, 21-22,
tsn, May 15, 1979).
CIVIL PROCEDURE CASES SESSION 2
Also, for 23 days, appellant was given a run-around from one
management official to another, pleading that he be allowed to
work as his family was in dire need of money and at the same
time inquiring (why) he was not allowed to work or drive a bus
of the company. Poor appellant did not only get negative results
but was given cold treatment, oftentimes evaded and given
confusing information, or ridiculed, humiliated, or sometimes
made to wait in the offices of some management personnel of
the appellee (pp. 2-29, tsn, May 15, 1979).
(The) General Manager and (the) Vice-President and Treasurer
... wilfully and maliciously made said appellant ... seesaw or ...
go back and forth between them for not less than ten (10) times
within a period of 23 days ... but (he) got negative results from
both corporate officials. Worse, on the 23rd day of his ordeal
appellant was suddenly told by General Manager Briones to
seek employment with other bus companies because he was
already dismissed from his job with appellee (without having
been) told of the cause of his hasty and capricious dismissal ...
(pp. 8, 11-13, 25, tsn, May 15, 1979).
Impelled to face the harsh necessities of life as a jobless person
and worried by his immediate need for money, appellant
pleaded with Corporate President Demetrio Munoz, Jr. for his
reinstatement and also asked P300.00 as financial assistance,
but the latter told the former that he (Munoz, Jr.) will not give
him even one centavo and that should appellant sue him in
court, then that will be the time President Munoz, Jr. will pay
him, if Munoz, Jr. loses the case x x (pp. 21-22, tsn, May 15,
1979).
Appellant also advised (the) President of the oppressive, anti-
social and inhumane acts of subordinate officers ... (but)
Munoz, Jr. did nothing to resolve appellant's predicament and
... just told the latter to go back ... to ... Briones, who insisted
that appellant seek employment with other bus firms in Metro
Manila ... (but) admitted that the appellant has not violated any
company rule or regulation ... (pp. 23-26, tsn, May 15, 1979).
... In pursuance (of) defendant's determination to oppress
plaintiff and cause further loss, irreparable injury, prejudice and
damage, (D.M. Transit) in bad faith and with malice persuaded
other firms (California Transit, Pascual Lines, De Dios Transit,
Negrita Corporation, and MD Transit) not to employ (appellant)
125

in any capacity after he was already unjustly dismissed by said
defendant ... (paragraph 8 of plaintiff's complaint).
These companies with whom appellant applied for a job called
up the D.M. Transit Office (which) ... told them ... that they
should not accept (appellant) because (he) was dismissed from
that Office.
Primero instituted proceedings against DM with the Labor Arbiters of the
Department of Labor, for illegal dismissal, and for recovery of back wages and
reinstatement. It is not clear from the record whether these proceedings
consisted of one or two actions separately filed. What is certain is that he
withdrew his claims for back wages and reinstatement, "with the end in view of
filing a damage suit" "in a civil court which has exclusive jurisdiction over his
complaint for damages on causes of action founded on tortious acts, breach of
employment contract ... and consequent effects (thereof ). 2
In any case, after due investigation, the Labor Arbiter rendered judgment dated
January 24, 1977 ordering DM to pay complainant Primero P2,000.00 as
separation pay in accordance with the Termination Pay Law. 3 The judgment
was affirmed by the National Labor Relations Commission and later by the
Secretary of Labor, the case having been concluded at this level on March 3,
1978. 4
Under the provisions of the Labor Code in force at that time, Labor Arbiters had
jurisdiction inter alia over
1) claims involving non-payment or underpayment of wages,
overtime compensation, social security and medicare benefits,
and
2) all other cases or matters arising from employer-employee
relations, unless otherwise expressly excluded. 5
And we have since held that under these "broad and comprehensive" terms of
the law, Labor Arbiters possessed original jurisdiction over claims for moral and
other forms of damages in labor disputes. 6
The jurisdiction of Labor Arbiters over such claims was however removed by PD
1367, effective May 1, 1978, which explicitly provided that "Regional Directors
shall not indorse and Labor Arbiters shall not entertain claims for moral or other
forms of damages." 7
CIVIL PROCEDURE CASES SESSION 2
Some three months afterwards, Primero brought suit against DM in the Court of
First Instance of Rizal seeking recovery of damages caused not only by the
breach of his employment contract, but also by the oppressive and inhuman,
and consequently tortious, acts of his employer and its officers antecedent and
subsequent to his dismissal from employment without just cause. 8
While this action was pending in the CFI, the law governing the Labor Arbiters'
jurisdiction was once again revised. The amending act was PD 1691, effective
May 1, 1980. It eliminated the restrictive clause placed by PD 1367, that
Regional Directors shall not indorse and Labor Arbiters entertain claims for
moral or other forms of damages. And, as we have had occasion to declare in
several cases, it restored the principle that "exclusive and original jurisdiction for
damages would once again be vested in labor arbiters;" eliminated "the rather
thorny question as to where in labor matters the dividing line is to be drawn
between the power lodged in an administrative body and a court;' " and, "in the
interest of greater promptness in the disposition of labor matters, ... spared
(courts of) the often onerous task of determining what essentially is a factual
matter, namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from employer-
employee relations." 9Parenthetically, there was still another amendment of the
provision in question which, however, has no application to the case at bar. The
amendment was embodied in B.P. Blg. 227, effective June 1, 1982. 10
On August 11, 1980 the Trial Court rendered judgment dismissing the complaint
on the ground of lack of jurisdiction, for the reason that at the time that the
complaint was filed. on August 17, 1978, the law the Labor Code as amended
by PD 1367, eff. May 1, 1978 conferred exclusive, original jurisdiction over
claims for moral or other damages, not on ordinary courts, but on Labor Arbiters.
This judgment was affirmed by the Intermediate Appellate Court, by Decision
rendered on June 29, 1984. This is the judgment now subject of the present
petition for review on certiorari. The decision was reached by a vote of 3 to 2.
The dissenters, placing reliance on certain of our pronouncements, opined that
Primero's causes of action were cognizable by the courts, that existence of
employment relations was not alone decisive of the issue of jurisdiction, and that
such relations may indeed give rise to "civil" as distinguished from purely labor
disputes, as where an employer's right to dismiss his employee is exercised
tortiously, in a manner oppressive to labor, contrary to morals, good customs or
public policy. 11
Primero has appealed to us from this judgment of the IAC praying that we
overturn the majority view and sustain the dissent.
126

Going by the literal terms of the law, it would seem clear that at the time that
Primero filed his complaints for illegal dismissal and recovery of backwages, etc.
with the Labor Arbiter, the latter possessed original and exclusive
jurisdiction also over claims for moral and other forms of damages; this, in virtue
of Article 265 12 of PD 442, otherwise known as the Labor Code, effective from
May 1, 1974. In other words, in the proceedings before the Labor Arbiter,
Primero plainly had the right to plead and prosecute a claim not only for the
reliefs specified by the Labor Code itself for unlawful termination of employment,
but also for moral or other damages under the Civil Code arising from or
connected with that termination of employment. And this was the state of the
law when he moved for the dismissal of his claims before the Labor Arbiter, for
reinstatement and recovery of back wages, so that he might later file a damage
suit "in a civil court which has exclusive jurisdiction over his complaint ... founded
on tortious acts, breach of employment contract ... and consequent effects
(thereof)." 13
The legislative intent appears clear to allow recovery in proceedings before
Labor Arbiters of moral and other forms of damages, in all cases or matters
arising from employer-employee relations. This would no doubt include,
particularly, instances where an employee has been unlawfully dismissed. In
such a case the Labor Arbiter has jurisdiction to award to the dismissed
employee not only the reliefs specifically provided by labor laws, but also moral
and other forms of damages governed by the Civil Code. Moral damages would
be recoverable, for example, where the dismissal of the employee was not only
effected without authorized cause and/or due process for which relief is granted
by the Labor Code but was attended by bad faith or fraud, or constituted an
act oppressive to labor, or was done in a manner contrary to morals, good
customs or public policy 14 for which the obtainable relief is determined by
the Civil Code 15 (not the Labor Code). Stated otherwise, if the evidence
adduced by the employee before the Labor Arbiter should establish that the
employer did indeed terminate the employee's services without just cause or
without according him due process, the Labor Arbiter's judgment shall be for the
employer to reinstate the employee and pay him his back wages or,
exceptionally, for the employee simply to receive separation pay. These are
reliefs explicitly prescribed by the Labor Code. 16 But any award of moral
damages by the Labor Arbiter obviously cannot be based on the Labor Code but
should be grounded on the Civil Code. Such an award cannot be justified solely
upon the premise (otherwise sufficient for redress under the Labor Code) that
the employer fired his employee without just cause or due process. Additional
facts must be pleaded and proven to warrant the grant of moral damages under
the Civil Code, these being, to repeat, that the act of dismissal was attended by
bad faith or fraud, or was oppressive to labor, or done in a manner contrary to
morals, good customs, or public policy; and, of course, that social humiliation,
wounded feelings, grave anxiety, etc., resulted therefrom. 17
CIVIL PROCEDURE CASES SESSION 2
It is clear that the question of the legality of the act of dismissal is intimately
related to the issue of the legality of the manner by which that act of dismissal
was performed. But while the Labor Code treats of the nature of, and the remedy
available as regards the first the employee's separation from employment
it does not at all deal with the second the manner of that separation which
is governed exclusively by the Civil Code. In addressing the first issue, the Labor
Arbiter applies the Labor Code; in addressing the second, the Civil Code. And
this appears to be the plain and patent intendment of the law. For apart from the
reliefs expressly set out in the Labor Code flowing from illegal dismissal from
employment, no other damages may be awarded to an illegally dismissed
employee other than those specified by the Civil Code. Hence, the fact that the
issue-of whether or not moral or other damages were suffered by an employee
and in the affirmative, the amount that should properly be awarded to him in the
circumstances-is determined under the provisions of the Civil Code and not the
Labor Code, obviously was not meant to create a cause of action independent
of that for illegal dismissal and thus place the matter beyond the Labor Arbiter's
jurisdiction.
Thus, an employee who has been illegally dismissed (i.e., discharged without
just cause or being accorded due process), in such a manner as to cause him
to suffer moral damages (as determined by the Civil Code), has a cause of
action for reinstatement and recovery of back wages and damages. When he
institutes proceedings before the Labor Arbiter, he should make a claim for all
said reliefs. He cannot, to be sure, be permitted to prosecute his claims
piecemeal. He cannot institute proceedings separately and contemporaneously
in a court of justice upon the same cause of action or a part thereof. He cannot
and should not be allowed to sue in two forums: one, before the Labor Arbiter
for reinstatement and recovery of back wages, or for separation pay, upon the
theory that his dismissal was illegal; and two, before a court of justice for
recovery of moral and other damages, upon the theory that the manner of his
dismissal was unduly injurious, or tortious. This is what in procedural law is
known as splitting causes of action, engendering multiplicity of actions. It is
against such mischiefs that the Labor Code amendments just discussed are
evidently directed, and it is such duplicity which the Rules of Court regard as
ground for abatement or dismissal of actions, constituting either litis pendentia
(auter action pendant) or res adjudicata, as the case may be. 18 But this was
precisely what Primero's counsel did. He split Primero's cause of action; and he
made one of the split parts the subject of a cause of action before a court of
justice. Consequently, the judgment of the Labor Arbiter granting Primero
separation pay operated as a bar to his subsequent action for the recovery of
damages before the Court of First Instance under the doctrine of res judicata,
The rule is that the prior "judgment or order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties and their successors in interest by title
127

subsequent to the commencement of the action or special proceeding, litigating
for the same thing and under the same title and in the same capacity. 19
We are not unmindful of our previous rulings on the matter cited in the dissent
to the decision of the Court of Appeals subject of the instant
petition, 20 notably, Quisaba v. Sta Ines-Melale Veneer & Plywood Inc., where a
distinction was drawn between the right of the employer to dismiss an employee,
which was declared to be within the competence of labor agencies to pass upon,
and the "manner in which the right was exercised and the effects flowing
therefrom," declared to be a matter cognizable only by the regular courts
because "intrinsically civil." 21 We opine that it is this very distinction which the
law has sought to eradicate as being so tenuous and so difficult to
observe, 22 and, of course, as herein pointed out, as giving rise to split
jurisdiction, or to multiplicity of actions, "a situation obnoxious to the orderly
administration of justice. 23 Actually we merely reiterate in this decision the
doctrine already laid down in other cases (Garcia v. Martinez, 84 SCRA 577;
Ebon v. de Guzman, 13 SCRA 52; Bengzon v. Inciong, 91 SCRA 248; Pepsi-
Cola Bottling Co. v. Martinez, 112 SCRA 578; Aguda v. Vallejos, 113 SCRA 69;
Getz v. C.A., 116 SCRA 86; Cardinal Industries v. Vallejos, 114 SCRA 471;
Sagmit v. Sibulo, 133 SCRA 359) to the effect that the grant of jurisdiction to the
Labor Arbiter by Article 217 of the Labor Code is sufficiently comprehensive to
include claims for moral and exemplary damages sought to be recovered from
an employer by an employee upon the theory of his illegal dismissal. Rulings to
the contrary are deemed abandoned or modified accordingly.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by
its Plant General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB,
IRENEO BALTAZAR & JORGE HERAYA vs. HON. LOLITA O. GAL-LANG,
SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAAS &
FULGENCIO LEGO
The question now before us has been categorically resolved in earlier decisions
of the Court that a little more diligent research would have disclosed to the
petitioners. On the basis of those cases and the facts now before us, the petition
must be denied.
The private respondents were employees of the petitioner who were suspected
of complicity in the irregular disposition of empty Pepsi Cola bottles. On July 16,
1987, the petitioners filed a criminal complaint for theft against them but this was
later withdrawn and substituted with a criminal complaint for falsification of
private documents. On November 26, 1987, after a preliminary investigation
CIVIL PROCEDURE CASES SESSION 2
conducted by the Municipal Trial Court of Tanauan, Leyte, the complaint was
dismissed. The dismissal was affirmed on April 8, 1988, by the Office of the
Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private
respondents were dismissed by the petitioner company on November 23, 1987.
As a result, they lodged a complaint for illegal dismissal with the Regional
Arbitration Branch of the NLRC in Tacloban City on December 1, 1987, and
decisions manded reinstatement with damages. In addition, they instituted in the
Regional Trial Court of Leyte, on April 4, 1988, a separate civil complaint against
the petitioners for damages arising from what they claimed to be their malicious
prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial
court had no jurisdiction over the case because it involved employee-employer
relations that were exclusively cognizable by the labor arbiter. The motion was
granted on February 6, 1989. On July 6, 1989, however, the respondent judge,
acting on the motion for reconsideration, reinstated the complaint, saying it was
"distinct from the labor case for damages now pending before the labor courts."
The petitioners then came to this Court for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions
of this Court to support their position that the private respondents civil complaint
for damages falls under the jurisdiction of the labor arbiter. They particularly cite
the case of Getz Corporation v. Court of Appeals, 1 where it was held that a
court of first instance had no jurisdiction over the complaint filed by a dismissed
employee "for unpaid salary and other employment benefits, termination pay
and moral and exemplary damages."
We hold at the outset that the case is not in point because what was involved
there was a claim arising from the alleged illegal dismissal of an employee, who
chose to complain to the regular court and not to the labor arbiter. Obviously,
the claim arose from employee-employer relations and so came under Article
217 of the Labor Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The
Labor Arbiters shall have the original and exclusive jurisdiction to hear
and decide within thirty (30) working days after submission of the case
by the parties for decision, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
128

2. Those that workers may file involving wages, hours of work and other
terms and conditions of employment;
3. All money claims of workers, including those based on non-payment
or underpayment of wages, overtime compensation, separation pay and
other benefits provided by law or appropriate agreement, except claims
for employees' compensation, social security, medicare and maternity
benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including
questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by labor Arbiters. 2
It must be stressed that not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This will be so only if there
is a "reasonable causal connection" between the claim asserted and employee-
employer relations to put the case under the provisions of Article 217. Absent
such a link, the complaint will be cognizable by the regular courts of justice in
the exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First
Instance of Rizal a civil complaint for damages against their employer for
slanderous remarks made against them by the company president. On the order
dismissing the case because it came under the jurisdiction of the labor arbiters,
Justice Vicente Abad Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not alleged any
unfair labor practice. Theirs is a simple action for damages for tortious
acts allegedly committed by the defendants. Such being the case, the
governing statute is the Civil Code and not the Labor Code. It results
that the orders under review are based on a wrong premise.
4
In Singapore Airlines Ltd. v. Pao, where the plaintiff was suing for damages
for alleged violation by the defendant of an "Agreement for a Course of
Conversion Training at the Expense of Singapore Airlines Limited," the
jurisdiction of the Court of First Instance of Rizal over the case was questioned.
The Court, citing the earlier case of Quisaba v. Sta. Ines Melale Veneer and
Plywood, Inc., 5 declared through Justice Herrera:
CIVIL PROCEDURE CASES SESSION 2
Stated differently, petitioner seeks protection under the civil laws and
claims no benefits under the Labor Code. The primary relief sought is
for liquidated damages for breach of a contractual obligation. The other
items demanded are not labor benefits demanded by workers generally
taken cognizance of in labor disputes, such as payment of wages,
overtime compensation or separation pay. The items claimed are the
natural consequences flowing from breach of an obligation, intrinsically
a civil dispute.
In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the
claim of the plaintiff against its sales manager for payment of certain accounts
pertaining to his purchase of vehicles and automotive parts, repairs of such
vehicles, and cash advances from the corporation was properly cognizable by
the Regional Trial Court of Dagupan City and not the labor arbiter, because
"although a controversy is between an employer and an employee, the Labor
Arbiters have nojurisdiction if the Labor Code is not involved."
The latest ruling on this issue is found in San Miguel Corporation v.
NLRC, 7 where the above cases are cited and the changes in Article 217 are
recounted. That case involved a claim of an employee for a P60,000.00 prize
for a proposal made by him which he alleged had been accepted and
implemented by the defendant corporation in the processing of one of its beer
products. The claim was filed with the labor arbiter, who dismissed it for lack of
jurisdiction but was reversed by the NLRC on appeal. In setting aside the
appealed decision and dismissing the complaint, the Court observed through
Justice Feliciano:
It is the character of the principal relief sought that appears essential, in
this connection. Where such principal relief is to be granted under labor
legislation or a collective bargaining agreement, the case should fall
within the jurisdiction of the Labor Arbiter and the NLRC, even though
a claim for damages might be asserted as an incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and
not to the Labor Arbiter and the NLRC. In such situations, resolution of
the dispute requires expertise, not in labor management relations nor in
wage structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily ascribed to Labor
129

Arbiters and the NLRC and the rationale for granting jurisdiction over
such claims to these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all money claims of workers," it is
not necessary to suppose that the entire universe of money claims that
might be asserted by workers against their employers has been
absorbed into the original and exclusive jurisdiction of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which do not
arise out of or in connection with their employer-employee relationship,
and which would therefore fall within the general jurisdiction of the
regular courts of justice, were intended by the legislative authority to be
taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis. The Court, therefore, believes and so
holds that the 'money claims of workers" referred to in paragraph 3 of
Article 217 embraces money claims which arise out of or in connection
with the employer- employee relationship, or some aspect or incident of
such relationship. Put a little differently, that money claims of workers
which now fall within the original and exclusive jurisdiction of Labor
Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious
prosecution which was filed with the Regional Trial Court of Leyte by the
employees of the defendant company. It does not appear that there is a
"reasonable causal connection" between the complaint and the relations of the
parties as employer and employees. The complaint did not arise from such
relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor
practice is asserted. What the employees are alleging is that the petitioners
acted with bad faith when they filed the criminal complaint which the Municipal
Trial Court said was intended "to harass the poor employees" and the dismissal
of which was affirmed by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the respondents herein have
committed the crime imputed against them." This is a matter which the labor
arbiter has no competence to resolve as the applicable law is not the Labor
Code but the Revised Penal Code.
"Talents differ, all is well and wisely put," so observed the philosopher-poet. 8 So
it must be in the case we here decide.
CIVIL PROCEDURE CASES SESSION 2
WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the petition
DENIED, with costs against the petitioner. SO ORDERED.
G.R. No. 70174 February 9, 1993
JOSE TIPAIT, SUBSTITUTED BY JOEL S. TIPAIT, MONTANO S. TIPAIT,
JOSE S. TIPAIT, HELEN S. TIPAIT, EVELYN S. TIPAIT and BEATRIZ S.
TIPAIT vs. HON. JUAN Y. REYES, REGIONAL TRIAL COURT JUDGE, 7th
JUDICIAL REGION AND SPOUSES ANGEL C. VELOSO AND MILAGROS
ESCANO VELOSO
This refers to a petition for certiorari to annul all orders issued by respondent
judge in Civil Case No. R-20975 of the then Court of First Instance (now
Regional Trial Court) of Cebu. On March 27, 1985, this Court issued a resolution
considering the spouses Angel C. Veloso and Milagros Escano Veloso
impleaded as respondents (p. 45, Rollo).
The record reveals the following antecedent facts:
On October 7, 1976, laborers Faustino Garbo, Certerio Garbo, Arcenio Alum,
Genaro Requizo, Expedito Armenteros, William Campana, and Ramos Faura
filed a complaint (p. 12, Rollo), docketed a TFU Case No. 536 of the Regional
Office No. VII of the Department of Labor, Cebu City, for illegal dismissal or
reinstatement with backwages, living allowance, and overtime pay against M.E.
Veloso Enterprises and/or Milagros Escano Veloso and/or Angel Veloso.
On October 20, 1976, Regional Director Francisco Armado issued an order
(Annex E, Petition, pp. 13-14, Rollo) against private respondents and M.E.
Veloso Enterprises to reinstate complainants and remunerate them overtime-
pay and emergency allowance.
Private respondents and M.E. Veloso Enterprises filed a motion for
reconsideration (Annex F, Petition, pp. 15-18, Rollo) of the order of October 20,
1976. On December 6, 1976, the Regional Director issued an order (Annex G,
Petition, p. 19, Rollo) setting aside the order of October 20, 1976 and reopening
the case for the reception of additional evidence.
After the parties had submitted their evidence, the Regional Director issued an
order dated February 3, 1977 (Annex H, Petition, pp. 20-22, Rollo) reiterating
his previous order directing respondents therein to reinstate the complainants
and to pay them overtime pay and emergency allowance. Respondents
appealed to the Minister of Labor. On October 18, 1979, the Minister of Labor
rendered a decision (Annex C, Petition, pp. 9-11, Rollo) dismissing the appeal.
Private respondents filed a motion for reconsideration which was denied by the
Minister of Labor in an order dated July 1, 1981. A second motion for
130

reconsideration was filed by private respondents and said second motion for
reconsideration was denied by the Deputy Minister, by authority of the Minister,
in an order dated January 25, 1985 (Annex 3, Private Respondents' Comment,
p. 71, Rollo). In said order the Deputy Minister directed the issuance of a writ of
execution.
Private respondents appealed to the Office of the President. On August 18,
1985, Presidential Assistant for Legal Affairs Manuel Lazaro, by authority of the
President, issued an order denying the appeal (p. 108, Rollo).
In the meantime, on August 18, 1981, the Office of the Minister of Labor
remanded the record of the case to the Regional Director for execution and/or
appropriate action (Answer of Regional Director, Annex J of Petition. p.
34, Rollo). On September 18, 1981, the Regional Director issued a writ of
execution (Annex B, Petition, p. 8, Rollo) and a notice of auction sale was issued
by the Provincial Sheriff involving 4 parcels of land with improvements (Annex
6, Respondents' Comment, pp. 74-75, Rollo). At the auction sale, the highest
bidder was petitioner herein who paid the amount of P100,000.00 to the Deputy
Sheriff and the latter issued a certificate of sale dated December 19, 1981
(Annex A, Respondents' Comment, pp. 83-84, Rollo).
On September 28, 1981, private respondents filed a complaint docketed as Civil
Case No. R-20975 of the Court of First Instance of Cebu (Annex I of Petition,
pp. 23-30, Rollo) for prohibition, praying that the Provincial Sheriff or his
deputies be restrained from enforcing or implementing the writ of execution
issued in TFU Case No. 536 and that said writ of execution be annulled. On
June 11, 1982, respondent judge issued an order (Annex A of Petition, pp. 6-
7, Rollo) nullifying the public auction sale and the Certificate of Sale.
Hence, petitioner (now substituted by his heirs, Resolution of March 8, 1989, p.
171, Rollo) filed the present petition, contending that respondent court has no
jurisdiction over Civil Case No. R-20975.
The petition is impressed with merit.
It is readily apparent that respondent court has no jurisdiction over Civil Case
No. R-20975 whose subject-matter is an incident of a labor case. Actually, said
civil case is in the nature of a motion to quash the writ of execution issued in
TFU Case No. 536, a labor case over which the Regional Director of the
Department of Labor has original and exclusive jurisdiction (Article 217, Labor
Code of the Philippines, as amended, Policy Instructions No. 6 of the Minister
of Labor). This Court in a similar case held:
CIVIL PROCEDURE CASES SESSION 2
A perusal of the petition for damages and prohibition filed by Saulog
Transit, Inc. in the lower court reveals that basically, what was being
questioned was the legality or propriety of the alias writ of execution
dated March 1, 1985, as well as the acts performed by the Ministry
officials in implementing the same. In other words, the petition was
actually in the nature of a motion to quash the writ; and with respect to
the acts of the Ministry officials, a case growing out of a labor dispute,
as the acts complained of, were perpetrated during the execution of a
decision of the then Minister of Labor and Employment. However
characterized, jurisdiction over the petition pertains to the Labor
Ministry, now Department and not the regular courts. This conclusion is
evident, not only from the provisions of Article 224 [b] of the Labor Code,
but also of Article 218, as amended by Batas Pambansa Blg. 227 in
connection with Article 255 of the same Code. (Pucan vs. Bengzon, 155
SCRA 692, 699 [1987]).
The proper remedy that private respondents should have taken, instead of
instituting Civil Case No. R-20975, was to file the necessary petition or motion
before the Secretary of Labor who has the power and authority to take any
measure under existing laws to ensure compliance with the decisions, orders
and awards of the Department of Labor. Despite the finality of the decision of
the Regional Director, the Secretary of Labor retains control over its execution
and implementation (Pucan vs. Bengzon, supra).
WHEREFORE, respondent court is hereby ordered to DISMISS Civil Case No.
R-20975 for lack of jurisdiction and all orders previously issued therein are
hereby ANNULLED and SET ASIDE.
Costs against private respondents. SO ORDERED.
G.R. No. 92598 May 20, 1994
PURIFICACION Y. MANLIGUEZ, ANTONINA Y. LUIS and BENJAMIN C.
YBANEZ vs. CA
This is an appeal by certiorari from the Decision of the Court of Appeals, 1 dated
November 16, 1989, denying due course to and dismissing the petition in CA-
G.R. SP NO. 18017. 2
The case at bench finds its roots in the Decision of the Department of Labor and
Employment (Region VII), ordering Inductocast Cebu, a partnership based in
Mandaue City, to pay its former employees a total of P232,908.00. As a
consequence of the judgment, the labor department's regional sheriff levied the
buildings and improvements standing on Lot 109, Plan 11-5121-Amd., at Tipolo,
131

Mandaue City. The levied properties (hereinafter referred to as the "Tipolo
properties") were subsequently sold at public auction to said employees.
On May 25, 1988, petitioners filed with the RTC of Cebu City, 7th Judicial
Branch, a Complaint 3 which sought the lifting of the levy over, and annulment
of the sale of, the Tipolo properties. The Complaint was docketed as Civil Case
No. Ceb-6917, and raffled to Branch 8 of the trial court. Petitioners therein
alleged that: they are the owners of the Lot 109; they entered into a lease
agreement with Inductocast Cebu over Lot 109; the lease contract provided that,
except for machineries and equipment, all improvements introduced in the
leased premises shall automatically be owned by the Lessor (petitioners) upon
the expiration/termination of the contract; 4 the lease agreement was terminated
by petitioners in November, 1980 due to non-payment of rentals by Inductocast
Cebu; 5 thereafter, petitioners took actual possession of and occupied the Tipolo
properties. Petitioners likewise alleged in their Complaint that they became
aware of the labor dispute involving Inductocast only after the impugned public
auction sale. 6
Atty. Danilo Pilapil, claiming to be the John Doe named in the Complaint, filed a
motion to dismiss on the ground that the trial court had no jurisdiction over the
case. The buyers of the Tipolo properties, as intervenors, also filed a motion to
dismiss on the same ground. Both motions, which were opposed by petitioners,
were denied.
The intervenors, however, moved for reconsideration of the denial. In an Order
dated April 18, 1989, the trial court granted the motion and dismissed Civil Case
No. Ceb-6917. It held that the civil case "is actually in the nature of a quashal of
the levy and the certificate of sale, a case arising out of a dispute that was
instituted by the previous employees of Inductocast before the Department of
Labor and Employment, Region 7." 7 Citing Pucan vs. Bengzon, 155 SCRA 692
(1987), it held it had no jurisdiction over the case since the levy and sale "are
connected with the case within the exclusive jurisdiction of the Department of
Labor and Employment." 8
Petitioners questioned the dismissal of their Complaint to the respondent Court
of Appeals, through a petition for certiorari and preliminary injunction. 9 The
appellate court, in its impugned Decision, denied the petition as it held:
To Our minds, the issue on what forum the case must be tried or heard
is a settled one. The Department of Labor is the agency upon which
devolves the jurisdiction over disputes emanating from and in relation
with labor controversies to the exclusion of the regular courts.
CIVIL PROCEDURE CASES SESSION 2
The issue in the case at bar concerns the levy of a property in pursuance
to a writ of execution, arising out of labor disputes. There can be no
doubt that jurisdiction pertains to the Department of Labor.
xxx xxx xxx
In the light of the factual antecedents and incidents that transpired in
the hearing of this case at bar, the (trial court) correctly ruled that indeed
the Department of Labor has jurisdiction over the case. Consequently,
WE see no abuse of discretion let alone a grave one, amounting to lack
or in excess of its jurisdiction correctible with a writ of certiorari.
Indeed, the issue of granting or denying a motion to dismiss is
addressed to the sound discretion of the court, and in the absence of a
capricious and whimsical exercise of power, certiorari will not lie.
Thus, this appeal where petitioners contend:
THE RESPONDENT APPELLATE COURT ERRED IN HOLDING
THAT THE DEPARTMENT OF LABOR HAS JURISDICTION ON THE
SUBJECT MATTER AND NATURE OF THE CASE AS AGAINST THE
CIVIL COURT.
We find merit in the appeal. Firstly, respondent court erred in holding that the
trial court does not have jurisdiction over the case filed by petitioners. It is at
once evident that the Civil Case No. Ceb-6917 is not a labor case. No employer-
employee relationship exists between petitioners and the other parties, and no
issue is involved which may be resolved by reference to the Labor Code, other
labor statutes, or any collective bargaining agreement. Neither can we
characterize petitioner's action before the trial court as arising out of a labor
dispute. It was not brought to reverse or modify the judgment of the Department
of Labor and Employment (DOLE). Neither did it question the validity of, or pray
for, the quashal of the writ of execution against Inductocast.
What is to be litigated in Civil Case No. Ceb-6917 is the issue of ownership over
the Tipolo properties. Clearly, it is the RTC and not the labor department which
can take cognizance of the case, as provided by B.P. Blg. 129 ("An Act
Reorganizing the Judiciary, Appropriating Funds Therefor, and For Other
Purposes"), thus:
Sec. 19. Jurisdiction in civil case. Regional Trial Courts shall exercise
exclusive original jurisdiction:
132

xxx xxx xxx
(2) In all civil actions which involve the title to, or possession of real
property, or any interest therein, except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;
xxx xxx xxx
The action taken by petitioners before the RTC asserting their ownership over
the levied properties is mandated by Section 17, Rule 39 of the Revised Rules
of Court. Time and again, we have held that:
Under Section 17, Rule 39, a third person who claims property levied
upon on execution may vindicate such claim by action. . . . The right of
a person who claims to be the owner of property levied upon on
execution to file a third-party claim with the sheriff is not exclusive, and
he may file an action to vindicate his claim even if the judgment creditor
files an indemnity bond in favor of the sheriff to answer for any damages
that may be suffered by the third-party claimant. By "action", as stated
in the Rule, what is meant is a separate and independent action. 10
Secondly, it is incorrect to argue that the trial court cannot take cognizance of
Civil Case No. Ceb-6917 without interfering with the writ of attachment and writ
of execution of a co-equal body. It is settled that the levy and sale of property
by virtue of a writ of attachment is lawful only when the levied property
indubitably belongs to the defendant. If property other than those of the
defendant is attached and sold by the sheriff, he acts beyond the limits of his
and the court's authority. 11 In this regard, we held in the case of Uy, Jr. vs. Court
of Appeals, 191 SCRA 275 (1991) that:
The main issue in this case is whether or not properties levied and
seized by virtue of a writ of attachment and later by a writ of execution,
were under custodia legis and therefore not subject to the jurisdiction of
another co-equal court where a third party claimant claimed ownership
of the same properties.
The issue has long been laid to rest in the case of Manila Herald
Publishing Co., Inc. v. Ramos (88 Phil. 94 [1951]) where the Court ruled
that while it is true that property in custody of the law may not be
interfered with, without the permission of the proper court, this rule is
confined to cases where the property belongs to the defendant or one
in which the defendant has proprietary interests. But when the Sheriff,
CIVIL PROCEDURE CASES SESSION 2
acting beyond the bounds of his office seizes a stranger's property, the
rule does not apply and interference with his custody is not interference
with another court's order of attachment.
Also, in the more recent case of Santos vs. Bayhon, 199 SCRA 525 (1991), we
stated, viz.:
The general rule that no court has the power to interfere by injunction
with the judgments or decrees of another court with concurrent or
coordinate jurisdiction possessing equal power to grant injunctive relief,
applies only when no third-party claimant is involved. . . . When a third
party, or stranger to the action, asserts a claim over the property levied
upon, the claimant may vindicate his claim by an independent action in
the proper civil court which may stop the execution of the judgment on
property not belonging to the judgment debtor (Citations omitted.)
Finally, it must be noted that the Pucan case relied upon by respondent court is
inapplicable to the case at bench which involves a third-party claim over property
levied on execution. In Pucan, we enjoined the Regional Trial Court from acting
on the petition for damages and prohibition against the enforcement of the writ
of execution issued by the NCR director of the then Ministry of Labor and
Employment in a labor case for the following reason:
A perusal of the petition for damages and prohibition filed by Saulog
Transit, Inc., in the lower court reveals that basically, what was being
questioned was the legality or propriety of the alias writ of execution
dated March 1, 1985, as well as the acts performed by the Ministry
officials in implementing the same. In other words, the petition was
actually in the nature of a motion to quash the writ; and with respect to
the acts of the Ministry officials, a case growing out of a labor dispute,
as the acts complained of, were perpetrated during the execution of a
decision of the then Minister of Labor and Employment. However
characterized, jurisdiction over the petition pertains to the Labor
Ministry, now Department and not the regular courts. This conclusion is
evident, not only from the provisions of Article 224(b) of the Labor Code,
but also of
Article 218, as amended by Batas Pambansa Blg. 227 in connection
with Article 255 of the same Code.
xxx xxx xxx
Apparently, Saulog Transit, Inc. was misled by its own prayer for actual,
moral and exemplary damages. It believed that such additional cause
of action could clothe the petition with the mantle of a regular action
133

cognizable by the regular courts. It was, of course, mistaken for the fact
remains that the acts complained of are mere incidents of a labor
dispute. Such prayer therefore did not alter the complexion of the case
as one arising from a labor dispute, but was subsumed by the nature of
the main case, over which the regular courts had no jurisdiction, much
less the power to issue a temporary or permanent injunction or
restraining order. . . . 12
In fine, we prohibited the action before the trial court in Pucan because it
attacked the regularity of the issuance of the alias writ of execution in the labor
case, which is but an incident of the labor dispute. This is not so in the case at
bench where the civil case filed by petitioners does not even collaterally attack
the validity of the DOLE's writ of attachment. On the contrary, petitioners in Civil
Case No. Ceb-6917 pray for the trial court's ruling that the DOLE's judgment
could not be validly executed on the Tipolo properties, which allegedly do not
belong to Inductocast.
IN VIEW WHEREOF, the petition for review is GRANTED. The Decision of the
Court of Appeals in CA-G.R. SP No. 18017, dated November 16, 1989, is
REVERSED and SET ASIDE. The Regional Trial Court of Cebu City, Branch 8
is ordered to try Civil Case Ceb-6917 on its merit. No costs.
SO ORDERED.
A.M. No. RTJ-00-1574 March 28, 2001
GORGONIO S. NOVA vs. JUDGE SANCHO DAMES II, Regional Trial
Court, Branch 38, Daet, Camarines Norte
The case is a complaint1 against Judge Sancho Dames II, presiding judge,
Regional Trial Court, Camarines Norte, Branch 38, Daet, in connection with his
issuance of a temporary restraining order in Civil Case NO. 6859, entitled "Sps.
Cesar Barcelona and Vilma Jalgalado-Barcelona vs. Hon. Frustuoso T.
Aurellano, et al.", restraining NLRC Sheriff Norberto B. Meteoro from conducting
the scheduled public auction of real property of Vilma J. Barcelona levied on
execution pursuant to a final decision of the NLRC in NLRC RAB V Case NO.
05-12-00141-95, entitled Gorgonio C. Nova, complainant, vs. R. A.
Broadcasting Corporation, Vilma Jalgalado-Barcelona and Deo N. Trinidad,
respondents.
The complaint alleged that, in issuing the temporary restraining order,
respondent judge acted with gross ignorance of the law because regular courts
had no jurisdiction to hear and decide questions which arose and were incidental
to decisions, orders or awards rendered in labor cases.1wphi1.nt
CIVIL PROCEDURE CASES SESSION 2
The facts are as follows:
In 1995, complainant Gregorio S. Nova filed with the NLRC Regional Arbitration,
Branch V, Legaspi City, a complaint for illegal dismissal, underpayment of
wages, non-payment of holiday pay, rest day, overtime pay, 13thmonth pay and
other allowances, backwages, separation pay and damages against the R.A.
Broadcasting Corporation/Station DZRM, represented by its Vice President for
Operations Vilma J. Barcelona and Station Manager Deo Trinidad.2
On July 31, 1996, Labor Arbiter Fructuoso T. Aurellano rendered a judgment,
the dispositive portion of which reads:
"WHEREFORE, premises considered, judgment is hereby rendered
ordering R. A. BROADCASTING CORP./DZRM, VILMA J.
BARCELONA and DEO TRINIDAD to solidarily pay the complainant the
total sum of ONE HUNDRED ELEVEN THOUSAND SIX HUNDRED
SIXTY-NINE PESOS and 60/100 (P111,669.60).
"SO ORDERED."
In time, respondent appealed the decision to the NLRC in Quezon City.
On October 7, 1996, the NLRC dismissed the appeal. Respondent moved for
reconsideration but the NLRC denied the motion as it was filed out of time.
Aggrieved by the resolution, on March 12, 1997, respondent filed with this Court
a petition for certiorari.3 On March 17, 1997, the Court dismissed the petition
and also denied the motion for reconsideration thereafter filed.
The decision having become final, on January 7, 1998, the NLRC issued
an alias writ of execution. Pursuant thereto, on February 3, 1998, Labor Sheriff
Norberto B. Meteoro levied on real property belonging to Sps. Cesar and Vilma
Barcelona and scheduled the auction sale on June 16, 1998, at 10:00 a.m.
On June 9, 1998, Vilma J. Barcelona and her husband Cesar Barcelona filed
with the Regional Trial Court, Camarines Norte, Daet a civil action for damages
with temporary restraining order due to the wrongful attachment of their
property.4 This was raffled to Branch 38, presided over by respondent Judge.
On June 15, 1998, respondent Judge finding that there was extreme urgency
and that irreparable injury would result of the plaintiff before the matter can be
heard on notice, issued a temporary restraining order, restraining the NLRC
Sheriff from conducting the scheduled public auction on June 16, 1998.
134

Hence, on January 5, 1999, complainant filed this administrative charge against
Judge Sancho Dames II, alleging that the issuance of the temporary restraining
order constituted a violation of Article 254 of the Labor Code which prohibited
the issuance of temporary restraining order or preliminary injunction in a case
arising from a labor dispute. He further submitted that the regular courts had no
jurisdiction to hear and decide questions which arose and were incidental to the
decisions, orders or awards rendered in labor case.5
On April 28, 1999, the Court Administrator referred the complaint to respondent
judge for comment.6
In his answer filed on June 2, 1999, respondent judge claimed that he issued
the temporary restraining order to maintain the subject of controversy in status
quo until the hearing of the application for permanent injunction; that Vilma
Jalgalado-Barcelona, Vice-President for Operations, and Deo Trinidad, the
Station Manager, were ordered to solidarily pay with the defendant corporation
despite the fact that the corporation had a distinct personality from its officers;
that Cesar Barcelona, not being a judgment debtor, would lose his
property via public auction for an alleged labor dispute he had nothing to do with;
that injunction will lie to prevent alienation of conjugal property; that all properties
acquired during the marriage are presumed to belong to the conjugal
partnership property, thus the subject property belonged to the conjugal
partnership of spouses Cesar Barcelona and Vilma Jalgalado-Barcelona and
could not be alienated via public auction; that injunction to prevent a wrong
would be favored than a course requiring plaintiffs to wait and seek damages
after the wrong had been done; and that the instant case involved a judicial
question and thus, should be dismissed.7
We referred the case to Court of Appeals Associate Justice Remedios A.
Salazar-Fernando, for investigation.8
In her report and recommendation, Justice Fernando found that respondent
Judge was guilty of gross ignorance of the law because the regular courts in
that level had no jurisdiction or authority to issue injunction or temporary
restraining order in labor cases. She recommended that respondent Judge be
fined P10,000.00, with a stern warning that repetition of the same or similar acts
in the future would be dealt with more severely.
We find the recommendation of Justice Salazar-Fernando to be supported by
the record and we accept the same.
Regular courts have no jurisdiction to hear and decide questions which arise
and are incidental to the enforcement of decisions, orders or awards rendered
in labor cases by appropriate officers and tribunals of the Department of Labor
CIVIL PROCEDURE CASES SESSION 2
and Employment.9 Corollarily, any controversy in the execution of the judgment
shall be referred to the tribunal which issued the writ of execution since it has
the inherent power to control its own processes in order to enforce its judgments
and orders.10
True, an action for damages lies within the jurisdiction 11 of a regional trial
court.12 However, the regional trial court has no jurisdiction to issue a temporary
restraining order in labor cases. Indeed, the respondent Judge restrained the
execution of a final decision of the labor arbiter, which he can not lawfully do.
Justice Malcolm aptly described ideal judges as "men who have a mastery of
the principles of law, who discharge their duties in accordance with law, who are
permitted to perform the duties of the office undeterred by outside influence, and
who are independent and self-respecting human units in a judicial system equal
and coordinate to the other two departments of government."13 Those who wield
the judicial gavel have the duty to study the laws and their latest wrinkles. They
owe it to the public to be legally knowledgeable with basic laws and principles,
for ignorance of the law is the bane of injustice.
WHEREFORE, the Court finds respondent Judge Sancho Dames II GUILTY of
gross ignorance of the law and imposes on him a FINE of Ten Thousand Pesos
(P10,000.00), payable within thirty (30) days from notice, with WARNING that a
repetition of similar acts shall be dealt with more severely.1wphi1.nt
SO ORDERED.
G.R. No. 149578 April 10, 2003
EVELYN TOLOSA vs. NLRC QWANA KAIUN (through its resident-agent,
FUMIO NAKAGAWA), ASIA BULK TRANSPORT PHILS. INC., PEDRO
GARATE and MARIO ASIS
As a rule, labor arbiters and the National Labor Relations Commission have no
power or authority to grant reliefs from claims that do not arise from employer-
employee relations. They have no jurisdiction over torts that have no reasonable
causal connection to any of the claims provided for in the Labor Code, other
labor statutes, or collective bargaining agreements.
The Case
The Petition for Review before us assails the April 18, 2001 Decision1 of the
Court of Appeals (CA) in CA-GR SP No. 57660, as well as the April 17, 2001
CA Resolution2 denying petitioner's Motion for Reconsideration. The dispositive
portion of the challenged Decision reads as follows:
135

"WHEREFORE, premises considered, the instant petition for certiorari
is hereby DENIED and accordingly DISMISSED, without prejudice to
the right of herein petitioner to file a suit before the proper court, if she
so desires. No pronouncement as to costs."3
The Facts
The appellate court narrated the facts of the case in this manner:
"Evelyn Tolosa (hereafter EVELYN), was the widow of Captain Virgilio
Tolosa (hereafter CAPT. TOLOSA) who was hired by Qwana-Kaiun,
through its manning agent, Asia Bulk Transport Phils. Inc., (ASIA BULK
for brevity), to be the master of the Vessel named M/V Lady Dona.
CAPT. TOLOSA had a monthly compensation of US$1700, plus
US$400.00 monthly overtime allowance. His contract officially began on
November 1, 1992, as supported by his contract of employment when
he assumed command of the vessel in Yokohama, Japan. The vessel
departed for Long Beach California, passing by Hawaii in the middle of
the voyage. At the time of embarkation, CAPT. TOLOSA was allegedly
shown to be in good health.
"During 'channeling activities' upon the vessel's departure from
Yokohama sometime on November 6, 1992, CAPT. TOLOSA was
drenched with rainwater. The following day, November 7, 1992, he had
a slight fever and in the succeeding twelve (12) days, his health rapidly
deteriorated resulting in his death on November 18, 1992.
"According to Pedro Garate, Chief Mate of the Vessel, in his statement
submitted to the U.S. Coast Guard on November 23, 1992 upon arrival
in Long Beach, California CAPT. TOLOSA experienced high fever
between November 11-15, 1992 and suffered from loose bowel
movement (LBM) beginning November 9, 1992. By November 11, 1992,
his temperature was 39.5 although his LBM had 'slightly' stopped. The
next day, his temperature rose to 39.8 and had lost his appetite. In the
evening of that day, November 13, 1992, he slipped in the toilet and
suffered scratches at the back of his waist. First aid was applied and
CAPT. TOLOSA was henceforth confined to his quarters with an able
seaman to watch him 24 hours a day until November 15, 1992, when
his conditioned worsened.
"On the same day, November 15, 1992, the Chief Engineer initiated the
move and contacted ASIA BULK which left CAPT. TOLOSA's fate in the
hands of Pedro Garate and Mario Asis, Second Mate of the same vessel
who was in-charge of the primary medical care of its officers and crew.
CIVIL PROCEDURE CASES SESSION 2
Contact with the U.S. Coast Guard in Honolulu, Hawaii (USCGHH) was
likewise initiated to seek medical advice.
"On November 17, 1992, CAPT. TOLOSA was 'losing resistance' and
his 'condition was getting serious.' At 2215 GMT, a telex was sent to
ASIA BULK requesting for the immediate evacuation of CAPT.
TOLOSA and thereafter an airlift was set on November 19, 1992.
However, on November 18, 1992, at 0753 GMT, CAPT. TOLOSA was
officially recorded as having breathed his last.
"Because of the death of CAPT. TOLOSA, his wife, EVELYN, as
petitioner, filed a Complaint/Position Paper before the POEA (POEA
Case No. 93-06-1080) against Qwana-Kaiun, thru its resident-agent,
Mr. Fumio Nakagawa, ASIA BULK, Pedro Garate and Mario Asis, as
respondents.
"After initial hearings and submissions of pleadings, the case was
however transferred to the Department of Labor and Employment,
National Labor Relations Commission (NLRC), when the amendatory
legislation expanding its jurisdiction, and removing overseas
employment related claims from the ambit of POEA jurisdiction. The
case was then raffled to Labor Arbiter, Vladimir Sampang.
xxx xxx xxx
"After considering the pleadings and evidences, on July 8, 1997, the
Labor Arbiter Vladimir P. L. Sampang, in conformity with petitioner's
plea to hold respondents solidarily liable, granted all the damages, (plus
legal interest), as prayed for by the petitioner. The dispositive portion of
his Decision reads:
'WHEREFORE, premises considered, the respondents are
hereby ordered to jointly and solidarily pay complainants the
following:
1. US$176,400.00 (US$2,100.00 x 12 months x 7 years) or
P4,586,400.00 (at P26.00 per US$1.00) by way of lost income;
2. interest at the legal rate of six percent (6%) per annum or
P1,238,328.00 (from November 1992 to May 1997 or 4
years);
3. moral damages of P200,000.00;
136

4. exemplary damages of P100,000.00; and
5. 10% of the total award, or P612,472.80, as attorney's fees.'
xxx xxx xxx
"On appeal, private respondents raised before the National Labor
Relations Commission (NLRC) the following grounds:
(a) the action before the Arbiter, as he himself concedes, is a
complaint based on torts due to negligence. It is the regular
courts of law which have jurisdiction over the action;
(b) Labor Arbiters have jurisdiction over claims for damages
arising from employer-employee relationship (Art. 217, Section
(a) (3));
(c) In this case, gross negligence is imputed to respondents
Garate and Asis, who have no employer-employee relationship
with the late Capt. Virgilio Tolosa;
(d) The labor arbiter has no jurisdiction over the controversy;
xxx xxx xxx
"Despite other peripheral issues raised by the parties in their respective
pleadings, the NLRC on September 10, 1998, vacated the appealed
decision dated July 8, 1997 of the Labor Arbiter and dismissed
petitioner's case for lack of jurisdiction over the subject matter of the
action pursuant to the provisions of the Labor Code, as
amended."4 (Citations omitted)
Ruling of the Court of Appeals
Sustaining the NLRC, the CA ruled that the labor commission had no jurisdiction
over the subject matter of the action filed by petitioner. Her cause did not arise
from an employer-employee relation, but from a quasi delict or tort. Further,
there is no reasonable causal connection between her suit for damages and her
claim under Article 217 (a)(4) of the Labor Code, which allows an award of
damages incident to an employer-employee relation.
Hence, this Petition.5
CIVIL PROCEDURE CASES SESSION 2
Issues
Petitioner raises the following issues for our consideration:
"I
"Whether or not the NLRC has jurisdiction over the case.
"II
"Whether or not Evelyn is entitled to the monetary awards granted by
the labor arbiter."6
After reviewing petitioner's Memorandum, we find that we are specifically being
asked to determine 1) whether the labor arbiter and the NLRC had jurisdiction
over petitioner's action, and 2) whether the monetary award granted by the labor
arbiter has already reached finality.
The Court's Ruling
The Petition has no merit.
First Issue:
Jurisdiction over the Action
Petitioner argues that her cause of action is not predicated on a quasi delict or
tort, but on the failure of private respondents -- as employers of her husband
(Captain Tolosa) -- to provide him with timely, adequate and competent medical
services under Article 161 of the Labor Code:
"ART 161. Assistance of employer. -- It shall be the duty of any
employer to provide all the necessary assistance to ensure the
adequate and immediate medical and dental attendance and treatment
to an injured or sick employee in case of emergency."
Likewise, she contends that Article 217 (a) (4)7 of the Labor Code vests labor
arbiters and the NLRC with jurisdiction to award all kinds of damages in cases
arising from employer-employee relations.
Petitioner also alleges that the "reasonable causal connection" rule should be
applied in her favor. Citing San Miguel Corporation v. Etcuban,8 she insists that
a reasonable causal connection between the claim asserted and the employer-
employee relation confers jurisdiction upon labor tribunals. She adds that she
137

has satisfied the required conditions: 1) the dispute arose from an employer-
employee relation, considering that the claim was for damages based on the
failure of private respondents to comply with their obligation under Article 161 of
the Labor Code; and 2) the dispute can be resolved by reference to the Labor
Code, because the material issue is whether private respondents complied with
their legal obligation to provide timely, adequate and competent medical
services to guarantee Captain Tolosa's occupational safety.9
We disagree. We affirm the CA's ruling that the NLRC and the labor arbiter had
no jurisdiction over petitioner's claim for damages, because that ruling was
based on a quasi delict or tort per Article 2176 of the Civil Code.10
Time and time again, we have held that the allegations in the complaint
determine the nature of the action and, consequently, the jurisdiction of the
courts.11 After carefully examining the complaint/position paper of petitioner, we
are convinced that the allegations therein are in the nature of an action based
on a quasi delict or tort. It is evident that she sued Pedro Garate and Mario Asis
for gross negligence.
Petitioner's complaint/position paper refers to and extensively discusses the
negligent acts of shipmates Garate and Asis, who had no employer-employee
relation with Captain Tolosa. Specifically, the paper alleges the following tortious
acts:
"x x x [R]espondent Asis was the medical officer of the Vessel, who
failed to regularly monitor Capt. Tolosa's condition, and who needed the
USCG to prod him to take the latter's vital signs. In fact, he failed to
keep a medical record, like a patient's card or folder, of Capt. Tolosa's
illness."12
"Respondents, however, failed Capt. Tolosa because
Garate never initiated actions to save him. x x x In fact, Garate rarely
checked personally on Capt. Tolosa's condition, to wit:"13
"x x x Noticeably, the History (Annex "D") fails to mention any instance
when Garate consulted the other officers, much less Capt. Tolosa,
regarding the possibility of deviation. To save Capt. Tolosa's life was
surely a just cause for the change in course, which the other officers
would have concurred in had they been consulted by respondent Garate
which he grossly neglected to do.
"Garate's poor judgement, since he was the officer effectively in
command of the vessel, prevented him from undertaking these
CIVIL PROCEDURE CASES SESSION 2
emergency measures, the neglect of which resulted in Capt. Tolosa's
untimely demise."14
The labor arbiter himself classified petitioner's case as "a complaint for
damages, blacklisting and watchlisting (pending inquiry) for gross negligence
resulting in the death of complainant's husband, Capt. Virgilio Tolosa."15
We stress that the case does not involve the adjudication of a labor dispute, but
the recovery of damages based on a quasi delict. The jurisdiction of labor
tribunals is limited to disputes arising from employer-employee relations, as we
ruled in Georg Grotjahn GMBH & Co. v. Isnani:16
"Not every dispute between an employer and employee involves
matters that only labor arbiters and the NLRC can resolve in the
exercise of their adjudicatory or quasi-judicial powers. The jurisdiction
of labor arbiters and the NLRC under Article 217 of the Labor Code is
limited to disputes arising from an employer-employee relationship
which can only be resolved by reference to the Labor Code, other labor
statutes, or their collective bargaining agreement."17
The pivotal question is whether the Labor Code has any relevance to the relief
sought by petitioner. From her paper, it is evident that the primary reliefs she
seeks are as follows: (a) loss of earning capacity denominated therein as "actual
damages" or "lost income" and (b) blacklisting. The loss she claims does not
refer to the actual earnings of the deceased, but to his earning capacity based
on a life expectancy of 65 years. This amount is recoverable if the action is
based on a quasi delict as provided for in Article 2206 of the Civil Code, 18 but
not in the Labor Code.
While it is true that labor arbiters and the NLRC have jurisdiction to award not
only reliefs provided by labor laws, but also damages governed by the Civil
Code,19 these reliefs must still he based on an action that has a reasonable
causal connection with the Labor Code, other labor statutes, or collective
bargaining agreements.20
The central issue is determined essentially from the relief sought in the
complaint. In San Miguel Corporation v. NLRC,21 this Court held:
"It is the character of the principal relief sought that appears essential in
this connection. Where such principal relief is to be granted under labor
legislation or a collective bargaining agreement, the case should fall
within the jurisdiction of the Labor Arbiter and the NLRC, even though
a claim for damages might be asserted as an incident to such claim."22
138

The labor arbiter found private respondents to be grossly negligent. He ruled
that Captain Tolosa, who died at age 58, could expect to live up to 65 years and
to have an earning capacity of US$176,400.
It must be noted that a worker's loss of earning capacity and blacklisting are not
to be equated with wages, overtime compensation or separation pay, and other
labor benefits that are generally cognized in labor disputes. The loss of earning
capacity is a relief or claim resulting from a quasi delict or a similar cause within
the realm of civil law.
"Claims for damages under paragraph 4 of Article 217 must have a reasonable
causal connection with any of the claims provided for in the article in order to be
cognizable by the labor arbiter. Only if there is such a connection with the other
claims can the claim for damages be considered as arising from employer-
employee relations."23 In the present case, petitioner's claim for damages is not
related to any other claim under Article 217, other labor statutes, or collective
bargaining agreements.
Petitioner cannot anchor her claim for damages to Article 161 of the Labor Code,
which does not grant or specify a claim or relief. This provision is only a safety
and health standard under Book IV of the same Code. The enforcement of this
labor standard rests with the labor secretary.24 Thus, claims for an employer's
violation thereof are beyond the jurisdiction of the labor arbiter. In other words,
petitioner cannot enforce the labor standard provided for in Article 161 by suing
for damages before the labor arbiter.
It is not the NLRC but the regular courts that have jurisdiction over actions for
damages, in which the employer-employee relation is merely incidental, and in
which the cause of action proceeds from a different source of obligation such as
a tort.25 Since petitioner's claim for damages is predicated on a quasi delict or
tort that has no reasonable causal connection with any of the claims provided
for in Article 217, other labor statutes, or collective bargaining agreements,
jurisdiction over the action lies with the regular courts 26 -- not with the NLRC or
the labor arbiters.
Second Issue:
Finality of the Monetary Award
Petitioner contends that the labor arbiter's monetary award has already reached
finality, since private respondents were not able to file a timely appeal before
the NLRC.
This argument cannot be passed upon in this appeal, because it was not raised
in the tribunals a quo. Well-settled is the rule that issues not raised below cannot
CIVIL PROCEDURE CASES SESSION 2
be raised for the first time on appeal. Thus, points of law, theories, and
arguments not brought to the attention of the Court of Appeals need not -- and
ordinarily will not -- be considered by this Court.27 Petitioner's allegation cannot
be accepted by this Court on its face; to do so would be tantamount to a denial
of respondents' right to due process.28
Furthermore, whether respondents were able to appeal on time is a question of
fact that cannot be entertained in a petition for review under Rule 45 of the Rules
of Court. In general, the jurisdiction of this Court in cases brought before it from
the Court of Appeals is limited to a review of errors of law allegedly committed
by the court a quo.29
WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and
Resolution AFFIRMED. Costs against petitioner. SO ORDERED.
G.R. No. 152121 July 29, 2003
EDUARDO G. EVIOTA vs. CA and STANDARD CHARTERED BANK
Before us is a petition for review on certiorari under Rule 45 of the Revised
Rules of Court, of the Decision1 of the Court of Appeals in CA-G.R. SP No.
60141 denying the petition for certiorari filed by the petitioner praying the
nullification of the Order of the Regional Trial Court of Makati, Branch 136.2
Sometime on January 26, 1998, the respondent Standard Chartered Bank and
petitioner Eduardo G. Eviota executed a contract of employment under which
the petitioner was employed by the respondent bank as Compensation and
Benefits Manager, VP (M21). However, the petitioner abruptly resigned from the
respondent bank barely a month after his employment and rejoined his former
employer.
On June 19, 1998, the respondent bank filed a complaint against the petitioner
with the RTC of Makati City. The respondent bank alleged inter alia in its
complaint that:
1. It is a foreign banking institution authorized to do business in the
Philippines, with principal offices at the 5th Floor, Bankmer Bldg., 6756
Ayala Avenue, Makati City.
2. Defendant Eduardo Eviota ("Eviota") is a former employee of the
Bank, and may be served with summons and other court processes at
8 Maple Street, Cottonwoods, Antipolo, Metro Manila.
139

3. On December 22, 1997, Eviota began negotiating with the Bank on
his possible employment with the latter. Taken up during these
negotiations were not only his compensation and benefit package, but
also the nature and demands of his prospective position. The Bank
made sure that Eviota was fully aware of all the terms and conditions of
his possible job with the Bank.
4. On January 26, 1998, Eviota indicated his conformity with the Banks
Offer of Employment by signing a written copy of such offer dated
January 22, 1998 (the "Employment Contract"). A copy of the
Employment Contract between Eviota and the Bank is hereto attached
as Annex "A."
5. Acting on the Employment Contract and on Eviotas uninhibited
display of interest in assuming his position, the Bank promptly
proceeded to carry out the terms of the Employment Contract as well
as to facilitate his integration into the workforce. Among others, the
Bank: (a) renovated and refurbished the room which was to serve as
Eviotas office; (b) purchased a 1998 Honda CR-V (Motor No.
PEWED7P101101; Chassis No. PADRD 1830WV00108) for Eviotas
use; (c) purchased a desktop IBM computer for Eviotas use; (d)
arranged the takeout of Eviotas loans with Eviotas former employer;
(e) released Eviotas signing bonus in the net amount of P300,000.00;
(f) booked Eviotas participation in a Singapore conference on Y2K
project scheduled on March 10 and 11, 1998; and (g) introduced Eviota
to the local and regional staff and officers of the Bank via personal
introductions and electronic mail.
6. The various expenses incurred by the Bank in carrying out the above
acts are itemized below, as follows:
a. Signing Bonus P 300,000.00
b. 1 Honda CR-V 800,000.00
c. IBM Desktop Computer 89,995.00
d. Office Reconfiguration 29,815.00
e. 2-Drawer Lateral File
Cabinet 13,200.00
f. 1 Officers Chair 31,539.00
CIVIL PROCEDURE CASES SESSION 2
g. 1 Guest Chair 2,200.00
h. 1 Hanging Shelf 2,012.00
i. Staff Loan Processing
Title Verification 375.00
Cost of Appraisal
Housing Loan 3,500.00
TOTAL P1,272,636.00
An itemized schedule of the above expenses incurred by the Bank is
hereto attached as Annex "B."
7. On February 25, 1998, Eviota assumed his position as Compensation
and Benefits Manager with the Bank and began to discharge his duties.
At one Human Resources ("HR") Committee meeting held on March 3,
1998, Eviota energetically presented to senior management his projects
for the year, thus raising the latters expectations. The same day, Eviota
instructed the Banks HR Administrator to book him a flight for
Singapore, where he was scheduled to participate in a Y2K project on
March 10 and 11, 1998. Confident of Eviotas professed commitment to
the Bank, the latter made the aforementioned airline booking for him. In
addition, the Bank allowed Eviota access to certain sensitive and
confidential information and documents concerning the Banks
operations.
8. After leading the Bank to believe that he had come to stay, Eviota
suddenly resigned his employment with immediate effect to re-join his
previous employer. His resignation, which did not comply with the 30-
day prior notice rule under the law and under the Employment Contract,
was so unexpected that it disrupted plans already in the pipeline (e.g.,
the development of a salary/matrix grid and salary structure, and the
processing of merit promotion recommendations), aborted meetings
previously scheduled among Bank officers, and forced the Bank to hire
the services of a third party to perform the job he was hired to do. For
the services of this third party, the Bank had to pay a total of
P208,807.50. A copy of a receipt for the above expenses is hereto
attached as Annex "C" (See also, Annex "B").
140

9. Aside from causing no small degree of chaos within the Bank by
reason of his sudden resignation, Eviota made off with a computer
diskette and other papers and documents containing confidential
information on employee compensation and other Bank matters, such
as the salary schedule of all Corporate and Institutional Banking officers
and photocopies of schedules of benefits provided expatriates being
employed by the Bank.
10. With the benefit of hindsight, the Bank realizes that it was simply
used by Eviota as a mere leverage for his selfish efforts at negotiating
better terms of employment with his previous employer. Worse, there is
evidence to show that in his attempts to justify his hasty departure from
the Bank and conceal the real reason for his move, Eviota has resorted
to falsehoods derogatory to the reputation of the Bank. In particular, he
has been maliciously purveying the canard that he had hurriedly left the
Bank because it had failed to provide him support. His untruthful
remarks have falsely depicted the Bank as a contract violator and an
undesirable employer, thus damaging the Banks reputation and
business standing in the highly competitive banking community, and
undermining its ability to recruit and retain the best personnel in the
labor market.
11. On March 16, 1998, the Bank made a written demand on Eviota to
return the aforementioned computer diskette and other confidential
documents and papers, reimburse the Bank for the various expenses
incurred on his account as a result of his resignation (with legal interest),
and pay damages in the amount of at least P500,000.00 for the
inconvenience and work/program disruptions suffered by the Bank.
A copy of the Banks demand letter dated March 16, 1998 is hereto attached as
Annex "D."
12. In partial compliance with said demand, Eviota made arrangements
with his previous employer to reimburse the Bank for the expenses
incurred in connection with the Banks purchase of the Honda CR-V for
his use. The Bank informed Eviota that in addition to the Honda CR-Vs
purchase price of P848,000.00 (of which Eviota initially shouldered
P48,000.00), incidental costs in the form of Processing Fees
(P1,000.00), FPD/MCAR/98-155684 (P1,232.53) and Fund Transfer
Price (P18,646.84) were incurred, bringing the total cost of the Honda
CR-V to P868,881.38. On April 29, 1998, the Bank received two
managers checks in the aggregate amount of P868,881.38,
representing costs incurred in connection with the purchase of the
Honda CR-V, inclusive of processing fees and other incidental costs.
CIVIL PROCEDURE CASES SESSION 2
Previously, Eviota had returned his P300,000.00 signing bonus, less the
P48,000.00 he had advanced for the Honda CR-Vs purchase price.
13. Eviota never complied with the Banks demand that he reimburse
the latter for the other expenses incurred on his account, amounting to
P360,562.12 (see, Annex "B").3
The respondent bank alleged, by way of its causes of action against the
petitioner, the following:
First Cause of Action
14. Eviotas actions constitute a clear violation of Articles 19, 20 and 21
of Republic Act No. 386, as amended (the "Civil Code"). Assuming
arguendo that Eviota had the right to terminate his employment with the
Bank for no reason, the manner in and circumstances under which he
exercised the same are clearly abusive and contrary to the rules
governing human relations.
14.1. By his actions and representations, Eviota had induced
the Bank to believe that he was committed to fulfilling his
obligations under the Employment Contract. As a result, the
Bank incurred expenses in carrying out its part of the contract
(see Annexes "B" and "C"). Less reimbursements received from
Eviota, the Bank is entitled to actual damages of P360,562.12.
(See, Annex "C").
Second Cause of Action
15. Under Article 285 (a) of Presidential Decree No. 442, as amended
(the Labor Code), an employee may terminate without just cause the
employer-employee relationship by serving written notice on the
employer at least one (1) month in advance. In addition, Section 13 of
the Employment Contract specifically provides that: "Your [i.e., Eviotas]
employment may be terminated by either party giving notice of at least
one month." (Annex "A," p. 5.)
15.1. Eviotas failure to comply with the above requirement
threw a monkey wrench into the Banks operations Eviotas
sudden resignation aborted meetings previously scheduled
among Bank officers and disrupted plans for a salary/merit
review program and development of a salary structure and
merit grid already in the pipeline.
141

Hence, Eviota is liable to the Bank for damages in the amount of at least
P100,000.00.
Third Cause of Action
16. Eviotas false and derogatory statements that the Bank had failed to
deliver what it had purportedly promised have besmirched the Banks
reputation and depicted it as a contract violator and one which does not
treat its employees properly. These derogatory statements have injured
the Banks business standing in the banking community, and have
undermined the Banks ability to recruit and retain the best personnel.
Hence, plaintiff is entitled to moral damages of at least P2,000,000.00.
17. By way of example or correction for the public good, and to deter
other parties from committing similar acts in the future, defendant
should be held liable for exemplary damages of at least P1,000,000.00
18. Eviotas actions have compelled plaintiff to obtain the services of
undersigned counsel for a fee, in order to protect its interests. Hence,
plaintiff is entitled to attorneys fees of at least P200,000.00.4
The respondent bank prayed, that after due proceedings, judgment be rendered
in its favor as follows:
WHEREFORE, it is respectfully prayed that judgment be rendered ordering the
defendant to pay the plaintiff:
1. As actual damages, the amount of P360,562.12, representing
expenses referred to in items c to i of par. 6 and the cost of the third-
party services mentioned in par. 8;
2. For violating the 30-day notice requirement under the Labor Code
and order (sic) the Employment Contract, damages in the amount of at
least P100,000.00;
3. As moral damages, the amount of P2,000,000.00;
4. As exemplary damages, the amount of P1,000,000.00;
5. As attorneys fees, the amount of P200,000.00; and
6. Costs of the suit.
CIVIL PROCEDURE CASES SESSION 2
Other just and equitable reliefs are likewise prayed for.5
The respondent bank appended to its complaint a copy of the petitioners
employment contract.
The petitioner filed a motion to dismiss the complaint on the ground that the
action for damages of the respondent bank was within the exclusive jurisdiction
of the Labor Arbiter under paragraph 4, Article 217 of the Labor Code of the
Philippines, as amended. The petitioner averred that the respondent banks
claim for damages arose out of or were in connection with his employer-
employee relationship with the respondent bank or some aspect or incident of
such relationship. The respondent bank opposed the motion, claiming that its
action for damages was within the exclusive jurisdiction of the trial court.
Although its claims for damages incidentally involved an employer-employee
relationship, the said claims are actually predicated on the petitioners acts and
omissions which are separately, specifically and distinctly governed by the New
Civil Code.
On November 29, 1999, the trial court issued an order denying the petitioners
motion to dismiss, ratiocinating that the primary relief prayed for by the
respondent bank was grounded on the tortious manner by which the petitioner
terminated his employment with the latter, and as such is governed by the New
Civil Code:
The Court holds that here, since the primary relief prayed for by the plaintiff is
for damages, grounded on the tortious manner by which the defendant
terminated his employment with the company, the same are recoverable under
the applicable provision of the Civil Code, the present controversy is removed
from the jurisdiction of the Labor Arbiter and brings in within the purview of the
regular courts.6
The petitioner filed a motion for reconsideration of the said order, but the court
issued an order denying the same. The petitioner filed a petition for certiorari
with the Court of Appeals for the nullification of the orders of the trial court,
alleging that the court a quo committed grave abuse of its discretion amounting
to excess or lack of jurisdiction in issuing the said orders. The petitioner further
asserted that contrary to the ruling of the court, the respondent bank claimed
damages in its complaint against the petitioner based on his employment
contract, and not on tortious acts.
On November 15, 2001, the CA promulgated a decision dismissing the petition,
holding that the trial court and not the Labor Arbiter had exclusive jurisdiction
over the action of the respondent bank. It held that the latters claims for
damages were grounded on the petitioners sudden and unceremonious
142

severance of his employment with the respondent bank barely a month after
assuming office.
With his motion for reconsideration of the decision having been denied by the
CA, the petitioner filed his petition with this Court contending that:
Suffice to state immediately that on the basis of the allegations in the complaint,
it is the Labor Arbiter, not the Regional Trial Court, which has jurisdiction of the
subject matter of the complaint in Civil Case No. 98-1397, the principal cause of
action being the alleged omission of petitioner in giving notice to the respondent
Bank employer of termination of their relationship; whereas the claims for other
actual/moral/exemplary damages are well within the competence of the Labor
Arbiter.7
The petition is barren of merit.
Article 217 of the Labor Code of the Philippines, as amended by Rep. Act No.
6715 which took effect on March 21, 1989 reads:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.(a) Except as
otherwise provided under this Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and other
terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations.
Case law has it that the nature of an action and the subject matter thereof, as
well as which court has jurisdiction over the same, are determined by the
material allegations of the complaint and the reliefs prayed for in relation to the
law involved.
CIVIL PROCEDURE CASES SESSION 2
Not every controversy or money claim by an employee against the employer or
vice-versa is within the exclusive jurisdiction of the labor arbiter. A money claim
by a worker against the employer or vice-versa is within the exclusive jurisdiction
of the labor arbiter only if there is a "reasonable causal connection" between the
claim asserted and employee-employer relation. Absent such a link, the
complaint will be cognizable by the regular courts of justice.8
Actions between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular
court.9 In Georg Grotjahn GMBH & Co. v. Isnani,10 we held that the jurisdiction
of the Labor Arbiter under Article 217 of the Labor Code, as amended, is limited
to disputes arising from an employer-employee relationship which can only be
resolved by reference to the Labor Code of the Philippines, other labor laws or
their collective bargaining agreements. In Singapore Airlines Limited v.
Pao,11 the complaint of the employer against the employee for damages for
wanton justice and refusal without just cause to report for duty, and for having
maliciously and with bad faith violated the terms and conditions of their
agreement for a course of conversion training at the expense of the employer,
we ruled that jurisdiction over the action belongs to the civil court:
On appeal to this court, we held that jurisdiction over the controversy belongs to
the civil courts. We stated that the action was for breach of a contractual
obligation, which is intrinsically a civil dispute. We further stated that while
seemingly the cause of action arose from employer-employee relations, the
employers claim for damages is grounded on "wanton failure and refusal"
without just cause to report to duty coupled with the averment that the employee
"maliciously and with bad faith" violated the terms and conditions of the contract
to the damage of the employer. Such averments removed the controversy from
the coverage of the Labor Code of the Philippines and brought it within the
purview of the Civil Law.
Jurisprudence has evolved the rule that claims for damages under paragraph 4
of Article 217, to be cognizable by the Labor Arbiter, must have a reasonable
causal connection with any of the claims provided for in that article. Only if there
is such a connection with the other claims can the claim for damages be
considered as arising from employer-employee relations.12
The claims were the natural consequences flowing from a breach of an
obligation, intrinsically civil in nature.
In Medina v. Castro-Bartolome,13 we held that a complaint of an employee for
damages against the employer for slanderous remarks made against him was
within the exclusive jurisdiction of the regular courts of justice because the cause
143

of action of the plaintiff was for damages for tortious acts allegedly committed
by the employer. The fact that there was between the parties an employer-
employee relationship does not negate the jurisdiction of the trial court.
In Singapore Airlines Ltd. v. Pao,14 we held that:
Stated differently, petitioner seeks protection under the civil laws and claims no
benefits under the Labor Code.1wphi1The primary relief sought is for
liquidated damages for breach of a contractual obligation. The other items
demanded are not labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural
consequences flowing from breach of an obligation, intrinsically a civil dispute.
In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr., 15 the
petitioner sued its employee Adonis Limjuco for breach of contract which reads:
That for a period of two (2) years after termination of service from EMPLOYER,
EMPLOYEE shall not in any manner be connected, and/or employed, be a
consultant and/or be an informative body directly or indirectly, with any business
firm, entity or undertaking engaged in a business similar to or in competition with
that of the EMPLOYER."16
The petitioner alleged in its complaint with the trial court that:
Petitioner claimed that private respondent became an employee of Angel Sound
Philippines Corporation, a corporation engaged in the same line of business as
that of petitioner, within two years from January 30, 1992, the date of private
respondents resignation from petitioners employ. Petitioner further alleged that
private respondent is holding the position of Head of the Material Management
Control Department, the same position he held while in the employ of
petitioner.17
The trial court dismissed the case for lack of jurisdiction over the subject matter
because the cause of action for damages arose out of the parties employer-
employee relationship. We reversed the order of the trial court and held, thus:
Petitioner does not ask for any relief under the Labor Code of the Philippines. It
seeks to recover damages agreed upon in the contract as redress for private
respondents breach of his contractual obligation to its "damage and prejudice"
(Rollo, p. 57). Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts. More so when we
consider that the stipulation refers to the post-employment relations of the
parties.18
CIVIL PROCEDURE CASES SESSION 2
In this case, the private respondents first cause of action for damages is
anchored on the petitioners employment of deceit and of making the private
respondent believe that he would fulfill his obligation under the employment
contract with assiduousness and earnestness. The petitioner volte face when,
without the requisite thirty-day notice under the contract and the Labor Code of
the Philippines, as amended, he abandoned his office and rejoined his former
employer; thus, forcing the private respondent to hire a replacement. The private
respondent was left in a lurch, and its corporate plans and program in jeopardy
and disarray. Moreover, the petitioner took off with the private respondents
computer diskette, papers and documents containing confidential information
on employee compensation and other bank matters. On its second cause of
action, the petitioner simply walked away from his employment with the private
respondent sans any written notice, to the prejudice of the private respondent,
its banking operations and the conduct of its business. Anent its third cause of
action, the petitioner made false and derogatory statements that the private
respondent reneged on its obligations under their contract of employment; thus,
depicting the private respondent as unworthy of trust.
It is evident that the causes of action of the private respondent against the
petitioner do not involve the provisions of the Labor Code of the Philippines and
other labor laws but the New Civil Code. Thus, the said causes of action are
intrinsically civil. There is no causal relationship between the causes of action
of the private respondents causes of action against the petitioner and their
employer-employee relationship. The fact that the private respondent was the
erstwhile employer of the petitioner under an existing employment contract
before the latter abandoned his employment is merely incidental. In fact, the
petitioner had already been replaced by the private respondent before the action
was filed against the petitioner.
IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED. The Decision of
the Court of Appeals dismissing the petition of the petitioner is AFFIRMED. SO
ORDERED.
G.R. No. 154830 June 8, 2007
PIONEER CONCRETE PHILIPPINES, INC., PIONEER PHILIPPINES
HOLDINGS, and PHILIP J. KLEPZIG vs. ANTONIO D. TODARO
Before the Court is a Petition for Review on Certiorari seeking to annul and set
aside the Decision1 of the Court of Appeals (CA) dated October 31, 2000 in CA-
G.R. SP No. 54155 and its Resolution2 of August 21, 2002 denying petitioners
Motion for Reconsideration.
The factual and procedural antecedents of the case are as follows:
144

On January 16, 1998, herein respondent Antonio D. Todaro (Todaro) filed with
the Regional Trial Court (RTC) of Makati City, a complaint for Sum of Money
and Damages with Preliminary Attachment against Pioneer International Limited
(PIL), Pioneer Concrete Philippines, Inc. (PCPI), Pioneer Philippines Holdings,
Inc. (PPHI), John G. McDonald (McDonald) and Philip J. Klepzig (Klepzig).3
In his complaint, Todaro alleged that PIL is a corporation duly organized and
existing under the laws of Australia and is principally engaged in the ready-mix
concrete and concrete aggregates business; PPHI is the company established
by PIL to own and hold the stocks of its operating company in the Philippines;
PCPI is the company established by PIL to undertake its business of ready-mix
concrete, concrete aggregates and quarrying operations in the Philippines;
McDonald is the Chief Executive of the Hongkong office of PIL; and, Klepzig is
the President and Managing Director of PPHI and PCPI; Todaro has been the
managing director of Betonval Readyconcrete, Inc. (Betonval), a company
engaged in pre-mixed concrete and concrete aggregate production; he resigned
from Betonval in February 1996; in May 1996, PIL contacted Todaro and asked
him if he was available to join them in connection with their intention to establish
a ready-mix concrete plant and other related operations in the Philippines;
Todaro informed PIL of his availability and interest to join them; subsequently,
PIL and Todaro came to an agreement wherein the former consented to engage
the services of the latter as a consultant for two to three months, after which, he
would be employed as the manager of PIL's ready-mix concrete operations
should the company decide to invest in the Philippines; subsequently, PIL
started its operations in the Philippines; however, it refused to comply with its
undertaking to employ Todaro on a permanent basis.4
Instead of filing an Answer, PPHI, PCPI and Klepzig separately moved to
dismiss the complaint on the grounds that the complaint states no cause of
action, that the RTC has no jurisdiction over the subject matter of the complaint,
as the same is within the jurisdiction of the NLRC, and that the complaint should
be dismissed on the basis of the doctrine of forum non conveniens.5
In its Order dated January 4, 1999, the RTC of Makati, Branch 147, denied
herein petitioners' respective motions to dismiss. 6 Herein petitioners, as
defendants, filed an Urgent Omnibus Motion7 for the reconsideration of the trial
court's Order of January 4, 1999 but the trial court denied it via its Order 8 dated
June 3, 1999.
On August 3, 1999, herein petitioners filed a Petition for Certiorari with the
CA.9 On October 31, 2000, the CA rendered its presently assailed Decision
denying herein petitioners' Petition for Certiorari. Petitioners filed a Motion for
Reconsideration but the CA denied it in its Resolution dated August 21, 2002.
CIVIL PROCEDURE CASES SESSION 2
Hence, herein Petition for Review on Certiorari based on the following
assignment of errors:
A.
THE COURT OF APPEALS' CONCLUSION THAT THE COMPLAINT
STATES A CAUSE OF ACTION AGAINST PETITIONERS IS
WITHOUT ANY LEGAL BASIS. THE ANNEXES TO THE COMPLAINT
CLEARLY BELIE THE ALLEGATION OF EXISTENCE OF AN
EMPLOYMENT CONTRACT BETWEEN PRIVATE RESPONDENT
AND PETITIONERS.
B.
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
IN A WAY NOT IN ACCORD WITH LAW AND WITH APPLICABLE
DECISIONS OF THE SUPREME COURT WHEN IT UPHELD THE
JURISDICTION OF THE TRIAL COURT DESPITE THE FACT THAT
THE COMPLAINT INDUBITABLY SHOWS THAT IT IS AN ACTION
FOR AN ALLEGED BREACH OF EMPLOYMENT CONTRACT, AND
HENCE, FALLS WITHIN THE EXLCUSIVE JURISDICTION OF THE
NATIONAL LABOR RELATIONS COMMISSION.
C
THE COURT OF APPEALS DISREGARDED AND FAILED TO
CONSIDER THE PRINCIPLE OF "FORUM NON CONVENIENS" AS A
VALID GROUND FOR DISMISSING A COMPLAINT.10
In their first assigned error, petitioners contend that there was no perfected
employment contract between PIL and herein respondent. Petitioners assert
that the annexes to respondent's complaint show that PIL's offer was for
respondent to be employed as the manager only of its pre-mixed concrete
operations and not as the company's managing director or CEO. Petitioners
argue that when respondent reiterated his intention to become the manager of
PIL's overall business venture in the Philippines, he, in effect did not accept
PIL's offer of employment and instead made a counter-offer, which, however,
was not accepted by PIL. Petitioners also contend that under Article 1318 of the
Civil Code, one of the requisites for a contract to be perfected is the consent of
the contracting parties; that under Article 1319 of the same Code, consent is
manifested by the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract; that the offer must be certain and
the acceptance absolute; that a qualified acceptance constitutes a counter-offer.
145

Petitioners assert that since PIL did not accept respondent's counter-offer, there
never was any employment contract that was perfected between them.
Petitioners further argue that respondent's claim for damages based on the
provisions of Articles 19 and 21 of the Civil Code is baseless because it was
shown that there was no perfected employment contract.
Assuming, for the sake of argument, that PIL may be held liable for breach of
employment contract, petitioners contend that PCPI and PPHI, may not also be
held liable because they are juridical entities with personalities which are
separate and distinct from PIL, even if they are subsidiary corporations of the
latter. Petitioners also aver that the annexes to respondent's complaint show
that the negotiations on the alleged employment contract took place between
respondent and PIL through its office in Hongkong. In other words, PCPI and
PPHI were not privy to the negotiations between PIL and respondent for the
possible employment of the latter; and under Article 1311 of the Civil Code, a
contract is not binding upon and cannot be enforced against one who was not a
party to it even if he be aware of such contract and has acted with knowledge
thereof.
Petitioners further assert that petitioner Klepzig may not be held liable because
he is simply acting in his capacity as president of PCPI and PPHI and settled is
the rule that an officer of a corporation is not personally liable for acts done in
the performance of his duties and within the bounds of the authority conferred
on him. Furthermore, petitioners argue that even if PCPI and PPHI are held
liable, respondent still has no cause of action against Klepzig because PCPI
and PPHI have personalities which are separate and distinct from those acting
in their behalf, such as Klepzig.
As to their second assigned error, petitioners contend that since herein
respondent's claims for actual, moral and exemplary damages are solely
premised on the alleged breach of employment contract, the present case
should be considered as falling within the exclusive jurisdiction of the NLRC.
With respect to the third assigned error, petitioners assert that the principle
of forum non conveniens dictates that even where exercise of jurisidiction is
authorized by law, courts may refuse to entertain a case involving a foreign
element where the matter can be better tried and decided elsewhere, either
because the main aspects of the case transpired in a foreign jurisdiction or the
material witnesses have their residence there and the plaintiff sought the forum
merely to secure procedural advantage or to annoy or harass the defendant.
Petitioners also argue that one of the factors in determining the most convenient
forum for conflicts problem is the power of the court to enforce its decision.
Petitioners contend that since the majority of the defendants in the present case
CIVIL PROCEDURE CASES SESSION 2
are not residents of the Philippines, they are not subject to compulsory
processes of the Philippine court handling the case for purposes of requiring
their attendance during trial. Even assuming that they can be summoned, their
appearance would entail excessive costs. Petitioners further assert that there is
no allegation in the complaint from which one can conclude that the evidence to
be presented during the trial can be better obtained in the Philippines. Moreover,
the events which led to the present controversy occurred outside the Philippines.
Petitioners conclude that based on the foregoing factual circumstances, the
case should be dismissed under the principle of forum non conveniens.
In his Comment, respondent extensively quoted the assailed CA Decision
maintaining that the factual allegations in the complaint determine whether or
not the complaint states a cause of action.
As to the question of jurisdiction, respondent contends that the complaint he
filed was not based on a contract of employment. Rather, it was based on
petitioners' unwarranted breach of their contractual obligation to employ
respondent. This breach, respondent argues, gave rise to an action for damages
which is cognizable by the regular courts.
Even assuming that there was an employment contract, respondent asserts that
for the NLRC to acquire jurisdiction, the claim for damages must have a
reasonable causal connection with the employer-employee relationship of
petitioners and respondent.
Respondent further argues that there is a perfected contract between him and
petitioners as they both agreed that the latter shall employ him to manage and
operate their ready-mix concrete operations in the Philippines. Even assuming
that there was no perfected contract, respondent contends that his complaint
alleges an alternative cause of action which is based on the provisions of
Articles 19 and 21 of the Civil Code.
As to the applicability of the doctrine of forum non conveniens, respondent avers
that the question of whether a suit should be entertained or dismissed on the
basis of the principle of forum non conveniens depends largely upon the facts
of the particular case and is addressed to the sound discretion of the trial judge,
who is in the best position to determine whether special circumstances require
that the court desist from assuming jurisdiction over the suit.
The petition lacks merit.
Section 2, Rule 2 of the Rules of Court, as amended, defines a cause of action
as the act or omission by which a party violates a right of another. A cause of
action exists if the following elements are present: (1) a right in favor of the
146

plaintiff by whatever means and under whatever law it arises or is created; (2)
an obligation on the part of the named defendant to respect or not to violate
such right; and, (3) an act or omission on the part of such defendant violative of
the right of the plaintiff or constituting a breach of the obligation of the defendant
to the plaintiff for which the latter may maintain an action for recovery of
damages.11
In Hongkong and Shanghai Banking Corporation Limited v. Catalan,12 this Court
held:
The elementary test for failure to state a cause of action is whether the
complaint alleges facts which if true would justify the relief demanded.
Stated otherwise, may the court render a valid judgment upon the facts
alleged therein? The inquiry is into the sufficiency, not the veracity of
the material allegations. If the allegations in the complaint furnish
sufficient basis on which it can be maintained, it should not be dismissed
regardless of the defense that may be presented by the defendants. 13
Moreover, the complaint does not have to establish or allege facts proving the
existence of a cause of action at the outset; this will have to be done at the trial
on the merits of the case.14 To sustain a motion to dismiss for lack of cause of
action, the complaint must show that the claim for relief does not exist, rather
than that a claim has been defectively stated, or is ambiguous, indefinite or
uncertain.15
Hence, in resolving whether or not the Complaint in the present case states a
cause of action, the trial court correctly limited itself to examining the sufficiency
of the allegations in the Complaint as well as the annexes thereto. It is
proscribed from inquiring into the truth of the allegations in the Complaint or the
authenticity of any of the documents referred or attached to the Complaint, since
these are deemed hypothetically admitted by the respondent.
This Court has reviewed respondents allegations in its Complaint. In a nutshell,
respondent alleged that herein petitioners reneged on their contractual
obligation to employ him on a permanent basis. This allegation is sufficient to
constitute a cause of action for damages.
The issue as to whether or not there was a perfected contract between
petitioners and respondent is a matter which is not ripe for determination in the
present case; rather, this issue must be taken up during trial, considering that
its resolution would necessarily entail an examination of the veracity of the
allegations not only of herein respondent as plaintiff but also of petitioners as
defendants.
CIVIL PROCEDURE CASES SESSION 2
The Court does not agree with petitioners' contention that they were not privy to
the negotiations for respondent's possible employment. It is evident from
paragraphs 24 to 28 of the Complaint16 that, on various occasions, Klepzig
conducted negotiations with respondent regarding the latter's possible
employment. In fact, Annex "H"17 of the complaint shows that it was Klepzig who
informed respondent that his company was no longer interested in employing
respondent. Hence, based on the allegations in the Complaint and the annexes
attached thereto, respondent has a cause of action against herein petitioners.
As to the question of jurisdiction, this Court has consistently held that where no
employer-employee relationship exists between the parties and no issue is
involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the Regional Trial Court
that has jurisdiction.18 In the present case, no employer-employee relationship
exists between petitioners and respondent. In fact, in his complaint, private
respondent is not seeking any relief under the Labor Code, but seeks payment
of damages on account of petitioners' alleged breach of their obligation under
their agreement to employ him. It is settled that an action for breach of
contractual obligation is intrinsically a civil dispute.19 In the alternative,
respondent seeks redress on the basis of the provisions of Articles 19 and 21 of
the Civil Code. Hence, it is clear that the present action is within the realm of
civil law, and jurisdiction over it belongs to the regular courts. 20
With respect to the applicability of the principle of forum non conveniens in the
present case, this Court's ruling in Bank of America NT & SA v. Court of
Appeals21 is instructive, to wit:
The doctrine of forum non conveniens, literally meaning the forum is
inconvenient, emerged in private international law to deter the practice
of global forum shopping, that is to prevent non-resident litigants from
choosing the forum or place wherein to bring their suit for malicious
reasons, such as to secure procedural advantages, to annoy and
harass the defendant, to avoid overcrowded dockets, or to select a more
friendly venue. Under this doctrine, a court, in conflicts of law cases,
may refuse impositions on its jurisdiction where it is not the most
"convenient" or available forum and the parties are not precluded from
seeking remedies elsewhere.
Whether a suit should be entertained or dismissed on the basis of said
doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. In the case
of Communication Materials and Design, Inc. vs. Court of Appeals, this
Court held that "xxx [a] Philippine Court may assume jurisdiction over
the case if it chooses to do so; provided, that the following requisites
are met: (1) that the Philippine Court is one to which the parties may
147

conveniently resort to; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the facts; and, (3) that the
Philippine Court has or is likely to have power to enforce its decision."
Moreover, this Court enunciated in Philsec. Investment Corporation vs.
Court of Appeals, that the doctrine of forum non conveniens should
not be used as a ground for a motion to dismiss because Sec. 1,
Rule 16 of the Rules of Court does not include said doctrine as a
ground. This Court further ruled that while it is within the
discretion of the trial court to abstain from assuming jurisdiction
on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require
the courts desistance; and that the propriety of dismissing a case
based on this principle of forum non conveniens requires a factual
determination, hence it is more properly considered a matter of
defense.22 (emphasis supplied)
In the present case, the factual circumstances cited by petitioners which would
allegedly justify the application of the doctrine of forum non conveniens are
matters of defense, the merits of which should properly be threshed out during
trial.
WHEREFORE, the instant petition is DENIED and the assailed Decision and
Resolution of the Court of Appeals are AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 185567 October 20, 2010
ARSENIO Z. LOCSIN vs. NISSAN LEASE PHILS. INC. and LUIS BANSON
Through a petition for review on certiorari,1 petitioner Arsenio Z. Locsin (Locsin)
seeks the reversal of the Decision2of the Court of Appeals (CA) dated August
28, 2008,3 in "Arsenio Z. Locsin v. Nissan Car Lease Phils., Inc. and Luis
Banson," docketed as CA-G.R. SP No. 103720 and the Resolution dated
December 9, 2008,4 denying Locsins Motion for Reconsideration. The assailed
ruling of the CA reversed and set aside the Decision5 of the Hon. Labor Arbiter
Thelma Concepcion (Labor Arbiter Concepcion) which denied Nissan Lease
Phils. Inc.s (NCLPI) and Luis T. Bansons (Banson) Motion to Dismiss.
THE FACTUAL ANTECEDENTS
On January 1, 1992, Locsin was elected Executive Vice President and
Treasurer (EVP/Treasurer) of NCLPI. As EVP/Treasurer, his duties and
responsibilities included: (1) the management of the finances of the company;
(2) carrying out the directions of the President and/or the Board of Directors
CIVIL PROCEDURE CASES SESSION 2
regarding financial management; and (3) the preparation of financial reports to
advise the officers and directors of the financial condition of NCLPI.6 Locsin held
this position for 13 years, having been re-elected every year since 1992, until
January 21, 2005, when he was nominated and elected Chairman of NCLPIs
Board of Directors.7
On August 5, 2005, a little over seven (7) months after his election as Chairman
of the Board, the NCLPI Board held a special meeting at the Manila Polo Club.
One of the items of the agenda was the election of a new set of officers.
Unfortunately, Locsin was neither re-elected Chairman nor reinstated to his
previous position as EVP/Treasurer.8
Aggrieved, on June 19, 2007, Locsin filed a complaint for illegal dismissal with
prayer for reinstatement, payment of backwages, damages and attorneys fees
before the Labor Arbiter against NCLPI and Banson, who was then President of
NCLPI.9
The Compulsory Arbitration Proceedings before the Labor Arbiter.
On July 11, 2007, instead of filing their position paper, NCLPI and Banson filed
a Motion to Dismiss,10 on the ground that the Labor Arbiter did not have
jurisdiction over the case since the issue of Locsins removal as EVP/Treasurer
involves an intra-corporate dispute.
On August 16, 2007, Locsin submitted his opposition to the motion to dismiss,
maintaining his position that he is an employee of NCLPI.
On March 10, 2008, Labor Arbiter Concepcion issued an Order denying the
Motion to Dismiss, holding that her office acquired "jurisdiction to arbitrate
and/or decide the instant complaint finding extant in the case an employer-
employee relationship."11
NCLPI, on June 3, 2008, elevated the case to the CA through a Petition for
Certiorari under Rule 65 of the Rules of Court.12 NCLPI raised the issue on
whether the Labor Arbiter committed grave abuse of discretion by denying the
Motion to Dismiss and holding that her office had jurisdiction over the dispute.
The CA Decision - Locsin was a corporate officer; the issue of his removal as
EVP/Treasurer is an intra-corporate dispute under the RTCs jurisdiction.
On August 28, 2008,13 the CA reversed and set aside the Labor Arbiters Order
denying the Motion to Dismiss and ruled that Locsin was a corporate officer.
148

Citing PD 902-A, the CA defined "corporate officers as those officers of a
corporation who are given that character either by the Corporation Code or by
the corporations by-laws." In this regard, the CA held:
Scrutinizing the records, We hold that petitioners successfully discharged their
onus of establishing that private respondent was a corporate officer who held
the position of Executive Vice-President/Treasurer as provided in the by-laws of
petitioner corporation and that he held such position by virtue of election by the
Board of Directors.
That private respondent is a corporate officer cannot be disputed. The position
of Executive Vice-President/Treasurer is specifically included in the roster of
officers provided for by the (Amended) By-Laws of petitioner corporation, his
duties and responsibilities, as well as compensation as such officer are likewise
set forth therein.14
Article 280 of the Labor Code, the receipt of salaries by Locsin, SSS deductions
on that salary, and the element of control in the performance of work duties
indicia used by the Labor Arbiter to conclude that Locsin was a regular employee
were held inapplicable by the CA.15 The CA noted the Labor Arbiters failure
to address the fact that the position of EVP/Treasurer is specifically enumerated
as an "office" in the corporations by-laws.16
Further, the CA pointed out Locsins failure to "state any circumstance by which
NCLPI engaged his services as a corporate officer that would make him an
employee." The CA found, in this regard, that Locsins assumption and retention
as EVP/Treasurer was based on his election and subsequent re-elections from
1992 until 2005. Further, he performed only those functions that were
"specifically set forth in the By-Laws or required of him by the Board of
Directors.17"
With respect to the suit Locsin filed with the Labor Arbiter, the CA held that:
Private respondent, in belatedly filing this suit before the Labor Arbiter,
questioned the legality of his "dismissal" but in essence, he raises the issue of
whether or not the Board of Directors had the authority to remove him from the
corporate office to which he was elected pursuant to the By-Laws of the
petitioner corporation. Indeed, had private respondent been an ordinary
employee, an election conducted by the Board of Directors would not have been
necessary to remove him as Executive Vice-President/Treasurer. However, in
an obvious attempt to preclude the application of settled jurisprudence that
corporate officers whose position is provided in the by-laws, their election,
removal or dismissal is subject to Section 5 of P.D. No. 902-A (now R.A. No.
8799), private respondent would even claim in his Position Paper, that since his
CIVIL PROCEDURE CASES SESSION 2
responsibilities were akin to that of the companys Executive Vice-
President/Treasurer, he was "hired under the pretext that he was being elected
into said post.18 [Emphasis supplied.]
As a consequence, the CA concluded that Locsin does not have any recourse
with the Labor Arbiter or the NLRC since the removal of a corporate officer,
whether elected or appointed, is an intra-corporate controversy over which the
NLRC has no jurisdiction.19 Instead, according to the CA, Locsins complaint for
"illegal dismissal" should have been filed in the Regional Trial Court (RTC),
pursuant to Rule 6 of the Interim Rules of Procedure Governing Intra-Corporate
Controversies.20
Finally, the CA addressed Locsins invocation of Article 4 of the Labor Code.
Dismissing the application of the provision, the CA cited Dean Cesar Villanueva
of the Ateneo School of Law, as follows:
x x x the non-coverage of corporate officers from the security of tenure clause
under the Constitution is now well-established principle by numerous decisions
upholding such doctrine under the aegis of the 1987 Constitution in the face of
contemporary decisions of the same Supreme Court likewise confirming that
security of tenure covers all employees or workers including managerial
employees.21
THE PETITIONERS ARGUMENTS
Failing to obtain a reconsideration of the CAs decision, Locsin filed the present
petition on January 28, 2009, raising the following procedural and substantive
issues:
(1) Whether the CA has original jurisdiction to review decision of the
Labor Arbiter under Rule 65?
(2) Whether he is a regular employee of NCLPI under the definition of
Article 280 of the Labor Code? and
(3) Whether Locsins position as Executive Vice-President/Treasurer
makes him a corporate officer thereby excluding him from the coverage
of the Labor Code?
Procedurally, Locsin essentially submits that NCLPI wrongfully filed a petition
for certiorari before the CA, as the latters remedy is to proceed with the
arbitration, and to appeal to the NLRC after the Labor Arbiter shall have ruled
on the merits of the case. Locsin cites, in this regard, Rule V, Section 6 of the
149

Revised Rules of the National Labor Relations Commission (NLRC Rules),
which provides that a denial of a motion to dismiss by the Labor Arbiter is not
subject to an appeal. Locsin also argues that even if the Labor Arbiter committed
grave abuse of discretion in denying the NCLPI motion, a special civil action for
certiorari, filed with the CA was not the appropriate remedy, since this was a
breach of the doctrine of exhaustion of administrative remedies.
Substantively, Locsin submits that he is a regular employee of NCLPI since - as
he argued before the Labor Arbiter and the CA - his relationship with the
company meets the "four-fold test."
First, Locsin contends that NCLPI had the power to engage his services as
EVP/Treasurer. Second, he received regular wages from NCLPI, from which his
SSS and Philhealth contributions, as well as his withholding taxes were
deducted. Third, NCLPI had the power to terminate his employment. 22 Lastly,
Nissan had control over the manner of the performance of his functions as
EVP/Treasurer, as shown by the 13 years of faithful execution of his job, which
he carried out in accordance with the standards and expectations set by
NCLPI.23 Further, Locsin maintains that even after his election as Chairman, he
essentially performed the functions of EVP/Treasurer handling the financial
and administrative operations of the Corporation thus making him a regular
employee.24
Under these claimed facts, Locsin concludes that the Labor Arbiter and the
NLRC not the RTC (as NCLPI posits) has jurisdiction to decide the
controversy. Parenthetically, Locsin clarifies that he does not dispute the validity
of his election as Chairman of the Board on January 1, 2005. Instead, he
theorizes that he never lost his position as EVP/Treasurer having continuously
performed the functions appurtenant thereto.25 Thus, he questions his
"unceremonious removal" as EVP/Treasurer during the August 5, 2005 special
Board meeting.
THE RESPONDENTS ARGUMENTS
It its April 17, 2009 Comment,26 Nissan prays for the denial of the petition for
lack of merit. Nissan submits that the CA correctly ruled that the Labor Arbiter
does not have jurisdiction over Locsins complaint for illegal dismissal. In
support, Nissan maintains that Locsin is a corporate officer and not an
employee. In addressing the procedural defect Locsin raised, Nissan brushes
the issue aside, stating that (1) this issue was belatedly raised in the Motion for
Reconsideration, and that (2) in any case, Rule VI, Section 2(1) of the NLRC
does not apply since only appealable decisions, resolutions and orders are
covered under the rule.
CIVIL PROCEDURE CASES SESSION 2
THE COURTS RULING
We resolve to deny the petition for lack of merit.
At the outset, we stress that there are two (2) important considerations in the
final determination of this case. On the one hand, Locsin raises a procedural
issue that, if proven correct, will require the Court to dismiss the instant petition
for using an improper remedy. On the other hand, there is the substantive issue
that will be disregarded if a strict implementation of the rules of procedure is
upheld.
Prefatorily, we agree with Locsins submission that the NCLPI incorrectly
elevated the Labor Arbiters denial of the Motion to Dismiss to the CA. Locsin is
correct in positing that the denial of a motion to dismiss is unappealable. As a
general rule, an aggrieved partys proper recourse to the denial is to file his
position paper, interpose the grounds relied upon in the motion to dismiss before
the labor arbiter, and actively participate in the proceedings. Thereafter, the
labor arbiters decision can be appealed to the NLRC, not to the CA.
As a rule, we strictly adhere to the rules of procedure and do everything we can,
to the point of penalizing violators, to encourage respect for these rules. We take
exception to this general rule, however, when a strict implementation of these
rules would cause substantial injustice to the parties.
We see it appropriate to apply the exception to this case for the reasons
discussed below; hence, we are compelled to go beyond procedure and rule on
the merits of the case. In the context of this case, we see sufficient justification
to rule on the employer-employee relationship issue raised by NCLPI, even
though the Labor Arbiters interlocutory order was incorrectly brought to the CA
under Rule 65.
The NLRC Rules are clear: the denial by the labor arbiter of the motion to
dismiss is not appealable because the denial is merely an interlocutory order.
In Metro Drug v. Metro Drug Employees,27 we definitively stated that the denial
of a motion to dismiss by a labor arbiter is not immediately appealable.28
We similarly ruled in Texon Manufacturing v. Millena,29 in Sime Darby
Employees Association v. National Labor Relations Commission 30 and in
Westmont Pharmaceuticals v. Samaniego.31 In Texon, we specifically said:
The Order of the Labor Arbiter denying petitioners motion to dismiss is
interlocutory. It is well-settled that a denial of a motion to dismiss a complaint is
150

an interlocutory order and hence, cannot be appealed, until a final judgment on
the merits of the case is rendered. [Emphasis supplied.]32
and indicated the appropriate recourse in Metro Drug, as follows: 33
x x x The NLRC rule proscribing appeal from a denial of a motion to dismiss is
similar to the general rule observed in civil procedure that an order denying a
motion to dismiss is interlocutory and, hence, not appealable until final judgment
or order is rendered [1 Feria and Noche, Civil Procedure Annotated 453 (2001
ed.)]. The remedy of the aggrieved party in case of denial of the motion to
dismiss is to file an answer and interpose, as a defense or defenses, the ground
or grounds relied upon in the motion to dismiss, proceed to trial and, in case of
adverse judgment, to elevate the entire case by appeal in due course [Mendoza
v. Court of Appeals, G.R. No. 81909, September 5, 1991, 201 SCRA 343]. In
order to avail of the extraordinary writ of certiorari, it is incumbent upon petitioner
to establish that the denial of the motion to dismiss was tainted with grave abuse
of discretion. [Macawiwili Gold Mining and Development Co., Inc. v. Court of
Appeals, G.R. No. 115104, October 12, 1998, 297 SCRA 602]
In so citing Feria and Noche, the Court was referring to Sec. 1 (b), Rule 41 of
the Rules of Court, which specifically enumerates interlocutory orders as one of
the court actions that cannot be appealed. In the same rule, as amended by
A.M. No. 07-7-12-SC, the aggrieved party is allowed to file an appropriate
special civil action under Rule 65. The latter rule, however, also contains
limitations for its application, clearly outlined in its Section 1 which provides:
Section 1. Petition for certiorari.
When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal,
or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging
the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such
incidental reliefs as law and justice may require.
In the labor law setting, a plain, speedy and adequate remedy is still open to the
aggrieved party when a labor arbiter denies a motion to dismiss. This is Article
223 of Presidential Decree No. 442, as amended (Labor Code), 34which states:
ART. 223. APPEAL
CIVIL PROCEDURE CASES SESSION 2
Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter; x x x [Emphasis supplied.]
Pursuant to this Article, we held in Metro Drug (citing Air Services Cooperative,
et al. v. Court of Appeals35) that the NLRC is clothed with sufficient authority to
correct any claimed "erroneous assumption of jurisdiction" by labor arbiters:
In Air Services Cooperative, et al. v. The Court of Appeals, et al., a case where
the jurisdiction of the labor arbiter was put in issue and was assailed through a
petition for certiorari, prohibition and annulment of judgment before a regional
trial court, this Court had the opportunity to expound on the nature of appeal as
embodied in Article 223 of the Labor Code, thus:
x x x Also, while the title of the Article 223 seems to provide only for the remedy
of appeal as that term is understood in procedural law and as distinguished from
the office of certiorari, nonetheless, a closer reading thereof reveals that it is not
as limited as understood by the petitioners x x x.
Abuse of discretion is admittedly within the ambit of certiorari and its grant of
review thereof to the NLRC indicates the lawmakers intention to broaden the
meaning of appeal as that term is used in the Code. For this reason, petitioners
cannot argue now that the NLRC is devoid of any corrective power to rectify a
supposed erroneous assumption of jurisdiction by the Labor Arbiter x x x. [Air
Services Cooperative, et al. v. The Court of Appeals, et al. G.R. No. 118693, 23
July 1998, 293 SCRA 101]
Since the legislature had clothed the NLRC with the appellate authority to
correct a claimed "erroneous assumption of jurisdiction" on the part of the labor
arbiter a case of grave abuse of discretion - the remedy availed of by petitioner
in this case is patently erroneous as recourse in this case is lodged, under the
law, with the NLRC.
In Metro Drug, as in the present case, the defect imputed through the NLCPI
Motion to Dismiss is the labor arbiters lack of jurisdiction since Locsin is alleged
to be a corporate officer, not an employee. Parallelisms between the two cases
is undeniable, as they are similar on the following points: (1) in Metro Drug, as
in this case, the Labor Arbiter issued an Order denying the Motion to Dismiss
by one of the parties; (2) the basis of the Motion to Dismiss is also the alleged
lack of jurisdiction by the Labor Arbiter to settle the dispute; and (3) dissatisfied
151

with the Order of the Labor Arbiter, the aggrieved party likewise elevated the
case to the CA via Rule 65.
The similarities end there, however. Unlike in the present case, the CA denied
the petition for certiorari and the subsequent Motion for Reconsideration in
Metro Drug; the CA correctly found that the proper appellate mechanism was
an appeal to the NLRC and not a petition for certiorari under Rule 65. In the
present case, the CA took a different position despite our clear ruling in Metro
Drug, and allowed, not only the use of Rule 65, but also ruled on the merits.
From this perspective, the CA clearly erred in the application of the procedural
rules by disregarding the relevant provisions of the NLRC Rules, as well as the
requirements for a petition for certiorari under the Rules of Court. To reiterate,
the proper action of an aggrieved party faced with the labor arbiters denial of
his motion to dismiss is to submit his position paper and raise therein the
supposed lack of jurisdiction. The aggrieved party cannot immediately appeal
the denial since it is an interlocutory order; the appropriate remedial recourse is
the procedure outlined in Article 223 of the Labor Code, not a petition for
certiorari under Rule 65.
A strict implementation of the NLRC Rules and the Rules of Court would cause
injustice to the parties because the Labor Arbiter clearly has no jurisdiction over
the present intra-corporate dispute.
Our ruling in Mejillano v. Lucillo36 stands for the proposition that we should
strictly apply the rules of procedure. We said:
Time and again, we have ruled that procedural rules do not exist for the
convenience of the litigants. Rules of Procedure exist for a purpose, and to
disregard such rules in the guise of liberal construction would be to defeat such
purpose. Procedural rules were established primarily to provide order to and
enhance the efficiency of our judicial system. [Emphasis supplied.]
An exception to this rule is our ruling in Lazaro v. Court of Appeals37 where we
held that the strict enforcement of the rules of procedure may be relaxed in
exceptionally meritorious cases:
x x x Procedural rules are not to be belittled or dismissed simply because their
non-observance may have resulted in prejudice to a party's substantive rights.
Like all rules, they are required to be followed except only for the most
persuasive of reasons when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his thoughtlessness in not
complying with the procedure prescribed. The Court reiterates that rules of
procedure, especially those prescribing the time within which certain acts must
CIVIL PROCEDURE CASES SESSION 2
be done, "have oft been held as absolutely indispensable to the prevention of
needless delays and to the orderly and speedy discharge of business. x x x The
reason for rules of this nature is because the dispatch of business by courts
would be impossible, and intolerable delays would result, without rules
governing practice x x x. Such rules are a necessary incident to the proper,
efficient and orderly discharge of judicial functions." Indeed, in no uncertain
terms, the Court held that the said rules may be relaxed only in exceptionally
meritorious cases. [Emphasis supplied.]
Whether a case involves an exceptionally meritorious circumstance can be
tested under the guidelines we established in Sanchez v. Court of Appeals, 38 as
follows:
Aside from matters of life, liberty, honor or property which would warrant the
suspension of the Rules of the most mandatory character and an examination
and review by the appellate court of the lower courts findings of fact, the other
elements that should be considered are the following: (a) the existence of
special or compelling circumstances, (b) the merits of the case, (c) a cause not
entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (d) a lack of any showing that the review sought is
merely frivolous and dilatory, and (e) the other party will not be unjustly
prejudiced thereby. [Emphasis supplied.]
Under these standards, we hold that exceptional circumstances exist in the
present case to merit the relaxation of the applicable rules of procedure.
Due to existing exceptional circumstances, the ruling on the merits that Locsin
is an officer and not an employee of Nissan must take precedence over
procedural considerations.
We arrived at the conclusion that we should go beyond the procedural rules and
immediately take a look at the intrinsic merits of the case based on several
considerations.
First, the parties have sufficiently ventilated their positions on the disputed
employer-employee relationship and have, in fact, submitted the matter for the
CAs consideration.
Second, the CA correctly ruled that no employer-employee relationship exists
between Locsin and Nissan.
Locsin was undeniably Chairman and President, and was elected to these
positions by the Nissan board pursuant to its By-laws.39 As such, he was a
corporate officer, not an employee. The CA reached this conclusion by relying
152

on the submitted facts and on Presidential Decree 902-A, which defines
corporate officers as "those officers of a corporation who are given that
character either by the Corporation Code or by the corporations by-laws."
Likewise, Section 25 of Batas Pambansa Blg. 69, or the Corporation Code of
the Philippines (Corporation Code) provides that corporate officers are the
president, secretary, treasurer and such other officers as may be provided for in
the by-laws.
Third. Even as Executive Vice-President/Treasurer, Locsin already acted as a
corporate officer because the position of Executive Vice-President/Treasurer is
provided for in Nissans By-Laws. Article IV, Section 4 of these By-Laws
specifically provides for this position, as follows:
ARTICLE IV
Officers
Section 1. Election and Appointment The Board of Directors at their first
meeting, annually thereafter, shall elect as officers of the Corporation a
Chairman of the Board, a President, an Executive Vice-President/Treasurer, a
Vice-President/General Manager and a Corporate Secretary. The other Senior
Operating Officers of the Corporation shall be appointed by the Board upon the
recommendation of the President.
xxxx
Section 4. Executive Vice-President/Treasurer The Executive Vice-
President/Treasurer shall have such powers and perform such duties as are
prescribed by these By-Laws, and as may be required of him by the Board of
Directors. As the concurrent Treasurer of the Corporation, he shall have the
charge of the funds, securities, receipts, and disbursements of the Corporation.
He shall deposit, or cause to be deposited, the credit of the Corporation in such
banks or trust companies, or with such banks of other depositories, as the Board
of Directors may from time to time designate. He shall tender to the President
or to the Board of Directors whenever required an account of the financial
condition of the corporation and of all his transactions as Treasurer. As soon as
practicable after the close of each fiscal year, he shall make and submit to the
Board of Directors a like report of such fiscal year. He shall keep correct books
of account of all the business and transactions of the Corporation.
In Okol v. Slimmers World International,40 citing Tabang v. National Labor
Relations Commission,41 we held that
x x x an "office" is created by the charter of the corporation and the officer
is elected by the directors or stockholders. On the other hand, an
CIVIL PROCEDURE CASES SESSION 2
"employee" usually occupies no office and generally is employed not by action
of the directors or stockholders but by the managing officer of the corporation
who also determines the compensation to be paid to such employee. [Emphasis
supplied.]
In this case, Locsin was elected by the NCLPI Board, in accordance with the
Amended By-Laws of the corporation. The following factual determination by the
CA is elucidating:
More important, private respondent failed to state any such "circumstance" by
which the petitioner corporation "engaged his services" as corporate officer that
would make him an employee. In the first place, the Vice-President/Treasurer
was elected on an annual basis as provided in the By-Laws, and no duties and
responsibilities were stated by private respondent which he discharged while
occupying said position other than those specifically set forth in the By-Laws or
required of him by the Board of Directors. The unrebutted fact remains that
private respondent held the position of Executive Vice-President/Treasurer of
petitioner corporation, a position provided for in the latters by-laws, by virtue of
election by the Board of Directors, and has functioned as such Executive Vice-
President/Treasurer pursuant to the provisions of the said By-Laws. Private
respondent knew very well that he was simply not re-elected to the said position
during the August 5, 2005 board meeting, but he had objected to the election of
a new set of officers held at the time upon the advice of his lawyer that he cannot
be "terminated" or replaced as Executive Vice-President/Treasurer as he had
attained tenurial security.42
We fully agree with this factual determination which we find to be sufficiently
supported by evidence. We likewise rule, based on law and established
jurisprudence, that Locsin, at the time of his severance from NCLPI, was the
latters corporate officer.
a. The Question of Jurisdiction
Given Locsins status as a corporate officer, the RTC, not the Labor Arbiter or
the NLRC, has jurisdiction to hear the legality of the termination of his
relationship with Nissan. As we also held in Okol, a corporate officers dismissal
from service is an intra-corporate dispute:
In a number of cases [Estrada v. National Labor Relations Commission, G.R.
No. 106722, 4 October 1996, 262 SCRA 709; Lozon v. National Labor Relations
Commission, 310 Phil. 1 (1995); Espino v. National Labor Relations
Commission, 310 Phil. 61 (1995); Fortune Cement Corporation v. National
Labor Relations Commission, G.R. No. 79762, 24 January 1991, 193 SCRA
258], we have held that a corporate officers dismissal is always a corporate act,
153

or an intra-corporate controversy which arises between a stockholder and a
corporation.43 [Emphasis supplied.]
so that the RTC should exercise jurisdiction based on the following legal
reasoning:
Prior to its amendment, Section 5(c) of Presidential Decree No. 902-A (PD 902-
A) provided that intra-corporate disputes fall within the jurisdiction of the
Securities and Exchange Commission (SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities
and Exchange Commission over corporations, partnerships and other forms of
associations registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving:
xxxx
c) Controversies in the election or appointments of directors, trustees, officers
or managers of such corporations, partnerships or associations.
Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8
August 2000, transferred to regional trial courts the SECs jurisdiction over all
cases listed in Section 5 of PD 902-A:
5.2. The Commissions jurisdiction over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court. [Emphasis supplied.]
b. Precedence of Substantive Merits;
Primacy of Element of Jurisdiction
Based on the above jurisdictional considerations, we would be forced to remand
the case to the Labor Arbiter for further proceedings if we were to dismiss the
petition outright due to the wrongful use of Rule 65.44 We cannot close our eyes,
however, to the factual and legal reality, established by evidence already on
record, that Locsin is a corporate officer whose termination of relationship is
outside a labor arbiters jurisdiction to rule upon.
Under these circumstances, we have to give precedence to the merits of the
case, and primacy to the element of jurisdiction. Jurisdiction is the power to hear
and rule on a case and is the threshold element that must exist before any quasi-
judicial officer can act. In the context of the present case, the Labor Arbiter does
CIVIL PROCEDURE CASES SESSION 2
not have jurisdiction over the termination dispute Locsin brought, and should not
be allowed to continue to act on the case after the absence of jurisdiction has
become obvious, based on the records and the law. In more practical terms, a
contrary ruling will only cause substantial delay and inconvenience as well as
unnecessary expenses, to the point of injustice, to the parties. This conclusion,
of course, does not go into the merits of termination of relationship and is without
prejudice to the filing of an intra-corporate dispute on this point before the
appropriate RTC.
WHEREFORE, we DISMISS the petitioners petition for review on certiorari, and
AFFIRM the Decision of the Court of Appeals, in CA-G.R. SP No. 103720,
promulgated on August 28, 2008, as well as its Resolution of December 9, 2008,
which reversed and set aside the March 10, 2008 Order of Labor Arbiter
Concepcion in NLRC NCR Case No. 00-06-06165-07. This Decision is without
prejudice to petitioner Locsins available recourse for relief through the
appropriate remedy in the proper forum. No pronouncement as to costs. SO
ORDERED.
G.R. No. 147874 July 17, 2006
DOLORES GAYOSO, DANNY GAYOSO, ELIZABETH G. DONDRIANO,
VICTORIANO GAYOSO, CHRISTOPHER GAYOSO, REMEDIOS GAYOSO
and THE HEIRS OF VICTORIANO GAYOSO vs. TWENTY-TWO REALTY
DEVELOPMENT CORPORATION
For our resolution is the instant Petition for Review on Certiorari assailing the
Decision1 of the Court of Appeals dated April 20, 2001 in CA-G.R. SP No.
48001.
This case stemmed from a Complaint for Ejectment filed by Twenty-Two Realty
Development Corporation (TTRDC), respondent, on December 12, 1996 with
the Metropolitan Trial Court (MeTC), Branch 60, Mandaluyong City against the
above-named petitioners. The complaint, docketed as Civil Case No. 15340,
alleges that on October 11, 1954, Victoriano Gayoso (now deceased) sold to
Prospero Almeda a lot located on Mariveles corner Calbayog Streets,
Mandaluyong City. After the sale, Almeda allowed Gayoso and his children,
herein petitioners, to stay on the property as lessees, paying P20.00 a month.
Later, Almeda's heirs sold the lot to respondent TTRDC. Thus, on February 19,
1996, the title to the property was transferred in the name of respondent
corporation.
However, petitioners have stopped paying rentals. Respondent then sent letters
dated September 12 and October 17, 1996 to petitioners demanding that they
vacate the premises, but they refused to do so. This prompted respondent to file
with the MeTC a complaint for illegal detainer against them.
154

In their answer, petitioners denied specifically TTRDC's allegations in its
complaint. They claimed that the MeTC has no jurisdiction over the case since
in their answer they are raising an issue of ownership. They alleged that their
father, the late Victoriano Gayoso, sold the lot (a conjugal property) to Almeda
without the consent of their mother. The sale, being void, Almeda could not have
transferred ownership of the lot to respondent corporation.
On July 21, 1997, the MeTC rendered its Decision, the dispositive portion of
which reads:
WHEREFORE, the Court renders judgment:
A. Ordering the defendants
1. and all other persons claiming rights under them to vacate
the premises located at Mariveles corner Calbayog Streets,
Mandaluyong City, and to surrender the possession of the
same to the plaintiff;
2. to pay the plaintiff the amount of P4,000.00 representing their
unpaid rentals beginning February 1981 to December 1996 and
the amount of P20.00 per month every month thereafter until
the premises shall have been vacated;
3. to pay the plaintiff the amount of P10,000.00 as and by way
of attorney's fees; and
4. to pay the costs of suit.
B. dismissing the counterclaim.
SO ORDERED.
The MeTC ruled that since petitioners failed to pay rentals for more than three
months, then respondent has the right to evict them from the premises.
On appeal, the Regional Trial Court (RTC), Branch 213, Mandaluyong City,
affirmed the MeTC Decision, holding that the refusal of petitioners to vacate the
property and pay the rents make out a clear case of unlawful detainer over which
the MeTC has jurisdiction.
Petitioners then filed with the Court of Appeals a Petition for Review under Rule
42 of the 1997 Rules of Civil Procedure, as amended.
CIVIL PROCEDURE CASES SESSION 2
In its Decision dated April 20, 2001, the Court of Appeals affirmed in toto the
RTC Decision, thus:
WHEREFORE, the petition is hereby DISMISSED. The decision of the
Regional Trial Court affirming the decision of the Metropolitan Trial
Court, National Capital Judicial Region, Mandaluyong City, Branch 60,
is hereby AFFIRMED IN TOTO.
SO ORDERED.
Hence, the instant petition.
Petitioners contend that since the issue of ownership of the property in dispute
is inextricably linked with the issue of possession, the MeTC has no jurisdiction
over Civil Case No. 15340.
For its part, respondent maintains that the real issue is who between the parties
is entitled to possession. Hence, the MeTC has jurisdiction to hear and decide
the case.
We find for the respondent.
It is basic that a court's jurisdiction is provided by law. Section 33 of Batas
Pambansa Blg. 129, as amended, provides in part:
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts in Civil Cases. - Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts
shall exercise:
xxx
(2) Exclusive original jurisdiction over cases of forcible entry and
unlawful detainer: Provided, That when, in such cases, the defendant
raises the question of ownership in his pleadings and the question
of possession cannot be resolved without deciding the question
of ownership, the issue of ownership shall be resolved only to
determine the issue of possession; (Emphasis supplied)
Moreover, Section 18, Rule 70 of the 1997 Rules of Civil Procedure, as
amended, states that:
155

SEC. 18. Judgment conclusive only on possession, not conclusive in
actions involving title or ownership. The judgment rendered in an
action for forcible entry or detainer shall be conclusive with
respect to the possession only and shall in no wise bind the title or
affect the ownership of the land or building. Such judgment shall not bar
an action between the same parties respecting title to the land or
building.
The judgment or final order shall be appealable to the appropriate
Regional Trial Court which shall decide the same on the basis of the
entire record of the proceedings had in the court of origin and such
memoranda and/or briefs as may be submitted by the parties or
required by the Regional Trial Court.
In Barba vs. Court of Appeals,2 this Court held:
The Court has repeatedly emphasized that municipal trial courts,
metropolitan trial courts, and municipal circuit trial courts now retain
jurisdiction over ejectment cases if the question of possession cannot
be resolved without passing upon the issue of ownership. In forcible
entry and unlawful detainer cases, even if the defendant raises the
question of ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership, inferior
courts, nonetheless, have the undoubted competence to provisionally
resolve the issue of ownership for the sole purpose of determining the
issue of possession. Such decision, however, does not bind the title or
affect the ownership of the land or building, neither shall it bar an action
between the same parties respecting title to the land or building nor be
held conclusive of the facts therein found in a case between the same
parties upon a different cause of action involving possession.
Likewise, in Tala Realty Services Corporation vs. Banco Filipino Savings and
Mortgage Bank,3 this Court ruled:
All ejectment cases are covered by the Rule on Summary Procedure
and are within the jurisdiction of the inferior courts regardless of whether
they involve questions of ownership. The courts in ejectment cases may
determine questions of ownership whenever necessary to decide the
question of possession.
Verily, we hold that the Court of Appeals did not err in holding that the MeTC of
Mandaluyong City has jurisdiction to hear and decide Civil Case No. 15340,
notwithstanding the issue of ownership raised by petitioners in their answer.
CIVIL PROCEDURE CASES SESSION 2
WHEREFORE, we DENY the petition. The Decision of the Court of Appeals
dated April 20, 2001 in CA-G.R. SP No. 48001 is AFFIRMED. Costs against
petitioners. SO ORDERED.
G.R. No. L-21450 April 15, 1968
SERAFIN TIJAM, ET AL vs. MAGDALENO SIBONGHANOY alias GAVINO
SIBONGHANOY and LUCIA BAGUIO and MANILA SURETY AND
FIDELITY CO., INC. (CEBU BRANCH)
On July 19, 1948 barely one month after the effectivity of Republic Act No.
296 known as the Judiciary Act of 1948 the spouses Serafin Tijam and
Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First
Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia
Baguio to recover from them the sum of P1,908.00, with legal interest thereon
from the date of the filing of the complaint until the whole obligation is paid, plus
costs. As prayed for in the complaint, a writ of attachment was issued by the
court against defendants' properties, but the same was soon dissolved upon the
filing of a counter-bond by defendants and the Manila Surety and Fidelity Co.,
Inc. hereinafter referred to as the Surety, on the 31st of the same month.
After being duly served with summons the defendants filed their answer in
which, after making some admissions and denials of the material averments of
the complaint, they interposed a counterclaim. This counterclaim was answered
by the plaintiffs.
After trial upon the issues thus joined, the Court rendered judgment in favor of
the plaintiffs and, after the same had become final and executory, upon motion
of the latter, the Court issued a writ of execution against the defendants. The
writ having been returned unsatisfied, the plaintiffs moved for the issuance of a
writ of execution against the Surety's bond (Rec. on Appeal, pp. 46-49), against
which the Surety filed a written opposition (Id. pp. 49) upon two grounds,
namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety
for the payment of the amount due under the judgment. Upon these grounds the
Surety prayed the Court not only to deny the motion for execution against its
counter-bond but also the following affirmative relief : "to relieve the herein
bonding company of its liability, if any, under the bond in question" (Id. p. 54)
The Court denied this motion on the ground solely that no previous demand had
been made on the Surety for the satisfaction of the judgment. Thereafter the
necessary demand was made, and upon failure of the Surety to satisfy the
judgment, the plaintiffs filed a second motion for execution against the
counterbond. On the date set for the hearing thereon, the Court, upon motion of
the Surety's counsel, granted the latter a period of five days within which to
answer the motion. Upon its failure to file such answer, the Court granted the
motion for execution and the corresponding writ was issued.
156

Subsequently, the Surety moved to quash the writ on the ground that the same
was issued without the required summary hearing provided for in Section 17 of
Rule 59 of the Rules of Court. As the Court denied the motion, the Surety
appealed to the Court of Appeals from such order of denial and from the one
denying its motion for reconsideration (Id. p. 97). Its record on appeal was then
printed as required by the Rules, and in due time it filed its brief raising therein
no other question but the ones covered by the following assignment of errors:
I. That the Honorable Court a quo erred in issuing its order dated
November 2, 1957, by holding the incident as submitted for resolution,
without a summary hearing and compliance with the other mandatory
requirements provided for in Section 17, Rule 59 of the Rules of Court.
II. That the Honorable Court a quo erred in ordering the issuance of
execution against the herein bonding company-appellant.
III. That the Honorable Court a quo erred in denying the motion to quash
the writ of execution filed by the herein bonding company-appellant as
well as its subsequent motion for reconsideration, and/or in not
quashing or setting aside the writ of execution.
Not one of the assignment of errors it is obvious raises the question of lack
of jurisdiction, neither directly nor indirectly.
Although the appellees failed to file their brief, the Court of Appeals, on
December 11, 1962, decided the case affirming the orders appealed from.
On January 8, 1963 five days after the Surety received notice of the decision,
it filed a motion asking for extension of time within which to file a motion for
reconsideration. The Court of Appeals granted the motion in its resolution of
January 10 of the same year. Two days later the Surety filed a pleading entitled
MOTION TO DISMISS, alleging substantially that appellees action was filed in
the Court of First Instance of Cebu on July 19, 1948 for the recovery of the sum
of P1,908.00 only; that a month before that date Republic Act No. 296, otherwise
known as the Judiciary Act of 1948, had already become effective, Section 88
of which placed within the original exclusive jurisdiction of inferior courts all civil
actions where the value of the subject-matter or the amount of the demand does
not exceed P2,000.00, exclusive of interest and costs; that the Court of First
Instance therefore had no jurisdiction to try and decide the case. Upon these
premises the Surety's motion prayed the Court of Appeals to set aside its
decision and to dismiss the case. By resolution of January 16, 1963 the Court
of Appeals required the appellees to answer the motion to dismiss, but they
failed to do so. Whereupon, on May 20 of the same year, the Court resolved to
CIVIL PROCEDURE CASES SESSION 2
set aside its decision and to certify the case to Us. The pertinent portions of its
resolution read as follows:
It would indeed appear from the record that the action at bar, which is a
suit for collection of money in the sum of exactly P1,908.00 exclusive of
interest, was originally instituted in the Court of First Instance of Cebu
on July 19, 1948. But about a month prior to the filing of the complaint,
more specifically on June 17, 1948, the Judiciary Act of 1948 took effect,
depriving the Court of First Instance of original jurisdiction over cases in
which the demand, exclusive of interest, is not more than P2,000.00.
(Secs. 44[c] and 86[b], R.A. No. 296.)
We believe, therefore, that the point raised in appellant's motion is an
important one which merits serious consideration. As stated, the
complaint was filed on July 19, 1948. This case therefore has been
pending now for almost 15 years, and throughout the entire proceeding
appellant never raised the question of jurisdiction until after receipt of
this Court's adverse decision.
There are three cases decided by the Honorable Supreme Court which
may be worthy of consideration in connection with this case, namely:
Tyson Tan, et al. vs. Filipinas Compaia de Seguros, et al., G.R. No. L-
10096, March 23, 1956; Pindangan Agricultural Co., Inc. vs. Jose P.
Dans, etc., et al., G.R. No. L-14591, September 26, 1962; and Alfredo
Montelibano, et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. No. L-
15092, September 29, 1962, wherein the Honorable Supreme Court
frowned upon the 'undesirable practice' of appellants submitting their
case for decision and then accepting the judgment, if favorable, but
attacking it for lack of jurisdiction when adverse.
Considering, however, that the Supreme Court has the "exclusive"
appellate jurisdiction over "all cases in which the jurisdiction of any
inferior court is in issue" (See. 1, Par. 3[3], Judiciary Act of 1948, as
amended), we have no choice but to certify, as we hereby do certify,
this case to the Supreme Court.1wph1.t
ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948 as
amended, let the record of this case be forwarded to the Supreme
Court.
It is an undisputed fact that the action commenced by appellees in the Court of
First Instance of Cebu against the Sibonghanoy spouses was for the recovery
of the sum of P1,908.00 only an amount within the original exclusive
jurisdiction of inferior courts in accordance with the provisions of the Judiciary
157

Act of 1948 which had taken effect about a month prior to the date when the
action was commenced. True also is the rule that jurisdiction over the subject
matter is conferred upon the courts exclusively by law, and as the lack of it
affects the very authority of the court to take cognizance of the case, the
objection may be raised at any stage of the proceedings. However, considering
the facts and circumstances of the present case which shall forthwith be set
forth We are of the opinion that the Surety is now barred by laches from
invoking this plea at this late hour for the purpose of annuling everything done
heretofore in the case with its active participation.
As already stated, the action was commenced in the Court of First Instance of
Cebu on July 19, 1948, that is, almost fifteen years before the Surety filed its
motion to dismiss on January 12, 1963 raising the question of lack of
jurisdiction for the first time.
It must be remembered that although the action, originally, was exclusively
against the Sibonghanoy spouses the Surety became a quasi-party therein
since July 31, 1948 when it filed a counter-bond for the dissolution of the writ of
attachment issued by the court of origin (Record on Appeal, pp. 15-19). Since
then, it acquired certain rights and assumed specific obligations in connection
with the pending case, in accordance with sections 12 and 17, Rule 57, Rules
of Court (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65 Phil.
170).
Upon the filing of the first motion for execution against the counter-bond the
Surety not only filed a written opposition thereto praying for its denial but also
asked for an additional affirmative relief that it be relieved of its liability under
the counter-bond upon the grounds relied upon in support of its opposition
lack of jurisdiction of the court a quo not being one of them.
Then, at the hearing on the second motion for execution against the counter-
bond, the Surety appeared, through counsel, to ask for time within which to file
an answer or opposition thereto. This motion was granted, but instead of such
answer or opposition, the Surety filed the motion to dismiss mentioned
heretofore.
A party may be estopped or barred from raising a question in different ways and
for different reasons. Thus we speak of estoppel in pais, or estoppel by deed or
by record, and of estoppel by laches.
Laches, in a general sense is failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
CIVIL PROCEDURE CASES SESSION 2
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of public
policy which requires, for the peace of society, the discouragement of stale
claims and, unlike the statute of limitations, is not a mere question of time but is
principally a question of the inequity or unfairness of permitting a right or claim
to be enforced or asserted.
It has been held that a party can not invoke the jurisdiction of a court to sure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or.
694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was
further said that the question whether the court had jurisdiction either of the
subject-matter of the action or of the parties was not important in such cases
because the party is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason
that such a practice can not be tolerated obviously for reasons of public
policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc.,
243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141 U.S.
127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that
it is not right for a party who has affirmed and invoked the jurisdiction of a court
in a particular matter to secure an affirmative relief, to afterwards deny that same
jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases mentioned in the
resolution of the Court of Appeals of May 20, 1963 (supra) to the effect that
we frown upon the "undesirable practice" of a party submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for
lack of jurisdiction, when adverse as well as in Pindagan etc. vs. Dans, et
al., G.R. L-14591, September 26, 1962; Montelibano, et al., vs. Bacolod-Murcia
Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court of
Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100
Phil. p. 277.
The facts of this case show that from the time the Surety became a quasi-party
on July 31, 1948, it could have raised the question of the lack of jurisdiction of
the Court of First Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the law then in force,
was within the original exclusive jurisdiction of inferior courts. It failed to do so.
158

Instead, at several stages of the proceedings in the court a quo as well as in the
Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative
relief and submitted its case for a final adjudication on the merits. It was only
after an adverse decision was rendered by the Court of Appeals that it finally
woke up to raise the question of jurisdiction. Were we to sanction such conduct
on its part, We would in effect be declaring as useless all the proceedings had
in the present case since it was commenced on July 19, 1948 and compel the
judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.
Coming now to the merits of the appeal: after going over the entire record, We
have become persuaded that We can do nothing better than to quote in toto,
with approval, the decision rendered by the Court of Appeals on December 11,
1962 as follows:
In Civil Case No. R-660 of the Court of First Instance of Cebu, which
was a suit for collection of a sum of money, a writ of attachment was
issued against defendants' properties. The attachment, however, was
subsequently discharged under Section 12 of Rule 59 upon the filing by
defendants of a bond subscribed by Manila Surety & Fidelity Co., Inc.
After trial, judgment was rendered in favor of plaintiffs.
The writ of execution against defendants having been returned totally
unsatisfied, plaintiffs moved, under Section 17 of Rule 59, for issuance
of writ of execution against Manila Surety & Fidelity Co., Inc. to enforce
the obligation of the bond. But the motion was, upon the surety's
opposition, denied on the ground that there was "no showing that a
demand had been made, by the plaintiffs to the bonding company for
payment of the amount due under the judgment" (Record on Appeal, p.
60).
Hence, plaintiffs made the necessary demand upon the surety for
satisfaction of the judgment, and upon the latter's failure to pay the
amount due, plaintiffs again filed a motion dated October 31, 1957, for
issuance of writ of execution against the surety, with notice of hearing
on November 2, 1957. On October 31, 1957, the surety received copy
of said motion and notice of hearing.
It appears that when the motion was called on November 2, 1957, the
surety's counsel asked that he be given time within which to answer the
motion, and so an order was issued in open court, as
follows:1wph1.t summary hearing required by Section 17 of Rule 59, which reads;
CIVIL PROCEDURE CASES SESSION 2
As prayed for, Atty. Jose P. Soberano, Jr., counsel for the
Manila Surety & Fidelity Co., Inc., Cebu Branch, is given until
Wednesday, November 6, 1957, to file his answer to the motion
for the issuance of a writ of execution dated October 30, 1957
of the plaintiffs, after which this incident shall be deemed
submitted for resolution.
SO ORDERED.
Given in open court, this 2nd day of November, 1957, at Cebu
City, Philippines.
(Sgd.) JOSE M. MENDOZA
Judge
(Record on Appeal, pp.
64-65, emphasis ours)
Since the surety's counsel failed to file any answer or objection within
the period given him, the court, on December 7, 1957, issued an order
granting plaintiffs' motion for execution against the surety; and on
December 12, 1957, the corresponding writ of execution was issued.
On December 24, 1957, the surety filed a motion to quash the writ of
execution on the ground that the same was "issued without the
requirements of Section 17, Rule 59 of the Rules of Court having been
complied with," more specifically, that the same was issued without the
required "summary hearing". This motion was denied by order of
February 10, 1958.
On February 25, 1958, the surety filed a motion for reconsideration of
the above-stated order of denial; which motion was likewise denied by
order of March 26, 1958.
From the above-stated orders of February 10, 1958 and March 26, 1958
denying the surety's motion to quash the writ of execution and motion
for reconsideration, respectively the surety has interposed the appeal
on hand.
The surety insists that the lower court should have granted its motion to
quash the writ of execution because the same was issued without the
159

"Sec. 17. When execution returned unsatisfied, recovery had
upon bond. If the execution be returned unsatisfied in whole
or in part, the surety or sureties on any bond given pursuant to
the provisions of this role to secure the payment of the judgment
shall become finally charged on such bond, and bound to pay
to the plaintiff upon demand the amount due under the
judgment, which amount may be recovered from such surety or
sureties after notice and summary hearing in the same action."
(Emphasis ours)
Summary hearing is "not intended to be carried on in the formal manner
in which ordinary actions are prosecuted" (83 C.J.S. 792). It is, rather,
a procedure by which a question is resolved "with dispatch, with the
least possible delay, and in preference to ordinary legal and regular
judicial proceedings" (Ibid, p. 790). What is essential is that "the
defendant is notified or summoned to appear and is given an
opportunity to hear what is urged upon him, and to interpose a defense,
after which follows an adjudication of the rights of the parties" (Ibid., pp.
793-794); and as to the extent and latitude of the hearing, the same will
naturally lie upon the discretion of the court, depending upon the
attending circumstances and the nature of the incident up for
consideration.
In the case at bar, the surety had been notified of the plaintiffs' motion
for execution and of the date when the same would be submitted for
consideration. In fact, the surety's counsel was present in court when
the motion was called, and it was upon his request that the court a
quo gave him a period of four days within which to file an answer. Yet
he allowed that period to lapse without filing an answer or objection. The
surety cannot now, therefore, complain that it was deprived of its day in
court.
It is argued that the surety's counsel did not file an answer to the motion
"for the simple reason that all its defenses can be set up during the
hearing of the motion even if the same are not reduced to writing"
(Appellant's brief, p. 4). There is obviously no merit in this pretense
because, as stated above, the record will show that when the motion
was called, what the surety's counsel did was to ask that he be allowed
and given time to file an answer. Moreover, it was stated in the order
given in open court upon request of the surety's counsel that after the
four-day period within which to file an answer, "the incident shall be
deemed submitted for resolution"; and counsel apparently agreed, as
the order was issued upon his instance and he interposed no objection
thereto.
CIVIL PROCEDURE CASES SESSION 2
It is also urged that although according to Section 17 of Rule 59, supra,
there is no need for a separate action, there must, however, be a
separate judgment against the surety in order to hold it liable on the
bond (Appellant's Brief, p. 15). Not so, in our opinion. A bond filed for
discharge of attachment is, per Section 12 of Rule 59, "to secure the
payment to the plaintiff of any judgment he may recover in the action,"
and stands "in place of the property so released". Hence, after the
judgment for the plaintiff has become executory and the execution is
"returned unsatisfied" (Sec. 17, Rule 59), as in this case, the liability of
the bond automatically attaches and, in failure of the surety to satisfy
the judgment against the defendant despite demand therefor, writ of
execution may issue against the surety to enforce the obligation of the
bond.
UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed,
with costs against the appellant Manila Surety and Fidelity Company, Inc.
G.R. No. L-34362 November 19, 1982
MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS
ADMINISTRATOR OF THE ESTATE OF DOMINGO MAGALI vs. HON.
PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE
COURT OF FIRST INSTANCE OF PANGASINAN, BRANCH I, and
FRANCISCO RAMOS
The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the
respondent Court against the private respondent is sought to be annulled and
set aside by this Petition For Review On Certiorari.
The antecedent material facts are not disputed. Sometime in 1961, a judgment
for a sum of money was rendered in favor of Independent Mercantile
Corporation against a certain Manuel Magali by the Municipal Court of Manila
in Civil Case No. 85136. After said judgment became final, a writ of execution
was issued on July 31, 1961. The Notice of Levy made on September 21,
1961 on a parcel of land covered by Transfer Certificate of Title No. 9138
registered in the name of "Domingo Magali, married to Modesta Calimlim",
specified that the said levy was only against "all rights, title, action, interest and
participation of the defendant Manuel Magali over the parcel of land described
in this title. " The Certificate of Sale executed by the Provincial Sheriff of
Pangasinan on October 17, 1961 in favor of Independent Mercantile
Corporation also stated that the sale referred only to the rights and interest of
Manuel Magali over the land described in TCT No. 9138. Manuel Magali is one
of the several children of Domingo Magali who had died in 1940 and herein
petitioner Modesta Calimlim.
160

However, when the Sheriff issued the final Deed of Sale on January 25, 1963,
it was erroneously stated therein that the sale was with respect to "the parcel
of land described in this title" (referring to TCT No. 9138) and not only over the
rights and interest of Manuel Magali in the same. The execution of the said
final Deed of Sale was annotated at the back of said title.
On February 23, 1967, Independent Mercantile Corporation filed a petition in
the respondent Court to compel Manuel Magali to surrender the owner's
duplicate of TCT No. 9138 in order that the same may be cancelled and a new
one issued in the name of the said corporation. Not being the registered owner
and the title not being in his possession, Manuel Magali failed to comply with
the order of the Court directing him to surrender the said title. On June 20,
1967, Independent Mercantile Corporation filed an ex-parte petition to declare
TCT No. 9138 as cancelled and to issue a new title in its name. The said
petition was granted by the respondent Court and in its Order dated July 13,
1967, it directed the issuance of a new certificate of title in the name of the
Independent Mercantile Corporation and the cancellation of TCT No. 9138. By
virtue of said Order, the Register of Deeds of Pangasinan issued a new title in
the name of the corporation, Identified as TCT No. 68568.
On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of
Domingo Magali, upon learning that her husband's title over the parcel of land
had been cancelled, filed a petition with the respondent Court, sitting as a
cadastral court, praying for the cancellation of TCT No. 68568. An opposition
to the said petition was filed by Independent Mercantile Corporation. After the
parties submitted their respective Memoranda, the respondent Court issued an
Order dated June 3, 1968 dismissing the petition. (Rollo, pp. 31-38.)
The herein petitioners did not appeal the dismissal of the petition they filed in
LRC Record No. 39492 for the cancellation of TCT No. 68568. Instead, on
January 11, 1971, they filed the complaint in Civil Case No. SCC-180 praying
for the cancellation of the conveyances and sales that had been made with
respect to the property, covered by TCT No. 9138 previously registered in the
name of Domingo Magali, married to Modesta Calimlim. Named as defendant
in said civil case was herein private respondent Francisco Ramos who claimed
to have bought the property from Independent Mercantile Corporation on July
25, 1967. Private respondent Francisco Ramos, however, failed to obtain a
title over the property in his name in view of the existence of an adverse claim
annotated on the title thereof at the instance of the herein petitioners.
Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No.
SCC-180 on the ground that the same is barred by prior judgement or by
statute of limitations (Rollo. pp. 42-45). Resolving the said Motion, the
respondent Court, in its Order dated April 21, 1971, dismissed Civil Case No.
SCC- 180 on the ground of estoppel by prior judgment. (Ibid., pp, 10-13.) A
CIVIL PROCEDURE CASES SESSION 2
Motion For Reconsideration filed by the petitioners was denied by the
respondent Judge in his Order of September 2, 1971. (Ibid., pp. 13-15.) A
second Motion For Reconsideration was similarly denied in the Order dated
September 29, 197 1. (Rollo, pp. 16-17.) Hence, this Petition.
We find merit in this appeal.
It is error to consider the dismissal of the petition filed by the herein petitioner
in LRC Record No. 39492 for the cancellation of TCT No. 68568 as a bar by
prior judgment against the filing of Civil Case No. SCC-180. In order to avail of
the defense of res judicata, it must be shown, among others, that the judgment
in the prior action must have been rendered by a court with the proper
jurisdiction to take cognizance of the proceeding in which the prior judgment or
order was rendered. If there is lack of jurisdiction over the subject-matter of the
suit or of the parties, the judgment or order cannot operate as an adjudication
of the controversy. (2 Moran Comments on the Rules of Court, 1970 Edition, p.
364.) This essential element of the defense of bar by prior judgment or res
judicata does not exist in the case presently considered.
The petition filed by the herein petitioners in LRC Record No. 39492 was an
apparent invocation of the authority of the respondent Court sitting as a land
registration court, Although the said petition did not so state, that reliance was
apparently placed on Section 112 of the Land Registration Act. It has been
settled by consistent rulings of this Court that a court of first instance, acting as
a land registration court, is a court of limited and special jurisdiction. As such,
its proceedings are not adequate for the litigation of issues pertaining to an
ordinary civil action, such as, questions involving ownership or title to real
property. (Bareng vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA
418; Manalo vs. Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA
747; Santos vs. Aquino, 101 SCRA 377.) In Hu chon Sunpongco vs. Heirs of
Nicolas Ronquillo, L- 27040, December 19, 1970, 36 SCRA 395, we have held
that:
Section 112 of Act 496 confers authority upon the land
registration court to order the cancellation, alteration or
amendment of a certificate of title but withdraws from the
Court the power to pass upon any question concerning
ownership of the registered property, or any incident where
the issues involved have become controversial.
It may hardly be questioned that the issues raised by the petitioners in their
petition to cancel TCT No. 68568 refer to the ownership or title over the
property covered thereby. The said petition presented before the respondent
Court in the exercise of its limited jurisdiction as a cadastral court, the question
161

of who should be considered the true and lawful owner of the parcel of land
embraced in said title. The petitioners alleged therein that they are the true
owners of the property, and that TCT No. 68568 which they sought to cancel
was issued as a result of the errors which were not of their own making. In
short, the petition raised a highly controversial matter which is beyond the
judicial competence of a cadastral court to pass upon or to adjudicate.
It may neither be claimed that the parties have mutually agreed to submit the
aforesaid issues for the determination by the court, it being a fact that herein
private respondent was not a party in the petition in LRC Record No. 39492.
Incidentally, although the said petition was filed by the herein petitioners on
November 21, 1967, the Opposition filed by Independent Mercantile
Corporation to the said petition made no mention of the alleged sale of the
property in question in favor of private respondent Francisco Ramos on July 5,
1967. This circumstance places in grave doubt the sincerity of said sale and
the claim that the private respondent was an innocent purchaser for value of
the property in question.
In the order of the respondent Judge dated September 29, 1971 denying the
second motion for reconsideration, he cited the case of Tijam vs.
Sibonghanoy, 23 SCRA 29, to uphold the view that the petitioners are deemed
estopped from questioning the jurisdiction of the respondent Court in having
taken cognizance of the petition for cancellation of TCT No. 68568, they being
the ones who invoked the jurisdiction of the said Court to grant the affirmative
relief prayed for therein. We are of the opinion that the ruling laid down
in Sibonghanoy may not be applied herein. Neither its factual backdrop nor the
philosophy of the doctrine therein expounded fits the case at bar.
A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the
subject-matter of the action is a matter of law and may not be conferred by
consent or agreement of the parties. The lack of jurisdiction of a court may be
raised at any stage of the proceedings, even on appeal. This doctrine has
been qualified by recent pronouncements which stemmed principally from the
ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the
holding in said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved
in Sibonghanoywhich justified the departure from the accepted concept of non-
waivability of objection to jurisdiction has been ignored and, instead a blanket
doctrine had been repeatedly upheld that rendered the supposed ruling
in Sibonghanoy not as the exception, but rather the general rule, virtually
overthrowing altogether the time-honored principle that the issue of jurisdiction
is not lost by waiver or by estoppel.
CIVIL PROCEDURE CASES SESSION 2
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered
the questioned ruling was held to be barred by estoppel by laches. It was ruled
that the lack of jurisdiction having been raised for the first time in a motion to
dismiss filed almost fifteen (15) years after the questioned ruling had been
rendered, such a plea may no longer be raised for being barred by laches. As
defined in said case, laches is "failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it."
The petitioners in the instant case may not be faulted with laches. When they
learned that the title to the property owned by them had erroneously and
illegally been cancelled and registered in the name of another entity or person
who had no right to the same, they filed a petition to cancel the latter's title. It
is unfortunate that in pursuing said remedy, their counsel had to invoke the
authority of the respondent Court as a cadastral court, instead of its capacity
as a court of general jurisdiction. Their petition to cancel the title in the name of
Independent Mercantile Corporation was dismissed upon a finding by the
respondent Court that the same was "without merit." No explanation was given
for such dismissal nor why the petition lacked merit. There was no hearing,
and the petition was resolved solely on the basis of memoranda filed by the
parties which do not appear of record. It is even a possibility that such
dismissal was in view of the realization of the respondent Court that, sitting as
a cadastral court, it lacked the authority to entertain the petition involving as it
does a highly controversial issue. Upon such petition being dismissed, the
petitioners instituted Civil Case No. SCC-180 on January 1, 1971, or only two
and one-half years after the dismissal of their petition in LRC Record No.
39492. Hence, we see no unreasonable delay in the assertion by the
petitioners of their right to claim the property which rightfully belongs to them.
They can hardly be presumed to have abandoned or waived such right by
inaction within an unreasonable length of time or inexcusable negligence. In
short, their filing of Civil Case No. SCC-180 which in itself is an implied non-
acceptance of the validity of the proceedings had in LRC Record No. 39492
may not be deemed barred by estoppel by laches.
It is neither fair nor legal to bind a party by the result of a suit or proceeding
which was taken cognizance of in a court which lacks jurisdiction over the
same irrespective of the attendant circumstances. The equitable defense of
estoppel requires knowledge or consciousness of the facts upon which it is
based. The same thing is true with estoppel by conduct which may be
asserted only when it is shown, among others, that the representation must
have been made with knowledge of the facts and that the party to whom it was
made is ignorant of the truth of the matter. (De Castro vs. Gineta, 27 SCRA
623.) The filing of an action or suit in a court that does not possess jurisdiction
162

to entertain the same may not be presumed to be deliberate and intended to
secure a ruling which could later be annulled if not favorable to the party who
filed such suit or proceeding. Instituting such an action is not a one-sided
affair. It can just as well be prejudicial to the one who filed the action or suit in
the event that he obtains a favorable judgment therein which could also be
attacked for having been rendered without jurisdiction. The determination of
the correct jurisdiction of a court is not a simple matter. It can raise highly
debatable issues of such importance that the highest tribunal of the land is
given the exclusive appellate jurisdiction to entertain the same. The point
simply is that when a party commits error in filing his suit or proceeding in a
court that lacks jurisdiction to take cognizance of the same, such act may not
at once be deemed sufficient basis of estoppel. It could have been the result of
an honest mistake, or of divergent interpretations of doubtful legal provisions.
If any fault is to be imputed to a party taking such course of action, part of the
blame should be placed on the court which shall entertain the suit, thereby
lulling the parties into believing that they pursued their remedies in the correct
forum. Under the rules, it is the duty of the court to dismiss an action
"whenever it appears that the court has no jurisdiction over the subject matter."
(Sec. 2, Rule 9, Rules of Court.) Should the court render a judgment without
jurisdiction, such judgment may be impeached or annulled for lack of
jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of
the same. (Art. 1144, par. 3, Civil Code.)
The inequity of barring the petitioners from vindicating their right over their
property in Civil Case No. SCC-180 is rendered more acute in the face of the
undisputed fact that the property in question admittedly belonged to the
petitioners, and that the title in the name of the private respondent was the
result of an error committed by the Provincial Sheriff in issuing the deed of sale
in the execution proceeding. The justness of the relief sought by herein
petitioners may not be ignored or rendered futile by reason of a doctrine which
is of highly doubtful applicability herein.
WHEREFORE, the Orders appealed from are hereby REVERSED and SET
ASIDE. The Motion To Dismiss filed by the private respondent in Civil Case
No. SCC-180 shall be deemed denied and the respondent Court is ordered to
conduct further proceedings in the case. With costs against the private
respondent. SO ORDERED.
G.R. No. 144025 December 27, 2002
SPS. RENE GONZAGA and LERIO GONZAGA vs. HON. COURT OF
APPEALS, Second Division, Manila, HON. QUIRICO G. DEFENSOR,
Judge, RTC, Branch 36, Sixth Judicial Region, Iloilo City, and LUCKY
HOMES, INC., represented by WILSON JESENA, JR., as Manager
CIVIL PROCEDURE CASES SESSION 2
Before this Court is a petition for review on certiorari seeking the reversal of the
decision1 of the Court of Appeals dated December 29, 1999 and its resolution
dated June 1, 2000 in CA-G.R. SP No. 54587.
The records disclose that, sometime in 1970, petitioner-spouses purchased a
parcel of land from private respondent Lucky Homes, Inc., situated in Iloilo and
containing an area of 240 square meters. Said lot was specifically denominated
as Lot No. 19 under Transfer Certificate of Title (TCT) No. 28254 and was
mortgaged to the Social Security System (SSS) as security for their housing
loan. Petitioners then started the construction of their house, not on Lot No. 19
but on Lot No. 18, as private respondent mistakenly identified Lot No. 18 as Lot
No. 19. Upon realizing its error, private respondent, through its general
manager, informed petitioners of such mistake but the latter offered to buy Lot
No. 18 in order to widen their premises. Thus, petitioners continued with the
construction of their house. However, petitioners defaulted in the payment of
their housing loan from SSS. Consequently, Lot No. 19 was foreclosed by SSS
and petitioners certificate of title was cancelled and a new one was issued in
the name of SSS. After Lot No. 19 was foreclosed, petitioners offered to swap
Lot Nos. 18 and 19 and demanded from private respondent that their contract
of sale be reformed and another deed of sale be executed with respect to Lot
No. 18, considering that their house was built therein. However, private
respondent refused. This prompted petitioners to file, on June 13, 1996, an
action for reformation of contract and damages with the Regional Trial Court of
Iloilo City, Branch 36, which was docketed as Civil Case No. 17115.
On January 15, 1998, the trial court2 rendered its decision dismissing the
complaint for lack of merit and ordering herein petitioners to pay private
respondent the amount of P10,000 as moral damages and another P10,000 as
attorneys fees. The pertinent conclusion of the trial court reads as follows:
"Aware of such fact, the plaintiff nonetheless continued to stay in the premises
of Lot 18 on the proposal that he would also buy the same. Plaintiff however
failed to buy Lot 18 and likewise defaulted in the payment of his loan with the
SSS involving Lot 19. Consequently Lot 19 was foreclosed and sold at public
auction. Thereafter TCT No. T-29950 was cancelled and in lieu thereof TCT No.
T-86612 (Exh. 9) was issued in favor of SSS. This being the situation obtaining,
the reformation of instruments, even if allowed, or the swapping of Lot 18 and
Lot 19 as earlier proposed by the plaintiff, is no longer feasible considering that
plaintiff is no longer the owner of Lot 19, otherwise, defendant will be losing Lot
18 without any substitute therefore (sic). Upon the other hand, plaintiff will be
unjustly enriching himself having in its favor both Lot 19 which was earlier
mortgaged by him and subsequently foreclosed by SSS, as well as Lot 18 where
his house is presently standing.
163

"The logic and common sense of the situation lean heavily in favor of the
defendant. It is evident that what plaintiff had bought from the defendant is Lot
19 covered by TCT No. 28254 which parcel of land has been properly indicated
in the instruments and not Lot 18 as claimed by the plaintiff. The contracts being
clear and unmistakable, they reflect the true intention of the parties, besides the
plaintiff failed to assail the contracts on mutual mistake, hence the same need
no longer be reformed."3
On June 22, 1998, a writ of execution was issued by the trial court. Thus, on
September 17, 1998, petitioners filed an urgent motion to recall writ of execution,
alleging that the court a quo had no jurisdiction to try the case as it was vested
in the Housing and Land Use Regulatory Board (HLURB) pursuant to PD 957
(The Subdivision and Condominium Buyers Protective Decree). Conformably,
petitioners filed a new complaint against private respondent with the HLURB.
Likewise, on June 30, 1999, petitioner-spouses filed before the Court of Appeals
a petition for annulment of judgment, premised on the ground that the trial court
had no jurisdiction to try and decide Civil Case No. 17115.
In a decision rendered on December 29, 1999, the Court of Appeals denied the
petition for annulment of judgment, relying mainly on the jurisprudential doctrine
of estoppel as laid down in the case of Tijam vs. Sibonghanoy.4
Their subsequent motion for reconsideration having been denied, petitioners
filed this instant petition, contending that the Court of Appeals erred in
dismissing the petition by applying the principle of estoppel, even if the Regional
Trial Court, Branch 36 of Iloilo City had no jurisdiction to decide Civil Case No.
17115.
At the outset, it should be stressed that petitioners are seeking from us the
annulment of a trial court judgment based on lack of jurisdiction. Because it is
not an appeal, the correctness of the judgment is not in issue here. Accordingly,
there is no need to delve into the propriety of the decision rendered by the trial
court.
Petitioners claim that the recent decisions of this Court have already abandoned
the doctrine laid down in Tijam vs. Sibonghanoy.5 We do not agree. In countless
decisions, this Court has consistently held that, while an order or decision
rendered without jurisdiction is a total nullity and may be assailed at any stage,
active participation in the proceedings in the court which rendered the order or
decision will bar such party from attacking its jurisdiction. As we held in the
leading case of Tijam vs. Sibonghanoy:6
CIVIL PROCEDURE CASES SESSION 2
"A party may be estopped or barred from raising a question in different ways
and for different reasons. Thus we speak of estoppel in pais, or estoppel by
deed or by record, and of estoppel by laches.
xxx
"It has been held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate, or question that same jurisdiction x x x x [T]he question
whether the court had jurisdiction either of the subject matter of the action or of
the parties was not important in such cases because the party is barred from
such conduct not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice can not be
tolerated obviously for reasons of public policy."
Tijam has been reiterated in many succeeding cases. Thus, in Orosa vs. Court
of Appeals;7 Ang Ping vs. Court of Appeals;8 Salva vs. Court of
Appeals;9 National Steel Corporation vs. Court of Appeals;10 Province of
Bulacan vs. Court of Appeals;11 PNOC Shipping and Transport Corporation vs.
Court of Appeals,12 this Court affirmed the rule that a partys active participation
in all stages of the case before the trial court, which includes invoking the courts
authority to grant affirmative relief, effectively estops such party from later
challenging that same courts jurisdiction.
In the case at bar, it was petitioners themselves who invoked the jurisdiction of
the court a quo by instituting an action for reformation of contract against private
respondents. It appears that, in the proceedings before the trial court, petitioners
vigorously asserted their cause from start to finish. Not even once did petitioners
ever raise the issue of the courts jurisdiction during the entire proceedings
which lasted for two years. It was only after the trial court rendered its decision
and issued a writ of execution against them in 1998 did petitioners first raise the
issue of jurisdiction and it was only because said decision was unfavorable to
them. Petitioners thus effectively waived their right to question the courts
jurisdiction over the case they themselves filed.
Petitioners should bear the consequence of their act. They cannot be allowed
to profit from their omission to the damage and prejudice of the private
respondent. This Court frowns upon the undesirable practice of a party
submitting his case for decision and then accepting the judgment but only if
favorable, and attacking it for lack of jurisdiction if not.13
Public policy dictates that this Court must strongly condemn any double-dealing
by parties who are disposed to trifle with the courts by deliberately taking
inconsistent positions, in utter disregard of the elementary principles of justice
164

and good faith.14 There is no denying that, in this case, petitioners never raised
the issue of jurisdiction throughout the entire proceedings in the trial court.
Instead, they voluntarily and willingly submitted themselves to the jurisdiction of
said court. It is now too late in the day for them to repudiate the jurisdiction they
were invoking all along.
WHEREFORE, the petition for review is hereby DENIED. SO ORDERED.
G.R. No. 139791 December 12, 2003
MANILA BANKERS LIFE INSURANCE CORPORATION vs. EDDY NG KOK
WEI
Before us is a petition for review on certiorari assailing the Decision 1 dated
March 26, 1999 and Resolution2 dated August 5, 1999 of the Court of Appeals
in CA-G.R. CV No. 40504, entitled "Eddy Ng Kok Wei vs. Manila Bankers Life
Insurance Corporation".
The factual antecedents as borne by the records are:
Eddy Ng Kok Wei, respondent, is a Singaporean businessman who ventured
into investing in the Philippines. On November 29, 1988, respondent, in a Letter
of Intent addressed to Manila Bankers Life Insurance Corporation, petitioner,
expressed his intention to purchase a condominium unit at Valle Verde
Terraces.
Subsequently or on December 5, 1988, respondent paid petitioner a reservation
fee of P50,000.00 for the purchase of a 46-square meter condominium unit (Unit
703) valued at P860,922.00. On January 16, 1989, respondent paid 90% of the
purchase price in the sum of P729,830.00.
Consequently, petitioner, through its President, Mr. Antonio G. Puyat, executed
a Contract to Sell in favor of the respondent. The contract expressly states that
the subject condominium unit "shall substantially be completed and delivered"
to the respondent "within fifteen (15) months" from February 8, 1989 or on May
8, 1990, and that "(S)hould there be no substantial completion and fail(ure) to
deliver the unit on the date specified, a penalty of 1% of the total amount paid
(by respondent) shall be charged against (petitioner)".
Considering that the stipulated 15-month period was at hand, respondent
returned to the Philippines sometime in April, 1990.
In a letter dated April 5, 1990, petitioner, through its Senior Assistant Vice-
President, Mr. Mario G. Zavalla, informed respondent of the substantial
CIVIL PROCEDURE CASES SESSION 2
completion of his condominium unit, however, due to various uncontrollable
forces (such as coup d etat attempts, typhoon and steel and cement shortage),
the final turnover is reset to May 31, 1990.1wphi1
Meanwhile, on July 5, 1990, upon receipt of petitioners notice of delivery dated
May 31, 1990, respondent again flew back to Manila. He found the unit still
uninhabitable for lack of water and electric facilities.
Once more, petitioner issued another notice to move-in addressed to its building
administrator advising the latter that respondent is scheduled to move in on
August 22, 1990.
On October 5, 1990, respondent returned to the Philippines only to find that his
condominium unit was still unlivable. Exasperated, he was constrained to send
petitioner a letter dated November 21, 1990 demanding payment for the
damages he sustained. But petitioner ignored such demand, prompting
respondent to file with the Regional Trial Court, Branch 150, Makati City, a
complaint against the former for specific performance and damages, docketed
as Civil Case No. 90-3440.
Meanwhile, during the pendency of the case, respondent finally accepted the
condominium unit and on April 12, 1991, occupied the same. Thus,
respondents cause of action has been limited to his claim for damages.
On December 18, 1992, the trial court rendered a Decision3 finding the petitioner
liable for payment of damages due to the delay in the performance of its
obligation to the respondent. The dispositive portion reads:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant, ordering Manila Bankers Life Insurance Corporation to pay plaintiff
Eddy Ng Kok Wei the following:
1. One percent (1%) of the total amount plaintiff paid defendant;
2. P100,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P25,000.00 by way of attorneys fees; and
Cost of suit.
"SO ORDERED."
165

On appeal, the Court of Appeals, in a Decision dated March 26, 1999,
affirmed in toto the trial courts award of damages in favor of the respondent.
Unsatisfied, petitioner filed a motion for reconsideration but was denied by the
Appellate Court in a Resolution dated August 5, 1999.
Hence, this petition for review on certiorari. Petitioner contends that the trial
court has no jurisdiction over the instant case; and that the Court of Appeals
erred in affirming the trial courts finding that petitioner incurred unreasonable
delay in the delivery of the condominium unit to respondent.
On petitioners contention that the trial court has no jurisdiction over the instant
case, Section 1 (c) of Presidential Decree No. 1344, as amended, provides:
"SECTION 1. In the exercise of its functions to regulate the real estate trade
and business and in addition to its powers provided for in Presidential Decree
No. 957, the National Housing Authority [now Housing and Land Use Regulatory
Board (HLURB)]4 shall have exclusive jurisdiction to hear and decide cases of
the following nature:
xxx
"C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units against the
owner, developer, dealer, broker or salesman.
x x x."
Pursuant to the above provisions, it is the HLURB which has jurisdiction over
the instant case. We have consistently held that complaints for specific
performance with damages by a lot or condominium unit buyer against the
owner or developer falls under the exclusive jurisdiction of the HLURB.5
While it may be true that the trial court is without jurisdiction over the case,
petitioners active participation in the proceedings estopped it from assailing
such lack of it. We have held that it is an undesirable practice of a party
participating in the proceedings and submitting its case for decision and then
accepting the judgment, only if favorable, and attacking it for lack of jurisdiction,
when adverse.6
Here, petitioner failed to raise the question of jurisdiction before the trial court
and the Appellate Court. In effect, petitioner confirmed and ratified the trial
CIVIL PROCEDURE CASES SESSION 2
courts jurisdiction over this case. Certainly, it is now in estoppel and can no
longer question the trial courts jurisdiction.
On petitioners claim that it did not incur delay, suffice it to say that this is a
factual issue. Time and again, we have ruled that "the factual findings of the trial
court are given weight when supported by substantial evidence and carries more
weight when affirmed by the Court of Appeals." 7 Whether or not petitioner
incurred delay and thus, liable to pay damages as a result thereof, are
indeed factual questions.
The jurisdiction of this Court in a petition for review on certiorari under Rule 45
of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing only
errors of law, not of fact, unless the factual findings being assailed are not
supported by evidence on record or the impugned judgment is based on a
misapprehension of facts.8 These exceptions are not present here.
WHEREFORE, the petition is DENIED. The assailed Decision dated March 26,
1999 and Resolution dated August 5, 1999 of the Court of Appeals are hereby
AFFIRMED IN TOTO. Costs against the petitioner. SO ORDERED.
G.R. No. 151821 April 14, 2004
BANK OF THE PHILIPPINE ISLANDS, as Successor-in-Interest of BPI
Investment Corporation vs. ALS MANAGEMENT & DEVELOPMENT
CORP.
Factual findings of the lower courts are entitled to great respect, but may be
reviewed if they do not conform to law and to the evidence on record. In the
case at bar, a meticulous review of the facts compels us to modify the award
granted by the Court of Appeals.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking
to set aside the November 24, 2000 Decision2 and the January 9, 2002
Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 25781. The assailed
Decision disposed as follows:
"WHEREFORE, premises considered, the assailed decision is
hereby AFFIRMED in toto and the instant appeal DISMISSED."4
The assailed Resolution denied reconsideration.
The Facts
166

The facts of the case are narrated by the appellate court as follows:
"On July 29, 1985, [petitioner] BPI Investment Corporation filed a
complaint for a Sum of Money against ALS Management and
Development Corporation, alleging inter alia that on July 22, 1983,
[petitioner] and [respondent] executed at Makati, Metro Manila a Deed
of Sale for one (1) unfurnished condominium unit of the Twin Towers
Condominium located at Ayala Avenue, corner Apartment Ridge Street,
Makati, Metro Manila designated as Unit E-4A comprising of 271
squares [sic] meters more or less, together with parking stalls identified
as G022 and G-63. The Condominium Certificate of Title No. 4800 of
the Registry of Deeds for Makati, Metro Manila was issued after the
execution of the said Deed of Sale. [Petitioner] advanced the amount
of P26,300.45 for the expenses in causing the issuance and registration
of the Condominium Certificate of Title. Under the penultimate
paragraph of the Deed of Sale, it is stipulated that the VENDEE
[respondent] shall pay all the expenses for the preparation and
registration of this Deed of Sale and such other documents as may be
necessary for the issuance of the corresponding Condominium
Certificate of Title. After the [petitioner] complied with its obligations
under the said Deed of Sale, [respondent], notwithstanding demands
made by [petitioner], failed and refused to pay [petitioner] its legitimate
advances for the expenses mentioned above without any valid, legal or
justifiable reason.
"In its Answer with Compulsory Counterclaim, [respondent] averred
among others that it has just and valid reasons for refusing to pay
[petitioners] legal claims. In clear and direct contravention of Section
25 of Presidential Decree No. 957 which provides that No fee except
those required for the registration of the deed of sale in the Registry of
Deeds shall be collected for the issuance of such title, the [petitioner]
has jacked-up or increased the amount of its alleged advances for the
issuance and registration of the Condominium Certificate of Title in the
name of the [respondent], by including therein charges which should not
be collected from buyers of condominium units. [Petitioner] made and
disseminated brochures and other sales propaganda in and before May
1980, which made warranties as to the facilities, improvements,
infrastructures or other forms of development of the condominium units
(known as The Twin Towers) it was offering for sale to the public, which
included the following:
The Twin Towers is destined to reflect condominium living at
its very best.
CIVIL PROCEDURE CASES SESSION 2
While the twin tower design and its unusual height will make
the project the only one of its kind in the Philippines, the human
scale and proportion [are] carefully maintained.
To be sure, modern conveniences are available as in the
installation of an intercom system and a closed-circuit TV
monitor through which residents from their apartments can see
their guests down at the lobby call station.
Some of the features of each typical apartment unit are: x x x
A bar x x x Three toilets with baths x x x.
The penthouse units are privileged with the provision of an all-
around balcony. x x x
"[Respondent] further averred that [petitioner] represented to the
[respondent] that the condominium unit will be delivered completed and
ready for occupancy not later than December 31, 1981. [Respondent]
relied solely upon the descriptions and warranties contained in the
aforementioned brochures and other sales propaganda materials when
[respondent] agreed to buy Unit E-4A of the Twin Tower(s) for the hefty
sum of P2,048,900.00 considering that the Twin Towers was then yet
to be built. In contravention of [petitioners] warranties and of good
engineering practices, the condominium unit purchased by [respondent]
suffered from the following defects and/or deficiencies:
1. The clearance in the walkway at the balcony is not sufficient
for passage;
2. The anodized aluminum used in the door and windows were
damaged;
3. The kitchen counter tops/splashboard suffered from cracks
and were mis-cut and misaligned;
4. The partition between living and masters bedroom was
unpainted and it had no access for maintenance due to
aluminum fixed glass cover;
5. The varifold divider, including the bar and counter top
cabinet were not installed;
6. The toilets had no tiles;
167

7. No closed circuit TV was installed;
8. Rainwater leaks inside or into the condominium unit."5
Respondents Answer prayed that "judgment be rendered ordering [petitioner]
to correct such defects/deficiencies in the condominium unit,"6 and that the
following reliefs be granted:
"1. The sum of P40,000.00 plus legal interest thereon from the date of
extra-judicial demand, representing the amount spent by the defendant
for the completion works it had undertaken on the premises.
CIVIL PROCEDURE CASES SESSION 2
the same on its behalf, the following defects/deficiencies in the
condominium unit owned by the [respondent]:
a) KITCHEN
i) The sides of the kitchen sink covered with sealants
as well as miscut marble installed as filler at the right
side of the sink;
ii) Miscut marble installed on both sides of the side wall
above the gas range;

"2. The sum of U.S.$6,678.65 (or its equivalent in the Philippine b) FOYERS
currency) representing the unearned rental of the premises which the
defendant did not realize by reason of the late delivery to him of the Water marks at the parquet flooring, near the main water supply
condominium unit; room;

"3. Twenty-four percent (24%) interest per annum on the agreed one c) MAIDS ROOM
(1) year advance rental and one (1) month deposit (totaling
U.S.$15,785.00) corresponding to the period January 1, 1982 to June
Ceiling cut off about one (1) square foot in size and left
17, 1982, which [petitioner] would have earned had he deposited the unfinished
said amount in a bank;
d) DINING ROOM
"4. The sum of U.S.$1,214.30 per month, commencing from May 1,
1985, which the [respondent] no longer earns as rental on the premises
because the lessee vacated the same by reason of defects and/or i) Water damaged parquet up to about one (1) meter
deficiencies; from the wall underneath the open shelves and directly
behind the plant box;
"5. The sum of P50,000.00 plus appearance fees of P300.00 per court
hearing, as attorneys fees; ii) Plant box directly behind the dining room;

"6. Litigation expenses and costs of suit."7 iii) The water damaged parquet flooring near the door
of the dining room to the passage way
On February 6, 1990, the trial court issued this judgment:
e) MASTERS BEDROOM
"1. Ordering the [respondent] to pay [petitioner] the sum of P26,300.45,
with legal interest from the filing of the complaint up to full payment i) Falling off paint layers at the bathroom wall behind
thereof, representing the amount spent for the registration of the title to the bathtub/faucet along the passageway of the
the condominium unit in [respondents] name; masters bedroom;

"2. Ordering [petitioner] to deliver, replace or correct at [petitioners] ii) Falling off water-damaged plywood ceiling in the
exclusive expense/cost or appoint a licensed qualified contractor to do masters bedroom bathroom;

168

iii) Grinders mark damage at the bathtub;
f) BALCONY WALKWAY
i) PVC pipes installed two (2) inches above floor level
causing water to accumulate;
ii) Cracks on level of wash out flooring;
iii) 14-inches passageway going to the open terrace not
sufficient as passageway;
iv) PVC pipe installed on the plant box water drained
directly on the balcony floor;
g) BALCONY (OPEN) TERRACE
i) Two (2) concrete cement measuring about 6 x 4
inches with protruding live wires, purportedly lamp
posts which were not installed;
h) BOYS BEDROOM
i) Water mark on the parquet flooring due to water
seepage;
ii) Asphalt plastered at the exterior wall/floor joints to
prevent water seepage;
i) ANALOC FINISH of the aluminum frames of doors and
windows all around the condominium were painted with dark
gray paint to cover dents and scratches;
j) LIVING ROOM
Intercom equipment installed without the TV monitor;
k) STORAGE FACILITIES at the ground floor
"3. Ordering [petitioner] to pay [respondent] the following:
CIVIL PROCEDURE CASES SESSION 2
a) The sum of P40,000.00 representing reimbursement for
expenses incurred for the materials/labor in installing walls/floor
titles in 2 bathrooms and bar counter cabinet.
b) The sum of P136,608.75, representing unearned income for
the five-month period that the defendant had to suspend a lease
contract over the premises.
c) The sum of P27,321.75 per month for a period of twenty-one
(21) months (from May 1985 to January 1987), representing
unearned income when defendants lessee had to vacate the
premises and condominium unit remained vacant, all with legal
interest from the filing of the counterclaim until the same are
fully paid."8
Ruling of the Court of Appeals
On appeal, after "a thorough review and examination of the evidence on
record,"9 the CA found "no basis for disbelieving what the trial court found and
arrived at."10
The appellate court sustained the trial courts finding that "while [petitioner]
succeeded in proving its claim against the [respondent] for expenses incurred
in the registration of [the latters] title to the condominium unit purchased, x x x
for its part [respondent] in turn succeeded in establishing an even bigger claim
under its counterclaim."11
Hence, this Petition.12
The Issues
Petitioner raises the following issues for our consideration:
"I. Whether or not the Honorable Court of Appeals erred in not holding
that the trial court had no jurisdiction over the respondents
counterclaims.
"II. Whether or not the decision of the Court of Appeals is based on
misapprehension of facts and/or manifestly mistaken warranting a
review by this Honorable Court of the factual findings therein.
169

"III. Whether or not the award of damages by the Honorable Court of
Appeals is conjectural warranting a review by this Honorable Court of
the factual findings therein."13
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Jurisdiction
Contending that it was the Housing and Land Use Regulatory Board (HLURB) -
- not the RTC -- that had jurisdiction over respondents counterclaim, petitioner
seeks to nullify the award of the trial court.
Promulgated on July 12, 1976, PD No. 957 -- otherwise known as "The
Subdivision and Condominium Buyers Protective Decree" -- provides that the
National Housing Authority (NHA) shall have "exclusive authority to regulate the
real estate trade and business."14 Promulgated later on April 2, 1978, was PD
No. 1344 entitled "Empowering the National Housing Authority to Issue Writs of
Execution in the Enforcement of Its Decisions Under Presidential Decree No.
957." It expanded the jurisdiction of the NHA as follows:
"SECTION 1. In the exercise of its function to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall
have exclusive jurisdiction to hear and decide cases of the following
nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, broker or
salesman." (Italics ours.)
CIVIL PROCEDURE CASES SESSION 2
On February 7, 1981, by virtue of Executive Order No. 648, the regulatory
functions of the NHA were transferred to the Human Settlements Regulatory
Commission (HSRC). Section 8 thereof provides:
"SECTION 8. Transfer of Functions. - The regulatory functions of the
National Housing Authority pursuant to Presidential Decree Nos. 957,
1216, 1344 and other related laws are hereby transferred to the
Commission (Human Settlements Regulatory Commission). x x x.
Among these regulatory functions are: 1) Regulation of the real estate
trade and business; x x x 11) Hear and decide cases of unsound real
estate business practices; claims involving refund filed against project
owners, developers, dealers, brokers, or salesmen; and cases of
specific performance."
Pursuant to Executive Order No. 90 dated December 17, 1986, the functions of
the HSRC were transferred to the HLURB.
As mandated by PD No. 957, the jurisdiction of the HLURB is encompassing.
Hence, we said in Estate Developers and Investors Corporation v. Sarte:15
"x x x. While PD 957 was designed to meet the need basically to protect
lot buyers from the fraudulent manipulations of unscrupulous
subdivision owners, sellers and operators, the exclusive jurisdiction
vested in the NHA is broad and general -to regulate the real estate
trade and business in accordance with the provisions of said law."
Furthermore, the jurisdiction of the HLURB over cases enumerated in Section 1
of PD No. 1344 is exclusive. Thus, we have ruled that the board has sole
jurisdiction in a complaint of specific performance for the delivery of a certificate
of title to a buyer of a subdivision lot;16 for claims of refund regardless of whether
the sale is perfected or not;17 and for determining whether there is a perfected
contract of sale.18
In Solid Homes v. Payawal,19 we declared that the NHA had the competence to
award damages as part of the exclusive power conferred upon it -- the power to
hear and decide "claims involving refund and any other claimsfiled by
subdivision lot or condominium unit buyers against the project owner, developer,
dealer, broker or salesman."20
Clearly then, respondents counterclaim -- being one for specific performance
(correction of defects/deficiencies in the condominium unit) and damages -- falls
under the jurisdiction of the HLURB as provided by Section 1 of PD No. 1344.
The Applicability of Estoppel
170

The general rule is that any decision rendered without jurisdiction is a total nullity
and may be struck down at any time, even on appeal before this Court.21 Indeed,
the question of jurisdiction may be raised at any time, provided that such action
would not result in the mockery of the tenets of fair play. 22 As an exception to
the rule, the issue may not be raised if the party is barred by estoppel. 23
In the present case, petitioner proceeded with the trial, and only after a judgment
unfavorable to it did it raise the issue of jurisdiction. Thus, it may no longer deny
the trial courts jurisdiction, for estoppel bars it from doing so. This Court cannot
countenance the inconsistent postures petitioner has adopted by attacking the
jurisdiction of the regular court to which it has voluntarily submitted.24
The Court frowns upon the undesirable practice of submitting ones case for
decision, and then accepting the judgment only if favorable, but attacking it for
lack of jurisdiction if it is not.25
We also find petitioner guilty of estoppel by laches for failing to raise the question
of jurisdiction earlier. From the time that respondent filed its counterclaim on
November 8, 1985, the former could have raised such issue, but failed or
neglected to do so. It was only upon filing its appellants brief 26 with the CA on
May 27, 1991, that petitioner raised the issue of jurisdiction for the first time.
In Tijam v. Sibonghanoy,27 we declared that the failure to raise the question of
jurisdiction at an earlier stage barred the party from questioning it later. Applying
the rule on estoppel by laches, we explained as follows:
"A party may be estopped or barred from raising a question in different
ways and for different reasons. Thus, we speak of estoppel in pais, of
estoppe[l] by deed or by record, and of estoppel by laches.
"Laches, in general sense, is failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it
or declined to assert it.
"The doctrine of laches or of stale demands is based upon grounds of
public policy which requires, for the peace of society, the
discouragement of stale claims and, unlike the statute of limitations, is
not a mere question of time but is principally a question of the inequity
or unfairness of permitting a right or claim to be enforced or asserted."28
CIVIL PROCEDURE CASES SESSION 2
Thus, we struck down the defense of lack of jurisdiction, since the appellant
therein failed to raise the question at an earlier stage. It did so only after an
adverse decision had been rendered.
We further declared that if we were to sanction the said appellants conduct, "we
would in effect be declaring as useless all the proceedings had in the present
case since it was commenced x x x and compel the judgment creditors to go up
their Calvary once more. The inequity and unfairness of this is not only patent
but revolting."29
Applicable herein is our ruling in Gonzaga v. Court of Appeals,30 in which we
said:
"Public policy dictates that this Court must strongly condemn any
double-dealing by parties who are disposed to trifle with the courts by
deliberately taking inconsistent positions, in utter disregard of the
elementary principles of justice and good faith. There is no denying that,
in this case, petitioners never raised the issue of jurisdiction throughout
the entire proceedings in the trial court. Instead, they voluntarily and
willingly submitted themselves to the jurisdiction of said court. It is now
too late in the day for them to repudiate the jurisdiction they were
invoking all along."31
Second and Third Issues:
Appreciation of Facts
It is readily apparent that petitioner is raising issues of fact that have been ruled
upon by the RTC and sustained by the CA. The factual findings of lower courts
are generally binding upon this Court and will not be disturbed on appeal,
especially when both sets of findings are the same.32 Nevertheless, this rule has
certain exceptions,33 as when those findings are not supported by the evidence
on record.
We have carefully scrutinized the records of this case and found reason to
modify the award to conform to law and the evidence. We thus address the
arguments of petitioner seriatim.
Warranties and Representations in the Brochure
The brochure that was disseminated indicated features that would be provided
each condominium unit; and that, under Section 19 of PD No. 957, would form
part of the sales warranties of petitioner.34 Respondent relied on the brochure in
171

its decision to purchase a unit.35
Since the former failed to deliver certain items
stated therein, then there was a clear violation of its warranties and
representations.
The brochure says that "[t]he particulars stated x x x as well as the details and
visuals shown x x x are intended to give a general idea of the project to be
undertaken, and as such, are not to be relied [upon] as statements or
representations of fact."36 This general disclaimer should apply only to the
general concept of the project that petitioner aptly characterizes thus:
"x x x [D]estined to reflect condominium living at its very best and its
design x x x will make the project the only one of its kind in the
Philippines."37
This disclaimer, however, should not apply to the features and the amenities
that the brochure promised to provide each condominium unit. Petitioner was
thus in breach when it failed to deliver a "closed-circuit TV monitor through which
residents from their apartments can see their guests x x x."38
Storage Facilities
The trial court erred, though, in requiring petitioner to provide storage facilities
on the ground floor, as the non-delivery had not been alleged in respondents
Answer with Counterclaim.39
It is elementary that a judgment must conform to and be supported by both the
pleadings and the evidence, and that it be in accordance with the theory of the
action on which the pleadings were framed and the case was tried. 40Indeed,
issues in each case are limited to those presented in the pleadings. 41
We are aware that issues not alleged in the pleadings may still be decided upon,
if tried with the parties express or implied consent.42 Trial courts are not
precluded from granting reliefs not specifically claimed in the pleadings --
notwithstanding the absence of their amendment -- upon the condition that
evidence has been presented properly, with full opportunity on the part of the
opposing parties to support their respective contentions and to refute each
others evidence.43 This exception is not present in the case at bar.
Moreover, a cursory reading of the brochure shows that there is no promise to
provide individual storage facilities on the ground floor for each condominium
unit. The brochure reads: "Storage facilities in the apartment units and the
ground floor."44 Apparent from the letter of petitioner dated June 18, 1982, 45 was
its compliance with its promise of storage facilities on the ground floor. In that
CIVIL PROCEDURE CASES SESSION 2
letter, respondent was also informed that it may course a reservation of those
facilities through the building superintendent.
Damages for Delay in Delivery
It is undisputed that petitioner sent respondent a "Contract to Sell"46 declaring
that the construction would be finished on or before December 31, 1981. 47 The
former delivered the condominium unit only in June 1982; 48 thus, the latter
claims that there was a delay in the delivery.
Because of this delay, the trial court ordered petitioner to pay damages
of P136,608.75 representing unearned income for the period that respondent
had to suspend a lease contract. We find a dearth of evidence to support such
award.
To recover actual damages, the amount of loss must not only be capable of
proof, but also be proven with a reasonable degree of certainty. 49 The lone
evidence for this award was the self-serving testimony of respondents witness
that a lease contract had indeed been intended to commence in January 1982,
instead of the actual implementation on June 18, 1982.50 Without any other
evidence, we fail to see how the amount of loss was proven with a reasonable
degree of certainty.
Condominium Defects
The rule is that a partys case must be established through a "preponderance of
evidence."51 By such term of evidence is meant simply evidence that is of
greater weight, or is more convincing than that which is offered in opposition to
it.52 Respondent was able to establish through its witness testimony that the
condominium unit suffered from defects.53 This testimony was confirmed by an
inspection report54 noted and signed by petitioners representative, as well as
by a commissioners report55 prepared after an ocular inspection by the clerk of
court acting as a commissioner. Furthermore, this conclusion is supported by
the circumstances that occurred during the lease period, as evidenced by the
complaint and the update letters56 of respondents lessee.
Petitioners contention that the claim arising from the alleged defects has
already prescribed must fail for being raised for the first time only on
appeal.57 Well-settled is the rule that issues not raised below cannot be resolved
on review in higher courts.58
We agree, however, that the lower courts erred in finding that there was a defect
in a portion of the balcony, which respondent alleges to be a "walkway x x x
172

passage."59
[that] is not sufficient for Petitioner was able to prove, however, that
the specifications thereof conformed to the building plan.
Respondent contends that this portion should have been 65 to 80 centimeters
wide, so that it would be sufficient as a passageway. 60 The building plan61 had
not specified the width, however. Architect Leo Ramos of W.V. Coscolluela &
Associates, the architectural firm that prepared the building plan, testified thus:
"Q I am directing your attention xxx to a certain portion in this
condominium unit x x x it appears x x x [that] there is no measurement
indicated therein, do you know why the measurement of said portion
was not indicated in the building plan?
A Normally, it is variable.
Q What do you mean by variable?
A It depends on the actual measurement of the building construction.
Q Could you please tell the Court, what x x x the purpose of the said
portion of the condominium unit [is]?
A It is used for watering the plants and the servicing of some area[s].
Q How much measurement is made to affix the portion of watering the
plants?
A Approximately .50 [m]."62
Respondent maintains that this portion should have been .80 meters (or 80
centimeters), similar to another area in the building plan that it offered as Exhibit
"2-A."63 But an analysis of this plan reveals that the latter area has a different
width from that of the former.
It is readily apparent from the foregoing facts that the portion in controversy was
not intended to be a walkway. Thus, there was no deviation from the building
plan. Because it has not been shown that this section was insufficient to serve
the purpose for which it was intended, the lower courts erred in considering it as
defective.
Reimbursement of P40,000 for Completion Work
CIVIL PROCEDURE CASES SESSION 2
The lower courts did not err in ordering petitioner to correct the defects in the
condominium unit, but in requiring it to reimburse respondent in the amount
of P40,000 for completion work done.
Petitioner argues that the trial courts Decision encompassed the areas beyond
those alleged in respondents Answer.64 This contention is not convincing,
because the allegations in the latter were broad enough to cover all the defects
in the condominium unit. In fact, respondent prayed that "judgment be rendered
ordering [petitioner] to correct such defects x x x in the condominium unit as may
be prove[d] during the trial."65
Petitioner further challenges the award of P40,000 as reimbursement for
completion work done by respondent, on the ground that this claim was not
proven during the trial. The latters evidence partook of a witness
testimony66and of a demand letter67 sent to petitioner requesting reimbursement
for completion work done. Petitioner argues that respondent should have
presented receipts to support the expenses.68
We agree with petitioner. While respondent may have suffered pecuniary losses
for completion work done, it failed to establish with reasonable certainty the
actual amount spent. The award of actual damages cannot be based on the
allegation of a witness without any tangible document, such as receipts or other
documentary proofs to support such claim.69 In determining actual damages,
courts cannot rely on mere assertions, speculations, conjectures or guesswork,
but must depend on competent proof and on the best obtainable evidence of
the actual amount of loss.70
Unearned Lease Income
Respondent entered into a lease contract with Advanced Micro Device on May
18, 1982, for the period June 18, 1982 to June 17, 1983, with option to
renew.71 The lease -- which was for an agreed monthly rental of P17,000 -- was
renewed for a period ending May 1, 1985, when Advanced Micro Device
vacated the unit.72 On the basis of these facts, the trial court ordered petitioner
to pay damages by way of unrealized income for twenty-one months or from
May 1, 1985, until January 1987 -- when respondent decided to move into the
condominium unit, which was unoccupied by then.
Despite the defects of the condominium unit, a lessee stayed there for almost
three years.73 The damages claimed by respondent is based on the rent that it
might have earned, had Advanced Micro Device chosen to stay and renew the
lease. Such claim is highly speculative, considering that respondent failed to
adduce evidence that the unit had been offered for lease to others, but that there
were no takers because of the defects therein. Speculative damages are too
173

remote to be included in an accurate estimate thereof.74
Absent any credible
proof of the amount of actual damage sustained, the Court cannot rely on
speculations as to its existence and amount.75
We recognize, however, that respondent suffered damages when its lessee
vacated the condominium unit on May 1, 1985, because of the defects therein.
Respondents are thus entitled to temperate damages.76 Under the
circumstances, the amount equivalent to three monthly rentals of P17,000 -- or
a total of P51,000 -- would be reasonable.
WHEREFORE, this Petition is PARTLY GRANTED, and the assailed Decision
and Resolution of the Court of Appeals MODIFIED, as follows:
Hereby DELETED is the requirement on the part of petitioner to (1)
deliver storage facilities on the ground floor; (2) pay P136,608.75 for
unearned income for the five-month period that the lease contract was
allegedly suspended; (3) correct the alleged passageway in the
balcony; (4) pay P40,000.00 as reimbursement for completion work
done by respondent; (5) pay P27,321.75 per month for a period of
twenty-one months for the alleged unearned income during the period
when the condominium unit remained vacant. Petitioner, however,
is ORDERED to pay P51,000 as temperate damages for the
termination of the lease contract because of the defects in the
condominium unit. All other awards are AFFIRMED.
No pronouncement as to costs. SO ORDERED.
G.R. No. 154295. July 29, 2005
METROMEDIA TIMES CORPORATION and/or ROBINA GOKONGWIE-PE
vs. JOHNNY PASTORIN
At issue in this Petition for Review1 on certiorari under Rule 45 is whether or not
lack of jurisdiction over the subject matter of the case, heard and decided by the
labor arbiter, may be raised for the first time before the National Labor Relations
Commission (NLRC) by a litigant who had actively participated in the
proceedings, which it belatedly questioned.
The facts, culled from the records, are as follows:
Johnny Pastorin (Respondent) was employed by Metromedia Times
Corporation (Petitioner) on 10 December 1990 as a Field
Representative/Collector. His task entailed the periodic collection of receivables
from dealers of petitioner's newspapers. Prior to the subject incident,
respondent claimed to have received a termination letter dated 7 May 1998 from
CIVIL PROCEDURE CASES SESSION 2
management terminating his services for tardiness effective 16 June 1988.
Respondent, member of Metro Media Times Employees Union, was not
dismissed due to the intervention of the labor union, the collective bargaining
agent in the company.
In May 1998, he obtained a loan from one of the dealers whom he dealt with,
Gloria A. de Manuel (De Manuel), amounting to Nine Thousand Pesos
(P9,000.00). After paying One Thousand One Hundred Twenty-five Pesos
(P1,125.00), respondent reneged on the balance of his loan. De Manuel wrote
a letter dated 6 July 1998 to petitioner, and seeking assistance for collection on
the remainder of the loan. She claimed that when respondent became remissed
on his personal obligation, he stopped collecting periodically the outstanding
dues of De Manuel2
On 9 July 1998, petitioner sent a letter addressed to respondent, requiring an
explanation for the transaction with De Manuel, as well as for his failure to pay
back the loan according to the conditions agreed upon. In his reply letter 3 dated
13 July 1998, respondent admitted having incurred the loan, but offered no
definitive explanation for his failure to repay the same.
Petitioner, through a Memorandum 4 dated 24 August 1998, imposed the penalty
of suspension on respondent for 4 days, from 27 August to 1 September 1998,
for violating Company Policy No. 2.175 and ordered his transfer to the
Administration Department.
On 2 September 1998, respondent wrote a letter 6 to petitioner, stating that he
wanted to sign a transfer memo before assuming his new position.
On September 7, 1998, he was handed the Payroll Change Advice 7 (PCA),
indicating his new assignment to the Traffic and Order Department of
Metromedia. Nonetheless, respondent stopped reporting for work. On 16
September 1998, he sent a letter8 to petitioner communicating his refusal to
accept the transfer.
Respondent duly filed a complaint for constructive dismissal, non-payment of
backwages and other money claims with the labor arbiter, a copy of which
petitioner received on 28 September 1998. The complaint was resolved in favor
of respondent. In a Decision9 dated 28 May 1999, Labor Arbiter Manuel P.
Asuncion concluded that respondent did not commit insubordination or
disobedience so as to warrant his transfer, and that petitioner was not aggrieved
by respondents failure to settle his obligation with De Manuel. The dispositive
portion read:
174

WHEREFORE, the respondents are hereby ordered to reinstate the
complainant to his former position, with full backwages from the time his salary
was withheld until he is actually reinstated. As of this date, the complainants
backwages has reached the sum of P97,324.17. The respondents are further
directed to pay the complainant his 13th month pay for 1998 in the sum
of P3,611.89. The claims for allowance and unpaid commission are dismissed
for lack of sufficient basis to make an award.
SO ORDERED.10
Petitioner lodged an appeal with the NLRC, raising as a ground the lack of
jurisdiction of the labor arbiter over respondents complaint. Significally, this
issue was not raised by petitioner in the proceedings before the Labor Arbiter.
In its Decision11 dated 16 March 2001, the NLRC reversed the Labor Arbiter on
the ground that thee latter had no jurisdiction over the case, it being a grievance
issue properly cognizable by the voluntary arbitrator. The decretal portion of the
NLRC Decision reads:
WHEREFORE, the decision under review is REVERSED and SET ASIDE, and
a new one entered, DISMISSING the complaint for lack of jurisdiction.
SO ORDERED.12
The motion for reconsideration having been denied on 18 May 2001, respondent
elevated the case before the Court of Appeals (CA) through a petition
for certiorari13 under Rule 65.
The CA Fifteenth Division reversed the Decision of NLRC, and reinstated the
earlier ruling of the Labor Arbiter. Adopting the doctrines by this Court in the
cases of Alfredo Marquez v. Sec. of Labor14 and ABS-CBN Supervisors
Employees Union Members v. ABS-CBN Broadcasting Corporation,15 the CA
ruled that the active participation of the party against whom the action was
brought, coupled with his failure to object to the jurisdiction of the court or quasi-
judicial body where the action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the case and will bar
said party from later on impugning the court or bodys jurisdiction. The appellate
court then disposed the case in this wise:
WHEREFORE, foregoing premises considered, the petition having merit, in fact
and in law, is hereby GIVEN DUE COURSE. Accordingly, the challenged
resolution/decision and orders of public respondent NLRC are hereby
REVERSED and SET ASIDE and the decision of the Labor Arbiter dated
May 28, 1999 REINSTATED with a slight modification, that the 13th month
pay be in the amount of P7,430.50. No costs.
CIVIL PROCEDURE CASES SESSION 2
SO ORDERED.16
Petitioner sought reconsideration17 of the above Decision18 but the CA denied
the motion in the assailed Resolution19 dated 27 June 2002. Hence, its recourse
to this Court, elevating the following issues:
I.
WHETHER OR NOT METROMEDIA IS ESTOPPED FROM QUESTIONING
THE JURISDICTION OF THE LABOR ARBITER OVER THE SUBJECT
MATTER OF THE CASE FOR THE FIRST TIME ONLY IN THEIR APPEAL
BEFORE THE NLRC.
II.
WHETHER OR NOT THE AWARD OF 13TH MONTH PAY BY THE LABOR
ARBITER MAY BE MODIFIED, NOTWITHSTANDING THAT THE SAME WAS
NEVER ASSIGNED AS AN ERROR.
Anent the first assignment of error, there are divergent jurisprudential doctrines
touching on this issue. On the one hand are the cases of Martinez v.
Merced,20 Marquez v. Secretary of Labor,21 Ducat v. Court of Appeals,22Bayoca
v. Nogales,23 Jimenez v. Patricia,24 Centeno v. Centeno,25 and ABS-CBN
Supervisors Employee Union Members v. ABS-CBN Broadcasting
Corporation,26 all adhering to the doctrine that a partys active participation in
the actual proceedings before a court without jurisdiction will estop him from
assailing such lack of jurisdiction. Respondent heavily relies on this doctrinal
jurisprudence.
On the other hand, the cases of Dy v. NLRC,27 La Naval Drug v. CA,28 De Rossi
vs. CA29 and Union Motors Corporation v. NLRC30 buttress the position of
petitioner that jurisdiction is conferred by law and lack of jurisdiction may be
questioned at any time even on appeal.
The Court of Appeals adopted the principles in the cases of Martinez,
Marquez and ABS-CBN in resolving the jurisdictional issue presented for its
resolution, to wit:
Indeed, we agree with petitioner that private respondent was estopped from
raising the question of jurisdiction before public respondent NLRC and the latter
gravely abused its discretion in addressing said question in private respondents
favor. As early as Martinez vs. De la Merced, 174 SCRA 182, the Supreme
Court has clearly ruled thus: "For it has been consistently held by this Court that
175

while lack of jurisdiction may be assailed at any stage, a partys active
participation in the proceedings before a court without jurisdiction will estop such
party from assailing such lack of jurisdiction."
....
The same principle was adopted by the Highest Tribunal in the case of Alfredo
Marquez vs. Sec. of Labor, 171 SCRA 337 and quoted in the latter case of ABS-
CBN Supervisors Employees Union Members vs. ABS-CBN Broadcasting
Corporation, 304 SCRA 497, where it was ruled that: "The active participation
of the party against whom the action was brought, coupled with his failure to
object to the jurisdiction of the court or quasi-judicial body where the action is
pending, is tantamount to an invocation of that jurisdiction and a willingness to
abide by the resolution of the case and will bar said party from later on
impugning the court or bodys jurisdiction."31
We rule differently. A cursory glance at these cases will lead one to the
conclusion that a party who does not raise the jurisdictional question at the
outset will be estopped to raise it on appeal. However, a more circumspect
analysis would reveal that the cases cited by respondent do not fall squarely
within the issue and factual circumstances of the instant case. We proceed to
demonstrate.
The notion that the defense of lack of jurisdiction may be waived by estoppel on
the party invoking the same most prominently emerged in Tijam v.
Sibonghanoy.32 Indeed, the Marquez case relied upon by the CA is in turn
grounded on Tijam, where We held that:
. . . a party can not invoke the jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or failing to obtain such relief,
repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86
A.L.R. 79). In the case just cited, by way of explaining the rule, it was further
said that the question whether the court had jurisdiction either of the subject-
matter of the action or of the parties is barred from such conduct not because
the judgment or order of the court is valid and conclusive as an adjudication, but
for the reason that such a practice can not be toleratedobviously for reasons
of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court . . . And in Littleton vs. Burges, 16
Wyo, 58, the Court said that it is not right for a party who has affirmed and
invoked the jurisdiction of a court in a particular matter to secure an affirmative
relief, to afterwards deny that same jurisdiction to escape a penalty.33
CIVIL PROCEDURE CASES SESSION 2
However, Tijam represented an exceptional case wherein the party invoking
lack of jurisdiction did so only after fifteen (15) years, and at a stage when the
proceedings had already been elevated to the Court of Appeals.
Even Marquez recognizes that Tijam stands as an exception, rather than a
general rule.34 The CA perhaps though felt comfortable citing Marquez owing to
the pronouncement therein that the Court would not hesitate to apply Tijameven
absent the extraordinary circumstances therein:
". . . where the entertainment of the jurisdictional issue at a belated stage of the
proceedings will result in a failure of justice and render nugatory the
constitutional imperative of protection to labor."35
In this case, jurisdiction of the labor arbiter was questioned as early as during
appeal before the NLRC, whereas in Marquez, the question of jurisdiction was
raised for the first time only before this Court. The viability of Marquez as
controlling doctrine in this case is diminished owing to the radically different
circumstances in these two cases. A similar observation can be made as to
the Bayoca and Jimenez cases.36
Neither do the other like-minded cases squarely settle the issue in favor of the
respondent. In the case of Martinez, the issue is not jurisdiction by estoppel but
waiver of preliminary conference. In that case, we said:
As pointed out by petitioners, private respondents had at least three
opportunities to raise the question of lack of preliminary conference first, when
private respondents filed a motion for extension of time to file their position
paper; second, at the time when they actually filed their position paper in which
they sought affirmative relief from the Metropolitan Trial Court; and third; when
they filed a motion for reconsideration of the order of the Metropolitan Trial Court
expunging from the records the position paper of private respondents, in which
motion private respondents even urged the court to sustain their position paper.
And yet, in none of these instances was the issue of lack of preliminary
conference raised or even hinted at by private respondents. In fine, these are
acts amounting to a waiver of the irregularity of the proceedings. For it has been
consistently held by this Court that while lack of jurisdiction may be assailed at
any stage, a party's active participation in the proceedings before a court without
jurisdiction will estop such party from assailing such lack of jurisdiction. 37
The case of Ducat was categorical in saying that if the parties acquiesced in
submitting an issue for determination by the trial court, they are estopped from
questioning the jurisdiction of the same court to pass upon the issue. But this
should be taken in the context of the "agreement" of the parties. We quote from
said case:
176

Petitioners filing of a Manifestion and Urgent Motion to Set Parameters of
Computation is indicative of its conformity with the questioned order of the trial
court referring the matter of computation of the excess to SGV and
simultaneously thereafter, the issuance of a writ of possession. If petitioner
thought that subject order was wrong, it could have taken recourse to the Court
of Appeals but petitioner did not. Instead he manifested his acquiescence in the
said order by seeking parameters before the trial court. It is now too late for
petitioner to question subject order of the trial court. Petitioner cannot be allowed
to make a mockery of judicial processes, by changing his position from one of
the agreement to disagreement, to suit his needs. If the parties acquiesced in
submitting an issue for determination by the trial court, they are estopped from
questioning the jurisdiction of the same court to pass upon the issue. Petitioner
is consequently estopped from questioning subject order of the trial court. 38
Centeno involved the question of jurisdiction of the Department of Agrarian
Reform Arbitration Board (DARAB). The Court did rule therein that "participation
by certain parties in the administrative proceedings without raising any objection
thereto, bars them from any jurisdictional infirmity after an adverse decision is
rendered against them."39Still, the Court did recognize therein that the movants
questioning jurisdiction had actually sought and litigated for affirmative reliefs
before the DARAB in support of a submitted counterclaim. No similar
circumstance obtains in this case concerning the petitioner.
Evidently, none of these cited precedents squarely operates as stare decisis on
this case, involving as they did different circumstances. The question now lies
as to whether the precedents cited by petitioner are more aproposto this case.
Petitioner seeks to convince this Court that the instant case falls squarely within
the purview of this Courts ruling in the case of Dy. Admittedly, a different factual
mileu was present insofar as the questioned jurisdiction was alleged to have
been properly lodged in the SEC instead of NLRC. Yet the rationale employed
by the Court therein warrants serious consideration. The aforementioned case
was ruled in this wise:
. . . .More importantly, estoppel cannot be invoked to prevent this Court from
taking up the question of jurisdiction, which has been apparent on the face of
the pleadings since the start of litigation before the Labor Arbiter. It is well settled
that the decision of a tribunal not vested with appropriate jurisdiction is null and
void. Thus, in Calimlim vs. Ramirez, this Court held:
"A rule that had been settled by unquestioned acceptance and upheld in
decisions so numerous to cite is that the jurisdiction of a court over the subject
matter of the action is a matter of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction of a court may be raised at any
CIVIL PROCEDURE CASES SESSION 2
stage of the proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in said case
had been applied to situations which were obviously not contemplated therein.
The exceptional circumstances involved in Sibonghanoy which justified the
departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing altogether the time
honored principle that the issue of jurisdiction is not lost by waiver or by
estoppel.
....
"It is neither fair nor legal to bind a party by the result of a suit or proceeding
which was taken cognizance of in a court which lacks jurisdiction over the same
irrespective of the attendant circumstances. The equitable defense of estoppel
requires knowledge or consciousness of the facts upon which it is based. The
same thing is true with estoppel by conduct which may be asserted only when
it is shown, among others, that the representation must have been made with
knowledge of the facts and that the party to whom it was made is ignorant of the
truth of the matter (De Castro vs. Gineta, 27 SCRA 623). The filing of an action
or suit in a court that does not possess jurisdiction to entertain the same may
not be presumed to be deliberate and intended to secure a ruling which could
later be annulled if not favorable to the party who filed such suit or proceeding
in a court that lacks jurisdiction to take cognizance of the same, such act may
not at once be deemed sufficient basis of estoppel. It could have been te result
of an honest mistake or of divergent interpretation of doubtful legal provisions.
If any fault is to be imputed to a party taking such course of action, part of the
blame should be placed on the court which shall entertain the suit, thereby lulling
the parties into believing that they pursued their remedies in the correct forum.
Under the rules, it is the duty of the court to dismiss an action `whenever it
appears that court has no jurisdiction over the subject matter.' (Section 2, Rule
9, Rules of Court) Should the Court render a judgment without jurisdiction, such
judgment may be impeached or annulled for lack of jurisdiction (Sec. 30, Rule
132, Ibid), within ten (10) years from the finality of the same (Art. 1144, par. 3,
Civil Code)."40
The jurisdiction of the Labor Arbiter was assailed in the cases of De Rossi v.
NLRC41 and Union Motors Corporation v. NLRC42 during appeal to the NLRC.
Since the same circumstance obtains in this case, the rulings therein, favorable
as they are to the petitioner, are germane.
In De Rossi, this Court elucidated:
177

Petitioner maintains that MICC can not question now the issue of jurisdiction of
the NLRC, considering that MICC did not raise this matter until after the case
had been brought on appeal to the NLRC. However, it has long been established
as a rule, that jurisdiction of a tribunal, agency, or office, is conferred by law,
and its lack of jurisdiction may be questioned at any time even on appeal. In La
Naval Drug Corporation vs. Court of Appeals, 236 SCRA 78, 90, this Court said:
"Lack of jurisdiction over the subject matter of the suit is yet another matter.
Whenever it appears that the court has no jurisdiction over the subject matter,
the action shall be dismissed. This defense may be interposed at any time,
during appeal or even after final judgment. Such is understandable, as this kind
of jurisdiction is conferred by law and not within the courts, let alone the parties,
to themselves determine or conveniently set aside."43
We held in the Union Motors Case:
The long-established rule is that jurisdiction over a subject matter is conferred
by law. [Ilaw at Buklod ng Manggaggawa v. NLRC, 219 SCRA 536 (1993); Atlas
Developer & Steel Industries, Inc. v. Sarmiento Enterprises, Inc., 184 SCRA 153
(1990); Tijam v. Sibonghanoy, 23 SCRA 29, 30 (1968)]. Estoppel does not apply
to confer jurisdiction to a tribunal that has none over a cause of action. Where it
appears that the court or tribunal has no jurisdiction, then the defense may be
interposed at any time, even on appeal or even after final judgment. Moreover,
the principle of estoppel cannot be invoked to prevent this court from taking up
the question of jurisdiction.44
The rulings in Lozon v. NLRC45 addresses the issue at hand. This Court came
up with a clear rule as to when jurisdiction by estoppel applies and when it does
not:
Lack of jurisdiction over the subject matter of the suit is yet another matter.
Whenever it appears that the court has no jurisdiction over the subject matter,
the action shall be dismissed (Section 2, Rule 9, Rules of Court). This defense
may be interposed at any time, during appeal (Roxas vs. Rafferty, 37 Phil. 957)
or even after final judgment (Cruzcosa vs. Judge Concepcion, et al., 101 Phil.
146). Such is understandable, as this kind of jurisdiction is conferred by law and
not within the courts, let alone the parties, to themselves determine or
conveniently set aside. In People vs. Casiano (111 Phil. 73, 93-94), this Court,
on the issue of estoppel, held:
"The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried and decided upon the
theory that it had jurisdiction, the parties are not barred, on appeal, from
CIVIL PROCEDURE CASES SESSION 2
assailing such jurisdiction, for the same 'must exist as a matter of law, and
may not be conferred by consent of the parties or by estoppel' (5 C.J.S.,
861-863). However, if the lower court had jurisdiction, and the case was
heard and decided upon a given theory, such, for instance, as that the
court had no jurisdiction, the party who induced it to adopt such theory
will not be permitted, on appeal, to assume an inconsistent positionthat
the lower court had jurisdiction. Here, the principle of estoppel applies. The
rule that jurisdiction is conferred by law, and does not depend upon the will of
the parties, has no bearing thereon.46 (Emphasis supplied)
Verily, Lozon, Union Motors, Dy and De Rossi aptly resolve the jurisdictional
issue obtaining in this case. Applying the guidelines in Lozon, the labor arbiter
assumed jurisdiction when he should not. In fact, the NLRC correctly reversed
the labor arbiters decision and ratiocinated:
What appears at first blush to be an issue which pertains to the propriety of
complainants reassignment to another job on account of his having contracted
a private loan, is one which may be considered as falling within the jurisdiction
of the Office of the Labor Arbiter. Nevertheless, since the complainant is a union
member, he should be bound by the covenants provided for in the Collective
Bargaining Agreement.47
....
Based on the foregoing considerations, it appears that the issue of validity of
complainants reassignment stemmed from the exercise of a management
prerogative which is a matter apt for resolution by a Grievance Committee, the
parties having opted to consider such as a grievable issue. Further, a review of
the records would show that the matter of reassignment is one not directly
related to the charge of complainants having committed an act which is inimical
to respondents interest, since the latter had already been addressed to by
complainants service of a suspension order. The transfer, in effect, is one which
properly falls under Section 1, Article IV of the Collective Bargaining Agreement
and, as such, questions as to the enforcement thereof is one which falls under
the jurisdiction of the labor arbiter."48
In line with the cases cited above and applying the general rule that estoppel
does not confer jurisdiction, petitioner is not estopped from assailing the
jurisdiction of the labor arbiter before the NLRC on appeal.
Respondent relied solely on estoppel to oppose petitioners claim of lack of
jurisdiction on the part of the labor arbiter. He adduced no other legal ground in
support of his contention that the Labor Arbiter had jurisdiction over the case.
Thus, his claim falls flat in light of our pronouncement, and more so considering
178

the NLRCs correct observation that jurisdiction over grievance issues, such as
the propriety of the reassignment of a union member falls under the jurisdiction
of the voluntary arbitrator.
Since jurisdiction does not lie with the Labor Arbiter, it is futile to discuss about
the computation of the 13th month pay.
WHEREFORE, the questioned decision of the Labor Arbiter and the Court of
Appeals are hereby REVERSED and SET ASIDE, and the decision of the NLRC
in dismissing the complaint for lack of jurisdiction REINSTATED. SO
ORDERED.
G.R. No. 167702 March 20, 2009
LOURDES L. ERISTINGCOL vs. CA and RANDOLPH C. LIMJOCO
This is a petition for review on certiorari under Rule 45 of the Rules of Court
which assails the Court of Appeals (CA) Decision1 in CA-G.R. SP. No. 64642
dismissing Civil Case No. 99-297 before the Regional Trial Court (RTC) for lack
of jurisdiction.
The facts, as narrated by the CA, are simple.
[Petitioner Lourdes] Eristingcol is an owner of a residential lot in Urdaneta
Village (or "village"), Makati City and covered by Transfer Certificate of Title No.
208586. On the other hand, [respondent Randolph] Limjoco, [Lorenzo] Tan and
[June] Vilvestre were the former president and chairman of the board of
governors (or "board"), construction committee chairman and village manager
of [Urdaneta Village Association Inc.] UVAI, respectively. UVAI is an association
of homeowners at Urdaneta Village.
[Eristingcols] action [against UVAI, Limjoco, Tan and Vilvestre] is founded on
the allegations that in compliance with the National Building Code and after
UVAIs approval of her building plans and acceptance of the construction bond
and architects fee, Eristingcol started constructing a house on her lot with
"concrete canopy directly above the main door and highway"; that for alleged
violation of its Construction Rules and Regulations (or "CRR") on "Set Back
Line" vis-a-vis the canopy easement, UVAI imposed on her a penalty
of P400,000.00 and barred her workers and contractors from entering the village
and working on her property; that the CRR, particularly on "Set Back Line," is
contrary to law; and that the penalty is unwarranted and excessive.
On February 9, 1999, or a day after the filing of the complaint, the parties
reached a temporary settlement whereby UVAI, Limjoco, Tan and Vilvestre
executed an undertaking which allowed Eristingcols workers, contractors and
CIVIL PROCEDURE CASES SESSION 2
suppliers to leave and enter the village, subject only to normal security
regulations of UVAI.
On February 26, 1999, UVAI, Limjoco, Tan and Vilvestre filed a motion to
dismiss on ground of lack of jurisdiction over the subject matter of the action.
They argued that it is the Home Insurance Guaranty Corporation (or
"HIGC")2which has jurisdiction over intra-corporate disputes involving
homeowners associations, pursuant to Exec. Order No. 535, Series of 1979, as
amended by Exec. Order No. 90, Series of 1986.
Opposing the motion, Eristingcol alleged, among others, that UVAI, Limjoco,
Tan and Vilvestre did not comply with the mandatory provisions of Secs. 4 and
6, Rule 15 of the 1997 Rules of Civil Procedure and are estopped from
questioning the jurisdiction of the [RTC] after they voluntarily appeared therein
"and embraced its authority by agreeing to sign an Undertaking."
On May 20, 1999, Eristingcol filed an amended complaint by (i) impleading
Manuel Carmona (or "Carmona") and Rene Cristobal (or "Cristobal"), UVAIs
newly-elected president and chairman of the board and newly-designated
construction committee chairman, respectively, as additional defendants and (ii)
increasing her claim for moral damages against each petitioner
from P500,000.00 to P1,000,000.00.
On May 25, 1999, Eristingcol filed a motion for production and inspection of
documents, which UVAI, Limjoco, Tan, Vilvestre, Carmona and Cristobal
opposed. The motion sought to compel [UVAI and its officers] to produce the
documents used by UVAI as basis for the imposition of the P400,000.00 penalty
on Eristingcol as well as letters and documents showing that UVAI had informed
the other homeowners of their violations of the CRR.
On May 26, 1999, the [RTC] issued an order which pertinently reads:
IN VIEW OF THE FOREGOING, for lack of merit, the defendants Motion to
Dismiss is Denied, and plaintiffs motion to declare defendants in default and for
contempt are also Denied."
The [RTC] ratiocinated that [UVAI, Limjoco, Tan and Vilvestre] may not assail
its jurisdiction "after they voluntarily entered their appearance, sought reliefs
therein, and embraced its authority by agreeing to sign an undertaking to desist
from prohibiting (Eristingcols) workers from entering the village." In so ruling, it
applied the doctrine enunciated in Tijam v. Sibonghanoy.
On June 7, 1999, Eristingcol filed a motion reiterating her earlier motion for
production and inspection of documents.
179

On June 8, 1999, [UVAI, Limjoco, Tan and Vilvestre] moved for partial
reconsideration of the order dated May 26, 1999. Eristingcol opposed the
motion.
On March 24, 2001, the [RTC] issued an order granting Eristingcols motion for
production and inspection of documents, while on March 26, 2001, it issued an
order denying [UVAIs, Limjocos, Tans and Vilvestres] motion for partial
reconsideration.
CIVIL PROCEDURE CASES SESSION 2
respondent, without impleading the lower courts or judges thereof either as
petitioners or respondents." As the losing party in defendants petition for
certiorari before the CA, Eristingcol should have impleaded all petitioners, the
winning and adverse parties therein.
On this score alone, the present petition could have been dismissed
outright.5 However, to settle the issue of jurisdiction, we have opted to dispose
of this case on the merits.

On May 10, 2001, [UVAI, Limjoco, Tan and Vilvestre] elevated the dispute
before [the CA] via [a] petition for certiorari alleging that the [RTC] acted without
jurisdiction in issuing the orders of May 26, 1999 and March 24 and 26, 2001. 3
The CA issued the herein assailed Decision reversing the RTC Order 4 and
dismissing Eristingcols complaint for lack of jurisdiction.
Hence, this appeal positing a sole issue for our resolution:
Whether it is the RTC or the Housing and Land Use Regulatory Board (HLURB)
which has jurisdiction over the subject matter of Eristingcols complaint.
Before anything else, we note that the instant petition impleads only Limjoco as
private respondent. The rest of the defendants sued by Eristingcol before the
RTC, who then collectively filed the petition for certiorari before the CA assailing
the RTCs Order, were, curiously, not included as private respondents in this
particular petition.
Eristingcol explains that only respondent Limjoco was retained in the instant
petition as her discussions with UVAI and the other defendants revealed their
lack of participation in the work-stoppage order which was supposedly single-
handedly thought of and implemented by Limjoco.
The foregoing clarification notwithstanding, the rest of the defendants should
have been impleaded as respondents in this petition considering that the
complaint before the RTC, where the petition before the CA and the instant
petition originated, has yet to be amended. Furthermore, the present petition
maintains that it was serious error for the CA to have ruled that the RTC did not
have jurisdiction over a complaint for declaration of nullity of UVAIs
Construction Rules. Clearly, UVAI and the rest of the defendants should have
been impleaded herein as respondents.
Section 4(a), Rule 45 of the Rules of Court, requires that the petition shall "state
the full name of the appealing party as petitioner and the adverse party as
Despite her having dropped UVAI, Lorenzo Tan (Tan) and June Vilvestre
(Vilvestre) from this suit, Eristingcol insists that her complaint against UVAI and
the defendants was properly filed before the RTC as it prays for the declaration
of nullity of UVAIs Construction Rules and asks that damages be paid by
Limjoco and the other UVAI officers who had inflicted injury upon her. Eristingcol
asseverates that since the case before the RTC is one for declaration of nullity,
the nature of the question that is the subject of controversy, not just the status
or relationship of the parties, should determine which body has jurisdiction. In
any event, Eristingcol submits that the RTCs jurisdiction over the case was
foreclosed by the prayer of UVAI and its officers, including Limjoco, for
affirmative relief from that court.
Well-settled in jurisprudence is the rule that in determining which body has
jurisdiction over a case, we should consider not only the status or relationship
of the parties, but also the nature of the question that is the subject of their
controversy.6 To determine the nature of an action and which court has
jurisdiction, courts must look at the averments of the complaint or petition and
the essence of the relief prayed for.7 Thus, we examine the pertinent allegations
in Eristingcols complaint, specifically her amended complaint, to wit:
Allegations Common to All Causes of Action
3. In 1958 and upon its incorporation, [UVAI] adopted a set of By-laws and Rules
and Regulations, x x x. Item 5 of [UVAIs] Construction Rules pertinently
provides:
"Set back line: All Buildings, including garage servants quarters, or parts thereof
(covered terraces, portes cocheres) must be constructed at a distance of not
less than three (3) meters from the boundary fronting a street and not less than
four (4) meters fronting the drainage creek or underground culvert and two (2)
meters from other boundaries of a lot. Distance will be measured from the
vertical projection of the roof nearest the property line. Completely open and
unroofed terraces are not included in these restrictions."

180

Suffice it to state that there is nothing in the same By-laws which deals explicitly
with canopies or marquees which extend outward from the main building.
4. [Eristingcol] has been a resident of Urdaneta Village for eleven (11) years. In
February 1997, she purchased a parcel of land in the Village, located at the
corner of Urdaneta Avenue and Cerrada Street. x x x.
5. In considering the design for the house (the "Cerrada property") which she
intended to construct on Cerrada Street, [Eristingcol] referred to the National
Building Code of the Philippines. After assuring herself that the said law does
not expressly provide any restrictions in respect thereof, and after noting that
other houses owned by prominent families had similar structures without being
cited by the Villages Construction Committee, [Eristingcol] decided that the
Cerrada property would have a concrete canopy directly above the main door
and driveway.
6. In compliance with [UVAIs] rules, [Eristingcol] submitted to [UVAI] copies of
her building plans in respect of the Cerrada property and the building plans were
duly approved by [UVAI]. x x x.
7. [Eristingcol] submitted and/or paid the "cash bond/construction bond deposit
and architects inspection fee" of P200,000.00 and the architects inspection fee
of P500.00 as required under Construction Rules x x x.
8. In the latter part of 1997, and while the construction of the Cerrada property
was ongoing, [Eristingcol] received a notice from [UVAI], charging her with
alleged violations of the Construction Rules, i.e., those on the height restriction
of eleven (11.0) meters, and the canopy extension into the easement. On 22nd
January 1998, [Eristingcol] (through her representatives) met with, among
others, defendant Limjoco. In said meeting, and after deliberation on the
definition of the phrase "original ground elevation" as a reference point,
[Eristingcols] representatives agreed to revise the building plan by removing
what was intended to be a parapet or roof railing, and thereby reduce the height
of the structure by 40 centimeters, which proposal was accepted by the Board
through defendant Limjoco, Gov. Catalino Macaraig Jr. ([UVAIs] Construction
Committee chairman), and the Villages Architect. However, the issue of the
alleged violation in respect of the canopy/extension remained unresolved.
xxxx
9. In compliance with the agreement reached at the 22nd January 1998 meeting,
[Eristingcol] caused the revision of her building plans such that, as it now stands,
the Cerrada property has a vertical height of 10.96 meters and, thus, was within
the Villages allowed maximum height of 11 meters.
CIVIL PROCEDURE CASES SESSION 2
10. Sometime in June 1998, [Eristingcol] was surprised to receive another letter
from [UVAI], this time from the Construction Committee chairman (defendant
Tan), again calling her attention to alleged violations of the Construction Rules.
On 15th June 1998, [UVAI] barred [Eristingcols] construction workers from
entering the Village. Thus, [Eristingcols] Construction Manager (Mr. Jaime M.
Hidalgo) wrote defendant Tan to explain her position, and attached photographs
of similar "violations" by other property owners which have not merited the same
scrutiny and sanction from [UVAI].
xxxx
11. On 26th October 1998, and for reasons known only to him, defendant
Vilvestre sent a letter to Mr. Geronimo delos Reyes, demanding for an "idea of
how [Mr. delos Reyes] can demonstrate in concrete terms [his] good faith as a
quid pro quo for compromise to" [UVAIs] continued insistence that [Eristingcol]
had violated [UVAIs] Construction Rules. x x x.
xxxx
12. [Eristingcol] through Mr. Hidalgo sent a letter dated 24th November 1998 to
defendant Tan, copies of which were furnished defendants Limjoco, Vilvestre
and the Board, reiterating that, among others: (i) the alleged height restriction
violation is untrue, since the Cerrada property now has a height within the limits
imposed by [UVAI]; and (ii) the demand to reduce the canopy by ninety (90)
centimeters is without basis, in light of the existence of thirty-five (35) similar
"violations" of the same nature by other homeowners. [Eristingcol] through Mr.
Hidalgo further mentioned that she had done nothing to deserve the crude and
coercive Village letters and the Boards threats of work stoppage, and she cited
instances when she dealt with [UVAI] and her fellow homeowners in good faith
and goodwill such as in 1997, when she very discreetly spent substantial
amounts to landscape the entire Village Park, concrete the Park track oval which
was being used as a jogging path, and donate to the Association molave
benches used as Park benches.
xxxx
13. On the same date (24th November 1998), defendant Vilvestre sent another
letter addressed to [Eristingcols] construction manager Hidalgo, again
threatening to enjoin all construction activity on the Cerrada property as well as
ban entry of all workers and construction deliveries effective 1st December 1998
unless Mr. delos Reyes met with defendants. x x x.
xxxx
181

14. On 2nd December 1998, [Eristingcols] representatives met with defendants
Limjoco, Tan, and Vilvestre. During that meeting, defendants were shown
copies of the architectural plans for the Cerrada property. [Eristingcols]
representatives agreed to allow [UVAIs] Construction Committees architect to
validate the measurements given. However, on the issue of the canopy
extension, the defendants informed [Eristingcols] representatives that the
Board would impose a penalty of Four Hundred Thousand Pesos (P400,000.00)
for violation of [UVAIs] "set back" or easement rule. Defendants cited the
Boards imposition of similar fines to previous homeowners who had violated the
same rule, and they undertook to furnish [Eristingcol] with a list of past penalties
imposed and paid by homeowners found by the Board to have violated the
Villages "set back" provision.
15. On 22nd December 1998, defendant Vilvestre sent [Eristingcol] a letter
dated 18th December 1998 formally imposing a penalty of P400,000.00 for the
"canopy easement violation." x x x.
16. On 29th December 1998, x x x, Vilvestre sent a letter to [Eristingcol], stating
that "as far as [his] administration is concerned, there has been no past penalties
executed by [UVAI], similar to the one we are presently demanding on your on
going construction. x x x
17. On 4th January 1999, [Eristingcols] representative sent a letter to the Board,
asking for a reconsideration of the imposition of the P400,000.00 penalty on the
ground that the same is unwarranted and excessive. On 6th January 1999,
[Eristingcol] herself sent a letter to the Board, expounding on the reasons for
opposing the Boards action. On 18th January 1999, [Eristingcol] sent another
letter in compliance with defendants request for a breakdown of her
expenditures in respect of her donations relative to the Village park.
18. On 3rd February 1999, [Eristingcol] through her lawyers sent defendants a
letter, requesting that her letters of 4th and 6th January 1999 be acted upon.
19. On 4th February 1999, x x x, defendant Limjoco gave a verbal order to
[UVAIs] guards to bar the entry of workers working on the Cerrada property.
20. In the morning of 5th February 1999, defendants physically barred
[Eristingcols] workers and contractors from entering the Village and working at
the Cerrada property.8
Eristingcol then lists the following causes of action:
1. Item 5 of UVAIs Construction Rules constitutes an illegal and
unwarranted intrusion upon Eristingcols proprietary rights as it imposes
CIVIL PROCEDURE CASES SESSION 2
a set-back or horizontal easement of 3.0 meters from the property line
greater than the specification in Section 1005(b) of the Building Code
that "the horizontal clearance between the outermost edge of the
marquee and the curb line shall be not less than 300 millimeters." As
such, Eristingcol prays for the declaration of nullity of this provision in
UVAIs Construction Rules insofar as she is concerned.
2. UVAIs imposition of a P400,000.00 penalty on Eristingcol has no
factual basis, is arbitrary, whimsical and capricious as rampant
violations of the set-back rule by other homeowners in the Village were
not penalized by UVAI. Eristingcol prays to put a stop to defendants
arbitrary exercise of power pursuant to UVAIs by-laws.
3. Absent any factual or legal bases for the imposition of a P400,000.00
penalty, defendants and all persons working under their control should
be permanently barred or restrained from imposing and/or enforcing
any penalty upon Eristingcol for an alleged violation of UVAIs
Construction Rules, specifically the provision on set-back.
4. Defendants Limjoco, Tan, and Vilvestre, in violation of Article 19 of
the Civil Code, demonstrated bias against Eristingcol by zeroing in on
her alone and her supposed violation, while other homeowners, who
had likewise violated UVAIs Construction Rules, were not cited or
penalized therefor. Defendants actuations were in clear violation of
their duty to give all homeowners, including Eristingcol, their due.
5. Defendants actuations have seriously affected Eristingcols mental
disposition and have caused her to suffer sleepless nights, mental
anguish and serious anxiety. Eristingcols reputation has likewise been
besmirched by UVAIs and defendants arbitrary charge that she had
violated UVAIs Construction Rules. In this regard, individual
defendants should each pay Eristingcol moral damages in the amount
of P1,000,000.00.
6. Lastly, defendants should pay Eristingcol P1,000.000.00 for litigation
expenses she incurred in instituting this suit and for attorneys fees.
At the outset, we note that the relationship between the parties is not in dispute
and is, in fact, admitted by Eristingcol in her complaint. Nonetheless, Eristingcol
is adamant that the subject matter of her complaint is properly cognizable by the
regular courts and need not be filed before a specialized body or commission.
Eristingcols contention is wrong.
182

Ostensibly, Eristingcols complaint, designated as one for declaration of nullity,
falls within the regular courts jurisdiction. However, we have, on more than one
occasion, held that the caption of the complaint is not determinative of the nature
of the action.9
A scrutiny of the allegations contained in Eristingcols complaint reveals that the
nature of the question subject of this controversy only superficially delves into
the validity of UVAIs Construction Rules. The complaint actually goes into the
proper interpretation and application of UVAIs by-laws, specifically its
construction rules. Essentially, the conflict between the parties arose as
Eristingcol, admittedly a member of UVAI, now wishes to be exempt from the
application of the canopy requirement set forth in UVAIs Construction Rules.
Significantly, Eristingcol does not assail the height restriction of UVAIs
Construction Rules, as she has readily complied therewith.
Distinctly in point is China Banking Corp. v. Court of Appeals, 10 which upheld
the jurisdiction of the Securities and Exchange Commission (SEC) over the suit
and recognized its special competence to interpret and apply Valley Golf and
Country Club, Inc.s (VGCCIs) by-laws. We ruled, thus:
Applying the foregoing principles in the case at bar, to ascertain which tribunal
has jurisdiction we have to determine therefore whether or not petitioner is a
stockholder of VGCCI and whether or not the nature of the controversy between
petitioner and private respondent corporation is intra-corporate.
As to the first query, there is no question that the purchase of the subject share
or membership certificate at public auction by petitioner (and the issuance to it
of the corresponding Certificate of Sale) transferred ownership of the same to
the latter and thus entitled petitioner to have the said share registered in its
name as a member of VGCCI. x x x.
By virtue of the aforementioned sale, petitioner became a bona fide stockholder
of VGCCI and, therefore, the conflict that arose between petitioner and VGCCI
aptly exemplifies an intra-corporate controversy between a corporation and its
stockholder under Sec. 5(b) of P.D. 902-A.
An important consideration, moreover, is the nature of the controversy between
petitioner and private respondent corporation. VGCCI claims a prior right over
the subject share anchored mainly on Sec. 3, Art. VIII of its by-laws which
provides that "after a member shall have been posted as delinquent, the Board
may order his/her/its share sold to satisfy the claims of the Club" It is pursuant
to this provision that VGCCI also sold the subject share at public auction, of
which it was the highest bidder. VGCCI caps its argument by asserting that its
corporate by-laws should prevail. The bone of contention, thus, is the proper
CIVIL PROCEDURE CASES SESSION 2
interpretation and application of VGCCIs aforequoted by-laws, a subject which
irrefutably calls for the special competence of the SEC.
We reiterate herein the sound policy enunciated by the Court in Abejo v. De la
Cruz:
6. In the fifties, the Court taking cognizance of the move to vest jurisdiction in
administrative commissions and boards the power to resolve specialized
disputes in the field of labor (as in corporations, public transportation and public
utilities) ruled that Congress in requiring the Industrial Courts intervention in the
resolution of labor-management controversies likely to cause strikes or lockouts
meant such jurisdiction to be exclusive, although it did not so expressly state in
the law. The Court held that under the "sense-making and expeditious doctrine
of primary jurisdiction the courts cannot or will not determine a controversy
involving a question which is within the jurisdiction of an administrative tribunal,
where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience, and services of the administrative
tribunal to determine technical and intricate matters of fact, and a uniformity of
ruling is essential to comply with the purposes of the regulatory statute
administered.
xxxx
In this case, the need for the SECs technical expertise cannot be over-
emphasized involving as it does the meticulous analysis and correct
interpretation of a corporations by-laws as well as the applicable provisions of
the Corporation Code in order to determine the validity of VGCCIs claims. The
SEC, therefore, took proper cognizance of the instant case.11
Likewise in point is our illuminating ruling in Sta. Clara Homeowners Association
v. Sps. Gaston,12 although it ultimately held that the question of subject matter
jurisdiction over the complaint of respondent- spouses Gaston for declaration of
nullity of a board resolution issued by Sta. Clara Homeowners Association
(SCHA) was vested in the regular courts. In Sta. Clara, the main issue raised by
SCHA reads: "Whether [the CA] erred in upholding the jurisdiction of the [RTC],
to declare as null and void the resolution of the Board of SCHA, decreeing that
only members [in] good standing of the said association were to be issued
stickers for use in their vehicles." In holding that the regular courts had
jurisdiction over respondent-spouses Gastons complaint for declaration of
nullity, we stressed the absence of relationship and the consequent lack of
privity of contract between the parties, thus:
Are [Respondent-Spouses Gaston] SCHA Members?
183

In order to determine if the HIGC has jurisdiction over the dispute, it is necessary
to resolve preliminarilyon the basis of the allegations in the Complaint
whether [respondent-spouses Gaston] are members of the SCHA.
[SCHA] contend[s] that because the Complaint arose from intra-corporate
relations between the SCHA and its members, the HIGC therefore has
jurisdiction over the dispute. To support their contention that [respondent-
spouses Gaston] are members of the association, [SCHA] cite[s] the SCHAs
Articles of Incorporation and By-laws which provide that all landowners of the
Sta. Clara Subdivision are automatically members of the SCHA.
We are not persuaded. The constitutionally guaranteed freedom of association
includes the freedom not to associate. The right to choose with whom one will
associate oneself is the very foundation and essence of that partnership. It
should be noted that the provision guarantees the right to form an association.
It does not include the right to compel others to form or join one.
More to the point, [respondent-spouses Gaston] cannot be compelled to
become members of the SCHA by the simple expedient of including them in its
Articles of Incorporation and By-laws without their express or implied consent. x
x x. In the present case, however, other than the said Articles of Incorporation
and By-laws, there is no showing that [respondent-spouses Gaston] have
agreed to be SCHA members.
xxxx
No privity of Contract
Clearly then, no privity of contract exists between [SCHA] and [respondent-
spouses Gaston]. As a general rule, a contract is a meeting of minds between
two persons. The Civil Code upholds the spirit over the form; thus, it deems an
agreement to exist, provided the essential requisites are present. x x x. From
the moment there is a meeting of minds between the parties, it is perfected.
As already adverted to, there are cases in which a party who enters into a
contract of sale is also bound by a lien annotated on the certificate of title. We
recognized this in Bel Air Village Association, Inc. v. Dionisio, in which we ruled:
There is no dispute that Transfer Certificate of Title No. 81136 covering the
subject parcel of land issued in the name of the petitioner contains an annotation
to the effect that the lot owner becomes an automatic member of the respondent
Bel-Air Association and must abide by such rules and regulations laid down by
the Association in the interest of the sanitation, security and the general welfare
of the community. It is likewise not disputed that the provision on automatic
CIVIL PROCEDURE CASES SESSION 2
membership was expressly annotated on the petitioners Transfer Certificate of
Title and on the title of his predecessor-in-interest.
The question, therefore, boils down to whether or not the petitioner is bound by
such annotation.
Section 39 of Art. 496 (The Land Registration Act) states:
Sec. 39. Every person receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land who takes a
certificate of title for value in good faith shall hold the same free of all
encumbrances except those noted on said certificate x x x. (Italics supplied)
The above ruling, however, does not apply to the case at bar. When
[respondent-spouses Gaston] purchased their property in 1974 and obtained
Transfer Certificates of Title Nos. T-126542 and T-127462 for Lots 11 and 12 of
Block 37 along San Jose Avenue in Sta. Clara Subdivision, there was no
annotation showing their automatic membership in the SCHA. Thus, no privity
of contract arising from the title certificate exists between [SCHA] and
[respondent-spouses Gaston].
Further, the records are bereft of any evidence that would indicate that private
respondents intended to become members of the SCHA. Prior to the
implementation of the aforesaid Resolution, they and the other homeowners
who were not members of the association were issued non-member gate pass
stickers for their vehicles. This fact has not been disputed by [SCHA]. Thus, the
SCHA recognized that there were subdivision landowners who were not
members thereof, notwithstanding the provisions of its Articles of Incorporation
and By-laws.
Jurisdiction Determined by Allegations in the Complaint
It is a settled rule that jurisdiction over the subject matter is determined by the
allegations in the complaint. Jurisdiction is not affected by the pleas or the
theories set up by the defendant in an answer or a motion to dismiss. Otherwise,
jurisdiction would become dependent almost entirely upon the whims of the
defendant.
The Complaint does not allege that [respondent-spouses Gaston] are members
of the SCHA. In point of fact, they deny such membership. Thus, the HIGC has
no jurisdiction over the dispute.13
184

In stark contrast, the relationship between the parties in the instant case is well-
established. Given this admitted relationship, the privity of contract between
UVAI and Eristingcol is palpable, despite the latters deft phraseology of its
primary cause of action as a declaration of nullity of UVAIs Construction Rules.
In short, the crux of Eristingcols complaint is UVAIs supposed arbitrary
implementation of its construction rules against Eristingcol, a member thereof.
Moreover, as in Sta. Clara (had respondent-spouses Gaston been members of
SCHA), the controversy which arose between the parties in this case partook of
the nature of an intra-corporate dispute. Executive Order (E.O.) No.
535,14 which amended Republic Act No. 580 creating the HIGC, transferred to
the HIGC the regulatory and administrative functions over homeowners
associations originally vested with the SEC. Section 2 of E.O. No. 535 provides
in pertinent part:
2. In addition to the powers and functions vested under the Home Financing Act,
the Corporation, shall have among others, the following additional powers:
(a) x x x; and exercise all the powers, authorities and responsibilities
that are vested on the Securities and Exchange Commission with
respect to home owners association, the provision of Act 1459, as
amended by P.D. 902-A, to the contrary notwithstanding;
(b) To regulate and supervise the activities and operations of all
houseowners association registered in accordance therewith.
By virtue thereof, the HIGC likewise assumed the SECs original and exclusive
jurisdiction to hear and decide cases involving controversies arising from intra-
corporate or partnership relations.15 Thereafter, with the advent of Republic Act
No. 8763, the foregoing powers and responsibilities vested in the HIGC, with
respect to homeowners associations, were transferred to the HLURB.
As regards the defendants supposed embrace of the RTCs jurisdiction by
appearing thereat and undertaking to desist from prohibiting Eristingcols
workers from entering the village, suffice it to state that the invocation of the
doctrine in Tijam, et al. v. Sibonghanoy, et al.16 is quite a long stretch.
The factual milieu obtaining in Tijam and in the case at bench are worlds apart.
As found by the CA, defendants appearance before the RTC was pursuant to,
and in compliance with, a subpoena issued by that court in connection with
Eristingcols application for a Temporary Restraining Order (TRO). On
defendants supposed agreement to sign the Undertaking allowing Eristingcols
workers, contractors, and suppliers to enter and exit the village, this temporary
CIVIL PROCEDURE CASES SESSION 2
settlement cannot be equated with full acceptance of the RTCs authority, as
what actually transpired in Tijam.1avvphi1.zw+
The landmark case of Tijam is, in fact, only an exception to the general rule that
an objection to the courts jurisdiction over a case may be raised at any stage of
the proceedings, as the lack of jurisdiction affects the very authority of the court
to take cognizance of a case.17 In that case, the Surety filed a Motion to Dismiss
before the CA, raising the question of lack of jurisdiction for the first timefifteen
years after the action was commenced in the Court of First Instance (CFI) of
Cebu. Indeed, in several stages of the proceedings in the CFI, as well as in the
CA, the Surety invoked the jurisdiction of said courts to obtain affirmative relief,
and even submitted its case for a final adjudication on the merits. Consequently,
it was barred by laches from invoking the CFIs lack of jurisdiction.
To further highlight the distinction in this case, the TRO hearing was held on
February 9, 1999, a day after the filing of the complaint. On even date, the
parties reached a temporary settlement reflected in the Undertaking. Fifteen
days thereafter, defendants, including Limjoco, filed a Motion to Dismiss.
Certainly, this successive and continuous chain of events cannot be
characterized as laches as would bar defendants from questioning the RTCs
jurisdiction.
In fine, based on the allegations contained in Eristingcols complaint, it is the
HLURB, not the RTC, which has jurisdiction over this case.
WHEREFORE, premises considered, the petition is DENIED. The Decision of
the Court of Appeals in CA-G.R. SP. No. 64642 is hereby AFFIRMED. Costs
against petitioner.
SO ORDERED.
185