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Tano v Socrates quipped at some point that the "endorsement of specific candidates in an
election to any public office is a clear violation of the separation clause."
Held: -The trial courts essay did not contain a statement of facts and a dispositive
Supreme Court is not possessed of original jurisdiction over petitions for portion, however. Due to this aberration, Velarde and Soriano filed separate
declaratory relief even if only questions of law are involved.As to the Motions for Reconsideration before the trial court owing to these facts.
second set of petitioners, the instant petition is obviously one for -The lower court denied these Motions. Hence, this petition for review.
DECLARATORY RELIEF, i.e., for a declaration that the Ordinances in On April 13, 2004, the Court en banc conducted an Oral Argument.
question are a nullity. . . for being unconstitutional. As such, their -In his Petition, Brother Mike Velarde submits the following issues for this
petition must likewise fail, as this Court is not possessed of original Courts resolution:
jurisdiction over petitions for declaratory relief even if only questions of 1. Whether or not the Decision dated 12 June 2003 rendered by the court a
law are involved, it being settled that the Court merely exercises quo was proper and valid;
appellate jurisdiction over such petitions. 2. Whether or not there exists justiciable controversy in herein respondents
Petition for declaratory relief;
2. Mike Velarde vs. Social Justice Society 3. Whether or not herein respondent has legal interest in filing the Petition
for declaratory relief;
Doctrine: Decision, more specifically a decision not conforming to the form 4. Whether or not the constitutional question sought to be resolved by
and substance required by the Constitution is void and deemed legally herein respondent is ripe for judicial determination;
inexistent (Panganiban) 5. Whether or not there is adequate remedy other than the declaratory
relief; and,
Facts: 6. Whether or not the court a quo has jurisdiction over the Petition for
-On January 28, 2003, SJS filed a Petition for Declaratory Relief before the declaratory relief of herein respondent.
RTC-Manila against Velarde and his co-respondents Eminence, Jaime
Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie Villanueva and Issues:
Brother Eliseo F. Soriano. In its oral argument, the Supreme Court condensed Velardes issues and
-SJS, a registered political party, sought the interpretation of several divided it into 2 groups:
constitutional provisions, specifically on the separation of church and state; A. Procedural Issues
and a declaratory judgment on the constitutionality of the acts of religious 1. Did the Petition for Declaratory Relief raise a justiciable controversy?
leaders endorsing a candidate for an elective office, or urging or requiring 2. Did it state a cause of action?
the members of their flock to vote for a specified candidate. 3.Did respondent have any legal standing to file the Petition for Declaratory
-The petitioner filed a Motion to dismiss before the trial court owing to the Relief?
fact that alleged that the questioned SJS Petition did not state a cause of B. Substantive Issues
action and that there was no justiciable controversy. 1. Did the RTC Decision conform to the form and substance required by the
-The trial courts junked the Velarde petitions under certain reasons: Constitution, the law and the Rules of Court?
1. It said that it had jurisdiction over the SJS petition, because in praying for 2. May religious leaders like herein petitioner, Bro. Mike Velarde, be
a determination as to whether the actions imputed to the respondents were prohibited from endorsing candidates for public office? Corollarily, may they
violative of Article II, Section 6 of the Fundamental Law, the petition has be banned from campaigning against said candidates? (Not answered in the
raised only a question of law. affirmative)
2. It then proceeded to a lengthy discussion of the issue raised in the
Petition the separation of church and state even tracing, to some extent, Decision:
the historical background of the principle. Through its discourse, the court
Petition for Review GRANTED. The assailed June 12, 2003 Decision and July 2. NO. A cause of action is an act or an omission of one party in violation of
29, 2003 Order of the Regional Trial Court of Manila DECLARED NULL AND the legal right or rights of another, causing injury to the latter. (Rebollido v.
VOID and thus SET ASIDE. The SJS Petition for Declaratory Relief is Court of Appeals, 170 SCRA 800)
DISMISSED for failure to state a cause of action. Its essential elements are the following: (1) a right in favor of the plaintiff;
(2) an obligation on the part of the named defendant to respect or not to
Holding: violate such right; and (3) such defendants act or omission that is violative
Procedural Issues: of the right of the plaintiff or constituting a breach of the obligation of the
1. NO. A justiciable controversy to an existing case or controversy former to the latter.
that is appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory. A petition filed with the trial court The court held that the complaints failure to state a cause of action became
should contain a plain, concise and direct statement of the ultimate facts on a ground for its outright dismissal. Why?
which the party pleading relies for his claim.
The Court found nothing in the SJS Petition to suggest that an explicit
The SJS Petition fell short of the requirements to constitute a justiciable allegation of fact that SJS had a legal right to protect. (trigger for the cause
controversy. Why? of action)

a. It stated no ultimate facts. The petition simply theorized that the people In special civil actions for declaratory relief, the concept of cause of action
elected who were endorsed by these religious leaders might become under ordinary civil actions does not strictly apply. The reason for this
beholden to the latter. exception is that an action for declaratory relief presupposes that there has
b. It did not sufficiently state a declaration of its rights and duties, what been no actual breach of the instruments involved or of rights arising
specific legal right of the petitioner was violated by the respondents therein, thereunder. Nevertheless, a breach or violation should be impending,
and what particular act or acts of the latter were in breach of its rights, the imminent or at least threatened.
law or the constitution,
c. The petition did not pray for a stoppage of violated rights (duh, wala The justices could only infer that the interest from its allegation was its
ngang rights na sinabi eh). It merely sought an opinion of the trial court. mention of its (SJS) thousands of members who are citizens-taxpayers-
However, courts are proscribed from rendering an advisory opinion. registered voters and who are keenly interested. Aside from the fact that
(tantamount to making laws, remember the questionability of justice this general averment did not constitute a legal right or interest, the courts
panganibans guidelines for article 36 of the family code) inferred interest was too vague and speculative in character. Rules require
that the interest must be material to the issue and affected by the
It must also be considered that even the religious leaders were puzzled as to questioned act or instrument.
the breach of rights they were claimed to have committed. As pointed out
by Soriano, what exactly has he done that merited the attention of SJS? To bolster its point, the SJS cited the Corpus Juris Secundum and submitted
Jaime Cardinal Sin adds that the election season had not even started at the that the plaintiff in a declaratory judgment action does not seek to enforce a
time SJS filed its Petition and that he has not been actively involved in claim against the defendant, but sought a judicial declaration of the rights of
partisan politics. The Petition does not even allege any indication or the parties for the purpose of guiding their future conduct, and the essential
manifest intent on the part of any of the respondents below to champion an distinction between a declaratory judgment action and the usual action is
electoral candidate, or to urge their so-called flock to vote for, a particular that no actual wrong need have been committed or loss have occurred in
candidate. It is a time-honored rule that sheer speculation does not give rise order to sustain the declaratory judgment action, although there must be
to an actionable right. no uncertainty that the loss will occur or that the asserted rights will be
invaded.
presumed interest impersonal in character; it is likewise too vague, highly
During the Oral Argument, Velarde and co-respondents strongly asserted speculative and uncertain to satisfy the requirement of standing.
that they had not in any way engaged or intended to participate in partisan In not a few cases, the Court has liberalized the locus standi requirement
politics. Not even the alleged proximity of the elections to the time the when a petition raises an issue of transcendental significance or importance
Petition was filed below would have provided the certainty that it had a to the people (IBP v Zamora). The Court deemed the constitutional issue
legal right that would be jeopardized or violated by any of those raised to be both transcendental in importance and novel in nature.
respondents. Nevertheless, the barren allegations in the SJS Petition as well as the
abbreviated proceedings in the court would prevent the resolution of the
Even if the SJS petition asserted a legal right, there was nevertheless no transcendental issue.
certainty that such right would be invaded by the said respondents.

3. NO. Legal standing or locus standi has been defined as a Substantive Issues
personal and substantial interest in the case, such that the party has
sustained or will sustain direct injury as a result of the challenged act.
1. NO. The Constitution commands that no decision shall be
Interest means a material interest in issue that is affected by the questioned rendered by any court without expressing therein clearly and distinctly the
act or instrument, as distinguished from a mere incidental interest in the facts and the law on which it is based. No petition for review or motion for
question involved. reconsideration of a decision of the court shall be refused due course or
denied without stating the basis therefor.
SJS has no legal interest in the controversy and has failed to establish how
the resolution of the proffered question would benefit or injure it. Consistent with this are Section 1 of Rule 36 of the Rules on Civil Procedure,
Rule 120 of the Rules of Court on Criminal Procedure, Administrative
Parties bringing suits challenging the constitutionality of a law, an act or a Circular No. 1. which states that :
statute must demonstrate that they have been, or are about to be, denied
some right or privilege to which they are lawfully entitled, or that they are A judgment or final order determining the merits of the case shall be
about to be subjected to some burdens or penalties by reason of the statute rendered. The decision shall be in writing, personally and directly prepared
or act complained of. by the judge, stating clearly and distinctly the facts and law on which it is
based, signed by the issuing magistrate, and filed with the clerk of court.
If the petition were to be valid, it should satisfy:
The SC has reminded magistrates to heed the demand of Section `4, Art VIII
First, parties suing as taxpayers must specifically prove that they have of the Constitution. This was evinced in Yao v. Court of Appeals where
sufficient interest in preventing the illegal expenditure of money raised by Davide, CJ said that faithful adherence to the requirements of Section 14,
taxation, particularly that of Congress' taxing power. Article VIII of the Constitution is indisputably a paramount component of
Second, there was no showing in the Petition for Declaratory Relief that SJS due process and fair play.
as a political party or its members as registered voters would be adversely
affected by the alleged acts of the respondents below, such as the In People v. Bugarin, the court held that the requirement that the decisions
deprivation of votes or barring of suffrage to its constituents. of courts must be in writing and that they must set forth clearly and
Finally, the allegedly keen interest of its "thousands of members who are distinctly the facts and the law on which they are based is intended, among
citizens-taxpayers-registered voters" is too general and beyond the other things, to inform the parties of the reason or reasons for the decision
contemplation of the standards set by our jurisprudence. Not only is the
so that if any of them appeals, he can point out to the appellate court the The standard for a dispositive was set in Manalang v. Tuason de Rickards
finding of facts or the rulings on points of law with which he disagrees. where the resolution of the Court on a given issue as embodied in the
dispositive part of the decision or order is the investitive or controlling
The assailed Decision contains no statement of facts (much less an factor that determines and settles the rights of the parties and the
assessment or analysis thereof) or of the courts findings as to the probable questions presented therein, notwithstanding the existence of statements
facts. The assailed Decision begins with a statement of the nature of the or declaration in the body of said order that may be confusing.
action and the question or issue presented. Then follows a brief
explanation of the constitutional provisions involved, and what the Petition In Magdalena Estate, Inc. v. Caluag: The rule is settled that where there is a
sought to achieve. Thereafter, the ensuing procedural incidents before the conflict between the dispositive part and the opinion, the former must
trial court are tracked. The Decision proceeds to a full-length opinion on the prevail over the latter on the theory that the dispositive portion is the final
nature and the extent of the separation of church and state. Without order while the opinion is merely a statement ordering nothing.
expressly stating the final conclusion she has reached or specifying the relief
granted or denied, the trial judge ends her Decision with the clause SO The statement quoted by SJS does not conclusively declare the rights (or
ORDERED. obligations) of the parties to the Petition. Neither does it grant proper relief
under the circumstances, as required of a dispositive portion.
A decision that does not clearly and distinctly state the facts and the law on
which it is based leaves the parties in the dark as to how it was reached and Failure to comply with the constitutional injunction is a grave abuse of
is precisely prejudicial to the losing party, who is unable to pinpoint the discretion amounting to lack or excess of jurisdiction. Decisions or orders
possible errors of the court for review by a higher tribunal. More than that, issued in careless disregard of the constitutional mandate are a patent
the requirement is an assurance to the parties that, in reaching judgment, nullity and must be struck down as void.
the judge did so through the processes of legal reasoning.
2. It is not legally possible to take up, on the merits, the
It was truly obvious that the RTCs Decision did not adhere to the Bugarin paramount question involving a constitutional principle. It is a time-honored
precedent because of its failure to express clearly and distinctly the facts on rule that the constitutionality of a statute or act will be passed upon only if,
which it was based. The significance of factual findings lies in the value of and to the extent that, it is directly and necessarily involved in a justiciable
the decision as a precedent (how will the ruling be applied in the future, if controversy and is essential to the protection of the rights of the parties
there is no point of factual comparison?). concerned. (So no answer)

Respondent SJS insisted that the dispositive portion can be found in the 3. Almeda vs. Bathala Marketing Industries,Inc.
body (p. 10) of the assailed Decision. Stating Endorsement of specific
candidates in an election to any public office is a clear violation of the FACTS: Respondent Bathala Marketing Industries renewed its contract of
separation clause. lease with Ponciano Almeda, the father of Romel Almeda and the husband
of Eufemia, who are the petitioners in this case. The contract of lease
The Court held that the statement is merely an answer to a hypothetical contains the following provisions which give rise to the instant case, to wit:
legal question and just a part of the opinion of the trial court. It does not SIXTH - It is expressly understood by the parties hereto that the rental rate
conclusively declare the rights (or obligations) of the parties to the Petition. stipulated is based on the present rate of assessment on the property, and
Neither does it grant any -- much less, the proper -- relief under the that in case the assessment should hereafter be increased or any new tax,
circumstances, as required of a dispositive portion. charge or burden be imposed by authorities on the lot and building where
the leased premises are located, LESSEE shall pay, when the rental herein
provided becomes due, the additional rental or charge corresponding to the
portion hereby leased; provided, however, that in the event that the not barred from instituting before the trial court the petition for declaratory
present assessment or tax on said property should be reduced, LESSEE shall relief.
be entitled to reduction in the stipulated rental, likewise in proportion to A. Requisites of Declaratory Relief:
the portion leased by him; Decisional law enumerates the requisites of an action for declaratory relief,
SEVENTH - In case an extraordinary inflation or devaluation of Philippine as follows:
Currency should supervene, the value of Philippine peso at the time of the 1) the subject matter of the controversy must be a deed, will, contract or
establishment of the obligation shall be the basis of payment; other written instrument, statute, executive order or regulation, or
During the effectivity of the contract, Ponciano died. Petitioners therein in a ordinance;
letter, advised respondent Bathala that it would be assessed and collect VAT 2) the terms of said documents and the validity thereof are doubtful and
from its monthly rentals. In response, Bathala contend that VAT may not be require judicial construction;
imposed as the rentals fixed on the contact of lease were supposed to 3) there must have been no breach of the documents in question;
include VAT, in lieu that their contract was established when the VAT law 4) there must be an actual justiciable controversy or the "ripening seeds" of
has been effected. However, respondent received another letter from the one between persons whose interests are adverse;
petitioners informing the former that its monthly rental should be increased 5) the issue must be ripe for judicial determination; and
by 73% pursuant to condition no. 7 of the contact and Article 1250 of the 6) adequate relief is not available through other means or other forms of
civil code. Bathala opposed the said increased arguing that there was no action or proceeding.
extraordinary inflation to warrant the application of the said Article. Hence,
respondent Bathala instituted an action for declaratory relief to determine B. On the issue on the separate actions instituted by the petitioners:
the correct interpretation of the conditions no. 6 and 7 of the contract of Petitioners claim that the instant petition is not proper because a separate
lease. In turn, petitioners instituted an action for ejectment, rescission and action for rescission, ejectment and damages had been commenced before
damages against respondent for failure to heed the demand to vacate the another court; thus, the construction of the subject contractual provisions
premises. In addition, they moved to dismiss the action for declaratory relief should be ventilated in the same forum.
since respondent already breach the obligation and the case would not end We are not convinced.
the litigation and settle the rights of the parties. The RTC ruled in favor of It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation we held
Bathala. On appeal, the Court of Appeals affirmed the trial courts decision. that the petition for declaratory relief should be dismissed in view of the
Hence, the matter was raised before the Supreme Court. pendency of a separate action for unlawful detainer. However, we cannot
apply the same ruling to the instant case. In Panganiban, the unlawful
ISSUE: Whether or not declaratory relief was proper considering that detainer case had already been resolved by the trial court before the
Bathala was in breach of obligation when it filed the action before the trail dismissal of the declaratory relief case; and it was petitioner in that case
court? who insisted that the action for declaratory relief be preferred over the
action for unlawful detainer. Conversely, in the case at bench, the trial court
HELD: YES. Petitioners insists that respondent was already in breach of the had not yet resolved the rescission/ejectment case during the pendency of
contract when the petition was filed. We do not agree. After petitioners the declaratory relief petition. In fact, the trial court, where the rescission
demanded payment of adjusted rentals and in the months that followed, case was on appeal, itself initiated the suspension of the proceedings
respondent complied with the terms and conditions set forth in their pending the resolution of the action for declaratory relief.
contract of lease by paying the rentals stipulated therein. Respondent
religiously fulfilled its obligations to petitioners even during the pendency of We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol
the present suit. There is no showing that respondent committed an act where the declaratory relief action was dismissed because the issue therein
constituting a breach of the subject contract of lease. Thus, respondent is could be threshed out in the unlawful detainer suit. Yet, again, in that case,
there was already a breach of contract at the time of the filing of the
declaratory relief petition. This dissimilar factual milieu proscribes the Court Judge Amores authorized the extraterritorial service of summons on
from applying Teodoro to the instant case. creditors
Given all these attendant circumstances, the Court is disposed to entertain Naturally, the creditors opposed and filed "Special Appearance to
the instant declaratory relief action instead of dismissing it, notwithstanding Question Jurisdiction of This Honorable Court Over Persons of
the pendency of the ejectment/rescission case before the trial court. The Defendants"
resolution of the present petition would write finis to the parties' dispute, as o Alleged that lower court does not and cannot acquire
it would settle once and for all the question of the proper interpretation of jurisdiction over the persons of defendants on the grounds
the two contractual stipulations subject of this controversy that private respondent's action does not refer to its
personal status
4.Kawasaki Port Service Corp v Amores o The action does not have for subject matter property
contemplated in Section 17 of Rule 14 of the Rules of Court,
Doctrine: An action purely for injunction is a personal action as well as an that the action does not pray that defendants be excluded
action in personam. As a personal action, personal or substituted service of from any interest or property in the Philippines;
summons upon the defendant, not extra territorial service, is necessary to o And that no property of the defendants has been attached
confer jurisdiction upon the Court over the defendant o Action is in personam; and that the action does not fall
within any of the four cases mentioned in Section 17, Rule
Facts: 14 of the Rules of Court.
Defense: affects status of CF Sharp and liability for Kabushikis
C.F Sharp Kabushiki (Kabushiki) incurred several obligations from indebtedness
several creditors, including petitioners herein
C.F. Sharp & Co (CF Sharp) anticipated that the creditors of ISSUE: Whether or not private respondents complaint for injunction
Kabushiki will run after it and/or declaratory relief is within the purview of the provisions of
Hence, C.F. Sharp prayed for injunctive relief against the Section 17, Rule 14 of the Rules of Court.
petitioners' demand for the payment of C.F. Sharp Kabushiki
Kaisha's liabilities HELD:
C.F. Sharp alleged that it is separate and distinct from Kabushiki. The prevailing rule is that where a declaratory
That the former is organized and existing under the laws of the judgment as to a disputed fact would be determinative
Philippines while the latter is under the laws of Japan. of issues rather than a construction of definite stated
o That it had no participation whatsoever or liability in rights, status and other relations, commonly expressed
connection with the transactions between the latter and in written instrument, the case is not one for
the defendants. declaratory judgment.
CF Sharp also prayed for declaratory relief that it is separate and Thus, considering the nature of a proceeding for declaratory
independent corporation, it is not liable for the obligations and judgment, wherein relief may be sought only to declare rights
liabilities of Kabushiki. (Note: not available according to the court and not to determine or try issues, there is more valid reason to
as no action in court has yet been filed by the creditors) adhere to the principle that a declaratory relief proceeding is
As the creditor-defendants are non-residents, without business unavailable where judgment would have to be made, only after
addresses in the Philippines but in Japan, CF Sharp asked the court a judicial investigation of disputed issues
to effect extraterritorial service of summons. Private respondent alleges that most if not all, of the petitioners
have merely demanded or have attempted to demand from the
former the payment of the obligations of C.F. Sharp K.K. (Rollo,
p. 63). Otherwise stated, there is no action relating to or the because the respondents were able to file an action for declaratory relief
subject of which are the properties of the defendants in the with said RTC. In their action, respondents were praying that the court rule
Philippines for it is beyond dispute that they have none in this on the extent or amount of their actual indebtedness.
jurisdiction nor can it be said that they have claimed any lien or In said RTC case, which was filed March 1979, herein petitioners were
interest, actual or contingent over any property herein, for as declared in default. Thus, even when the Tambunting, et al moved for the
above stated, they merely demanded or attempted to demand dismissal of the case on the ground that mortgaged deed/contract had
from private respondent payment of the monetary obligations already been breached prior to the action, said motion was denied for
of C.F. Sharp K.K. No action in court has as yet ensued. having been filed out of time.
Finally, the alternative relief sought is injunction, that is to On Jan. 1981, the RTC rendered a decision finding that respondents liability,
enjoin petitioners from demanding from private respondent the by virtue of their mortgage deed/contract, was P15,743.83. Pursuant to this
payment of the obligations of C.F. Sharp K.K. decision, the respondents made a consignation with the RTC in said amount.
Where the complaint does not involve the personal status of
plaintiff, nor any property in the Philippines in which After almost 14 years, or on Feb 1995, CHFI again foreclosed on the
defendants have or claim an interest, or which the plaintiff has contested land. The respondents came to know of this because they
attached, but purely an action for injunction, it is a personal received a notice of foreclosure sale, to be conducted by the sheriff, of the
action as well as an action in personam, not an action in rem or land in question
quasi in rem. As a personal action, personal or substituted This time, the petitioners filed an action with Branch 120 of the RTC of
service of summons on the defendants, not extraterritorial Caloocan for injunction against the foreclosure sale. But, the sale still
service, is necessary to confer jurisdiction on the court. In an pushed thru, with CHFI being declared the highest bidder. A new TCT was
action for injunction, extra-territorial service of summons and then issued to CHFI. Thus, respondent spouses amended their complaint to
complaint upon the non-resident defendants cannot subject an action for nullification of the foreclosure/sheriffs sale, the new TCT of
them to the processes of the regional trial courts which are CHFI, as well as reconveyance.
powerless to reach them outside the region over which they On Feb 2000, Branch 120 of the RTC declared the foreclosure sale as void. It
exercise their authority. Extra- territorial service of summons likewise ruled that reconveyance of the property should be made to the
will not confer on the court jurisdiction or power to compel respondents. This decision was grounded on the fact that consignation of
P15k has already been made by CHFI pursuant to the earlier decision of the
them to obey its orders. Branch 33 of the RTC.
After a denial of petitioners MR, they filed petition for review on certiorari
with the SC. The petitioners argued that RTC, Branch 33, erred when it
5. Tambunting v Spouses Sumabat ordered the consignation of P15k. As earlier pointed out, the action in first
case was for declaratory relief. But petitioner points out the fact that
Facts: Spouses Sumabat and Baello were the registered land owners of a respondents are not entitled anymore to file an action for declaratory relief
parcel of land in Caloocan. In May 1973, and in order to obtain a P7,727.95 because there had already been a violation of the mortgaged contract when
loan from petitioner Tambunting, the spouses mortgaged said land to the the spouses defaulted on their amortizations. Furthermore the action for
former. Subsequently, Tambunting assigned his rights to the mortgaged to foreclosure by CHFI on 1995 has already prescribed
Commercial House Finance (CHFI). And because respondent spouses have ISSUES:
not been paying their monthly amortizations, they were informed that their 1. Was the decision of Branch 120 of the RTC wrong when it ordered the
indebtedness has ballooned to P15k. nullification of the foreclosure sale on the ground that consignation has
And so, CHFI and Tambunting filed a case for foreclosure but was restrained already been made in a previous case?
by Branch 33 of the RTC of Caloocan. The reason for the restraint was
2. Was the foreclosure action in 1995 and subsequent sale of the property The purpose of the action is to secure an authoritative statement of the
already barred by prescription? rights and obligations of the parties under a statute, deed, contract, etc. for
3. Thus, should the action for nullification and reconveyance filed by the their guidance in its enforcement or compliance and not to settle issues
respondents be dismissed? arising from its alleged breach.2 It may be entertained only before the
breach or violation of the statute, deed, contract, etc. to which it refers.
HELD: The trial court erred when it affirmed the validity of the
consignation. The RTC should have been barred from taking cognizance of 6. Executive Secretary v Southwing Heavy Industries
the action for declaratory relief since petitioners, being already in default in
their loan amortizations, there existed a violation of the mortgage deed FACTS:
even before the institution of the action. Hence, the CFI could not have The instant consolidated petitions seek to annul and set aside the Decisions
rendered a valid judgment in Civil Case No. C-7496, and the consignation of the Regional Trial Court of Olongapo City and Decision of the Court of
made pursuant to a void judgment was likewise void. Appeals which declared Article 2, Section 3.1 of Executive Order No. 156 (EO
An action for declaratory relief should be filed by a person interested under 156) unconstitutional. Said executive issuance prohibits the importation
a deed, will, contract or other written instrument, and whose rights are into the country, inclusive of the Special Economic and Freeport Zone or the
affected by a statute, executive order, regulation or ordinance before Subic Bay Freeport (SBF or Freeport), of used motor vehicles, subject to a
breach or violation thereof. The purpose of the action is to secure an few exceptions.
authoritative statement of the rights and obligations of the parties under a
statute, deed, contract, etc. for their guidance in its enforcement or The undisputed facts show that on December 12, 2002, President Gloria
compliance and not to settle issues arising from its alleged breach. It may be Macapagal-Arroyo, through Executive Secretary Alberto G. Romulo, issued
entertained only before the breach or violation of the statute, deed, EO 156, entitled PROVIDING FOR A COMPREHENSIVE INDUSTRIAL POLICY
contract, etc. to which it refers. Where the law or contract has already been AND DIRECTIONS FOR THE MOTOR VEHICLE DEVELOPMENT PROGRAM AND
contravened prior to the filing of an action for declaratory relief, the court ITS IMPLEMENTING GUIDELINES. The challenged provision states:
can no longer assume jurisdiction over the action.
The issuance of EO 156 spawned three separate actions for
Nonetheless, the petition must fail. declaratory relief before Branch 72 of the Regional Trial Court of Olongapo
Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten City, all seeking the declaration of the unconstitutionality of Article 2,
years. Section 3.1 of said executive order. The cases were filed by herein
Here, petitioners right of action accrued in May 1977 when respondents respondent entities, who or whose members, are classified as Subic Bay
defaulted in their obligation to pay their loan amortizations. It was from Freeport Enterprises and engaged in the business of, among others,
that time that the ten-year period to enforce the right under the mortgage importing and/or trading used motor vehicles.
started to run. The period was interrupted when respondents filed Civil Case
No. C-6329 sometime after May 1977 and the CFI restrained the intended G.R. No. 164171: On January 16, 2004, respondents Southwing Heavy
foreclosure of the property. However, the period commenced to run again Industries, Inc., (SOUTHWING) United Auctioneers, Inc. (UNITED
on November 9, 1977 when the case was dismissed. AUCTIONEERS), and Microvan, Inc. (MICROVAN), instituted a declaratory
A. Nature of Declaratory Relief: relief case docketed as Civil Case No. 20-0-04, against the Executive
An action for declaratory relief should be filed by a person interested under Secretary, Secretary of Transportation and Communication, Commissioner
a deed, will, contract or other written instrument, and whose rights are of Customs, Assistant Secretary and Head of the Land Transportation Office,
affected by a statute, executive order, regulation or ordinance before Subic Bay Metropolitan Authority (SBMA), Collector of Customs for the Port
breach or violation thereof. at Subic Bay Freeport Zone, and the Chief of the Land Transportation Office
B. Purpose of Declaratory Relief: at Subic Bay Freeport Zone. SOUTHWING, UNITED AUCTIONEERS and
MICROVAN prayed that judgment be rendered (1) declaring Article 2, trade and/or import new and used motor vehicles and spare parts,
Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the Secretary except used cars. Other types of motor vehicles imported and/or
of Finance, Commissioner of Customs, Collector of Customs and the traded by respondents and not falling within the category of used
Chairman of the SBMA to allow the importation of used motor vehicles; (2) cars would thus be subjected to the ban to the prejudice of their
ordering the Land Transportation Office and its subordinates inside the business. Undoubtedly, respondents have the legal standing to
Subic Special Economic Zone to process the registration of the imported assail the validity of EO 156.
used motor vehicles; and (3) in general, to allow the unimpeded entry and o As to the propriety of declaratory relief as a vehicle for assailing the
importation of used motor vehicles subject only to the payment of the executive issuance, suffice it to state that any breach of the rights of
required customs duties. respondents will not affect the case. In Commission on Audit of the
Province of Cebu v. Province of Cebu, 371 SCRA 196 (2001), the
G.R. No. 164172: On January 20, 2004, respondent Subic Integrated Macro Court entertained a suit for declaratory relief to finally settle the
Ventures Corporation (MACRO VENTURES) filed with the same trial court, a doubt as to the proper interpretation of the conflicting laws
similar action for declaratory relief docketed as Civil Case No. 22-0-04, with involved, notwithstanding a violation of the right of the party
the same prayer and against the same parties as those in Civil Case No. 20- affected. We find no reason to deviate from said ruling mindful of
0-04. In this case, the trial court likewise rendered a summary judgment on the significance of the present case to the national economy.
May 24, 2004, holding that Article 2, Section 3.1 of EO 156, is repugnant to o The Court finds that Article 2, Section 3.1 of EO 156 is void insofar
the constitution. Elevated to this Court via a petition for review on as it is made applicable to the presently secured fenced-in former
certiorari, Civil Case No. 22-0-04 was docketed as G.R. No. 164172. Subic Naval Base area as stated in Section 1.1 of EO 97-A.
Pursuant to the separability clause of EO 156, Section 3.1 is declared
G.R. No. 168741. On January 22, 2003, respondent Motor Vehicle Importers valid insofar as it applies to the customs territory or the Philippine
Association of Subic Bay Freeport, Inc. (ASSOCIATION), filed another action territory outside the presently secured fenced-in former Subic Naval
for declaratory relief with essentially the same prayer as those in Civil Case Base area as stated in Section 1.1 of EO 97-A. Hence, used motor
No. 22-0-04 and Civil Case No. 20-0-04, against the Executive Secretary, vehicles that come into the Philippine territory via the secured
Secretary of Finance, Chief of the Land Transportation Office, Commissioner fenced-in former Subic Naval Base area may be stored, used or
of Customs, Collector of Customs at SBMA and the Chairman of SBMA. This traded therein, or exported out of the Philippine territory, but they
was docketed as Civil Case No. 30-0-2003, before the same trial court. cannot be imported into the Philippine territory outside of the
secured fenced-in former Subic Naval Base area.
ISSUE:

Whether Article 2, Section 3.1 of Executive Order No. 156 (EO 156) 7. Martelino v NHMF Corp
unconstitutional.
FACTS:
HELD:
o The established rule that the constitutionality of a law or Petitioners filed a petition for declaratory relief and prohibition with
administrative issuance can be challenged by one who will sustain a urgent prayer for the issuance of a TRO and/or preliminary injunction filed
direct injury as a result of its enforcement has been satisfied in the before the RTC of Caloocan City against the NHMFC and HDMF and Sheriff
instant case. The broad subject of the prohibited importation is all Alberto A. Castillo.
types of used motor vehicles. Respondents would definitely suffer Petitioners alleged that they obtained housing loans from
a direct injury from the implementation of EO 156 because their respondents who directly released the proceeds to the subdivision
certificate of registration and tax exemption authorize them to developer, Shelter Philippines, Inc. (Shelter).
o However, Shelter failed to complete the subdivision according to without hearing and prior notice to the party or person sought to be
the subdivision plan. Petitioners spent their own resources to improve the enjoined.
subdivision roads and alleys, and to install individual water facilities. In the case at bar, petitioners even admit that the HDMF was not
o Respondents failed to ensure Shelters completion of the notified of the PI hearing. Petitioners do not contest the lower courts
subdivision. ruling that the July 9, 1998 Order cannot apply to the HDMF. They merely
o Respondent ignored their right to suspend amortization contend and insist that HDMF voluntarily submitted to the RTCs
payments for Shelters failure to complete the subdivision, charged interests jurisdiction. However, such contention is immaterial because the issue
and penalties on their outstanding loans, threatened to foreclose their involved is the validity of the PI order absent a notice of hearing for its
mortgages and initiated foreclosure proceedings against petitioner Rafael issuance to the HDMF.
Martelino.
o Hence, they prayed that respondents be restrained from foreclosing Declaratory Relief and Prohibition
their mortgages. The ruling that the Petition for Declaratory Relief and Prohibition is
The RTC set the PI hearing, but said order, including the summons improper is correct, because the Petition must be filed before the
and petition, were served only on the NHMFC and Sheriff Castillo. occurrence of breach or any violation. Under 1, Rule 63, a person must file
Subsequently, the RTC ordered that a writ of preliminary injunction be a petition for declaratory relief before breach or violation of a deed, will,
issued restraining the respondents from foreclosing the mortgages on contract, other written instrument, statute, executive order, regulation,
petitioners houses. ordinance or any other governmental regulation.
RTCs RULING: In dismissing the case, the RTC ruled that the issue However, petitioners had already suspended payment of
of non-completion of the subdivision should have been brought before the amortizations. Clearly giving the HDMF a right to foreclose the mortgage for
HLURB. It also ruled that no judicial declaration can be made because the failure to pay the debt secured by the mortgage. Petitioners actual
petition was vague. The RTC assumed that the subject of the petition was suspension of payments defeated the purpose of the action to secure an
Republic Act No. 8501 (Housing Loan Condonation Act of 1998) which was authoritative declaration of their supposed right to suspend payment, for
cited by petitioners. But the RTC pointed out that petitioners failed to state their guidance.
which section of the law affected their rights and needed judicial o Thus, the RTC could no longer assume jurisdiction over the action
declaration. Moreover, the RTC noted that respondents still foreclosed for declaratory relief because there was an occurrence of breach before
their mortgages, a breach of said law which rendered the petition for filing the action.
declaratory relief improper. The proper remedy was an ordinary civil action. PURPOSE OF THE ACTION: Secure an authoritative statement of the
The Court of Appeals affirmed the RTC Order. rights and obligations of the parties under a statute, deed, contract, etc. for
their guidance in its enforcement or compliance and not to settle issues
ISSUES: Whether or not arising from its alleged breach.
(1) The preliminary injunction order against the HDMF is valid NO WHEN TO FILE THE ACTION: It may be entertained only BEFORE the
(2) The petition for declaratory relief and prohibition was properly breach or violation of the statute, deed, contract to which it refers. Where
dismissed NO the law or contract has already been contravened prior to the filing of an
action for declaratory relief, the court can no longer assume jurisdiction
RULING: over the action.
Preliminary Injunction
We affirm the RTC and Court of Appeals ruling that the preliminary The Dismissal of the Petition was Improper
injunction order is not valid against the HDMF. 5, Rule 58 of the Rules of
Court expressly states that No preliminary injunction shall be granted If the petition for declaratory relief and prohibition was vague,
dismissal is not proper because the respondents may ask for more
particulars. Notably, the NHMFC never assailed the supposed vagueness of far-reaching implications and it raises questions that should be resolved, it
the petition in its motion to dismiss nor did it ask for more particulars may be treated as one for prohibition.
before filing its answer. When the RTC also set the pre-trial conference and Under the circumstances, action for prohibition is still improper.
ordered the parties to submit their pre-trial briefs, it even noted that the PROHIBITION is a remedy against proceedings that are without or in excess
issues had already been joined. Petitioners fairly stated also the necessary of jurisdiction, or with grave abuse of discretion, there being no appeal or
ultimate facts, except that their action for declaratory relief was improper. other plain, speedy adequate remedy in the ordinary course of law. But
The RTC made an assumption that RA No. 8501 was the subject here, the petition did not even impute lack of jurisdiction or grave abuse of
matter of the case. But while the petition mentioned the law, the discretion committed by respondents and Sheriff Castillo regarding the
declaration that petitioners sought was not anchored on any of its foreclosure proceedings.
provisions. The petition only stated that despite the effectivity of said law,
respondents still acted in bad faith and with undue haste in threatening WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision
petitioners with foreclosures, instead of encouraging them to avail of its and Resolution of the appellate court are AFFIRMED.
benefits.
COMMENTO: The Condonation Act took effect, but instead of 8. Velasco v Villegas
applying for condonation and for the restructuring of their loans, Petitioners
filed an erroneous petition before the RTC (siguro akala nila automatic 9. The Honorable Monetary Board v Philippine Veterans Bank
unyay, wala na silang utang!). On the other hand, the RTC was incorrect
on the point that the case should have been filed before HLURB. The Facts:
jurisdiction of the HLURB to hear and decide cases is determined by the 1. The Philippine Veterans Bank, pursuant to its mandate to provide
nature of the cause of action, the subject matter or property involved and financial assistance to veterans and teachers under Republic Acts 3518 and
the parties. In this case, the petition for declaratory relief and prohibition 7169, established pension loans for bona fide veterans and beneficiaries, as
did not involve an unsound real estate business practice, or a refund filed by well as salary loan products for teachers. As these clientele do not have
subdivision buyers against the developer, or a specific performance case security other than their continuing good health or employment, to secure
filed by buyers against the developer. their loans, the PVB devised a program by charging a premium, a higher fee
known as Credit Redemption Fund (CRF) from the borrowers. Special Trust
Conversion of the Petition for Declaratory Relief and Prohibition to Ordinary Funds were established by PVB for the loans of its clientele and in case of
Action death of the borrower, the fees charged from him and credited to the trust
GENERAL RULE: 6, Rule 63 allows the course of action. funds will be used to fully pay the loan.
However, petitioners failed to specify the ordinary action they 2. Bangko Sentral ng Pilipinas found that PVBs collection of the CRF
desired. The Court cannot assume that they seek annulment of the violated Section 54 of Republic Act No. 8791 which prohibited banks from
mortgages and further, the issue was not raised before the RTC. Therefore, directly engaging in insurance business as insurer. Thus, it wrote the PVB to
the CA properly refused to entertain the issue as it cannot be raised for the inform it that CRF is a form of insurance, based on opinion by the Insurance
first time on appeal. Commission and should be discontinued. PVB then stopped collecting the
fees.
Conversion of Petition for Declaratory Relief to an Action for Prohibition 3. The Monetary Board issued MB Resolution No. 1139 directing the
GENERAL RULE: In De La Llana, etc., et al. v. Alba, etc., et al., the PVBs Trust and Investment Department to return to the borrowers all the
Court considered a petition erroneously entitled Petition for Declaratory balances of the CRF; and to preserve the records of borrowers who were
Relief and/or for Prohibition as an action for prohibition. The case involved deducted CRF pending resolution of ruling of the Office of the General
the constitutionality of BP Blg. 129, it was held that: that if the petition has Counsel of the BSP. The BSP denied PVBs request for reconsideration,
hence it filed a petition for declamatory relief before the RTC of Makati City.
4. The Monetary Board moved to dismiss the petition, citing that the o The authority of the petitioners to issue the questioned MB
petition should not prosper because of the prior breach of PVB by Section Resolution emanated from its powers under Section 37 of RA No. 7653 and
54 of RA 8791. The RTC dismissed the petition for declaratory relief, ruling Section 66 of RA No. 8791 to impose, at its discretion, administrative
that the issue of whether or not PVB violated Section 54 of Republic Act sanctions, upon any bank for violation of any banking law.
8791 should be resolved in an ordinary civil action, not a declaratory relief. o The nature of the BSP Monetary Board as a quasi-judicial agency,
5. Almost year later, it filed a Motion to Admit Motion for and the character of its determination of whether or not appropriate
Reconsideration, stating that it did not receive a copy of the order until sanctions may be imposed upon erring banks, as an exercise of quasi-judicial
September 3, 2008, which the Monetary Board opposed, alleging that per function
certification by the Philippine Postal Corporation, the order was served on
respondent on October 17, 2007. A quasi-judicial agency or body is an organ of government other
6. The RTC ruling on the motion for reconsideration, reversed itself than a court and other than a legislature, which affects the rights of private
and ruled that the collection of the CRF by PVB did not constitute engaging parties through either adjudication or rule making. The very definition of an
in the issuance business as an insurer, hence not a violation of Section 54 of administrative agency includes its being vested with quasi-judicial powers.
RA 8791. Accordingly, it declared MB Resolution No. 1189 null and void. Its o It recognizes the need for the active intervention of administrative
motion for reconsideration denied, it filed before the Supreme Court a agencies in matters calling for technical knowledge and speed in countless
petition for review on certiorari to contest the RTC decision, on the issue of controversies, which cannot possibly be handled by regular courts.
whether or not the petition for declaratory relief is proper.
A quasi-judicial function is a term which applies to the action,
ISSUE: Was the petition for declaratory relief proper? discretion, etc. of public administrative officers or bodies, who are required
to investigate facts, or ascertain the existence of facts, hold hearings, and
HELD: draw conclusions from them, as a basis for their official action and to
Declaratory relief is an action by any person interested in a deed, exercise discretion of a judicial nature.
will, contract or other written instrument, executive order or resolution, to
determine any question of construction or validity arising from the Lastly, also worth noting is the fact that the court a quos Order
instrument, executive order or regulation, or statute; and for a declaration dated September 24, 2007, which dismissed respondents petition for
of his rights and duties thereunder. The only issue that may be raised in declaratory relief, had long become final and executory.
such a petition is the question of construction or validity of provisions in an o To recall, said Order was duly served on and received by respondent
instrument or statute on October 17, 2007, as evidenced by the Certification issued by the
In CJH Development Corporation v. Bureau of Internal Revenue, the Philippine Postal Corporation. Almost a year later, however, or on October
SC that in the same manner that court decisions cannot be the proper 15, 2008, respondent moved for reconsideration of the court a quos Order
subjects of a petition for declaratory relief, decisions of quasi-judicial of dismissal, claiming it received a copy of said Order only on September 3,
agencies cannot be subjects of a petition for declaratory relief for the simple 2008.
reason that if a party is not agreeable to a decision either on questions of o Thus, respondents self-serving claim should not have prevailed over
law or of fact, it may avail of the various remedies provided by the Rules of the Certification issued by the Philippine Postal Corporation. It was error for
Court. the trial court to entertain it for the second time despite the lapse of almost
In this case, the decision of the BSP Monetary Board cannot be a a year before respondent filed its motion for reconsideration against said
proper subject matter for a petition for declaratory relief. The BSP Order.
Monetary Board is a quasi-judicial agency and the MB resolution it issued
was in its exercise of quasi-judicial powers or functions.